You know that failing to follow Department of Labor (DOL) claims regulations can result in the court using the de novo review standard, rather than the abuse of discretion standard in reviewing claim decisions.

But the court still may apply the abuse of discretion standard: if the plan can establish:

(1) it has procedures in full conformity with DOL regulations, and

(2) its failure to follow regulations was inadvertent and harmless.

So, what is the plan’s BURDEN OF PROOF to establish that it has procedures in conformity with DOL regulations?

And…does Plaintiff get to conduct discovery into claims procedures, and the way you handled the specific claim?

Here’s the recent case of Capretta v. Prudential Ins. Co., 2017 WL 4012058 (S.D.N.Y. August 28, 2017) “[A plan’s] burden to prove compliance with DOL regulations arises, if it ever arises, only after a plaintiff makes a reasonable showing that the defendant violated DOL rules.”)

FACTS: Capretta worked for four years following lung cancer treatment, and sought ERISA-governed long term disability benefits, which were denied. Plaintiff pursued discovery regarding Prudential’s claim procedures and its conduct in handling the specific claim.

ISSUE: Whether Prudential maintained “administrative processes designed to ensure that similarly-situated claimants are treated consistently and in accordance with plan documents?”

HELD:

                 PLAN’S BURDEN OF PROOF.

  1. “District courts have disagreed whether the plan’s burden of proof requires it to demonstrate compliance with the regulation in general, or simply to show that any noncompliance was inadvertent and harmless.” Op. at
  2. “[A plan’s] burden to prove compliance with DOL regulations arises, if it ever arises, only after a plaintiff makes a reasonable showing that the defendant violated DOL rules.” Op. at  (Emph. added)
  3. It would be wrong to require “a plan to prove affirmatively compliance based on the mere allegation that it might have violated the regulations.” (Emph. in original.) Op. at

DISCOVERY OF CLAIMS PROCEDURES DENIED.

  1. “[T]o take discovery outside of the administrative record, a plaintiff challenging a claims decision must show that there is ‘a reasonable chance that the requested discovery will satisfy the good cause requirement.’” Op. at
  2. Plaintiff “must do more than merely claim that [discovery] is needed to determine whether she received a full and fair review.” Op. at
  3. “[E]ven where a plaintiff has sufficiently alleged good cause, discovery requests may not be overly broad or redundant of what is already in the administrative record.” Op. at
  4. Plaintiff fails to show that [Prudential] did not maintain reasonable claims procedures, or explain how [Prudential’s] application of the procedures may have been irregular or noncompliant in this case.” Op. at
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Photo of Mike Reilly Mike Reilly

Mike Reilly is a nationally recognized labor, employment and employee benefits attorney, named one of the “Top 100 Most Powerful Employment Attorneys in the Nation” for the past five consecutive years by Human Resource Executive®. He has decades of experience providing strategic employment…

Mike Reilly is a nationally recognized labor, employment and employee benefits attorney, named one of the “Top 100 Most Powerful Employment Attorneys in the Nation” for the past five consecutive years by Human Resource Executive®. He has decades of experience providing strategic employment advice, and has represented clients in more than 75 jury trials, arbitrations, bench trials and claims before the EEOC and Washington State Human Rights Commission.

Small and large employers retain Mike for his strategic advice and decades of experience in employment issues and litigation, business decisions and litigation avoidance. Mike provides advice in claims involving discrimination, retaliation, wrongful discharge, disability accommodation, ERISA and non-ERISA employee benefit claims, and wage/hour claims. He served as lead counsel in an employee raiding/trade secret case as reported in the Wall Street Journal, and defends employers in class action claims.

Mike’s remarks on employment issues have been quoted in NewsweekCorporate Legal TimesSeattle TimesEmployee Relations Law JournalPuget Sound Business JournalCFO.com, and other professional journals and management publications. Chambers USA’s Guide to America’s Leading Lawyers for Businessrates Mike in the top ranking (band one) for his work in labor and employment law, and has described him as “one of Seattle’s top-rate attorneys” who is “truly phenomenal [with] superb legal instincts” and “an amazingly assertive litigator.” His clients include Nordstrom, Seattle Seahawks, Home Depot, KeyBank, Starbucks, Fred Hutchinson Cancer Research Center, Red Robin and Seattle Chamber of Commerce, among others.