Benefits & ERISA Law

Will the Critics Get Their Wish? The Supreme Court Gives Some Thought to Structural Conflicts of Interest

Unlike me, Appellate Law and Practice, the scrivener who covers all things appellate, didn’t take New Year’s Eve off, and noted that day that the federal government had recommended that the Supreme Court accept cert in a case addressing the question of how a structural conflict of interest - that is, where the administrator who is deciding benefits under an ERISA governed plan is also the party responsible for paying such benefits if they are awarded - should affect the standard of review applied by a court to a challenge to a benefit determination. SCOTUSBlog sums up the issue here, noting that the government recommended granting cert in the case of “MetLife v. Glenn, limited to the question presented of whether an ERISA plan administrator that both evaluates and pays claims operates under a conflict of interest that must be weighed on judicial review of benefit determinations.”

The question of how this type of situation should affect the standard of review has been subject to a variety of answers in a variety of different circuits, as surveyed here, and the current rules concerning this issue have been subject to extensive academic and judicial criticism, to the point that in the First Circuit, appellate panels have criticized the rules governing the issue even as they have applied them. Personally, I am not convinced that the dispute over the issue isn’t really academic to a certain extent, in that, in the realpolitik world of litigation, it has been my experience that the underlying facts point towards the right outcome regardless of the standard of review applied in cases involving such alleged structural conflicts; I won’t reiterate that entire argument here, but you can find some of it here in this post.

Anyway, there is obviously enough background noise in the system over this particular issue of so-called structural conflicts of interest that it would make sense for it to be on the Supreme Court’s radar, and probably eventually its docket. I have noted before that I think the Supreme Court is looking for vehicles to weigh in on some of the more problematic areas of ERISA jurisprudence, and I think you see another instance of that here.

Full post as published by Boston ERISA Law Blog on January 02, 2008 (boomark / email).