Wednesday, January 26, 2011

3rd Cir: Living in a Post-Glenn ERISA World

Erisa Thanks to friend of the blog, Katie Eyer (Penn) for bringing to my attention the interesting ERISA case of Miller v. American Airlines from the 3rd Circuit Court of Appeals.  As Katie points out, this is one of the first major decisions in the Third Circuit to address the post-Glenn world.  Readers might recall that in Metropolitan Life v. Glenn, the Supreme Court reaffirmed the Firestone standard for arbitrary and capricious review of denial of benefit claims under ERISA Section 502(a)(1)(B), but also reiterated the need to weigh conflict of interests when plan administrators are both responsible for claim determinations and claim payments.

I will defer here to some interesting points that Katie makes for readers of this blog and others with ERISA on the brain:

1) Following Met Life v. Glenn all structural and procedural factors have to be weighed as part of the merits analysis on arbitrary and capricious review;

2) Employer-funded plans create a conflict of interest, even where they are actuarially grounded (overruling prior Third Circuit case law on the basis of language in the Supreme Court's decision in Met Life v. Glenn)

3) Finds the employer's decision was arbitrary and capricious based almost exclusively on numerous procedural errors & irregularities;

4) Retroactive reinstatement of benefits is the proper remedy for an arbitrary and capricious termination of benefits.

Interested readers can access the decision here. For my two cents, I am still somewhat skeptical that Glenn will lead to that many more plaintiffs winning ERISA section 502(a)(1)(B) claims.  This is especially true after the abysmal decision by the Supreme Court last year in Conkright v. Frommert, where plan administrators and their sponsors seem to get a never-ending opportunity to give the least generous interpretation of the plan which might not be considered arbitrary and capricious.


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