Texas Ban on MetLife's Discretionary Clause is Great for Long Term Disability Claimants
In Curtis v. Metropolitan Life Insurance Company, a Texas District court focused only on the standard of review it will use when it evaluates MetLife’s denial of plaintiff’s long term disability benefits. Three issues were raised: 1) Did MetLife’s plan contain a discretionary clause; 2) Was the clause banned under Texas law applicable to insurance policies; and, 3) Was the Texas law banning the clause preempted by ERISA.
In 1989, the U.S. Supreme Court decided, in Firestone Tire & Rubber Co. v Bruch, that in evaluating a denial of benefits under ERISA, courts should use the de novo standard unless the plan contained a clause granting discretion to the plan administrator, then review should be for abuse of discretion. This is known as the Bruch rule. The standard of review used by a court can make a major difference in whether the court upholds a denial of benefits on the grounds that the administrator did not abuse his/her discretion or whether the court reviews the denial according to law without any deference given to the administrator’s denial.
MetLife’s Plan Contained a Discretionary Clause
The Texas court analyzed several parts of the particular disability policy and concluded that the language met the Bruch rule and did in fact include a discretionary clause, meaning that the court would give deference to the administrator’s decision when evaluating the termination of benefits.
Texas Law Bans Discretionary Clauses
The Texas Insurance Code as well as the Texas Administrative Code ban discretionary clauses in disability insurance policies “offered, issued, renewed, or delivered on or after February 1, 2011.” There was no question that this particular policy was issued after that date so the ban on such clauses applied unless preempted by ERISA.
ERISA Does Not Preempt the Texas Ban on Discretionary Clauses
The court began its analysis by noting that a majority of circuit courts “have sustained such state law prohibitions, despite ERISA.” Although ERISA “expressly preempts all State laws that relate to any employee benefit plan,” it also has “a savings clause that excepts ‘any law of any State which regulates insurance, banking, or securities’ from preemption.”
The court relied on a 2003 Supreme Court case, Kentucky Association of Health Plans, Inc. v. Miller, which established a two-prong test to determine if the State law under discussion regulated insurance so as not to be preempted by ERISA:
1. The law must specifically be aimed “toward entities engaged in insurance,” and
2. Substantially affect the risk pooling arrangement between insurer and the insured.
The district court engaged in a detailed analysis of each prong of the Miller test as well as referencing each circuit that has, to date, been faced with a similar issue. It then concluded: “Texas laws prohibiting discretionary clauses affect the benefits an insured has access to, alter the scope of permissible bargains between insurers and insured, and thus substantially affects their risk pooling arrangement. As a result, the Texas laws satisfy both Miller prongs, and fall within ERISA’s Savings Clause.” Since the Texas ban on discretionary clauses was upheld, the court ruled that “under Bruch, the appropriate standard of review for the denial of benefits determination is de novo, not abuse of discretion.”
This case was not handled by our office, but we feel it is instructive to those who live in a state that has banned discretionary clauses. This case demonstrates the way to establish the standard of review before the court begins its examination of the adverse administrative ruling. If you have any questions about your disability case, call one of our attorneys for a free case evaluation.
Resources to Help You Win Disability Benefits
Submit a Strong MetLife Appeal Package
We work with you, your doctors, and other experts to submit a very strong Metlife appeal.
Sue MetLife
We have filed thousands of disability denial lawsuits in federal Courts nationwide against Metlife.
Get Your MetLife Disability Application Approved
Prevent a MetLife Disability Benefit Denial
Negotiate a MetLife Lump-Sum Settlement
Our goal is to negotiate the highest possible buyout of your long-term disability policy.
Policy Holder Rating
Only care about $$$$$
Reply
They demanded an overpayment, stopped my claim, and lied about it
Reply
Your decision making process is absurd!
My husband has 2-5 yrs to live, yet MetLife has been giving him the run around
Reply
Inappropriate conduct!! Rude, discriminatory, etc
Reply
Haven't been paid since MetLife denied my appeal months ago
Reply
Metlife closed my STD claim amid several injuries
Reply
Metlife's COLA recalculation cut my payments with no explanation why
Reply
Q: How far behind in payments does Metlife have to be to take legal action?
Q: Does Metlife pay Disability payments ahead? Example: December payment is for January.
Q: Would any new disabling conditions be considered by Metlife when considering whether or not to continue my benefits?
Q: MetLife: Mental Health and Physical Disabilities
Q: Can my employer switch my job because I go on LTD?
Q: Can MetLife deduct the ssdi benefits I receive for my dependent kids from what they pay me?
Q: Is MetLife entitled to overpayment if they realized 15 years later?
Q: Do I have to sign and return MetLife's authorization to disclose my info in order to continue my claim?
How Does Having A Disability Lawyer Help Me Fight For Metlife Disability Benefits?
What Should I Expect if Metlife Wants to Send Someone to Interview me?
MetLife Disability Buyout and Lump Sum Settlements are Back
Metlife - Latest trends seen in handling ERISA and private disability insurance claims
Disability Benefit Denial Reason #4 - Your Doctor Is Misled By the Disability Company
Disability Benefit Denial Reason #3 - Video & Social Media Surveillance
How Do You Fight a Long-Term Disability Denial?
Disability Denial Reason #2 - Change of Disability Definition & Vocational Review
Teacher's Disability Benefits Reinstated by MetLife
MetLife Denies Disability Benefits and Tells TFORCE Truck Driver Its Safe For Him to Drive
Contracts Manager With Toxic Encephalopathy Wins MetLife Long Term Disability Denial Appeal
MetLife Approves Long Term Disability Claim For Executive Assistant with Neck Pain
MetLife Approves Disability Benefits to Dentist With De Quervain's
Dell Disability Lawyers Successfully Appeals Metlife Denial of Benefits to Veteran
Metlife Overturns Denial on Appeal by Dell Disability Lawyers
Senior Global Tax Director for billion dollar worldwide industrial company is again receiving disability benefits from MetLife after Appeal by Attorney Alexander Palamara
Reviews from Our Clients






