A federal judge from the U.S. District Court for the Northern District of Texas issued in June a stinging indictment of the disability benefit plan that covers both active and former football players who become permanently and totally disabled due to injuries sustained during their professional football playing careers.
The opinion in Cloud v. Bert Bell/Pete Rozelle NFL Player Retirement Plan begins with the following words:
The curtain has been pulled back as to the inner workings of Defendant The Bert Bell/Pete Rozelle NFL Player Retirement Plan. And what lies behind it is far from pretty with respect to how it handles disability benefit claims sought by former players, such as Michael Cloud.
Michael Cloud played professional football in the National Football League as a running back for several teams from 1999 to 2006; in the course of his career, he suffered repeated head and brain trauma that resulted in his disability. Obvious symptoms of Cloud’s impairment manifested even before he retired from football but became progressively worse thereafter.
In 2014, the Bert Bell/Pete Rozelle NFL Player Retirement Plan awarded Cloud disability benefits applicable to disabilities that result from football injuries but do not become disabling until after the player’s retirement.
Cloud’s 2016 efforts to have his claim reclassified, which would permit him to receive a higher benefit due to the onset of disability while he was still an active player, were rebuffed by the NFL’s disability plan. A subsequent 2016 appeal to the plan was also unsuccessful.
After conducting a trial earlier this year, the court determined that Cloud’s reclassification claim for disability benefits was wrongfully and arbitrarily denied.
The court concluded that Cloud was denied a full and fair review on several grounds.
First, the letter denying Cloud’s prelitigation appeal included reasons for the denial that were not articulated in the initial decision and included post hoc rationalizations developed by the plan’s staff. The court found as a result that the plan denied Cloud a meaningful review, as required by the Employee Retirement Income Security Act, and failed to provide a substantive explanation for the benefit denial.
Next, the court concluded that the members of the plan’s board who considered Cloud’s claim failed to review all the documents in his file and relied instead on recommendations made by counsel to the plan. According to the court, those recommendations were rife with errors.
The appeal denial letter was also prepared by the plan’s counsel, and it was evident to the court from the letter that the entire file was not reviewed or taken into consideration. Both the plan and the ERISA claim regulations promulgated by the U.S. Department of Labor require that a determination take into account all comments, documents, records and other information submitted by the claimant.
The court was also troubled that the same persons who rendered the initial determination participated in making the decision upholding that finding, even though ERISA requires a claim review be performed by an individual who did not make the adverse benefit determination that is the subject of the appeal, or such an individual’s subordinate.
Further, the court found Cloud’s rights were violated by the plan’s failure to obtain testing that its medical consultant had recommended, and further determined that the medical advice rendered to the board and on which the determination was based did not come from a health care professional who has appropriate training and experience in the field of medicine involved in the medical judgment, as the regulations require.
The court further ruled the plan abused its discretion in finding that Cloud failed to show changed circumstances to justify the reclassification of his claim.
Looking to decisions on claims other than Cloud’s, the court concluded the board had not utilized uniform standards in making such determinations, which violated ERISA’s requirement that plans must implement claim procedures that contain safeguards designed to ensure and to verify that plan provisions are applied consistently to similarly situated claimants.
The court also took the plan to task for failing to refer Cloud to a neutral physician, which was required under the terms of the plan, and for disregarding special rules contained in the plan applicable to claims pertaining to repetitive head trauma.
Turning to the merits, the court cited ample evidence establishing that Cloud showed signs of cognitive impairment while he was still playing. The court observed there was no dispute as to Cloud’s permanent and total disability, nor any disagreement that the disability was the result of head injuries from repetitive concussions that were incurred while playing football or in practice.
The court also rejected the plan’s argument that Cloud could not have been found disabled while he was on a team’s roster as an active NFL football player. The court deemed that argument inconsistent with the language of the benefit plan.
The court thus concluded: “The Board’s review process, its interpretation and application of the Plan language, and overall factual context all suggest an intent to deny Plaintiff’s reclassification appeal regardless of the evidence.”
The court then added:
Behind the curtain is the troubling but apparent reality that these abuses by the Board are part of a larger strategy engineered to ensure that former NFL players suffering from the devastating effects of severe head trauma are not awarded Active Football benefits. It is telling that out of the thousands of former players who filed applications for benefits, only 30 players currently receive Active Football benefits.
The court’s opinion cited other decisions involving the plan and former football players, which the court maintained showed a pattern as to how players are treated by the plan. The court thus awarded Cloud the benefits he was due. In addition, on July 18, Cloud was awarded over $1.2 million in attorney fees.
This ruling says a great deal about the NFL’s disability benefit plan.
The evidence recounted by the court showed the toll that playing football had taken on Michael Cloud. One of the most poignant aspects of the court’s ruling was the court’s recounting of what occurred toward the end of Cloud’s football career. He was picked up and then cut by several teams because he could not remember even basic plays.
That tragedy was compounded by the plan’s resistance to paying Cloud benefits.
It is shocking that after all the publicity concerning chronic traumatic encephalopathy suffered by football players due to repeated head trauma that only 30 players have qualified for the plan’s Active Football benefits, which are paid when a player suffers a permanent and total disability during or very shortly after the end of their careers.
The court’s opinion revealed the inner workings of the NFL’s disability plan. In order to do so, the court did something that is rarely done when courts adjudicate disability benefit claims: It held a trial.
Although the plan protested, the evidence presented at the trial enabled the court to better understand how Cloud’s claim was adjudicated and expose the defects in that adjudication.
Oddly, trials are rare in ERISA cases, which are usually conducted as record review proceedings, although the U.S. Court of Appeals for the Seventh Circuit’s 2009 ruling in Krolnik v. Prudential Insurance Company of America deemed trials essential in ERISA cases.
The ERISA claim regulations lay out a framework as to how plans may meet ERISA’s statutory requirement of providing claimants with a full and fair review. The rules establish common sense principles that include a requirement that the plan consider all the evidence presented by the claimant and that the plan must have medical evidence reviewed by an appropriate medical professional.
The regulation also establishes a review that is intended to be independent of the initial claim decision. The court found the plan failed to meet any of the rules’ basic requirements.
When the U.S. Supreme Court last addressed the issue of whether plans might be biased against claimants in Metropolitan Life Insurance Co. v. Glenn in 2008, it noted that a history of biased claim adjudication is relevant to show improper claim handling. The Supreme Court also counseled lower courts to adjudicate ERISA claims taking into account a variety of factors.
The Cloud court took heed not only of other reported cases involving the same plan but found the entire course of the adjudication of Cloud’s claim was problematic.
A concurring opinion issued last year by the U.S. Court of Appeals for the Fifth Circuit in Michael J.P. v. Blue Cross & Blue Shield of Texas also focused on the need for courts adjudicating ERISA benefit claims to examine the entire record and not just look for any evidence that supports the benefit determination. The court in Cloud did exactly that; and the picture that emerged was one of unfairness and arbitrariness.
ERISA’s deferential standard of review mostly insulates benefit plan claim determinations from scrutiny. While the Supreme Court countenanced such a regime in Glenn and in its 1989 opinion in Firestone Tire & Rubber Co. v. Bruch, the Supreme Court’s reliance on trust law and fiduciary responsibility as the rationale for deference seems misplaced in view of the scenario presented in the Cloud ruling.
The plan’s determined effort to deny Cloud’s claim, which was exposed by the court, was completely at odds with the behavior expected of a fiduciary and thus should not have been reviewed under a standard that accords deference to the claim determination.
With deference comes the responsibility to act fairly. According to the Cloud decision, that responsibility was abrogated to such a degree that the court needed to set matters straight.
This ruling should send a message to courts around the country that they are not to act as rubber stamps of benefit claim decisions without considering all the evidence presented within the context of the claim at issue.
To paraphrase the Supreme Court’s pronouncement in a seminal 1951 ruling on administrative law, Universal Camera Corp. v. National Labor Relations Board, which was cited in the later Glenn decision in support of the court’s admonition that ERISA imposes a duty to render an accurate claim determination, courts must now assume more responsibility for the reasonableness and fairness of claim decisions, and judges must not
abdicate the conventional judicial function.
Thus, while judicial deference may be due, it should be tempered with a degree of skepticism and a willingness to be certain that there is a logical connection between the evidence and the claim determination, since a claim determination that is neither full nor fair should not be allowed to stand.
Mark DeBofsky is a shareholder at DeBofsky Law.
This article was first published by Law 360 on July 20, 2022.
 Cloud v. Bert Bell/Pete Rozelle NFL Player Retirement Plan, 2022 U.S. Dist. LEXIS 109942, 2022 WL 2237451 (N.D. Tex. June 21, 2022).
 29 C.F.R. § 2560.503-1(h)(2)(iv).
 29 C.F.R. § 25060.503-1(h)(3)(ii).
 29 C.F.R. § 2560.503-1(h)(3)(iii).
 29 C.F.R. § 2560.503-1(b)(5).
 Krolnik v. Prudential Insurance Company of America, 570 F.3d 841 (7th Cir. 2019). However, Krolnik was a case adjudicated under the de novo standard of judicial review; and the Seventh Circuit has adhered to record reviews when the arbitrary and capricious standard of review applies. Perlman v. Swiss Bank Corp., 195 F.3d 975 (7th Cir. 1999).
 29 U.S.C. § 1133.
 Metropolitan Life Insurance Company v. Glenn, 554 U.S. 105 (2008).
 554 U.S. at 117.
 Michael J.P. v. Blue Cross & Blue Shield of Texas, 2021 U.S. App. LEXIs 28704, 2021 WL 4314316 (5th Cir. 2021) (unpublished) (Oldham, J., concurring).
 Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (1989).
 Universal Camera v. N.L.R.B., 340 U.S. 474, 490 (1951).