Comments on First Circuit Law Post-Glenn

I thought I would post some thoughts and comments on the First Circuit’s pronouncement of its law after Glenn, before too much more time goes by, rather than waiting for a window of time that would allow me to write a much longer post on it. Some things that sit too long get stale, and comments on new, noteworthy opinions fall in that category, so here are my thoughts. First, for those of you who haven’t seen it yet, a First Circuit panel has now issued an opinion detailing how the First Circuit will handle structural conflict of interest situations in light of the Supreme Court’s ruling in Glenn. You can find the opinion here. Of note, the panel goes out of its way to paint prior, pre-Glenn, First Circuit decisions as not particularly different than the holding in Glenn, and to a certain extent this is true: prior First Circuit precedent had required that structural conflicts only affect the outcome if there was a showing that the conflict had actually impacted the benefit determination, and in many ways this is very consistent with the holding in Glenn that consideration of the structural conflict is only one aspect of the review and that such a conflict is essentially irrelevant if the evidence shows the conflict was cabined in a way that demonstrates it played little or no role in the outcome.

Second, and of particular note, the panel made clear that it was only dealing with the specific issue at play in Glenn, namely the impact of a structural conflict of interest. The court indicated that the rule may well be different in the presence of evidence showing that there was an actual conflict that motivated the outcome, and that a change in the standard of review might continue to be appropriate under that circumstance. In essence, while withholding judgment on what rule it might adopt in that circumstance after Glenn, the First Circuit is distinguishing between arguments that begin from the premise that there was a structural conflict of interest - the Glenn type scenario - and arguments based on the idea that the administrator was actually subjectively motivated by a conflict; the court made clear that only the former scenario is governed by its new decision applying the Glenn rubric.

Third, in an aspect of its decision that provoked the ire of one member of the Panel who wrote a concurring opinion specifically to challenge the opinion’s analysis of this issue, the case holds that the First Circuit’s prior rulings on discovery in denial of benefits cases - that little is to be allowed and it is disfavored - remain in effect and are consistent with Glenn. Of even more interest and practical concern going forward, though, is the court’s conclusion that, rather than engage in discovery into the possible impact of a structural conflict of interest on a decision, it is incumbent upon administrators to make the evidence of the cabining and lack of impact of such a conflict part of the administrative record compiled during the administrator’s handling of a claim. If there is a functional impact of the First Circuit’s ruling on plan administrators, it is this one - the need to evidence the lack of importance of the structural conflict in the administrative record itself.