Below are summaries of some of the more interesting / significant ERISA cases decided during the month of October. Please contact us if you would like further information on the cases or if you have any questions.
Long term disability; Conflict of interest; Burden of proof
Townsend v. Delta Family-Care Disability and Survivorship Plan, 2008 WL 4507571 (11th Cir. Oct. 8, 2008): In this long term disability case, the Eleventh Circuit upheld the district court's grant of summary judgment to the plan, employer and administrator finding the denial of benefits was not arbitrary or capricious. Significantly, because the Plan was funded through non-reversionary, periodic payments by the employer into a benefit trust and because the committee reviewing claims had no connection to the trust, the Court found there was no conflict of interest. In footnote 1 of the opinion, the Court rejected plaintiff's argument that the Supreme Court's recent decision in Glenn affected the standard of review, explaining that the same trust principles outlined in Firestone were applied by the Court under an arbitrary and capricious standard of review and, as such, Glenn did not alter that standard. Moreover, the Court noted that Glenn addressed only cases involving a conflict of interest and no conflict was found to exist here. With respect to the merits of the denial of benefits, the administrator's decision that the plaintiff was capable of at least part time sedentary work was based, at least in part, on a statement reportedly made by the plaintiff's treating physician during a telephone conversation with a medical director working for Aetna who made the first level benefit eligibility decisions. In response to the plaintiff's argument that the statement was never made or was misconstrued, the Court held that the claimant bears the burden to prove she is entitled to benefits, and any shortcomings in the record fell to her to correct. She had an opportunity to correct the record prior to the final review and did not. As such, the reviewing committee was entitled to rely on the information. The Court held that the committee was entitled to rely on a FCE conducted by a physical therapist, even if it conflicted with the opinions of the plaintiff's treating physicians. Finally, the Court held that the committee had no obligation to conduct a vocational assessment to identify jobs that the plaintiff would be able to perform, reiterating that the burden to prove her disability lay with plaintiff.
Long term disability; Lack of evidence in record
Bernardo v. American Airlines, Inc., 2008 WL 4657080 (5th Cir. Oct. 22, 2008): The Fifth Circuit vacated the district court's decision and remanded with instructions to enter judgment in favor of the plaintiff, ruling that the reviewing physicians did not adequately consider the opinions of plaintiff's treating physicians that she was disabled as a result of side effects from her medication. Plaintiff suffered from cataracts and had aplastic anemia, which was in remission at the time benefits were terminated. Her treating physicians, however, concluded that she was totally disabled due to cyclosporin A neurotoxicity. She was placed on cycolsporin A due to her aplastic anemia and thrombocytopenia, and the drug caused her to develop progressive systemic and neurologic symptoms that her physicians believed were disabling. The Court explained that this was not a situation in which the reviewing physician reached a different decision than the treating physicians, nor did evidence of the claimant's condition contradict the diagnosis of her treating physicians. Rather, there was an unexplained gap between the conclusions reached by the treating physicians and the reviewing physicians and there was no evidence that the reviewing physician considered the reports regarding cyclosporin A neurotoxicity except to speculate that it was not disabling. In short, because the plan administrator presented no evidence to contradict the treating physician's opinion that the claimant was disabled, the Court ruled that it abused its discretion in denying LTD benefits.
Long term disability; Lack of evidence in record; Own occupation
Schofield v. Metropolitan Life Ins. Co., 2008 WL 4750350 (9th Cir. Oct. 30, 2008): The Ninth Circuit reversed the district court's grant of summary judgment in favor of Metropolitan Life Ins. Co. and remanded for a determination of the amount of retroactive benefits and whether Schofield was entitled to attorney's fees and prejudgment interest. Schofield, a participant under a long term disability benefits plan, made a claim for benefits, was denied twice and, thereafter, filed suit in district court. The district court granted summary judgment for MetLife after it "credited the conclusion of the two independent medical reviewers over the conclusions of Schofield's physician." Schofield was a Certified Registered Nurse Anesthetist. The own occupation standard that applied to her claim required MetLife to determine whether she was able to earn more than 80% of her predisability earnings. MetLife argued that since it found that she could do her job, the 80% test was unnecessary. The Ninth Circuit found that under the terms of the plan, the 80% test had to be applied regardless of whether it may have been unnecessary. Further, the Court found that even if MetLife's argument [that the 80% test was unnecessary because it found she could do her job] was correct, it abused its discretion since its independent physician actually found that the plaintiff could not perform her own occupation.
Exhaustion of administrative remedies
Karpiel v. Ogg, Cordes, Murphy & Ingnelzi, 2008 WL 4721490 (3rd Cir. Oct. 28, 2008): In the underlying action, the district court granted summary judgment in favor of Defendant who allegedly refused to allow Karpiel to rollover, transfer or withdraw her funds held in their 401k plan, on the grounds that Karpiel failed to exhaust her administrative remedies. Karpiel filed a timely appeal. The Third Circuit vacated and remanded the judgment of the district court after finding that the defendant, as the moving party, did not satisfy their burden of proving Karpiel had failed to exhaust remedies. Specifically, while defendant stated that she failed to take the steps necessary to exhaust her remedies under the plan, it did not provide what those administrative remedies were. As a result, the decision of the district court was vacated and remanded for further proceedings.