California Insurance Litigation Blog

The Wednesday August 11, 2010 edition of the Los Angeles Daily Journal featured my article, entitled “The Waiver Doctrine, Alive And Well in ERISA Cases,” in the Perspective column. It explains a very recent case from the Ninth Circuit Court of Appeals in Mitchell v. CB Richard Ellis Long Term Disability Plan, 2010 DJDAR 11532 (9th Cir. July 26).  The article is posted below with permission of Daily Journal Corp. (2010). ... More

The Department of Health and Human Services issued new appeal regulations under the recently enacted Patient Protection and Affordable Care Act (“Affordable Care Act”).  These regulations give claimants the right to appeal decisions made by their health plan to an outside, independent decision maker, regardless of what state they live in or what type of health coverage they have, i.e., both group and individual coverage.  If a particular health plan or insurance is governed by a state law, the state regulations will apply as long as the protections offered to consumers is at least as strong as the National Association... More

Last month, the U.S. Supreme Court handed ERISA plan participants a big victory when they decided the important ERISA disability case of Hardt v. Reliance Standard Life Insurance, __ U.S. __ (Decided May 24, 2010)(see our blog discussion here) holding that an ERISA plan participant may be able to collect attorneys’ fees from a plan or claim administrator without obtaining a judgment in the action.  It did not take long for the Ninth Circuit Court of Appeals to apply Hardt.  In Simonia v. Glendale Nissan/Infiniti Disability Plan, __ F.3d __ (9th Cir. June 24, 2010), the court rejected a plan... More

In the last several years, the scope of discovery in ERISA cases has been a point of contention between plaintiff and defense counsel.  Plaintiffs typically want free range to conduct discovery on any potentially relevant information addressing the conflict of interest issue while defense counsel would like discovery requests to be as narrow as possible.  Generally, discovery in ERISA cases is limited to what was before the plan administrator at the time the claim decision was made.  In other words, the administrative record.  However, in 2008, the Supreme Court in Metropolitan Life Ins. Co. v. Glenn, 554 U.S. 105 (2008)... More

For most insurance litigation, the majority of the evidence used by both sides comes from the claim file, also known as the administrative record in ERISA cases.  The claim file represents the insurance carrier’s written record of its handling and processing of an insurance claim.  Obviously, this information is highly relevant whenever coverage or a claim is disputed.  Moreover, in the case of life, health, or disability insurance cases, the claim file will also be full of personal and confidential information such as medical records and social security numbers.... More

As predicted in my April blog post, the U.S. Supreme Court today handed ERISA plan participants a big victory when they decided the important ERISA disability case of Hardt v. Reliance Standard Life Insurance, __ U.S. __ (Decided May 24, 2010) holding that an ERISA plan participant may be able to collect attorneys’ fees from a plan or claim administrator without obtaining a judgment in the action.  In that case, Bridget Hardt filed suit against the plan’s disability insurer, arguing that Reliance Standard Life Insurance Co. wrongly denied her claim for long-term disability benefits.  The district court found that Reliance’s... More

The federal courts have for a long time struggled with how to apply the deferential standard of review to actions taken by ERISA plan administrators in light of the United States Supreme Court holding in Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (1989).  Firestone held that an ERISA plan administrator with discretionary authority to interpret a plan is entitled to deference in exercising that discretion.  Courts have reached different results on an important issue: is a plan administrator that incorrectly interprets a plan document still entitled to an abuse of discretion standard of review when courts review... More

The U.S. Supreme Court heard oral arguments yesterday in the important ERISA disability case of Hardt v. Reliance Standard Life Insurance (09-448).  In that case, Bridget Hardt filed suit, arguing that Reliance Standard Life Insurance Co. wrongly denied her claim for long-term disability benefits.  The district court found that Reliance’s original decision denying benefits disregarded pertinent medical evidence in violation of ERISA and found that the decision was otherwise unsupported by substantial evidence. Based on those findings, the district court remanded the matter to Reliance for reconsideration, ordering it to make a new benefits determination, after which it finally granted... More

What happens when an ERISA plan provides for a certain level of benefits and the required summary plan description (“SPD”) given to plan participants provides for greater benefits?  The District Court for the Central District of California answered that question recently with its holding in Skinner v. Northrop Grumman Retirement Plan B, 2010 U.S. Dist. LEXIS 6591 (C.D. Cal. Jan 26, 2010).  In that case, the court held that former employees who received an inaccurate SPD were not entitled to increased retirement benefits as a result of the error.  In so ruling, the court determined that plaintiffs failed to demonstrate... More

Recently, in Montour v. Harford Life & Accident, 582 F.3d 933 (9th Cir. 2009), the Ninth Circuit Court of Appeals, in one of its most important cases, adopted a new standard of reviewing ERISA abuse of discretion cases where the insurer has a conflict of interest.  The court held that a “modicum of evidence in the record supporting the administrator’s decision will not alone suffice in the face of such a conflict, since this more traditional application of the abuse of discretion standard allowed no room for weighing the extent to which the administrator’s decision may have been motivated by... More

Can a plan participant sue for breach of fiduciary duty when his individual account is diminished by a failure of the administrator to follow his investment instructions? The U.S. Supreme Court answered this important question in the affirmative in James LaRue  v. DeWolff, Boberg & Associates Inc., 128 S. Ct. 1020 (2008).  LaRue filed an action under ERISA alleging that his employer (also the plan administrator) breached its fiduciary duty with regards to an ERISA-regulated 401(k) retirement savings plan by failing to follow his investment instructions.  Relying on the Supreme Court’s ruling in Massachusetts Mutual Life Insurance Co. v. Russell... More

The Ninth Circuit recently addressed, for the first time, whether the standard of review analysis for “top hat” ERISA plans is the same as for other ERISA plans.  In Sznewajs v. U.S. Bancorp Amended and Restated Supplemental Benefits Plan, 572  F.3d 727 (9th Cir. 2009), Franciene Sznewajs, the ex-wife of co-defendant Robert Sznewajs, challenged the Plan’s decision to treat Robert Sznewajs’ second wife, Virginia Sznewajs, as his surviving beneficiary. The Plan Administrator denied Franciene’s claim for benefits because it interpreted Robert’s “retirement” to have occurred when Robert started collecting benefits. Franciene argued that “retirement” meant the date of Robert’s termination of employment.... More

After the United States Supreme Court decided MetLife Ins. Co. v. Glenn in which the Court held that a reviewing court must consider the conflict of interest arising from the dual role of an insurer acting as a plan administrator and payor of plan benefits as a factor in determining whether the insurer abused its discretion in denying benefits, several courts have struggled with this standard.  The Ninth Circuit Court of Appeals clarified how courts within the Ninth Circuit will apply this standard in Montour v. Hartford Life & Accident, 582 F.3d 933 (9th Cir. 2009).  In Montour, the court... More

One of the most interesting questions in ERISA litigation is: What constitutes the administrative record for purposes of determining whether the administrator abused its discretion in making a claim determination?  Bartholomew v. Unum Life Ins. Co., 579 F. Supp. 2d 1339 (W.D. Wash. 2008) helped answer this question. Plaintiff, who sued to recover benefits under her long-term disability (LTD) plan, sought to expand the scope of discovery under ERISA by seeking documents outside the Administrative Record. Among others, the Plaintiff requested; “Details of compensation and financial incentives,” “revenue and profitability reports for the last 10 years,” and “[a]ny document discussing... More

In Marin General Hospital v. Modesto & Empire Traction Co., 581 F.3d 941 (9th Cir. 2009), the Ninth Circuit Court of Appeals held that section 502(a)(1)(B) of ERISA did not completely preempt state-law causes of actions for breach of contract, negligent misrepresentation, quantum meruit and estoppel brought by a hospital against a patient’s employer and its claims administrator based on an alleged oral agreement between the hospital and claims administrator to pay for services provided by the hospital. Because the claims could not be pursued under section 502(a)(1)(B), the Ninth Circuit concluded that the state-law claims were not preempted, depriving... More

On Monday October 19, 2009, Lisa Girion of the Los Angeles Times reported on the healthcare reform bills being debated in Congress and their potential impact on claim denials by insurers. Girion states that, “Despite growing frustration with the way health insurers deny medical treatments, major healthcare bills pending in Congress would give patients little new power to challenge those sometimes life-and-death decisions.” She further explains that “a patient's ability to fight insurers' coverage decisions could be more important than ever because Congress, in promoting cost containment and price competition, may actually add to the pressure on insurers to deny... More