Prichard v. Metropolitan Life Ins. Co.

A court reviews denials of insurance benefits de novo when the governing plan document does not contain discretion-granting terms.

Matthew Prichard filed suit contesting an ERISA plan administrator's denial of his long-term disability benefits. Prichard obtained disability insurance from his employer IBM, and was denied long-term disability benefits by the insurer, Metropolitan Life Insurance Company (“MetLife”). Prichard was asked for proof of continued medical disability, but MetLife concluded that there was insufficient evidence to give Prichard long-term disability benefits. The district court reviewed MetLife’s decision for abuse of discretion, and determined that MetLife was within its authority as granted by the Summary Plan Document (“SPD”). On appeal, Prichard argued that the district court should have reviewed the case de novo because, as stated in CIGNA Corp. v. Amara, the grant of discretion located exclusively within an SPD is insufficient to grant discretionary review. The Ninth Circuit noted that sometimes an SPD may constitute a governing plan document through a “consolidated approach.” However, the panel determined that an insurance certificate in the record was the governing plan document because it specifically stated the plan’s terms and provisions, and was clearly written for IBM employees, the beneficiaries, which included Prichard. The panel found that the insurance certificate contained no grant of discretion to MetLife. Therefore, the panel reasoned that since the insurance certificate contained no grant of discretion, the discretionary language within the SPD does not create an additional term of the plan. Thus, the panel concluded that the district court erred in using abuse of discretion, and remanded the case to be reviewed de novo. VACATED and REMANDED.