Collier v. Lincoln Life Assurance Co. of Bos.

When a district court applies de novo review to an administrator’s denial of benefits, it affords no deference, evaluating only whether the correct choice was made. Abatie v. Alta Health & Life Ins. Co., 458 F.3d 955, 963 (9th Cir. 2006) (en banc).

Respondent provided insurance through Petitioner’s employer, and denied Petitioner’s long-term disability claim, based upon an assessment of Petitioner’s job and medical records. Petitioner’s internal appeal was denied. The district court, on de novo review of the same evidence, also denied the claim. ERISA § 502(a)(1)(B); 29 U.S.C. § 1132(a)(1)(B). The district court’s conclusion rested in large part upon a new rational for denying Petitioner benefits, not advanced by Respondent in previous denials, a lack of credibility. Upon denial, plan administrators must provide the claimant a specific reason for denial. 29 C.F.R. § 2560.503–1(g)(1)(i). When a district court applies de novo review to an administrator’s denial of benefits, it affords no deference, evaluating whether the correct choice was made. Abatie v. Alta Health & Life Ins. Co., 458 F.3d 955, 963 (9th Cir. 2006) (en banc). During review, if any new rationales are advanced, the claimant must have a “reasonable opportunity to respond." 29 C.F.R. § 2560.503–1(h)(4)(ii). When a plan administrator advances a new rationale for the first time in litigation, ERISA and implementing regulations are undermined. See, e.g., Harlick v. Blue Shield of California, 686 F.3d 699, 719-20 (9th Cir. 2012). Respondent’s lack of credibility argument was not advanced until litigation, “sandbag[ing]” Petitioner from effectively responding. Id. at 720. Reversed and remanded.