The Supreme Court recently denied review in the matter of Martinez-Claib v. Bus. Men’s Assurance Co. of Am., U.S., No. 12-1403, cert. denied 11/4/13. This case arose from the Eleventh Circuit Court of Appeals (the federal court with appellate jurisdiction over the district courts in Alabama, Florida, and Georgia). Martinez-Claib involved a claim for long-term disability (“LTD”) benefits under the Employee Retirement Income Security Act of 1974 (“ERISA”). The plan administrator for the LTD plan denied Ms. Martinez-Claib’s claim for benefits in November 2004, based on the rationale that her coverage under the plan did not become effective until after she became disabled. The administrator also reasoned that Ms. Martinez-Claib’s last day of work was after the date on which her employer canceled its insurance policy which funded the LTD benefits.
The U.S. District Court for the Middle District of Florida ruled in favor of the plan administrator. The district court found that Ms. Martinez-Claib’s LTD claim was time-barred because she failed to submit her claim within the time frame established by the plan. This reason was not put forth by the administrator at the time that it denied her claim for benefits. Ms. Martinez-Claib appealed to the U.S. Court of Appeals for the Eleventh Circuit, arguing that the district court should not have considered the administrator’s timeliness argument because it did not raise that argument in its letter denying her claim.
The Eleventh Circuit affirmed the district court’s ruling in favor of the administrator. The Eleventh Circuit found that it was not improper for the district court to consider this “post-hoc” argument, because it was engaged in a de novo-rather than abuse-of-discretion-review of the plan administrator’s decision. De novo review generally applies to a court’s review of an ERISA benefit claim denial where the plan documents governing the terms of the benefits do not grant “discretionary authority” to the decision-maker.
In her petition to the Supreme Court, Ms. Martinez-Claib asked the high court whether 1) ERISA’s statutory and regulatory requirements limit the grounds on which an administrator may defend a benefits action to the reasons it timely communicated to the claimant; 2) whether the plan’s own requirements limit the grounds on which an administrator may defend a benefits action to the reasons it timely communicated to the claimant; and 3) when a plan administrator, having knowledge of grounds for claim denial, fails to communicate them to a claimant when it denies a claim, whether waiver principles preclude it from defending a benefits action based on those undisclosed grounds.
A denial of certiorari does not mean that the Supreme Court affirms a Circuit Court’s decision and that it is the law of the land. Fortunately, for our clients, whose cases are filed in the Ninth Circuit Court of Appeals, administrators’ post-hoc rationales are prohibited in all cases, de novo and deferential alike. See Harlick v. Blue Shield of Cal., 686 F.3d 699, 719-720 (9th Cir. 2012) (cert. den.,133 S.Ct 1492 (2013)) (deferential analysis), Hyder v.Kemper Nat’l Services, Inc., 302 Fed.Appx. 731, 733 (9th Cir. 2008) (de novo analysis).
When presented with a claim denial, the attorneys at Kantor & Kantor LLP review the record beyond the reasons put forward by an administrator to ensure that our clients’ disability claim is fully supported by the record on appeal. Given the importance of your LTD claim record before an administrator’s final denial of your claim, we recommend that you contact us as soon as you receive a written denial of your claim for benefits.