The U.S. Court of Appeals for the Seventh Circuit says yes. Take a look at Diaz v. Prudential Ins. Co. of America, ___ F.3d ___, 2007 U.S. App. LEXIS 20067 (7th Cir. 2007), decided yesterday. You can find it here in the website library. Hugo Diaz had a disability claim that the court had previously determined needed to be considered under a de novo, rather than deferential, standard of review. The trial court granted Prudential's motion for summary judgment, ruling that there were no genuine issues of material fact about whether Diaz was not disabled under the terms of the insurance policy and that Prudential was entitled to judgment in its favor as a matter of law. Diaz appealed and the Seventh Circuit reversed. It ruled that Diaz had clearly presented facts to create a genuine issue about whether he was disabled under the policy terms and that "the time has come to try this case . . .." If that were all the court said, I would still feel comfortable that the Seventh Circuit had no intention of changing the well-established framework of dealing with ERISA benefit denial cases by reviewing the pre-litigation record compiled by the parties as part of the requirement that ERISA claimants exhaust their appeals to the plan and its administrator(s) before bringing suit. In short, there are many, many cases across the country indicating that it doesn't matter whether the standard of review in litigation is de novo or deferential under an abuse of discretion standard: the scope of review for the court will be limited to the facts and arguments the parties presented in the pre-litigation appeal process. See, for example, Hall v. UNUM, 300 F.3d 1197 (10th Cir. 2002) (dealing with a de novo standard of review). But Diaz states quite clearly that this is the wrong model. The court states: ". . . in these cases [de novo review of ERISA benefit claims] the district courts are not reviewing anything; they are making an independent decision about the employee's entitlement to benefits. In the administrative arena, the court normally will be required to defer to the agency's findings of fact; when de novo consideration is appropriate in an ERISA case, in contrast, the court can and must come to an independent decision on both the legal and factual issues that form the basis of the claim. What happened before the plan administrator or ERISA fiduciary is irrelevant" (emphasis in original). Thus, the court's ruling contemplates a full blown trial. De novo review ERISA cases in the Seventh Circuit will now involve discovery, evidentiary issues, presentation of documents, the need for the court to evaluate the credibility of witnesses, etc. I have mixed feelings about this. If such a rule was in place in the Tenth Circuit where I regularly practice, it would undoubtedly make some cases easier to get resolved because both parties would see that the additional cost of discovery and a trial would pressure settlements that don't occur right now. On the other hand, some cases that, for various reasons, now involve the parties presenting cross motions for summary judgment and the court coming down on one side or the other will end up being tried. There will be more cost and time expended in the discovery and trial process with attendant stress to all concerned. But I also believe that hearing all the evidence and witnesses at trial will more likely produce fair and just results. Make no mistake: Diaz is quite a sea change.