# Prologue — Kobs v. United Wisconsin Insurance

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URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386016_0259%3A0

## Record

- **Collection:** Supreme Court brief
- **Document type:** Prologue
- **Published:** January 1, 2005
- **Citation:** 546 U.S. 1033

## Text

0 ==
No. 05394 SE 2 3 2005

Sa InEEEEEineeeeemem

IN THE

Supreme Court of the Wnited States

ELVIS KOBS,
Petitioner,
Vv.

UNITED WISCONSIN INSURANCE COMPANY, —
Respondent.

On Petition For A Writ Of Certiorari
To The United States Court Of Appeals
For The Seventh Circuit

PETITION FOR A WRIT OF CERTIORARI

LAURA W. BRILL. JASON W. WHITLEY
Counsel of Record NOVITZKE, GUST, SEMPF &

TED M. SICHELMAN WHITLEY

IRELL & M..NELLA, LLP 314 Keller Avenue North,

1800 Avenue of the Stars Suite 399

Los Angeles, California 90067 Amery, Wisconsin 54001

(310) 277-1010 (715) 268-6130

Counsel for Petitioner Elvis Kobs

September 23, 2005

(1)

(2)

QUESTIONS PRESENTED

Whether an insurance company that both funds and
makes discretionary benefits determinations under
a plan governed by the Employment Retirement
Income Security Act of 1974 (“ERISA”), 29 U.S.C.
§ 1001 et seq., inherently acts under a conflict of
interest to be considered in the judicial review of a
denial of benefits under 29 U.S.C. § 1132(a)(1\B).

If the anSwer to the first question is “yes,” the
following question is presented: Whether the
appropriate means to consider a conflict of interest
of an insurance company in such an action is de
novo review, a “burden shifting” test, a “sliding
scale” test, or some other means.

hi
PARTIES TO THE PROCEEDINGS BELOW

The only parties to this proceeding are named in the
caption.

iii

TABLE OF CONTENTS
; Page
QUESTIONS PRESENTED ..............:::cccesesessseceecersessereees i
PARTIES TO THE PROCEEDINGS BELOV ............ ii
PETITION FOR A WRIT OF CERTIORAR lL .............. 1
et PO tciscccccetcctsccasnesstintoasantensiidettieyiiedadtens 1
FT BO crcecrcevccsscctesrsessevesencsvsenseventecieasovsoaneoteunees 1
RELEVANT STATUTORY rriOVISIONs..............006+ 1
I ITITITTTT iinctrrcencuscuisinadeinsaieititeithiansaseahbecehininssoreiaaniele 2
REASONS FOR GRANTING THE WRIT.................... 7
I. The Circuit Courts Are Intractably
Divided Over the Questions Presented................. 8
A. There Is A Deep Split Among The
Circuits Over Whether A Dual-
Role Insurer Is Subject To An
Inherent Conflict To Be
Considered In The Judicial
Review Of A Denial Of Benefits .............. 10
B. There Is A Three-Way Split
Among Eleven Circuits Over What
Approach Applies When A Conflict
TR NTI ainsi cisiniensiatetiscelidlamiseiiensinntcdadtinstesontal 17
Il. The Questions Presented Are Frequently
Litigated And Of Manifest National
i icicisccanictitcninincsmisinseibibusiiinacctbmnimytiinsntios 22
A. Each Year, There Are Millions Of
ERISA-Governed Benefits
Determinations, Resulting In
Thousands Of Lawsuits
Challenging Denials Of Benefits ............. 22
B. The Objectives Of ERISA To
Protect Private Employee Benefits
Are Thwarted By The Decision
SEETIITD iccoicelindinssiasindetieianinshesaiiiccdalananalsiiihebamaiidinaial 23
SI esokhkn cissinibetaddnniecicticainhonisieeiini ita cancer cemecls 28

iv

TABLE OF AUTHORITIES
Page(s)

Cases:
Aetna Health Inc. v. Davila, 542 U.S. 200, 124

is Ga Se CIGD cirhinvecsinsichetblinionasctvedasabeeveiioie 7, 23
Alford v. Dch Found. Group Long-Term

Disability Plan, 311 F.3d 955 (9th Cir.

De pciiaslaliciticnsocimaahetlahiandaitubeatidioansiitancastnitsicusastteth 14
Armstrong v. Aetna Life Ins. Co., 128 F.3d

SOR CE BI i hicicccstidetiibivbetciietei 11, 12, 20, 26
Atwood v. Newmont Gold, 45 F.3d 1317 (9th

CUE See actos ctncscanisidnensintnttabitoinpensabiohdia 13, 14, 19
Black & Decker Disability Plan v. Nord, 538

Cs Oe CD tet sritienvissenniepibidieninedtcapisiptidiascheasta 14
Brown v. Blue Cross & Blue Shield of Ala., 898

F.2d 1556 (11th Cir. 1990) ............sscccsesesees passim
Carr v. Reliance Std. Life Ins. Co., 363 F.3d

Ge FO Gs Fa chen tcecsieipithinitnitssiadctinlidamsidesesint 11

Central States, Southeast & Southwest Areas

Pension Fund v. Central Transport,

Bret g BT TTD. TE CGO) ccsenctacsntnscnsvinushteisieenscion 25
Darland v. Fortis Benefits Ins. Co., 317 F.3d

Be CE Ny ED icin ce ncpicaitsetuarsrcsdasnacdbaddedustdubbin 11
Dawvolt v. Executive Comm. of O'Reilly Auto.,

206 F.3d 806 (8th Cir. 2000) .0..... eee eeceseteeeeees 20
DeFelice v. American Int Life Assur. Co. of

New York, 112 F.3d 61 (2d Cir. 1997).............06 13

Doe v. Group Hospitalization v. Med. Servs., 3
F.3G SO (46B Che. 1968) nnccccosersoverecesesevccercerse passim

Page(s)

Doe v. Travelers Ins. Co., 167 F.3d 53 (1st Cir.

lee cistiasctncinictniantititestinniadiaiiieiaioningiecentds 18
Doyle v. Paul Revere Life Insurance Co., 144

op jt te | =a 11,14
Firestone Tire & Rubber Co. v. Bruch, 489 U.S.

| EEE ERS ane eee So passim
FMC Corp. v. Holliday, 498 U.S. 52 (1990)............c00000 23
Fought v. Unum Life Ins. Co. of America, 379

F.3d 997 (8th Cir. 2004) .............cccccecceeees 15, 17, 19
Gismondi v. United Techs. Corp., 408 F.3d 295

Ey ney Seeds cheeanshecnveepndcaeatatampsbeaieiiigieienbameets 10
Glenn v. Life Ins. Co. of N. Am., 240 F.3d 679

Le S| RRERC ERE ess Pe 14
Harden v. Am. Express Fin. Corp., 384 F.3d

ES SC Se 20
HCA Health Services of Georgia, Inc. v.

Employers Health Ins. Co., 240 F.3d

Se CE GAIN Petree tencentesintnibisadnccetnisiueitlinnineebecteees 20
Johnson v. California, 125 S. Ct. 1141 (2005)............... 21
Kirk v. Readers Digest Ass’n, 57 Fed. Appx. 20

EERE ES EL Re 13
Kosiba v. Merck & Co., 384 F.3d 58 (3d Cir.

BENE NS SEER a ae 14, 20
Leipzig v. AIG Li; Ins. Co., 362 F.3d 406 (7th

SEG: SINT caccceaicineeinsischeiecupniicionUeaieiidagiedadiiend ttasteaialicigeveanill 6
Meinhard v. Salmon, 164 N.E 545 (N.Y. 1928)............. 25

Mers v. Marriott Int'l Group Accidental Death
& Dismemberment Plan, 144 F.3d 1014
GREER RS ad alae 6, 11, 12, 17

Page(s)

Miller v. Metropolitan Life Ins., 925 F.2d 979

FE Sy a icccciniariniesisiceniinctesasicnnabicniadinndiies 10, 17
NLRB v. Amax Coai Co., 453 U.S. 322 (1981)............... 25)
Nord v. Black & Decker Disability Plan, 356

F.3d 1008 (9th Cir. 2004) .0........ccceseeceeceeeees 14, 19
Pagan v. NYNEX Pension Plan, 52 F.3d 438

GR eh, SIU itclinitinincniinichisanemedtienciiousineseniniupanies 12
Peach v. Ultramar Diamond Shamrock, 109

Fed. Appx. 711 (6th Cir. 2004) 00.0.0... cccccseeeersees 14
Periman v. Swiss Bank Corp. Comprehensive

Disability Protection Plan, 195 F.3d 975

CE tee SUED Acntinirycadidcbiicipmibennionnameniighdaiingnd 5,11
Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41

RSE See ee sae ase SNe 24
Pitman v. Blue Cross & Blue Shield of Okia.,

24 F.3d 118 (10th Cir. 1994) 00.0.0... eeeeeeeee 10, 11
Pulvers v. First UNUM Life Ins. Co., 210 F.3d

I, I ilies eiintens inti ctebitaladieseeteneddiatiae 12°
Rush Prudential HMO Inc. v. Moran, 536 U.S.

Pe nicchteptcinteeittitiianntinieadathiseibinceds 14, 20, 21
Schatz v. Mutual of Omaha Ins. Co., 220 F.3d

GE ae ic Se ticeetnseciheetitianninitiniintniciinieniie 13
Snow v. Standard Ins. Co., 87 F.3d 327 (9th

ME ME MRSA AP SRLS SET 13
Stup v. UNUM Life Ins. Co. of Am., 390 F.3d

ee I Si inchciiccriniincecentcicccnpeiaiiiibianiins 14, 20

Sullivan v. LTV Aerospace & Defense Co., 82
fe: Fe ST eer rerem 19

Page(s)

Trem » v. Bell Indus., Inc., 196 F.3d 970 (9th

CR, Be eiicieninsssenssininseriascieneaidinanients 13, 16, 19, 21
Varity Corp. v. Howe, 516 U.S. 489 (1996)..........cccceeeeee 27
Vega v. Nat'l Life Ins. Serv., Inc., 188 F.3d 287

GED GS. See beccasniescnptepneiedetiansieiamesticngieiiaations passim
Wesiern Industries v. Vilter Mfg. Co., 257 Wis.

SEP Cee aes BUD cicivincinensctininsctadctnaiiitiidiaininaiiiaitiia 25
Whitney ». Empire Blue Cross & Blue Shield,

BOG Fe SIO GR Cat a iscsccentsioscctadtadweccucttortsc 12
Williams v. BellSouth Telecomms., Inc., 373

se eb th Be % SORA R eon 14
Woo v. Deluxe Corp., 144 F.3d 1157 (8th Cir.

iii ictutiapiicincienanviitensnshiitiaiiciensiteihiadiidiicdeaiea 12, 13, 20
Wright v. R. R. Donnelley & Sons Co. Group

Benefits Plan, 402 F.3d 67 (1st Cir.

TIPU dusecvectestenicnubidienittdutcapiaialeaiianamininie ta 9,14
Yeager v. Reliance Standard, 88 F.3d 376 (6th

CARTE Meee Diceitepinsibcinhantelahechakitibilliammaiesiadhetinlldauaaidin 10
Statutes, Regulation, and Rule:
Sr Eras ey Rae a iccstrccssadsenisdgenaheennsinbmmammiommmadiambdions 1
APD TEE sehiinitcs scdsatediasiinscaiinsiamnnda’ Scaiinbilndaibabian 5
Eide © Ts ectitintntimtviccicimiiinniantaaiitantieiaimininiedidens i, 8
ee AsO ED wsccincierinsertsteiienrinsancisaanedibaiadaaadmmaa 8
Be eS Ded tarvcnteceanttteinsnintnel sdescittncasanisicicisunasiat tian 22
- pik To Ba’) ttf \ SRR CCRMeE Tenn ORE: 24
a Erte ean We UM OLRILIED sccivcnssensnnmetissonssisninnsannesmnniiaad 25

BPD. § SD ceccccisntnnnsitienitinssinntionsintonaamitisaiial 25

Page(s)

Suey MP IEIEAY OF EEL DUIND cceccccsevcrsvescstecssescecessonteusees passim
EL SIR ce ee eR Ae oF 5
SS SLR aa a aa: sere 16
a EIS RTI RAS a OE 5
Miscellaneous:
Employee Retirement Income Security Act of

1974; Rules and Regulations for

Administration and Enforcement;

Claims Procedure, 65 Fed. Reg. 70246

ECS Sareea eee S 23
G. Bogert, Trusts and Trustees § 543, at 475-

I 25
Motion of America’s Health Insvrance Plans

and the American Council of Life

Insurers, Fought v. Unum Life Ins. Co.
Of America, cert. denied, 125 S. Ct.
II tis III sicdennndnicettnacsinmathaiirtsnamedpecinein 15

Paul J. Schneider & Barbara W. Freedman,
ERISA: A Comprehensive Guide
§§ 1.02-1.05 (Aspen 2d ed. 2003)..............:ccccceeeeees 8

Peter A. Meyers, Comment, Discretionary
Language, Conflicts of Interest, and
Standard of Review for ERISA
Disability Plans, 28 Seattle U. L. Rev.
a edudicnonlonion 23

Peter G. Gosselin, The New Deal; The Safety
Net She Believed In Was Pulled Away
When She Fell, Los Angeles Times,
po a Se 27

Petition for Writ of Certiorari, Fought v.
Unum Life Ins. Co. of America, cert.

denied, 125 S. Ct. 1972 (May 2, 2005).....

Restatement (Second) of Trusts § 170(1) cmts.

EE sistinnicittlesccsinscivsiltiminmmattehidieninibers
Restatement (Second) of Trusts § 187 (1959) .....

Restatement (Second) of Trusts § 187 cmt. d

(Fie rwertiircrarencstingrioniacncgenapivonstanetintetenaenes

Robert L. Stern et al., Supreme Court Practice

651-52 (Sth ed. 2002)..........cesessseerereersees

Trial Brief, Schneider v. Provident Life &
Accident Ins. Co., No. C 97-4646 SC
(N.D. Cal. Apr. 5, 1999).......c.cccccccccesssoveres

PETITION FOR A WRIT OF CERTIORARI

Petitioner Elvis Kobs respectfully petitions for a writ
of certiorari to review the judgment of the United States
Court of Appeals for the Seventh Circuit in this case.

OPINIONS BELOW

The opinion of the Court of Appeals for the Seventh
Circuit (Pet. App. la-9a) is published at 400 F.3d 1036.
The court of appeals’ order denying rehearing and
rehearing en banc (Pet. App. 21a) is unpublished. The
opinion of the district court (Pet. App. 10a-18a) is
unpublished.

JURISDICTION

The judgment of the court of appeals was entered on
March 16, 2005. Petitioner’s timely request for rehearing
and rehearing en banc was denied on April 26, 2005. On
July 11, 2005, Justice Stevens granted an extension of
time in which to file the present petition until
September 23, 2005. This Court has jurisdiction
pursuant to 28 U.S.C. § 1254(1).

RELEVANT STATUTORY PROVISIONS

In relevant part, 29 U.S.C. § 1132(a)(1\B) states:
(a) Persons empowered to bring a civil action
A civil action may be brought--
(1) by a participant or beneficiary--

xk *

(B) to recover benefits due to him under the terms of
his plan, to enforce his rights. under the terms of the
plan, or to clarify his rights to future benefits under
the terms of the plan[.)

2
STATEMENT

This case presents the question whether an insurance
company that funds and makes discretionary t«nefits
determinations (hereinafter, a “dual-role insurer”) under
a plan governed by ERISA inherently acts under a conflict
of interest to be considered in reviewing denials of
benefits under 29U.S.C. §1132(a)(1)(B). Since this
Court’s decision in Firestone Tire & Rubber Co. v. Bruch,
489 U.S. 101, 115 (1989), this question has deeply divided
eleven circuit courts of appeal. Acknowledging this
square circuit conflict, the Seventh Circuit decided in this
case that a dual-role insurer does not act under such an
inherent conflict.

Because, contrary to the judgment of the Seventh
Circuit, a dual-role insurer does act under such an
inherent conflict of interest, this case presents the
additional question of whether the appropriate means to
consider the conflict is de novo review, a “burden shifting”
test, a “sliding scale” test, or some other means. The
question of the appropriate consideration of a conflict of
interest has also deeply divided the circuits, with at least
three different prevailing approache- in effect among
eleven circuit courts.

1. In January 2002, while removing Christmas
ornaments from the roof of his house, 50-year-old
Petitioner Elvis Kobs fell 25 feet onto concrete pavement
and suffered severe injuries, including memory loss,
cognitive difficulties, recurring headaches, and
musculoskeletal injury to his back and legs. Pet. App. 1a,
54a-7la. At the time of his fall, Mr. Kobs was employed
as a business manager at an auto dealership, earning
about $85,000 per year. Id. at 47a-49a. Mr. Kobs was a
participant in his employer’s group disability plan
(hereinafter, the “Plan”), which is administered by the
United Wisconsin Insurance Company (““UWIC”). Id. at
la. UWIC is a dual-role insurer in that it administers the

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386016_0259%3A0. Public record. Not legal advice.