North Cypress Medical Center Operating Company, Ltd., et al. v. Cigna Healthcare, et al.

This case raises an important and recurring question under the Employee Retirement Income Security Act of 1974 (ERISA), Pub. L. No. 93-406, 88 Stat. 829 (29 U.S.C. 1001 et seq.). In reviewing whether an ERISA administrator abused its discretion in denying a benefits claim, this Court has instructed lower courts to apply a “combination-of-factors” analysis. Under that analysis, reviewing courts “must” consider all relevant “case-specific” factors and weigh them together. In the decision below, the Fifth Circuit abandoned that totality analysis and replaced it with a per se rule: According to the Fifth Circuit, an administrator automatically wins so long as “two other courts,” right or wrong, endorsed the administrator’s plan interpretation in the past—rendering it “immaterial” whether the administrator’s reading was legally correct, infected by conflicts of interest, motivated by bad faith, or applied unevenly to other participants. This mechanical new rule conflicts with the prevailing standard applied by this Court and other circuits—where all factors “must” be considered before deciding if a benefits denial can stand. The question presented is: Whether, in reviewing an ERISA administrator’s benefits denial, it is automatically dispositive that “two other courts” upheld the administrator’s interpretation (as the Fifth Circuit held below, rendering “immaterial” the traditional “abuse-of-discretion inquiry”), or whether a reviewing court must consider all the traditional factors required in this Court’s “combination-of-factors” analysis (as required by multiple courts of appeals and this Court). (I)