Cogdell v. Reliance Standard Life Insurance Company: How the Supreme Court’s Decision in Loper-Bright Impacts ERISA’s Disability Claims
In June 2024, the Supreme Court issued a landmark decision in Loper-Bright Enterprises v. Raimondo, — U.S. —- (2024), which overturned the well-established precedent set by Chevron U.S.A. v. Natural Resources Defense Council (1984).
This decision altered the way courts interpret federal agency regulations, no longer requiring courts to defer to an agency’s interpretation of ambiguous statutes (commonly known as “Chevron Deference”). As soon as the ruling came down, legal scholars, practitioners, and industry experts began to debate how this new landscape would affect various sectors of law, including the Employee Retirement Income Security Act (ERISA), which governs employee benefit plans, including disability insurance.
ERISA disability claimants often rely heavily on the regulations issued by the Department of Labor to ensure a “full and fair review” of their claims. These regulations provide crucial timelines and procedures that safeguard claimants against unreasonable delays by insurance companies, ensuring that decisions are made in a timely and transparent manner. Naturally, many wondered how Loper would impact these protections.
Our long-term disability law firm, BenGlassLaw, recently faced this question head-on in the case of Cogdell v. Reliance Standard Life Insurance Company in the Eastern District of Virginia, 1:23-cv-1343 (AJT/JFA). We represented Ms. Cogdell, a former employee of MITRE, who experienced long-term disability due to lingering, long-term symptoms from two separate COVID-19 infections, also known as long-haul COVID syndrome. Despite submitting extensive medical evidence supporting her condition, Reliance Standard Life Insurance Company (“Reliance”) denied her claim at every stage, forcing us to take the case to court.
Background of the Cogdell v. Reliance Standard Life Insurance Company Case
After her second bout with COVID-19, Ms. Cogdell experienced debilitating symptoms including headaches, chronic fatigue, brain fog, and respiratory issues—symptoms commonly associated with long-haul COVID. These conditions made it impossible for her to continue working in her role at MITRE. Like many employees, she sought disability benefits through her employer’s insurance plan, administered by Reliance. However, Reliance denied her claim, dismissing the evidence and claiming she did not meet the policy’s definition of “disabled.”
We submitted a comprehensive appeal, backed by substantial medical research and reports from her treating physicians, demonstrating that long-haul COVID syndrome rendered Ms. Cogdell unable to perform her job. Reliance not only ignored the overwhelming evidence but also failed to make a decision on her appeal within the timeframe required by ERISA regulations, forcing us to file a lawsuit on her behalf.
Legal Strategy and Reliance’s Defense
The central issue in our case was Reliance’s failure to issue a timely decision on Ms. Cogdell’s appeal, a clear violation of ERISA’s procedural safeguards. Under ERISA, insurers have a strict 45-day window to decide disability appeals, with a possible 45-day extension for special circumstances. Reliance missed this deadline without justification, which should have triggered a de novo review by the court, meaning the judge would evaluate the evidence independently, rather than deferring to Reliance’s decision.
Our legal team, led by attorney Damon Miller, argued that Reliance’s violation of the timeline regulation meant the court should not defer to its denial of benefits, and instead conduct a thorough, independent review of the case. This position was well-supported by prior case law interpreting ERISA regulations, which require insurers to act promptly and fairly.
However, the timing of the Loper-Bright decision added an unexpected twist. At oral argument, Reliance introduced a new defense: it argued that the Loper decision, which invalidated Chevron deference, should also apply to ERISA’s regulations, rendering the Department of Labor’s authority to enforce the appeal deadlines invalid. According to Reliance, Loper meant that courts no longer had to defer to the Department of Labor’s regulations, and thus, Reliance should be entitled to a more deferential standard of review.
The Impact of Loper-Bright and the Court’s Analysis
This argument presented a novel question that no court has addressed before: does Loper-Bright invalidate key ERISA regulations, particularly those governing the timeline for appeals? Our firm contended that Loper did not affect the validity of ERISA’s regulatory framework for several key reasons.
First, we argued that Loper only applies to cases where an agency is interpreting ambiguous statutes. ERISA, by contrast, explicitly grants the Department of Labor the broad and full authority to issue regulations that ensure claimants receive a “full and fair review.” The statute is not ambiguous in this regard, and Congress intended for the Department to play a central role in implementing ERISA’s protections.
Second, even under Loper, agency regulations remain valid unless properly challenged through the Administrative Procedure Act (APA), which lays out specific steps for challenging an agency’s rulemaking, including a statute of limitations that sets a deadline for how long a party has to challenge an agency’s regulations. Reliance had failed to challenge the validity of ERISA’s regulations within the appropriate timeframe, rendering its argument procedurally deficient.
The court found our arguments compelling. In its opinion, the judge ruled that Loper did not apply to ERISA’s regulations because Congress had clearly delegated rulemaking authority to the Department of Labor. The judge also noted that Reliance’s attempt to invalidate ERISA’s timeline regulations was untimely and failed to meet the procedural requirements of the APA.
The Court’s Decision
With the Loper issue resolved, the court turned to the merits of Ms. Cogdell’s case. The judge agreed with our position that Reliance’s failure to issue a timely appeal decision stripped it of any entitlement to deferential review. The court also rejected Reliance’s argument that its delay was justified due to the need for an independent medical review. The judge emphasized that obtaining such a review is a routine part of the appeals process, not a “special circumstance” warranting an extension beyond ERISA’s 45-day deadline.
Given Reliance’s procedural failures, the court conducted a de novo review of the evidence and found in favor of Ms. Cogdell. The judge concluded that her long-haul COVID symptoms, as documented by her medical providers and corroborated by statements from friends and colleagues, rendered her unable to perform her occupation. As a result, the court ordered Reliance to pay all past-due benefits, with pre- and post-judgment interest.
Significance of The Case
This case is particularly significant for several reasons. First, it is one of the first ERISA disability cases to confront the potential impact of the Supreme Court’s decision in Loper-Bright. Had Reliance succeeded in its argument, it could have opened the door for insurance companies to challenge a wide range of ERISA regulations, undermining the protections afforded to disabled claimants.
The court’s decision reaffirms the validity of ERISA’s regulatory framework, ensuring that claimants like Ms. Cogdell continue to benefit from the procedural safeguards designed to protect them from insurance company abuses. This ruling not only protects disabled workers but also reinforces the importance of timely decision-making in the disability claims process.
Moreover, this case sets a crucial precedent for other courts that may face similar challenges in the wake of Loper-Bright. It sends a clear message that insurance companies cannot use the Supreme Court’s ruling as a pretext to evade their obligations under ERISA. As the first court in the country to address this issue, the Cogdell case will likely serve as a guiding precedent for other judges confronted with similar arguments in the future.
Conclusion
The outcome of Cogdell v. Reliance Standard Life Insurance Company underscores the critical role that ERISA’s regulations play in ensuring a fair and timely review process for disability claimants. Despite Reliance’s attempt to exploit the Supreme Court’s decision in Loper-Bright, the court decisively upheld the Department of Labor’s authority to enforce ERISA’s protections.
This case marks a significant victory for disabled claimants and a reaffirmation of the legal principles that govern ERISA litigation. As more courts grapple with the implications of Loper, we remain committed to fighting for the rights of disabled individuals and ensuring that insurance companies are held accountable for their obligations under the law.
Questions or comments about this big victory? Reach out to attorney Damon Miller.
