United States District Court, D. Rhode Island
J. McCONNELL, JR. UNITED STATES DISTRICT JUDGE.
Justin Hughes moves for the Court to determine that de novo
review is the proper standard of review in this case. ECF No.
15. For the reasons below, the Court GRANTS Mr. Hughes's
Motion for De Novo Review.
years before his disability, Mr. Hughes was a client manager
for Fidelity Investments. ECF No. 1 at 2. Mr. Hughes is
totally disabled because he "suffers from reflex
sympathetic dystrophy syndrome, inflammatory arthritis, and
gout." ECF No. 1 at 3. Mr. Hughes has sued Life
Insurance Company of North America ("LINA") in an
ERISA action to recover long-term disability benefit payments
under an employee welfare benefit plan ("Fidelity
Plan") set up by FMR Corporation ("Fidelity").
LINA insured long-term disability benefits under the Fidelity
Plan and served as the Claim Administrator. Mr. Hughes now
moves for this Court to consider his denial of long-term
disability benefits under a de novo standard of review. ECF.
No. 15. Mr. Hughes contends that the Fidelity Plan does not
bestow discretionary authority to LINA and so the Court
should review his claim de novo. LINA contends the opposite,
arguing that the grant of discretionary authority is
sufficiently clear in the Fidelity Plan's language.
STANDARD OF REVIEW
denial of benefits challenged under § H32(a)(1)(B) is to
be reviewed under a de novo standard unless the benefit plan
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). A grant of
discretionary decision-making authority in an ERISA plan is
found if the terms unambiguously show the claims
administrator has discretion to determine whether benefits
are due in a particular instance and to construe the terms of
the plan. Stephanie C. v. Blue Cross Blue Shield of
Massachusetts HMO Blue, Inc., 813 F.3d 420, 428 (1st
Cir. 2016). Similarly, a named fiduciary may only claim
discretionary authority if the "[p]lan's
language...clearly grant this authority."
Rodriguez-Lopez v. Triple-S Vida, Inc., 850 F.3d 14,
22 (1st Cir. 2017).
First Circuit has set forth the proper analysis that district
courts should follow in determining if an ERISA-regulated
health plan confers discretionary decision-making authority.
See Stephanie G, 813 F.3d at 420. In Stephanie C, the First
Circuit considered and rejected Blue Cross Blue Shield's
("BCBS") argument that the power to decide implied
the existence of discretion to call for a deferential review
of an action to recover long-term disability benefit
payments. Id. at 428. The language of the policy
provided that BCBS "decides which health care services
and supplies that you receive (or are planning to receive)
are medically necessary and appropriate for coverage."
Id. The First Circuit held that the plan's
language was insufficient to bestow discretionary authority
as "the 'BCBS decides' language falls well short
of what is needed for a clear grant of discretionary
authority" and the "language merely restates the
obvious: that no benefits will be paid if BCBS determines
they are not due." Id. Further, the First
Circuit mandates that the existence of discretion in the plan
must be unambiguous and specific. See id, ("The short of
it is that a grant of discretionary decisionmaking authority
in an ERISA plan must be couched in terms that unambiguously
indicate that the claims administration has discretion to
construe the terms of the plan and determine whether benefits
are due in particular instances.")
Court focuses its analysis on whether the terms of the
Fidelity Plan clearly and unambiguously bestow discretionary
authority on LINA. If the Court finds discretionary authority
lacking, then the Court need not reach the merits of the
parties' other arguments.
the Fidelity Plan states, "The Plan Administrator has
appointed the Insurance Company as the named fiduciary for
deciding claims for benefits under the Plan, and for deciding
any appeals of denied claims." ECF No. 16-1 at 36. LINA
contends that this language bestows discretionary authority
because it shows its discretion to determine claims and
decide appeals and it is therefore entitled to discretionary
review. ECF No. 17-1 at 2. However, the language on which
LINA relies only states that it has the power to decide
benefits and appeals. The First Circuit instructs that the
power to decide does not bestow discretion. Stephanie C, 813
F.3d at 428. The court rejected the argument that the power
to decide necessarily implies the existence of discretion.
tries to distinguish Stephanie C. and contends that
"decid[ing] claims for benefits" confers enough
discretionary authority to distinguish it from the ability to
"decideD which health care services and supplies that
you receive," the language in Stephanie C. Id.
However, both here and in Stephanie C, the insurer relies on
specific language on the power to decide, and that is
insufficient to constitute a clear grant of discretionary
decision-making authority. Id.) see also Doe v.
Blue Cross & Blue Shield of Rhode Island,
No. 15-cv41-M-LDA, 2016 WL 4223331, at *2 (D.R.I. Aug. 9,
2016) (holding that insurer's power to decide benefits
and eligibility for benefits was not enough to grant
the Fidelity Plan does not unambiguously indicate the claims
administrator has discretion to construe the terms of the
plan and determine whether benefits are due in a particular
instance, the Court finds that LINA lacked discretionary
authority and the Court must use the default standard of