When applying de novo review to a claim for disability benefits under a group disability policy governed by the Employee Retirement Income Security Act of 1974 (ERISA), district courts must consider all the evidence and determine if a preponderance of that evidence establishes entitlement to benefits.

On November 4, 2016, the Ninth Circuit Court of Appeals issued an opinion in Avery Armani v. Northwestern Mutual Life Insurance Company in which the court did not change this standard but seemingly narrowed the focus of the district courts by imposing a bright line test that if a participant cannot sit for more than four hours a day, he or she cannot perform a sedentary occupation.

Summary of Facts

Armani was a full-time controller for the Renaissance Insurance Agency who injured his back while lifting a heavy backup power supply. He was diagnosed with a lumbar sprain, muscle spasms, and sciatica. His treating chiropractor instructed him not to sit continuously without the ability to change positions.

As a Renaissance employee, Armani was insured under a group long-term disability policy issued by Northwestern Mutual. Under the plan, participants were entitled to disability benefits for the first 24 months if they were unable to perform “with reasonable continuity the material duties of [their] own occupation.” After benefits had been paid for 24 months, participants needed to establish that they were “unable to perform with reasonable continuity the material duties of any gainful occupation for which [they were] reasonably fitted by education, training, and experience.”

The evidence before the district court included an attending physician’s statement indicating that Armani was limited to sitting for four hours, standing for two hours, and walking for two hours during an eight-hour workday. Northwestern Mutual’s vocational case manager confirmed that Armani’s occupation was classified as sedentary.

Based on a review of medical records obtained from Armani’s healthcare providers, Northwestern Mutual’s reviewing physician, Dr. John Hart, determined that Armani was capable of working in a sedentary position. Relying on Dr. Hart’s opinion, Northwestern Mutual identified three positions in addition to Armani’s own position that he could perform at a sedentary level. The company based its assessment on the U.S. Department of Labor’s Dictionary of Occupational Titles (DOT), which states that “[s]edentary work involves sitting most of the time, but may involve walking or standing for brief periods of time.”

Northwestern Mutual informed Armani that his claim was being closed because the records did not support a finding that he was entitled to disability benefits under either the “own occupation” or “any occupation” standards required by the plan. Armani appealed the decision.

In evaluating the appeal, Northwestern Mutual had Armani’s medical records reviewed by Dr. Hans Carlson, who also found that they did not support that Armani would be precluded from sedentary work. Dr. Carlson stated that “[i]t would be reasonable that [Armani] would have the ability to reposition from sitting to standing occasionally as needed.” Northwestern Mutual informed Armani that it was upholding its claim decision. 

The District Court’s Analysis

The district court concluded that Armani was disabled under the “own occupation” standard and awarded nine days of benefits at the end of the initial 24-month period. The district court also held that Armani failed to show by a preponderance of the evidence that he was disabled from “all occupations,” concluding that the administrative record contained “scant information regarding [Armani’s] condition during this period.” 

Armani argued that he was unable to perform any occupation classified as sedentary because, by definition, sedentary work required an ability to sit for six hours. The district court rejected this argument, holding that Northwestern Mutual was not bound by this definition, as it was drawn from the Social Security context, and ERISA and Social Security are vastly different. It also held that Armani had failed to demonstrate how his disability prevented him from performing any of the sedentary occupations identified by Northwestern.

The Ninth Circuit’s Opinion

The Ninth Circuit first recognized that “the claimant has the burden of proving by a preponderance of the evidence that he was disabled under the terms of the plan.” The court also found that the evidence before the district court “plainly showed that . . . every physician and chiropractor who treated Armani determined that he could not sit for more than four hours a day.”  

The Ninth Circuit then concluded that the district court had erred in rejecting Armani’s definition of “sedentary” work that was drawn from the Social Security context. The court based this conclusion in part on the fact that “other courts evaluating ERISA claims and interpreting the DOT have consistently held that an employee who cannot sit for more than four hours in an eight-hour workday cannot perform work classified as ‘sedentary.’” The court also found that “[s]ome of these courts have further noted that ‘sedentary work’ generally requires the ability to sit for at least six hours.” 

The court held that an employee who cannot sit for more than four hours in an eight-hour workday cannot perform sedentary work that requires sitting most of the time.  The court concluded that the district court erred in finding that Armani had not established that he could not perform the sedentary occupations identified by Northwestern Mutual because the undisputed evidence established that Armani was unable to sit for more than four hours a day.

Analysis

The only positive aspect of this opinion is the Ninth Circuit’s reliance on the Department of Labor’s Dictionary of Occupational Titles. This provides a basis to challenge the argument from the plaintiffs’ bar that the DOT is outdated.

It is troubling that the Ninth Circuit endorsed the application of standards applied under Social Security to matters governed by ERISA. This encourages continued efforts by the plaintiffs’ bar to expand the application of these standards to ERISA claims, which is rarely a good thing for plans or insurance carriers.

The more troubling aspect of this opinion is that it invites the district courts to apply a bright-line rule. The presentation of an ERISA matter before the district court generally involves arguing all the evidence in a persuasive fashion. The determination of whether a claimant can perform a sedentary job involves a variety of factors, including the ability to change positions. This determination is not conducive to a bright-line rule because all claims are in fact different and need to be decided on the weight of all the evidence in the administrative record. In the face of the simple argument by claimants that they cannot sit for more than 4 hours and therefore are entitled to benefits, it will be incumbent upon defendants to emphasize that all the evidence must be considered in applying the preponderance of the evidence standard.