The Meaning of Arbitrary and Capricious Review

A colleague - who, to protect the innocent, shall remain nameless (sort of a blog witness protection program) - passed along this remarkable decision out of the Fourth Circuit this month, Evans v. Eaton Corporation Long Term Disability Plan. The decision is an elegant and sustained defense of the granting of discretion to administrators and the application of the arbitrary and capricious standard of review under ERISA. The opinion reads almost as though the court set out to answer, and perhaps even to throw down a gauntlet to, critics who complain that the Supreme Court should not have established discretionary authority and the corresponding level of review, explaining, among other points, that such review is instead entirely consistent with the purposes and operation of ERISA, as well as with congressional intent. It’s a fine decision, whether you agree or disagree with the court’s analysis and conclusions. I would go beyond that, and suggest that critics of arbitrary and capricious review need to confront and provide a persuasive response to the court’s analysis of these issues, if they are going to criticize, with any credibility, the arbitrary and capricious review standards applied by the courts.