Black v. UnumProvident Co., 240 F.Supp.2d 274 (D. Maine 2003)

District Court Judge Singal

This class action was brought under ERISA against a common disability insurer for long-term disability benefits, alleging violation of due process based on insurer’s status as reviewer of administrative appeals of benefit denials. Plaintiffs were each insured under a group disability insurance policy issued by the Defendant. Insurer moved to dismiss and/or strike complaint, dismiss the due process claims, and to sever claims.

The court may only grant a motion to dismiss if it clearly appears that, on the facts alleged, the plaintiff cannot recover on any viable theory.

The court denied Defendant’s motion to dismiss the complaint in its entirety because facts alleged were speculative in nature, holding that the complaint set forth sufficient facts to inform the Defendant of the allegations against it and was not so intelligible as to prevent a response. The court, however, granted Defendant’s motion to strike certain portions of the complaint that were deemed to be redundant.

Plaintiffs argue that their constitutional right to a full and fair review of their claims has been denied because the Defendant retains complete control over the review process while having a substantial financial interest in the outcome. Due process requires that there not be a financial conflict of interest between any person exercising adjudicatory authority under the law and the person who is subject to that authority. Additionally, the Constitution’s procedural due process safeguards are triggered only by conduct that constitutes state action. The court concluded that the administrator’s status as the source of funding does not create a conflict of interest so serious to preclude the administrator from acting as the reviewing authority. Also, absent the requisite legislative delegation of adjudicative authority, Defendant’s conduct remains that of a private, rather than state, actor. Therefore, Plaintiff’s constitutional argument fails, and Defendant’s motion to dismiss is granted.

As the Plaintiffs’ due process claims are dismissed, the Plaintiffs’ complaints rely on their individual cases, which arise out of different allegations of disabilities and circumstances. Therefore, the court ordered the Plaintiffs to submit independent complaints for relief.