The Sixth Circuit has held that a federal district court retained jurisdiction over litigation involving a claimant's request for disability benefits in which the Sixth Circuit remanded the case to the plan's insurer/claims administrator for further proceedings (Card v. Principal Life Ins. Co., (6th Cir. Nov. 2, 2021)).

After being diagnosed with a form of leukemia, the claimant in this case sought benefits under an ERISA disability plan. The plan's insurer denied the claimant's request for short-term disability (STD), long-term disability (LTD), and total disability benefits, after which the claimant sued the insurer in federal court for benefits under ERISA (see Practice Note, ERISA Litigation: Causes of Action and Remedies Under ERISA Section 502 for Benefit and Fiduciary Breach Claims and ERISA Litigation Toolkit). The district court ruled for the insurer and the claimant appealed to the Sixth Circuit.

Applying a deferential (arbitrary and capricious) standard of review on appeal, the Sixth Circuit concluded that the insurer acted arbitrarily in reviewing the claimant's claim (see Practice Note, ERISA Litigation: Standard of Review and Standard Clause, SPD Language: Firestone Plan Interpretation). The disability plan at issue included a definition of:

The Sixth Circuit concluded that the insurer failed to consider whether the claimant's cancer prevented the claimant from performing the tasks of her job or occupation.

The Sixth Circuit's opinion included "decretal language" (that is, the part of the court's judgment that states what the court is ordering) that remanded the case to the insurer for further proceedings consistent with the Sixth Circuit's opinion. The claimant later filed additional motions regarding the case in the district court. However, the district court interpreted the Sixth Circuit's decretal language as a final judgment that:

The district court therefore denied the claimant's motions for lack of jurisdiction. The claimant appealed this second district court order (regarding jurisdiction) to the Sixth Circuit.

(For more information on civil litigation in the Sixth Circuit, see Sixth Circuit Civil Appeals Toolkit.)

In a decision addressing how remands to ERISA plan decisionmakers should work, the Sixth Circuit held that the district court retained jurisdiction over the claimant's lawsuit during the remand to the insurer for further proceedings.

The Sixth Circuit indicated that where a plan decisionmaker's claims processing fails even the deferential (arbitrary and capricious) standard of review and there is no doubt that a claimant is eligible for benefits, a court may award the claimant benefits due under the plan terms. By contrast, the Sixth Circuit observed, if a plan decisionmaker's determination is arbitrary due to a procedural reason, the appropriate remedy may be to "remand" the claim to the plan administrator for a second benefits determination. For example, this type of remand may apply if a claims administrator fails to consider all the evidence or applies an incorrect standard.

The Sixth Circuit then considered the situation (such as the one before it) where a district court rules for the plan decisionmaker but a circuit court concludes on review that the case requires a remand to the plan decisionmaker. Here, the Sixth Circuit indicated, the appellate court generally reverses and remands the case to the district court with instructions for the district court to remand the case to the plan decisionmaker.

The Sixth Circuit acknowledged that its decretal language remanding the case to the insurer for further proceedings consistent with the its decision:

Nonetheless, the Sixth Circuit held that the district court was incorrect in concluding that it lacked continued jurisdiction over the matter after the remand to the insurer. The Sixth Circuit stated that it had not intended to remand the decision directly to the insurer without also keeping the case alive in the district court. As a result, the Sixth Circuit held that the district court had jurisdiction over the claimant's later-filed motions and must consider those motions on remand.

Remand orders in ERISA claims litigation are relatively common—making this case all the more noteworthy for the district court's post-remand uncertainty regarding jurisdiction and the concurring opinion's concerns over the legal underpinnings of its remand power. In some instances, the availability of remands may allow claims administrators that commit fairly significant violations of the claims procedure regulations in initially adjudicating a claim to nonetheless receive a second chance to review the claim on remand. The concurring judge suggests that instead of remanding cases to private litigants for further proceedings, it would be more legally sound to complete those proceeding in court. It will be interesting to see if other federal courts question the legal justifications for this remand power in the ERISA claims context in the future.