In 2002, (opinion withdrawn and superceded in 2003), the Ninth Circuit, in Jebian v. Hewlett-Packard, held that the plan administrator’s failure to decide an appeal within 120 days justified de novo review – where the Plan provides for the 120-day period found in the regulations. On May 31, 2005, the Court refused to apply the holding where the participant or beneficiary relies on the regulation alone. The district court, in that case, had concluded that once an administrator has violated the regulation’s time limitation, the “deemed denied” language operates to cut off the administrator’s discretion, making de novo review appropriate. “Instead” the Court held, “we read the ‘deemed denied’ language to provide beneficiaries with a ‘final decision’ from which to appeal if the administrator has not made a decision within the timelines established in the regulation.” Further, the Court held that “procedural violations of ERISA do not alter the standard of review unless those violations are so flagrant as to alter the substantive relationship between the employer and employee, thereby causing the beneficiary substantive harm.” Gatti v. Reliance Standard Life Ins. Co., 409 F.3d 1061 (9th Cir. 2005).
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