ERISA and Life Insurance News

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Attorneys at Law

ERISA and Life Insurance News Covering ERISA and Life, Health and Disability Insurance Litigation

INSIDE THIS ISSUE Administrator Not Required to Consider SSDI Award Made Two Years after Claim Decision............................................................4 Pension Plan Equitably Estopped to Deny Claim for Increased Benefits..........................5 Three-Year Contractual Limitation Period Enforceable in ERISA Disability Benefits Case...................................................................6 Change of Beneficiary Was Effective, Despite Agent’s Failure to Submit Form to Insurer.......6 Plaintiff ’s Deposition May Be Taken in ERISA Case Subject to De Novo Standard of Review...............................................................7 Denial of LTD Benefits Held Unreasonable Because Administrator Ignored Evidence Favorable to Employee....................................8 “Scintilla of Evidence” Not Enough to Support Claim Denial; Award of Attorney’s Fees Upheld......................................................9 Plan Not Required to Consider Social Security Determination That Is “Devoid of Reasoning”......................................................10 Plan Administrator Not Required to Obtain Independent Vocational or Medical Evidence to Decide LTD Claim......................................11

DECEMBER 2010

Attorney’s Fees under ERISA: Supreme Court Rejects Prevailing Party Rule In Hardt v. Reliance Standard Life Insurance Company, 130 S. Ct. 2149 (2010), the Supreme Court directly addressed whether a “fee claimant” must be a “prevailing party” in order to seek attorney’s fees under ERISA’s fee provision, 29 U.S.C. § 1132(g). The Court rejected the “prevailing party” rule, which had been adopted by the Fourth Circuit and by a few other circuits, concluding that such a rule was “contrary to § 1132(g)(1)’s plain text.” Questions surviving the decision include the continuing viability of the five-factor test traditionally applied in ERISA attorney’s fees cases and the extent to which the decision will aid insurers and self-funded plans in their own claims to recover fees.

The Hardt Decision Hardt submitted a claim for disability benefits under her employer’s plan. Reliance paid Hardt’s claim during the 24-month “own occupation” period, but determined that she was not disabled from “any occupation.” After Hardt sued, the district court concluded that there was “compelling evidence” that she was eligible for additional benefits. Moreover, the court concluded that the case presented “‘one of those scenarios where the plan administrator has failed to comply with the ERISA guidelines,’ meaning ‘Ms. Hardt did not get the kind of review to which she was entitled . . . .’” The court did not rule in her favor, however, instead remanding the case to Reliance “to address the deficiencies in its approach.” The court instructed Reliance to consider “all the evidence” within 30 days or “judgment will be issued in favor of Ms. Hardt.” On remand, Reliance reversed its original decision and found that Hardt was entitled to “any occupation” benefits. Hardt then sought fees under § 1132(g)(1) and the court awarded fees, concluding that she was a “prevailing party,” because the remand order had “sanctioned a material change in the legal relationship of the parties.” The court also concluded that a fees award was appropriate under the traditional five factor test. The Fourth Circuit reversed, holding that Hardt was not


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