ERISA-Fifth Circuit Reversed The District Court Decision Against CIGNA, Since It Did Not review CIGNA’s Decision Under The Abuse Of Discretion Standard

In Connecticut General Life Insurance Company v. Humble Surgical Hospital, L.L.C., No. 16-20398 (5th Cir. 2017), the Fifth Circuit Court of Appeals (the “Court”) was asked to decide whether the district court erred when it granted judgment for Humble Surgical Hospital (“Humble”) on its claims for damages against the Connecticut General Life Insurance Company and its parent-corporation, Cigna Health and Life Insurance Company, (collectively, “Cigna”) under ERISA §§ 502(a)(1)(B) and 502(a)(3).

In analyzing the case, the Court said that the district court failed to apply the required abuse of discretion analysis; other courts have upheld Cigna’s interpretation of its insurance plans; and there was substantial evidence supporting Cigna’s interpretation. Accordingly, the Court reversed the district court judgement against Cigna. Moreover, as Cigna is not a named plan administrator, the Court reversed the district court’s award of ERISA penalties against Cigna. It vacated in part the district court’s dismissal of Cigna’s claims against Humble. It further vacated the district court’s award of attorneys’ fees and remanded the case for further consideration.

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