Anatomy — continued from Previous Page
The profit-making motive of the car-
riers has created another issue in ERISA litigation, mitigating the judicially-created rules regarding discovery, deference and trial evidence. That is, the courts have now recognized that administrators/fidu- ciaries that both render claim decisions and pay benefit claims with their own funds have a structural “conflict of inter- est” which merits further scrutiny by the trial court. (Abatie, 458 F.3d at pp. 965- 966.) As a result, a rule has developed that where, as is often the case, the claims administrator has a financial interest in the claims decision, i.e., an insurance company, an ERISA plaintiff may be per- mitted, at the discretion of the trial court, to submit evidence outside of the claim file on the issue of whether the insurer’s
decision was influenced by its financial interest in the case. (Id. at p. 970.) This is frequently termed as “conflict
of interest” evidence. In recent years, trial courts have also allowed limited discovery that is directed to showing that the insur- ance company acted in a biased manner. This may include evidence that the insurer did not comply with its claim procedures, utilized biased physicians to review the claim, etc. Finally, if the plaintiff’s evidence demonstrates that the carrier’s conflict of interest substantially infiltrated the claim process, or “tainted the claim” decision, the district court is to include this factor in its decision and reduce the deference it pro- vides to the carrier’s claim decision. (Ibid., and Montour v. Hartford Acc. & Life Ins. Co. (9thCir., 2009) 588 F.3d 623, 630-631.)
Legal Nurse
With the confusing statute and judi-
cially-created rules and exceptions to those rules, it is understandable why gen- eral practitioners shy away from dabbling in ERISA cases. There may be some ERISA cases that actually fulfill the stated goal of an expeditious process to recover benefits. However, in our experience, the above-stated rules inject substantial com- plexity into what should be a simple process to determine whether an employ- ee’s benefits were improperly denied by an insurance carrier. An example of the potential complexity of one of these cases can be seen in a case that was recently tried in the Central District of California.
The case
• The nature of the dispute The plaintiff was diagnosed with mul-
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tiple sclerosis in 1988. Despite her diagno- sis, she continued to work in a demand- ing occupation – a managing attorney for a Fortune 500 Company. In 2005, plain- tiff’s symptoms deteriorated to the point where she could not longer perform her job, and she filed a claim for disability benefits under her employer-provided insurance plan. Her claim was approved for 23
months. In May, 2008, based upon surveil- lance conducted by the insurer and the opinion of an insurer retained physician who reviewed plaintiff’s file for one hour (as opposed to personally examining the insured), the carrier terminated her bene- fits. Plaintiff “appealed” the decision to the insurance carrier, who retained anoth- er medical reviewing firm to review her file and upheld the decision to terminate benefits. Plaintiff’s request to be exam- ined by the insurer’s doctors was refused. Although the insurer retained an attorney to advocate plaintiff’s disability to the Social Security Administration, it refused to consider that award as evidence of her disability. After unsuccessfully appealing to the
insurance carrier, plaintiff filed an action in the federal court to recover her bene- fits and, if successful, an award for her attorneys’ fees. The case was mediated early and it was determined that the case would not settle. Therefore, the case
58— The Advocate Magazine JUNE 2011
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