Thurber v. Aetna Life Insurance
712 F.3d 654
2d Cir.2013Background
- Sharon Thurber worked for Quest Diagnostics and was enrolled in an ERISA long-term disability plan administered by Aetna.
- Thurber suffered knee and spinal issues after accidents and stopped work in 2007; short-term disability benefits were paid through February 2008.
- Thurber informed Aetna she received other income (no-fault benefits) which the plan could reduce when calculating benefits.
- Aetna denied Thurber’s long-term disability claim in March 2008 after reviewing medical reports and an independent medical review.
- Thurber appealed; Aetna conducted additional independent reviews and reaffirmed denial in December 2008.
- The district court granted summary judgment for Aetna on Thurber’s ERISA claim and denied equitable relief on Aetna’s counterclaim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| What is the proper standard of review for denial of benefits? | Thurber contends lack of discretion means de novo review. | Aetna plan reserves discretion; arbitrary and capricious standard applies. | Arbitrary and capricious review applies; district court correct. |
| Must a plan participant receive plan documents to trigger discretionary review? | Thurber lacked actual notice of the plan’s discretion clause. | Discretionary review does not require actual notice; language in plan/SPD suffices. | No actual notice required; plan language reserves discretion and governs review. |
| Did Aetna's denial of long-term disability benefits have substantial evidence? | Thurber argues errors in consideration of medical evidence and pain complaints. | denial supported by substantial evidence and independent reviews. | Yes; Aetna’s denial was supported by substantial evidence; Thurber’s claim affirmed. |
| Whether Aetna’s counterclaim seeks equitable relief under §1132(a)(3)? | Aetna’s claim is legal restitution, not equitable relief. | Plan terms create an equitable lien by agreement to recover overpayments. | Aetna’s counterclaim seeks appropriate equitable relief; district court reversal and judgment for Aetna. |
Key Cases Cited
- Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (Supreme Court 1989) (establishes default deferential review when discretion exists in plan)
- Pagan v. NYNEX Pension Plan, 52 F.3d 438 (2d Cir. 1995) (defines arbitrary and capricious standard in ERISA cases)
- Kinstler v. First Reliance Standard Life Ins. Co., 181 F.3d 243 (2d Cir. 1999) (clarifies scope of deferential review under ERISA when discretion exists)
- Sereboff v. Mid Atlantic Medical Services, Inc., 547 U.S. 356 (Supreme Court 2006) (equitable lien by agreement on identifiable funds)
- Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204 (Supreme Court 2002) (establishes equitable vs. legal restitution framework under ERISA)
- Cusson v. Liberty Life Assurance Co. of Boston, 592 F.3d 215 (1st Cir. 2010) (equitable relief possible where plan terms identify funds to be returned)
- Bilyeu v. Morgan Stanley Long Term Disability Plan, 683 F.3d 1083 (9th Cir. 2012) (whether funds dissipated affects enforceability of equitable lien)
- Funk v. CIGNA Grp. Ins., 648 F.3d 182 (3d Cir. 2011) (discusses dissipation of funds in equitable lien by agreement context)