Tuesday, November 28, 2006

Supreme Court Sends Back ERISA Denial of Benefits Cases to Ninth Circuit

4united_states_supreme_court_112904_13 A number of months ago, we wrote in a previous post about the Ninth Circuit Court of Appeals en banc decision in AbatieAbatie concerns the proper standard of judicial review in an ERISA denial of benefit claim case when the plan administrator is acting under a conflict of interest.

Fuguerre of the Blogging Employee Benefits Blog read the decision in Abatie this way:

[T]he 9th calls for a case-by-case “indefinite” abuse of discretion review that weighs conflict on the basis of the particular facts and circumstances. The influence of a potential conflict is to be taken into account, without first requiring the participant to show presence of a serious conflict. Although the burden is not necessarily passed back to the plan administrator, the court suggests that “a conflicted administrator, facing closer scrutiny, might find it advisable to bring forth afirmative evidence that any conflict did not influence its decisionmaking process….”

In light of this decision in August, the Supreme Court yesterday sent a similar ERISA case, Metropolitan Life Insurance v. Hawkins-Dean, 04-55277, 161 Fed. Appx. 684 (9th Cir. 2006) (Westlaw password required) (here is the petition for cert.) back to the Ninth Circuit for reconsideration under this new conflict of interest standard.

It will be interesting to see if the decision of the previous panel in Hawkins-Dean to overturn the judgment of the plan administrator will be upheld by the new panel in light of the new approach outlined by the Ninth Circuit in Abatie.

Hat Tip:  SCOTUSBlog



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