Seventh Circuit Does Not Tolerate MetLife’s Refusal to Acknowledge Medical Evidence

Today, December 29, 2009, the Seventh Circuit remanded a case back to MetLife for further assessment of a short-term disability claim for failure to acknowledge objective evidence reported during the claimant’s Functional Capacity Evaluation (FCE), and other functional assessments from the claimant’s treating physician. Specifically, although the FCE examiner concluded the claimant could perform medium level work, he also noted that he was incapable of sitting or typing. The Court noted that in the past it held that both ignoring evidence in an FCE “out of hand” that a claimant was not capable of sitting, and ignoring a treating physician’s medical conclusions without explanation, was arbitrary and capricious. The Court also noted that ignoring key evidence in the case at bar was a failure to afford the Plaintiff a full and fair review. However, the Court declined to reverse MetLife’s disability claim determination and instead remanded the claim back to MetLife for additional review, noting that this was not a case where the only determination that MetLife could reasonably make is that the claimant is disabled. Majeski v. MetLife

Unum Wins Against HIV Fatigued Client

On December 16, 2009, a district court in Illinois ruled that Unum was not “downright unreasonable” in terminating an HIV claimant’s long-term disability benefits, despite reported fatigue, vision problems and diarrhea. The Court found that the Plaintiff was not disabled from being a product technician, which required great visual acuity for reading small parts, despite reported increased visual blurring and a recommendation by Plaintiff’s physician to see an ophthalmologist. The Plaintiff's job also involved frequent walking, lifting and math. The Court acknowledged that the conclusion of Unum’s Dr. Beecher that the Plaintiff could perform his regular occupation conflicted with that of his treating physician, but that reaching such decision “amid…conflicting medical evidence” should be left to the plan under the arbitrary and capricious standard of review. The Court found reasonable Unum’s conclusion that HIV was not causing the claimant’s fatigue since the HIV treatment was successful. The Court cited the Seventh Circuit’s prior note that, “the prognosis for individuals with HIV has improved since HIV was first reported in the United States in the early 1980s.” The Court also shot down the Plaintiff’s argument that Unum wrongfully dismissed his self-reported complaints by making a distinction between amount of fatigue, which it noted as subjective, and how much fatigue limits one’s functional capacity, which it stated could be objectively measured. Wallace v. Select Group Insurance Trust

Court Calls Unum Out on Empty FCE Findings and Failure to Consider Side Effects From Meds

On December 11, 2009, a district court out of Arkansas ordered Unum to reinstate a claimant’s long-term disability benefits that she had been receiving as a result of degenerative disc disease including arthritis and carpal tunnel syndrome. Although the Court reviewed Unum’s termination of benefits de novo as opposed to the more common arbitrary and capricious standard, it found that Unum’s “independent medical examination” (IME) report and other medical reviews it relied upon contained contradictory findings as well as lacked the benefit of claimant’s advanced diagnostics, and that its Functional Capacity Evaluation (FCE) reports failed to include the specific evidence for their conclusions and were result driven. The court recognized, for example, that an FCE report that found the claimant had more than sedentary capacity over an eight hour day, seemed to focus on the Plaintiff’s alleged self-limiting behavior rather than explain the testing and observations that supported such conclusion. The Court also importantly made the distinction between the ability to do some work, and the ability to work in a gainful occupation, i.e. an eight hour day or forty hour week. Last, the Court criticized Unum for “overlooking” Plaintiff’s medications when determining she was capable of gainful employment which included a narcotic, a muscle relaxer and anti-anxiety medication that would “drastically inhibit her ability to work” due to drowsiness. Lowery v. Unum

The Fifth Disagrees on Disability Administrator’s Bait and Switch Tactic

On December 16, 2009, the Fifth Circuit held that the failure of a disability claim administrator to provide its basis for denial on appeal during the initial adverse determination did not deprive the Plaintiff of a “full and fair review” or result in any significant non-compliance with ERISA that requires notice of the specific reason for denial. Specifically, the Court held that the reason provided on appeal, that the disability claimant was working part-time, simply added support to its initial denial rationale, that the claimant was capable of gainful employment, and did not reflect a new rationale. The dissent, however, held that by not disclosing the precise basis for its decision, the administrator did not give the claimant an opportunity to contest the merits on the administrative level, and that the majority deviated from the “substantial compliance” standard by ruling otherwise . Cooper v. Hewlett-Packard Co. Disability Plan

Arbitrary and Capricious Standard is Not a Rubber Stamp of the Administrator’s Decision

The Sixth Circuit, reversing a district court opinion, found that Zurich American Insurance Company abused its discretion in determining that the loss of a claimant’s leg in a motorcycle accident was not “accidental” simply because he was intoxicated, and that Zurich’s denial of benefits under the group “accidental death and dismemberment” (AD&D) policy was arbitrary and capricious. The Court rejected Zurich’s conclusion that the claimant’s intoxication amounted to a “self-inflicted wound” (an exclusion in the policy), and found that while the claimant intentionally drank in excess, he did not intentionally harm himself. The Court specifically noted that while drunk driving is ill-advised, there are many other activities that can also lead to car wrecks that would be considered “accidental”, and moral judgment should not influence interpretation of the policy provisions. The Court distinguished this case from the leading Sixth Circuit case that upheld the denial of benefits based on the much lower level of intoxication and less dramatic circumstances of the crash. Most importantly for ERISA claimants in general was the Sixth Circuit’s re-iteration that the arbitrary and capricious standard of review does not mandate the courts to simply rubber-stamp the administrator’s decision, but requires a review of the quality and quantity of the evidence on both sides of the issues. Kovach v. Zurich American Ins. Co.

News in the Ninth: Reflex Sympathetic Dystrophy

Today, December 16, 2009, where total disability was not in question, the Ninth Circuit affirmed a district court opinion that found that MetLife did not abuse its discretion by concluding that Reflex Sympathetic Dystrophy fell into the disability insurance policy’s limitation for "neuromusculoskeletal and soft tissue disorder" which limits the duration of disability benefits payable for such disorders to 24 months. Lydia Winz-Byone v. MetLife et. al.

Florida News: No Damages For Failure to Act in Participant's Best Interest

On December 14, 2009, the Middle District of Florida found that a plan administrator’s "apparent lack of understanding and concern with its obligations under ERISA as plan administrator" along with its failure “to act in the best interest of the participant” did not warrant an award of disability benefits. Larsen v. Airtran Airways. Specifically, Airtran’s failure to provide a Summary Plan Description to the claimant, while “negligent”, did not rise to the level of breach (also finding that a constructive trust over past-due benefits is not an available remedy for fiduciary breach under 502(a)(3)). Also, misleading information given to the claimant orally allegedly leading him to refrain from securing his own disability insurance coverage did not warrant relief under the common law claim of equitable estoppel, even with ambiguous plan terms, since intentional deception on the part of the Defendant was not present.