This month's Friday Five brings a quartet of court of appeals decisions: a pair from the Ninth Circuit relating to standard of review, an Eighth Circuit decision upholding a mental illness limitation, and a Sixth Circuit case dealing with the proper pleading of improper amendment claims. Finally, the Middle District of Florida addresses whether data-breach claims are preempted by ERISA.

1. When a claim administrator fails to issue a final decision, should a court apply an abuse of discretion standard? The defendant, Metropolitan Life, failed to issue a final decision on a claim for long-term disability benefits, years after the 90-day deadline for claim determination had passed. It was undisputed that MetLife was granted discretionary authority in the plan documents, and the District Court of the Northern District of California applied an "abuse of discretion" standard in granting summary judgment to MetLife. The Ninth Circuit Court of Appeals reversed, stating that de novo review (rather than abuse of discretion review) applies when "an administrator fails to actually exercise its discretion in the denial of benefits" or when an administrator commits "wholesale and flagrant violations of the procedural requirements of ERISA, and ... acts in utter disregard of the underlying purpose of the benefit plan." Gordon v. Metro. Life Ins. Co., 17-16821, 2019 WL 102403 (9th Cir. Jan. 4, 2019).
2. Must a court address all procedural irregularities under an abuse of discretion standard? Screen Actors Guild Producers Pension Plan won summary judgment against a plaintiff who claimed that the plan erred when it found that the plaintiff’s disability was not due to physical impairments, and therefore the policy’s mental illness limitation applied. The Ninth Circuit reversed, holding that the district court failed to address all procedural irregularities alleged in its decision. Even though it was undisputed that an abuse of discretion standard would apply, the court of appeals held that "[w]here there are 'procedural irregularities' in the claim review process, the abuse of discretion standard that is applied by the district court will be 'tempered’ by heightened skepticism." Hoffman v. Screen Actors Guild Producers Pension Plan, 16-56663, 2019 WL 103895 (9th Cir. Jan. 4, 2019).
3. May an insurer reasonably find that disability is caused by mental illness rather than a physical condition where objective medical evidence of pain is lacking? In seeking LTD benefits, a plaintiff claimed that her disability was caused by fibromyalgia rather than her documented depression and other cognitive issues. The administrator, United of Omaha, found that objective evidence of her physical symptoms was lacking and denied her claim. The district court, applying an abuse of discretion standard, granted summary judgment for the insurer. The Court of Appeals for the Eighth Circuit upheld the decision, noting that the plaintiff "was not left in the dark about how she could establish a physical disability" and that her theory that her cognitive issues were all caused by her physical ailments was not supported by her own treating physicians. Thiry v. United of Omaha Life Ins. Co., 17-3288, 2019 WL 140833 (8th Cir. Jan. 9, 2019).
4. Can a plaintiff successfully argue that an administrator failed to comply with procedural requirements when the requested benefits would never be available under the governing plan? An employer, American Water, provided a claimant with an incorrect life insurance certificate in the course of the claimant’s application for benefits. Upon motions for summary judgment, the district court granted summary judgment for insurer MetLife, finding that it had applied the correct governing certificate in denying the plaintiff’s claim for benefits. The plaintiff also argued that the plan had been improperly amended; however, the district court rejected this argument as it has not been plead as a § 1132(a)(3) invalid-amendment claim against MetLife in his complaint. The Court of Appeals for the Eighth Circuit agreed with the district court’s decision that the plaintiff’s claim could not be construed as a procedural violation under § 1133, because there was no "adverse benefit determination." Rather, because the governing certificate would never provide the requested benefits, the plaintiff’s claim would only be properly plead as an invalid-amendment claim. The plaintiff’s failure to include this claim in his complaint against MetLife was fatal to his claim. David Moore v. Metropolitan Life Insurance Co., et al., No. 18-5325, (6th Cir. Jan. 3, 2019).
5. Does ERISA preempt claims stemming from improper disclosure of health data? The plaintiff's insurer, Aetna Life Insurance, mailed a letter to the plaintiff concerning the plaintiff’s private health information. The plaintiff’s HIV status was revealed through a very large window in the envelope. The plaintiff filed suit against Aetna, alleging various state-law causes of action including breach of contract and intentional infliction of emotional distress. The District Court for the Middle District of Florida found that because the plaintiff’s contract and negligence claims all rest upon the terms of the plaintiff’s plan with Aetna, the claims were preempted. However, the court found that the invasion of privacy claim was not preempted, as the plaintiff adequately pled an independent legal duty (separate from the terms of the plan) under Florida law. Doe v. Aetna Life Ins. Co., 618CV979ORL37GJK, 2018 WL 6829728 (M.D. Fla. Dec. 27, 2018).