May 24, 2018
The U. S. Court of Appeals for the Sixth Circuit has issued a number of encouraging decisions recently, at least from the perspective of plaintiffs’ lawyers. And really, what other perspective matters? Evans v. UNUMProvident Corp., 434 F.3d 866 (6th Circuit 2006) deals with a denied disability claim being reviewed under an arbitrary and capricious standard of review. This is the most deferential review courts provide when asked to take a look at the decisions ERISA plans and their insurers and fiduciaries make. Despite such significant deference, the decision reverses the denial and orders payment of benefits.
There are many good bits of language and analysis in the court's ruling. For example, the court states that even though an insurer's denial will be sustained unless it is arbitrary and capricious, "it is not, however, without some teeth. . . merely because our review must be deferential does not mean our review must be inconsequential. . . the federal courts do not sit in review of the administrator's decision only for the purpose of rubber stamping those decisions."
The decision then refers to the inherent conflict of interest UNUMProvident has in acting both as the ERISA fiduciary obligated to make decisions solely in the interest of ERISA participants and for the exclusive purpose of providing them benefits while at the same time acting as a profit making company that incurs a direct expense as a result of any decision it makes to pay benefits. After reviewing various legal principles from prior Sixth Circuit decisions, the court applies them to the facts of the case to conclude, 1) the insurer unreasonably discounted the opinions of the applicant's treating physicians that the applicant was disabled, 2) the insurer improperly focused on the relatively non-taxing physical demands of the applicant's job while ignoring the more significant mental and emotional demands of the job, and 3) the internal communications of the insurer made it clear that, as the court puts it, "the defendant's conflict of interest unduly influenced its evaluation of plaintiff's claim."
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