After reporting just a few days ago about a significant victory on an ERISA case, today we are reporting on a loss from the 5th Circuit. This case is from Eastern District of Lousiana but the appeals court is the 5th Circuit which is the same appeals court for cases out of Texas and the court that Texas courts are to look to in rendering their decisions. The case is styled, Amanda C. Foster v. Principal Life Insurance Company.
Amanda worked as an attorney when she started experiencing intractable migraine headaches that made work impossible. Amanda applied to Principal for long term disability (LTD) benefits. After multiple reviews by various healthcare providers Principal denied her claim, concluding Amanda was not disabled within the meaning of the policy.
As in most disability claims, the reports from various medical providers for the claimant are voluminous and lengthy, as are the reviews by the doctors hired by the insurer to review the claim.
The Principal policy defines “disabled” when the claimant “cannot perform one or more of the substantial and material duties of his or her Own Occupation.” “Substantial and material duties” are “essential tasks generally required by employers from those engaged in a particular occupation that cannot be modified or omitted.” The Principal policy goes on to define “Own Occupation” for lawyers as “the specialty in the practice of law the Member is routinely performing for the Policyholder when his or her Disability begins.”
This case then describes Amanda’s usual work routine and what is required of her in the performance of her job.
Amanda went through the mandatory appeal process required in all ERISA cases and her claim denial continued. She filed suit and lost at the District Court level and the case then reached this 5th Circuit Court of Appeals.
This Court then stated the law saying, Where a benefits plan gives the administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe the terms of the plan, the reviewing court applies an abuse of discretion standard to the plan administrator’s decision to deny benefits. The Court then reviews de novo the district court’s conclusion that an ERISA plan administrator did not abuse its discretion in denying benefits.
The law requires that if the plan fiduciary’s decision is supported by substantial evidence and is not arbitrary and capricious, it must prevail. And what is important to keep in mind is that even if an ERISA claimant supports his claim with substantial evidence, or even with a preponderance, he will not prevail for that reason. Rather, it is the plan administrator’s decision that must be supported by substantial evidence. If it is supported by substantial evidence, it must prevail.