They say that professional football is far and away the most successful entertainment business – let alone sports league – in the country, but behind the scenes all is not tea and roses, quite clearly. Anyone who follows the sport knows the physical toll it takes on many of its best players, and a dark story of that aspect of the sport has been playing out in the courts for some time now, involving the debilitating injuries, and subsequent claim for disability benefits, of one of football’s bigger stars, the former Pittsburgh Steelers center Mike Webster. Webster, we learn from a lawsuit his estate brought seeking higher benefits than those awarded to him by the administrator of the National Football League’s retirement plan, “was diagnosed in 1998 with brain damage resulting from multiple head injuries he incurred while playing football.” He thereafter received from the retirement plan the lesser of two possible disability benefit awards available under the league’s retirement plan.
Lawyers for Webster eventually sued the retirement plan, alleging that the plan was governed by ERISA and that the plan administrator abused its discretion in denying the higher of the benefit awards to Webster, and in awarding him only the lower of the two. Discretion was reserved to the administrator in no uncertain terms, and yet the courts had no trouble concluding that the discretion had been abused, and in therefore overruling the plan’s benefit decision. As any of you who practice in this field or regularly read this blog know, a finding that an administrator acted arbitrarily and capriciously and abused its discretion – warranting rejection of the administrator’s determination – is a relatively uncommon event.
As a result, when one gets beyond the sports story interest raised by the case, the interesting question that is left behind is what was it about the administrator’s determination that drove the court to such a conclusion. And the answer to that question is telling: the Fourth Circuit had little trouble concluding that an abuse of discretion had occurred because “[w]hile recognizing that the decisions of a neutral plan administrator are entitled to great deference, we are nevertheless constrained to find on these facts that the Board lacked substantial evidence to justify its denial here. In particular, the Board ignored the unanimous medical evidence, including that of its own expert, disregarded the conclusion of its own appointed investigator, and relied for its determination on factors disallowed by the Plan.”
Well, if you think about it, how can those facts be anything but an abuse of discretion? And in many ways, that is what is different about this case from most denial of benefit cases, in which claimants routinely assert that an administrator wrongly weighed the evidence in the administrative record and therefore committed an abuse of discretion; in those typical cases, the evidence in the administrative record is subject to differing possible conclusions, and ERISA grants the administrator – so long as it was granted discretion by the plan documents – the freedom to select which of those possible conclusions should apply. Here, however, the administrator was not picking among possible conclusions warranted by the evidence, but was instead selecting a conclusion that was entirely contradicted by the overwhelming – and it appears possibly unanimous – evidence before it. That, we see quite clearly in this case, is beyond the outer edge of an administrator’s discretion.
The case, which is interesting for those of you interested in football, in Mike Webster, or in ERISA, is Sunny Jani, Administrator of the Estate of Michael L. Webster v. the Bert Bell/Pete Rozelle NFL Player Retirement Plan, out of the Fourth Circuit this week.