The Summit

One of the more notable observations of the responsibility of plan administrators to provide full and fair reviews consistent with 29 U.S.C. § 1133 appeared two decades ago in Univ. Hosps. of Cleveland v. Emerson Elec. Co., 202 F.3d 839, 848 n. 7 (6th Cir. 2000).  There, Judge Gerald Rosen, former chief U.S. district judge for the Eastern District of Michigan, sitting by designation, resolved a provider-plan dispute under ERISA, holding:

[I]t strikes us as problematic to, on one hand, recognize an administrator’s discretion to interpret a plan by applying a deferential “arbitrary and capricious” standard of review, yet, on the other hand, allow the administrator to “shore up” a decision after-the-fact by testifying as to the “true” basis for the decision after the matter is in litigation, possible deficiencies in the decision are identified, and an attorney is consulted to defend the decision by developing creative post hoc arguments that can survive deferential review. The concerns inherent in this scenario are even more pronounced where, as here, the administrator has a financial incentive to deny benefits.  Id.

Seventeen years later, the Sixth Circuit reaffirmed this notion in Corey v. Sedgwick Claims Mgt. Services, Inc., 858 F.3d 1024, 1028 (6th Cir. 2017).  The Court held:

The Administrator’s response leans heavily on the plan’s grant of interpretive discretion. But the record leaves us guessing as to how the Administrator interpreted the plan’s objective-findings definition. The Administrator’s denial letters simply quote the plan language and then conclude Corey’s evidence fails to suffice. Although the Administrator enjoys interpretive latitude, we defer only to its actual interpretations—it can’t issue a conclusory denial and then rely on an attorney to craft a post-hoc explanation. Id. (citing Univ. Hosps. of Cleveland v. Emerson Elec. Co., 202 F.3d 839, 848 n.7 (6th Cir. 2000)).

These cases advance the notion that although ERISA cases still function as adversarial proceedings, claims under the statute are required to be evaluated differently than most other disputes.  The plan’s administrators are fiduciaries, tasked with fiduciary standards of conduct, not partisan advocates.  These rulings do not mean that a claimant seeking benefits must win, far from it.  They do require, however, that ERISA participants must, by law, be given a fair shot at presenting their claims.  Evaluation of their claims must not be outcome-determinative or results-oriented. Courts continue to frown upon denials which are the product of lawyerly arguments rather than the type of independent decision-making ERISA requires.

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