In a recent law review article, I predicted that the level of review of the administrative record after Glenn will vary based upon judicial temperament. “The Debate Over Deference In The ERISA Setting – Judicial Review Of Decisions By Conflicted Fiduciaries“, 54 South Dakota Law Review 1 (2009). The Sixth and Fourth Circuit Courts of Appeals offer interesting comparisions illustrating differing perspectives on judicial review of benefit denials.
The potential for inconsistency inherent in the Glenn approach was noted at the very outset. In his concurring opinion, Chief Justice Roberts properly noted a liability in the majority’s unstructured approach in determining the effect of a conflict of interest. He noted a “triumph of understatement” in the majority’s acknowledgement that its approach “does not consist of a detailed set of instructions.”
As the results come in, a pattern may be discerned which litigants neglect at their peril. As an example, I will compare two circuits, the Sixth and the Fourth. Granted, the facts and issues differ in the cases compared, but I believe a sense of emphasis can be gained even from these early post-Glenn cases that foretells much about how conflict issues will be treated in these two circuits.
The Sixth Circuit (from which Glenn originated) continues to scrutinize benefit denials with a careful view to procedural consistency and throughness. See, e.g., :: Sixth Circuit Applies Met Life v. Glenn Factors To Overturn ERISA Disability Benefit Denial. In Delisle v. Sun Life Assur. Co., 2009 FED App. 0082P (6th Cir.) (6th Cir. Mich. 2009), for example, the Sixth Circuit expressed concern over the “incentives” of consultants and how they may have been affected by the presentation and communication of issues on which they opined. Evidence of bias was not required to trigger this analysis.
On the other hand, the Fourth Circuit appears to view Glenn as requiring some evidence of improper intent or bias. The Court has not articulated what evidence would suffice and, in such cases, what the effect would be.
For example, in Champion v. Black & Decker (U.S.) Inc., 550 F.3d 353 (4th Cir. 2008), the Fourth Circuit acknowledged Glenn by reviewing the administrative record for any evidence of “improper intent”. Chief Justice Robert’s actually preferred this test (as did Justice Scalia) in opposition to the majority opinion which permits conflicts to “enhance[] the significance of other factors already considered by reviewing courts, even if the conflict is not shown to have played any role in the denial of benefits.” Under Champion, the lack of evidence of bias leaves all other factors the same as if there were no conflict. I took issue with this approach here.
More recently, in Carden v. Aetna Life Ins. Co., 2009 U.S. App. LEXIS 5122 (4th Cir. 2009), the Fourth Circuit applies Glenn’s rejection of special evidentiary and procedural rules to eliminate its former jurisprudence under which ambiguities in ERISA plans were construed against the drafter whenever a conflict of interest existed. After reaching the analysis portion of the opinion, the Court went to its factors taken from Booth v. Wal-Mart Stores, Inc. Associates Health & Welfare Plan, 201 F.3d 335 (4th Cir. 2000), and only mentioned Glenn again once, and that to say that it had weighed the conflict in reaching the decision that the plan administrator did not abused its discretion.
While factual issues and procedural irregularities are always important, they are even more so in the Fourth Circuit given this line of reasoning. The existence of a conflict of interest will not have any particular significance unless a case can be made that some improper intent or bias affected the decision. With limited discovery, that is a difficult burden to carry. We will have to await future decisions to see whether Glenn will permit broader discovery in district court proceedings which will often be the only avenue for claimants to gain any advantages from Glenn at the appellate level