In Johnson v. United of Omaha Life Ins. Co., 775 F.3d 983 (8th Cir. 2014), the court determined that the district court erroneously reviewed the administrator’s determination under the de novo standard, instead of the arbitrary and capricious standard. It ruled that it did not need to decide whether procedural irregularities still could result in a change of the standard of review.
First, the court noted that, under its precedent pre-dating Met Life v. Glenn by a decade, de novo review might apply even when the administrator has discretionary authority, when a serious procedural irregularity caused a serious breach of the plan administrator’s fiduciary duty. The court noted that its precedent was “partially abrogated” by Glenn, but stated that “[o]ur circuit has not definitively resolved the impact of Glenn on the ‘procedural irregularity component of the Woo sliding scale approach.’” The court determined that it still was not necessary to resolve this issue, because there the plaintiff failed to establish that any procedural irregularities existed.
For a procedural irregularity to change the standard of review, it must leave “the court with serious doubts as to whether the result reached was the product of an arbitrary decision or the plan administrator’s whim.” The district court found the procedural irregularities to include “lost or misplaced medical records, fail[ure] to timely process the claims, fail[ure] to resubmit additional evidence to a physician for review, and generally [giving] Johnson and her counsel ‘the run-around.” The Eighth Circuit found, however, that “[t]hese alleged procedural irregularities would not have changed the outcome, nor do the alleged irregularities ‘trigger a total lack of faith in the integrity of the decision making process.’” … Therefore, we reject the district court’s finding of procedural irregularities.”
The court also held that a grant of discretionary authority in an SPD is sufficient to require arbitrary and capricious review when the SPD is incorporated into the plan.
Having determined that the district court applied the wrong standard of review, the court quickly found that the administrative determination was reasonable, reversed the district court’s determination and directed entry of judgment for the administrator.