ERISA-Fifth Circuit Rules That Plan Administrator’s Denial Of Claim For Death Benefits Must Be Upheld

In Porter v. Lowe’s Companies, No. 12-60683 (5th Cir. 2013), plaintiff Josh Porter (“Porter”) brought suit against defendant Lowe’s Companies (“Lowe’s”), to challenge the Plan Administrator’s denial of a claim for death benefits under an ERISA Plan. The covered employee had died in an automobile accident on her way to respond to a night alarm at work. The district court granted relief from the Plan Administrator’s denial of Porter’s claim, and awarded the death benefits to Porter, concluding that the Plan Administrator had abused its discretion.

In analyzing the case, the Fifth Circuit Court of Appeals (the “Court”) found that the Plan Administrator was entitled to a review of its decision to deny the claim by a court using the arbitrary and capricious standard, since the ERISA plan granted it the discretion to interpret the plan’s meaning and to determine benefit eligibility. Since the Plan Administrator did not insure the plan, there was no conflict of interest. The Plan Administrator’s interpretation of the plan, in a manner which denied the claim for the death benefits, was not unreasonable. As such, the Court ruled that the Plan Administrator did not abuse its discretion, so its claim denial must be upheld. Accordingly, the Court reversed the district court’s decision, and rendered judgment in favor of Lowe’s.

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