The U.S. Supreme Court yesterday heard oral argument in the MetLife v. Glenn case. This is an important case that could affect all future lawsuits to collect benefits under an employee benefit plan.
Where an employee benefits lawsuit is governed by ERISA, the lawyers in nearly every case argue over the standard of review. Those seeking benefits (usually employees or beneficiaries) argue that the court should determine whether the best decision has been reached (so-called de novo review) while employers and plan sponsors argue that the court should defer to the judgement of the decision-maker, i.e., that the decision should be overturned only if it was arbitrary and capricious. In the Glenn case, the Supreme Court will decide what standard of review should be applied if there is a potential conflict of interest and the same entity that decides whether to pay benefits is also the entity that will pay benefits (e.g., insurance companies or self-insured employers). The circuit courts have reached different views on this.
Paul Secunda of the Workplace Prof Blog has some good analysis of the oral argument transcript here.
