There is an interesting twist to a recent Seventh Circuit decision, Leger v. Tribune Company Long Term Disability Plan. The decision starts out as an attempt by the participant to resuscitate her benefits claim by invoking Glenn v. MetLife and asserting that a structural conflict of interest existed warranting an alteration to the standard of review. The Seventh Circuit, though, quickly rejected that position, finding that there wasn’t even a conflict of a level that warranted being considered as a factor in conducting an arbitrary and capricious standard of review. Uh oh, says the reader, we know how this story ends: the conflict of interest argument in this context signifies in most decisions that the participant has no other hook to hang her claim on, and is taking her last, desperate shot, dooming her when, as in this opinion, the court summarily rejects the argument. But the Seventh Circuit surprises here, as this issue is not the last one addressed, but is instead simply a signpost along the way to the ultimate conclusion and to the application by the court of what, in most cases, is not an approach one sees taken. Rather than stopping with the standard analysis that, one, the conflict of interest doesn’t change anything, and, two, there is reasonable support in the record for the decision to terminate benefits, thus ending the case, the court continued from there, finding, instead, that the decision, despite having support in the record, failed to account for numerous conflicting pieces of evidence contained in the administrative record or possible interpretations justified by the record. The court held that the decision to terminate could not be sustained in that circumstance, and that, instead, the issue had to go back to the administrator for purposes of making a decision that did, in fact, take all such concerns into account (the court actually just remanded it to the district court for proceedings consistent with its ruling, but one presumes this would mean remanding it back to the administrator to address these issues, followed by litigating the issues all over again).
I have commented in the past on this point – the question of courts applying a more searching level of review while nominally still proceeding under the arbitrary and capricious standard of review is much more significant both to parties and to the development of the law in this area than is the question of whether conflicts exist, and if so their impact.