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Citing ERISA Preemption, Sixth Circuit Dismisses State-Law Claims

Excerpt: The Sixth Circuit rejected Lerner's [the plaintiff] arguments that his state-law claims against EDS were based not on Continental's denial of long-term disability benefits, but on EDS's alleged failure to make sure that his SDRC benefits were not diminished in the corporate transition. The Court pointed out that Lerner had specifically pled in his state-law claims that his damages included 'the loss of disability insurance benefits (monthly benefit payments, return to work benefits, and rehabilitation benefits.)' In the view of the Court, 'Lerner has thus chosen to seek payment of the disability insurance benefits themselves, not merely damages in an amount equal to those benefits.' Therefore, the Court said, 'the state-law claims against EDS for breach of contract, fraudulent misrepresentation, and innocent misrepresentation 'relate to' an ERISA benefit plan and are preempted by that federal statute.'

Court of Appeals Finds Sun Life Acted Arbitrarily and Capriciously in Disability Case

Excerpt: After reviewing the quality and quantity of the medical evidence, the court found that 'the entirety of the medical evidence available to Sun Life was not reviewed in a 'deliberate' or 'principled' fashion, which is a factor suggesting that Sun Life's ultimate determination was arbitary.' The fact that DeLisle worked for two weeks after leaving her employer and listed 'lack of work' as her reason for leaving her employer did not amount to persuasive evidence that she was able to complete the duties of her job on April 17, 2002. For these and other reasons, the Sixth Circuit agreed with the district court and concluded that Sun Life had acted arbitrarily and capriciously.

Court Orders CIGNA to Pay Six-Figure Attorney's Fees in ERISA Case

Excerpt: Steven Alfano won his ERISA claim for long-term disability benefits against CIGNA. The district court had previously ruled that there was 'no sound basis in the record to support CIGNA's finding that plaintiff's back condition ? had in fact improved.' Alfano sought attorney's fees from CIGNA under 29 U.S.C. ? 1132(g)(1). In its analysis, the court considered the following factors under Second Circuit jurisprudence: (1) defendant's culpability or bad faith, (2) defendant's ability to withstand payment, (3) the extent to which an award would deter others from similar conduct, (4) the relative merits of the parties' positions, and (5) whether the action confers a common benefit on a class.

Sixth Circuit Says Independent Medical Examination Results Doom Plaintiff's Disability Claim

Excerpt: The bottom line is that the use of examining physicians can seriously affect the outcome of an ERISA claim. Indeed, in Lupo v. Daimlerchrysler Corp., 2008 U.S. App. LEXIS 13658 (5th Cir. Jun. 24, 2008), the use of an examining physician became entirely conclusive.

Prudential Policy Language Insufficient to Trigger Abuse-of-Discretion Review

Excerpt: Language commonly used by Prudential in its disability policies is no stranger to dispute. The language says that a claimant is entitled to benefits 'when Prudential determines' that he or she is eligible. Prudential asserts that this language meets the Firestone test for vesting discretionary authority.