## Facts

- William T. Jacobs, Jr. participated in his employer’s ERISA-governed health plan (Bill Jacobs Motorsport, Inc. Health Insurance Plan), funded through a group policy issued by The Guardian Life Insurance Company of America (Guardian).
- In 2004, Jacobs was diagnosed with a rare bile duct cancer (metastatic cholangiocarcinoma) and received care at MD Anderson Cancer Center and later the University of Arizona.
- Jacobs’s treating oncologist prescribed a chemotherapy regimen using combinations of drugs for an off-label use.
- The policy excluded coverage for treatment Guardian determined to be “experimental or investigational” and/or not “medically necessary” under the policy’s definitions.
- Guardian denied coverage for the requested combination regimen, taking the position that when a drug combination lacks clinical-trial support or FDA approval for the specific condition, it may be excluded as experimental and not medically necessary under the policy.
- Jacobs appealed through the plan’s administrative process.
- During the appeal, Guardian obtained eight peer-review reports from three independent review organizations; the reviewing physicians concluded the regimen was experimental, not medically necessary, and not supported by sufficient clinical studies or acceptance by a professional medical society for Jacobs’s cancer.
- Jacobs relied primarily on his treating physician’s view that the regimen was helping him, and he did not submit countervailing studies or society guidelines to dispute Guardian’s characterization of the regimen as experimental under the policy.
- Jacobs sued under ERISA § 502(a)(1)(B) to recover benefits and also pleaded a claim for equitable relief under ERISA § 502(a)(3).
- The parties filed cross-motions for summary judgment.

## Issues

1. Whether Guardian and the Plan provided Jacobs the notice and “full and fair review” required by ERISA § 503 (29 U.S.C. § 1133) and the implementing regulations when denying coverage and handling the appeal.
2. If the claims process complied with ERISA, whether Guardian’s denial of coverage for the off-label combination chemotherapy was arbitrary and capricious (abuse of discretion) under the plan’s “experimental” and “medically necessary” provisions.
3. Whether Jacobs could pursue equitable relief under ERISA § 502(a)(3) based on the same conduct challenged as a denial of benefits under § 502(a)(1)(B).

## Decision

- The court held that Guardian complied with ERISA’s claims-procedure requirements and provided Jacobs adequate notice of the reasons for denial and a reasonable opportunity to submit material on appeal.
- Because the plan gave Guardian discretionary authority to interpret the policy and decide eligibility, the court applied deferential arbitrary-and-capricious (abuse-of-discretion) review.
- On the merits, the court upheld the denial as reasonable and supported by substantial evidence in the administrative record, including the eight independent peer-review reports concluding the regimen was experimental and not medically necessary for Jacobs’s condition.
- The court treated Guardian’s dual role as both evaluator and payor as a factor under conflict-of-interest analysis, but found it did not warrant overturning the decision given the use of multiple independent reviews and a record-based explanation tied to the policy terms.
- The court denied Jacobs’s motion for summary judgment and granted defendants’ cross-motion for summary judgment.
- To the extent Jacobs sought separate equitable relief based on the same benefits denial, the court rejected that theory.

## Legal Principles

- In an ERISA benefits case, judicial review generally focuses on the administrative record developed during the claim and appeal.
- ERISA § 1133 requires meaningful notice of an adverse benefit determination and a reasonable opportunity for full and fair review; substantial compliance with these requirements is sufficient when the process provides a real chance to respond.
- When a plan grants the administrator discretionary authority, courts review a benefits denial for abuse of discretion (arbitrary and capricious), asking whether the decision falls within a range of reasonable outcomes under the plan language and the record evidence.
- An administrator may reasonably credit independent peer-review opinions over a treating physician’s opinion, especially where the claimant does not submit clinical literature or guideline support that conflicts with the peer reviewers’ conclusions.
- A structural conflict of interest (the decision-maker also pays claims) is considered as one factor in abuse-of-discretion review, and its weight depends on the record (including steps taken to obtain independent medical review).
- ERISA § 502(a)(3) does not provide duplicative relief where § 502(a)(1)(B) supplies an adequate remedy for the complained-of injury (wrongful denial of benefits).

## Conclusion

In *Jacobs v. Guardian Life Insurance Co.*, the Northern District of Illinois held that Guardian gave Jacobs a full and fair ERISA review and, under deferential arbitrary-and-capricious review, reasonably denied coverage for an off-label combination chemotherapy regimen as experimental and not medically necessary based on multiple independent peer reviews; the court granted summary judgment for Guardian and the Plan and declined separate equitable relief tied to the same benefits denial.


Jacobs v. Guardian Life Insurance Co., 730 F.Supp.2d 830 (2010)