Harris v. Lincoln Nat’l Life Ins. Co., No. 21-13186, __ F.4th __, 2022 WL 3009199 (11th Cir. July 29, 2022) (Before Circuit Judges Jordan and Rosenbaum, and District Judge John Steele).
ERISA is very specific about some things, but on others it is famously vague. For example, ERISA says that plan participants are allowed to bring a civil action for benefits, but it doesn’t give much guidance as to how the courts should handle those actions. Are they handled the same way as other civil cases under the Federal Rules of Civil Procedure? Do claimants have the right to a jury? What standard of review should the courts use?
The Supreme Court has answered some of these questions. For example, in Firestone Tire & Rubber Co. v. Bruch, the Court held that denials of claims under ERISA should be reviewed de novo by the courts unless the benefit plan contains language to the contrary. However, other questions have not been answered, and in that vacuum the lower courts have been forced to create their own rules.
One of these lingering questions is: in cases where the court is performing de novo review, what evidence is admissible? As this week’s notable decision explains, the Circuit Courts have not answered this question uniformly. Some courts are quite restrictive, holding that review should be limited to the record that was before the administrator at the time it made its decision. Others have struck a middle course, holding that while review should typically be limited to the administrative record, extrinsic evidence is allowed under certain circumstances. And finally, some courts have held that de novo review requires courts to consider all relevant evidence, regardless of whether it was before the administrator.
Here, plaintiff Virgil Harris sought approval of his claim for long-term disability benefits under an employee benefit plan insured and administered by defendant Lincoln National Life Insurance Company. At trial, Mr. Harris attempted to submit evidence in the form of an affidavit and updated medical records. However, the district court held that this evidence was inadmissible because it post-dated the denial of benefits and was not before Lincoln at the time it denied his claim.
The Eleventh Circuit reversed in a published opinion, concluding that the evidence should have been admitted. The court noted that its analysis was guided by two prior Eleventh Circuit cases, Moon v. American Home Assurance Co. and Kirwan v. Marriott Corp., in which the court held that parties were allowed to present evidence which was not before the administrator when it denied benefits. The court stated that these cases “have not been abrogated by the Supreme Court. Nor have they been overruled by an en banc opinion of this court. As a result, they remain binding precedent.”
In so holding, the Eleventh Circuit rejected several of Lincoln’s arguments. First, the court distinguished Lincoln’s citations to other Eleventh Circuit cases in which evidence outside the record was excluded, finding them inapposite because they were decided under the abuse of discretion standard of review.
Second, the court rejected Lincoln’s contention that the court’s multi-step analytical approach to deciding benefit cases, which was adopted after Moon and Kirwan, abrogated the holdings of those cases. The court held that its multi-step test was not relevant to the evidentiary issue because the test does “not speak to what evidence a district court can consider when review is de novo,” and even if it did, Moon and Kirwan would still control because they were decided earlier.
Finally, Lincoln contended that claimants should not have an “unfettered right to introduce new evidence,” and should have to make a showing “akin to good cause” before submitting that evidence. The Eleventh Circuit quickly dismissed this argument, stating, “We have never mentioned, much less demanded, a showing of good cause to present new evidence in ERISA benefit cases governed by the de novo standard.”
As a result, the Eleventh Circuit reversed the district court’s judgment in favor of Lincoln, instructed the district court to consider Mr. Harris’ new evidence, and remanded for further proceedings. The evidentiary door is now wide open in de novo cases in the Eleventh Circuit. One wonders if other Circuits will reconsider their approaches in light of this decision, or whether the Supreme Court will ultimately have to resolve this issue on a nationwide basis.
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