How I feel about this case: McCauley v. First Unum Life Insurance Company. Justice at last. . . sorrow that one of my fellow tax attorneys had to fight such a legal battle for over 13 long years when he should have been able to focus on fighting the disease that was ravaging his body. . .gratefulness that the Second Circuit was able to finally deliver a proper result with a little help from MetLife v. Glenn.
As usual, Roy Harmon has provided a summary of the legal arguments of the case in his wonderful style here. However, besides the obvious importance of the case in its post-Glenn analysis, I have the following comments:
(1) The McCauley case is a perfect example of what the Supreme Court had in mind when it said this in the Glenn case:
We believe that Firestone means what the word “factor” implies, namely, that when judges review the lawfulness of benefit denials, they will often take account of several different considerations of which a conflict of interest is one. . . In such instances, any one factor will act as a tiebreaker when the other factors are closely balanced, the degree of closeness necessary depending upon the tiebreaking factor’s inherent or case-specific importance. The conflict of interest at issue here, for example, should prove more important (perhaps of great importance) where circumstances suggest a higher likelihood that it affected the benefits decision, including, but not limited to, cases where an insurance company administrator has a history of biased claims administration. See Langbein, supra, at 1317–1321 (detailing such a history for one large insurer). . .
Interesting to note is the fact that the Second Circuit, in a discussion of the insurer’s “history of deception and abusive tactics”, refers to episodes of “60 Minutes” and “Dateline” as being indicative of such history.
(2) Although Glenn will at least provide some help to employees seeking to perfect claims under their employer-based disability policies, employers may still want to consider structuring their disability programs for employees as non-ERISA plans in order to ensure a greater possibility of recovery. Read more about this quagmire in the law in this previous post here: Voluntary Benefits Becoming a Catch 22 for Employers.