Below you鈥檒l learn what to expect in your long term disability litigation where ERISA applies, as well as considerations for mediation. This content does not constitute legal advice, nor should it be used as a substitute for consultation with a qualified attorney. Always consult with an ERISA long term disability attorney to discuss your long term disability litigation.
If a reasonable settlement is not reached, your ERISA long term disability litigation may last 1 to 2 years or more. Litigating to recover your long term disability benefits is a lengthy and complicated process. There can be many ups and downs along the way. There will always be delays. In fact, some delays are unavoidable, such as the time it takes for a judge to issue a decision. With the right ERISA long term disability attorney, the time expended and the ups and downs endured will be worth the effort.
Read our full-length article here: When Can You File Your ERISA Long Term Disability Litigation?
Generally, if your claim is subject to ERISA, you cannot file your long term disability lawsuit until you 鈥渆xhaust鈥 all of your 鈥渁dministrative remedies.鈥 This means you must do everything you can to claim benefits from your insurer. You must go through the entire process provided by your insurance company. For example, first you must file a claim for disability benefits. If that claim is denied, you then must appeal that decision using your insurance company鈥檚 internal appeal process and receive a final denial.
While typically you must go through the entire administrative process, there are certain limited exceptions that will allow you to file a lawsuit earlier:
Your long term disability lawsuit must commence within a certain period known as the 鈥渟tatute of limitations.鈥 The statute of limitations is essentially a deadline by which you must file your litigation. Compliance with the statute of limitations is critical. If you file too late, you will very likely be precluded from pursuing your litigation.
The applicable statute of limitations will vary from state to state. However, the time you have to file your long term disability lawsuit also can be limited to a shorter period by your insurance policy. Many states permit the statute of limitations to be altered by contract terms. Therefore, courts often have applied shorter limitation periods found in the policy itself. For example, most policies provide that a litigation must be brought within three (3) years of the date proof of loss is required. The United States Supreme Court has held that such a provision is enforceable because it is not unreasonably short.
Because pinpointing the exact date the statute of limitations will run in a specific case can be quite confusing, the Department of Labor updated its most recent regulations (effective in April 2018) to require your insurer to specify the statute of limitations date in the final denial letter. 29 C.F.R. 搂 2560.503-1(g)(1)(iv). Even if the final denial letter specifies a statute of limitations date, it is still advisable to consult with the attorney in case the letter contains an error. In summary, you always should seek the advice of a qualified long term disability attorney to determine how much time you have to file a lawsuit.
In your long term disability litigation, you will be the 鈥plaintiff鈥 and each entity you sue will be a 鈥defendant.鈥 Determining which entity to sue can be a complicated process. The decision often is not straightforward. There may even be multiple defendants. Your attorney鈥檚 failure to name the proper defendants could result in dismissal of your lawsuit or an inability to collect all damages and relief you might otherwise be eligible to receive.
An ERISA long term disability lawsuit will usually name the insurance company that insures your long term disability benefits as a defendant. This is because the insurer often is both the administrator of your claim and the party responsible for paying your benefits. However, this is not always the case. Some courts require the long term disability plan itself be sued, rather than just the insurance company.
Even if not required, there are some circumstances where your attorney might additionally advise suing your employer and/or the long term disability plan itself. One example might be because your long term disability plan is funded by your employer 鈥 known as a 鈥渟elf-funded鈥 or 鈥渟elf-insured鈥 plans. For self-funded plans, your attorney likely will want to sue the entity that is ultimately responsible for paying the benefits, in addition to the entity that administers the plan (if they are different).
If you lost ancillary benefits (such as health care benefits) due to your long term disability claim denial, tell your attorney. Your attorney will consider adding additional parties to account for those losses.
Venue is typically possible in any district: (a) where the plaintiff resides; (b) where the employer is headquartered; (c) where the plaintiff worked; (d) where the insurance company is headquartered; (e) where the insurance company or plan administrator administered the claim; and (f) where many important witnesses are located. However, your attorney also should check whether the plan contains a choice of venue provision. If so, your attorney will need to research whether such provision is enforceable and, if so, where you want to file.
Venue is very important. Indeed, the way ERISA is applied varies from court to court. As a result, considerable thought should be given as to the benefits and pitfalls of each possible venue. Choice of venue could affect the standards under which the court reviews your case and weighs your medical evidence, as well as the speed by which your case will be heard and decided. The venue even could impact a court award of attorneys鈥 fees and interest.
A 鈥渟tandard of review鈥 is the rule or framework of rules that the court will use to review the adverse benefit decision in your case. There are two standards that courts use to review insurer decisions in long term disability lawsuits. The first standard is called the 鈥de novo鈥 standard. The second standard is called the 鈥渁rbitrary and capricious鈥 standard (also known as an 鈥渁buse of discretion鈥 standard). The standard of review the court uses can make it much easier or more difficult for you to win.
Read more about de novo vs. arbitrary and capricious standards of review.
The complaint is a document prepared by your attorney that sets forth allegations about what the defendant got wrong, how you were damaged, and what the court should do about it. With the complaint, your attorney will notify the defendant of your long term disability lawsuit and explain why you are pursuing legal action.
In setting forth the allegations in your complaint, your attorney will seek to formulate a clear, effective disability narrative. Every experienced long term disability lawyer knows this is critical. The complaint should read in a clear and simple fashion, with specific references to your supportive evidence of disability. First impressions are important, and the complaint is your attorney鈥檚 opportunity to 鈥渟tand up鈥 immediately. Indeed, the failure to draft a strong, comprehensive complaint may damage your chances of success and prevent you from collecting all damages and relief you may be entitled to receive.
To prepare the complaint, your attorney must include each 鈥淐ount鈥 you are alleging against the defendant as a separate a Cause of Action. The section listing each Cause of Action, which requests specific remedies, should be included towards the end of the complaint. If your claim is subject to ERISA, your attorney may include the following Causes of Action:
After your complaint is filed and served, each defendant will have a chance to respond. In an ERISA long term disability litigation, there are typically three ways a defendant may respond. A defendant will usually respond with a motion to dismiss, an answer, or an answer with counterclaims.
The defendant may respond to your complaint by filing a 鈥渕otion to dismiss.鈥 A motion to dismiss asks the court to dismiss your lawsuit without even reviewing the evidence. A motion to dismiss can be made on several technical grounds. For example, a defendant may argue that the statute of limitations was violated, the court does not have the power to hear your case, the defendant was not properly notified, or another person or company should be sued in lieu of the defendant. A motion to dismiss also may be made on the basis that, even if all the allegations in the complaint are true, you are not entitled to the relief requested in the complaint.
A defendant may respond to your complaint by filing an answer. In general, the defendant will either admit, deny, or say it 鈥渓acks sufficient information鈥 to respond to each of the allegations made in your complaint. This will help narrow the issues presented to the court because the defendant will admit certain allegations in your complaint are true. You also may get a preview of the defendant鈥檚 arguments by reviewing its defenses and any counterclaims.
A defendant may respond to your complaint by filing an answer that contains one or more counterclaims against you. The most common basis for a counterclaim relates to an overpayment or offset caused by your receipt of Social Security Disability Benefits, Workers鈥 Compensation Benefits, or other income. If the answer contains a counterclaim, your attorney must submit a reply. If your attorney fails to do so, the allegations in the counterclaim will be deemed admitted as true.
At a minimum, discovery will include a copy of the Administrative Record. This is essentially the claim file that your insurer maintained on your claim. It should include all documents considered 鈥渞elevant鈥 under ERISA regulations, meaning everything submitted, considered, or generated in the course of making the benefit determination, without regard to whether such document, record, or other information was relied upon.
Without limitations, your attorney should make a request for all documents that:
Your attorney also should request: all notes kept throughout the administration of your claim, including all notes of telephone conversations with you or any treating physician; video and/or photographic surveillance footage; and any third-party investigative reports.
It is common for the Administrative Record to exceed 1,000 pages in length. Your ERISA long term disability attorney will comb through the file to check whether it is complete. The problem is that the Administrative Record provided to the plaintiff often is incomplete. When this happens, parties may argue about what should be in the file, and discovery may become necessary.
Many courts permit discovery regarding the parameters and completeness of the administrative record in ERISA long term disability litigation. This discovery can be critical. Often, information such as internal notes, memorandums, and other internal documentation is so-called 鈥渁ccidentally鈥 omitted from the Administrative Record. The missing documents often contain information that helps establish key points. For example, a careless review of your claim.
The same goes for all plan documents. This includes the policy, the SPD, amendments/addendums/attachments to the plan, and other important documentation relevant to your long term disability claim.
Depending on the facts surrounding your case, the court may consider other information outside of the Administrative Record in limited circumstances. For example, a plaintiff in the Second Circuit must ultimately demonstrate good cause to have the additional evidence considered by the court, but the burden to obtain discovery is much lower. To obtain discovery, the plaintiff just needs to show a reasonable chance that the requested discovery will satisfy the good cause requirement.
As a practical matter, with most courts, to get discovery in an ERISA long term disability litigation, your attorney must point out procedural irregularities and other deficiencies in the insurer鈥檚 claims determinations. Unfortunately, to best do this, discovery would help. But, your attorney鈥檚 only source of information will be the claim file and any additional information found on the internet or from other litigations against the same insurer.
Your attorney may request more information relating to:
There could be a trial. However, most ERISA long term disability litigations are resolved by a motion requesting 鈥渟ummary judgment.鈥 Summary judgment is a decision entered by the court in favor of one party and against another party without conducting a full-blown trial. Both parties can make a motion for summary judgment during or following discovery.
Before a trial is even considered, your ERISA long term disability attorney will argue that your case should be granted by summary judgment. By contrast, the defendant(s) will argue that your case should be dismissed. The strategy your attorney will employ for your summary judgment motion will depend heavily on which standard of review applies to your case 鈥 the de novo standard or the arbitrary and capricious standard.
To be awarded summary judgment under a de novo standard of review, your attorney must:
To be awarded summary judgment under an arbitrary and capricious standard, your attorney must establish that the insurer鈥檚 decision was without reason, unsupported by substantial evidence, or erroneous as a matter of law. This is a higher burden to meet. The court will consider a 鈥渃ombination-of-factors,鈥 including conflict of interest, to determine whether your insurer鈥檚 decision should be overturned under this standard. There are two other basic approaches to winning under the arbitrary and capricious standard: (1) argue the insurer鈥檚 determination was not supported by substantial evidence; or (2) argue the insurer鈥檚 determination was unreasonable and/or unfair. In our experience, the second strategy is usually more successful.
If the judge grants your motion, you win the case. If the judge grants defendant's motion, you lose. If the judge denies both parties' motions, then the case may go to trial.
If the court does not grant summary judgment to either party, there may be a trial.
Trial is a long and tedious process which the parties usually try to avoid. Trial will involve many hours of intense legal preparation and drafting. Typically, numerous briefs and reply papers must be filed. Live testimony may be necessary from you and/or your physicians. This can result in substantial costs, depending on how much your doctors charge for their time. Oral arguments also may be held.
Some attorneys鈥 fees from your long term disability litigation may be recoverable under ERISA鈥檚 fee-shifting provision. In relevant part, ERISA鈥檚 fee-shifting statute provides: 鈥淚n any cause of action under this title 鈥 the court in its discretion may allow a reasonable attorney鈥檚 fee and costs of action to either party.鈥 ERISA 搂502(g)(1), 29 U.S.C. 搂1132(g)(1). However, awards of attorneys鈥 fees under ERISA are discretionary. Whether or not you can be awarded attorneys鈥 fees heavily depends on the local law where your court is located.
If you do not win at the district court level, you will have the right to file an appeal in the appropriate Court of Appeals. Bringing your case to the Court of Appeals can be a lengthy and stressful process 鈥 one in which many plaintiffs are unsuccessful. With all of that said, if you have a strong appeal, a good long term disability attorney will advise you to pursue it. In our practice, we have been very successful with the appeals we have decided to take. This is largely because of our extensive experience, but also because we spend substantial time building the evidentiary record and establishing the legal issues at the lower levels.
If you are not successful in the Court of Appeals, you have the option to bring your case to the United States Supreme Court. Note, however, that the United States Supreme Court on average agrees to hear only one or two ERISA cases per year.
Often, the parties will engage in informal settlement discussions without the assistance of a mediator. When this happens, the parties鈥 attorneys will usually exchange their respective positions on the merits. They also will discuss risk, valuation of the benefits, and any other damages at stake. These discussions can be successful, but the parties may reach an impasse if they cannot understand or respect each other鈥檚 positions.
Many times, the parties may agree to hire and work with a private mediator. Often, the parties will split the cost of the private mediation. In some instances, the defendant may agree to cover the cost, if asked.
An effective private mediator will serve as a neutral liaison between the parties that assists them in reaching an agreeable compromise. Usually, the parties must agree on the mediator to be used, which enables the parties to hire an individual having specific experience with ERISA long term disability issues. This familiarity can be very beneficial for both parties.
If the parties pursue court-sponsored mediation, the court will select a mediator without the approval or input of the parties. This can be problematic because the mediator selected may have little to no experience dealing with ERISA long term disability issues. On the flip side, court-sponsored mediation is usually free or low-cost for the parties.
The court may assign a neutral Magistrate Judge to effectively serve as a mediator and conduct a mediation. Except, the mediation is conducted in a court setting and is instead called a 鈥渟ettlement conference.鈥 The parties will have no control over the Magistrate Judge assigned. Certain Magistrate Judges are highly skilled mediators, but others may be less effective or inexperienced in ERISA long term disability issues. The biggest con is that some Magistrate Judges, after many years serving on the bench, may be less flexible than a mediator might be in conducting a mediation. Another con is that the courtroom setting in which the settlement conference is conducted can be very intimidating and scary for plaintiffs. The environment may not foster the most productive settlement discussions.
There are steps you can take to prepare for a successful long term disability mediation or settlement conference. Remember:
Not every long term disability litigation settles via initial informal discussions, or even at a mediation or settlement conference. This often is the case. If a settlement is not reached, you must battle your litigation out in court. For this reason, you want an experienced ERISA long term disability attorney that will be ready to fight for you.
ERISA long term disability litigations are like no other. They have their own rules, procedures, and standards. experienced ERISA litigation team will zealously advocate on your behalf in court. We understand how stressful litigation can be, and are we are here to help. Contact an ERISA long term disability litigation attorney at Riemer Hess today to discuss your options.