Merck's Laundry List

 A recent case caused Merck & Co. to go down swinging on every pitch served up by the Third Circuit when it comes to being arbitrary and capricious. 

Kosiba v.Merck & Company, 2011 WL 843927, set forth a procedural laundry list of errors by a plan administrator which would lead a court to find an administrator’s decision terminating LTD benefits to be arbitrary and capricious. 

In any other “world” but ERISA any procedural error from the following list would almost automatically call for an “arbitrary and capricious” reversal of a decision favoring an administrator, but in ERISA law, where the administrator is highly favored, such a reversal is news.

Here’s the Third Circuit list.  See if you don’t agree.

  • A reversal of benefits determination without additional evidence.
  • A disregard of opinions previously relied upon .
  • A self-serving selectivity in the use of evidence or reliance on self-serving paper reviews of medical files.
  • A reliance on the opinions of non-treating doctors over treating doctors without explanation.
  • A reliance on inadequate of incomplete investigation.
  • A failure to comply with notice requirements of Section 504 of ERISA.
  • Failure to analyze all relevant diagnoses.
  • Failure to consider claimant’s ability to perform actual job requirements.

With all of these strikes against it, one would think that the Court would automatically reinstate the claimant’s benefits without question.  Not so in ERISA.

Although the Court did restore claimant’s benefits, it took pains to declare that if the administrator had denied claimant’s “any occupation” LTD benefits from the start, it would have remanded the claim rather than reinstate her right to benefits.

How come?  Defendant had multiple swings at the ball. 

On this sorry record, why give it more?

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