Metropolitan Life Ins. Co. v. Glenn

PETITIONER:Metropolitan Life Insurance Company et al.
LOCATION:Earthquake Park

DOCKET NO.: 06-923
DECIDED BY: Roberts Court (2006-2009)
LOWER COURT: United States Court of Appeals for the Sixth Circuit

CITATION: 554 US 105 (2008)
GRANTED: Jan 18, 2008
ARGUED: Apr 23, 2008
DECIDED: Jun 19, 2008

Amy K. Posner
E. Joshua Rosenkranz – for the respondent
Nicole A. Saharsky – Assistant to the Solicitor General, Department of Justice, for the United States as amicus curiae, supporting the respondent

Facts of the case

Wanda Glenn, a long-time employee of Sears and manager of its women’s department, was covered by the company’s long-term disability plan. In 2000, Glenn took medical leave from Sears based on an ailing heart condition and submitted a disability claim under her ERISA plan. Metlife, the insurance carrier, approved the claim and told Glenn to seek social security payments which could then be deducted from her Metlife payments. However, after an administrative law judge determined, based in part on information provided by Metlife, that Glenn was disabled and eligible for social security payments, Metlife revised its own opinion and decided Glenn was no longer eligible for disability benefits.

Glenn brought suit against Metlife in district court, where Metlife’s change of heart was vindicated, however the U.S. Court of Appeals for the Sixth Circuit reversed. In making its decision, the Sixth Circuit took into account Metlife’s dual role as both the entity determining when disability awards should be paid out as well as the entity actually funding those payments, noting the possible conflicts of interest that could arise based on this arrangement. In seeking Supreme Court review, Metlife drew attention to circuit splits on the issue of whether these conflicts should be taken into account in determining the validity of Metlife’s decisions on disability. In addition to the conflict of interest argument, Glenn pointed out that Metlife’s flip-flop did not take into account certain of Glenn’s doctor evaluations and that Metlife’s representations to the administrative judge were at odds with its own eventual determination that she was not disabled.


Does an insurance carrier, acting both as the entity determining when awards are to be paid and actually funding those awards, have the right to represent to a court that an individual is disabled when the insurance carrier separately determines for other purposes that the individual is in fact not disabled?

Media for Metropolitan Life Ins. Co. v. Glenn

Audio Transcription for Oral Argument – April 23, 2008 in Metropolitan Life Ins. Co. v. Glenn

Audio Transcription for Opinion Announcement – June 19, 2008 in Metropolitan Life Ins. Co. v. Glenn

John G. Roberts, Jr.:

Justice Breyer has the opinion of the Court in three cases this morning.

Stephen G. Breyer:

First case is Metropolitan Life Insurance v. Glenn and has to do with the Employee Retirement Income Security Act of 1974 which we all know as ERISA.

Now that Act allows a person who has — has been denied health benefits or disability benefits, certain others under the employee benefit plan to challenge in federal court the denial.

In an earlier case called Firestone Tire & Rubber, we held that trust law supplies the relevant standard of review when they bring their lawsuit.

Applying that law, we said that when a benefit plan gives the plan administrator discretion to make benefits decisions, a court should review the administrator’s decision, I mean the decision denying health benefits say to a worker.

The Court should review it under an abusive discretion standard and we said that if the administrator is laboring under a conflict of interest, the conflict should be weighed as a factor but may conduct that abuse of discretion review.

Now in this case, MetLife an insurance company is both the administrator and the insurer of the Sears, Roebuck disability plan.

So, it evaluates a worker’s claim, is it right or wrong and then if the claim is right, as insurer, it pays the claim.

The Sixth Circuit said that is a conflict of interest and it should be treated as a factor in deciding whether MetLife’s decision and discretionary decisions in denying permanent disability benefits to the respondent Ms. Wanda Glenn takes that conflict of interest into account.

Now, we granted review to determine whether the Court of Appeals was right in finding that MetLife did have a conflict of interest and we also said if that’s so we will consider how courts should account for such a conflict on judicial review.

Since that was the question, two questions and the answer that we’ve given is we first conclude in the administrator of a plan that both evaluates and pays the claim does have a conflict of interest of the kind that Firestone mentioned.

It’s quite clear when the employer is administering and also evaluating the claim, paying the claim because then every dollar the employee says, “I won’t pay” is the extra dollar he has in his own pocket.

So, that’s a conflict.

The conclusions will be less clear when it’s an insurance company that’s performing that dual role because they do have a professional interest in fair claims evaluation, that’s insurance companies are in the business of doing in part, but although these marketplace pressures provide a reason why a professional insurer might have a less serious conflict than an employer would, we still think that some kind of conflict exists.

So, turning to the question and of how a court should account for the conflict, we simply apply Firestone’s teaching and it is just one factor among many.

We add Firestone means what it says and Firestone said it’s a factor.

That’s what it is, it’s a factor.

When judges review, the lawfulness of a denial of benefits, they all account for many different considerations of which is one, that’s just the third way of saying what I’ve already said twice.

The factor may be — account for a lot more, where for example, the administrator is an insurance company with a history of biased claims proceeding.

On the other hand, that factor could account a lot — for a lot less where the administrator has a history of setting up internal procedures and checks that try to minimize any financial incentive to deny claims.

So, that’s the best we could do and we look at this case and say, “We think that the Sixth Circuit got it right.

“And they said the insurance company was wrong and should have paid the money to Ms. Glenn and we agree with her about that and they applied the proper standard then we affirm the Court’s decision.

So we have an example here of what we think went right.

The Chief Justice has filed an opinion concurring in part and concurring in the judgment.

Justice Kennedy has filed an opinion concurring in part and dissenting in part and Justice Scalia has filed a dissenting opinion in which Justice Thomas has joined or at least that’s fairly —