Appeals Judges Clarify Disability Benefits Appeal Procedures

>The US 2 ^nd Circuit Court of Appeals issued that caution to lower court judges in a case involving a former legal secretary suffering from chronic fatigue syndrome who has been battling a benefits denial by UNUM Life Insurance Company of America.

“We hold that a conflicted administrator (one with a conflict of interest) does not per se constitute good cause (for the court to review new evidence), and caution district courts that a finding of a conflicted administrator alone should not be translated necessarily into a finding of good cause,” Circuit Judge Chester Straub wrote.

>The appeals court said its guidance came as a clarification to its 1997 ruling in another benefits denial case after several lower court judges improperly interpreted the DeFelice v. American International Life Assurance Co. of New York ruling to say “that an administrator’s dual status as claims reviewer and claims payor is per se ‘good cause’ for allowing additional evidence upon a review of factual issues.” Not so, said Straub, because the earlier case was based on more than a conflict of interest; It was also based on flawed procedures for claims determinations and appeals.

>Despite the procedural caution, the three-judge panel upheld the March 2002 ruling by US District Judge Laura Taylor Swain that plaintiff Marianne Locher was, in fact, disabled under the policy of her former law firm.

>The appeals judges agreed with Swain that there was good reason for her to have heard new evidence (in addition to that originally presented to UNUM as part of the benefits appeal) and for Swain to have awarded her $2,129 monthly for July, August, and September 1993 and $1,355 monthly from then until June 2003. UNUM appealed Swain’s ruling.

>The case, Locher v. UNUM Life Insurance Company of America, 03-9229, is at http://www.ca2.uscourts.gov:81/isysnative/RDpcT3BpbnNcT1BOXDAzLTkyMjlfb3BuLnBkZg==/03-9229_opn.pdf .