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When reviewed by the District Court, the ERISA disability denial is often — but not always — subject to the “de novo” standard of review rather than the “discretionary” standard of review.
Under the “discretionary” standard of review (also known as the “abuse of discretion” standard of review, the District Court must defer to the insurance company’s denial if it has a strand of reasonableness. As the 9th Circuit stated in Abatie v. Alta Health & Life Ins. Co., 458 F.3d 955, 969 (9th Cir. 2006), under the “discretionary” standard of review, District Court “would uphold an administrator’s decision so long as it was “grounded on any reasonable basis.” Id. Under the “de novo” standard of review, by contrast, the District Court is obligated to review the denial without deferring to the insurance company’s denial.
The federal courts in the 9th Circuit have held that, under de novo review, the claimant has the burden by a preponderance of evidence to prove that she is disabled. Muniz v. Amec Constr. Mgmt., 623 F.3d 1290, 1294 (9th Cir. 2010). This burden, more particularly, is to prove that the plan administrator incorrectly denied benefits. Abatie v. Alta Health & Life Ins. Co., 458 F.3d 955, 963 (9th Cir. 2006) As the Abatie Court described de novo review:
If de novo review applies, no further preliminary analytical steps [relative to the existence of a conflict of interest] are required. The court simply proceeds to evaluate whether the plan administrator correctly or incorrectly denied benefits, without reference to whether the administrator operated under a conflict of interest. Id. at 963. (Emphasis added.)
As with any other civil case, the claimant has the burden under the “de novo” standard to prove that he is more likely disabled than not. The insurer is barred from arguing, as it may in a case subject to the discretionary standard of review, that the District Court simply must uphold the denial because there is some reasonable basis to support it even though the evidence overwhelmingly supports a finding of disability.
Contact The Law Offices of Bennet M. Cohen, P.C. to arrange a consultation with our experienced San Francisco, CA Denials Governed By Erisa Attorney.