Tuesday, May 11, 2010

If they’re going to lie cheat and steal when they consider your insurance claim, you really think they’d be straight about what the law is?

A few weeks ago the Supreme Court issued its opinion in Conkright v. Frommert, and told us that if an ERISA administrator has phony-baloney discretion, a “single honest mistake” will not cause a loss of that absurd advantage in court and make it so they lose the case if they’re, you know, wrong.

Conkright was, of course, a win for the dark side, since now, despite a screw-up they still get the judge’s thumb on the scale in their favor.

But that wasn’t good enough for them, no sir. So they’ve been running around saying Conkright did way more than it actually did.

A bit of background: The Supreme Court first addressed this “discretion” nonsense in Firestone v. Bruch, in 1989. Then, in the 2008 case of MetLife v. Glenn, the Court talked further about how a court should conduct its analysis when an administrator has that phony-baloney “discretion.”

Glenn set the ground rules. And now in Conkright the Court has said those Glenn ground rules continue to apply even if the administrator commits a “single honest mistake.” The Court could not have been more clear about that; they said in words even an ERISA insurer could understand that, despite the “single honest mistake” which occurred in Conkright, “the lower courts should have applied the standard established in Firestone and Glenn."

The ERISA mob, though, has been arguing that Conkright actually changed “the standard applied in Firestone and Glenn,” and that after Conkright it is now even easier for them to win despite being wrong. Take for example this take on Conkright, published by the ERISA defense firm of Sonnenschein Nath & Rosenthal LLP. According to these guys, “the Supreme Court's reading of Glenn in Conkright may make those courts more reluctant to rely on Glenn to overturn plan administrator decisions in conflict situations.” Not only that, “the same considerations the Supreme Court marshaled to reject a ‘prior wrong decision‘ exception to judicial deference can be -- and may well be -- applied to virtually any other attempt to override a plan administrator decision, making all such decisions harder to overturn.”

Oh hell yes let’s make ERISA claim denials even harder to overturn, since they’ve been so easy to overturn for all these years.

So here’s how it’s supposed to work according to the ERISA mob:

Oops! What the hell, the wrong team won! That’s OK, “single honest mistake,” right? Time for a do-over:

Damn. Still no good. But let’s use our phony-baloney "discretion" to clean up our mess:

There. That’s more like it.

It’s not fair, it’s not just, and it ruins the lives of real innocent people. But we must preserve phony-baloney “discretion” at all costs. Discretion uber alles!