McCauley v. First Unum: A Second Circuit New Year's Gift to NY Long Term Disability Lawyers

Actually, the scathing Second Circuit decision in McCauley v. First Unum Life Ins. Co., 2008 U.S. App. LEXIS 26094 (2nd Cir., Dec. 24, 2008) came down this past Christmas Eve. But why quibble with form over substance when heralding this ground-breaking, pro-claimant decision interpreting the Supreme Court’s recent decision in  MetLife v. Glenn.  McCauley, if followed by other circuits, has the potential to impact all claimant’s with ERISA long term disability denials throughout the country.  If you don’t think Unum was "taken behind the barn",  just read this from the Court in McCauley:

"First Unum is no stranger to the courts, where its conduct has drawn biting criticism from judges. A district court in Massachusetts wrote that “an examination of cases involving First Unum . . . reveals a disturbing pattern of erroneous and arbitrary benefits denials, bad faith contract misinterpretations, and other unscrupulous tactics.” Radford Trust v. First Unum Life Ins. Co., 321 F. Supp. 2d 226, 247 (D. Mass. 2004), rev’d on other grounds, 491 F.3d 21, 25 (1st Cir. 2007).

That court listed more than thirty cases in which First Unum’s denials were found to be unlawful, including one decision in which First Unum’s behavior was “culpably abusive.” Id. at 247 n.20. Also, First Unum’s unscrupulous tactics have been the subject of news pieces on “60 Minutes” and “Dateline,” that included harsh words for the company. Id. at 248-49. First Unum has fared no better in legal academia. See John H. Langbein, Trust Law as Regulatory Law: The Unum/Provident Scandal and Judicial Review of Benefit Denials Under ERISA, 101 Nw. U. L. Rev. 1315 (2007). In light of First Unum’s well-documented history of abusive tactics, and in the absence of any argument by First Unum showing that it has changed its internal procedures in response, we follow the Supreme Court’s instruction and emphasize this factor here.

Accordingly, we find First Unum’s history of deception and abusive tactics to be additional evidence that it was influenced by its conflict of interest as both plan administrator and payor in denying McCauley’s claim for benefits."   –  Ouch! 

Much like the recent ERISA disability claim we won on appeal for a trial attorney with MS who was turned down by his own employer, the infamous Met Life, Mr. McCauley was a tax attorney with an unquestionable disability – advanced colon cancer with the after effects of surgery and treatment. He originally applied for and was denied disability benefits in 1996, and the fact that he lived through the glacial administrative and legal process of ERISA claims is nothing short of a miracle, or perhaps the will of a determined man who had been wronged.

Despite the inhumanity of Unum’s actions in this case, perhaps they have been unfairly singled out.  As an industry, there are very few long term disability insurers who don’t use ERISA as a shield against unfair, and often times shocking, disability claim denials.  Cigna’s unscrupulous disability claim denial tactics were the subject of a recent series of stories on Good Morning America.  As Professor Langbein so acutely observed in his article on the Unum Provident scandal cited by the Courts in both Glenn and McCauley:

"Cases of abusive benefit denials involving other disability insurers abound. Unum turns out to have been a clumsy villain, but in the hands of subtler operators such misbehavior is much harder to detect.” 101 Nw.U.L.Rev. at 1321.

With new discovery opportunities envisioned by both Glenn and McCauley, it will be our job, as claimant ERISA long term disability attorneys, to expose the "subtler operators".