In this issue:
- Benefit Claim Denial Litigation After Glenn and Conkright
- Case Summaries
An excerpt from "Benefit Claim Denial Litigation After Glenn and Conkright"
No single issue accounts for more ERISA litigation than the denials of claims for benefits. ERISA Section 502(a)(1)(B) provides a vehicle for a dissatisfied participant to obtain judicial review of a denial of benefits. Although ERISA permits either a state court of competent jurisdiction or a federal court to hear a lawsuit seeking review of a claim denial, most suits end up in federal court, either by claimant’s choice or the exercise of a plan’s right to remove to a federal forum.
In a denial of benefits lawsuit, the role of the federal courts is to perform a review function, which is different than their role in a typical lawsuit. Rather, the primary decision-making is left to plan administrators who presumably know the plan better, understand the broader strategies for providing employee benefits, and possess jurisdiction over the plan wherever it serves participants.
Despite the plethora of benefit denial lawsuits, the Supreme Court did not define a standard for judicial review of benefit claim litigation until 1989 in Firestone Tire & Rubber Co. v. Bruch. In Bruch, the Supreme Court established that the standard for reviewing plan administrator decisions on benefit claims is de novo. Bruch also noted that plans could contractually increase the level of deference accorded to administrators by delegating discretion to them to decide facts and construe plan terms. If a plan did so, the standard of review by a federal court would be an abuse of discretion, one of the most deferential levels of review.
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