More Confusion with Review of ERISA Denial of Benefits

In taking the case of Metlife v. Glenn, the Supreme Court attempted to bring some clarity to ERISA denial of benefit cases when the insurer is both the one to determine the benefits and pay them.  Instead, things are now even more confused.

We already reported how the Fourth Circuit took the new language of Glenn and used it to reverse a decision for the plaintiff. Now comes the Second Circuit in McCauley v. First Unum Life Ins. Co., No. 06-5100 (2d Cir. Dec. 23, 2008), doing the exact opposite.

As Paul Mollica explains:

The panel . . . factored in the conflict of interest:  "Taken in combination, these factors are plainly exacerbated by First Unum's conflict of interest, as both administrator and payor, for what else would have influenced First Unum to avoid following up on simple inquiries prompted by McCauley's June 10 submission?"

The standard enunciated here -- "for what else?" -- seems perfectly opaque to me.  But then, maybe the Second Circuit is simply announcing a special "First Unum" rule, for the panel opinion goes on to report:

"First Unum is no stranger to the courts, where its conduct has drawn biting criticism from judges. A district court in Massachusetts wrote that 'an examination of cases involving First Unum . . . reveals a disturbing pattern of erroneous and arbitrary benefits denials, bad faith contract misinterpretations, and other unscrupulous tactics.' Radford Trust v. First Unum Life Ins. Co., 321 F. Supp. 2d 226, 247 (D. Mass. 2004), rev'd on other grounds, 491 F.3d 21, 25 (1st Cir. 2007). That court listed more than thirty cases in which First Unum's denials were found to be unlawful, including one decision in which First Unum's behavior was 'culpably abusive.' Id. at 247 n.20. Also, First Unum's unscrupulous tactics have been the subject of news pieces on '60 Minutes' and 'Dateline,' that included harsh words for the company. Id. at 248-49. First Unum has fared no better in legal academia. See John H. Langbein, Trust Law as Regulatory Law: The Unum/Provident Scandal and Judicial Review of Benefit Denials Under ERISA, 101 Nw. U. L. Rev. 1315 (2007). In light of First Unum's well-documented history of abusive tactics, and in the absence of any argument by First Unum showing that it has changed its internal procedures in response, we follow the Supreme Court's instruction and emphasize this factor here. Accordingly, we find First Unum's history of deception and abusive tactics to be additional evidence that it was influenced by its conflict of interest as both plan administrator and payor in denying McCauley's claim for benefits."

Justice courtesy of network news notoriety?  This is the record that a participant must present to win a simple ERISA claim??  I've litigated ERISA cases for some 18 years, but even with my experience I'm having trouble figuring how to piece this all together.

You're not alone, Paul.

PS