Sixth Circuit Affirms Denial of Long-COVID LTD Benefits Under Non-ERISA Federal Reserve Plan, Applying Arbitrary-and-Capricious Review Borrowed from ERISA Case Law

In Martin v. Fed. Rsrv. Bank of Cleveland, et al., No. 25-3518, —F.4th—-2026 WL 1256663 (6th Cir. May 7, 2026), the Sixth Circuit affirmed judgment on the administrative record for the Federal Reserve Bank of Cleveland, Matrix Absence Management, Inc., and the Long Term Disability Income Plan for Employees of the Federal Reserve System. Although the Plan is a non-ERISA governmental plan exempt under 29 U.S.C. § 1003(b)(1), the court applied an arbitrary-and-capricious standard derived from New York contract law that closely mirrors ERISA review of plans vesting discretion in the administrator. The decision is significant for ERISA practitioners because the panel borrows substantively from ERISA case law to define the scope of judicial review, the limits on discovery, and the treatment of treating-physician opinions.

What were the facts and procedural posture of the case?

Martin worked as a Project Director at the Bank from August 2018 until she took leave on April 13, 2022, citing long-COVID symptoms including fatigue, migraines, brain fog, and sensitivity to light. After Matrix denied her initial claim and affirmed on appeal, Martin sued for breach of contract and breach of fiduciary duty under New York law. The district court denied her motions for both open and limited discovery beyond the administrative record, granted judgment on the record to the defendants, and Martin appealed all three rulings. Matrix’s denial rested on the conclusion that Martin had worked through her second COVID-19 infection in December 2021 and continued working until April 13, 2022, with treatment notes from mid-April reflecting improvement on Botox therapy. Matrix relied on independent reviewer Dr. Moufawad, who examined Martin in December 2022, and on three additional file reviewers (Drs. Erdos, Glass, and Sonne) commissioned during the appeal. Martin submitted rebuttal opinions from her treating physicians, Drs. Riffle and Dornan.

What standard of review applies to a non-ERISA governmental disability plan?

The panel addressed three issues. First, on the standard of review, the court reaffirmed O’Kelly v. Federal Reserve Bank of Cleveland, 2023 WL 4045223, holding that because ERISA does not govern the Plan and the Plan contains a New York choice-of-law provision, New York contract law supplies the standard. Where a plan vests “sole authority” in the designated decision-maker, denial may be set aside only if “made in bad faith, was arbitrary[,] or was the result of fraud,” quoting Welland v. Citigroup, Inc., 2003 WL 22973574. The court rejected Martin’s argument that the district court had improperly imported ERISA deference into a non-ERISA case, observing that New York law has long imposed similar deference on discretion-vesting non-ERISA plans.

Was the claimant entitled to discovery beyond the administrative record?

Second, on discovery, the panel held the district court did not abuse its discretion in denying both open Rule 26 discovery and limited discovery. Because review is confined to the administrative record, open discovery was foreclosed. As to limited discovery, the court found no inherent conflict of interest because the Bank does not make benefit determinations under the Plan, and Martin’s allegations regarding the “consultant circuit” reviewers and Matrix’s evidentiary weighing amounted to “mere allegations of bias,” insufficient under Moore v. Lafayette Life Ins. Co., 458 F.3d 416 (6th Cir. 2006), and Johnson v. Conn. Gen. Life Ins. Co., 324 F. App’x 459 (6th Cir. 2009).

Was Matrix’s denial of LTD benefits arbitrary and capricious?

Third, on the merits, the panel held Matrix’s denial was not arbitrary. Matrix had reviewed treating-physician records, credited Moufawad and three additional reviewers, and articulated a reasoned explanation grounded in Martin’s continued work through April 13, 2022, and contemporaneous notes reflecting improvement. Citing Black & Decker Disability Plan v. Nord, 538 U.S. 822 (2003), the court reiterated that administrators owe no special deference to treating physicians and are not required to engage in point-by-point rebuttal of every treating opinion. Matrix’s reliance on “the medical opinion of one doctor over that of another” satisfied McDonald v. W.-S. Life Ins. Co., 347 F.3d 161 (6th Cir. 2003). The panel also rejected Martin’s contention that her recording of the Moufawad examination, her subjective evidence, and the rebuttal letters from Drs. Riffle and Dornan compelled reversal, declining to impose a categorical duty on reviewers to respond to each treating-physician communication.