Standard of Review and Discovery after Glenn: The Effect of the Glenn Standard of Review on the Role of Discovery in Cases Involving Conflicts of Interest

By Bondurant, Elizabeth J. | Defense Counsel Journal, January 2010 | Go to article overview

Standard of Review and Discovery after Glenn: The Effect of the Glenn Standard of Review on the Role of Discovery in Cases Involving Conflicts of Interest


Bondurant, Elizabeth J., Defense Counsel Journal


This article originally appeared in the October 2009 Business Litigation Committee Newsletter.

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After the Supreme Court's decision in Firestone Tire & Rubber Co. v. Bruch, (1) lower courts sometimes struggled to apply the appropriate standard of review to ERISA benefit determinations. The results were not uniform, particularly when a plan administrator operated under a conflict of interest. In Metropolitan Life Insurance Company v. Glenn, (2) the Supreme Court narrowed at least some of the divergence among the Courts of Appeal by establishing a uniform standard of review to be applied when a plan administrator operates under a conflict of interest. While most Circuits have embraced the standard set by Glenn, a new conflict has developed among the Circuits regarding the appropriate scope of discovery.

The new standard set by Glenn, requiting courts to weigh "as a factor" an insurer's conflicting duties of both evaluating and paying claims, has left courts questioning how to fully evaluate that conflict. Since Glenn, beneficiaries have sought discovery regarding internal procedures and guidelines, arguing that a court cannot evaluate a conflict of interest without at least some discovery outside of the scope of the administrative record. The resolutions to this discovery question have not been uniform: some courts allow grants of discovery when a structural conflict exists; others impose a strict denial of discovery as inconsistent with the level of deference courts generally grant administrators.

This article discusses both the standards of review embraced by the individual circuits since Glenn and the recent trends regarding the issue of discovery in cases involving an administrator's conflict of interest.

I. Metropolitan Life Insurance Company v. Glenn (3)

A. Case Discussion

In Metropolitan Life Insurance Company v. Glenn, the Supreme Court resolved two issues related to the appropriate standard of review for benefit determination cases where a plan administrator operates under a "conflict of interest." First, the Court held that a plan administrator who both evaluates and pays claims operates under a conflict of interest in making benefit decisions. Second, the Court held that the existence of this conflict of interest does not change the standard of review or shift the burden of proof to be applied by a reviewing court. Rather, this conflict of interest should be considered as but one of several factors in evaluating a benefits decision.

In Glenn, MetLife operated as both administrator and insurer of Sears, Roebuck & Company's long-term disability plan, which was governed by ERISA. The plan simultaneously gave MetLife (as administrator) discretion to decide employee benefits claims and provided that MetLife (as insurer) would pay these claims.

Ms. Glenn, a Sears employee, sought long-term disability benefits for a heart disorder. MetLife decided that Ms. Glenn was capable of doing sedentary work, and it denied her claim for long-term disability benefits.

Ms. Glenn filed suit seeking review of MetLife's decision as permitted by ERISA. The district court denied her claim, and the Sixth Circuit reversed, holding that MetLife's conflict of interest as both decider and payer of Ms. Glenn's claim was one of several factors that it considered in finding that MetLife's claim decision was arbitrary and capricious. The Supreme Court affirmed both the result and the analysis of the Sixth Circuit.

First, the Supreme Court confirmed that a conflict of interest exists when an administrator acts as both claim decider and claim payer. That is, the Supreme Court recognized that there is a conflict between the fiduciary interest in granting a borderline claim and the financial interest in denying it. Therefore, the Court determined, judges must consider this type of conflict of interest when reviewing the discretionary acts of plan administrators in ERISA benefits cases. …

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