The Ninth Circuit recently found the District Court for Northern California improperly reviewed MetLife’s denial of long-term disability benefits for plaintiff Matthew Prichard1. When a disability plan gives the plan administrator discretionary authority to determine a participant’s eligibility for disability benefits, a district court must review the administrator’s decision for abuse of discretion. Otherwise, the district court is required to review a plan administrator’s denial of benefits under the de novo standard of review. The de novo standard of review requires the court to look at the facts from the beginning, without giving any weight to the administrator’s determination.
In this case, the district court relied on the summary plan description (SPD), which purported to give the plan administrator, MetLife, discretionary authority to determine Mr. Prichard’s eligibility for disability benefits. However, this plan also had a governing plan document, which did not include the SPD. The governing plan document contained the official terms of the disability plan, and did not grant MetLife discretionary authority to determine Mr. Prichard’s eligibility for disability benefits.
Relying upon its own authority to review for clear error the underlying facts applicable to a district court’s choice and application of the standard of review, the Ninth Circuit determined that the district court was inaccurate to apply the abuse of discretion standard of review to MetLife’s denial of Mr. Prichard’s disability benefits. The Ninth Circuit instead ruled that the district court should not have relied upon the SPD, but upon the governing plan document and therefore examined MetLife’s denial under the de novo standard of review. The Circuit court vacated and remanded the district court’s decision so that it could examine MetLife’s denial of benefits de novo.