Denmark v. Liberty Life Assurance Co., 05-2877 (1^st Cir., Mar. 28, 2007)

Here’s a decision that only a true ERISA junkie could love: an appeal of a denial of retirement benefits that leads to a rare three-way division within the typically uniform First Circuit. Judge Lipez summarizes the conflict in his lead decision:

This seemingly straightforward appeal of a denial of disability benefits presents difficult issues involving our standard of review in cases arising under the Employee Retirement Income Security Act (”ERISA”). In fact, the issues are so difficult that this case has generated three opinions. Although I agree with the district court that the insurer’s denial of disability benefits was neither arbitrary nor capricious, I believe that our circuit should reexamine in an en banc proceeding the standard of review that applies when an insurer both reviews and pays disability claims, resulting in a structural conflict of interest. Judge Selya concurs in the judgment affirming the decision of the district court, but disagrees with my assessment of the standard of review. Finally, although Judge Howard dissents, believing that the disability benefits denial was arbitrary and capricious under our current standard of review, he joins me in concluding that our circuit should reexamine our standard of review in these structural conflict cases.

Will the panel’s disagreement provoke an en banc review, or just a big yawn? Stay tuned . . .

Posted Wed, 28 Mar 2007 11:23:25 and filed under Employment, Decision of the Day. You can leave a response, or trackback from your own site.