Term: 2007
Docket: 06-923
Metro. Life Ins. Co. v. Glenn
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06-923 METRO. LIFE INS. CO., ET AL V. GLENN DECISION BELOW: 461 F3d 660 LIMITED TO QUESTION 1 PRESENTED BY THE PETITION AND THE FOLLOWING QUESTION: "IF AN ADMINISTRATOR THAT BOTH DETERMINES AND PAYS CLAIMS UNDER AN ERISA PLAN IS DEEMED TO BE OPERATING UNDER A CONFLICT OF INTEREST, HOW SHOULD THAT CONFLICT BE TAKEN INTO ACCOUNT ON JUDICIAL REVIEW OF A DISCRETIONARY BENEFIT DETERMINATION?" EXPEDITED BRIEFING SCHEDULE CERT. GRANTED 1/18/2008 QUESTION PRESENTED: 1. Whether the Sixth Circuit erred in holding, in conflict with two other Circuits, that the fact that a claim administrator of an ERISA plan also funds the plan benefits, without more, constitutes a "conflict of interest" which must be weighed in a judicial review of the administrator's benefit determination under Firestone Tire & Rubber v. Bruch, 489 U.S. 101 (1989)? 2. Whether the Sixth Circuit erred in holding, in conflict with six other Circuits, that an ERISA claim administrator must consider and refute in its written disability determination a decision, without the underlying record, of a Social Security Administration administrative law judge? LOWER COURT CASE NUMBER: 05-3918
In the case of Metropolitan Life Insurance Co. v. Glenn in 2007, the U.S Supreme Court ruled that a conflict of interest occurs when an insurance company acts as both the determiner and payer of employee benefits under a plan governed by Employee Retirement Income Security Act (ERISA). Wanda Glenn, who was suffering from severe heart disease, had her claim for long-term disability benefits denied by MetLife despite Social Security Administration's approval for disability payments. The court held that such dual role creates a significant conflict of interest which courts must consider in reviewing denials of ERISA-governed benefits under an abuse-of-discretion standard. However, it does not change the standard to de novo review but is one factor among many that judges should take into account.
In the dissenting opinion for Metropolitan Life Insurance Co. v. Glenn, Justice Antonin Scalia argued that the majority's decision to allow courts to consider a conflict of interest as one factor in reviewing an ERISA plan administrator's discretionary determination was inconsistent with trust law principles and unnecessarily complicated matters for lower courts. He contended that under traditional trust law, a fiduciary who is operating under a conflict of interest is not inherently suspect and their decisions should not be subjected to special scrutiny unless there is evidence they have been influenced by their own interests rather than those of beneficiaries. Furthermore, he criticized the majority’s approach as vague and unpredictable because it did not provide clear guidance on how much weight should be given to conflicts of interest in different circumstances or what other factors might also need consideration.
