ERISA Disability and Life Insurance Litigation

Should the district court maintain control over an ERISA-related lawsuit while the insurance company Principal reevaluates the benefits decision?

• Ben Glass • Episode 22

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Here, the claimant was a night-shift nurse at a long-term care and skilled rehabilitation center grappling with multiple health issues, including fibromyalgia, chronic fatigue syndrome, degenerative disc disease, and migraines, which significantly impacted her ability to work, particularly in her demanding role as a night-shift nurse.

Despite the significant impact on her ability to perform, Principal Life Insurance Co. denied her long-term disability claim, asserting that the medical proof didn't back her incapacity for any suitable job. This decision was based on their assessment of
her medical condition and the requirements of the disability insurance policy terms.

The claimant appealed, arguing the insurer overlooked the combined severity of her conditions including fibromyalgia, chronic fatigue syndrome, degenerative disc disease, and migraines, on her ability to continue working as a night-shift nurse. He challenged their decision with evidence she believed demonstrated her disability, highlighting the conflict between personal health realities and insurance assessment.

This is the oral argument in the 6th circuit court of appeals

These public domain recordings are brought to you by Ben Glass Law, a national long term disability and life insurance firm headquartered in Fairfax, VA.

By making these recordings into a "podcast," we've made the listening easier for claimants, attorneys and claims adjusters alike.

If long term disability or life insurance benefits have been denied, we'd love to review your denial letter and give you a strategy for moving forward. This is a free service and you can go here to begin submitting your denial letter.

Speaker 1:

Can I ask you just a generic question? So I'm not an orisa specialist by any means. So when I discovered these remands to a private party, that struck me as it's well established in the orisa context but it's quite unusual anywhere else. I can't think of any other scenario where we one of the parties is a party to a lawsuit and we say we remand the suit to the party.

Speaker 2:

Welcome to this podcast. This podcast is brought to you by Ben Glass Law, a personal injury and long-term disability law firm with headquarters in Fairfax, virginia. Listening to oral arguments is one of the best ways to both learn and stay abreast of the substantive and procedural aspects of practicing law. By putting these public domain recordings into the form of a podcast, ben Glass Law has made it easy for the public to access these recordings. All commentary that is not part of the actual court proceedings is that of the show's sponsor, case number 20-6217, Susan Card v Principal Life Insurance Company, or arguments not to exceed 15 minutes per side.

Speaker 3:

Mr Andrew Michael Grabhorn for their pollin.

Speaker 4:

May it please the court. My name is Andrew Grabhorn. I represent Susan Card in this matter. If I could reserve three minutes for rebuttal time, this case presents three issues. The first, whether the district court aired and finding it was without jurisdiction to reopen Ms Card's case. This court previously ruled that a principal's decision on Ms Card's long-term disability, short-term disability and life insurance continued disability determination LCDD what we generally refer to as life waiver or premium found those decisions to be arbitrary and capricious and remanded it back. Ms Card moved to reopen the case and the court entered a virtual order that simply said it's without jurisdiction to consider the issue. That's the first issue before this court that, in effect, will almost decide the entire case. If the court rules in our favor on that case, then it goes back to the district court to pretty much do everything else that we're asking.

Speaker 1:

I was gonna ask you that. So the parties briefed a lot of the merits, including the attorney's fees issue and the merits of the subsequent plan decision. If we find jurisdiction. I think in this scenario wouldn't we generally just remand rather than address the merits, because we're a court of review, not a first view, as we've said, in some cases, as Judge McKeeke said earlier, I'm gonna give you a clever answer and that is on the attorney's fees aspect.

Speaker 4:

I agree, no matter what. If you agree with us that the district court did have jurisdiction, that no matter what, that needs to go back. Even if this court maintained jurisdiction, I think it needs to go back at least to do the load star analysis. The first circuit in the gross case we cited said that's a very fact-intensive issue that the court of appeals really doesn't have time nor the resources to really deal with right now. District court, you do that, then we'll deal with it on our end if we need. And then also, I believe there's another case that we cited in there it's along the same lines from the sixth circuit that says that the calculus that's done, the multiplication there, that's for the district court to do.

Speaker 4:

So yes, I agree, if this court finds that it's with jurisdiction or without jurisdiction, no matter what, that issue needs to go back down. Because the McKeeke case from this court found that once a plaintiff in these orisa cases is determined to at least get a remand, that is a some degree of success. On the merits comes from the Hart case, Supreme Court case, as so the LTD and LCDD claims themselves. It's a split one. Yes, we're fine if the court remains back down, but on the other hand, if the court were already here the issues have been briefed multiple times already Under moon, the court's going to do a de novo review of everything anyways.

Speaker 5:

I think it'd be well there would be nothing else that would go in the record on that in the district court. No, and these are just be what the committee does, the second decision or whatever.

Speaker 4:

And we still dispute that the second decision gets in and that goes down the lines of the timeliness of the decision. That principle may, because he's in these cases. As soon as that time period lapses, that's when the administrative record needs to close Nothing else can come in and from there on, that's all the courts allowed to look at. That's the law pretty much every every second in the nation is that what was before the administrative or the administrator when they made the decision? And here the administrative record closed, arguably on January 26, 2020. And so from that day forward, nothing else could come in, including the decision. But then, even if the decision comes in we've addressed why it still doesn't meet with. This court has already ruled what the law of the case is. They did not meet their burden here.

Speaker 1:

So, getting back to jurisdiction, though you said the first issue was the district court's jurisdiction, I wonder if the first issue is our own jurisdiction, why does the virtual order, which is in some respects quite unusual, why does that qualify as a final decision on the merits for purposes of our appellate jurisdiction statute?

Speaker 4:

I believe that also goes into one of the arguments the principal made here, and it's this is one of the weirder procedural ones that I've ever seen, because, I'm with you, I'm not used to seeing these virtual orders even, especially on a jurisdictional issue. But this court in Bowers held that as soon as the case is remanded to the plan administrator, then whatever happens with that decision whether it be a deemed denial, which we argued happened here whether the plan administrator actually makes the decision, then either party is free to ask the district court to reopen the case. There's no need to refile any brand new lawsuit, or you can file a motion in that case again and ask please reopen the case. There's other issues that we need to address, so on and so forth. So that's getting down to our position is that, yes, the district court had jurisdiction to consider that, but if it didn't, then the only other court that could have jurisdictions this court. And if this court were to find it didn't have jurisdiction, then it almost leaves miscard with what do I do?

Speaker 4:

filed a new case, I suppose that's not how these cases work according to bowers that we would be following. We would not be following the 6th, president Bowers, if we file a brand new lawsuit. The procedure and it actually happened relatively in short order In another case that we have that's actually before the 6th circuit right now. Case names bus that are be standard insurance company Exact same thing there accepted income up here was district court decision remanded back down. They were late making a decision. File the motion to reopen. Judge said you're correct, we get to, we reopen and move forward and went through briefing and everything else announced back up here. Can I ask you, just a generic question.

Speaker 1:

So I'm not a an orisa specialist by any means. So when I discovered these remands to a private party, that struck me as it's well established in the orisa context, but it's quite unusual anywhere else. I can't think of any other scenario where we one of the parties is a party to a lawsuit and we say we remand the suit to the party. That's quite strange. I think that's a very different story. I think that's a very different story. Is that just well accepted now in the?

Speaker 4:

A recipe bar at the Supreme Court has never adopted it, but the courts of appeals all seem to have adopted it and I maybe get my cases confused here by believe, judge, the par road, a red dissent on around talking about the same thing recently, about these judicially created Remands or administrative regulations. So we're going to be talking about the case where we're supposed to do something and within the claim regulations, following the applicable law, following the applicable evidence. That didn't happen here. As always, our position that in that case, need to put the plaintiff back where they would have been up through the data, that order where they're found to be arbitrary and capricious, because otherwise now we are almost in 2022 and we're talking about a case where the court of appeals is not going to be arbitrary.

Speaker 1:

But to answer your question simply yes, it's one of those. How does it affect? How does it affect A risk of plaintiffs to a risk of plaintiffs today, like these procedures?

Speaker 5:

from your perspective, or do they think that? Is it just a waste of time there? They would win? Wouldn't the plaintiff win if the defendant?

Speaker 1:

it's normally if the defendant did something wrong or breach the contract, the plaintiff would just prevail and say that's not the case, and so I think that maybe the district court should just as get rid of arbitrary and capricious and as a no no matter, determine whether the plaintiff is entitled to benefits, rather than giving the plan a second chance at doing so.

Speaker 2:

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Speaker 4:

I agree with you wholeheartedly, your honor. It's one of those things. Like you said, it's just become general practice. But no, I agree with you and I agree with judge nalbal team. Hopefully I pronounced that correctly, sorry, but no, I agree with both of you. It's a contract. Did you breach the contract? Did you do what you were supposed to do, principal?

Speaker 4:

This court found principal did not do what they were supposed to do. Their decision was arbitrary and capricious and I know there was a dissent there. But principal even filed a motion for re-hearing and bonk that was denied. So it's all the law of the case. Now, even if we go back to the district court and I believe I know this is in our briefing too and the district court rules against us and we're gonna be right back up here and we're gonna be saying moon says this court reviews it to novo and, based on what this courts already said, principal Did nothing different here. Because, exactly what you said, it's just wasted time. Essentially, we have now been because of this courts mandate issued in December 12th of 2019 and now we're almost two years past that and we're no closer to getting any sort of relief for miscard, all because of this remand procedure.

Speaker 4:

But to answer your question another way, while it is an accepted practice to there is some benefit because she hasn't lost yet. It's one of those we always say tell our clients there's three ways the case can go. You can either the court says, nope, principal was correct, or at least their decision was reasonable. To their decision was not reasonable, we think you're entitled to benefits. Or three the remand procedure and then to the remand procedure it Whether or not you've been in pay status before and whether or not you get to be put back in the position you were.

Speaker 4:

But for that's one of the other issues that come up. Unfortunately in this case they deny miscards short, short term disability from the get-go they did not a long-term disability out of the gate, as well as our LCDD, so that really that issue never really came up, but that she's still entitled to seek her attorney's fees under the McKay v Relying standard case, which is from this court. I didn't see a question. So I think, if we move into because I think we have really established one thing here and that's the Fundamental issues who has jurisdiction? Is that this court still, or is it back to the decision?

Speaker 1:

on that. On that question, when, when the remand directive Comes from our court, the vast majority of our cases have to remands or remand with instructions. They say remand to the district court with instructions for the district court to remand to the plan. Does it matter that language was not in our earlier opinion or would you interpret that language to be Implied from what our opinion is doing when you read it in the context of the case law?

Speaker 4:

I think it's more so implied from what the case law is in these cases, as soon as this court ruled and Issued its mandate, its divestive of all jurisdiction, and then it goes back to the plan a minute to the district court, who then is basically just overseeing making sure whatever that mandate said happens. Here, the district court, here the discord said go back principle, do your decision. Again, the district court, the district court they didn't. The district court didn't need to do anything because it was already remanded back to principle by this court. And the failure of these growing from a case from this court said this records have duty, after they receive a mandate, once again obtained jurisdiction to obey the terms of the mayor mandate and carry it to into effect.

Speaker 3:

And that's exactly what needed to happen here.

Speaker 4:

To carry it into a minute, went back you know we were waiting for the court to make a decision. We filed a motion for attorney's fees and then nothing really happened. That was fully briefed. While we are waiting, then we're waiting for principle to make their decision, or whatever they were going to do.

Speaker 3:

They went ahead and paid her short-term disability benefits and seating that she was disabled at least through that period of time, which would be the elimination period for the L T D benefits, and then we had to go back to the district, and we had to go back to the district and address both the ultimate merits of the long-term disability and the attorney fees. That's correct and that's what you're still maintaining now. That's jurisdiction should have exercised. That's correct. So why don't we just stop right there and remand it back to do what we all think? Arguably the district should?

Speaker 4:

have done, and then we have to go back to the district and we have to go back to the district and really address all this other stuff If you rule in our favor on that issue in a reverse and instruct, not tell, judge called well to go ahead and actually make a decision on these issues, both on the L T D and L C D, or say that she had jurisdiction to consider can consider the L T D and L C D as well as their attorney fees, and I think that's a good point.

Speaker 4:

So I think that's a good backstop argument. Basically, I do see a amount of time I'm. If you don't mind, I'll answer your question shortly. But the answer your question, the reason we went into that second pronged approach, is going back to what judge Murphy was insinuating was. Look how much time this remand has really caused us. Eventually, this case is going to be up on this court on to no more review anyways.

Speaker 3:

Here's all the facts within your hearing, and I think that's a good point, and I think that's a good point, and that's not only in case we don't send it back.

Speaker 6:

That's, that was only in case this court found that found that it had jurisdiction rather than the dish or court main. Thank you, council. Good morning, your honors Good morning. Opposing Council made please the court and occur, staying with Wilson out there for principle the appellee.

Speaker 3:

In this case we agree with council for miscarred counsel, and we're not sure that we could get that to quite ended up like this and you're opposing us remanding it back?

Speaker 6:

No, not really, we were surprised about the order of the district. We should remand it back. Are we done? I think the only issue that we feel we should put on the record is that the timeliness that miscards council is hung up on is based on the argument that the court has made.

Speaker 5:

The court has decided to make a decision started running Usually the procedural posture. Is that an argument for us now, or would it be for judge Caldwell? If we were to demand the case, you could tell judge Caldwell that their main argument about timing doesn't work for whatever reason you're going to give yes, as long as we all agree.

Speaker 6:

it's not waived and it was put on the record. We certainly don't think that's the right argument.

Speaker 1:

You actually say that the district court didn't have jurisdiction, so you're switching positions now, aren't?

Speaker 6:

you. No, we never argued jurisdiction in the district court. Okay, it was never an issue because, frankly, nobody ever thought that the district court could believe that the mandate was directed at the district court. Granted, the language is not in the mandate, I agree. I think that's the right argument for the district court. The language of the decision awkwardly maybe, if I may say so remanded it directly to the claims administrator, which is certainly what judge Caldwell picked up on and decided to base her ruling on. On this, timeliness question.

Speaker 3:

Doesn't it really come down to the question of whether we think we would benefit from the district judge analyzing it in the first place and then we would review her decision?

Speaker 6:

Absolutely. I think that's the right argument. I think that's the premise that the district court should review issues first before the appellate court gets involved, meaning anything that was raised down below and wasn't decided, wasn't reached, should not be discussed before the appellate court, which largely ends my argument. If there's really nothing else to discuss, pretending to the merits, I do not need to discuss the facts.

Speaker 5:

I do not need to discuss the facts. I'm just curious about the ruling. Fair enough, thank you, council. We appreciate it.

Speaker 2:

Thank you. Any rebuttal? Okay, I appreciate that too. The case will be submitted. The proceeding has been a production of Ben Glass Law, a Fairfax, virginia-based personal injury and long-term disability law firm. For a free evaluation of your claim, visit us at themescapeshakescom service. No-transcript.