Back in December, we reported on the Sixth Circuit’s “unprecedented and extraordinary step to expand the scope of ERISA coverage” in Rochow v. LINA, 737 F.3d 415 (6th Cir. 2013). In that case, the court held that it was appropriate to require a disability claim administrator to disgorge $3,800,000 in profits it allegedly made on $900,000 in benefits that it had unreasonably failed to pay.Disgorgement of $3,800,000 ordered for failure to pay $900,000 in disability benefits
Well, there’s good news. On February 19, 2014, the Sixth Circuit granted LINA’s petition for rehearing en banc. This means that the December 2013 decision is vacated. Under the court’s rules: “The effect of the granting of a hearing en banc shall be to vacate the previous opinion and judgment of this court, to stay the mandate and to restore the case on the docket sheet as a pending appeal.”
So, this bad decision doesn’t exist for the time being. Hopefully the court will make it go away permanently. We wish LINA and its lawyers good luck.