Benefits & ERISA Law

You Say Potato, I Say Potahtoe: Structural Conflicts of Interest After Metropolitan Life

Geez, I certainly don't mean anything by it, but in its application by the courts, this new 'structural conflict of interest' rule imposed by the Supreme Court in Metropolitan Life v. Glenn seems to be just as open to variation from circuit to circuit as was the case with the highly variegated rules across the circuits on this issue that predated it. Some circuits appear to be treating the standard as little more than a variation on the themes that preceded it; for instance, my take at this point in the First Circuit is that the standard now means that discovery is proper to explore whether the conflict affected the outcome and, if it did, than that should be taken into account; I have to say, I am having trouble seeing how this is much different than the circuit's rule pre- Metropolitan Life, which held that a structural conflict was only relevant if it had an actual impact on the outcome. I suppose one change is that the rule now allows discovery into that question, before a court rules on that point - as occurred here - which wasn't necessarily the case in this circuit prior to the Supreme Court's ruling. On the other end of the spectrum is a recent ruling by the Ninth Circuit, discussed here, which can be fairly understood as treating the existence of the structural conflict as a legitimate basis for engaging in de novo review by another name; it is hard to read this analysis of that decision without viewing the court as having conducted a de novo review of the evidence in light of the structural conflict and using that as the basis for decision making. Variety is the spice of life, I guess, and has long been the norm when it comes to the handling by different circuits of the same issues arising under ERISA. Although Metropolitan Life appears to have standardized those rules with regard to one issue - namely the effect of 'structural conflict of interests' - to some degree, it hasn't come close to putting the treatment of that issue on the same page in every circuit.

Full post as published by Boston ERISA Law Blog on September 22, 2009 (boomark / email).