Innovative Pretrial

Practice & Procedures

Lee W. Marcus, Esq.

Orlando, FL

Litigating Disability Insurance Claims

American Conference Institute – January 24-25, 2013

Venue

ERISA

• Permissible Venue -

1132(e)(2)

An action “may be brought in the district where the plan is administered, where the breach took place, or where a defendant resides or may be found”

Venue

ERISA

• Plaintiff advantage/Defense concern: Forum shopping among circuits for favorable law

• Favorable decisions on standard of review • Favorable decisions on scope of discovery • Favorable decisions on scope of evidence

Venue

ERISA

• Plaintiff advantage/Defense concern: More convenient (and cheaper) for Plaintiff‟s counsel Less convenient (and more expensive) for defense BUT

Could be more expensive/inconvenient for Plaintiff at

time of mediation/trial

Venue

ERISA

• FILE MOTION TO TRANSFER?

Knee-jerk reaction – YES Defense advantages: - Preferable case law in target district - Less expensive/inconvenient for witnesses - Preference for defense counsel/judges in target district - Plaintiff‟s counsel may not be licensed in target district

Venue

ERISA

• FILE MOTION TO TRANSFER?

Reasons to consider not filing motion:

- Expense of motion vs. likelihood of success - Preference for defense counsel/judge in original district - Tradeoff on other issues (e.g. scope of discovery)

Venue

ERISA

• MOTION TO TRANSFER Forum non conveniens

• Location of material witnesses • Location of corporate rep (for mediation/trial) • Location of employment • Location of adjustment of claim

Venue

Non-ERISA Proper venue

USUALLY

• Place where defendant does business

• Place where contract was entered into or delivered

• Place where alleged conduct occurred

Can vary by state

• E.g. PA - allows where Plaintiff resides

Not aware of any that permit “where Plaintiff‟s lawyer does business/resides”

Venue

Non-ERISA

If no contractual provision, selected venue could impact choice of law rule to be applied

Federal Courts (diversity) apply choice of law rules of state in which case was first properly filed, regardless of transfer.

Choice of law analysis is particularly important as it relates to claims for bad faith

E.g. Pastor v. Union Central Life Ins. Co., 184 F.Supp.2d 1301

(S.D. Fla. 2002)

E.g. Nichols v. Northwestern Mut. Life Ins. Co., 2012 WL 2498848 (9th Cir. 2012)

Venue

Non-ERISA State vs. Federal

• Why Plaintiff Wants State/Why Defendants Remove

Less chance of SJ in state court

More liberal discovery in state court

More liberal deadlines in state court

Plaintiff‟s counsel might not be licensed in federal court or have experience with Fed.R.Civ.P.

In some jurisdictions, more sophisticated jury pool in federal court

Venue

Non-ERISA State vs. Federal

• Why Plaintiff May Want Federal

Case will move to trial faster

Less judicial tolerance for discovery abuses and delay

Can plead for punitive damages from outset

Procedural preferences over state court

Venue

Removal of ERISA Cases

ERISA cases should ALWAYS be removed to federal court if filed in state court

• State judges unfamiliar with law regarding:

Standard of Review

Limitations on Discovery

Limitations on Evidence

• State judges are predisposed to state SJ standards

Venue

Removal of ERISA Cases

Plaintiffs challenge removal based on:

• Statutory Safe Harbor

29 USC

1003(b)

• Governmental plan

• Church plan

Venue

Removal of ERISA Cases

Plaintiffs challenge removal based on:

• Regulatory Safe Harbor

29 CFR

2510-3.1(j)

• (1) Sponsor doesn‟t contribute to plan

• (2) Participation in the plan is voluntary

• (3) Sponsor doesn‟t endorse participation, but may allow publicizing and facilitate payment of premiums through payroll deductions

• (4) Sponsor receives no consideration

Venue

Removal of ERISA Cases

Burden of proving applicability of ERISA rests on removing party

• Should attach supporting documentation to motion

• Affidavit from administrator or sponsor

• Group policy

• Summary Plan Description

• DOL 5500

Rule 56 vs. Rule 52 ERISA

RULE 56

• The judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.

RULE 52

• In an action tried on the facts without a jury or with an advisory jury, the court must find the facts specially and state its conclusions of law separately. . . Findings of fact, whether based on oral or other evidence, must not be set aside unless clearly erroneous, and the reviewing court must give due regard to the trial court's opportunity to judge the witnesses‟ credibility.

Rule 56 vs. Rule 52 ERISA

“ERISA” and “DISABILITY” and “RULE 56” in Allfeds

• 2652 results

“ERISA” and “DISABILITY and “RULE 52” in Allfeds

• 285 results

• Fewer than half involved actual Rule 52 motions

Rule 56 vs. Rule 52

Reasons to move for summary judgment

• Purely legal question

Release

Statute of Limitations

Policy Interpretation

• 2 “bites at the apple”

• “Sneak peek” at the other side‟s case

Rule 56 vs. Rule 52

Reasons for Rule 52 motion

• Different standard on appeal creates greater finality

• Creates vehicle for seeking oral argument and presentation of evidence

Particularly important in cases with surveillance

Rule 56 vs. Rule 52 Appellate Review

• Rule 56

de novo review of trial court decision

• Rule 52

de novo review of trial court‟s decision on which standard of review to apply

“clearly erroneous” review applied to findings of fact and to application of law to facts

Rule 56 vs. Rule 52 Rule 52 appeals

• “[A] finding [of fact] is clearly erroneous and reversible under Rule 52(a) only when the reviewing court on the entire evidence is left with a definite and firm conviction that a mistake has been committed. If the district court's findings of fact are plausible in light of the record viewed in its entirety, the court of appeals must accept them even if it is convinced that had it been sitting as the trier of fact, it would have weighed the evidence differently.”

Childrey v. Bennett, 997 F.2d 830, 833 (11th Cir.1993)

• “A finding of fact is not clearly erroneous unless „it is without factual support in the record, or if the appellate court, after reviewing all the evidence, is left with the definite and firm conviction that a mistake has been made.‟ ”

Las Vegas Ice & Cold Storage Co. v. Far West Bank, 893 F.2d 1182, 1185

(10th Cir.1990)

Rule 56 vs. Rule 52

Rule 52 appeals

• District court only reverses decision if administrator was “unreasonable”

• Circuit court only reverses District court if it‟s conclusion as to “reasonableness” was “reasonable”

• Essentially, Circuit court will only reverse for procedural irregularities by trial court

Failure to apply proper standard of review

Failure to adhere to proper procedure

“Clear error” as to factual findings (very rare)

Rule 56 vs. Rule 52

“When there is conflicting evidence from which different inferences may be drawn regarding the reasonableness of a defendant's conduct, then what is reasonable is always a question to be determined by the trier of fact.”

• Denham v. Sunoco, Inc. (R&M) 222 Fed.Appx. 687, 690 (10th Cir.

2007)

Thus, the determination of “reasonableness” is a finding of fact,

requiring “clear error” for reversal on appeal

Rule 56 vs. Rule 52

“The district court's finding that [the plaintiff] qualifies for long-term disability benefits is a finding of fact subject to the clearly erroneous standard of review. This standard plainly does not entitle a reviewing court to reverse the finding of the trier of fact simply because it is convinced that it would have decided the case differently. The reviewing court oversteps the bounds of its duty under Rule 52(a) if it undertakes to duplicate the role of the lower court.”

• Sloan v. Hartford Life and Acc. Ins. Co., 475 F.3d 999, 1005 (8th Cir. 2007) [citations omitted]

Rule 56 vs. Rule 52

“Those who wish to ensure that a judgment is treated with the deference due the result of a bench trial are advised to eschew Rule 56 and stick to Rule 52(a).”

• Patton v. MFS/Sun Life Financial Distributors, Inc. 480 F.3d 478, 484 (7th Cir. 2007)

Innovative Pretrial

Practice & Procedures

Lee W. Marcus, Esq.

Orlando, FL

Litigating Disability Insurance Claims

American Conference Institute – January 24-25, 2013