Our firm represents Richard Weiss, a successful securities trader, who has sued First Unum Life Insurance Co. for terminating previously provided long term disability (LTD) benefits after a massive myocardial infarction rendered him totally disabled.We alleged violations of federal RICO.The district court in New Jersey dismissed the RICO action as barred by the McCarran-Ferguson Act, holding that to permit a RICO cause of action would impair New Jerseys state insurance scheme and frustrate state policy because New Jerseys statutory regulation of insurance companies does not provide a private cause of action for its violation.Weiss v. First Unum Life Ins. Co., 416 F. Supp. 2d 298 (D.N.J. 2005).I appealed that decision and won a reversal in the Third Circuit, Weiss v. First Unum Life Insurance Co., 482 F.3d. 254 (3d. Cir. 2007), a precedential opinion, where the court expressed the firm conviction that, under the factors established in Humana Inc. v. Forsyth, 525 U.S. 299 (1999), RICO does not and will not impair New Jerseys state insurance scheme.
The subsequently published commentaries on Weiss have been both numerous and diverse.Most writers have been attorneys who represent insurance industry interests, and they do not even agree among themselves upon the ramifications of the decision.Some lament and anticipate proliferation of federal RICO, while others counsel that this result is simply not portended.
Unum is the largest by far of the disability insurance carriers, and also appears to be the worst offender in rejecting claims of its insureds.Discovery throughout the country has revealed that Unum has had a scheme in place to deny or terminate benefits for even the most seriously ill or injured insureds to benefit its bottom line.There are scores of individual and class action suits pending throughout the country, and others that have already concluded, that have demonstrated Unums bad faith practices.Its scheme has been showcased on several network television specials.Although it continues to resist these charges, it seems that each case develops more incriminating information.Several courts have noted its abuses.Langbein, J.H., Trust Law as Regulatory Law: The Unum/Provident Scandal and Judicial Review of Benefit Denials Under ERISA, Northwestern University Law Review, vol. 101, No. 3, p. 1315, 1318-1319 (2007).
Insureds under group disability policies governed by ERISA are barred by the statute from obtaining bad faith damages.The only favorable judicial result for an ERISA insured is the resumption or implementation of benefits.The main significance of Weiss is that it provides an aggrieved insured covered under a group policy with a right to claim damages (treble) under federal RICO, which serves a salutary purpose similar to state bad faith damages.(Those who own personal policies are not subject to ERISA strictures and state causes of action for bad faith have always been available.)
And while other disability insurance carriers have yet to be exposed as had Unum, individual cases of questionable claims practices are emerging with some frequency.Because so many of us have disability coverage under group policies controlled by ERISA, we are at the mercy of carriers conflicted decision makers.We suspect that the denial of many claims cannot be explained by idiosyncratic occurrences in the claims process, but must be the result of methods purposefully devised.A plethora of federal district court opinions reflects an on-going prevalent pattern to deny or terminate LTD benefits.
In Weiss, the records submitted to the Third Circuit showed that Unum unreasonably terminated his previously granted LTD benefits without independent medical examinations and in the face of overwhelming medical evidence from treating physicians.One year after filing suit, and after we made known our intention to seek RICO damages, Unum suddenly, and without explanation, resumed payments retroactively, again without benefit of an independent medical exam, and continues to pay over five years later.(Weiss persistent declining health resulted in a heart transplant in September 2007.)The case is now remanded to the district court for adjudication of the RICO claim.