High Court Rules Against Disability Insurer

In the MetLife decision, the Supreme Court held that, as in Firestone, “A court should be ‘guided by principles of trust law’, analogizing a plan administrator to a trustee and considering a benefit determination a fiduciary act.”

Chief Justice John Roberts concurred in the judgment and wrote an opinion agreeing in part with the court’s opinion.

Justice Anthony Kennedy concurred in part and dissented in part, and Justice Antonin wrote a dissenting opinion on behalf of himself and Justice Clarence Thomas.

“We accept the decision of the court,” MetLife Inc., New York, says in a statement about the ruling. “While the decision does not substantively change the law, it did affirm the award of benefits to Glenn, and we will pay those benefits promptly. The court does provide some guidance on how courts should review disputed claims which will be important to the employee-benefits community. As both an insurer and claim fiduciary, MetLife holds itself to the highest standards of integrity and ethical behavior to ensure we make appropriate, timely determinations on behalf of our clients and their employees.”

Joshua Rosenkranz of Heller Ehrman L.L.P., New York, who represented the claimant, welcomed the ruling.

“This was a critically important ruling for any employee seeking to recover the benefits that he was promised,” Rosenkranz says.

MetLife took the position that the court should defer to the judgment of the insurance company when the company denies benefits, assuming that it is indifferent to whether or not it must pay claims, Rosenkranz says.

“The Supreme Court understood that this position defies common sense,” Rosenkranz says. “Anyone who has ever had a dispute with an insurance company knows that they are not necessarily always bent on paying what they owe. The Supreme Court held that lower courts should consider that reality when they review claim denials.”