Jottings By An Employer's Lawyer

Tuesday, August 15, 2006

9th Circuit Reverses Course on ERISA Standard of Review

While I am sure that there will be more in depth coverage of today's decision in Abatie v. Alta Life & Health Insurance Co. (9th Cir. 8/15/06)(en banc) [pdf], by those who write regularly on benefits issues, a quick word to the wise -- there's a new rule in the 9th Circuit for determining how to judge a fiduciary acting with discretion when there is a conflict of interest. Out is the Court's previous burden shifting approach of Atwood v. Newmont Gold Co., 45 F.3d 317 (9th Cir. 1995), which the Court today says was wrongly decided.

Instead the Court aligns itself with other circuits, with a conscious rejection of some's use of the "sliding scale" metaphor. And to pique the ERISA practitioners' interest, the Court also set out new rules on reviewing a fiduciary's action when procedural aspects of ERISA have been violated.

Check it out.


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