Well, I guess this wouldn’t be much of an ERISA blog if I didn’t put up a post about the Supreme Court’s decision in Conkright v. Frommert, on the question of whether an administrator continues to be entitled to deferential review when it has already had one interpretation of the challenged plan terms rejected by the court under that standard. Interestingly, coming on the heels of Glenn, the simple fact that the Court had accepted cert in the case suggested some type of change was in the offing for the standard of review, even if it was only incrementally with regard to the application of that standard of review in this type of a fact pattern. Otherwise, frankly, one could see no reason for the Court’s particular interest in the case. The Court, though, found no change to be warranted, and simply reinforced the basic themes of its main cases over the years related to this issue: that deferential review is to be applied, that lower courts are not to deviate from it on ad hoc rationales, and that deferential review is a necessary element of the balancing act between employee rights on the one hand and the need to encourage employers to provide benefit plans on the other. Its not a bad ruling, in the sense that it does give lower courts and practitioners some much needed guidance after decisions such as Glenn, by the Supreme Court, and lower court decisions that played at the margins of the deferential review standards; the decision can, in many ways, be understood as a signal to stick to the basic rules that apply in this area, to not accept the many creative challenges to deferential review that participant lawyers come up with (and which, to their credit, seem to be limited only by the extent of their imagination and legal skills), and to not read cases like Glenn as suggesting any fundamental weakening of that standard outside of the specific factual circumstances presented by that case. And in that regard, the majority opinion can be read as sending that message loud and clear; in fact, the language of the opinion seems to have been selected to purposely drive that point home in as strong a tone as possible. That’s my take on it, anyway.
In fact, the majority opinion was written by Chief Justice Roberts, who, you will recall, authored a concurring opinion in LaRue that has been interpreted by some writers, myself included, as an attempt to prevent the ruling from significantly expanding the extent and scope of ERISA litigation, by placing the type of claim at issue in that case in the realm of denied benefit claims – where deferential review, limited discovery, limitation to the administrative record, and internal administrative appeals rule – rather than in the more free form realm of fiduciary duty litigation. His opinion in LaRue strikes the same tone of wanting to prevent an escalation in ERISA litigation that is at play in the opinion authored by him in Conkright, and this ruling may well have that exact effect; if nothing else, it should quickly become arrow number one in a defense lawyer’s quiver whenever a participant or a participant class seeks to deviate from a strict application of the arbitrary and capricious standard.