This month’s Friday Five covers cases relating to a plaintiff’s attempts to seal a complaint seeking disability benefits, an administrator’s uncommunicated decision to discontinue its investigation into certain medical conditions, an administrator’s loss of the deferential standard of review for failure to follow claims regulations, when administrative appeals are mandatory under the language of a benefit plan, and fee shifting under ERISA.

1. Court Refuses to Seal Complaint Seeking Long-Term Disability Benefits Based on Waiver Analysis. In a recent long-term disability case in Florida federal court, the plaintiff asked the court to seal a previously filed complaint because the pleading threatened to disclose “private health information.” The court recognized that, as a general matter, parties have an important right to protect their private health information. But, the court denied the plaintiff’s attempt to seal his complaint because “Plaintiff has placed his own medical condition squarely at issue” by filing a claim for disability benefits. While not addressed substantively by the court, it did make specific note that the plaintiff waited seven weeks after filing the complaint to seek the retroactive seal of the pleading. Schramm v. Metropolitan Life Ins. Co., No. 23-163, 2023 WL 3320086 (M.D. Fla. May 9, 2023).
2. Claims Administrator Acted Arbitrary and Capricious by Failing to Inform the Claimant that Certain Conditions Were No Longer Being Investigated. On summary judgment in another long-term disability dispute, the court took particular issue with the claims administrator’s decision to end its investigation into cognitive and psychiatric conditions of the plaintiff, particularly because this decision was not conveyed to the claimant. During the administrative process, counsel for the claimant suggested that previously identified cognitive and psychiatric conditions were not disabling. In response, the administrator stopped investigating or evaluating these conditions. The court determined that the administrator’s approach was improper for two reasons. First, it was unreasonable to stop reviewing certain symptoms based on a single line in the claims correspondence, particularly when the medical records supported a variety of combined medical issues, including cognitive and psychiatric ones. Second, it was further improper for the administrator to fail to inform the claimant of the decision. If notice was given, the plaintiff would have had the opportunity to correct the misinterpretation. Murch v. Sun Life Assurance Co. of Canada, No. 20-3900, 2023 WL 3058780 (N.D. Ill. Apr. 24, 2023).
3. Lack of Strict Adherence to ERISA Claims Procedures Invokes De Novo Review. In an interim ruling during a long-term disability case, a New York federal court determined that the claims administrator’s failure to comply with portions of the ERISA claims procedures required a de novo review of the underlying decision. In particular, the court found that the administrator’s administrative review process was deficient in three respects. First, the administrator’s failure to engage a medical review on appeal, particularly considering the “abundance” of documents related to the claimant’s medical conditions and related abnormalities, was improper. Second, the court determined that the administrator should have provided the plaintiff with notice and an opportunity to respond to an addendum report of a medical reviewer, even if the addendum primarily reaffirmed the reviewer’s prior opinions. Third, the administrator’s failure to issue a timely decision was likewise deemed unforgiveable by the Court. Rhodes v. First Reliance Standard Life Ins. Co., No. 22-5264, 2023 WL 3099294 (S.D. N.Y. Apr. 26, 2023).
4. Lack of Mandatory Appeal Language in Plan Provides Greenlight to Early Federal Court Bid for Aggrieved Claimant. The underlying plan in a long-term disability dispute stated: “If a claim is wholly or partially denied, the claimant will have up to 180 days to make an appeal.” The language surrounding this statement, which provided “the opportunity” to submit evidence on appeal, led the court to conclude that the plan did not expressly require exhaustion of the administrative appeal prior to litigation. The court believed that “telling a claimant about a right of appeal” is not the same thing as telling the claimant that she must use the appeal or risk losing the ability to challenge the claims decision in court. As a result, the court concluded that pre-suit exhaustion of the administrative appeal process was merely optional under the plan, rendering the plaintiff’s federal court litigation ripe. Jackson v. The Guardian Life Ins. Co. of Am., No. 22-3142, 2023 WL 2960290 (N.D. Cal. Apr. 13, 2023).
5. Court Declines to Shift Fees After Claimant Prevails on Total Disability Claim. A disability policy included a provision for lifetime benefits. Under this rider, full disability benefits were available for an “injury,” but only a fraction of benefits was payable for a “sickness.” On his claim forms, the plaintiff completed the “sickness” portions related to his back ailments. The plaintiff later asked to recategorize his condition as an injury resulting from years of repetitive work stress on his back, but the claims administrator refused. The court eventually sided with the plaintiff, which meant that the plaintiff was entitled to lifetime disability benefits at the full rate. Despite the plaintiff prevailing on summary judgment, the court declined to also award him attorney’s fees and costs under ERISA. The court explained that although it sided with the claimant’s position, the administrator’s position was still reasonable and supported in other jurisdictions. Therefore, the court saw no utility in shifting the plaintiff’s fees to the administrator, and denied that portion of the plaintiff’s summary judgment motion. Stein v. Paul Revere Life Ins. Co., No. 21-3546, 2023 WL 2539004 (E.D. Pa. Mar. 16, 2023).