A United States District Court Denies Plaintiff’s
Claim that Insurer Violated ERISA in
Denying Long-Term Disability Benefits

            Plaintiff alleged that Unum and Jostens improperly denied her long-term disability benefits in violation of the Employee Retirement Income Security Act of 1974 (“ERISA”).   Plaintiff sought to recover benefits for neck and back pain stemming from a 1980 motor vehicle accident.   Unum denied plaintiff’s request for benefits and affirmed the denial of benefits upon appeal and reappeal, citing the opinion of its consulting orthopedic surgeon, who based his opinion on a review of plaintiff’s medical records.

            The federal District Court for the Eastern District of New York (Trager, J.) held that judicial review of a decision to deny ERISA benefits must be de novo “unless the benefit plan gives the administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe the terms of the plan.”   If the administrator does have such discretion under the plan, a court may reverse the administrator’s decision only if it is arbitrary and capricious.   Plaintiff did not contest here that Unum had discretion under the plan to determine benefit eligibility and, therefore, the arbitrary and capricious standard applied.

            The court held as follows:

            1. Unum was not arbitrary and capricious in concluding that plaintiff’s physical limitation did not prevent her from performing her regular occupation;

            2. The case should be remanded to Unum for reconsideration of whether plaintiff’s occupation as it is performed in the national economy is sedentary, light, or some other category of work, in accordance with the plan and the opinion;

            3. A plan’s finding is not arbitrary and capricious simply because it differs from that of the Social Security Administration;

            4.  There was no ambiguity in the plan language regarding the term “national economy”;

            5.  Plaintiff’s affidavit, which was outside the administrative record, could not be considered by the court.

            6.  ERISA pre-empts state law claims that “relate to” employee benefit plans.   Courts interpret this pre-emption broadly.   Since all of plaintiff’s state law claims related to denial of her benefits under an ERISA plan and are, therefore, subsumed by ERISA.