7 Trial Lawyer • Spring 2023 See Employee Benefit Claims p 8 governed by the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001, et seq. ERISA governs most private employer-sponsored definedbenefit plans, defined-contribution plans, such as 401(k) plans, 403(b) plans, employee stock ownership plans (ESOPs) and profit-sharing plans, and privatesector health plans, including health maintenance organization (HMO) plans, flexible spending accounts (FSAs), disability plans, and life insurance plans. While a claimant who had purchased an individual disability insurance policy would have the rights Liz thought she had, Liz’s rights and potential remedies were extremely limited under ERISA: • Her case would be decided based upon the parties’ motions, which would argue the “cold record,” consisting of all documents obtained, produced and generated during the claim review process. There would be no testimony, by Liz or her doctors, family members or colleagues, supporting her claim. Nor would the important earlier medical records be reviewed by the court. • There would be no jury trial. See, Thomas v. Or. Fruit Prods. Co., 228 F.3d 991, 996 (9th Cir. 2000) (“[P]lan participants and beneficiaries are not entitled to jury trials for claims brought under, or preempted by, section 502 of ERISA.”). • If her case were to be successful, Liz probably would recover no more than the monthly benefits through the date of judgment, minimal interest and attorney fees and costs incurred in litigation. ERISA preemption would bar any threat of a bad faith claim, extracontractual damages and other claims. If the denial decision were overturned, she would be back to “dealing with the devil,” having to provide proof of her continuing disability for the life of her claim. Adequately established disability Even worse, because Liz’s disability coverage was through a self-funded plan that included a provision delegating to the claims administrator the “discretionary authority to make all benefit decisions and interpret the terms of the plan,” the denial decision would be reviewed under the abuse of discretion standard of review. “Under this deferential standard, [the] plan administrator's decision ‘[would] not be disturbed if reasonable.’” Stephan v. Unum Life Ins. Co. of Am., 697 F.3d 917 (9th Cir. 2012) (quoting Conkright v. Frommert, 130 S. Ct. 1640, 1651 (2010) (internal quotation marks omitted in Stephan). Had Liz’s disability coverage been provided through an insurance policy issued in Oregon, judicial review would have been under the de novo standard, where “the court does not give deference to the claim administrator’s decision, but rather determines in the first instance if the claimant has adequately established that he or she is disabled under the terms of the plan.” Muniz v. Amec Constr. Mgmt., Inc., 623 F.3d 1290, 1295-96 (9th Cir. 2010). While Oregon, like about half the states, has since 2015 banned so-called discretionary clauses, see OAR 836-010-0026, because Liz’s disability coverage was not provided through an insurance policy, it was not subject to the insurance code. Therefore, the discretionary clause was not barred. Liz was facing a serious uphill battle. I recognized based upon our discussion that her claim might not be viable for litigation. I offered to obtain and review the claim file, which she authorized. The claim file, provided by the plan administrator (see, 29 CFR § 2560.5031(h)(2)(iii), (m)(8)), was a bit of a mixed bag and was weak overall. The recent medical records, going back a year before her disability, documented Liz’s symptoms and summarized her long history of treatment for chronic back pain and the car collision. Her employer had noted on the administrator’s disability claim form that Liz had been a “valuable expert and employee” and that “disability/pain was very obvious.” Among the most helpful documents were notes by the claim manager documenting Liz’s suggestions that the manager request prior medical records that “document a long history of back pain, treatment and prior MVA,” coupled with two form letters issued by the administrator, assuring Liz, “we will use your medical authorization to request all needed medical records.” The claim file showed the administrator had pushed back against Liz’s efforts Thank You to members of the OTLA Publications Committee Blaine Clooten Shannon Conley Kyle Dukelow Marilyn Heiken Barb Long Shangar Meman Faith Morse Matt Rizzo Tim Walsh Rob Wilkinson For your hard work throughout the year to bring us the fine content of this and every issue of Trial Lawyer magazine.
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