Russell W. Newcomb, M.D. v. Standard Insurance Company, a Foreign Corporation
Docket: 98-35986
Court: Court of Appeals for the Ninth Circuit; August 9, 1999; Federal Appellate Court
Dr. Russell W. Newcomb filed a lawsuit against Standard Insurance Company for long-term disability benefits under ERISA. The district court ruled in favor of Newcomb, granting his motion for summary judgment, and found that Standard had abused its discretion in denying his claim. Standard appealed, arguing that the denial of benefits should be reviewed under the abuse of discretion standard because the policy granted it adequate discretion as the plan administrator.
The district court initially agreed with Standard and reviewed the case for abuse of discretion, referencing the precedent set in Snow v. Standard Ins. Co., which established that similar policy language conferred sufficient discretion. However, subsequent rulings in Kearney v. Standard Ins. Co. altered this perspective, interpreting the same language as ambiguous and thus requiring de novo review for benefit denials.
Standard attempted to differentiate its policy from those in Kearney and Snow by pointing to a provision requiring claimants to provide written authorization for obtaining necessary records to determine eligibility. It argued this provision conferred adequate discretion for an abuse of discretion standard of review. Standard cited cases such as Eley v. Boeing Co. and Bogue v. Ampex Corp. to support its position that language indicating a determination of eligibility grants sufficient discretion for such a review standard. Ultimately, the Ninth Circuit affirmed the district court's ruling in favor of Newcomb.
Two prior cases are distinguishable from the current case regarding the standard of review for a denial of benefits. In Kearney, the court noted that discretion is only valid where it is explicitly retained by the administrator, a condition not met here. The term "determine" in the policy does not establish such discretion; instead, it simply indicates the requirement for the claimant to authorize the release of records. Consequently, the appropriate standard of review is de novo.
Under de novo review, the key issue is whether there is a genuine dispute over Dr. Newcomb's disability. Standard Insurance challenges Dr. Newcomb's claim based on the assessment of Dr. Zivin, an independent medical expert. However, the district court found that Dr. Zivin's opinion was insufficient to counter the substantial evidence presented by Drs. Desmond, Hammond, and Petajan, who concluded that Dr. Newcomb's right-sided weakness prevented him from continuing his surgical practice. This was further supported by Hospital Administrator Marley Jackman’s recommendation for Dr. Newcomb's permanent medical leave.
Despite the district court initially applying an abuse of discretion standard, its findings still align with the requirements of a de novo review. Standard's argument that the district court improperly weighed evidence is moot, as this is a necessary step in a de novo review. Therefore, there is no need for a remand, and the district court's judgment is affirmed.
