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http://www.americanconference.com/litigation/Litigating_Disability_Insurance_Claims.htm

Last year, Scott M. Riemer spoke at the 11th National Advanced Forum in Boston. The topic of his discussion at that conference was "Standard of Review in ERISA Litigation in Light of MetLife v. Glenn."

This decision is a valuable precedent because it provides a possible solution to the dilemma of being whipsawed between the insurance company and its consultants. When seeking documents, each entity claims that the other has the sole duty of producing the requested documents. In this case, the Court rejected Hartford's assertion that the documents held by its consultants, Medical Advisory Group and University Disability Consortium were outside Hartford's control. The Court ordered Hartford to use its influence with its consultants to obtain the requested documents. The Court held:

In these circumstances, Hartford is directed to cause the production of the requested materials that are in the hands of UDC and MAG. Should it fail to do so, and should plaintiff press the point, a hearing concerning the relationships between Hartford and each of these entities and the nature of Hartford's efforts to secure their cooperation could prove necessary.

The Award will be presented at the Chapter's Annual Meeting and dinner to be held at the New York Marriott Marquis Hotel on January 12, 2009.

For more information about the NYC Chapter of the National MS Society, please click here: http://www.nationalmssociety.org/chapters/NYN/index.aspx

For more information on the conference, please go to the ALI-ABA website: http://www.ali-aba.org/index.cfm?fuseaction=courses.course&course_code=CP620

1. Glenn describes a "combination-of-factors method of review" in order to determine whether a defendant has "abused its discretion." It does not describe the standard as the "arbitrary and capricious" standard of review. This represents a shift from the arbitrary and capricious standard of review, which has its basis in administrative law, to the abuse of discretion standard, which has its basis in trust law. This shift is important to claimants because trust law calls for much more scrutiny of a defendant's determination than administrative law.

2. Glenn establishes for the first time a priority of the competing goals and purposes of ERISA. Prior to Glenn, Courts have restricted discovery and judicial review on the grounds that extensive proceedings were inconsistent with ERISA's goals to: (a) avoid complex review proceedings; (b) avoid deterring employers from setting up benefit plans; and (c) allowing employers to administer their own plans. The Glenn Court held, "As to all three [of those goals] taken together, we believe them outweighed by Congress' desire to offer employees enhanced protection for their benefits." Courts will now focus more on protecting the rights of employees.

3. Glenn shifts the presumption that a tie goes to the defendant. Glenn holds that a defendant's conflict of interest could "act as a tiebreaker when the other factors are closely balanced." This is hugely important to claimants because in many of the cases that make it to litigation the other factors are closely balanced. Thus, instead of a victory in favor of defendant, Glenn supports a victory in favor of the claimant.

4. Glenn specified that there should be no "special burden-of-proof rules, or other special procedural or evidentiary rules, focused narrowly upon the evaluator/payor conflict." Prior to Glenn, the Courts established elaborate procedures for dealing with a defendant's conflict of interest. These rules often made it difficult for a claimant to present the insurer's conflict of interest as an issue in the case.

As a result of these paradigm shifts, the law will enter a period of uncertainty as the lower courts parse through what is still good law. Overall, however, Glenn appears to be very good news for claimants. Claimants will be provided with increased discovery and Courts will provide much closer scrutiny of insurance company determinations.

Glenn's focus on the insurer's conduct will be crucial in the average case that reaches litigation, where the record includes both evidence submitted by the claimant supporting disability and evidence procured by the insurer militating against disability. Under the de novo standard, the Court will weigh that evidence, with plaintiff having the burden of establishing disability by a “preponderance” of the evidence. When the evidence is evenly balanced, it is far from certain that the plaintiff will establish this burden.

Under the Glenn standard, however, the Court will take into account a conflicted insurer’s own conduct. As the Court states, “ERISA imposes higher-than-marketplace quality standards on insurers.” Accordingly, instead of evenly weighing the medical evidence and deciding whether the claimant satisfied his or her burden, the Glenn standard requires the Court to look at the insurer’s evidence with a degree of skepticism. To a judge with no medical background being asked to make a medical determination, this may tip the balance. In other words, when there is evidence on both sides (as there is in most cases in litigation), the insurer’s conflict will taint the insurer’s evidence and thereby serve as a tiebreaker in favor of the claimant.

On June 19, 2008, the Supreme Court issued its long awaited decision in MetLife v. Glenn. The Supreme Court held that Courts must consider an insurer's conflict of interest as one of the factors when deciding whether an insurer's determination was an abuse of discretion. Most importantly, the Supreme Court established that the conflict of interest may serve as a tiebreaker when the other factors are closely balanced. As a practical matter, this could have a huge impact. Prior to MetLife v. Glenn, close cases usually were decided in favor of the insurance company. Now, the opposite may prove true. Stay tuned. The next few years of litigation will be quite interesting.

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Last year, Scott M. Riemer spoke at the 10th National Advanced Forum in Boston. The topic of his discussion at that conference was ""Developments in ERISA Claims Handling and Litigation."

MetLife v. Glenn is a potentially landmark case, which will address how much deference, if any, a court should give the determination of an insurance company that has an inherent conflict of interest, i.e., when the insurance company both decides claims and pays benefits.

The Chapter's brief argues that Article III of the Constitution requires that Ms. Glenn receive a de novo plenary proceeding; that granting any level of deference to the determination of a conflicted insurance company would constitute an unconstitutional relegation of judicial power.

A copy of the brief could be obtained by clicking here. Download file

This new relief will help fully compensate plaintiffs when insurance companies improperly deny their claim for benefits. It will also help deter insurance companies from inappropriately denying meritorious insurance claims in the first place.

On January 18, 2008, the Supreme Court agreed to decide whether the arbitrary and capricious standard of review should be tempered or abandoned if the insurance company both decides the claim and pays the benefits. Right now, the Circuit Courts of Appeal have widely different standards. In the Second Circuit, where we practice, such a conflict has no impact on the standard of review. The standard of review is only switched if a plaintiff can demonstrate that the insurance company's conflict of interest in fact influenced the claim determination. Because that is extremely difficult to establish, no plaintiff has ever been able to switch the standard of review based on a conflict of interest. In other Circuits, such as the Third Circuit, the Court will apply a heightened standard of review in the event of an inherent conflict. In Glenn v. MetLife, the Sixth Circuit held that the District Court committed reversible error because it failed to take into account that MetLife was both decider and payor of the claim.

Given the existing standard in the Second Circuit, we are cautiously optimistic that no matter how the Supreme Court decides MetLife v. Glenn, plaintiffs within the Second Circuit will benefit.

At the workshop, I focussed on the top ten sleezy practices of disability insurance companies. They are:
1. Losing your documents.
2. Misrepresenting conversations with your doctor.
3. Cherrypicking your medical records.
4. Requesting Functional Capacity Evaluations that have no scientific validity.
5. Insisting on objective evidence of pain and fatigue.
6. Evaluating your claim solely on the basis of a "peer review."
7. Characterizing your occupation as sedentary and ignoring its cognitive demands.
8. Moving the goal posts.
9. Putting a wedge between you and your doctor.
10. Pressuring an insured to take a low lump sum settlement.

For more information on the sleezy practices of insurance companies, please see the obtaining benefits section of our website.

Insurance companies make money by collecting premiums, not by paying out benefits. Disability insurers are every bit as bad as the HMOs described in Michael Moore’s recent movie “Sicko.” They do everything they can to reduce the amount of benefits they must pay. One common tactic is to lull claimants into feeling safe and secure by assuring claimants that they are there to help—as if they were part of the team assigned to get the claimant through this difficult time.

What should you do? Be courteous and cooperative, but also be careful. Nothing you say is off the record. Everything you tell the case manager will be evaluated, i.e. could it help support a denial of your claim.

Because what you tell the case manager is so important, think about what you are going to say before each time you speak with case manager. If you are called at a bad time, ask the case manager to call you back when you had an opportunity to better gather your thoughts.

For more information on applications for long term disability benefits, please see the obtaining benefits section of our website.

If you fall into the trap of describing a "typical" day, the insurance company will often assume that that is what you could do on all of your days. Making matters worse, it has been our experience that most claimants who describe their "typical" day unwittingly describe what they could do on one of their "better" days. The insurance company is therefore not provided with any information on your symptoms on your "bad" days. This understates your claim, making it less likely that you will obtain disability benefits.

For more information on applications for long term disability benefits, please see the obtaining benefits section of our website.

Recognizing the unfairness of the law, Congresswoman McCarthy has introduced House Resolution 2622. HR2622 would tell federal judges to look at the evidence "de novo." This means that the federal judge will be able to look at the case fairly, and not to give insurance companies an unfair advantage.

This Bill needs all the support it can get because the lobbying machine of all the insurance companies is working full time to defeat it. Click here to see a copy of the Bill: http://thomas.loc.gov/cgi-bin/query/z?c110:H.R.2622:

What can you do? You can write your Congressman or Congresswoman to express your support. You could explain how you have been unfairly treated when you or a family member submitted your long term disability claim. It is very helpful for Congress to see specific examples of how the existing law treats individuals unfairly.

To find out the name and contact information of your Congressman or Congresswoman, please click here: http://www.house.gov/writerep/