The winds of change are blowing in ERISA litigation. Beginning in 2020, when Judge Amul Thapar questioned the basis for the administrative exhaustion doctrine in ERISA claims litigation, writing, “[i]t is troubling to have no better reason for a rule of law than that the courts made it up for policy reasons,”[1] it is becoming increasingly clear that unique features of ERISA litigation which that deviate from the Federal Rules of Civil Procedure may be coming to an end. An even more recent ruling, also out of the Sixth Circuit, has openly questioned “remands” of ERISA cases to private litigants as “rest[ing] on paper-thin reasoning.” The most recent ruling even cited an article I wrote several years ago that broadly addressed anomalies in ERISA civil procedure [3].

Another recent case of note has also questioned the application of deferential review of ERISA cases and the meaning of “substantial evidence.” In Michael J.P. v. Blue Cross and Blue Shield of Texas [4], a concurrence authored by Judge Andrew Oldham questioned the manner in which courts examine records for substantial evidence and deemed the current practice of seeing if there is any evidence in the record is a deviation from the directive given by the Supreme Court in Firestone Tire & Rubber Co. v. Bruch.[5] The Michael J.P. case involved a claim for health insurance benefits – after her fifth attempted suicide, the plaintiff’s daughter was psychiatrically hospitalized but the benefit plan covered only a few days of treatment and deemed ongoing residential treatment unnecessary, asserting the patient was no longer at imminent risk of suicide or self-harm.

A district court upheld the insurer’s determination, which was based on the Milliman Care guidelines to determine the appropriate level of care, finding the insurer’s determination was based on substantial evidence. The court of appeals affirmed. However, Judge Oldham issued a concurring opinion in which he wrote the substantial evidence standard used in ERISA cases “is notably more deferential than ordinary substantial-evidence review” in cases arising under administrative law. He questioned whether the substantial evidence standard’s application in such a manner was “justifiable” since the standard as applied permitted affirmance of a claim decision so long as there is some reliable evidence supporting the determination.

Retracing the history of the use of the substantial evidence standard, Judge Oldham maintained that what the courts have been doing is inconsistent with Firestone, which distinguished ERISA cases from pre-ERISA cases brought under the Labor Management Relations Act, in which court review examined whether the plan trustees “have acted arbitrarily, capriciously or in bad faith; that is, is the decision of the Trustees supported by substantial evidence or have they made an erroneous decision on a question of law.”[6] Firestone found, however:

Unlike the LMRA, ERISA explicitly authorizes suits against fiduciaries and plan administrators to remedy statutory violations, including breaches of fiduciary duty and lack of compliance with benefit plans. Thus, the raison d’être for the LMRA arbitrary and capricious standard—the need for a jurisdictional basis in suits against trustees—is not present in ERISA. Without this jurisdictional analogy, LMRA principles offer no support for the adoption of the arbitrary and capricious standard insofar as § 1132(a)(1)(B) is concerned [7].

Although Firestone permitted plans to reserve discretion, in such cases, review should be the same as under trust law, i.e., for “abuse of discretion.” [8] Judge Oldham complained that courts have instead used an “arbitrary and capricious” standard of review, upholding the plan’s determination so long as it is supported by substantial evidence. But as the concurrence noted, ERISA’s “‘substantial evidence’ is radically different from ‘substantial evidence’ elsewhere in law.”

To discern the meaning of the term “substantial evidence,” Judge Oldham turned to the Supreme Court’s seminal case defining “substantial evidence,” Universal Camera Corp. v. NLRB.[9] There, the Court explained that it would be improper to affirm an administrative agency determination so long as there was some evidence in the record that supported the outcome. Instead, a “holistic” assessment is required – one that necessitates giving “consideration to ‘the record as a whole,’ ‘taking into account contradictory evidence or evidence from which conflicting inferences could be drawn.’”[10]

Judge Oldham observed that the current regime of substantial evidence is inconsistent with that standard and defective because courts do not “engage in a holistic review of the evidence,” and once a court finds thee is some evidence supporting the claim decision, courts do not “consider how substantial the plaintiff’s evidence is, because it doesn’t matter—the administrator has carried their burden.” In other words, courts “quickly approve the administrator’s decision as supported by substantial evidence, without taking into account contradictory evidence or evidence from which conflicting inferences could be drawn.” [11] As a result, Judge Oldham acknowledged that such a minimalist view of substantial evidence makes “it particularly difficult for ERISA beneficiaries to vindicate their rights under the cause of action created by Congress. And it does so with no apparent support in law, logic, or history.”

What makes this concurrence even more interesting though is a detail Judge Oldham omitted. The majority opinion authored by Justice Stephen Breyer in Metro. Life Ins. Co. v. Glenn,[12] reiterated Firestone’s holding and then cited Universal Camera as a roadmap for how courts should review benefit denials “by taking account of several different, often case-specific, factors, reaching a result by weighing all together.” [13] By citing Universal Camera, Justice Breyer was echoing what Justice Felix Frankfurter wrote in Universal Camera:

[C]ourts must now assume more responsibility for the reasonableness and fairness of Labor Board decisions than some courts have shown in the past. Reviewing courts must be influenced by a feeling that they are not to abdicate the conventional judicial function. Congress has imposed on them responsibility for assuring that the Board keeps within reasonable grounds. That responsibility is not less real because it is limited to enforcing the requirement that evidence appear substantial when viewed, on the record as a whole, by courts invested with the authority and enjoying the prestige of the Courts of Appeals. The Board’s findings are entitled to respect; but they must nonetheless be set aside when the record before a Court of Appeals clearly precludes the Board’s decision from being justified by a fair estimate of the worth of the testimony of witnesses or its informed judgment on matters within its special competence or both.

Judge Oldham’s concurrence is a reminder that judges adjudicating ERISA benefit disputes need to examine the evidence presented by both parties and view that evidence in the context of the entire record. He also presented a powerful argument for the need for courts to reassess how they decide claim disputes and avoid the tendency to simply check off boxes in finding the plan administrator’s evidence sufficient. Just because the plan administrator’s decision has support from a specialist physician is not a guarantee that the evidence is sufficient when viewed in comparison to the plaintiff’s submission and as part of an examination of the record as a whole.

As Universal Camera teaches, courts are not to abdicate their judicial responsibilities and rubber stamp claim decisions just because the plan administrator has discretionary authority. ERISA is a paternalistic statute that was enacted for the protection of plan participants and their beneficiaries. Courts need to go about their duty in adjudicating cases with that principal in mind and insure the record shows the claim was fully and fairly assessed. Judge Oldham’s opinion should be read and taken to heart by every federal judge because he convincingly argues that courts have deviated from their proper role without any authority or basis for doing so.


Mark DeBofsky is a shareholder at DeBofsky Law.

This article was first published in the ABA Spring 2022 Newsletter in the Tort Trial and Insurance Section (Paid membership is required to access the Newsletter).

[1] Wallace v. Oakwood Healthcare, Inc., 954 F.3d 879, 900 (6th Cir. 2020) (Thapar, J., concurring); see, DeBofsky, “6th Circ. Ruling Offers Fresh Look at ERISA Exhaustion,” Law 360 (April 24, 2020); available at https://www.law360.com/articles/1264985

[2] Card v. Principal Life Insurance Co., 2021 U.S. App. LEXIS 32599, 2021 WL 5074692 (6th Cir. November 2, 2021)

[3] Mark D. DeBofsky, A Critical Appraisal of the Current State of ERISA Civil Procedure, 18 Emp. Rts. & Emp. Pol’y J. 203, 233–34 (2014)

[4] Michael J. P. v. Blue Cross and Blue Shield of Texas, 2021 U.S. App. LEXIS 28704, 2021 WL 4314316 (5th Cir. September 22, 2021) (non-precedential).

[5] 489 U.S. 101 (1989)

[6] Danti v. Lewis, 312 F.2d 345, 348, 114 U.S. App. D.C. 105 (D.C. Cir. 1962); see also Giler v. Bd. of Trustees of Sheet Metal Workers Pension Plan of S. Cal., 509 F.2d 848, 849 (9th Cir. 1974); Brune v. Morse, 475 F.2d 858, 860 n.2 (8th Cir. 1973); Miniard v. Lewis, 387 F.2d 864, 865, 128 U.S. App. D.C. 299 (D.C. Cir. 1967); Kosty v. Lewis, 319 F.2d 744, 747, 115 U.S. App. D.C. 343 (D.C. Cir. 1963)

[7] Firestone, 489 U.S. 953-54 (citations omitted)

[8] Id. at 957; also see Kathryn J. Kennedy, Judicial Standard of Review in ERISA Benefit Claim Cases, 50 Am. U.L. Rev. 1083, 1096-1107 (2001) (discussing the various standards of review applied to ERISA claims)

[9] 340 U.S. 474, 71 S. Ct. 456, 95 L. Ed. 456 (1951)

[10] Citing Universal Camera at 487, 490; accord Dish Network Corp. v. NLRB, 953 F.3d 370, 377-78 (5th Cir. 2020)

[11] Citing Universal Camera, 340 U.S. at 487

[12] 554 U.S. 105 (2008)

[13] 554 U.S. at 117

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