Tuesday, December 23, 2008
As readers might recall, the Supreme Court case of Metlife v. Glenn from this past basically left the Firestone review standard for denial of benefits alone and held that a conflict of interest that a dual-role insurer has is just one factor to take into account in determining whether the plan administrator abused his discretion in denying benefits to a plan participant or beneficiary.
I predicted back then that this would lead to more ERISA plaintiffs losing their denial of benefit claims under Section 502(a)(1)(B):
Prediction: there will be no uniformity or predictability in these "combination-of-factors method of review" cases and the conservative bent of the lower federal courts will mean that employee participants and their beneficiaries will continue to lose these denial of benefit cases involving dual-role insurers at an alarming rate.
Unfortunately, it looks like I am turning out to be right. Exhibit A: Champion v. Black & Decker (U.S.) Inc., No. 07-1991 (4th Cir. 12/19/08). The Fourth Circuit in Champion found that a woman was properly denied her disability benefits once it no longer modified the standard of review to account for the conceded conflict of interest, and rather found the conflict, under Glenn, to just be “one factor” as part of its deferential review.
At this point, Congress needs to amend the provisions of ERISA concerning review of denial of benefits to put more teeth into the law and to hold claim administrators more accountable for their claim decisions.