9 F.4th 78
2d Cir.2021Background
- Mayer, a New York resident and producer for Ringler Associates, applied for long-term disability (LTD) benefits after surgeries and claimed higher pre-disability earnings based on RAI-Scarsdale records and 1099/SEP contributions.
- The Ringler LTD Plan names Ringler Associates Inc. (RAI) as Employer/Plan Administrator, and designates Hartford Life as claims administrator with express discretionary authority to determine benefits.
- Hartford Life initially denied Mayer’s claim, then reversed, then on further review concluded RAI (not RAI-Scarsdale) controlled payroll records, excluded SEP-IRA contributions from pre-disability earnings, and treated benefits as fully taxable; Hartford relied on RAI’s documentation and Plan booklets.
- Mayer contended the Plan’s discretionary clause was void under California Insurance Code § 10110.6(a) (because the policy was issued in California), that Hartford failed to provide “full and fair review” by not producing certain emails developed during appeal before the final decision, and that Hartford erred in earnings and tax treatment.
- The district court applied the arbitrary-and-capricious standard (finding the discretionary grant valid and ERISA procedures satisfied) and sustained Hartford’s decision; Mayer appealed to the Second Circuit.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether CA Ins. Code § 10110.6(a) voids the Plan’s grant of discretionary authority | Mayer: §10110.6(a) voids discretionary clauses in policies issued/delivered in CA, so deferential review is unavailable | Hartford: §10110.6(a) applies only to claims brought by California residents, not to this NY-resident claimant | Held: §10110.6(a) applies to California residents’ claims only; Mayer was a NY resident, so discretionary grant stands and arbitrary-and-capricious review applies |
| Whether ERISA claims-procedure regs required pre-decision disclosure of documents developed/considered during administrative appeal | Mayer: Regs (29 C.F.R. §2560.503-1) required Hartford to produce appeal-stage emails/documents while appeal was pending so he could have a full and fair review; failure mandates de novo review | Hartford: Prior version of the regs did not require production of documents generated/considered during appeal before final determination; production is after final decision | Held: Under the regulation version governing Mayer’s claim, pre-decision production was not required; failure to produce during appeal did not deny a full and fair review; arbitrary-and-capricious standard remains appropriate |
| Whether Hartford’s benefits determination (employer identity, exclusion of SEP-IRA, taxability) was reasonable | Mayer: Benefits should be calculated using RAI-Scarsdale earnings and SEP contributions; benefits may be non-taxable if he paid premiums | Hartford: Plan defines RAI as Employer/Plan Administrator; payroll records in RAI’s possession control; SEP-IRAs are 408(k) and not salary-reduction arrangements under Plan; record shows employer-paid premiums | Held: Hartford’s determinations were reasonable and supported by substantial evidence: RAI was the Employer for plan purposes, SEP contributions excluded under Plan terms, and benefits properly treated as taxable |
Key Cases Cited
- Novella v. Westchester Cnty., 661 F.3d 128 (2d Cir. 2011) (plans granting administrator discretionary authority reviewed under arbitrary-and-capricious standard)
- Hartford Roman Catholic Diocesan Corp. v. Interstate Fire & Cas. Co., 905 F.3d 84 (2d Cir. 2018) (standard of review on appeal from bench trial; legal conclusions reviewed de novo)
- Metropolitan Life Ins. Co. v. Glenn, 554 U.S. 105 (U.S. 2008) (discusses judicial review deference where plan grants discretion)
- Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (U.S. 1989) (ERISA review standards for benefit denials)
- Healy v. Beer Inst., 491 U.S. 324 (U.S. 1989) (limits on state regulation affecting interstate commerce)
- American Booksellers Foundation v. Dean, 342 F.3d 96 (2d Cir. 2003) (Commerce Clause concerns in state regulation of out-of-state activity)
- Pettaway v. Teachers Ins. & Annuity Ass'n of Am., 644 F.3d 427 (D.C. Cir. 2011) (appeal-stage document disclosure not required pre-decision)
- Glazer v. Reliance Standard Life Ins. Co., 524 F.3d 1241 (11th Cir. 2008) (production of documents relied on during appeal occurs after final decision)
- Midgett v. Washington Group Int'l Long Term Disability Plan, 561 F.3d 887 (8th Cir. 2009) (pre-decision disclosure of appeal-level materials would create burdensome cycles of review)
- Metzger v. UNUM Life Ins. Co. of Am., 476 F.3d 1161 (10th Cir. 2007) (regulatory purpose is to allow post-decision appraisal for appeal, not continuous pre-decision disclosure)