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A judge in the Southern District of Mississippi found a “decades-long pattern of arbitrary claim denials and other misdeeds” by Reliance Standard in long term disability cases. The facts of the case are relatively routine, but the end result is not. Ms. Nichols stopped working at a chicken processing factory due to circulatory system disorders. Reliance Standard admitted that she could not work in cold temperatures, but it denied her claim after its vocational expert found that Nichols’ occupation as performed in the national economy did not require her to be exposed to cold.
Judge Carlton Reeves concluded that Reliance Standard’s decision was “unsupported by any evidence, let alone substantial evidence.” The court then took an expansive look at more than 100 decisions in the last 21 years criticizing Reliance Standard’s disability decisions. Of those, 60 opinions were very critical of its claims administration. The court also noted that Reliance Standard did not submit any evidence showing that it had taken steps to mitigate its conflict of interest. It concluded that Reliance Standard abused its discretion by denying Nichols’ benefits.
The most unique aspect of this case comes from the remedy, as the court ordered Reliance Standard to pay all past due benefits and future benefits. The court’s rationale was explained thusly:
Many courts have, after recounting Reliance’s abuses, ordered the insurer to pay benefits and attorney’s fees. Apparently these costs have not caused Reliance to change course, as it has spent decades ignoring them with impunity—perhaps treating them as the price of doing business. In future cases, courts may be asked to order further relief to curb Reliance’s perceived abuses. That relief can be quite broad.
Because few cases include an award of future benefits, it will be informative to see how this case is decided. This may also show the way for how other courts in the future weigh appropriate relief in an individual case against a long history of abuse by insurance companies administering disability benefit claims.
 The case was appealed to the Fifth Circuit Court of Appeals on July 12, 2018.
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