Gross v. Sun Life Assurance Co. of Canada
734 F.3d 1
1st Cir.2013Background
- Gross sought LTD benefits under Pinnacle's group insurance through Sun Life; district court held ERISA preempts state claims and applied arbitrary-and-capricious review.
- The Pinnacle plan was found to be a unitary ERISA program, with LTD embedded in a broader benefits package.
- Sun Life denied benefits in 2007 based on surveillance and medical reviews; the record included therapy notes, FCE, and IME.
- Gross appealed, challenging ERISA applicability, discretionary review, and Sun Life's denial.
- Court held safe harbor inapplicable and that de novo review applies unless a clear grant of discretion is shown.
- Remand was ordered to develop the record, particularly regarding the impact of surveillance on disability assessment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| ERISA safe harbor applies to LTD policy? | Gross argues safe harbor exempts LTD from ERISA. | Sun Life contends the plan fails safe harbor. | Safe harbor inapplicable. |
| Whether Pinnacle's LTD policy is part of an ERISA plan? | Gross contends separate policy outside ERISA. | Sun Life asserts LTD is part of Pinnacle's welfare plan. | Pinnacle's benefits constitute an ERISA plan. |
| Standard of review for denial of benefits? | De novo review should apply; no clear discretionary grant. | Discretionary authority exists via policy language. | De novo review applies; not deferential. |
| Remand and further record development necessary? | Need fuller consideration of surveillance and symptoms. | Record may suffice; no further development needed. | Remand to develop the record on surveillance impact and symptom veracity. |
Key Cases Cited
- Wickman v. Nw. Nat'l Ins. Co., 908 F.2d 1077 (1st Cir. 1990) (ERISA plan components and establishment tests)
- Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (Supreme Court 1989) (default de novo review; discretionary language matters)
- Brigham v. Sun Life of Can., 317 F.3d 72 (1st Cir. 2003) (satisfactory to us language insufficient for discretion; de novo review)
- Maher v. Mass. Gen. Hosp. Long Term Disability Plan, 665 F.3d 289 (1st Cir. 2011) (de novo review where no clear discretionary grant; pesistence of evidence)
- Leahy v. Raytheon Co., 315 F.3d 11 (1st Cir. 2002) (discretionary language analysis in ERISA plans)
- Herzberger v. Standard Ins. Co., 205 F.3d 327 (7th Cir. 2000) (model Herzberger language as clear grant of discretion)
- Viera v. Life Ins. Co. of N.A., 642 F.3d 407 (3d Cir. 2011) (ambiguous 'satisfactory to us' language dismisses discretion)
- Diaz v. Prudential Life Ins. Co., 424 F.3d 635 (7th Cir. 2005) (ambiguity of 'satisfactory' language re discretion)
- Feibusch v. Integrated Device Tech., Inc. Emp. Benefit Plan, 463 F.3d 880 (9th Cir. 2006) (ambiguity of 'satisfactory to' language reducing discretion)
- Kinstler v. First Reliance Standard Life Ins. Co., 181 F.3d 243 (2d Cir. 1999) (advocates explicit discretionary language)