ERISA-Third Circuit Reveal Some Pitfalls In Disability Cases.

In Goletz v. Prudential Insurance Company of America, No. 08-4740 (3rd Cir. 2010), the Third Circuit reveals some pitfalls in disability cases. Here, the defendant, Prudential Insurance Company of America (“Prudential”), decided to deny the plaintiff’s claim for long-term disability (“LTD”) benefits. The plaintiff filed suit under ERISA to challenge this decision. The District Court granted summary judgment in Prudential’s favor, and the plaintiff appealed.

At the Third Circuit, the plaintiff asked the Court to rule that Prudential’s decision to deny the LTD benefits should be reviewed under the de novo standard, rather than the deferential arbitrary and capricious standard (the de novo standard being more favorable to the plaintiff). However, the plaintiff had raised this issue for the first time in the appeal. The Court stated that, absent exceptional circumstances (none present here), the Court would not entertain an issue not raised in the District Court. The plaintiff again tried for review under the de novo standard, based on the grounds that the District Court had admonished Prudential for making a mistake in the course of the proceedings. However, the Court pointed to the recent Supreme Court’s decision in Conkright v. Frommert, under which the de novo standard does not become applicable merely because Prudential made an error.

Outside of the case, the plaintiff had been awarded disability benefits from Social Security. In the appeal, the plaintiff attempted to have the summary judgment stricken on the basis that Prudential failed to explain why it could deny the plaintiff’s claim for disability, when she had received this award from Social Security. Here, the Court found that Social Security had based its decision on different evidence than Prudential, namely certain experts that Prudential had relied on. As a result of the above, the Court affirmed the summary judgment in Prudential’s favor.

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