This month’s Friday Five explores decisions from around the country discussing differences between the scope of discovery and ability to add documents to the record on a claim for review challenging the denial of LTD benefits, LTD and LWOP policies, the breadth of discretion available to claims administrators and the always important topic of timely action by insurers in issuing claims decisions.
- Whether claims for ERISA retaliatory discharge and ERISA interference must allege with specificity a plaintiff’s engagement in a statutorily protected activity and that the protected activity was causally related to his termination and an employer’s specific intent to violate ERISA, respectively. Yes, a plaintiff asserting a claim for ERISA retaliatory discharge must allege, plausibly or otherwise, that he engaged in a statutorily protected activity and that such protected activity was causally related to his termination. Similarly, in a claim for ERISA interference a plaintiff must not only plead that (1) prohibited employer conduct (2) taken for the purpose of interfering (3) with the attainment of any right to which the employee may become entitled but must also plead that the employer had the specific intent to violate 29 U.S.C. § 1140. A plaintiff must plead and ultimately prove (via either direct or circumstantial evidence) that the employer made a conscious decision to interfere with the employee’s attainment of pension eligibility or additional benefits. Notably, when the plaintiff offers no direct evidence, they must show that the employer made a conscious decision to interfere with the employee's attainment of pension eligibility or additional benefits. As to both claims, the Court concluded that plaintiff’s general allegations that he was terminated in violation of FMLA were insufficient to meet the specificity requirements for pleading a claim for ERISA retaliatory discharge and ERISA interference. Delp v. Hexcel Corp., No. 3:25-CV-00233, 2025 WL 2618766 (M.D. Pa. Sept. 10, 2025).
- Whether an employee benefit plan must consider additional or corrected information on appeal, which is completely inconsistent information with the information initially provided by insured. No, completely inconsistent information, such as a change in reported disability onset date and last day worked, changes the nature of the claim and means that an insured must submit a new application for benefits. Absent the submission of new application, and exhaustion of administrative remedies, a court’s review is limited to the original information and whether based on that information the insured qualifies for coverage. ERISA’s regulations that a plan administrator take into account all information submitted by the claimant relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination does not alter that conclusion. In reaching its decision affirming the lower court’s order granting summary judgment in favor of the insurer, the Seventh Circuit Court of Appeals noted that in the ERISA plan benefits context, a district court is charged with making an independent decision about the employee’s entitlement to benefits. Thus, in conducting its de novo review, the appellate court concluded that a change in the date last worked was more than just fixing a scrivener's error as urged by the insured. The Court further noted that no claims processing system can work if an applicant can submit information that is not just new or complementary but completely inconsistent with previous facts. Moratz v. Reliance Standard Life Ins. Co., No. 24-2825, 2025 WL 2505760 (7th Cir. Sept. 2, 2025)
- Is an insured permitted to obtain limited discovery when challenging the denial of long term disability benefits if he makes a speculative allegation of bias? No, in an ERISA benefit denial case, the district court sits in a role more akin to an appellate tribunal than a trial court and as such discovery is not permitted unless the discovery is sought in support of a procedural challenge to the administrator’s decision, such as an alleged lack of due process afforded by the administrator or alleged bias on its part. To be entitled to such discovery, an ERISA claimant must provide sufficient evidence of bias, or of any procedural irregularity, to justify the discovery. A mere allegation of bias or mere speculation of bias is insufficient. And simply because a defendant is both the administrator and the payor under the ERISA plan does not indicate bias. Further, while the presence of an apparent conflict is a factor to be considered in deciding whether discovery should be permitted, that fact alone does not provide a basis for discovery. Claimant attempted to substantiate its need for discovery by alleging that a series of issues, when combined, met the threshold for discovery. These issues included, but were not limited to, claims that (a) the insurer denied higher value claims more frequently; (b) the insurer denied claims where an individual suffered seizures or seizure-like disorders and thus treated individuals with this condition differently; (c) the insurer’s medical reviewers have a financial incentive to deny claims; and (d) the insurer refused to tender to claimant the resumes of its reviewers. The Court concluded that there was insufficient evidence to support any of the allegations and that claimant’s position was based on mere speculation. Notably, because the Court found that claimant failed to raise a colorable claim of bias or that Defendant’s denial was improperly influenced by bias or a conflict of interest, claimant was not permitted to take discovery. Digeronimo v. Unum Life Ins. Co. of Am., No. 1:22-CV-00773, 2025 WL 2459557 (N.D. Ohio Aug. 27, 2025).
- Whether a plan administrator’s decision denying long-term disability benefits is arbitrary and capricious when substantial evidence establishes that there has been a change in condition, the Plan conducts a paper review of recent medical records, and claimant has been approved for SSD benefits. No, an administrator's decision is not arbitrary and capricious if it is supported by substantial evidence. Substantial evidence is such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. Here, despite Claimant living with multiple sclerosis and receiving benefits under the Plan for four years, there was substantial evidence that Claimant was no longer eligible for long-term disability benefits. Based on the definition of disabled under the Plan and Claimant’s arguments, the Court found that the Plan’s previous determination of disability did not prevent a review of new medical records which supported the Plan’s change in position. These records established that Claimant’s condition had improved and no longer prevented Claimant from performing any job. The Court further found that it was not improper for the Plan to rely on the conclusions of its experts, who conducted paper reviews and were not specialists in the specific disease afflicting Claimant, over the conclusions of Claimant’s treating physicians. The experts explained their reasoning and had ample expertise from which to draw their conclusions. The experts' lack of specialization in Multiple Sclerosis specifically was not per se evidence of arbitrary and capricious conduct. The Court did note that that a plan administrator’s decision to conduct a paper review is a factor weighing against the plan administrator, but found that such review does not render a plan administrator’s determination unreasonable per se. Last, the Court noted that the fact that Claimant had been approved for SSD benefits does not in itself establish that a plan administrator's decision was arbitrary and capricious as the guidelines for SSD benefits were substantially different than the terms of the Plan. These differences are substantial enough that a reasonable mind could still conclude that Claimant did not satisfy the Plan’s definition of disable. In light of the foregoing, the Court concluded that the denial of the claim was not arbitrary or capricious. McDonald v. E.I. Dupont De Nemours and Company Total and Permanent Disability Plan, No. CV 23-1141-RGA, 2025 WL 27336371 (D. Del. Sept. 25, 2025).
- Whether a Court is required to transfer a case brought under ERISA to a different venue pursuant to 28 USC §1404(a) when the requesting venue is where the claimant resides and where she received treatment and there appears to be minimal ties to the forum where the litigation was brought. No, a Court is not required to transfer venue in an ERISA case to where the claimant resides and received treatment, as other factors such as timeliness of motion and judicial resources are relevant factors. After paying benefits, claimant filed an action in the Southern District of Florida under ERISA. Almost two years after the filing, the insurer sough to transfer the action to Utah because it was where the claimant resided and where he received treatment. Under 28 USC §1404(a), courts may transfer cases for convenience and in the interest of justice. The analysis involves (1) whether the case could have been brought in the transferee district; and (2) whether transfer serves convenience and justice. In analyzing this second prong, courts analyze several factors, including the following: (1) the convenience of the witnesses; (2) the location of relevant documents and the relative ease of access to sources of proof; (3) the convenience of the parties; (4) the locus of operative facts; (5) the availability of process to compel the attendance of unwilling witnesses; (6) the relative means of the parties; (7) a forum's familiarity with the governing law; (8) the weight accorded a plaintiff's choice of forum; and (9) trial efficiency and the interests of justice, based on the totality of the circumstances. Applying the transfer factors, the Court found that the case could have been brought in the transferee district. However, with respect to the second prong of the analysis, the Court noted that ERISA cases are usually resolved on summary judgment, and not trial, thus, factors such as witness convenience and access to documents are less significant. Consequently, the Court focused on the justice element of the analysis and explained that in the instant matter, the transferor court (the Eleventh Circuit Court of Appeals) and the transferee court (the Tenth Circuit Court of Appeals) applied different law to review of ERISA denials. The Eleventh Circuit allows extra record evidence which the Tenth Circuit does not. Notably, the insurer sought transfer after discovery revealed documents that favored the claimant under Eleventh Circuit Law. As a result, the Court found the insurer’s motion untimely as it was filed just before discovery closed and after months of litigation in Florida. The timing of the motion suggested that the request to transfer was akin to forum shopping rather than genuine inconvenience. As such, the Court denied the motion to transfer venue, holding that transfer would waste resources and delay resolution. Williams v. Unum Life Insurance Co., of America, Case No. 24-CV-24113-RAR, 2025 WL 1591213 (S.D. Fla. June 5, 2025).
