So who is a proper defendant in an ERISA benefits case? BIG NEWS: The answer just changed in the Ninth Circuit.
The Ninth Circuit just overruled Everhart v. Allmerica Financial Life Insurance Co., 275 F.3d 751 (9th Cir. 2011) and other cases, which limited proper defendants to plans and plan administrators.
In the Ninth Circuit, federal law allows ERISA beneficiaries to sue third party insurers.
Here’s today’s case: Cyr v. Reliance Standard, __ F. 3d __ (9th Cir. June 22, 2011)(pdf)
FACTS:
Cyr was a beneficiary under her employer, CTI’s ERISA long term disability benefit, insured by Reliance Standard. Reliance controlled the decision on denial of benefits, but was not identified as the plan administrator. Cyr sued claiming she should receive higher disability benefit amounts. She sued: Reliance, the CTI Group plan and CTI as plan administrator.
Reliance moved for summary judgment contending only the plan or plan administrator were proper parties. It was denied. Reliance appealed.
ISSUE: Whether Reliance was a proper defendant in a suit for benefits “even though it isn’t a plan or a plan administrator?”
HELD: Reliance IS a proper defendant.
- “Potential defendants in actions under Section 1132(a)(1)(B) should NOT be limited to plans and plan administrators….”. Op. at 8503-4 (Emph. added).
- Reliance is a proper defendant in this lawsuit. Any suggestions to the contrary in our prior decisions, including…Everhart v. Allmerica Financial Life Insurance Co., 275 F.3d 751, 756 (9th Cir. 2001) [and other cases] are overruled.”