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The Wagner Law Group

The Wagner Law Group is a nationally recognized practice in the areas of ERISA and employee benefits, estate planning, employment, labor and human resources and investment management.

 

Established in 1996, The Wagner Law Group is dedicated to the highest standards of integrity, excellence and thought leadership and is considered to be amongst the nation's premier ERISA and employee benefits law firms. The firm has seven offices across the country, providing unparalleled legal advice to its clients, including large, small and nonprofit corporations as well as individuals and government entities worldwide. The Wagner Law Group's 32 attorneys, senior benefits consultant and five paralegals combine many years of experience in their fields of practice with a variety of backgrounds. Seven of the attorneys are AV-rated by Martindale-Hubbell and six are Fellows of the American College of Employee Benefits Counsel, an invitation-only organization of nationally recognized employee benefits lawyers.  Seven of the firm's attorneys have been named to the prestigious Super Lawyers list for 2017, which highlights outstanding lawyers based on a rigorous selection process.

 

 

 

Contact Info

The Wagner Law Group

 

  Integrity | Excellence

  

Boston 

Tel: (617) 357-5200 

Fax: (617) 357-5250 

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Boston, MA 02110

 

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Tel: (202) 969-2800

 

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Tel: (314) 236-0065

Fax: (314) 236-5743
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www.wagnerlawgroup.com

 

 

 

 Fifth Circuit Adopts Standard of Review for ERISA Benefit Denial Claims

  

March 22, 2018

 

 

 

The Fifth Circuit Court of Appeals, in Ariana v. Humana Health Plan of Texas, has held that the "de novo" standard of review applies to ERISA denial of benefits claims involving challenges to a legal interpretation of plan provisions and factual determinations about benefit claims unless the plan administrator has been granted discretionary authority.

 

Law. In Firestone Tire & Rubber Co. v. Bruch, the Supreme Court held that if an ERISA plan does not delegate discretionary authority to the plan's administrator to interpret plan provisions, a denial of benefits claims based on these provisions is to be reviewed under a de novo standard. The Court further clarified that where a plan had delegated authority to the administrator, the decision must be reviewed under the heightened "arbitrary and capricious" standard.

 

Following Firestone, the majority of circuit courts of appeals have held that, in cases where a plan has not delegated discretionary authority to its plan administrator, the de novo standard of review applies to both challenges to the legal interpretation of a plan and the administrator's factual conclusions.

 

An arbitrary and capricious standard of review means that the plan's decision will only be overturned by the court if it is "without reason, unsupported by substantial evidence or erroneous as a matter of law." By contrast, a de novo review means that a court will independently review a claim and not defer to the plan administrator's, or insurer's, decision.

 

Background. In Ariana, the plaintiff filed a lawsuit against the defendant to challenge its decision to discontinue coverage of inpatient treatment for an eating disorder after two experts said she was no longer a danger to herself. After reviewing the claim using the abuse of discretion standard, the district court ruled in favor of the defendant. In turn, the plaintiff appealed the decision to the Fifth Circuit.

 

Fifth Circuit. The Fifth Circuit first reviewed the Firestone holding and, this time, determined that the decision provided a general standard of review for both legal interpretations of plan language and factual findings. It further acknowledged that subsequent Supreme Court decisions did not limit the de novo standard of review to legal interpretations of plan terms. Finally, the court observed that its past reasoning for declining to apply the de novo standard when reviewing a plan administrator's factual determination (i.e., doing so would deplete plan funds and overrun courts) had not come to fruition in the other circuits that applied a uniform standard of review. Accordingly, the Fifth Circuit reversed its long-standing precedent of using the abuse of discretion standard to review a plan administrator's factual determination and ruled that the de novo standard of review should be used when discretionary authority is not granted.

 

Employer takeaway. In the wake of Ariana, all circuit courts of appeals now apply the de novo standard of review, in the context of ERISA benefit denial claims, to both legal interpretation of plan documents and factual determinations made by a plan administrator when discretionary authority is not granted through plan provisions.

 

 

 

 

 

 

 

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This Newsletter is provided for information purposes by The Wagner Law Group to clients and others who may be interested in the subject matter, and may not be relied upon as specific legal advice.  This material is not to be construed as legal advice or legal opinions on specific facts. Under the Rules of the Supreme Judicial Court of Massachusetts, this material may be considered advertising.