Administrator Abused Discretion in Denial of Disability Benefits.


The U.S. District Court for the Southern District of Mississippi denies the defendant's motion for summary judgment due to an abuse of discretion and reverses the defendant's decision to deny the plaintiff's long-term disability (LTD) benefits.

The plaintiff is an employee of a food-processing factory that provided LTD benefits through an employee benefits plan governed by the Employee Retirement Income Security Act of 1974 (ERISA). The defendant is the insurance company that insured and administered the LTD benefits under the plan.

Under the plan, LTD benefits are available if an individual cannot perform the material duties of his or her regular occupation as a result of an injury or sickness. Regular occupation is defined as the occupation the individual is routinely performing at the onset of the disability. To determine what that occupation is, the defendant looks at an individual's occupation as it is normally performed in the national economy and not at the unique duties performed for a specific employer or specific locale.

The plaintiff's job required her to spend a majority of her time in processing areas of the factory that were kept at 8 degrees above freezing. In 2016, she was diagnosed with various circulatory system disorders, including a condition that causes arteries to become unduly reactive and enter spasm when cold. As a result of the diagnosis, the plaintiff was forced to stop working at the factory. The plaintiff subsequently applied for LTD benefits through the plan.

Although the defendant admits that the plaintiff's medical conditions prevented her from working in cold temperatures and, therefore, her current duties for her employer, the defendant determined that the plaintiff's occupation as it was performed in the national economy was sanitarian, an occupation with duties that do not require exposure to cold temperatures. Based on this determination, the defendant denied the plaintiff's application for LTD benefits. The plaintiff appealed the initial decision, and the defendant denied the appeal. The plaintiff subsequently filed suit alleging wrongful denial of her claim under ERISA.

Because the defendant was granted the right and discretion to determine benefit eligibility and to interpret plan terms, the court will review the determination for an abuse of discretion. As established by the Fifth Circuit and the Supreme Court, an insurer abuses its discretion when the decision is not based on evidence, even if...

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