How to Think Like a Plaintiff in a Unum Lawsuit

Richmond, VAKimberly Stoddard had been receiving long term disability payments under her Unum disability insurance policy for more than ten years, so it was a shock when the plan reconsidered and stopped paying her.

She filed a lawsuit in federal court. She lost. The Fourth Circuit Court of Appeals’ December 2017 opinion is brief and brutal. Stoddard failed to demonstrate that First Unum abused its discretion in rendering its benefits decision against her.

But the decision also teaches a lesson about how Unum unfair disability denial plaintiffs can win: Tales of woe are a dime a dozen; focusing on process is the key.

The hurdle ERISA plaintiffs face

The Employee Retirement Income Security Act (ERISA), as originally enacted in 1974, was intended to protect workers’ rights to receive benefits under their employers’ benefit plans. Since the 1989 Supreme Court decision in Firestone Tire & Rubber Co. v, Bruch , however, plan participants who want to sue over a benefit denial, will prevail only in the most extreme situations. Plaintiffs must show that the plan administrators, in this case the insurance company, abused their discretion in making the decision, Courts are very reluctant to second-guess the decision of a plan administrator.

What starts as a dispute about money quickly devolves into a dispute about internal company procedures, and the person trying to get benefits usually loses.

But it is possible to win, given the right set of facts. To show abuse of discretion, claimants have to treat any benefit denial as if it could become a lawsuit and to document the way a claim is handled from the beginning.

What qualifies as abuse of discretion?

It varies from jurisdiction to jurisdiction but these are the kinds of facts unfair disability denial claimants should discuss with their lawyers:

• A claims review process that is in conflict with the terms of the plan document, including especially time periods and deadlines;
• Failure to review medical files, or having them reviewed by someone without the necessary expertise;
• Reliance on a “paper” review rather than a physical examination of a claimant;
• Misclassifying the kind of work a claimant does, for example, labeling a job as sedentary when it actually requires heavy lifting; and
• Anything else that would suggest that the plan administrator or an ostensibly independent medical reviewer had a conflict of interest.

It may seem counterintuitive to focus on the way a long term disability claim is denied, rather than the frustration and suffering that the denial can cause. But that’s the way to win a Unum disability lawsuit.