Table of Contents
- 5 Standard-of-Review Mistakes That Quietly Hurt ERISA Cases
- Why The Standard Of Review Matters So Much
- Mistake #1: Treating The Standard Of Review As A Briefing Issue Instead Of An Intake Issue
- Mistake #2: Assuming Any “Discretion” Language Automatically Wins Deference
- Mistake #3: Underestimating How Much Procedure Can Influence Review
- Mistake #4: Ignoring Conflict-Of-Interest Evidence Because “The Court Already Knows The Insurer Pays Claims”
- Mistake #5: Building The Administrative Record Without The Standard-Of-Review Fight In Mind
- Under De Novo Review
- Under Abuse-Of-Discretion Review
- Why These Mistakes Often Go Unnoticed Until Late In The Case
- What Claimants Often Ask About The Standard Of Review
- “If The Insurer Is Wrong, Doesn’t That Matter More Than The Standard?”
- “Does A Procedural Violation Automatically Mean De Novo Review?”
- “If The Plan Contains A Discretionary Clause, Is That The End Of It?”
- “Does Every Circuit Handle This The Same Way?”
- The Bigger Point: Standard Of Review Is Really About Case Architecture
- Final Takeaway
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5 Standard-of-Review Mistakes That Quietly Hurt ERISA Cases
ERISA benefit cases often look like they turn on medical records, policy language, or whether an insurance company “got it wrong.” In practice, one issue can shape nearly everything that follows: the standard of review.
That phrase sounds technical, but it affects how much deference a court gives to the plan administrator’s decision. In many cases, that difference can quietly influence what evidence matters, how arguments are framed, and whether a denial gets a fresh look or a more deferential one. The Supreme Court’s foundational ERISA decision, Firestone Tire & Rubber Co. v. Bruch, explained the starting point: courts generally apply de novo review unless the plan gives the administrator discretionary authority to determine eligibility or interpret plan terms. When discretion exists, courts often move into a more deferential framework, often described as abuse of discretion or arbitrary and capricious review, depending on the jurisdiction and context (Justia).
If you want a deeper primer on the basics before getting into the mistakes, it may help to start with this plain-English overview of how courts look at de novo and abuse-of-discretion review, and why plan wording can matter.
In this post, you’ll learn five standard-of-review mistakes that quietly undermine ERISA cases, why they matter, and how lawyers often think about them early—long before briefing starts.
Scroll to the bottom for every post in this series.
Why The Standard Of Review Matters So Much
The standard of review is not just a legal label. It can affect:
- how aggressively a court re-examines the denial;
- how much weight is given to conflicts of interest;
- whether procedural defects matter in a meaningful way;
- how the administrative appeal is built; and
- in some courts, whether the judge’s role looks more like record review or independent fact-weighing.
Under Firestone, de novo review is the default unless the plan grants discretionary authority. The Court also noted that if the administrator has discretion and operates under a conflict of interest, that conflict is weighed as a factor in deciding whether there was an abuse of discretion (Justia). Later, in Metropolitan Life Insurance Co. v. Glenn, the Supreme Court reinforced that a structural conflict exists when the same entity both decides claims and pays benefits, and that conflict can matter more when the record shows signs of biased decision-making, such as selective reliance on favorable medical evidence or failure to account for a Social Security disability finding (Cornell LII).
That is why standard-of-review issues rarely sit off to the side. They often sit at the center of the case.
Mistake #1: Treating The Standard Of Review As A Briefing Issue Instead Of An Intake Issue
One of the quietest mistakes in ERISA litigation is waiting too long to identify the likely standard of review. By the time a complaint is filed—or worse, by the time summary judgment briefing begins—the record may already be locked, the wrong issues may have been emphasized on appeal, and key plan documents may still be missing.
In general terms, the standard-of-review analysis often begins with a few basic questions:
- Does the governing plan language actually grant discretion?
- Which document contains that language—the policy, SPD, wrap plan, or another instrument?
- Is the plan insured or self-funded?
- Could state insurance law affect the enforceability of a discretionary clause?
- Were there claims-procedure violations that may alter the analysis in that circuit?
These are not “later” questions. They are early questions.
This matters because a case built for de novo review may look very different from one built for abuse-of-discretion review. Under de novo review, counsel may focus more heavily on demonstrating entitlement to benefits on the administrative record itself. Under a deferential standard, the framing often shifts toward conflicts, inconsistent reasoning, cherry-picked evidence, procedural irregularities, and whether the denial was supported by substantial evidence.
The Fifth Circuit’s en banc decision in Ariana M. v. Humana Health Plan of Texas, Inc. is a useful reminder that assumptions in this area can become outdated. There, the court held that when an ERISA plan does not grant discretion, factual determinations are reviewed de novo, overruling prior circuit precedent that had applied a more deferential approach to fact issues even without a valid discretionary clause (Fifth Circuit). For lawyers who still rely on older shorthand, that kind of doctrinal shift can quietly affect case strategy.
A person dealing with a denied disability or health claim may see this as legal fine print. Attorneys who handle these matters regularly often see it as a threshold issue that influences nearly every other decision.
Mistake #2: Assuming Any “Discretion” Language Automatically Wins Deference
Another common mistake is assuming that if the insurer or administrator points to “discretionary authority,” the standard-of-review question is over.
It often is not.
Under Firestone, the key issue is whether the benefit plan gives the administrator discretionary authority to determine eligibility or construe plan terms (Justia). That sounds straightforward, but real-world disputes are often more complicated. Among other things:
- the language may be vague rather than clearly discretionary;
- the clause may appear in a document that is not controlling;
- the relevant plan instrument may be incomplete or inconsistent;
- state law may prohibit discretionary clauses in some insured products; or
- the plan may be self-funded, changing the preemption analysis.
State discretionary-clause bans are a recurring example. Texas law, for instance, prohibits insurers from using certain documents containing discretionary clauses, and that statutory framework has played a meaningful role in ERISA litigation involving insured plans issued there (Texas Insurance Code § 1701.062). Whether such a ban affects a particular ERISA case can depend on the policy’s date, the type of plan, and whether the arrangement is insured versus self-funded.
That distinction can be easy to miss. Claimants sometimes assume all employer benefit plans operate under the same rules. They do not. A self-funded ERISA plan may present a very different standard-of-review landscape than an insured plan delivered in a state with a discretionary-clause prohibition.
This is one reason lawyers often spend substantial time collecting the actual governing documents rather than relying on excerpts from denial letters. If the court is going to decide how much deference applies, small wording differences can matter a great deal.
Mistake #3: Underestimating How Much Procedure Can Influence Review
Many ERISA claimants focus almost entirely on medical proof and ignore the claims process itself. That is understandable. The denial usually talks about symptoms, diagnoses, restrictions, limitations, or medical necessity. But procedure can shape standard of review, and in some cases it can shape outcome.
ERISA requires plans to provide a “full and fair review,” and the Department of Labor’s claims-procedure regulation lays out detailed requirements for notices, appeals, authorized representatives, and related safeguards (U.S. Department of Labor). For disability claims in particular, DOL regulations strengthened procedural protections effective April 1, 2018, including rules aimed at improving transparency and fairness in the review process (U.S. Department of Labor fact sheet).
Courts do not all handle procedural violations the same way.
For example, in Halo v. Yale Health Plan, the Second Circuit rejected the old “substantial compliance” approach and held that when a plan fails to comply with the claims-procedure regulation, it may lose deferential review unless it can show the violation was inadvertent and harmless in the relevant sense (Justia). Other courts may analyze procedural defects differently, sometimes treating them as factors within abuse-of-discretion review rather than an automatic path to de novo review.
That difference between circuits matters. A missed deadline, inadequate denial explanation, failure to disclose key evidence, or irregular review process may carry very different weight depending on where the case is litigated and what type of claim is involved.
The practical takeaway is not that every procedural mistake changes the standard. It is that procedural history is often part of the standard-of-review fight, and overlooking it can weaken an otherwise strong record.
This is also why administrative appeals are so important. If you are looking for a broader explanation of how to think about the review standard at the beginning of a case, this breakdown of the core review frameworks and the role of plan wording provides useful context.
Mistake #4: Ignoring Conflict-Of-Interest Evidence Because “The Court Already Knows The Insurer Pays Claims”
Many people hear that an insurer both decides claims and pays benefits and assume that is either dispositive or irrelevant. In reality, it is usually neither.
In Glenn, the Supreme Court held that this dual role creates a conflict of interest, but it did not create a special standalone standard. Instead, the conflict becomes one factor in the abuse-of-discretion analysis, and its significance depends on the surrounding facts (Cornell LII). The Court highlighted circumstances suggesting the conflict mattered more in that case, including failure to account for a Social Security disability determination, emphasis on favorable medical reports, and failure to give internal reviewers all relevant evidence (Cornell LII).
That point often gets lost. A conflict of interest is not just a box to check. It is often developed through evidence showing how the conflict may have influenced the decision-making process.
Examples that often come up in litigation include:
- selective discussion of medical evidence;
- abrupt reversal after years of paid benefits;
- repeated use of paper reviewers over examining physicians;
- inconsistent treatment of functional evidence;
- failure to address SSA findings after encouraging the claimant to apply; and
- unusual departures from ordinary review practices.
The Third Circuit’s decision in Noga v. Fulton Financial Corp. Employee Benefit Plan illustrates this kind of analysis. The court treated the structural conflict together with significant procedural irregularities and concluded that the administrator abused its discretion, emphasizing deviations from normal eligibility-review processes and the alignment between those irregularities and the insurer’s financial incentives (Third Circuit).
In other words, conflict evidence becomes more persuasive when it is tied to the claim file and the decision path, not just the plan’s business model.
For claimants, this can be frustrating because the denial letter may look polished and technical. For experienced ERISA counsel, those letters are often read for what they leave out as much as for what they say.
Mistake #5: Building The Administrative Record Without The Standard-Of-Review Fight In Mind
This may be the most expensive mistake of all.
Even when lawyers understand the standard-of-review issue, some appeals are still prepared as if the only goal is to send “more medical records.” That can leave major gaps later. ERISA litigation is often record-driven, and once the case reaches court, opportunities to add missing material may be limited.
What goes into the administrative record can matter under either standard, but the theory of the appeal may differ depending on the review framework:
Under De Novo Review
The appeal often needs to present the cleanest possible case for entitlement to benefits. That may include:
- detailed physician support tied to plan definitions;
- vocational or occupational analysis where relevant;
- direct responses to peer reviews;
- timeline evidence;
- clarification of surveillance, file reviews, or utilization-review issues; and
- close parsing of exclusions, limitations, and evidentiary burdens.
Under Abuse-Of-Discretion Review
The appeal may still include all of the above, but lawyers often also focus heavily on creating a record of:
- procedural defects;
- internal inconsistencies;
- failure to engage with treating evidence;
- conflict-related facts;
- departure from plan procedures; and
- denial rationales that shift over time.
This is where standard-of-review mistakes become self-reinforcing. If a claimant assumes de novo review but the court applies deference, the appeal may have too little material aimed at the administrator’s flawed process. If the claimant assumes deference but de novo review applies, the record may be underdeveloped on the merits.
Either way, the problem often starts earlier than people think.
That is one reason people with ERISA denials often look for counsel with documented experience in highly similar matters, not just general litigation experience. Standard-of-review disputes are technical, circuit-specific, and deeply tied to how the appeal record was built.
Why These Mistakes Often Go Unnoticed Until Late In The Case
Standard-of-review problems are easy to miss because they do not always look dramatic at first. There may be no glaring deadline failure, no spectacular bad-faith memo, and no obvious “smoking gun.” Instead, the damage appears gradually:
- the wrong plan document gets treated as controlling;
- the appeal focuses on diagnosis instead of plan wording;
- conflict evidence goes undeveloped;
- procedural defects are mentioned but not framed correctly;
- briefing assumes the court will view the case from a fresh perspective when it may not.
By the time the standard is decided, the litigation path may already be narrower.
This is especially true in ERISA because the administrative appeal and the court case are closely connected. A weak appeal record can limit later arguments. A strong appeal prepared with the likely review standard in mind can give counsel more room to work with.
What Claimants Often Ask About The Standard Of Review
“If The Insurer Is Wrong, Doesn’t That Matter More Than The Standard?”
It matters, but the court’s level of deference can affect how the error is evaluated. In a de novo case, the court may independently assess entitlement to benefits. In a deferential case, the question may be closer to whether the administrator’s decision was unreasonable, unsupported, or tainted by conflict or procedural flaws.
“Does A Procedural Violation Automatically Mean De Novo Review?”
Not always. The answer can depend on the type of plan, the kind of claim, and the circuit. Some courts have taken a stricter approach than others. Halo is an important example of a stricter approach in the Second Circuit, while other courts have folded procedural defects into abuse-of-discretion review rather than treating them as a complete reset (Justia; Third Circuit).
“If The Plan Contains A Discretionary Clause, Is That The End Of It?”
Not necessarily. Counsel may still examine whether the clause is valid, whether the document is controlling, whether state insurance law affects it, and whether procedural issues change the analysis.
“Does Every Circuit Handle This The Same Way?”
No. Core Supreme Court rules apply nationwide, but the way lower courts implement them can vary in meaningful ways. That is part of what makes relevant experience in ERISA litigation so important.
The Bigger Point: Standard Of Review Is Really About Case Architecture
The phrase “standard of review” can make this issue sound academic. It is not. It is really about case architecture.
It shapes what evidence gets prioritized, what arguments are preserved, how appeals are written, and what kind of lawyer-client strategy makes sense from the beginning. In some ERISA cases, the standard of review quietly does more to influence the path of the dispute than the headline diagnosis or benefit amount.
That is why people facing denied long-term disability, life, health, or other ERISA-governed benefits often look for an attorney with demonstrable experience based on court records, especially in disputes involving plan interpretation, discretionary-clause issues, procedural irregularities, and conflict-of-interest arguments.
Final Takeaway
The five mistakes above share one theme: they often look small until they are not.
- Treating standard of review as a late briefing issue
- Assuming any discretion language automatically controls
- Underestimating procedural defects
- Ignoring conflict-of-interest evidence
- Building the appeal record without the review fight in mind
For someone living through a denied-benefits dispute, these points can feel abstract at first. In litigation, they often shape the entire field of play. An attorney with verified experience in highly similar ERISA matters may be able to identify those issues early, evaluate the governing documents, and frame the record around the review standard the case is likely to face.
Visit ReferU.AI to get matched with an attorney who has demonstrable experience in cases like yours — for free.
