ERISA cases are highly unusual in that they are not tried before a jury, and in most cases the federal judge who has sole discretion over the outcome of the case is compelled by the law to give deference to the insurance company being sued. Claimants have no opportunity to speak to the judge, call or cross examine witnesses, or introduce new evidence. The only information that will be considered is that which is contained in the administrative record.
Although it may seem as though the laws are stacked against you, ERISA cases can be won with the aid of an experienced attorney. J. Price McNamara has stood up to the largest, most powerful insurance companies in the nation, representing a variety of injured employees who were denied the benefits to which they were entitled.
The following descriptions of complications that commonly arise in ERISA lawsuits are not meant to discourage you from pursuing your benefits in court. Rather, they are intended to emphasize the importance of securing skilled legal counsel if you want to even the odds against you:
ERISA Lawsuits Can Only Be Filed in a United States District Court
Because ERISA law trumps state laws regarding insurance and disability claims,ERISA lawsuits must be filed in a United States District Court, which is a federal court. ERISA lawsuits filed in state courts are generally not dismissed, but rather “removed” to the appropriate federal courts. Once the suit reaches a federal judge, he or she will examine the complaint meticulously to ensure that it meets the pleading requirements established by the official plan document.
The Court Must Be Satisfied That the Claimant Has Exhausted All Avenues of Appeal
If the federal judge reviewing the case finds that the claimant has not fulfilled his or her obligation to exhaust all administrative remedies after the denial of his or her claim, as specified in the summary plan description (SPD) and including the possibility of two rounds of appeals, then the case may be dismissed with prejudice.
Naming a Defendant Can Be Tricky
While ERISA allows employees to file a lawsuit after the final denial of their claims, the law does not specify which party should be named the defendant in such suits. The courts have arrived at contradictory decisions regarding this matter:
- Some courts have found that the plan itself must be the named defendant
- Some courts have found that the plan and the plan administrator can both be named defendants
- Some courts have found that the plan and the employer can both be named defendants
Naming the incorrect defendant can put a lawsuit in immediate jeopardy.
The Defendant May File a Motion for Dismissal
Although they are not successful in most cases, the defendants named in ERISA lawsuits often file a motion to dismiss for failure to state a claim on which relief may be granted. In other words, the defendant asks the court to dismiss the lawsuit on the basis that the claimant failed to present sufficient facts to indicate that he or she was entitled to legal remedy. This motion is usually rejected on the grounds that the claimant has presented sufficient facts to make a claim at least superficially plausible.
Discovery Is Limited in ERISA Cases
In fact, in many ERISA cases, discovery – the allowance of the plaintiff and the defendant to “discover” the evidence the other side has to present – is not permitted. Generally, any document that is part of the administrative record is allowed to be submitted into evidence, and is the only evidence considered by the court. The only instance in which discovery is allowed is when there are claims of due process violations or bias on the part of the plan administrator.