ERISA LITIGATION: Fifth Circuit Suggests Everything's Bigger in Texas-Including the Cost of Defending an ERISA Benefit Dispute

[Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 114 (1989)] While a plan administrator may lose the abuse of discretion standard of review through a faulty procedure, without the delegation of discretion, the benefit denial always will be reviewed based on the de novo standard. Because these claims are based on the administrative record of the participant's claim, there is rarely (if ever) a dispute over the facts underlying the claim, as all facts have been thoroughly memorialized by a participant's medical records (in the case of a health plan) and benefit claim denial and appeal documents. Because the parties typically agree on the facts, the cases are appropriate for resolution through competing dispositive motions. Specific suggestions include the following: * Confirm that your plan document clearly grants discretion to the plan administrator (and prepare to make a strong preemption argument in court in the event state law bans a grant of discretion); * Review your plan document and summary plan description to ensure that the benefit claims procedures are adequately described and conform to ERISA; and * Regularly audit benefit claim reviews to confirm that the ERISA-compliant claims procedures are being followed in practice.