The U.S. Supreme Court has shown an interest in a group long-term disability insurance discretionary clause case.
The court has asked Paul Clement, the solicitor general of the United States, to file a brief expressing his views on the case, MetLife et al. vs. Wanda Glenn.
The MetLife case hinges on questions about the procedures courts should follow when reviewing disputes involving insurance contracts that give administrators broad discretion over interpreting policy terms and reviewing claims.
The solicitor general is the U.S. Justice Department official who represents the United States in cases before the Supreme Court.
A representative for MetLife Inc., New York, declined to comment on the MetLife case.
At least 4 justices must support a motion for a “call for the views of the solicitor general” before the court will issue a call.
The Supreme Court issues calls to the solicitor general for only about 10 to 20 cases per year, and a call often gives the parties involved in a case a chance to explain their positions to the staffers who are helping to develop the solicitor general’s response, according to a discussion of the practice written by lawyers at Morrison & Foerster L.L.P., San Francisco.
The MetLife case concerns Wanda Glenn, a former retail store sales manager who went on disability leave after she developed an enlarged heart muscle and her cardiologist said she could no longer handle the stress related to full-time work.
A unit of MetLife acted both as the group LTD plan insurer and the plan administrator, and it helped Glenn apply successfully for Social Security Disability Income benefits.
The company cut off Glenn’s benefits after an independent consultant suggested that Glenn might be able to handle a sedentary job on a trial basis.
Glenn sued for reinstatement of benefits in the U.S. District Court in Columbus, Ohio, in 2003.
The court ruled in MetLife’s favor, noting that the LTD policy included a clause giving MetLife discretion over benefits determinations.
A panel of 3 judges from the 6th U.S. Circuit Court of Appeals decided in September 2006 to overturn the lower court ruling.
Although courts can overturn determinations involving LTD plans with discretionary clauses only when the determinations are “arbitrary and capricious,” the “arbitrary-and-capricious standard…does not require us merely to rubber stamp the administrator’s decision,” Judge Martha Craig Daughtrey wrote in the opinion explaining the court’s decision.
In the MetLife case, MetLife may have had a conflict of interest because it acted both as the LTD insurer and the LTD plan administrator, and it may not have given sufficient consideration to the Social Security Administration’s determination that Glenn was totally disabled, Daughtrey wrote.
The 6th Circuit holding on the conflict-of-interest issue conflicts with holdings in 2 other circuits, and the holding on the lack of weight apparently given to the SSA determination conflicts with holdings in 6 other circuits, according to Public Citizen, Washington.