Opinion ID: 2543
Heading Depth: 3
Heading Rank: 2

Heading: Metropolitan Life Insurance Co. v. Glenn

Text: In Glenn, the Supreme Court clarified its earlier decision in Firestone. The Court noted that Firestone set forth four principles of review: (1) In determining the appropriate standard of review, a court should be guided by principles of trust law ...[;] (2) Principles of trust law require courts to review a denial of plan benefits under a de novo standard unless the plan provides to the contrary[;] (3) Where the plan provides to the contrary by granting the administrator or fiduciary discretionary authority to determine eligibility for benefits, trust principles make a deferential standard of review appropriate[; and] (4) If a benefit plan gives discretion to an administrator or fiduciary who is operating under a conflict of interest, that conflict must be weighed as a factor in determining whether there is an abuse of discretion. Glenn, 128 S.Ct. at 2347-48 (citing Firestone, 489 U.S. at 111-15, 109 S.Ct. 948) (quotation marks and alterations omitted) (emphasis in original). After acknowledging these principles, the Court directly focus[ed] upon the application and the meaning of the fourth [principle]. Id. at 2348. Addressing the question of whether the fact that a plan administrator both evaluates ... and pays benefits claims creates the kind of `conflict of interest' to which Firestone 's fourth principle refers, the Court concluded that it does. Id. at 2348. The Court reasoned that [i]n such a circumstance, every dollar provided in benefits is a dollar spent by the employer; and every dollar saved is a dollar in the employer's pocket. The employer's fiduciary interest may counsel in favor of granting a borderline claim while its immediate financial interest counsels to the contrary. Thus, the employer has an interest conflicting with that of the beneficiaries, the type of conflict that judges must take into account when they review the discretionary acts of a trustee of a common-law trust. Id. (internal quotation marks, alterations, and citations omitted). The Court then addressed the question of how this conflict should be taken into account upon judicial review of a discretionary benefit determination. See id. at 2350. The Court clarified that under Firestone, such a conflict should be weighed as a factor in determining whether there is an abuse of discretion. Id. (internal quotation marks omitted). In doing so, the Court rejected the notion that the conflict of interest justifies changing the standard of review from deferential to de novo. Id. It reasoned that [t]rust law continues to apply a deferential standard of review to the discretionary decisionmaking of a conflicted trustee, while at the same time requiring the reviewing judge to take account of the conflict when determining whether the trustee, substantively or procedurally, has abused his discretion. Id. The Court saw no reason to forsake Firestone 's reliance upon trust law in this respect. Id. Additionally, the Court noted that it is neither necessary [n]or desirable for courts to create special burden-of-proof rules, or other special procedural or evidentiary rules, focused narrowly upon the evaluator/payor conflict. Id. at 2351. Our previous standard is now inconsistent with these instructions in one set of cases: When a plaintiff proves both that a conflict of interest exists and that this conflict affected the reasonableness of the administrator's discretionary decision. See Sullivan, 82 F.3d at 1255-56. We thus abandon the use of de novo review in these cases and set forth, in accordance with Glenn, the appropriate standard to be used in future cases.