1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 NORTHERN DISTRICT OF CALIFORNIA 9 HEATHER FARRIS, 10 Case No. 25-cv-04164-RS Plaintiff, 11 v. ORDER GRANTING DEFENDANT’S 12 MOTION REGARDING CHOICE OF LIFE INSURANCE COMPANY OF LAW AND STANDARD OF REVIEW 13 NORTH AMERICA,
14 Defendant.
15 I. INTRODUCTION 16 In this action regarding denial of benefits under the Employee Retirement Security Act of 17 1974 (“ERISA”), Defendant moves for a court order setting out North Carolina as the governing 18 law and abuse of discretion as the proper standard of review. For the reasons set forth below, 19 California law that protects California residents such as Plaintiff from abuse of discretion review 20 of ERISA benefits decisions does not void the parties’ North Carolina choice of law. Accordingly, 21 Defendant’s motion is granted.1 22 II. BACKGROUND 23 A. Factual Background 24 Plaintiff Heather Farris worked for Lowe’s Companies, Inc. (“Lowe’s”) in California until 25 she acquired a disability. She resided in California at that time and has continued to reside here. 26
27 1 Pursuant to Civil Local Rule 7-1(b), the motion is suitable for disposition without oral argument, ] Lowe’s is incorporated in North Carolina. Defendant Life Insurance Company of North America 2 |} (“LINA”) denied Plaintiffs claim for long-term disability benefits under Lowe’s Long-Term 3 Disability Plan (the “Plan”), giving rise to this action. Plaintiff filed suit against LINA in May 4 || 2025, and the parties went to mediation but did not settle in January 2026. Defendant LINA filed 5 || the present motion, which Plaintiff opposes, to establish by court order the choice of law and 6 || proper standard of review in February 2026. 7 LINA issued the at-issue group long-term disability policy VDT-0980095 (the “Policy’’), 8 || which is governed by ERISA, to Lowe’s in North Carolina effective September 1, 2013. LINA 9 || insures the benefits and adjudicates the claims under the Policy while Lowe’s is the Plan 10 || Administrator. The cover page of the Policy contains the following provision: the Policy “is issued 11 in North Carolina and shall be governed by its laws” (the “North Carolina Provision”). Dkt. 25-4 12 at 1170. 13 The terms of the Plan are set forth in the Policy and other documents, including an 14 || appointment of claim fiduciary document (“ACF”), a Certificate of Coverage (the “Certificate”), 15 and Supplemental Information for Lowe’s Companies, Inc. required by ERISA (the “ERISA a 16 || Information”). The ACF and Certificate contain language granting discretionary authority to 17 || Defendant (the “Discretionary Review Provisions”), and the ACF requires that this grant of Zz 18 discretion be included in the Summary Plan Description (“SPD”). Dkt. 25-5 at 1301; Dkt. 25-6 at 19 1255, 1295. ERISA requires the SPD be distributed to Policy participants. 20 The Certificate also lists the benefits, conditions, and limits of the Policy and states to 21 whom benefits will be paid. The first page of the Certificate also includes the following notice (the 22 IMPORTANT NOTICES °° If you reside in one of the following states, please read the important notices below: Arizona, Florida and Marvland residents: The group policy is issued in the state of North Carolina and will be governed by its 26 laws. If you reside in a state other than North Carolina, this certificate of insurance may not provide all of the benefits and protections provided by the laws of vour state. 27 PLEASE READ YOUR CERTIFICATE CAREFULLY. . CASE No. 25-cv-04164-RS
1 “Arizona-Florida-Maryland Notice”): 2 Dkt. 25-6 at 1223. There is an additional notice on that page for residents of Texas, but no notice 3 on that or other pages directed at residents of California. The ERISA Information provides certain 4 information required by ERISA, identifies the Plan Administrator as Lowe’s, and, as mentioned, 5 grants discretionary authority to LINA. Defendant asserts in its motion that the Certificate and 6 ERISA Information constitute the Plan’s required SPD. 7 B. California Insurance Code § 10110.6 8 California Insurance Code § 10110.6, which became effective on January 1, 2012, protects 9 California residents against disability insurance policies that grant discretionary authority to 10 interpret the policy to the insurer or its agent. It provides in relevant part, 11 (a) If a policy, contract, certificate, or agreement offered, issued, delivered, or renewed, whether or not in California, that provides or funds life insurance or 12 disability insurance coverage for any California resident contains a provision that reserves discretionary authority to the insurer, or an agent of the insurer, 13 to determine eligibility for benefits or coverage, to interpret the terms of the policy, contract, certificate, or agreement, or to provide standards of 14 interpretation or review that are inconsistent with the laws of this state, that 15 provision is void and unenforceable. 16 Cal. Ins. Code § 10110.6. The purpose of the Legislature in enacting Senate Bill No. 621, 17 which became § 10110.6, was to “prohibit life and disability insurance policies from 18 containing a discretionary clause, and to prohibit the Insurance Commissioner from 19 approving disability insurance policies that contain a discretionary clause.” S. Rules 20 Comm., 2011-2012 Sess., S.B. 621 (Cal. Aug. 26, 2011). 21 III. LEGAL STANDARD 22 A motion for determination of the choice of law and standard of review in an ERISA case 23 presented with matters outside the pleadings is brought as a motion for partial summary judgment 24 under Federal Rule of Civil Procedure 56. See Murphy v. California Physicians Serv., 213 F. 25 Supp. 3d 1238, 1241 (N.D. Cal. 2016). Under Rule 56, judgment is proper where “there is no 26 genuine issue as to any material fact and… the movant is entitled to judgment as a matter of law.” 27 Fed. R. Civ. P. 56(c). The moving party bears the burden of demonstrating the absence of a 1 genuine issue of material fact for trial. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 2 (1986). If the moving party carries that burden, then the opposing party must set forth specific 3 facts showing that a triable issue exists. Id. 4 Here, Defendant’s Motion in Support of the ERISA Plan’s North Carolina Choice of Law 5 and the Abuse of Discretion Standard of Review seeks resolution of questions of law based on 6 declarations and attached plan documents. Accordingly, it is treated as a motion for partial 7 summary judgment under Rule 56. 8 IV. DISCUSSION 9 The default standard of review for a denial of ERISA benefits is de novo “unless the 10 benefit plan gives the administrator or fiduciary discretionary authority to determine eligibility for 11 benefits or to construe the terms of the plan.” Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 12 101, 115, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989). The plan language purporting to grant discretion 13 must be clear and unambiguous in providing discretion to the administrator. Kearney v. Standard 14 Ins. Co., 175 F.3d 1084, 1090 (9th Cir. 1999). If the plan unambiguously gives the plan 15 administrator discretion to determine a plan participant’s eligibility for benefits, then 16 the standard of review shifts to abuse of discretion. Abatie v. Alta Health & Life Ins. Co., 458 F.3d 17 955, 963 (9th Cir. 2006) (en banc).
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1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 NORTHERN DISTRICT OF CALIFORNIA 9 HEATHER FARRIS, 10 Case No. 25-cv-04164-RS Plaintiff, 11 v. ORDER GRANTING DEFENDANT’S 12 MOTION REGARDING CHOICE OF LIFE INSURANCE COMPANY OF LAW AND STANDARD OF REVIEW 13 NORTH AMERICA,
14 Defendant.
15 I. INTRODUCTION 16 In this action regarding denial of benefits under the Employee Retirement Security Act of 17 1974 (“ERISA”), Defendant moves for a court order setting out North Carolina as the governing 18 law and abuse of discretion as the proper standard of review. For the reasons set forth below, 19 California law that protects California residents such as Plaintiff from abuse of discretion review 20 of ERISA benefits decisions does not void the parties’ North Carolina choice of law. Accordingly, 21 Defendant’s motion is granted.1 22 II. BACKGROUND 23 A. Factual Background 24 Plaintiff Heather Farris worked for Lowe’s Companies, Inc. (“Lowe’s”) in California until 25 she acquired a disability. She resided in California at that time and has continued to reside here. 26
27 1 Pursuant to Civil Local Rule 7-1(b), the motion is suitable for disposition without oral argument, ] Lowe’s is incorporated in North Carolina. Defendant Life Insurance Company of North America 2 |} (“LINA”) denied Plaintiffs claim for long-term disability benefits under Lowe’s Long-Term 3 Disability Plan (the “Plan”), giving rise to this action. Plaintiff filed suit against LINA in May 4 || 2025, and the parties went to mediation but did not settle in January 2026. Defendant LINA filed 5 || the present motion, which Plaintiff opposes, to establish by court order the choice of law and 6 || proper standard of review in February 2026. 7 LINA issued the at-issue group long-term disability policy VDT-0980095 (the “Policy’’), 8 || which is governed by ERISA, to Lowe’s in North Carolina effective September 1, 2013. LINA 9 || insures the benefits and adjudicates the claims under the Policy while Lowe’s is the Plan 10 || Administrator. The cover page of the Policy contains the following provision: the Policy “is issued 11 in North Carolina and shall be governed by its laws” (the “North Carolina Provision”). Dkt. 25-4 12 at 1170. 13 The terms of the Plan are set forth in the Policy and other documents, including an 14 || appointment of claim fiduciary document (“ACF”), a Certificate of Coverage (the “Certificate”), 15 and Supplemental Information for Lowe’s Companies, Inc. required by ERISA (the “ERISA a 16 || Information”). The ACF and Certificate contain language granting discretionary authority to 17 || Defendant (the “Discretionary Review Provisions”), and the ACF requires that this grant of Zz 18 discretion be included in the Summary Plan Description (“SPD”). Dkt. 25-5 at 1301; Dkt. 25-6 at 19 1255, 1295. ERISA requires the SPD be distributed to Policy participants. 20 The Certificate also lists the benefits, conditions, and limits of the Policy and states to 21 whom benefits will be paid. The first page of the Certificate also includes the following notice (the 22 IMPORTANT NOTICES °° If you reside in one of the following states, please read the important notices below: Arizona, Florida and Marvland residents: The group policy is issued in the state of North Carolina and will be governed by its 26 laws. If you reside in a state other than North Carolina, this certificate of insurance may not provide all of the benefits and protections provided by the laws of vour state. 27 PLEASE READ YOUR CERTIFICATE CAREFULLY. . CASE No. 25-cv-04164-RS
1 “Arizona-Florida-Maryland Notice”): 2 Dkt. 25-6 at 1223. There is an additional notice on that page for residents of Texas, but no notice 3 on that or other pages directed at residents of California. The ERISA Information provides certain 4 information required by ERISA, identifies the Plan Administrator as Lowe’s, and, as mentioned, 5 grants discretionary authority to LINA. Defendant asserts in its motion that the Certificate and 6 ERISA Information constitute the Plan’s required SPD. 7 B. California Insurance Code § 10110.6 8 California Insurance Code § 10110.6, which became effective on January 1, 2012, protects 9 California residents against disability insurance policies that grant discretionary authority to 10 interpret the policy to the insurer or its agent. It provides in relevant part, 11 (a) If a policy, contract, certificate, or agreement offered, issued, delivered, or renewed, whether or not in California, that provides or funds life insurance or 12 disability insurance coverage for any California resident contains a provision that reserves discretionary authority to the insurer, or an agent of the insurer, 13 to determine eligibility for benefits or coverage, to interpret the terms of the policy, contract, certificate, or agreement, or to provide standards of 14 interpretation or review that are inconsistent with the laws of this state, that 15 provision is void and unenforceable. 16 Cal. Ins. Code § 10110.6. The purpose of the Legislature in enacting Senate Bill No. 621, 17 which became § 10110.6, was to “prohibit life and disability insurance policies from 18 containing a discretionary clause, and to prohibit the Insurance Commissioner from 19 approving disability insurance policies that contain a discretionary clause.” S. Rules 20 Comm., 2011-2012 Sess., S.B. 621 (Cal. Aug. 26, 2011). 21 III. LEGAL STANDARD 22 A motion for determination of the choice of law and standard of review in an ERISA case 23 presented with matters outside the pleadings is brought as a motion for partial summary judgment 24 under Federal Rule of Civil Procedure 56. See Murphy v. California Physicians Serv., 213 F. 25 Supp. 3d 1238, 1241 (N.D. Cal. 2016). Under Rule 56, judgment is proper where “there is no 26 genuine issue as to any material fact and… the movant is entitled to judgment as a matter of law.” 27 Fed. R. Civ. P. 56(c). The moving party bears the burden of demonstrating the absence of a 1 genuine issue of material fact for trial. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 2 (1986). If the moving party carries that burden, then the opposing party must set forth specific 3 facts showing that a triable issue exists. Id. 4 Here, Defendant’s Motion in Support of the ERISA Plan’s North Carolina Choice of Law 5 and the Abuse of Discretion Standard of Review seeks resolution of questions of law based on 6 declarations and attached plan documents. Accordingly, it is treated as a motion for partial 7 summary judgment under Rule 56. 8 IV. DISCUSSION 9 The default standard of review for a denial of ERISA benefits is de novo “unless the 10 benefit plan gives the administrator or fiduciary discretionary authority to determine eligibility for 11 benefits or to construe the terms of the plan.” Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 12 101, 115, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989). The plan language purporting to grant discretion 13 must be clear and unambiguous in providing discretion to the administrator. Kearney v. Standard 14 Ins. Co., 175 F.3d 1084, 1090 (9th Cir. 1999). If the plan unambiguously gives the plan 15 administrator discretion to determine a plan participant’s eligibility for benefits, then 16 the standard of review shifts to abuse of discretion. Abatie v. Alta Health & Life Ins. Co., 458 F.3d 17 955, 963 (9th Cir. 2006) (en banc). If California Insurance Code Section 10110.6 (“Section 18 10110.6”) applies, however, such discretionary review provisions are void and unenforceable. Cal. 19 Ins. Code § 10110.6; Orzechowski v. Boeing Co. Non-Union Long-Term Disability Plan, 856 F.3d 20 686, 692 (9th Cir. 2017) (“The statute… is ‘self-executing’; thus, if any discretionary provision is 21 covered by the statute, ‘the courts shall treat that provision as void and unenforceable.’ ” (citations 22 omitted)). 23 Accordingly, the proper standard of review for Plaintiff’s claim denial depends on a 24 threshold question: whether, as Defendant argues, the North Carolina Provision operates as a 25 North Carolina choice of law provision such that Section 10110.6 does not apply. Plaintiff 26 disagrees, arguing that: the “North Carolina Provision” cannot be interpreted reasonably as a 27 contractual choice of law provision governing all aspects of the Policy and superseding California 1 insurance protections; despite a purported split of authority on the matter, a choice of law 2 provision cannot invalidate Section 10110.6; and there is no conflict between Section 10110.6 and 3 North Carolina law, so any choice in the North Carolina Provision can be applied alongside 4 California’s protections. 5 A. The North Carolina Provision as a Valid Choice of Law Provision 6 Plaintiff argues that the North Carolina Provision, which states “[i]t [i.e., the Policy] is 7 issued in North Carolina and shall be governed by its laws,” does not reflect a bargained-for 8 contractual choice of law because a reasonable layperson would not read this single sentence, 9 “placed not within any of the actual substantive sections of the Policy,” Dkt.29 at 6, as voiding all 10 other state insurance regulation but rather as “merely a declaration that the issuance of the Policy 11 is being done pursuant to North Carolina’s laws,” id. at 7. They argue this interpretation is 12 supported by the Arizona-Florida-Maryland Notice because that notice would be unnecessary if 13 the North Carolina Provision already provided notice that those states laws would not apply. These 14 arguments are unavailing. The statement, on the cover page of the Policy, that the Policy “shall be 15 governed by [North Carolina’s] laws” unambiguously reflects a choice of North Carolina law. The 16 Arizona-Florida-Maryland Notice provides additional warning to residents in those states, but it 17 does not neutralize the North Carolina Provision. 18 B. Enforceability of the Choice of Law Provision 19 Plaintiff argues that even if the North Carolina Provision is a contractual choice of law 20 provision, it is not enforceable such that Section 10110.6 does not apply. In federal question cases 21 like ERISA suits, “the court should apply federal, not forum state, choice of law rules.” In re 22 Lindsay, 59 F.3d 942, 948 (9th Cir. 1995); Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 56, 107 23 S.Ct. 1549, 95 L.Ed.2d 39 (1987) (ERISA suits reflect federal law questions). Under federal law, 24 “[w]here a choice of law is made by an ERISA contract, it should be followed, if not unreasonable 25 or fundamentally unfair” “when viewed from the time when the contract was made.” Wang 26 Laboratories, Inc. v. Kagan, 990 F.2d 1126, 1128-29 (9th Cir. 1993) (where plaintiff was a 27 California resident injured in California, but defendant and most of its employees resided in 1 Massachusetts, application of plan’s selection of Massachusetts law was fair and reasonable). 2 Various courts in this district have rejected the position that a non-California choice of law 3 provision is unreasonable or fundamentally unfair simply because it does not provide for the 4 protection intended by Section 10110.6. See Moorhead v. Unum Life Ins. Co. of Am., No. 25-CV- 5 01826-HSG, 2026 WL 874398, at *3 (N.D. Cal. Mar. 30, 2026); Whitesell v. Liberty Life 6 Assurance Co. of Bos., 650 F. Supp. 3d 832, 836 (N.D. Cal. 2022); Ehrlich v. Hartford Life & Acc. 7 Ins. Co., No. 20-cv-02284-JST, 2021 WL 4472845, at *7-8 (N.D. Cal. May 7, 2021). These 8 courts, instead, enforced choice of law provisions selecting non-California law and did not void 9 provisions providing for discretionary review of benefits decisions. There is no persuasive reason 10 to break from those cases.2 11 Here, North Carolina choice of law is fair and reasonable for similar reasons as in those 12 cases. Lowe’s is headquartered in North Carolina with hundreds of thousands of employees in 13 states across the country, and so uniform application of North Carolina law to each dispute arising 14 under the LTD policy is reasonable. See Moorhead, No. 25-CV-01826-HSG at *3. Accordingly, 15 the North Carolina Provision is enforceable as a choice of law provision, and the Discretionary 16 Review Provisions are not voided by Section 10110.6. 17 V. CONCLUSION 18 For the foregoing reasons, the choice of law to be applied is North Carolina and the 19 standard of review is abuse of discretion. Defendant’s motion is granted. 20 21 22 23
24 2 Rapolla v. Waste Mgmt. Emp. Benefits Plan, No. 13-CV-02860-JST, 2014 WL 2918863 (N.D. 25 Cal. June 25, 2014) is a case that went the other way on this issue, and on which two other cases relied, Snyder v. Unum Life Ins. Co. of America, Case No. CV–13–07522 BRO RZX, 2014 WL 26 7734715, at *10–11 (C.D.Cal. Oct. 28, 2014) and Hirschkron v. Principal Life Ins. Co., 141 F. Supp. 3d 1028, 1031 (N.D. Cal. 2015). However, the Rapolla court repudiated the Rapolla 27 decision in Ehrlich, saying it erred in Rapolla by failing to conduct a choice of law analysis and engage with the Ninth Circuit’s instruction in Wang. Rapolla, No. 20-cv-02284-JST at *7 n. 8. 1 IT IS SO ORDERED. 2 3 Dated: May 8, 2026 4 CHARD SEEBORG 5 Chief United States District Judge 6 7 8 9 10 11 a 12
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