A final note about the recent Tenth Circuit decision, Geddes v. United Staffing Alliance Employee Med. Plan, 2006 U.S. App. LEXIS 28249 (10th Cir. 2006). I’ve commented on it earlier here and here. Because I do the majority of my work within the Tenth Circuit, the decision has a greater impact on my own practice than decisions from other Circuits. But there are other reasons to revisit it. The decision is important precedent for the states in the Tenth Circuit and, with regard to its standard of review analysis, is at odds with every other Circuit court decision of which I’m aware. Geddes involves an ERISA plan fiduciary delegating its discretionary authority to a non-fiduciary. The third party claims administrator, ostensibly acting as a ministerial agent, then processed the claim, denied the claim and affirmed the appeal of the denial all without any input from the fiduciary. The majority held this lack of involvement by the named fiduciary, the entity entitled to discretion to decide claims under the plan document, did not divest the court of the obligation to defer to the decision. The Tenth Circuit ruled that the trial judge could overturn the denial only if it was arbitrary and capricious. The majority opinion goes astray in part because it fails to take any notice of 29 U.S.C. §1133, ERISA’s claims procedure section. Under that section of the statute, all denied claims that are appealed must be given a “full and fair review by the appropriate named fiduciary” of the ERISA plan. Despite the fact that this section of the statute is the most explicit statement in ERISA about who must review and decide an appeal of a denied ERISA claim, neither the majority nor the dissenting opinions in Geddes reference it. This is especially troubling because the majority in Geddes says it does not matter whether Everest, the non-fiduciary who handled both the initial processing and consideration of the appeal of the claim, was a fiduciary or not. The court accepts the stipulation of all parties that Everest acted only as a ministerial agent, not as a fiduciary. If that is true, how did the plan and its named fiduciary, United Staffing Alliance, satisfy the requirements of §1133? The majority’s statement that it doesn’t matter whether a fiduciary or ministerial agent of a fiduciary carries out ERISA’s mandated “full and fair review” process is directly at odds with the language of the statute. In fact, Everest was pretty clearly a "functional" fiduciary under ERISA's definitions but it was not the "appropriate named fiduciary" as required under Section 1133. The language of Section 1133 goes a long way towards undermining the majority's "agent of the fiduciary is just as good as the fiduciary" analysis. Consequently, it appears more clear than ever that the dissent in the opinion has the better end of this argument. I’m tempted to put Geddes in the “misses” section of the website library but the case also contains an excellent analysis of an issue involving what are usual and customary charges for medical expenses.