Legal Memorandum: Review Standard on Appeal and ERISA Plans

Issue: Within the 11th Circuit, what is the standard of review on appeal for a case involving administration of an ERISA plan?

Area of Law: Employee Law, Litigation & Procedure
Keywords: ERISA plan; Standard of review on appeal; Administrator or fiduciary discretionary authority
Jurisdiction: Federal
Cited Cases: 978 F.2d 1045; 904 F.2d 644; 966 F.2d 618; 10 F.3d 1550; 10 F.3d 1547; 877 F.2d 37; 816 F. Supp. 1338; 898 F.2d 1556; 929 F.2d 1558; 748 F. Supp. 874; 888 F.2d 86; 906 F.2d 660; 823 F. Supp. 416; 825 F. Supp. 1064; 10 F.3d 784
Cited Statutes: Restatement (Second) of Torts § 187
Date: 02/01/2001

           De novo review applies unless the plan expressly "gives the administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe the terms of the plan."  Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989) (emphasis added).  If the plan terms give general authority to the fiduciary or administrator to control the plan, the fiduciary or administrator "must do so in accordance with the terms of the Plan;" however, if the plan terms do not in unambiguous language give precise discretionary authority to determine eligibility requirements, de novo review applies.  Kirwan v. Marriott Corp., 10 F.3d 784, 788-89 (11th Cir. 1994).

The court in Firestone noted that "if a benefit plan gives discretion to an administrator or fiduciary who is operating under a conflict of interest, that conflict must be weighed as a ‘facto[r] in determining whether there is an abuse of discretion.’"  489 U.S. at 115 (quoting Restatement (Second) of Torts § 187, cmt. d (1959)).  The Eleventh Circuit has applied a modified standard of review in such cases, sometimes termed a heightened scrutiny or less highly deferential standard.  Perhaps the most extensive discussion of that standard is found in Brown v. Blue Cross & Blue Shield, Inc., 898 F.2d 1556 (11th Cir. 1990), cert. denied, 498 U.S. 1040 (1991).

We therefore hold that the abuse of discretion, or arbitrary and capricious, standard applies to cases such as this one, but the application […]


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