This month’s Friday Five addresses a myriad of issues including whether returning to work post-injury automatically invalidates a disability claim, what information an administrator must provide before elevating the opinions of its own reviewing physicians over that of plaintiff’s treating physicians; and what information a court may consider in determining the reasonableness of a fee award.
1. Returning to work post-injury does not invalidate a disability claim automatically.
In Kaviani, a plaintiff-dentist was involved in an automobile accident in 2012. An MRI revealed disc bulging, herniation, and mild stenosis in certain of his vertebrae. Over the next three years the plaintiff was seen by an orthopedic surgeon for neck pain radiating to his shoulder, arms, hands, and fingers, weakness, numbness, tingling, and restless sleep. He was also treated by a neurologist for headaches with neck and back pain. Despite continued pain and related symptoms, he continued to practice dentistry until mid-2015 when he reported that his pain made it difficult for him to perform his job as a dentist without dropping his tools. In July 2015, he submitted his resignation and submitted a claim for LTD benefits, which was denied. He filed suit and the district court found in his favor. Reliance timely appealed.
The circuit court upheld the lower court’s decision on two bases. First, the court held that “disability is not disproved by the fact that a claimant continues to work.” According to the circuit court, the uncontroverted evidence showed that the plaintiff’s condition became progressively worse and that he was likely practicing dentistry in an unsafe manner. Reliance’s failure to consider this fact was arbitrary and capricious. Second, although Reliance was not required to give absolute deference to the findings in the plaintiff-submitted materials (FCE and IME reports and physician statements), it could not “willfully blind itself to the conflict in the evidence” and discount them “without a reasoned basis.” As but one example, both of the plaintiff’s physicians found that he suffered symptoms that would make it difficult for him to practice dentistry safely. According to the circuit court, Reliance’s failure to articulate how those doctors’ statements were flawed was arbitrary and capricious. Kaviani v. Reliance Standard Life Insurance Company, Civil No. No. 19-11798, 2020 WL 506551 (M.D. Fla. Jan. 31, 2020).
2. ERISA does not grant to a plan administrator “carte blanche” to adopt the opinions of its own reviewing physicians.
In Geraci, the plaintiff stated that she has a congenital form of dwarfism with degeneration of her vertebrae, stenosis, and hip pain. She explained that she was unable to keep up with the work pace and responsibilities of the job due to pain such as numerous falls, difficulty concentrating, inability to lift or carry a laptop or charts, climb a stool/stoop down to reach for charts, or sit in order to work on a chart. defendant initially approved her claim in the own occupation period, but denied it at the any occupation stage. The plaintiff appealed, but the denial was upheld. This lawsuit followed.
In finding for the plaintiff, the court relied in part on a discrepancy in the record. Specifically, the sitting limitation set forth by the defendant’s file examiner (and relied upon in making the disability determination) was different than that opined by the plaintiff’s treating physician. The former noted the need for changes in sitting after 1-2 hours with a 10-15 minute break, while the latter called for breaks while sitting during the 1-2 hours. The court held, "without analysis of whether this distinction makes a difference in the ability to perform sedentary work, [p]laintiff’s ability to perform such work is unknown. Accordingly, the [c]ourt cannot find that [d]efendant’s decision to terminate [p]laintiff’s long-term disability benefits is supported by substantial evidence." The case was remanded, with additional concerns regarding whether the plaintiff’s pain tolerance and her reliance on a cane for ambulation were properly considered in reaching a determination that she could perform sedentary work. Geraci v. Hartford Life & Accident Insurance Company, Civil Action No. 18-cv-2367, 2020 WL 511781, at *13 (N.D. Ohio Jan. 31, 2020).
3. Before issuing an adverse benefit determination, a plan must provide the claimant with new or additional evidence considered and a reasonable opportunity to respond.
In McConnell, the plaintiff filed a claim in 2009 for LTD benefits. The defendant and its predecessor paid benefits without interruption from 2009 to June 2018, when the defendant terminated benefits. After the plaintiff appealed the termination, the defendant obtained an independent medical review of his medical records and then rejected the appeal – based primarily on that review in February 2019, but without first disclosing to the plaintiff the reviewer’s report. This arguably ran afoul of 29 C.F.R. § 2560.503-1(h)(4)(i) (2019), which in essence, states that before a plan can issue an adverse benefit determination on review it must provide the claimant with new or additional evidence considered and provide a reasonable opportunity to respond. The defendant argued that subsection (h)(4)(i) did not apply to the plaintiff’s claim, citing prefatory language in the regulations. The court rejected this argument finding that the regulatory language made clear that subsection (h)(4)(i) applied in February 2019 (to a claim originally made in 2009). Notably, the court then went on to determine that the action will be governed by de novo review because the Eleventh Circuit Court of Appeals has not foreclosed de novo review under these circumstances. McConnell v. American General Life Insurance Company, Civil Action No. 19-0174-WS-MU, 2020 WL 292193 (S.D. Ala. Jan. 21, 2020).
4. A plaintiff’s documented limitations may not be dismissed as being "subjective exaggerations," where the individuals purporting to make that credibility determination did not meet or examine the claimant.
In Bruton, the plaintiff held a managerial job in the field of information technology when he began suffering from back and leg pain that he alleged prevented him from sitting for any extended period of time. He sought LTD benefit, but his claim was denied and a lawsuit followed. Although the district court found in favor of the plan administrator, the plaintiff appealed and the Sixth Circuit reversed, entering judgment in the plaintiff’s favor.
The court ruled in the plaintiff’s favor on two grounds. First, the court held that a claimant’s documented limitations may not simply be dismissed as being "subjective exaggerations," particularly where, as here, the individual purporting to make that credibility determination did not meet or examine the claimant. Although the defendant’s DRMS-affiliated medical professionals reviewed the plaintiff’s claim file and determined that the evidence was inconsistent with his reported amount of pain, the court found that there was no basis upon which to elevate the opinions of DRMS-affiliated practitioners who did not observe or physically assess the plaintiff over those of his treating practitioners. Second, the court rejected defendants' position that the plaintiff's failure to obtain certain recommended medical care, including a repeat MRI, meant that he was not in “regular attendance” of a physician, as required by the policy. In rejecting this position, the court explained that a "regular attendance" clause does not empower an administrator to micromanage a claimant’s medical care, instead, it exists merely to prevent malingering and fraud. The court entered judgment in favor of the plaintiff and directed the defendant to pay disability benefits through the full 24-month period, subject to any offset from SSDI. Bruton v. Am. United Life Ins. Corp., No. 19-3466, 2020 WL 398539, at *8 (6th Cir. Jan. 23, 2020).
5. When determining the "reasonableness" of an attorney’s fees award, a court may consider a plaintiff’s prior rejection of a voluntary remand offer.
In Gorbacheva, the circuit court addressed the “reasonableness” of the plaintiff’s fee award, which the district court awarded the plaintiff after she lost summary judgment. For context, in 2015, after reviewing the parties’ initial cross-motions for summary judgment, the district court remanded the plaintiff’s claim to the plan administrator to consider an FCE and a favorable SSDI award. At that time, the plaintiff filed a motion for attorneys’ fees, which the court denied without prejudice. On remand, the benefits claim was denied. The plaintiff reopened the action and the parties again filed cross-motions. Although the court granted the defendants’ motion for summary judgment, the plaintiff filed a renewed motion for attorneys’ fees seeking a six-figure award for time spent to incur the first order remanding the claim and preparing the fee motion. The court granted the plaintiff’s motion, finding that she had achieved some degree of success on the merits by obtaining a remand order. The court did reduce the requested amount by 10% to factor in that the plaintiff only achieved limited success, but it rejected the defendant’s argument that the hourly rate ($700) was excessive. This appealed followed.
To start, the circuit court agreed that by obtaining an initial remand, the plaintiff had satisfied her hurdle to request fees even if the district court did not ultimately agree that she was entitled to benefits. But, the court added, even if a party is entitled to recover fees under ERISA, those fees must be “reasonable.” On this point, the circuit court determined that the district court erred by rejecting evidence that the plaintiff had refused an early settlement offer to remand. Specifically, given that district court’s remand order was nearly identical to the settlement offer and contained no additional benefit, the circuit court concluded that the district court abused its discretion in finding “reasonableness” for those hours expended on the litigation after the plaintiff’s rejection of the offer. Accordingly, the circuit court reversed and entered a remand order to include only those fees incurred prior to the plaintiff’s rejection of the voluntary remand offer. Gorbacheva v. Abbott Laboratories Extended Disability Plan, Civil Action Nos. No. 18-15400, 18-16178, 2019 WL 6716022 (9th Cir. Dec. 10. 2019).
