Opinion
No. 091244
Filed March 4, 2010.
TIMOTHY J. MATUSHESKI, Counsel of Record.
QUESTIONS PRESENTED
1. When a defendant pleads ERISA preemption as an affirmative defense to common law bad faith and breach of contract claims, is a plaintiff entitled to have a jury decide whether ERISA applies?
2. During judicial review of an administrator's decision to deny a life insurance claim, does ERISA permit the district court to apply an abuse of discretion standard if the administrator has no discretion to determine eligibility for benefits or to construe the terms of the plan? PGPage ii
TABLE OF CONTENTS
Circuit Court Decision District Court Decision Order Denying RehearingTABLE OF AUTHORITIES
CASES 398 U.S. 144 160 201 F.3D 335 340 477 U.S. 317 323 12 F.3D 410 417 688 F.2D 1367 1373 573 F.3D 210 212 480 F.3D 140 146 507 F.3D 1120 498 U.S. 133 28 F.3D 1254 1257 448 F.3D 843 849 560 F.3D 404 411 494 U.S. 545 550 461 F.3D 1 11 481 U.S. 41 57 562 F.3D 522 581 F.3D 355 365 6 F.3D 131 572 F.3D 727 978 SO.2D 613 634 586 F.3D 1053 1057 908 F.2D 1077 1082 321 F.3D 933 939 129 S. CT. 1187 1196 STATUTES 28 U.S.C. § 1254 28 U.S.C. § 1331 29 U.S.C. § 1001 29 U.S.C. § 1132 29 U.S.C. § 1144 29 USCS § 1003 29 USCS § 1003 QUESTIONS PRESENTED........................................................i TABLE OF AUTHORITIES......................................................ii OPINIONS BELOW.............................................................1 JURISDICTION...............................................................1 RELEVANT PROVISIONS INVOLVED...............................................2 STATEMENT..................................................................3 REASONS FOR GRANTING THE PETITION..........................................6 CONCLUSION................................................................19 APPENDIX ............................................1a ..........................................12a ..........................................27a ADICKES v. S. H. KRESS CO., , (1970)....................................................................7 BOOTH v. WAL-MART STORES, INC. ASSOC. HEALTH WELFARE PLAN, , (4TH CIR. 2000)....................................................................18 CELOTEX CORP. v. CATRETT, , (1986).......................7, 8 CUSTER v. PAN AM. LIFE INS. CO., , (4TH CIR. 1993)...........................................................8 DONOVAN v. DILLINGHAM, , (11TH CIR. 1982) (EN BANC).......................................................8 DUTKA v. AIG LIFE INS. Co., , (5TH CIR. 2009)...............................................................18 FIRESTONE TIRE RUBBER CO. v. BRUCH, 489 U.S. 101, 114 (1989)...........................................................17 GULBERT v. GARDNER, , (2D CIR. 2007).....................................................................8 HAMILTON v. STANDARD INS. CO., , 1123 (8TH CIR. 2007).................................................... 18 HANCOCK v. METROPOLITAN LIFE INS. CO., 590 F.3D 1141 (10TH CIR. 2009)................................................... 19 INGERSOLL-RAND CO. v. MCCLENDON, , 137 (1990)................................................................20 JOHNSTON v. PAUL REVERE LIFE INS. CO., 241 F.3D 623, 629 (8TH CIR. 2001)..................................................8 KENNEY v. ROLAND PARSONS CONTRACTING CORP., , (D.C. CIR. 1994).......................................8 KOLKOWSKI v. GOODRICH CORP., , (6TH CIR. 2006)...........................................................8 KRAUSS v. OXFORD HEALTH PLANS, INC., 517 F.3D 614, 622 (2D CIR. 2008)................................................. 18 LYTLE v. BEXAR COUNTY TEXAS, , (5TH CIR. 2009)..........................................................16 LYTLE v. HOUSEHOLD MFG., INC., , (1990)...................................................................16 METROPOLITAN LIFE INS. CO. v. GLENN, 128 S. CT. 2343,2348 (2008)..........................................................18 MOORE v. CAPITALCARE, INC., , (D.C. CIR.2006)................................................................19 PILOT LIFE INS. CO. v. DEDEAUX, , (1987)....................................................................7 SANDERSTROM v. CULTOR FOOD SCI., INC., 214 F. 3D 795, 797 (7TH CIR. 2000)..................................................8 SCHWING v. THE LILLY HEALTH PLAN, , 525 (3D CIR. 2009).......................................................18 SHEARER v. SOUTHWEST SERV. LIFE INS. CO., 516 F.3D 276, 279 (5TH CIR. 2008).............................................8 SHELBY COUNTY HEALTH CARE CORP. v. THE MAJESTIC STAR CASINO, LLC GROUP HEALTH BENEFIT PLAN, , (6TH CIR. 2009)..........................18 SIPMA v. MASSACHUSETTS CAS. INS. CO., 256 F.3D 1006, 1012 (10TH CIR. 2001)...............................................8 SMITH v. THE HARTFORD INS. GROUP, , 136 (3D CIR. 1993)........................................................8 SZNEWAJS v. U.S. BANCORP AMENDED RESTATED SUPPLEMENTAL BENEFITS PLAN, , 733 (9TH CIR. 2009)......................................................18 UNITED AM. INS. CO. v. MERRILL, , (MISS. 2007)..............................................................7 UNIVERSAL LIFE INS. CO. v. VEASLEY, 610 SO.2D 290, 295 (MISS. 1992).....................................................7 VEGA v. NATIONAL LIFE INS. SERV., INC., 145 F.3D 673, 676 (5TH CIR. 1998)..................................................8 WETZLER v. ILLINOIS CPA SOC'Y FOUND. RET. INCOME PLAN AND PLAN ADMIN. FOR THE ILLINOIS CPA SOC'Y FOUND. RET. INCOME PLAN, , (7TH CIR. 2009)................................18 WICKMAN v. NORTHWESTERN NAT. LIFE INS. CO., , (1ST CIR. 1990).......................................8 WINTERROWD v. AMERICAN GEN. ANNUITY INS. CO., , (9TH CIR. 2003)....................................8 WYETH v. LEVINE, , (2009)...............................7 (1).........................................................2 ............................................................4 ............................................................2 (a)(1)(B)................................................2, 3 (a).......................................................3,7 (a)...........................................................3 (b)...........................................................3OPINIONS BELOW
The per curium opinion of the United States Court of Appeals for the Fifth Circuit, filed on October 22, 2009, although unpublished, is reported at Graham v. Metro. Life Ins. Co., 2009 U.S. App. LEXIS 23337, and is reprinted in the Appendix hereto, pp. 1a-11a.
The Order of the Fifth Circuit denying rehearing En Banc, filed December 4, 2009, is unreported and unpublished, but is reprinted in the Appendix hereto, pp. 27a.
The memorandum order of the United States District Court for the Southern District of Mississippi, granting Respondent's Motion for Summary Judgment, filed January 8, 2009, although unpublished, is reported at Graham v. Metro. Life Ins. Co., 2009 U.S. Dist. LEXIS 1555, and is reprinted in the Appendix hereto, pp. 12a-26a.
JURISDICTION
On October 26, 2007, Petitioner brought suit against Respondent in the Circuit Court of Wayne County, Mississippi, alleging Respondent denied her claim for life insurance benefits in bad faith. Petitioner sought extra-contractual and punitive damages based upon Respondent's conduct in denying her life insurance claim. On December 7, 2007, Respondent removed Petitioner's Complaint to the United States District Court for the Southern District of Mississippi asserting federal question jurisdiction based on its allegation that Petitioner's claims were preempted by the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001, et seq. (ERISA). On December 10, 2007, Petitioner filed an Amended Complaint adding, inter alia, an alternative claim under ERISA, 29 U.S.C. § 1132(a)(1)(B).
On January 8, 2009, the Honorable Daniel P. Jordan, III, District Judge for the United States District Court for the Southern District of Mississippi, filed his memorandum order granting Respondent's Motion for Summary Judgment, dismissing Petitioner's claims with prejudice. On January 22, 2008, Petitioner appealed the dismissal of her Amended Complaint to the United States Court of Appeals for the Fifth Circuit.
On October 22, 2009, a panel from the Fifth Circuit issued a per curium opinion affirming the District Court. On November 3, 2009, Petitioner timely filed a Petition for Rehearing En Banc to the Fifth Circuit. On December 4, 2009, treating Petitioner's Petition for Rehearing En Banc as a Petition for Panel Rehearing, the Fifth Circuit panel entered its order denying Petitioner's Petition for Rehearing En Banc.
The jurisdiction of this Court to review the Judgment of the Fifth Circuit is invoked under 28 U.S.C. § 1254(1).
RELEVANT PROVISIONS INVOLVED
U.S. Const. Seventh Amend.
In Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury, shall be otherwise re-examined in any Court of the United States, than according to the rules of the common law.29 U.S.C. § 1132(a)(1)(B)
(a) Persons empowered to bring a civil action. A civil action may be brought —
(1) by a participant or beneficiary —
(A) for the relief provided for in subsection (c) of this section, or
(B) to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan;29 U.S.C. § 1144(a)
(a) Supersedure; effective date. Except as provided in subsection (b) of this section, the provisions of this title and title IV shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan described in section 4(a) [ 29 USCS § 1003(a)] and not exempt under section 4(b) [ 29 USCS § 1003(b)]. This section shall take effect on January 1, 1975.
STATEMENT
Facts Giving Rise To This Case
This case involves the bad faith refusal to pay a $45,000 life insurance claim Petitioner presented to Respondent in April 2005, after the February 2005, death of her husband, Robert Graham. Petitioner immediately reported the death of her husband to Respondent. In response, Respondent tendered $8,100 to Petitioner and closed her claim, never providing Petitioner a written explanation for its refusal to pay her the $45,000 to which it was contractually obligated. In response, Petitioner retained counsel and filed her Complaint in the Circuit Court of Wayne County, Mississippi, alleging contractual and extra-contractual damages.
The District Court Proceedings
On December 7, 2007, Respondent removed Petitioner's Complaint to the United States District Court for the Southern District of Mississippi asserting that federal question jurisdiction existed under 28 U.S.C. § 1331 because Petitioner's state law claims were preempted by ERISA. Although Petitioner disputed that the life insurance policy at issue was governed by ERISA, and that her state law claims were thus preempted, the Petitioner amended her Complaint to allege an ERISA claim in the alternative, in case the life insurance policy was indeed governed by ERISA.
Respondent filed a Motion for Summary Judgment seeking a ruling that the life insurance policy for which Petitioner was the beneficiary was governed by ERISA — thus preempting Petitioner's state law claims of bad faith and breach of contract. The Respondent's Motion for Summary Judgment also sought a ruling that the proper standard of judicial review over its denial of Petitioner's claim was abuse of discretion, and that it did not abuse its discretion when denying Petitioner's life insurance claim. The Petitioner argued in her response that the record established a disputed question of fact regarding whether the life insurance policy was governed by ERISA. The Petitioner further argued that even if the life insurance policy was governed by ERISA, the proper judicial review over Respondent's decision to deny Petitioner's claim is de novo because the life insurance policy did not grant Respondent any discretion to interpret the policy or make coverage decisions, but rather expressly vested that discretion in Georgia Pacific — the employer of Petitioner's deceased husband. On January 8, 2009, the district court held: (1) that it — instead of a jury — had the authority to resolve factual disputes regarding whether ERISA preempted Petitioner's state law claims, (2) that ERISA applied to the subject life insurance policy, (3) that Petitioner's state law claims were preempted by ERISA, (4) Respondent's decision to deny Petitioner's claim must be reviewed under an abuse of discretion standard even though the life insurance policy granted no discretion to Respondent, and (5) Respondent did not abuse its discretion in denying Petitioner's claim.
The Appellate Court Proceedings
On January 22, 2009, Petitioner filed her Notice of Appeal to the Fifth Circuit Court of Appeals. On October 22, 2009, a panel from the Fifth Circuit rendered an unpublished, per curiam opinion, holding that although the existence of a plan governed by ERISA is a question of fact, "nothing requires this determination be made by a jury; indeed, ERISA claims do not entitle a plaintiff to a jury." In addition, the Fifth Circuit held that because the resolution of Petitioner's life insurance claim "turned on a factual question", an abuse of discretion standard applies even though the life insurance policy does not give Respondent "discretionary authority to determine eligibility for benefits or to construe terms of the plan." On November 3, 2009, Petitioner filed her Petition for Rehearing En Banc with the Fifth Circuit. On December 4, 2009, the panel treated the Petition for Rehearing En Banc as a petition for panel rehearing, and denied the Petition without comment.
The Fifth Circuit panel's holding in this regard is based on flawed circular logic. ERISA does not act to deprive a plaintiff of a jury trial unless, and until, the defendant meets its burden of proving ERISA applies to the plaintiff's claims. A plaintiff is not deprived of a jury trial based on the ipse dixit of a defendant raising the ERISA preemption defense.
REASONS FOR GRANTING THE PETITION
I. The Fifth Circuit Panel Improperly Resolved Disputed Questions Of Material Fact When Affirming Summary Judgment On Respondent's ERISA Preemption Defense And Deprived Petitioner Of A Constitutionally Guaranteed Jury Trial
Petitioner alleges in her Amended Complaint that Respondent is liable to her under Mississippi law for breaching its duty to pay her life insurance benefits in bad faith. She alleges contractual and extra-contractual damages caused by Respondent's breach of contract and its mishandling of her claim. Petitioner's Amended Complaint also demands punitive damages. However, if the Petitioner's right to collect benefits from Respondent under the life insurance policy is regulated by ERISA, then Petitioner's bad faith and breach of contract claims are preempted. Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 57 (1987); see also 29 U.S.C. § 1144(a).
In the alternative, Petitioner's Amended Complaint asserts a claim under ERISA to recover the same life insurance proceeds.
Under Mississippi law, the court may award extra-contractual damages if the insurance company fails to pay insurance benefits without an arguable reason. Universal Life Ins. Co. v. Veasley, 610 So.2d 290, 295 (Miss. 1992).
Under Mississippi law, punitive damages should be submitted to the jury if the insurer: (1) lacked an arguable reason to deny Plaintiffs claim, and (2) the insurer committed a willful or malicious wrong, or acted with gross and reckless disregard for the insured's rights. United Am. Ins. Co. v. Merrill, 978 So.2d 613, 634 (Miss. 2007).
Although Respondent's Answer alleged ERISA preemption as an affirmative defense to Petitioner's state law claims, it cannot receive the benefit of that affirmative defense unless it discharges its burden of establishing that the state law claims are preempted. See Wyeth v. Levine, 129 S. Ct. 1187, 1196 (2009). When a defendant files a summary judgment motion, it bears the burden of establishing the absence of any material fact, Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986), and the court must view all facts contained in the evidence submitted by the parties, and any inferences that can be drawn therefrom, in the light most favorable to the non-moving party. Adickes v. S. H. Kress Co., 398 U.S. 144, 160 (1970). Summary judgment is only proper if the defendant demonstrates the absence of a genuine issue of material fact. Celotex, 477 U.S. at 323.
The Fifth Circuit utilizes a three-prong test to determine whether an employee benefit program is an ERISA plan: "To be an ERISA plan, an arrangement must be (1) a plan, (2) not excluded from ERISA coverage by the safe-harbor provisions established by the Department of Labor, and (3) established or maintained by the employer with the intent to benefit employees." Shearer v. Southwest Serv. Life Ins. Co., 516 F.3d 276, 279 (5th Cir. 2008).
In addition, every circuit is in agreement that a particular insurance policy is governed by ERISA only if, from the surrounding circumstances, a reasonable person can ascertain, inter alia, the intended benefits and the procedures for receiving benefits. Wickman v. Northwestern Nat. Life Ins. Co., 908 F.2d 1077, 1082 (1st Cir. 1990); Gulbert v. Gardner, 480 F.3d 140, 146 (2d Cir. 2007); Smith v. The Hartford Ins. Group, 6 F.3d 131, 136 (3d Cir. 1993); Custer v. Pan Am. Life Ins. Co., 12 F.3d 410, 417 (4th Cir. 1993); Vega v. National Life Ins. Serv., Inc., 145 F.3d 673, 676 (5th Cir. 1998); Kolkowski v. Goodrich Corp., 448 F.3d 843, 849 (6th Cir. 2006); Sanderstrom v. Cultor Food Sci., Inc., 214 F. 3d 795, 797 (7th Cir. 2000); Johnston v. Paul Revere Life Ins. Co., 241 F.3d 623, 629 (8th Cir. 2001); Winterrowd v. American Gen. Annuity Ins. Co., 321 F.3d 933, 939 (9th Cir. 2003); Sipma v. Massachusetts Cas. Ins. Co., 256 F.3d 1006, 1012 (10th Cir. 2001); Donovan v. Dillingham, 688 F.2d 1367, 1373 (11th Cir. 1982)( En Banc); Kenney v. Roland Parsons Contracting Corp., 28 F.3d 1254, 1257 (D.C. Cir. 1994).
When reviewing the district court's decision to grant Respondent's summary judgment on the ERISA preemption defense, the Fifth Circuit panel properly recognized that the existence vel non of a ERISA plan is a question of fact. However, it held that there was "no question of material fact that would allow a reasonable trier of fact to determine that an ERISA plan did not exist." This holding was in error because there was a dispute of material fact as to whether a reasonable person could ascertain the intended life insurance benefits, and procedures for receiving those benefits, based on the circumstances. Petitioner offered substantial evidence that a reasonable person could not ascertain the intended benefits or the procedures for receiving those benefits from Respondent. This evidence established disputed fact questions on Respondent's ERISA preemption defense. However, the Fifth Circuit panel completely ignored this evidence.
Interestingly, the panel does not identify what evidence it relied upon to make this decision.
Respondent, at its corporate deposition, was unable to identify the intended benefits under Petitioner's life insurance policy, or the procedures for receiving benefits. This is exhibited in Respondent's deposition beginning on page 33:
Q. Okay. Did you tell Carlene Graham who the party was that was making the decision on whether to approve or deny her claim?
A. No, I don't recall that either.
Q. Okay. Did you ever tell Carlene Graham the plan provisions on which you based your decision to tender 8,000 rather than a higher amount for her claim?
MR. KENNA: Object to the form. It assumes facts not in evidence.
Q. You can answer.
A. Read that back, please.
(Question read) A. I wouldn't recall. There were no claims submitted for higher than $8,000.
Q. Explain to me how Carlene Graham could have submitted a claim for more than $8,000?
A. She wouldn't submit a claim. Georgia Pacific would. If I had gotten anything from her, I would have had to go to them.
Q. With who is the plan — — according to the plan who is Carlene Graham supposed to submit her claim to?
A. SHPS.
Q. Okay.
A. And then SHPS sends it to us — — or used to send it to us.
Q. Okay. Now, for the life portion of the plan, does Georgia Pacific pay MetLife policy premiums for an insurance policy that covers their employees and beneficiaries of their employees? A. I would assume so. I'm not involved in that.
Q. So you don't know? A. No.
Q. Okay. So what does SHIPS —. When a Claimant submits a claim, they are supposed to submit it to SHPS, correct?
A. Correct.
Q. And then what does SHPS —. Strike that. MetLife then evaluates the claim? A. Correct.
Q. Okay. What does SHPS require the Claimant to submit?
MR. KENNA: Object to this being beyond the scope of the Notice, asking her what another party — — another company would require.
Q. What task did Georgia Pacific perform in relation to claims under the submit plan. It's on the Notice. If you don't know, that's fine?
A. I don't know what they require.
Nor did Respondent know what the ERISA mandated appeal procedures were for Petitioner to appeal the Respondent's decision to deny her claim.
Consider the following excerpts beginning on page 15 of Respondent's deposition:
Q. At this point, at the claim's process, was this Carlene Graham's appeal?
A. No. It was just an outgoing phone call.
Q. What is the procedure — let's say an insured like Carlene Graham is dissatisfied with the examiner's decision in a claim —
A. She's not insured.
Q. A beneficiary is dissatisfied with an examiner's decision on a the claim.
A. There was no claim for 48,000.
Q. Let me finish my question. Let's say a beneficiary is dissatisfied with an examiner's decision on her claim, what is her remedy?
A. I guess she would write a letter, if she wanted to.
Q. Can she appeal?
A. There was no denial.
Mr. Brents: He's asking in general, not with respect to this specific claim.
Q. Can she appeal?
A. Then, I guess, I'm not understanding. To me appeal is after someone has had a letter sent to them and they are appealing our decision. No letter had been sent to her.
Mr. Kenna: Are you talking generally, is that your question or is it specific to this claim?
Q. I'll repeat the question.
Mr. Kenna: I think she answered the question.
Q. My question is very simple. Does Carlene Graham have any kind of remedy or appeal rights?
Mr. Kenna: She answered.
Q. What's your answer to that question?
Mr. Kenna: Read it back.
Q. Does a beneficiary like Carlene Graham generally and specifically have any recourse if they are paid an amount less than they believe they're entitled under the policy?
A. She would have to submit —
Mr. Kenna: Object to the form, in that you are saying a beneficiary like Carlene Graham.
Q. Okay. Did Carlene Graham — my question is, in MetLife policies, does Carlene Graham have any type of recourse if she's dissatisfied with the amount of money she is awarded on her claim?
Mr. Kenna: You can answer.
A. Okay. She can go back to Georgia Pacific and inquire with them why it was only $8,000 or she can submit proof to us so we can go back to Georgia Pacific and see why it was only $8,000. She never submitted any proof to me, so I had nothing to go with.
In addition, the Fifth Circuit panel ignored the Affidavit of Carlene Graham which indicated confusion with the intended benefits and a failure on the Respondent to communicate the procedures for obtaining those benefits:
3. Sherry Arrington of Georgia Pacific told me, after my husband died in 2005, that my husband's life insurance policy, for which I was the beneficiary, provided $45,000 in coverage and a few thousand more in interest.
4. Before filing suit, I called MetLife and Georgia Pacific, and other companies they told me to call, at least 20 times to report my claim and find out why they would only send me $8,100. I told them Sherry Arrington of Georgia Pacific told me after my husband died that the policy insuring my late husband's life provided the amount of coverage referred to in the paragraph above. My attorney told me MetLife has no record of these phone calls in its files and this is very disappointing to me that MetLife is deceiving the Court to cheat me out of the life insurance proceeds I need, and my husband worked his whole career to accrue, to insure my security after he died. MetLife told me that Sherry Arrington was no longer working for Georgia Pacific any more so it could not call her about my life insurance claim. I called Sherry Arrington thereafter and she told me that she was still employed with Georgia Pacific. I am disappointed to learn from my attorney that MetLife told me this when it had been in contact with Sherry Arrington about my claim and knew she still worked for Georgia Pacific.
5. MetLife told me it was not going to pay me more than $8,100 and there was nothing I could do about it. I asked MetLife why it would not pay what I was entitled to under my husband's life insurance policy, but it refused to tell me. All MetLife kept telling me is that they had no record of my husband's life insurance policy, and that I was not getting any more money. MetLife told me I could hire a lawyer and it still would not have to pay me the insurance money MetLife owed me because it had fancy corporate lawyers. MetLife was very mean and condescending to me on the phone. I was told by Sherry Arrington that the $8,100 dollars I received from MetLife was not even proceeds from a life insurance policy but was a standard payment made to the surviving family upon the death of any employee, or former employee out on disability leave, like my late husband.
"The Seventh Amendement preserves the right to trial by jury in `suits at common law'". Lytle v. Household Mfg., Inc., 494 U.S. 545, 550 (1990). When the evidence in this case is viewed in the light most favorable to Petitioner, a fact question exists as to whether Respondent's ERISA preemption defense has merit. As the testimonial evidence establishes, Respondent — the administrator of the life insurance policy — could not ascertain the intended benefits or procedures for receiving benefits, including submitting appeals to the claims administrator. In addition, Petitioner, a reasonable person, could not ascertain the same. This factual dispute regarding ERISA preemption must be resolved by a jury. The district court's failure to submit the disputed facts to a jury violated Petitioner's Seventh Amendment rights and ignored Supreme Court authority that mandates Petitioner receive a trial by jury to resolve the ERISA preemption defense raised by Respondent. The Fifth Circuit panel decision affirming the district court was in error. II. The Fifth Circuit Panel's Judicial Review of Respondent's Denial of Life Insurance Benefits With An Abuse Of Discretion Standard Is In Conflict With The Holdings Of This Court and All Other Circuits
In the Fifth Circuit, "juries must resolve disputed fact issues". Lytle v. Bexar County Texas, 560 F.3d 404, 411 (5th Cir. 2009).
This is not to say that if Respondent is successful at trial in convincing a jury to find in its favor on ERISA preemption that Petitioner's alternative ERISA claim would be resolved by a jury. It is the question of whether ERISA preempts Petitioner's claims that must be resolved by a jury under the facts of this case.
The language in the life insurance policy at issue in this case, the Georgia Pacific LifeChoices Plan (Plan), vested sole discretion to make benefit determinations and construe the terms of the Plan with Georgia Pacific, granting no discretion to Respondent. The Plan documents expressly state:
Georgia Pacific Corporation is the plan administrator for the LifeChoices Benefits Program. The plan administrator has the exclusive responsibility and complete discretionary authority to control the operation and administration of the plan, with all powers necessary to enable it to properly carry out such responsibility, including but not limited to, the power to construe the terms of the plan, to determine status and eligibility for benefits and to resolve all interpretive, equitable and other questions that shall arise in the operation and administration of this plan.
Clearly, this is a case where Respondent, the administrator of Petitioner's life insurance policy did not have discretionary authority to determine eligibility for benefits or to construe terms of the plan. The United States Supreme Court held in Firestone Tire Rubber Co. v. Bruch, 489 U.S. 101, 114 (1989), "that a denial of benefits challenged under § 1132(a)(1)(B) is to be reviewed under a de novo standard unless the benefit plan gives the administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe the terms of the plan." This holding was reiterated by the United States Supreme Court in Metropolitan Life Ins. Co. v. Glenn, 128 S. Ct. 2343, 2348 (2008), when it stated, "[p]rinciples of trust law require courts to review a denial of plan benefits under a de novo standard unless the plan provides to the contrary."
Notwithstanding these holdings, and as the Fifth Circuit panel held in the case sub judice, a Fifth Circuit panel recently held in a published decision that "this Circuit reads Bruch as speaking only to questions of law; thus, with or without a discretion clause, a district court rejects an administrator's factual determinations in the course of a benefits review only upon the showing of an abuse of discretion." Dutka v. AIG Life Ins. Co., 573 F.3d 210, 212 (5th Cir. 2009). This Fifth Circuit panel decisions are in conflict with each and every other circuit court considering the same question. Richards v. Hewlett-Packard Corp., 2010 U.S. App. LEXIS 1010 *15 (1st Cir. 2010); Krauss v. Oxford Health Plans, Inc., 517 F.3d 614, 622 (2d Cir. 2008); Schwing v. The Lilly Health Plan, 562 F.3d 522, 525 (3d Cir. 2009); Booth v. Wal-Mart Stores, Inc. Assoc. Health Welfare Plan, 201 F.3d 335, 340 (4th Cir. 2000); Shelby County Health Care Corp. v. The Majestic Star Casino, LLC Group Health Benefit Plan, 581 F.3d 355, 365 (6th Cir. 2009); Wetzler v. Illinois CPA Soc'y Found. Ret. Income Plan and Plan Admin. For the Illinois CPA Soc'y Found. Ret. Income Plan, 586 F.3d 1053, 1057 (7th Cir. 2009); Hamilton v. Standard Ins. Co., 507 F.3d 1120, 1123 (8th Cir. 2007); Sznewajs v. U.S. Bancorp Amended Restated Supplemental Benefits Plan, 572 F.3d 727, 733 (9th Cir. 2009); Hancock v. Metropolitan Life Ins. Co., 590 F.3d 1141 (10th Cir. 2009); Capone v. Aetna Life Ins. Co., 2010 U.S. App. LEXIS 91 *9 (11th Cir. 2010); Moore v. Capitalcare, Inc., 461 F.3d 1, 11 (D.C. Cir. 2006).
As such, since Respondent was granted no discretion by the life insurance policy or plan documents to determine Petitioner's eligibility for benefits or to construe terms of the Plan, Respondent's decision to deny Petitioner's claim must be reviewed by a district court with a de novo standard pursuant to federal law. The Fifth Circuit panel decision holding that an abuse of discretion standard applied in this case was in error, conflicts with this Court's prior holdings, and conflicts with the decisions of every other circuit court. For this reason, the Fifth Circuit must be reversed.
CONCLUSION
Based on the foregoing, this Court should grant this Petition for a Writ of Certiorari. The Fifth Circuit's decision in this case is in conflict with the decisions of this Court and other Circuit Courts. Between January 1, 2008, and January 1, 2010, 17,787 cases have been filed in Federal Court identifying ERISA as the Nature of Suit on the civil cover sheet. The issues raised in this Petition are important; the resolution of which will create more certainty and fairness in the application of a statutory scheme, ERISA, that is viewed by many as a failure in its congressional purpose to "promote the interests of employees and their beneficiaries in employment benefit plans." Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 137 (1990).
This information was derived by entering 791 in the Nature of Suit parameter on PACER and searching all proceedings filed in United States District Courts between January 1, 2008, and January 1, 2010.
Respectfully submitted