Split Created: Addict's Risk of Relapse As Disability Under ERISA

Per Colby v. Union Sec. Ins. Co. (1st Cir. Jan. 17, 2013)

I hated ERISA cases as a clerk.  They were like petitions for review of agency action, requiring record-intensive factual review in an area where the governing law is generally settled--i.e., defer to "reasonable" interpretations of statute/plan language provided there is "some evidence" to support factual positions.  Except that in ERISA, the "agency" record consisted of hundreds of pages of undecipherable doctor's scrawl and review of that record required some medical knowledge.

But enough about me, and onto this relatively straightforward split.  Can an ERISA plan administrator apply a per se rule barring disability benefits for on-the-wagon addicts?  The CA4 said yes, relapse is a choice not a disability.   The CA1 now says no, the present risk of relapse can (but does not have to) amount to a disability.  (See p. 16, 19-20.)  To the extent it influences your opinion, plaintiffs in both cases were anesthesiologists who became addicted to the drugs they administered.

I agree with the CA1.  The CA4's reasoning just looks sparse to me.  In essence, the CA4 ruled that the pre-existing division in precedent on this point ipso facto rendered the administrator's interpretation of the plan reasonable.  But the CA4 performed no analysis of the plan's text--i.e., the definition of disability--itself.  In contrast, the CA1 performs just such a textual analysis and demonstrates how addiction and risk of relapse fall within the plain language of the plan.

That said, I am not on board for all of the CA1 opinion.  For example, the Court bolsters its textual analysis with a reference to the contra proferentem doctrine.  (p. 17.)  But there is a circuit split on whether contra proferentem can ever apply to ERISA plans.  (CA9 yes; CA8 no).  Even assuming the doctrine could apply, moreover, its application is quite troubling where (as here) the plan administrator is explicitly granted discretion to resolve ambiguities.  Unlike certain canons of construction (such as expressio unius or noscitur a sociis), contra proferentem--like the rule of lenity--is a policy-based rule that only comes into play when the statute (or contract) is determined to be ambiguous.  But ambiguity should trigger the administrator's discretion not policy-based canons.  (This is the CA10's approach to contra proferentem in the ERISA context).

The existence of multiple circuit splits make this case an interesting candidate for review, especially where the Court semi-regularly grants cert to clarify ERISA jurisprudence.  If the Court does take cert, I hope it will deal with the contra proferentem issue in the broader context of Chevron deference.  The circuits are currently split on whether to apply traditional canons of statutory construction at Chevron step one, in determining whether the statute plainly addresses an issue.  My view is that some, but not all, of the canons should be applied.  More specifically, the text-based canons should be applied in determining whether Congress has spoken clearly, but not the policy-based canons, which operate more as a thumb on the scale than as an interpretative tool.

Since I opened with a side note, I might as well close with one.  It appears that the First Circuit must batch cases for each panel, and that this panel received the "circuit split" batch.  At least three of my previous posts have related to decisions also arising out of this same sitting.  As before, my best wishes go out to Judge Boudin and his family.