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9th Circuit Court Of Appeals Upholds Reliance Standard Insurance Company’s Denial Of Disability Benefits And Interpretation Of The 24 Month Mental Nervous Limitation
Expert Article by Gregory Michael Dell
Reliance Standard Insurance Company’s decision to terminate a disability claimant’s long term disability benefits as a result of a 24 month “mental nervous limitations “clause has been upheld by the Ninth Circuit Court of Appeals. It is very common to see disability insurance companies denying claims as a result of a 24 month mental nervous limitation. In the recent 9th circuit court of appeals case of Maurer v. Reliance Standard Life Insurance Company, the plaintiff claimed that Reliance Standard abused their discretion by terminating long term disability benefits. The Appellate court stated,
“[Reliance Standard] permissibly interpreted the “mental/nervous” limitation to preclude coverage when, in the absence of a mental or nervous disorder, a beneficiary would be physically capable of working. Defendant’s interpretation is consistent with the Plan’s limitation of coverage for disabilities that are “caused by or contributed to” by mental disorders.”
No Strong Evidence of A Physically Disabling Condition In the Record
The court clarified that the doctrine of contra proferentem does not apply when the fiduciary/ plan administrator has been granted explicit discretion to interpret the plan. This case is very fact specific as three of the claimant’s physicians provided medical records stating that the claimant was disabled by psychological issues despite physical complaints. One of the physicians stated, “without psychiatric elements, the patient would be capable of work activity.” A different treating doctor found that the claimant’s “physical problems caused her mood disorder.” Reliance Standard argued that mental disorder “contributed to” her disability and therefore the claim is limited to 24 months. This is a unique case as based upon the facts provided in the District Court and Appellate Court decisions it appears that the claimant did not have strong medical evidence or documentation to support a primary disabling condition which was physical. If the claimant had an underlying disabling condition which was physical in nature and had psychiatric limits which were secondary, it is highly unlikely that Reliance Standard would have been unable to rely on the 24 month mental nervous limitation.
Psychiatric Complaints Secondary to a Physically Disabling Condition Should not be Subject to Mental Nervous Limitation
As a disability insurance lawyer that has represented thousands of claimants, it is very common to see a psychiatric condition such as depression or cognitive difficulties which are secondary to a physical limitation. It is normal for a claimant to be depressed or anxious over the reality that they have lost their inability to work and enjoyment of life due to a disabling condition. When dealing with a disability insurance claim, claimants with a physical disability must make sure that their doctors are documenting any psychiatric limitations as secondary to the physical. As long as the physical condition on its own is disabling, then the fact that a psychiatric condition is also disabling should not subject a claimant to a 24 month limitation.
More Disability Insurance blog posts from this author can be found here: http://www.diattorney.com/our-blog/
ACI event related to this topic
When: Thursday, January 24 to Friday, January 25, 2013
Where: The Carlton Hotel, New York, NY, USA
For more information, and to register: click here
Gregory Michael Dell is a partner and the managing attorney of the disability income division of Dell & Schaefer, Chartered. The firm’s disability income division is a nationwide practice representing claimants throughout all stages (i.e. applications, denials, appeals, litigation, & lump-sum policy buyouts) of a claim for individual or group (ERISA) long-term disability benefits. Gregory Dell received his B.S./B.A. in Accounting at Washington University in St. Louis and his J.D. from Benjamin Cardozo School of Law in New York City. Mr. Dell has litigated and represented claimants against every major disability insurance company, including a disability class action against Prudential.
At a national level, Mr. Dell is Vice Chair of the American Bar Association Health and Disability Insurance Law Committee, author of a Westlaw treatise on Long-Term Disability Insurance Law, recognized as Super Lawyer in the field of Employee Benefits, selected by Best Lawyers In America in the field of Insurance Law, American Association for Justice member, author of numerous nationally published disability articles, multiple national radio appearances and lectures as a disability insurance expert, founder of the Disability Attorneys YouTube.com channel with more than 150 videos and publisher of www.diattorney.com, the internet’s most informative resource for disability insurance claims.
- 9th Circuit Court Of Appeals Upholds Reliance Standard Insurance Company’s Denial of Siability Benefits And Interpretation Of The 24 Month Mental Nervous Limitation (December 13, 2012)
Contact Gregory Michael Dell
Avoiding Costly Sanctions and Ensuring Compliance in an Era of Heightened Scrutiny and Enhanced Regulatory and Enforcement Initiatives
When: Tuesday, January 22 to Wednesday, January 23, 2013
Where: The Carlton Hotel, New York, NY, USA
For more information, and to register: click here
An overview of what attendees learned from last year’s event
Session 1: January 24, 2012
Going Beyond OFAC Screening: What Insurance and Reinsurance Companies Must Do To Avoid Sanctions and Ensure Compliance
- Martin Feuer, Chief Compliance Officer Americas at Zurich Financial Services
- Frank Bria, VP & Assistant General Counsel at General Reinsurance Corporation
- David Butman, Senior Counsel at Locke Lord LLP
- Kathy Strom, Counsel at Cahill Gordon & Reindel LLP
Session 2: January 25, 2012
Streamlining your AML, OFAC & FCPA Compliance Programs: Leveraging Existing Resources to Increase Efficiency and Reduce Costs While Ensuring Compliance
- Brian C. Loutrel, VP & Chief Privacy Officer at New York Life Insurance Co.
- Cari N. Stinebower, Crowell & Morig LLP
- Noreen M. Fierro, VP & Corporate Counsel at Prudential Financial
Be a part of the nation’s premier long term care defense litigation conference and ensure that you stay on the cutting edge of evolving defense strategies and emerging theories of liability
When: Wednesday, January 23 to Thursday, January 24, 2013
Where: The Conrad, Miami, FL, USA
For more information, and to register: click here
Industry related article from Ltlmagazine.com, by The Long-Term Living editors, posted on 11/07/12:
What President Obama’s re-election means for the future of long-term care
The re-election of President Obama and the retention of a Democratic majority in the Senate point toward a continuation of current policies and initiatives pertaining to the long-term care (LTC) industry. But control of the U.S. House of Representatives remains strongly with the Republican Party, adding the factor of party-based conflict among the legislature, much like after the presidential election in 2008.
However, the looming deadlines within the 2010 Affordable Care Act (ACA)—including sequestration and the tax increases of the so-named “fiscal cliff” should Congress fail to act by year’s end—mean lawmakers and the President still must work together on a host of challenges in the next two months.
No one can predict how Congress and the LTC industry players will choose to form their conjoined solutions, or how those solutions will affect skilled nursing facilities and other LTC operations, including the extent of the effects on Medicare. Some of the possible compromises already voiced include certain Medicare reductions and perhaps an increase in the eligibility age for beneficiaries from 65 to 67, among other proposals.
Yet, now that the Presidential election is over, many political entities no longer have reason to campaign heatedly against each other on national healthcare issues, leading to hopes of better bipartisan communication and cooperation down the road. “There is intense pressure in Washington to find a solution,” says Bob Gatty, founder and president of G-Net Strategic Communications, Sykesville, Md., and contributing writer to Long-Term Living. “The early tone of [post-election] comments from President Obama and House Speaker John Boehner indicates that there may be a possibility of compromise between the [Republican-controlled] House of Representatives and the White House.”
Now that the nation’s voters have had their say, it’s time to return to the hard work of working together on the issues troubling the U.S. healthcare system, says American Health Care Association President and CEO Mark Parkinson, in a statement following the elections. “While we know that the President and our newly elected Congress must find ways to reduce federal spending and fund a wide variety of programs, now is the time to take a hard look at meaningful reforms to solve the issues that face both the Medicare and Medicaid programs. Stable Medicare and Medicaid funding will help ensure America’s seniors continue to have access to high quality long term and post-acute care.”
Leading long-term care organizations also are ready to move beyond the election rhetoric and return to reform initiatives already underway. “I think our course is now known,” LeadingAge President and CEO Larry Minnix told Long-Term Living. “We’re now beyond political posturing. We’ve got to get into actual implementation of [the ACA]. There are models that people are working on that will work.”
AS THE ELECTION DUST SETTLES
The LTC industry has long complained that continuing reductions in Medicare are jeopardizing patient care and that increases in funding are needed to overcome the failure of Medicaid to adequately cover the cost of serving those patients. However, given the pressure to deal with the federal budget deficit, it is rather unlikely that such increases will be approved by Congress.
Post-election frustrations abound among some in the LTC industry, a care sector that gets a huge amount of its reimbursements from Medicare. William V. Day, president of St. Barnabas Health System in Gibsonia, Pa., says he’s worried that as many as 50 percent of hospitals and nursing homes will close because of Medicare cuts. “Both parties project that $716 billion will be cut from Medicare to use in Obamacare,” he told Long-Term Living. “I doubt that older Americans realize the impact Obamacare will have on their lives and their health in the future.”
Day views the re-election of President Obama as a great victory for those in favor of increased government control of healthcare: “Regulations and inspections in the healthcare delivery system will be dramatic over the next four years,” he predicts.
The LTC space should prepare for more regulatory activities, agrees Caroline J. Berdzik, Esq., partner, Goldberg Segalla LLP. “We will continue to see more rule-making from the Department of Labor, OSHA and EEOC that will negatively impact nursing homes and result in increased labor costs and additional employment litigation defense costs,” she says.
Berdzik also suggests that “a flurry of regulations under the ACA will be issued to gear up for 2014, and operators will need to pay very close attention, as these regulations will impact areas such as compliance, increased transparency disclosures and background checks of employees. It is highly unlikely that ACA will be repealed now, so operators will have to strategically prepare for these changes and also evaluate, if they have not done so already, how this will affect health insurance offerings to their employees. You may have employers looking to significantly reduce hours of employees to avoid increased health insurance costs. However, any proposed action will need to be analyzed in conjunction with maintaining excellent quality and continuity of care.”
Other LTC industry leaders are cautiously optimistic about Congress’ ability to iron out the healthcare challenges, hoping that efforts can focus on improving quality of care. LeadingAge’s Minnix comments on the LTC industry shift toward quality outcomes: “You’ve heard ‘cash is king?’ Well , now ‘quality is queen,’ and the queen is the boss now,” he says. “So we’re going to work to help people define and measure, and to stand accountable for their quality, because that’s the only thing that will earn the public trust.”
Another key post-election issue is how Congress will choose to deal with the upcoming physician Medicare payment reductions, currently scheduled to take place on January 1. Although another temporary Congressional “doc fix” is possible, it would just add to the overall federal budgetary pressures that Congress is already facing, Gatty notes.
The American Medical Association remains committed to finding a different solution, one that is focused on rewarding physician leadership in the mission of quality outcomes within patient-centric healthcare delivery. “It is time to transition to a plan that will move Medicare away from this broken physician payment system and toward a Medicare program that rewards physicians for providing well-coordinated, efficient, high-quality patient care while reducing health care costs,” the AMA wrote in its response to the election results.
THE ROLE OF THE STATES
The U.S. Congress isn’t the only law-making body that has work to do under the ACA deadlines. Each state has until Nov. 16 to declare which of the three Health Insurance Exchange (HIX) models will be used within the state.
After the June 28 Supreme Court decision that allowed states to choose whether or not to participate in Medicaid expansion, six states—Florida, Georgia, Louisiana, Mississippi, South Carolina and Texas—had vowed not to participate in Medicare expansion. In yesterday’s Presidential election, five of those six states voted Republican, with Florida still undeclared as of this posting.
Yet, nearly all states have been attending policy meetings on forming state exchanges, says Nancy Taylor, JD, co-chair of the Health and FDA Business Practice at Greenberg Traurig, LLC, Washington, D.C. Among the three HIX models, she says, most states are planning state-federal partnership exchanges, while 10-15 states are considering purely state-certified exchanges. One or two states may opt for a federally-facilitated exchange model, where the state exchange will be operated by the federal government for an initial time period, she adds.
DOWN IN THE LTC TRENCHES
Meanwhile, LTC facilities are busy getting ready for 2013 and 2014, regardless of the election. While care coordinators deal with Meaningful Use compliance, therapy caps and Medicaid, LTC facility owners are grappling with their corporate decisions concerning the new employee benefits mandates within the ACA.
“There’s so much going on that it’s almost overwhelming,” Taylor says, although she clarifies that LTC facilities shouldn’t plan on any postponements to current deadlines. “Many nursing homes are pretty up to speed. But we need to get the employer issues stabilized for nursing homes so they have a pathway on how to comply with the law, and then they can deal with all their reimbursement issues. Over the next few months, we’ll see more guidances and regulations, so the long-term care community knows how to comply with the employer requirements.”
When it comes to reimbursements, LTC facilities will have to wait to see how the influx of new beneficiaries affects the fee schedules. “I think with an Obama presidency we can expect that the fee schedules will be revisited to try to neutralize the financial impact of the significantly larger number of people who will be receiving services,” says Eli Pick, president of Post Acute Innovations, Elmhurst, Ill. “[The adjustments] will either be way too low or the reductions won’t be anywhere near enough to account for the expansion of the population, and it’s usually the latter—underestimating the volume of people to be covered. So, the options most likely won’t be able to account for the increased number of people who will receive services.”
THE ROLE OF TECHNOLOGY
Championing the use of technology infrastructures within long-term care—including electronic medical records, ePrescribing and streamlined transitions of care—has long been touted as a pathway to reduced healthcare costs and better care quality. Many of the initiatives begun under the 2009 Health Information Technology for Economic and Clinical Health Act (HITECH) would have been viewed as in dire jeopardy for continued funding had President Obama not won the election, but healthcare technology thought leaders now hope the industry can finish the various initiatives already underway.
“Cuts to long-term and post-acute care providers and the lack of incentives to assist them in upgrading their technology make it difficult to achieve interconnectivity and interoperability in a healthcare system that is to have a person-centric ,electronic, longitudinal-care focus ,” says John Derr, RPh, co-founder of the Long-Term and Post-Acute Care Health Information Technology Collaborative (LTPACHIT) and health information technology strategy consultant to Golden Living. “We need to encourage pro-action, prevention of episodic incidents and higher quality clinical outcomes.”
LeadingAge’s Minnix agrees: “We know that the current approach of [LTC] service delivery is fragmented and isn’t holding its own weight financially,” he says. “So we’re going to be emphasizing integrated models of service in every community—things like housing with services, managed care approaches where our members work with hospitals and doctors and how technology can help with all that.”
THE ATMOSPHERE OF CHANGE
Industry leaders are calling for meaningful reforms to solve the Medicare and Medicaid issues and pledge to work with the President and Congress to find viable solutions. There’s no doubt that many more reform discussions will take place, especially among the new Congress that takes office in 2013, Gatty says.
Meanwhile, most LTC facilities are preparing for moving ahead into a new world of integrated care delivery with acute care, home care, assisted living, and beyond. “We will definitely see a lot of changes,” Tim Dressman, executive director, St. Leonard Franciscan Community, Centerville, Ohio, told Long-Term Living. “I just hope they [the federal entities] don’t cut funding so drastically that the person is taken out of the healing process and healthcare becomes nothing more than an assembly line.”
During the ongoing regulatory and legislative processes, it will be essential for all LTC industry players—from small facilities to large ones—to get involved, notes LeadingAge’s Minnix. “While Medicaid obviously needs to be changed, you can’t do it on the backs of vulnerable people,” he says. “We believe our members will do their part on innovation. A number have done things that show great promise for improving quality and reducing costs, but those things need time to incubate. We believe that over the next four years, we’ve got time to begin to see the fruits of those solutions.”
Bob Gatty, founder and president of G-Net Strategic Communications, Sykesville, Md., contributed to this report
When: Wednesday, October 17 to Thursday, October 18, 2012
Where: Union League, Philadelphia, PA, USA
The landscape for litigating contract surety bonds and fidelity insurance claims is swarming. The stakes are high, the issues are complex, and the associated costs are on the rise.
Given all that is happening in the industry, more than 90 firms and companies to date are already sending representatives to American Conference Institute’s National Advanced Forum on Litigating Contract Surety Bonds and Fidelity Insurance Claims.
This is the essential forum that will shape the future of litigation and claims strategies for the year ahead. As faculty, it features renowned federal and state judges as well as in-house professionals from around the country.
From the in-house professionals, learn how they manage expectations of outside counsel, where outside counsel fail in depicting an accurate picture of potential exposures and the related risks in litigation, and how improvements can be made to streamline litigation and minimize costs.
No other Fidelity & Surety conference provides the Judicial insights that this forum offers. From our renowned faculty of federal and state judges, learn their thoughts and insights on the specialized insurance litigation landscape, effective courtroom strategies, and key tips for outside counsel for motion practice.
When: Thursday, September 27 to Friday, September 28, 2012
Where: New York Marriott Downtown, New York, NY, USA
Ponemon Institute’s latest data breach study reveals that the average cost of a data breach is $194 per customer record.
As a result of these staggering costs, cyber and data risk insurance has never been more in more demand than it is now and it has never been more important to attend ACI’s 6th National Advanced Forum on Cyber & Data Risk Insurance – the original conference that brings you the latest coverage, underwriting and claims strategies for managing privacy/security, data and network risk liability.
This is the definitive forum that the industry has known and trusted for 6 years now!
CLICK HERE TO VIEW THE FULL FACULTY
More than 100 organizations are already participating in this event and the seats in the conference ballroom will sell out. With all that’s at stake and with all those who are going to be there, you will miss out if you or your company does not attend!
Hear regulatory and enforcement priorities from:
|The experienced faculty will provide you with first-hand, practical and comprehensive information on:
• New exposures, coverage options, claims trends, pricing and selling
Comcast Corp. v. Behrend: Supreme Court Grants Certiorari Regarding Evidence Requirements at Class Certification
Expert Article by Wystan M. Ackerman
Yesterday, the U.S. Supreme Court granted certiorari in Comcast Corp. v. Behrend, No. 11-864 (docket), to address the question of “[w]hether a district court may certify a class action without resolving whether the plaintiff class has introduced admissible evidence, including expert testimony, to show that the case is susceptible to awarding damages on a class-wide basis.” The Court will review the Third Circuit’s opinion in Behrend v. Comcast Corp., 655 F.3d 182 (3d Cir. 2011).
This case is a putative antitrust class action alleging that acquisitions by Comcast of other cable providers and “swap agreements” that Comcast entered into with competing cable providers were anticompetitive and led to monopolization by Comcast of the Philadelphia market area. The case has a complex factual and procedural history. The district court ultimately certified a class, finding, after a four-day evidentiary hearing, that antitrust impact could be proven through common evidence to establish damages on a class-wide basis. The Third Circuit affirmed, applying its “rigorous analysis” standard from In re Hydrogen Peroxide Antitrust Litigation, 552 F.3d 305 (3d Cir. 2008), but noting that “at the class certification stage, we are precluded from addressing any merits inquiry unnecessary to making a Rule 23 determination.” Behrend, 655 F.3d at at 190. In discussing class certification standards, the Third Circuit concluded that:
Many of Comcast’s contentions ask us to reach into the record and determine whether Plaintiffs actually have proven antitrust impact. This we will not do. Instead, we inquire whether the District Court exceeded its discretion by finding that Plaintiffs had demonstrated by a preponderance of the evidence that they could prove antitrust impact through common evidence at trial.
Although in Hydrogen Peroxide we heightened the inquiry a district court must perform on the issue of class certification, nothing in that opinion indicated that class certification hearings were to become actual trials in which factual disputes are to be resolved. Indeed, as we explained in Hydrogen Peroxide, a district court may inquire into the merits only insofar as it is “necessary” to determine whether a class certification requirement is met. 552 F.3d at 316. Eisen still precludes any further inquiry. See Eisen, 417 U.S. at 178, 94 S.Ct. 2140 (“[T]he question is not whether the plaintiff or plaintiffs … will prevail on the merits, but rather whether the requirements of Rule 23 are met.” (quoting Judge Wisdom’s holding inMiller v. Mackey Int’l, Inc., 452 F.2d 424, 427 (5th Cir.1971))); Hydrogen Peroxide, 552 F.3d at 317 (“Eisen is best understood to preclude only a merits inquiry that is not necessary to determine a Rule 23 requirement.”). We allow preliminary merits inquiries when necessary for Rule 23 because of the potentially “decisive effect on litigation” of a certification decision, Newton, 259 F.3d at 167, but those inquiries remain limited and non-binding on the merits at trial, Hydrogen Peroxide, 552 F.3d at 318. Nothing in Hydrogen Peroxide requires plaintiffs to prove their case at the class certification stage; to the contrary, they must establish by a preponderance that their case is one that meets each requirement of Rule 23. To require more contravenes Eisen and runs dangerously close to stepping on the toes of the Seventh Amendment by preempting the jury’s factual findings with our own.
Id. at 197, 199-200.
With respect to the specific issue of damages, which is the focus of the question presented as formulated by the Supreme Court, the Third Circuit wrote that:
At the class certification stage we do not require that Plaintiffs tie each theory of antitrust impact to an exact calculation of damages, but instead that they assure us that if they can prove antitrust impact, the resulting damages are capable of measurement and will not require labyrinthine individual calculations. Cf. Newton, 259 F.3d at 187. We are satisfied that Plaintiffs’ damages model meets this burden.
Additionally, the cases that Comcast offers are distinguishable on multiple grounds. Most to the point, those cases considered the merits of experts’ theories following adverse jury verdicts; here, we address only whether Plaintiffs have provided a method to measure and quantify damages on a class-wide basis. We have not reached the stage of determining on the merits whether the methodology is a just and reasonable inference or speculative.
Id. at 206.
Judge Jordan dissented from the ruling on damages, finding that, under Daubert, the plaintiffs’ proffered expert testimony “fails the requirement of ‘fit’ because it is disconnected from Plaintiffs’ only viable theory of antitrust impact . . . and, thus, the proffered expert testimony cannot help the jury determine whether reduced overbuilding caused damages.” Id. at 216 (Jordan, J., dissenting).
Comcast’s petition for certiorari focuses on the Supreme Court’s opinion last term in Wal-Mart Stores, Inc. v. Dukes, arguing that Wal-Mart requires the lower courts to decide the types of merits issues that the Third Circuit refused to take up. The petition also argues that the Third Circuit’s focus on whether the claims could be proven through common evidence was the wrong approach because Wal-Mart requires a determination of whether class certification requirements were in fact proven. The cert petition, however, was seeking somewhat broader review than the Supreme Court ultimately granted – the Court’s order granting certiorari appears to limit its review to the damages question and the issue of the admissibility of expert testimony.
This case could have broad impact on class actions, including insurance cases, but that will depend on how the opinion is written (which could take seven months to a year). If the Court were to simply hold thatDaubert applies at class certification (as Wal-Mart suggested in dictum) and then determine whether or not the expert in this case has satisfied that standard (or perhaps remand for the district court to reassess that question), that would not constitute any significant shift in federal class action law. The general rule most courts are following is that Daubert applies at class certification, although there is some debate about how strongly it applies (see my posts about the Seventh Circuit’s decision in Messner and the Eighth Circuit’s decision in Zurn Pex Plumbing). The Court might resolve that debate, but in my view that is a relatively small quibble in the grand scheme of class action law. If the Court were to, in the course of addressing the damages and expert testimony issues, also comment on the extent to which the merits must be considered at class certification and whether the Third Circuit got that right or wrong under Wal-Mart, that type of ruling would have a much greater impact. It seems possible the Court could go that far even though the question presented is not as broad as Comcast may have desired. If the Court reaches into the issue of the extent to which the merits can be considered on class certification, Wal-Mart’s discussion of deciding merits issues at class certification, which is strongly favorable to defendants seeking such rulings, could be reaffirmed and extended, or it could be scaled back, swinging the pendulum back towards plaintiffs. It is also possible that the Court could address in a broader fashion the extent to which the need for individual adjudication of damages, where a court concludes that liability can be resolved on a class-wide basis, makes class certification inappropriate.
Expert article by Wystan M. Ackerman
Last year, in Smith v. Bayer Corp., 131 S. Ct. 2368 (2011), the Supreme Court held that a denial of class certification was not binding on absent members of the putative class, and thus a federal district court that had denied class certification could not enjoin an absent, non-named member of the putative class from pursuing certification of essentially the same proposed class in a state court. The Court noted, however, that repetitive relitigation of class certification is a significant problem for the judicial system. In dictum, the Court stated that “our legal system generally relies on principles of stare decisis and comity among courts to mitigate the sometimes substantial costs of similar litigation brought by different plaintiffs,” and that “we would expect federal courts to apply principles of comity to each other’s class certification decisions when addressing a common dispute.” Id. at 2381-82.
In Smentek v. Dart, No. 11-3261, 2012 U.S. App. LEXIS 12325 (7th Cir. June 19, 2012) (Posner, J.), the Seventh Circuit recently addressed how far that principle of comity goes, holding that comity does not require a trial judge to adhere to prior decisions by other trial judges. Rather, comity is merely a “weak notion . . . requiring a court to pay respectful attention to the decision of another judge in a materially identical case, but no more than that even if it is a judge of the same court or a judge of a different court within the same judiciary.” Id. at *10.
Smentek involved a series of class actions filed by prisoners in the Northern District of Illinois, alleging that the failure to make sufficient dental services available at the Cook County Jail was a constitutional violation. Two district judges denied class certification, but a third judge granted certification. The defendant argued that the dictum in Smith v. Bayer Corp. regarding comity among federal courts required the district judge deciding the third case to follow her colleagues’ rulings. The Seventh Circuit, in an opinion by Judge Poser, rejected this argument, explaining that “[t]he mandatory comity for which the defendants in our case contend is just another name for collateral estoppel,” which Smith v. Bayer Corp. had found expressly inapplicable. Id. at *8.
The result here is not surprising to me. When I first read Smith v. Bayer Corp., without studying case law about comity, I had assumed the Court was referring to a relatively weak form of comity, and it did not occur to me that defendants would make the argument for the strong form of comity that was asserted inSmentek.
But there ought to be some solution that enables a defendant to avoid re-litigating class certification over and over, and relieves the burden that imposes on conscientious trial court judges who will not simply rubber stamp one of their colleagues’ rulings but feel a need to take a fresh look at the case before them. An appellate decision is not the answer where the defendant wins in the trial court the first time (or two or three) and cannot appeal. I’ve mused before about whether a defendant faced with this problem could bring a declaratory judgment action against a class of would-be class representatives for the purpose of obtaining one final, dispositive ruling on class certification. But I’m not aware of anyone testing that novel approach.
Expert Article by Emily Seymour Costin
Although more than fifteen years have passed since the Third Circuit issued its seminal decision in Moench v. Robertson, 62 F.3d 553 (3d Cir. 1995), courts are still grappling with its application and reach.
Indeed, district courts nationwide have reached conflicting decisions on whether the “Moench presumption” may be applied when considering a motion to dismiss. On February 22, 2012, the Sixth Circuit resolved a split among its district courts, holding that the Moench presumption of “reasonableness” is not an additional pleading requirement and, thus, does not apply at the motion to dismiss stage.
However, on May 8, 2012, the Eleventh Circuit considered and rejected the Sixth Circuit’s reasoning. Embracing the reasoning previously articulated by the Second and Third Circuits, the Eleventh Circuit held that the Moench analysis is not an evidentiary presumption, but can be applied to dismiss a claim under Fed. R. Civ. P. 12(b)(6). The Sixth Circuit now stands as the only Circuit to affirmatively reject the Moench presumption as a standard that may be applied at the pleading stage. These recent Circuit court opinions beg the question: When does the Moench presumption of prudence apply?
Mr. DiCarlo has over 18 years of experience litigating employee benefit disputes. He represents both retirement and welfare plans, as well as their sponsors and insurers, in claims for benefits and/or fiduciary breach. Mr. DiCarlo has represented some of America’s largest employers in disputes stemming from service provider fees, investments in employer securities, the prudence of particular investments, executive compensation disputes, disclosure and securities issues and challenges to benefit claim review procedures and decisions. ERISA is a complex area of law requiring litigators with deep experience in litigation of this type. Mr. DiCarlo currently serves as national coordinating counsel for one of our nation’s largest insurers, representing this client in litigation in all 50 states.
Mr. DiCarlo is currently recognized by Chambers USA: America’s Leading Lawyers for Business as a leading individual in the ERISA Litigation category. He received his J.D. degree, cum laude, from the University of Georgia School of Law in 1994, and his B.A. from the University of Georgia in 1991.