“When an ERISA plan lawfully delegates discretionary authority to the plan administrator, a court reviewing the denial of a claim is limited to assessing whether the administrator abused that discretion. For plans that do not have valid delegation clauses, the Supreme Court has held that a denial of benefits challenged under §1132(a)(1)(B) is to be reviewed under a de novo standard. For a quarter century, we have interpreted that holding to apply only to a denial of benefits based on an interpretation of plan language. The result is a bifurcated standard of review for challenges in our circuit to the denial of ERISA benefits. Courts reviewing challenges to the legal interpretation of a plan do not give any deference to the administrator’s view of plan language. But challenges to an administrator’s factual determination that a beneficiary is not eligible are reviewed under the same abuse-of-discretion standard that applies when plans have delegated discretion. Pierre v. Conn. Gen. Life Ins. Co., 932 F.2d 1552, 1562 (5th Cir. 1991). When Pierre was decided, it created a circuit split with one other court of appeals that had read Firestone to set a default de novo standard for both legal and factual determinations. In the time since, seven other courts of appeals have chimed in. Every one has taken the view that the standard of review does not depend on whether the denial is deemed to be based on legal or factual grounds. We thus have long stood alone in limiting Firestone’s de novo review to denials based on interpretations of plan terms. Our outlier view did not affect a great number of ERISA cases, however, because delegation clauses that remove a case from the default standard of Firestone are so prevalent. But the importance of this issue may be growing. As part of a trend in a number of states, Texas recently enacted a law banning insurers’ use of delegation clauses. Assuming that the anti-delegation statute is not preempted by Federal law — something we do not decide today as that defense has not been asserted — a lot more ERISA cases will be subject to Firestone’s default standard of review. So we granted en banc review of this case to reconsider Pierre and determine the default standard of review that applies when a beneficiary challenges a plan denial based on a factual determination of ineligibility.”
Considering the caselaw, “and without having to endorse all the critiques other circuits have made of Pierre, on balance we conclude that they warrant changing course and adopting the majority approach — an approach the Federal and Texas governments also support. We are also influenced by ERISA’s strong interest in uniformity. Being on the lonely side of the lopsided split means that ERISA denials involving nondiscretionary plans are reviewed with more deference in Texas, Louisiana, and Mississippi than they are in the rest of the country. It even means that employees working for the same company with the same health or retirement plan may suffer different fates in court depending on the circuit where they reside. Although sometimes there is virtue in being a lonely voice in the wilderness, in this instance we conclude that one really is the loneliest number. We overrule Pierre and now hold that Firestone’s default de novo standard applies when the denial is based on a factual determination.”
Ariana M. v. Humana Health Plan of Texas, No.16-20174, 2018 WL 1096980 (5th Cir. March 1, 2018) (on rehearing) (en banc).