capacity."
employee whose COBRA coverage was
terminated after the plan administrator
conferred with an attorney was entitled
to "know what the legal opinion was, in
oral and written forms."
exception to pre-decisional legal advice,
despite the prospect of post-decisional
litigation, on the grounds that "denying
benefits to a beneficiary is as much a
part of the administration of a plan as
conferring benefits to a beneficiary."
including the ultimately disappointed
beneficiary, are entitled to know what the
legal opinion was.
to apply where a claimant files a timely
administrative appeal of a denial of
benefits, since the benefits decision
is not considered "final" during the
pendency of the administrative appeal.
and substantial possibility of litigation,"
the fiduciary exception typically does
not apply. For example, in one case,
communications following a claimant's
counsel's argumentative correspondence
demanding payment of the claim in
question and threatening the pursuit
of claims in court were ruled protected
by the attorney-client privilege.
occurring after a final benefits decision
remain subject to the fiduciary exception
for all beneficiaries other than the
disappointed beneficiary; however,
language from existing cases suggests
that once a final benefits decision
has been made, or there is a real and
substantial possibility of litigation, the
fear of any beneficiaries gaining access.
is also important in determining the
fiduciary exception's applicability.
Because an employer often wears
two hats in plan administration one
involving the fiduciary duty owed to
its employees and the other involving
the employer's own interests in areas
such as plan design, amendment
and termination
communication requires an examination
of its content and context to determine
whether it was for the benefit of the
beneficiaries or employer. For example,
when a communication is for the benefit
of an employer in connection with its
consideration of plan adoption, courts
generally find that the communication
encompasses a non-fiduciary matter and
is inaccessible by beneficiaries.
for attorneys and plan
administrators in light of
the fiduciary exception?
recognizing the fiduciary exception,
it is wise for attorneys and plan
administrators in jurisdictions that
have not yet addressed the exception to
nonetheless manage their affairs as if it
applies. An important consideration for
attorneys thinking strategically will be
properly structuring their relationship
and interaction with benefits staff with
regards to counseling that occurs before
an ERISA claim is filed. The first blush
reaction to avoid creating anything
but the most bland record of counseling
and advice sessions is probably an
over-reaction and fails to account for the
deference courts pay to administrators
the "arbitrary and capricious" standard.
A plan administrator's decision is
considered arbitrary and capricious only
when it "is without reason, unsupported
by substantial evidence or erroneous as
a matter of law."
best practice is for the administrator
and attorney to instead, consistent with
ERISA principles, continue to have the
robust discussions warranted by benefits
claims, including the pros and cons
of the facts, strengths and weaknesses
of applicable law, ambiguities in plan
documents, etc. The advice and its bases
should be recorded and preserved in
all mediums to ensure that there is a
clear, contemporaneous record of the
administrator's non-arbitrary, full and
diligent consideration of the claim. In
the event the claim is denied and suit
is brought, discovery of the record,
including the advice of plan counsel,
may help justify and support the
reviewing court's decision to dismiss
the claim.
5 Id. at *11.
6 Geissal v. Moore Medical Corp., 192 F.R.D. 620, 625
9 Thies v. Life Ins. Co. of North America, 768 F. Supp. 2d
11 Shields v. Unum Provident Corp., 2007 WL 764298 at