8th Circuit affirms denial of death benefits under ERISA

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In Brief

• 8th Circuit affirmed summary judgment for MetLife in an ERISA benefits dispute.
• Court found home dialysis treatment contributed to the circumstances causing Dana Kleinsteuber’s death.
• Judges rejected claims that MetLife failed to provide a full and fair ERISA review.
• Panel ruled there was insufficient evidence that MetLife’s conflict of interest affected the benefits decision.

Dana Kleinsteuber developed an eating disorder as a teenager, which eventually led to end-stage renal disease (ESRD). She began home dialysis treatment.

A month later, while she was undergoing a home dialysis session, an accident occurred. Her husband, Charles, arrived home, finding her lying in her blood on the floor. When first responders arrived, they realized that she did not close her dialysis chest port, which resulted in severe blood loss. While first responders were able to stop the bleeding, Dana suffered cardiac arrest and died.

After her death, Charles filed a claim for accidental death and dismemberment benefits under his employer-sponsored ERISA plan, which was administered by MetLife. Per the plan, benefits are payable when an accidental injury is the direct and sole cause of a covered loss, including death. However, there is an an exclusion for losses that were caused by or contributed to by a physical or mental illness, infirmity, or the treatment of those conditions.

MetLife initially declined to review the claim, citing the death certificate which listed ESRD as a cause of death. It did eventually review the claim, determining that it would deny benefits because Dana’s death was caused by or contributed to by ESRD.

Charles appealed to MetLife’s appeals committee, but the insurer upheld the denial. In their final decision, while MetLife acknowledged that Dana’s death was an accident, it concluded that the policy exclusion still applied. That was because her treatment for ESRD contributed to the circumstances that caused her death.

Charles filed a lawsuit under ERISA in U.S. District Court for Minnesota. Judge John R. Tunheim granted MetLife’s motion for summary judgment. Charles appealed to the 8th U.S. Circuit Court of Appeals, arguing that MetLife failed to conduct a full and fair review of his claim, that the district court gave insufficient weight to MetLife’s conflict of interest, and that MetLife’s denial was based on an unreasonable interpretation of the policy exclusion and lacked substantial evidentiary support.

Charles contended that MetLife failed to comply with ERISA obligations requiring a full and fair review with adequate written notice, particularly in its initial denial letter. The initial notice must provide enough explanation to allow a claimant to understand the basis for the denial and seek further review.

In an opinion filed May 29,  the 8th Circuit panel — Judges Bobby E. Shepherd, Ralph R. Erickson and L. Steven Grasz — found that MetLife met the standard in its initial and final denial letters, as they clearly stated that the claim was denied under the policy exclusion for losses caused by or contributed to by illness or its treatment. The panel noted that while regulations require administrators to request additional information when necessary to decide a claim, that obligation applies only when missing evidence could change the outcome. In this case, MetLife did not need to request additional information.

Charles also raised a conflict-of-interest claim. In cases where a plan administrator both determines eligibility for benefits and pays those benefits from its own funds, courts must account for the administrator’s inherent conflict of interest as a factor in reviewing its decision, with the weight assigned depending on the circumstances.

The district court acknowledged MetLife’s conflict but gave it only minor to moderate weight because the record contained little evidence showing that the conflict actually influenced MetLife’s handling of Kleinsteuber’s claim.

While Charles argued that the conflict should be given great weight, the panel noted that he did not point to evidence linking any alleged investigative shortcomings to the final decision denying benefits. The panel found that even if his assertions suggested bias, they were insufficient without a demonstrated connection to the benefits determination.

The panel applied de novo review and interpreted the policy’s terms according to their ordinary meaning. It looked at the terms “caused or contributed to,” finding that a “cause” is something that brings about a result, and “contribute” means being one of the reasons it occurs. If ESRD or its treatment was either a direct cause or contributing factor in the death, the panel found that the policy exclusion would apply.

Additionally, Charles argued that MetLife lacked substantial evidentiary support. In its final denial letter, MetLife relied on medical records and reports from the doctor, sheriff’s office and medical examiner, to conclude that the exclusion applied. The panel found that the evidence supported MetLife’s conclusion that Dana’s home dialysis contributed to her death because her failure to properly close the port directly led to the fatal blood loss. Even if other interpretations exist, the panel determined that the court could not reweigh the evidence or substitute its judgment for MetLife’s.