New York District Court Finds First Unum’s LTD Denial Reasonable Under ERISA’s Deferential Standard

In Pistilli v. First Unum Life Insurance Company, No. 24 CIV. 5266 (AKH), 2025 WL 2814714 (S.D.N.Y. Oct. 3, 2025), Judge Alvin K. Hellerstein upheld Unum’s denial of long-term disability (“LTD”) benefits to a corporate finance attorney, finding the insurer’s decision was neither arbitrary nor capricious. Applying the deferential ERISA standard of review, the court held that Unum followed proper procedures, relied on substantial medical evidence, and acted reasonably in concluding that the claimant was not disabled under the policy. This decision reinforces how discretionary authority gives insurers an advantage. With discretion, an insurer only needs to show that its decision was reasonable.

Background

The plaintiff was employed as a corporate finance attorney at an elite global “white-shoe” firm. In July 2022, her car was rear-ended while she was stopped at a traffic light. She later reported headaches, nausea, and difficulty concentrating, and was diagnosed with a concussion. Though her EEG and MRI scans were normal, she stopped working and received 26 weeks of short-term disability benefits through First Unum.

When her short-term benefits ended, Pistilli applied for LTD benefits under the law firm’s group policy, which covered 60% of her salary if she could show that, because of injury or sickness, she was unable to perform the material duties of her occupation. Unum reviewed the file, which included conflicting medical opinions. While her treating doctors supported disability, Unum’s independent reviewers—including neurologists, neuropsychologists, and rehabilitation specialists—found no objective evidence of impairment. They noted normal imaging, inconsistent test results, and a prior history of severe headaches that predated the accident.

Unum denied the LTD claim in June 2023 and later upheld its decision on appeal, despite Pistilli’s submission of new evaluations and reports from additional specialists.

The Court’s Legal Reasoning

The court began its analysis by noting that the Unum long-term disability plan expressly granted the insurer “discretionary authority” to interpret policy terms and determine eligibility. That language triggered the highly deferential arbitrary and capricious standard of review, under which a court may not overturn an administrator’s decision so long as it is reasonable and supported by substantial evidence.

Pistilli argued that the court should instead apply de novo review—meaning the judge would decide the matter anew—because, she said, Unum violated the Department of Labor’s ERISA claims regulations in several respects. Specifically, she contended that Unum (1) relied on unqualified or biased medical reviewers, (2) failed to provide an impartial appeal review, and (3) improperly extended its appeal decision deadline beyond what the regulations allow.

Judge Hellerstein rejected each argument in turn.

Qualified Reviewers

The court first held that Unum’s review complied with ERISA’s requirement that insurers consult healthcare professionals “with appropriate training and experience” in the relevant field. Although a nurse initially screened Pistilli’s appeal, Unum subsequently referred the file to multiple board-certified physicians and neuropsychologists, including specialists in physical medicine and rehabilitation. The court found that this layered review process satisfied the regulatory requirement and demonstrated good-faith diligence rather than procedural deficiency.

Independence and Impartiality

Next, the court addressed Pistilli’s claim that Unum’s reviewers were not impartial because they were paid by the insurer. Judge Hellerstein acknowledged that structural conflicts can exist when a plan both evaluates and pays claims, but emphasized that payment alone does not prove bias. Absent specific evidence of undue influence or cherry-picking experts to justify a denial, courts presume independence. Here, the record showed that Unum engaged qualified outside reviewers who gave reasoned, medically grounded opinions—even when those opinions differed from some of Pistilli’s treating providers. That, the court said, was consistent with ERISA’s expectation of professional, objective evaluation.

Timeliness and Procedural Compliance

Pistilli also alleged that Unum’s 45-day extension of its appeal review violated the ERISA regulations. The court disagreed, explaining that the regulations allow a single extension of up to 45 additional days when “special circumstances” justify the delay. Unum documented its reasons for the extension, including the need to assess new medical evidence Pistilli submitted late in the process and to give her a fair chance to respond to preliminary findings. The court found this rationale consistent with both the text and spirit of the regulations—emphasizing that the purpose of the rule is to encourage prompt yet careful decision-making, not to punish insurers for conducting thorough reviews.

Reasonableness of the Denial

Having determined that Unum’s process complied with ERISA’s procedural safeguards, the court then turned to the substance of the denial. Under the arbitrary and capricious standard, the question was not whether the judge agreed with Unum’s conclusion, but whether the decision had a rational basis in the record.

Here, the evidence showed that Pistilli’s accident was relatively minor—she was rear-ended at low speed, did not lose consciousness, and had normal neurological scans. Several of Unum’s consulting experts concluded that her neuropsychological test results were invalid or inconsistent, suggesting symptom exaggeration. Other reviewers pointed to preexisting headaches and anxiety that could explain her ongoing symptoms. The court found that this body of evidence easily met the “substantial evidence” threshold required to uphold Unum’s decision.

Judge Hellerstein also remarked that even under de novo review, the outcome would be the same. While Pistilli testified credibly about her symptoms, her testimony could not overcome the objective medical record, which failed to support a disabling impairment. In short, the court concluded that Unum’s determination was reasonable, methodical, and supported by competent medical evidence.