Ninth Circuit Rules ERISA Benefit Denial Review Must Be Based on Administrative Record

On November 21, 2022, in Collier v. Lincoln Life Assurance Company of Boston, the Ninth Circuit reversed the district court’s affirmance of an ERISA plan’s denial of LTD benefits. In the opinion, the Ninth Circuit emphasized that review of an ERISA plan administrator’s denial of benefits must be based upon the reasons reflected in the administrative record and not rationales subsequently introduced.

In this case, plaintiff Vicki Collier was an insurance sales agent who began employment with the Automobile Club of Southern California (AAA) in 2013. She suffered from ongoing pain in her back and upper extremities, which prevented her from being able to type and sit for extended periods of time. Eventually, she was diagnosed with mobility impairments and tried various treatments, including surgery, to address her symptoms. In 2018, she stopped working, citing her persistent pain.

In 2019, Collier submitted a claim for benefits to Lincoln Life Assurance Company of Boston (Lincoln), the insurer of the ERISA LTD benefit plan sponsored by AAA. Lincoln denied her claim based upon a reviewing physician’s report that she did not meet the plan’s definition of disability. The denial letter said nothing about Collier's credibility or her failure to submit objective medical evidence as the basis for denying benefits.

Collier timely appealed the denial and submitted additional medical records to support her claim. As part of its review, Lincoln scheduled an independent medical examination for Collier. The physician who conducted the exam concluded that Collier could work full-time, with certain limitations. Lincoln then denied Collier’s appeal, citing a lack of medical documentation to prove that her impairments and symptoms remained of such severity, frequency and duration that she was unable to perform the duties of her occupation (and thus did not meet the plan’s definition of disability).

Collier then filed a lawsuit for judicial review of the denial of her claim for ERISA LTD plan benefits. In trial briefs, Lincoln argued, for the first time, that Collier was not credible and that her doctors relied upon her subjective reports of pain rather than objective evidence of her disability. Collier asserted that the district court should reject Lincoln’s credibility and objective evidence arguments because Lincoln did not present those arguments in its denial letters. The district court affirmed Lincoln’s denial of Collier’s claim, relying upon the new reasons Lincoln set forth during the litigation.

On appellate review, the Ninth Circuit held that when a district court reviews a denial of ERISA benefits de novo (i.e., without deference to the plan administrator’s conclusions), it examines the administrative record to determine whether the administrator erred in denying benefits. Therefore, the district court’s task was to determine whether Lincoln’s decision was supported by the plan’s administrative record and not to engage in a new determination of whether Collier was disabled based upon reasons introduced in litigation that Collier had no opportunity to respond to during the administrative process. The Ninth Circuit noted that a contrary conclusion would deny Collier her statutory right under ERISA to “full and fair review” of her claim denial. Accordingly, the Ninth Circuit reversed the district court’s ruling and remanded the case for reconsideration.

The decision is important because it clarifies the scope of a trial court’s authority in reviewing an ERISA plan’s denial of benefits. For plan administrators, the case is a reminder of the importance of adhering to ERISA’s claim review requirements and procedures in order to provide impartial and consistent treatment of benefit claims. Plan administrators should carefully and thoroughly review each claim and ensure a claim denial notice includes the specific reason(s) for the denial and a description and explanation of additional material or information necessary to perfect the claim.

Collier v. Lincoln Life Assurance Company of Boston »