INTRODUCTION: THE NINTH CIRCUIT AND ACCIDENTAL DEATH AND DISMEMBERMENT CLAIMS UNDER ERISA

When it comes to federal law in the western United States, few courts carry as much weight as the U.S. Court of Appeals for the Ninth Circuit. Headquartered in San Francisco, the Ninth Circuit is the largest of the thirteen federal appellate courts, covering nine western states and two Pacific Island jurisdictions — including California, Arizona, Nevada, Oregon, Washington, Alaska, Hawaii, Idaho, Montana, Guam, and the Northern Mariana Islands.

This court hears appeals from federal district courts within its jurisdiction and reviews decisions in a wide range of legal areas — from constitutional law and civil rights to environmental regulation, immigration, intellectual property, and ERISA benefits litigation. Because it covers such a vast and diverse population — over 60 million people — and because California generates a high volume of federal litigation, the Ninth Circuit’s rulings often have national influence.

Thus, the Ninth Circuit’s decisions frequently shape legal precedent well beyond its boundaries, especially when the U.S. Supreme Court declines to hear further appeals. Whether you are a lawyer navigating a complex ERISA claim or a litigant challenging a federal regulation, understanding how the Ninth Circuit interprets the law is critical — because what happens in the Ninth often sets the tone for what happens across the country.

ERISA governs most employer-sponsored benefit plans, including accidental death and dismemberment (AD&D) policies, which provide critical financial protection in the event of unforeseen injury or death. An issue that commonly arises in the AD&D claims process is whether a particular death qualifies as an “accident” under a given policy. This can be one of the most contentious issues in ERISA litigation and understanding how federal courts approach the definition of “accident” is crucial for successfully navigating AD&D benefit disputes.

WHAT CONSTITUTES AN “ACCIDENT”?

Generally, AD&D policies define “accident” as “an unintended or unforeseen bodily

injury sustained by a covered person, wholly independent of disease, bodily infirmity, illness, infection, or any other abnormal physical condition.” The Ninth Circuit has endorsed the widely accepted analytical framework for determining whether an event constitutes an “accident” under ERISA-governed AD&D policies as established by the First Circuit in Wickman v. Northwestern National Insurance Co., 908 F.2d 1077 (1st Cir. 1990). This framework involves an overlapping subjective and objective inquiry that examines both the decedent’s perspective and the circumstances surrounding the death from an objective standpoint. In Wickman, the decedent had climbed over the guardrail of a bridge and hung off the bridge with one hand, then fell and sustained extensive injuries from which he later died. It was unclear whether he intentionally let go of the bridge or if his hand slipped when he fell. The First Circuit Court of Appeals determined that the death was not an accident. The First Circuit concluded in Wickman that the decedent either subjectively expected serious injury, or his subjective expectation was inconclusive based on the evidence; objectively, a reasonable person in his shoes would have expected to die or be seriously injured when climbing over the guardrail and hanging off the bridge with one hand.

The Ninth Circuit established precedent for how courts should approach accident determinations in Padfield v. AIG Life Ins. Co., 290 F.3d 1121 (9th Cir. 2002). The decedent in Padfield died due to autoerotic asphyxiation and it was not apparent that he had intentionally killed himself; the court found that the death was accidental and held that injury sustained during a voluntary risky act is not necessarily “intentionally self-inflicted injury.”

A critical threshold issue in any AD&D case is whether the policy in question defines the term “accident.” Most policies provide a definition of the term “accident” exactly the same or similar to the definition discussed above. When policies contain specific definitions, courts apply only those policy-specific definitions rather than general common law interpretations, so this framework depends significantly on whether the policy itself provides a specific definition of “accident.” This principle reflects the fundamental contract law concept that parties’ express agreements should govern their relationship. Conversely, where the policy does not define “accident,” courts resort to the general federal common law definition developed through cases like Wickman and Padfield.

Although “accident” has been consistently described by courts as an inherently vague concept that is difficult to define, courts have recognized that the meaning of “accident” in insurance contracts must be that of the average person, who would characterize a dire result that is tragically out of proportion to its trivial cause as something unforeseen, unexpected, extraordinary, and an unlooked-for mishap. This test, derived from common speech and understanding, serves as the foundational approach that courts apply when interpreting undefined accident provisions.

EXCLUSIONS IN AD&D POLICIES

Exclusions also play a significant role in determining whether a claim is covered under an AD&D policy. One common exclusion is for losses caused or contributed to by illness or pre-existing conditions.

Perhaps the seminal case discussing the issue of whether this very common and important exclusion applies is Dowdy v. Metro. Life Ins. Co., 890 F.3d 802 (9th Cir. 2018), in which the Ninth Circuit instructed on use of the “substantial causation” test to determine whether a policy exclusion can serve as the basis for denying a claim.

In 2014, Tommy Dowdy, a 60-year-old diabetic, was involved in a serious automobile accident on California State Route 4 when he lost control of his vehicle. The accident resulted in severe injuries, including a semi-amputated left ankle and chest abrasions. Dowdy was transported by helicopter to John Muir Medical Center and treated in the Intensive Care Unit.

Dowdy remained hospitalized until October 11, 2014, and was discharged to a skilled nursing facility as non-weightbearing due to his leg injury. The injury failed to improve, and approximately three months later, he was transferred back to the hospital for treatment of persistent infection issues. On February 13, 2015, Dr. Christopher Coufal amputated Dowdy’s left leg below the knee.

The Dowdys had purchased accidental death and dismemberment insurance from Metropolitan Life Insurance Company (MetLife) through Mrs. Dowdy’s employment at Bank of the West. The policy provided coverage if the insured sustained an accidental injury that is the direct and sole cause of a covered loss.  The policy defined direct and sole cause to mean that the covered loss occurs within 12 months of the date of the accidental injury and was a direct result of the accidental injury, independent of other causes.

The policy contained an illness or infirmity exclusion stating that MetLife would not issue benefits for any loss caused or contributed to by physical illness or infirmity, or the diagnosis or treatment of such illness or infirmity. MetLife denied the Dowdys’ claim, citing this exclusion and arguing that Dowdy’s diabetes contributed to the need for amputation.  Dowdy sued MetLife.  At a FRCP 52 hearing, the trial court agreed and entered judgment in favor of MetLife.

The Ninth Circuit reversed the district court’s decision, holding that the substantial contribution standard applies in interpreting the concepts of cause and contribution in illness or infirmity exclusions. The court explained that the Illness or Infirmity Exclusion serves the same purpose as the threshold limitation on coverage to accidental injury that is the “direct and sole cause” of a covered loss.  Accordingly, to satisfy the exclusion, any cause or contribution by an illness or infirmity must be substantial.

The court emphasized that for a court to distinguish between a responsible cause and a philosophic insignificant cause, there must be some evidence of a significant magnitude of causation. Such evidence need not be presented with mathematical precision but must nonetheless demonstrate that a causal or contributing factor was more than merely related to the injury and was instead a substantial catalyst.

The Ninth Circuit provided important guidance on the meaning of “substantial” in the causation context. The court stated: the word “substantial” is used to denote the fact that the defendant’s conduct has such an effect in producing the harm as to lead reasonable men to regard it as a cause.  Applying this standard to the facts, the court found that the record fell short of showing that diabetes was a substantial contributing factor. The court held that diabetes was a complicating factor, but it was not identified as a substantial contributor to the ultimate loss.

The Ninth Circuit emphasized that MetLife had the burden of proving that the exclusion applied. The court stated that under general principles of insurance law, exclusions are construed narrowly and that under ERISA, exclusionary clauses are given strict construction and should be read narrowly rather than expansively.

The Dowdy decision significantly impacts the interpretation of exclusionary clauses in ERISA-governed insurance policies. The ruling establishes that illness or infirmity exclusions must be interpreted using the substantial causation standard, requiring more than mere contribution or complication.

Another exclusion often found in AD&D policies is for self-inflicted injuries or suicide. Courts have consistently held that such exclusions are enforceable, provided they are clearly stated in the policy. Some policies also exclude coverage for injuries or deaths resulting from infections unless the infection occurs in an external accidental wound. Insurers bear the burden of proving that an exclusion applies to deny benefits. Claimants should carefully review their policy language and gather evidence to support their claim, particularly when exclusions or pre-existing conditions are at issue.

CONCLUSION

Navigating the complexities of AD&D policies under ERISA requires a thorough understanding of the policy language, applicable exclusions, and legal standards. The Ninth Circuit’s decisions provide valuable guidance on how courts interpret these policies, emphasizing the importance of clear and unambiguous terms. For policyholders, understanding the definitions and exclusions in their AD&D policies is crucial. By understanding what constitutes an accident and the potential exclusions, policyholders can better protect their rights and ensure they receive the benefits they are entitled to under their AD&D coverage.