Fifth Circuit Court of Appeals Resolves ERISA Issue
The Fifth Circuit Court of Appeals recently resolved a case concerning the Employee Retirement Income Security Act of 1974. Leipzig v. Principal Life Ins. Co., No. 10-10394 (Nov. 29, 2010), available at http://www.ca5.uscourts.gov/opinions/unpub/10/10-10394.1.wpd.pdf.
The plaintiff alleged that the insurance company denied his disability insurance claim in violation of ERISA, and he appealed a summary judgment for the insurer. The plaintiff was a surgical ear, nose and throat doctor. After being diagnosed with double vision, he ceased performing surgeries and began receiving disability benefits. Following an eye surgery, he resumed a non-surgical practice two days per week, and the insurer continued to pay reduced benefits. Later, the insurer stopped paying benefits after it determined that the plaintiff was working a reduced schedule because he did not have enough patients to justify a full-time schedule, not because of his disability.
Where a plan subject to ERISA gives the administrator discretionary authority to determine eligibility for benefits, the Court applies an abuse-of-discretion standard to the denial of a benefits claim. Here, because the insurer’s interpretation of the plan was both a uniform construction and a fair reading, it was legally correct. Thus, the insurer did not abuse its discretion when it denied the disability claim. The Court affirmed the summary judgment.
To speak to a Dallas, Texas employment law attorney about a workplace disability matter or an ERISA matter, contact the employment lawyers at Clouse Dunn Khoshbin LLP at [email protected].
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