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District Court Order Remanding Claim for Disability Benefits to an ERISA Claims Administrator Is Not an Immediately Appealable Final Order

Dickens v. Aetna Life Insurance Co.
No. 11-1434 (U.S. Court of Appeals for the Fourth Circuit, April 27, 2012)

by Colleen K. O’Brien, Associate
Semmes, Bowen & Semmes (

Here, the Plaintiff sued Aetna Life Insurance Company (“Aetna”) after Aetna terminated his long-term disability benefits under an employer-sponsored plan, governed by the Employee Retirement Income Security Act of 1974 ("ERISA"). The parties filed cross-motions for summary judgment, and Plaintiff moved in the alternative to have the matter remanded to Aetna for a benefits determination. The District Court denied both summary judgment requests, concluded that relevant evidence had not been adequately addressed, and remanded to Aetna, the claims administrator, for further consideration. Aetna, in turn, noted an appeal to the Fourth Circuit. During oral argument, the Fourth Circuit raised whether it had appellate jurisdiction of the case. Aetna maintained that the Court had jurisdiction and that that Order was appealable under the collateral order doctrine. The Court disagreed and dismissed the case for want of jurisdiction.

The underlying facts in the case were not in dispute. In 2004, the Plaintiff, who was employed as a pharmaceutical company territory manager, began to experience clinical depression, anxiety, insomnia, and suicidal thoughts. He applied for long-term disability (“LTD”) benefits, which were granted. He also applied for Social Security disability benefits. The Social Security Administration ("SSA") determined that Plaintiff was disabled and awarded him benefits. Later, Aetna terminated LTD benefits, finding that the medical evidence indicated that Dickens no longer suffered from a debilitating injury or illness. The SSA continued to regard Dickens as disabled.

The trial court concluded that Aetna had abused its discretion by neglecting to address the relevant evidence relating to the SSA’s award of disability benefits. More specifically, the court decided that, because the Plan’s and the SSA’s definitions of "disability" were similar and the SSA’s regulatory definition was more restrictive, Aetna was obliged to accord substantial weight to the SSA’s disability determination. The Order explained that the SSA’s disability award also warranted consideration because the Plan required Dickens to apply for Social Security benefits, and the Plan profited from the SSA’s award in offset of the Plan’s LTD benefits. Because the court concluded that Aetna failed to consider the SSA disability award in "any meaningful way," it deemed Aetna’s decision to terminate LTD benefits "arbitrary and unreasonable." The trial court, however, expressed no opinion as to whether Plaintiff was disabled under the terms of the plan. Because the remand was considered by the trial court as a momentary backtrack of the litigation, it never entered a final judgment. Nonetheless, Aetna filed a notice of appeal.

In an issue of first impression, the Fourth Circuit considered whether a District Court Order remanding a claim to an ERISA claims administrator for reconsideration constituted a final decision that was immediately appealable. The majority of other circuits have held that remand of an ERISA dispute to a claims administrator for further proceedings is not appealable. The Seventh and Ninth Circuits, however, have taken the minority view that such an order is appealable.

The Fourth Circuit determined that a remand was not a final order, and so it analyzed the matter under the collateral order doctrine, which means that appellate jurisdiction only exists if the District Court decision: 1) conclusively determines the disputed question; 2) resolves an important issue completely separate from the merits of the action; and 3) is effectively unreviewable on appeal from a final judgment. The Court concluded that because the Order did not conclusively determine whether Plaintiff was disabled under the terms of the policy and because the Order did not direct Aetna to find in favor of disability, that it was not a collateral order. The Fourth Circuit further pointed out that even if Aetna were to give substantial weight to SSA’s disability determination, and award LTD benefits to Plaintiff, Aetna could appeal at that time. In addressing the concern that ERISA claims administrators would not be able to challenge the remand order in a later proceeding because they would be challenging their own eligibility determination, the Fourth Circuit’s simple solution was to interpret the District Court remand Order as having retained jurisdiction, and then to allow either party to challenge the ensuing eligibility determination by motion before the same trial court. Ultimately, the Fourth Circuit concluded that the collateral order doctrine did not apply and dismissed the appeal due to lack of jurisdiction.