Mark is unimpressed with Murphy. Particularly galling to him is the administrative law framework the Tenth Circuit utilizes in analyzing the issue. In fact, nothing in ERISA's language or legislative history allows courts to provide anything less than plenary review of a denied ERISA benefit claim. In other words, there is no justification for the idea that the court is "reviewing" anything. Rather, participants and beneficiaries are entitled under the statute and the Federal Rules of Civil Procedure to present their cases at trial, examine witnesses and documents and present their cases under a de novo standard of review in the same way other civil litigation is handled. Rules 1, 2 and 81 of the Federal Rules of Civil Procedure require no less.
The Tenth Circuit is not alone in asserting that it is restricted to reviewing the pre-litigation appeal record. Many courts, including the Supreme Court, have cited ERISA's legislative history for the idea that a truncated review in litigation of ERISA benefit denial cases is necessary. The oft repeated language in legislative history for this argument is Senate Report No. 93-383, at 1179 (1973) reprinted in 1974 U.S.C.C.A.N. 4639, 5000. In that transcript is language to the effect that ERISA was enacted to provide "a method for workers and beneficiaries to resolve disputes over benefits inexpensively and expeditiously." Murphy and many other cases quote this purported legislative history to support the idea that Congress did not intend to provide participants and beneficiaries with full blown trials in federal court.
But here's the problem: this language in the legislative history relates to an early version of ERISA containing a provision to allow claimants to pursue administrative proceedings or arbitration before the Department of Labor. That procedure was later dropped from the statute. Thus, the language which has provided a significant part of the rationale for treating ERISA benefit recovery claims like administrative review proceedings is inapplicable to ERISA as it was actually enacted. It never should have been, and should not continue to be, quoted as support for the bogus argument that federal judges may only review what insurers, acting as quasi-judicial bodies, have decided. In addition, 29 U.S.C. Sec. 1133, ERISA's claims procedure provision, does not allow for discovery or provide any protection for the evidentiary integrity of what ends up being placed in the "administrative appeal record" as insurers and other ERISA plan fiduciaries are fond of calling their claims files. Under these circumstances, it is necessary for ERISA claimants to obtain plenary review before a federal district court judge of all claims involving benefit denials.
Every ERISA claimant lawyer in the country complains about the gross inequity that is the process through which individuals have to adjudicate their claims in federal court. ERISA sets up a a remarkably unfair playing field for claimants. Quoting Mark, "there is no justifiable public policy rationale for giving an insurance company deference; and claimants for benefits should be entitled to a fair, even-handed opportunity to prove their claims to a court with all of the tools that any other civil litigant possesses."
Amen to that brother.
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