In Montour v. Hartford Life & Accid.Ins.Co., 2009 U.S.App.LEXIS 20378 (Sep. 14), the 9th U.S. Circuit Court of Appeals has taken an approach to Glenn v. Metro.Life Ins.Co., 128 S.Ct. 2343 (2008), that requires a court reviewing a benefit decision governed by the Employee Retirement Income Security Act, 29 U.S.C. §1001 et seq., to apply a "more complex application of the abuse of discretion standard" when taking into consideration a determination made by a conflicted plan administrator. No longer may a court affirm a determination based on a "modicum of evidence" supporting the administrator's decision. Although the policy at issue contained language sufficient to trigger deference to the insurer's determination, the 9th Circuit found that in ERISA cases involving insurance, it is no longer adequate for a lower court to "[s]imply constru[e] the terms of the underlying plan and scan the record for medical evidence supporting the plan administrator's decision." Instead, Glenn instructs that the court is to consider a combination of factors, including the conflict of interest, and weigh all the factors together.

The court enumerated several of those factors, which include: "the quality and quantity of the medical evidence, whether the plan administrator subjected the claimant to an in-person medical evaluation or relied instead on a paper review of the claimant's existing medical records, whether the administrator provided its independent experts 'with all of the relevant evidence[,]' and whether the administrator considered a contrary SSA disability determination, if any."

In addition, the weight assigned to each factor depends on the circumstances of each case, with the conflict given less consideration where evidence is produced showing the insurer took active steps to reduce the threat the conflict would influence the decision. However, more weight is given to the conflict where it appears it influenced the insurer's decision.

Applying those principles to the evidence of record, the court of appeals noted several instances demonstrating bias. First, the court cited Hartford's heavy reliance on surveillance that had been performed, but noted that the surveillance showed minimal activities that were all consistent with Montour's claimed restrictions. Hence, the court concluded that the plaintiff's ability to "perform sedentary activities in bursts spread out over four days does not indicate that he is capable of sustaining activity in a full-time occupation." In addition, the court found Hartford overstated the results of the surveillance in communications with plaintiff's physicians and with the doctors it retained to review the claim, going so far as to inform its doctors that the surveillance "video clearly shows the claimant performing activities above those required for a sedentary job." But the court found "this was clearly not the case."

The court also pointed to Hartford's failure to present any evidence of efforts to assure an accurate claim determination. Instead of showing a neutral review process, the court found the evidence demonstrated that Hartford took an advocacy position to deny disability. The court was particularly disturbed by Hartford's decision to conduct a "pure paper" review rather than perform an in-person medical examination. While making it clear that an insurer is not required to conduct an examination, the policy of insurance gives it the authority to do so, and the reliance on a paper evaluation "raise[s] questions about the thoroughness and accuracy of the benefits determination." (citing Bennett v. Kemper Nat'l Servs., Inc., 514 F.3d 547, 554 (6th Cir. 2008)).

The court was also skeptical of the quality of the file reviews that were performed which were dismissive of the severity of Montour's pain due to a claimed lack of objective evidence, with the court finding it "would probably have been unreasonable for Hartford to require Montour to produce objective proof of his pain level." Also disturbing to the court was one consultant's fixation on the lack of progression of Montour's back condition, since the court had already found in another case that when an insurer has paid disability benefits for several years based on the same findings, further progression of those findings may not be required in order to sustain benefits. (Citing Saffon v. Wells Fargo & Co. Long Term Disability Plan, 522 F.3d 863 (9th Cir. 2008)).

The final factor cited by the court was the insurer's failure to consider a contrary disability determination made by the Social Security Administration. The Hartford policy required an application for Social Security disability, and Hartford demanded that Montour apply for benefits. Yet, despite a favorable Social Security disability outcome, which resulted in a dollar for dollar offset of the social security payment against the Hartford benefits, nearly halving Hartford's liability, the insurer offered no explanation for not considering the Social Security award.

The court explained, "While ERISA plan administrators are not bound by the SSA's determination, complete disregard for a contrary conclusion without so much as an explanation raises questions about whether an adverse benefits determination was 'the product of a principled and deliberative reasoning process.'" While acknowledging the existence of some differences between the Social Security disability program and Hartford's disability insurance policy, such as that Social Security gives deference to the treating doctor's opinion if certain criteria are met, the court found that was not enough of a basis to disregard the Social Security award since SSA utilizes a more stringent standard for an award of benefits than Hartford. The court then explained the insurer's obligation — "Ordinarily, a proper acknowledgment of a contrary SSA disability determination would entail comparing and contrasting not just the definitions employed but also the medical evidence upon which the decisionmakers relied." While the court conceded that the claimant failed to provide more than just the fact of the Social Security award, Hartford was criticized for not requesting that such evidence be provided since the insurer implied that was the reason why the Social Security determination was not given any weight. Hence, the court found Hartford's failure to explain why it reached a conclusion that differed from the Social Security finding was yet another factor justifying reversal of Hartford's determination.

Montour is a very significant ruling. The 9th Circuit clearly understood that Glenn's citation to two administrative law rulings, Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402 (1971), and Universal Camera Corp. v. NLRB, 340 U.S. 474 (1951), was a signal to the lower courts that in adjudicating ERISA cases, they are to ascertain that the determination under review be supported by adequate proof. Both Overton Park and Universal Camera cautioned lower courts against abdicating their judicial role despite their duty to defer to the prior administrative determination. Montour also seized upon language utilized in the 6th Circuit Glenn opinion requiring the court to examine the quality of the evidence relied on by the plan administrator; and which expressed skepticism about findings made by doctors who perform pure file reviews rather than perform examinations of the claimant. The Supreme Court placed emphasis in Glenn on the need for accuracy in claim determinations. Both the 6th Circuit, and now the 9th Circuit recognize the risk of inaccurate conclusions from file reviews. While this is good news indeed for the citizens of the states encompassed by those circuits, it means the residents of other states have far weaker protection under ERISA despite the Congressional intent to promote uniformity under the law.

Judges decide cases based on the principle of stare decisis and seek to avoid uncertainty that would surely result should each court decide the same question of law differently without the guiding hand of precedent. However, ERISA precedent has created a trap for courts requiring them to give deference to determinations made by insurance companies under a framework for decisionmaking that generally accepts file reviews performed by partisan doctors whose opinions are received as substantial evidence without any meaningful challenge. This is due to the bizarre application, without any statutory basis, of an administrative law paradigm to the adjudication of ERISA cases that offers none of the due process protections inherent in administrative adjudications. Unfortunately, once the door was opened by the Supreme Court's ruling in Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (1989), precedent requires that courts will continue to defer to reviewing doctor opinions without skepticism. And courts must also give deference in ERISA cases to insurance company findings despite what must be doubt in most judicial minds as to whether there exists a legitimate public policy basis for doing so. Glenn reset the clock and created an opportunity for courts to reframe their analysis of claim decisions under ERISA.

In Montour, the 9th Circuit seized the opportunity presented; and those fortunate enough to live in the states within that circuit are now assured of greater protection of their health and disability benefits.