District Court Rejects Chevron’s Summary Judgment Bid in ERISA Long-Term Disability Dispute Due to Invalid Delegation of Authority

In Daniel C. v. Chevron Corporation, 24-cv-03851-SK (N.D. Cal. May 20, 2025), a matter involving a claim for ERISA-governed long-term disability benefits, California Northern District Magistrate Judge Sallie Kim—to whom the parties consented to handle the matter for all purposes—denied the parties’ summary judgment motions, finding that de novo review applies and the matter could not be resolved on summary judgment. The court set the matter for bench trial under Federal Rule of Civil Procedure 52.

Daniel C., a Chevron employee, began short-term disability leave in 2017 for major depressive disorder related to workplace conflict. Just before returning to work, he was struck by a vehicle and remained in a coma for ten days. He was diagnosed with traumatic brain injury, post-concussion syndrome, and major depression following the accident.

ReedGroup, the third-party claims administrator, initially approved and extended Daniel’s LTD benefits until June 30, 2020. However, in August 2020, ReedGroup denied his request for continued benefits, citing insufficient medical evidence to support continued total disability and noting that the claimant had reached the Plan’s limit for disabilities stemming from mental health conditions. Daniel appealed and submitted further documentation, but ReedGroup upheld its decision, asserting that the LTD benefits cap for mental/behavioral conditions applied, and he was no longer eligible. The instant action followed.

Chevron moved for summary judgment arguing that its decision to terminate benefits was entitled to deferential review under the abuse-of-discretion standard. Daniel countered that de novo review was warranted because Chevron never properly delegated discretionary authority to ReedGroup. The court sided with Daniel. Although the Plan granted Chevron discretionary authority and permitted delegation, the court found that Chevron failed to comply with the Plan’s requirement that any delegation be made via a “written instrument that specifies the fiduciary responsibilities” assigned. Chevron argued that the Summary Plan Description (SPD) satisfied this requirement by naming ReedGroup as the claims administrator. The court disagreed, emphasizing several key deficiencies:

1. SPD Is Not a Delegation Instrument: The SPD merely disclosed ReedGroup’s contact information and referenced its role in claims processing. It did not clearly identify fiduciary responsibilities or constitute a formal delegation under ERISA or the Plan’s terms.
2. SPD Is Not a “Written Instrument” Under ERISA: Citing CIGNA Corp. v. Amara, 563 U.S. 421 (2011), the court reaffirmed that SPDs are meant for participant disclosure—not to alter or define plan terms. Chevron’s SPD lacked any language to suggest it was intended as a legally binding delegation instrument.
3. No Incorporation by Reference: Applying California contract law (as required by the Plan), the court found that the Plan did not clearly and unequivocally incorporate the SPD as a plan document. Casual references to SPD procedures did not suffice to transform the SPD into an enforceable delegation.

Because Chevron failed to prove a valid delegation of discretionary authority to ReedGroup, the court ruled that the de novo standard of review applies. Under this standard, courts review benefit denials without affording any deference to the plan administrator’s decision. Both parties acknowledged that the case could not be resolved at summary judgment under de novo review. The court therefore denied both motions and set a briefing schedule for a bench trial under FRCP 52.

This decision underscores the importance of strict adherence to ERISA’s procedural requirements for delegation of discretionary authority. If your disability insurer has denied or otherwise limited your ERISA benefits claim, contact us for assistance.