Supreme Court Presumes Conflict of Interest in "Dual Role" Benefits Denial Cases

On June 19, 2008, the Supreme Court upheld the application of the deferential abuse of discretion standard of review for benefit decisions under ERISA-governed plans even in instances when the decision-maker on the claim also is responsible for paying benefits or is affiliated with the payer. This standard of review is very favorable to benefit decision-makers, as it generally requires a court to affirm the decision unless it is “downright unreasonable” in light of the record presented to the decision-maker. However, at the same time, the Supreme Court held that courts applying this standard of review must weigh the conflict of interest created by the dual payer/decision-maker role and must ascertain whether the conflict of interest has resulted in an unreasonable benefits determination. MetLife v. Glenn, 554 U.S. ___ (2008).