ERISA Litigation: A Primer

Clients and lawyers alike are often surprised to learn that when ERISA litigation is successful, and a plan administrator’s decision is overturned by a court as arbitrary and capricious, the court “may either remand the case to the plan administrator for a renewed evaluation of the claimant’s case or . . . may order an award of benefits.” Flinders v. Workforce Stabilization Plan, 491 F.3d 1180 (10th Cir. 2007). According to this 10th Circuit Court of Appeals decision, if the plan administrator (often an insurance company) failed to make adequate factual findings or failed to adequately explain the grounds for the decision, then the proper remedy is to remand the case to the administrator (insurance company) for further findings or additional explanation. The judge makes the decision to either remand the case or to issue an award of benefits. If the judge remands the case, the claimant will have technically won the case without having actually obtaining a recovery. In this circumstance, the case/claim is simply remanded back to the insurance company which has another opportunity to better explain its denial. In our opinion, remanding the case back to the insurance company with a road map on how to better deny the claim the second time around is an injustice and entirely inconsistent with the consumer protections intended by the ERISA laws.

In the most recent decision from a Federal District Court Judge for the District of Colorado addressing this issue, a remand was the order of the day. In Hidalgo v. Comcast the the judge found that the rationale given by Broadspire (the designated claims administrator) to deny benefits was “unreasonable, not supported by substantial evidence, and did not appear to be based on a fair reading of the plan’s definitions for disability.” Ms. Hidalgo suffered from osteoarthritis, fibromyalgia, schleroderma and Raynauds Disease. The court found that there were “objective” medical findings, that Broadspire’s decision to reject the treating physician’s opinion was improper, that fibromyalgia is diagnosed entirely on the basis of patient’s reports and other symptoms, that while deference to a treating physician’s opinion is not required, it cannot be improperly discounted or ignored by the administrator, and that Broadspire failed to properly evaluate the effect of Plaintiff’s pain and fatigue on her ability to work. Despite these findings by the court, the judge decided not to award Ms. Hidalgo her past due disability benefits and instead remanded the case to Broadspire (Comcast) to conduct a proper review based on the language of the plan. I am quite sure Ms. Hidalgo was expecting a different outcome, namely the receipt of disability benefits and not further delay, when she “won” her case.

The issue of a remand of a successful lawsuit is another example of the issues unique to ERISA long-term disability claim litigation. Read more about ERISA claims here. As always, you can find a capable Colorado ERISA attorney to assist you at The Law Office of Shawn E. McDermott in any way concerning your ERISA long-term disability claim, administrative appeal or litigation.

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