Liberalizing Discovery in ERISA Disability Insurance Cases

Publication Source: New York Law Journal

Long-term disability insurance provided by employers and governed by the Employee Retirement Income Security Act of 1974, 29 U.S.C. §1001 et seq., has been fertile ground for litigation. Insofar as ERISA preempts any and all state laws "as they may now or hereafter relate to" an employer-sponsored disability insurance plan, a separate body of federal law exclusively governs all issues concerning such disability insurance claims. See 29 U.S.C. §§1144(a) & 1144(c)(1).

Among the heavily litigated issues is what standard of review the courts must undertake in determining whether the disability insurance plan administrator has properly denied benefits: de novo review or the more limited "abuse of discretion" standard. See Firestone Tire & Rubber Company v. Bruch, 489 U.S. 101, 115 (1989) (a de novo review is undertaken "unless the benefit plan gives the administrator . . . discretionary authority to determine eligibility for benefits").

In determining whether the plan in question contains the required language, the U.S. Court of Appeals for the Second Circuit has held there are no "magic words" that confer discretionary authority on the plan administrator as a matter of law, leaving the courts to address this issue on a case-by-case basis. See Kinstler v. First Reliance Standard Life Insurance Co., 181 F.3d 243, 251 (1999).

Another significant issue is whether the court may admit evidence beyond the materials or information considered by the plan administrator in reviewing the disability insurance claim (referred to as the "administrative record"). In the Second Circuit, district courts have discretion to admit evidence outside the administrative record upon a finding of "good cause." DeFelice v. American Intern. Life Assur. Co. of New York, 112 F.3d 61, 66 (1997).

Read the full article in the attached PDF.

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Kevin Schlosser is a Shareholder at Meyer, Suozzi, English & Klein, P.C., where he is Chair of the Litigation and Alternative Dispute Resolution Department which has a full roster of available private judges from virtually all disciplines of law. Mr. Schlosser also authors the popular blog, “New York Fraud Claims,” which analyzes the latest developments concerning civil fraud claims under New York law.

Reprinted with permission by the New York Law Journal.