Commodities Trader Gets 2nd Chance for Benefits Denial Suit Trial

July 5, 2005 (PLANSPONSOR.com) - A Chicago commodities futures and options trader won a partial victory with a ruling by a federal appeals court that he was entitled to take his battle for long-term disability (LTD) benefits to a trial.

>The US 7 th Circuit Court of Appeals ruled that an ambiguity existed in the LTD plan offered by SMW Trading Co. as to whether independent contractors were eligible for benefits and whether they were required to work full time. The appeals judges threw out a ruling by US District Judge Joan Humphrey Lefkow of the US District Court for the Northern District of Illinois in favor of the plan, asserting instead that a trial was necessary to resolve the uncertainty.

>At the same time, Circuit Judge Kenneth Ripple, in writing for the appeals court, ruled that plaintiff Andrew Ruttenberg was to be considered as a plan beneficiary whose benefits claims were governed by the Employee Retirement Income Security Act (ERISA). “We join the weight of authority in concluding that an ERISA ‘beneficiary’ may be a person designated to receive benefits under the terms of the plan itself; the definition is not limited to individuals designated by a ‘participant’ to receive benefits,” Ripple said in writing for the three-judge appellate panel.

>Ruttenberg worked as an independent contractor for SMW Trading.  He submitted a claim for benefits, saying that he his shortness of breath and other breathing difficulties made it difficult for him to function as a floor trader where it was necessary for him to engage in hours of shouting, according to the court.

>In the previous court ruling, Lefkow said Ruttenberg’s original suit over the benefits claim had to be dealt with under ERISA.  She decided in favor of the plan administrator after finding that Ruttenberg failed to prove that he worked at least 30 hours per week, as required in the plan’s certificate of insurance.

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>The opinion in Ruttenberg v. United States Life Insurance Co. in the City of New York, 7th Cir., No. 04-1653, 6/30/05 is  here .

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