“When I use a word,” Humpty Dumpty said in rather a scornful tone, “it means just what I choose it to mean — neither more nor less.”

“The question is,” said Alice, “whether you can make words mean so many different things.”

“The question is,” said Humpty Dumpty, “which is to be master — that’s all.”

Lewis Carroll, Through the Looking Glass.

Disputes over the meaning of a word or phrase in an insured benefit plan almost always end up with the litigants feeling like they have gone through the looking glass to a place where the words you thought you understood all your life suddenly mean something entirely different.

The most recent example of this phenomenon is Carlile v. Reliance Std. Life Ins. Co., — F.3d –, 2021 WL 671582 (10th Cir, Feb. 22, 2021), where the dispute revolved around whether Mr. Carlile was an “active, Full-time Employee” when he became disabled.

Mr. Carlile had worked for the disability plan sponsor for about four years when he was given notice in March 2016, that he was being laid off as part of a reduction in force effective June 20, 2016. Accompanying the notice was a lump-sum payment of his wages for the notice period, and the confirmation that he no longer needed to come into work. Apparently, though, he continued to visit the office “at his convenience” until he was diagnosed with prostate cancer on May 31, 2016. Apparently his “last day of work” (whatever that means) was June 7, 2016. He filed a claim for LTD benefits, which Reliance Standard denied, finding that Mr. Carlile’s participation in the disability plan had terminated before June 7, because he was no longer an “active, Full-time Employee.”

Follow us through the looking glass as we watch the Tenth Circuit explore: why the meaning of “active, Full-time Employee” is not influenced at all by the plan’s definitions of “Actively at Work” or “Active Work;” why the court’s own prior decision defining “actively at work full time” in a similar context supported Reliance only “at first glance”; and why determining how much an employee worked during his “regular work week” apparently does not require proof of how much the employee ever really worked at all. At the end of the journey, it turns out that “active” really means nothing, because an “active, Full-time Employee” is exactly the same as a “Full-time Employee.”
Continue Reading Tenth Circuit Decides That An “Active, Full-time Employee” Is Entirely Different Than an Employee Who is “Actively at Work”

On May 22, 2017, Department of Labor (DOL) Secretary Alexander Acosta announced in an op-ed in the Wall Street Journal that the DOL would not issue another delay of the “fiduciary rule,” and that it was set to generally become effective on June 9, 2017. As we now know, certain provisions of the fiduciary rule went into effect on that date, with others being delayed until July 1, 2019. However, the fiduciary rule remains under attack in the courts. Two notable appellate court decisions were issued within days of one another, and both were decided by three judge panels. One case upheld narrow provisions of the fiduciary rule, and the other effectively completely invalidated the rule. Shortly after the second decision, the Department of Labor announced that it would not enforce the fiduciary rule “pending further review.”
Continue Reading The Fate of the Department of Labor Fiduciary Rule Could Be Uncertain

In Williams v. FedEx Corporate Servs., 849 F.3d 889 (10th Cir. 2017), plaintiff sued FedEx for violating the Americans with Disabilities Act (ADA) by requiring him to enroll in the company’s substance abuse and drug testing program. He also sued Aetna, FedEx’s STD insurer, for breach of fiduciary duty for reporting to FedEx that plaintiff had filed a disability claim for substance abuse. The district court granted summary judgment for defendants on both claims.

The Court reversed the ADA decision, and remanded to the district court for further evaluation of one of FedEx’s defenses.
Continue Reading Insurer Did Not Breach Fiduciary Duty by Disclosing Substance Abuse Claim to Employer

In Mead v. Reliastar Life Ins. Co., — F.3d –,  2014 WL 4548868 (2d Cir. Sept. 16, 2014), the district court determined that Reliastar’s decision on plaintiff’s disability claim was arbitrary and capricious, and remanded the matter to Reliastar to calculate the benefits owed for plaintiff’s own-occupation disability, and to determine whether she was disabled from any occupation. Reliastar appealed, and plaintiff moved to dismiss for lack of appellate jurisdiction, arguing that the remand order was not a “final decision” under 28 U.S.C. § 1291. The court noted that it had “never definitively decided whether, or under what circumstances, a district court’s remand to an ERISA plan administrator is immediately appealable.” It held now that it was not appealable.
Continue Reading Second Circuit Evaluates Split in Circuits, and Rules That Order Remanding Claim to Administrator Is Generally Not Appealable

Every so often a bit of legal synchronicity seems to occur. Sometimes its personal, like when you have several cases with the same uncommon issue, or multiple cases in the same rarely visited court. In 2013, there appears to be a larger force at work that has caused three circuits to address the question whether a plan that requires proof to be satisfactory to the insurer confers discretion.

It has long been clear that a plan document must give discretionary authority to an insurer in order to require courts to conduct an arbitrary and capricious review. It is also well-established that no “magic words” are required to give discretion. However, the vast majority of plans intending to grant discretion use the magic words anyway, and say that the insurer has “discretionary authority to determine claims and construe the plan” or some variant.

But what happens when a plan does not use the magic words?  
Continue Reading Effect of Requiring “Satisfactory” Proof Is A Popular Issue in the Circuits This Year

One of the great things about writing this blog is learning something new. I sometimes fall into the trap of determining the law on a particular issue in the circuit in which I practice most (the Second), and assume that other circuits are the same. Sometimes, though, it turns out that one circuit is not in step with the others, and one case can throw a monkey wrench into my world view.

The case that drew back the curtain for me on vesting of welfare benefits (an exciting topic, I know!), is Price v. Bd. of Trustees of Indiana Laborer’s Pension Fund, — F.3d –,  2013 WL 561354 (6th Cir. Feb. 15, 2013) (“Price II”). Price II held that an ERISA fiduciary could enforce a plan amendment shortening the length of time disability benefits would be payable against a participant who was on claim at the time of the amendment.

At first read, the decision seemed bizarre, because I knew (or thought I knew) that welfare benefits like disability benefits could not be changed for a participant who was “on claim.” As the Second Circuit held: “as a matter of law[,] …absent explicit language to the contrary, a plan document providing for disability benefits promises that these benefits vest with respect to an employee no later than the time that the employee becomes disabled.” Feifer v. Prudential Ins. Co. of Am., 306 F.3d 1202, 1212 (2d Cir. 2002). This rule means that you look to the plan language when the disability allegedly began, and subsequent amendments are irrelevant.

Though on re-reading Feifer, it was clear that the court recognized that other circuits approached this issue differently, that kind of caveat was not something that stuck with me. Then along came Price II and caused me to revisit the issue.
Continue Reading Vesting of Employee Welfare Benefits – Who Knew It Was So Complicated?

ERISA claim practitioners generally have the concept of exhaustion of administrative remedies engrained in our thought process. They know well that claimants are required to exhaust their administrative remedies before they can sue over a benefit determination. Given the focus on this exhaustion requirement, it may surprise some to know that, in many circuits, the statute of limitations clock can begin to run well before administrative remedies are exhausted.
Continue Reading Statute of Limitations Can Start Running Before Claim Accrues

The Seventh Circuit has recently considered whether surveillance evidence can be relied upon in deciding ERISA-governed disability claims. Marantz v. Permanente Med. Group, Inc. Long Term Disability Plan, 2012 WL 2764792 (7th Cir. July 10, 2012), involved a de novo review of the claim determination. The claimant was a pulmonologist who developed back pain. After paying benefits for about four years, the claim administrator began to look more closely at the claim, and its investigation included surveillance. As the Seventh Circuit described it:

The surveillance video shows Dr. Marantz running across a busy street in heeled boots; shopping at Home Depot, Neiman Marcus, Loehmann’s, and Nordstrom Rack; lifting heavy items into her car; riding a stationary bike in a group exercise class at a health club; and, after the second day of the evaluation, shopping at a fur store and Petco. The investigators followed Dr. Marantz for five days, but only recorded activity on three of those days. Dr. Marantz testified that one of the surveillance days was unusual in that she was hosting a friend who was visiting Chicago from out-of-town.

Dr. Marantz argued that surveillance was “inherently unreliable.” The Seventh Circuit disagreed, but identified several situations when surveillance “is of limited utility”: “when the recorded data does not conflict with the applicant’s self reports of limitations, or when the surveillance catches limited bursts of activity that might be anomalous.”

The First Circuit has also expressed the same notion more simply: “weight given to surveillance in these sorts of cases depends both on the amount and nature of the activity observed.” Maher v. Massachusetts Gen. Hosp. Long Term Disability Plan, 665 F.3d 289, 295 (1st Cir. 2011).

Marantz held that the activities caught on tape were inconsistent with Dr. Marantz’s statements about what she could and could not do. Marantz also held that, because she engaged in these inconsistent activities after she had worked in her part-time job or had spent several hours in rigorous physical therapy, the activity “cannot be explained by a ‘good days/bad days’ scenario.”

Because the devil is in the details on these kind of issues, a discussion of other Circuits’ evaluation of surveillance evidence is in order.


Continue Reading Looking in on Surveillance