Sixth Circuit

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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?

In Lipker v. AK Steel Corp., 2012 WL 5346325 (6th Cir. Oct. 31, 2012), the plaintiff applied for surviving spouse benefits under the pension benefits plan administered by her husband’s former employer. The administrator approved her claim, but she disputed the amount of the benefit. The discrepancy between her expectation and the actual award hinged on “the interpretation of plan language that both parties argue is unambiguous, yet each party interprets differently.” Though the district court had held in favor of the plaintiff’s interpretation, the Sixth Circuit reversed,  finding that the administrator’s proposed interpretation of the plan language to be truer to its plain meaning when read with reference to the law it expressly refers to.
Continue Reading Social Security Statute Aids Interpretation of Ambiguous Plan Offset Provision

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