HILLMAN, District Judge.
Plaintiff, Gail A. Connor, seeks reinstatement of her long term disability benefits from Defendant PNC Corp. & Affiliates Long Term Disability Plan (hereinafter "Defendant"). The long term disability plan at issue is an employee welfare benefit plan governed by the Employee Retirement Income Security Act (hereinafter "ERISA"), 29 U.S.C. § 1001 et seq. The Court is called upon to determine whether the denial of Plaintiff's long term disability benefits was arbitrary and capricious, and, therefore, unlawful pursuant to 29 U.S.C. § 1132(a)(1)(B). Plaintiff moves for summary judgment [Doc. 23] and Defendant cross-moves for summary judgment
Plaintiff brought his claims pursuant to ERISA and this Court has jurisdiction over her claims under 28 U.S.C. § 1331 and 29 U.S.C. § 1132(d)(e) & (f).
Plaintiff, Gail A. Connor, worked for PNC Bank Corp.
The Plan identified PNC as the Plan Administrator, and gave it discretionary authority to interpret the terms of the Plan and administer benefits. In addition, the Plan contained a provision that permitted the Plan Administrator to "appoint or employ individuals or firms to assist in the administration of the Plan ...". Plan, Doc. 30, Exhibit 4 at AR 344. Pursuant to this provision, PNC entered into an Administrative Services Agreement with a third party company, Sedgwick Claims Management Services, Inc. (hereinafter
On or about January 17, 2007, more than ninety (90) days after her last day of active employment, Plaintiff filed her application for LTD benefits with Sedgwick.
As further evidence of Plaintiff's disability, Dr. Burnstein submitted to Sedgwick a letter he sent to her primary care physician. In this letter, he concluded Plaintiff has rhupus
On March 15, 2007, Sedgwick informed Plaintiff that her "[m]edical information indicates" she is "unable to continue" her
Several months later, on November 21, 2007, Sedgwick informed Plaintiff that "based upon a lack of current treatment information on file supportive of continuing total disability" her "claim for Long Term Disability benefits was formally suspended."
Dr. Burnstein's March 5, 2007 records indicated Plaintiff complained of morning stiffness, headaches, fatigue and some nausea. Her physical examination revealed some warmth, swelling and tenderness in the joints of her hands and feet. Dr. Burnstein's records, however, did not note any limitations on Plaintiff's ability to stand, sit or walk, nor did he mention any other limitations of Plaintiff.
The medical records from June 5, 2007 noted Plaintiff complained of fatigue, but admitted it was better with medication. Plaintiff failed to report any dizziness, numbness or weakness, and her physical examination did not reveal any pain or swelling. Dr. Burnstein's records did not indicate any limitations on Plaintiff's ability to stand, sit or walk, nor did he mention any other limitations of Plaintiff. The physician concluded that Plaintiff's rhupus was "stable" with methotrexate and plaquenil.
Plaintiff's August 23, 2007 medical records indicated she complained of fatigue. She, however, did not report any dizziness, headache, numbness or weakness to Dr. Burnstein, nor did his physical examination of her reveal any pain or swelling. The records also failed to note any limitations on Plaintiff's ability to stand, sit or walk.
Dr. Burnstein's October 9, 2007 medical records mentioned a rheumatoid arthritis "flare up" and that Plaintiff reported fatigue, morning stiffness, soreness in shoulders and that methotrexate was "not doing anything." Doc. 30, Exhibit 1 at AR 063.
Dr. Burnstein's November 2, 2007 medical records do not contain any noteworthy observations. On December 10, 2007, Sedgwick, after receipt of Dr. Burnstein's medical records, informed Plaintiff that it would reinstate her LTD benefits.
On February 6, 2008, Plaintiff forwarded Sedgwick medical records from her December 19, 2007 visit with Dr. Burnstein. These records indicated Plaintiff reported headaches and morning stiffness lasting approximately two hours. Dr. Burnstein's physical examination revealed some swelling in the joints of Plaintiff's hands and feet. Plaintiff also mentioned she experienced daily pain in the range of 6-7 on a scale of ten, but "feels better." Doc. 30, Exhibit 1 at AR 078. Dr. Burnstein's records did not discuss any limitations on Plaintiff's ability to stand, sit or walk, nor did he indicate any other limitations of Plaintiff.
On July 9, 2008 and again on August 6, 2008, Sedgwick reminded Plaintiff that the definition of "Total Disability" and "Totally Disabled" changes after benefits have been paid for twenty-four (24) months.
In response, Plaintiff submitted a Report of Disability dated July 30, 2008. This report indicated "no changes" in her condition. PNC LTD Report of Disability, Doc. 30, Exhibit 1 at AR 093. The submission to Sedgwick also contained a July 29, 2008 Report of Disability from Dr. Burnstein. This report indicated Plaintiff's objective symptoms of disability were "tender hand joints." LTD Report of Disability, Exhibit 1 at AR 095. Dr. Burnstein further noted that in an eight-hour workday, Plaintiff could sit, stand and walk for one hour and that her restricted actions included "lifting/carrying, use of hands in repetitive actions, use of feet in repetitive movements, reaching above shoulder level, bending, squatting [and] crawling." Id.
On September 10, 2008, Sedgwick again requested an update from Dr. Burnstein. Several days later, on September 18, 2008, Dr. Burnstein replied and essentially reiterated the same information he previously provided Sedgwick. According to Dr. Burnstein, Plaintiff has morning stiffness, cannot sit or stand for more than 1-2 hours a day, has arm stiffness, has restricted motion in joints and has difficulty with fine grasping and manipulation. He then expressed his doubt that Plaintiff could return to gainful employment. Dr. Burnstein also sent to Sedgwick the records from Plaintiff's June 23, 2008 office
Shortly after receiving Dr. Burnstein's report, Sedgwick contacted a third-party, Network Medical Review, to independently review Plaintiff's LTD claim. This company subsequently assigned physician Dennis Payne, Jr. M.D.
On October 24, 2008, Sedgwick informed Plaintiff that, as of September 30, 2008, she was no longer eligible to receive LTD benefits because she was no longer "Totally Disabled" under the terms of the Plan. The denial letter reiterated the findings of Dr. Payne's report and largely focused on his conclusion that Plaintiff lacked objective medical evidence of a disability.
Although Sedgwick's letter informed Plaintiff that she had a right to appeal within 180 days, it did not specifically inform her what type of evidence she must present on appeal to perfect her LTD claim.
Shortly after the receipt of Sedgwick's denial letter Plaintiff retained counsel. On January 16, 2009, Plaintiff's attorney appealed Sedgwick's October 24, 2008 decision. In addition to the appeal letter, Plaintiff submitted (1) a letter from Dr.
After receipt of Plaintiff's appeal, Sedgwick again contacted Network Medical Review to independently review her LTD benefits claim. The company assigned Dr. Tanya Lumpkins, M.D.
On March 6, 2009, Sedgwick upheld its denial of Plaintiff's appeal. Approximately one week later, on March 12, 2009, Plaintiff initiated this lawsuit. Over one year later Plaintiff moved for summary judgment. Shortly thereafter, Defendant filed its cross-motion for summary judgment.
Summary judgment is appropriate where the Court is satisfied that "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Celotex Corp. v. Catrett, 477 U.S. 317, 330, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Fed. R.Civ.P. 56(c).
An issue is "genuine" if it is supported by evidence such that a reasonable jury could return a verdict in the nonmoving party's favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A fact is "material" if, under the governing substantive law, a dispute about the fact might affect the outcome of the suit. Id. In considering a motion for summary judgment, a district court may not make credibility determinations or engage in any weighing of the evidence; instead, the nonmoving party's evidence "is to be believed and all justifiable inferences are to be drawn in his
Initially, the moving party has the burden of demonstrating the absence of a genuine issue of material fact. Celotex Corp., 477 U.S. at 323, 106 S.Ct. 2548. Once the moving party has met this burden, the nonmoving party must identify, by affidavits or otherwise, specific facts showing that there is a genuine issue for trial. Id. Thus, to withstand a properly supported motion for summary judgment, the nonmoving party must identify specific facts and affirmative evidence that contradict those offered by the moving party. Anderson, 477 U.S. at 256-57, 106 S.Ct. 2505. A party opposing summary judgment must do more than just rest upon mere allegations, general denials, or vague statements. Saldana v. Kmart Corp., 260 F.3d 228, 232 (3d Cir.2001).
Defendant contends summary judgment should be entered on its behalf because Plaintiff filed her initial claim for LTD benefits approximately eight days late. Thus, according to Defendant, she failed to timely file her claim, as required by the Plan. Plaintiff seemingly acknowledges her untimeliness. She argues, however, that because her failure to timely file the benefits claim never formed a basis for Sedgwick's denial of the claim, Defendant is barred from raising untimeliness as a post hoc justification for the denial of the LTD benefits. In response, Defendant postulates that, in an attempt to modify the terms of the Plan, Plaintiff's argument improperly raises principles of waiver and estoppel.
The Court disagrees with Defendant's characterization of the timeliness issue. Our role in the present matter is to determine whether Sedgwick abused its discretion and improperly denied Plaintiff's LTD benefits claim. To resolve this inquiry, the Court examines Sedgwick's rationale for denying the benefits claim, as evidenced by the administrative record and explained in its denial letters to Plaintiff. Although Defendant now attempts to raise a timeliness issue with Plaintiff's claim, Sedgwick never denied her claim on that basis. Rather, it was denied on substantive grounds entirely unrelated to timeliness. Furthermore, any concern over timeliness is absent from the administrative record and both of the denial letters sent to Plaintiff. See Haisley v. Sedgwick Claims Mgmt. Servs., Inc., 776 F.Supp.2d 33, 48, No. 08-1463, 2011 WL 818669, at *12 (W.D.Pa. March 2, 2011) (concluding that no finding of untimeliness was made by the plan administrator during the administrative proceedings, and therefore, defendant cannot now "turn around and rely on [untimeliness] as a basis for defeating" the ERISA claims).
The Court will not permit Defendant to utilize a timeliness argument now, at this stage of the litigation, as a post hoc rationalization for Sedgwick's denial of benefits. See Skretvedt v. E.I. DuPont de Nemours & Co., 268 F.3d 167, 178 n. 8 (3d Cir.2001) ("[I]t strikes us as problematic to ... allow the administrator to `shore up' a decision after-the-fact by testifying as to the `true' basis for the decision after the matter is in litigation, possible deficiencies in the decision are identified, and an attorney is consulted to defend the decision by developing creative post hoc arguments that can survive deferential review .... To depart from the administrative record in this fashion would, in our view, invite more terse and conclusory decisions from plan administrators, leaving room for them-or, worse yet, federal judges-to brainstorm and invent various proposed `rational bases' when their decisions are challenged in
ERISA provides that a plan participant or beneficiary may bring a suit "to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan." 29 U.S.C. § 1132(a)(1)(B). The statute, however, does not specify a standard of review for an action brought pursuant to § 1132(a)(1)(B). Mitchell v. Eastman Kodak Co., 113 F.3d 433, 437 (3d Cir.1997). The Supreme Court addressed this issue and opined that "a denial of benefits challenged under § 1132(a)(1)(B) is to be reviewed under a de novo standard unless the benefit plan gives the administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe the terms of the plan." Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989). When the plan affords the administrator with discretionary authority, courts must review the benefit decision for an abuse of discretion.
In the present matter, Plaintiff contends the abuse of discretion standard is inappropriate because PNC, the Plan Administrator, did not make the decision regarding Plaintiff's LTD benefits eligibility. Rather, a claims management company, Sedgwick, made the determination, and, according to Plaintiff, only decisions of the Plan Administrator are entitled to the deferential abuse of discretion standard of review. In response, Defendant opines that the Plan vests PNC with broad discretionary authority, including the ability to delegate that authority to a third party to assist with the review and administration of benefit claims. According to Defendant, PNC entered into an agreement that transferred its discretionary authority to Sedgwick. Plaintiff retorts that this agreement was contrary to the provisions of the Plan.
To determine the appropriate standard of review, the Court must first examine the language of the plan and ascertain whether it gives the plan administrator discretionary authority to decide eligibility benefits or interpret terms of the plan. See Firestone Tire & Rubber Co., 489 U.S. at 115, 109 S.Ct. 948; see also Luby v.
Plan, Doc. 30, Exhibit 3 at AR 343-44. This provision not only vested discretionary authority with PNC, but also identified it as the Plan Administrator.
Even though the Plan does not specifically identify Sedgwick or directly vest it with any discretionary authority, the Court may still review Sedgwick's decision under the abuse of discretion standard. Neither the Supreme Court nor the Third Circuit has ever limited the "deferential standard of review to [only] ERISA fiduciaries." Marx v. Meridian Bancorp, Inc., 32 Fed.Appx. 645, 650 (3d Cir.2002); Geddes v. United Staffing Alliance Employee Medical Plan, 469 F.3d 919, 925 (10th Cir.2006) (noting that the Supreme Court has "declined to limit how an ERISA plan administrator ... may exercise its discretionary authority"). In fact, ERISA explicitly permits a "named fiduciary", such as the plan administrator, to delegate its fiduciary responsibilities to a non-fiduciary. Marx, 32 Fed.Appx. at 650 (citing 29 U.S.C. 1105(c)(1) ("The instrument under which a plan is maintained may expressly provide for procedures ... for named fiduciaries to designate persons other than named fiduciaries to carry out fiduciary responsibilities ... under the plan")). In other words, "[o]nce a health plan administrator... has been delegated discretionary authority under the terms of the ERISA plan, nothing prevents that administrator from then delegating portions of its discretionary authority to non-fiduciary third parties." Geddes, 469 F.3d at 926; see Lee v. MBNA Long Term Disability & Benefit Plan, 136 Fed.Appx. 734, 742 (6th Cir.2005) ("It is well established that an
As a prerequisite for a plan administrator to assign its fiduciary responsibilities to a third party, the plan must authorize the delegation. See Geddes, 469 F.3d at 926 (noting it "is especially true" that a plan administrator may delegate its discretionary authority when "such delegation is explicitly authorized by the plan document"); see also Marx v. Meridian Bancorp, Inc. Long Term Disability Plan, No. 99-4484, 2001 WL 706280, at *3 (E.D.Pa. June 20, 2001), aff'd, 32 Fed.Appx. 645 (3d Cir.2002) (holding that the plan document authorized the plan administrator to delegate "the review of a denial of benefits" to a third party). However, the plan need not provide the specific details of the delegation. The responsibilities and duties of the assignee may be defined in other documentation, such as an administrative services agreement or a summary of plan description. See Marx, 2001 WL 706280, at *3, aff'd, 32 Fed.Appx. 645 (3d Cir.2002) (relying upon the details contained within the administrative services agreement to conclude that the plan administrator granted discretionary authority to a third party to adjudicate the disability claims for the plan); see also Costantino v. Washington Post Multi-Option Benefits Plan, 404 F.Supp.2d 31, 39-41 (D.D.C.2005) (relying upon the details contained within the summary of plan description to conclude that the plan administrator granted discretionary authority to a third party to adjudicate the disability claims for the plan).
In the present matter, Plaintiff's primary contention is that the Plan did not permit PNC to delegate its discretionary authority to Sedgwick. According to Plaintiff, the Plan only bestowed the authority upon PNC to appoint a third party to assist with the administration of the Plan. Although the Plan does not specifically utilize the term "delegate," there are no "magic words" for delegation. See Marx, 32 Fed.Appx. at 649 (quoting Luby, 944 F.2d at 1180, (quoting de Nobel v. Vitro Corp., 885 F.2d 1180, 1187 (4th Cir. 1989)) (noting that with respect to discretionary authority, "no `magic words' ... need by expressly stated in order for the plan to accord the administrator discretion to interpret plan terms ... so long as the plan on its face clearly grants such discretion")). Furthermore, a reasonable interpretation of the term `assist' permits delegation. `Assist' is a very broad term. If a plan administrator delegates to a third party its discretionary authority to adjudicate disability claims, that third party, in turn, assists the plan administrator. Consequently, `delegate' and `assist' are not mutually exclusive. The Court, therefore, concludes that the Plan, specifically Section V(3)(a)(6), permitted Defendant to delegate its discretionary authority to Sedgwick.
This interpretation of the Plan is further buttressed by the Service Agreement. Attachment B of the Service Agreement outlined in substantial detail the responsibilities of Sedgwick. These responsibilities included, for example, "claims administration for any employee applying for LTD" and the "determination of eligibility for benefit on all LTD claims." Service Agreement with Sedgwick Claims Management
Under the abuse of discretion standard of review, "the Court's role is not to interpret ambiguous provisions de novo, but rather to `analyze whether the plan administrator's interpretation of the document is reasonable.'" Brunswick Surgical Ctr., L.L.C. v. CIGNA Healthcare, No. 09-5857, 2010 WL 3283541, at *14 (D.N.J. Aug. 18, 2010) (quoting Bill Gray Enters. Inc. Employee Health and Welfare Plan v. Gourley, 248 F.3d 206, 218 (3d Cir.2001)). A decision is considered arbitrary and capricious "if it is without reason, unsupported by substantial evidence or erroneous as a matter of law." Abnathya v. Hoffmann-La Roche, Inc., 2 F.3d 40, 45 (3d Cir.1993). To determine whether a plan administrator abused its discretion, the Court must focus "on how the administrator treated the particular claimant." Miller v. Am. Airlines, Inc., 632 F.3d 837, 845 (3d Cir. 2011) (quoting Post v. Hartford Ins. Co., 501 F.3d 154, 162 (3d Cir.2007)). "Specifically, in considering the process that the administrator used in denying benefits, we have considered numerous irregularities to determine whether ... the administrator has given the court reason to doubt its fiduciary neutrality." Id. (internal quotations omitted). This is accomplished "by taking account of several different, often case-specific, factors, reaching a result by weighing all together." Id. (quoting Metropolitan Life Ins. Co. v. Glenn, 554 U.S. 105, 117, 128 S.Ct. 2343, 171 L.Ed.2d 299 (2008)). The scope of our review, however, "is narrow, and the court is not free to substitute its own judgment for that of the plan administrator in determining eligibility for plan benefits." Cardiology Consultants of North Morris v. UFCW Local 464A Health Reimbursement Welfare Fund, No. 06-5557, 2007 WL 4570160, at *2 (D.N.J. Dec. 21, 2007). In other words, the plaintiff retains the burden to prove that he is entitled to benefits, and that the plan administrator's decision was arbitrary and capricious.
Section 502(a)(1)(B) of ERISA permits a participant to file suit to recover benefits due under the terms of the plan. 29 U.S.C. § 1132(a)(1)(B). Plaintiff asserts that Sedgwick's termination of her LTD benefits was arbitrary and capricious because Sedgwick (1) failed to comply with ERISA's notice provisions, (2) resorted to `cherry picking' to affirm its decision, (3) failed to consider the decision of the SSA granting Plaintiff disability benefits, (4) failed to consider the side effects of Plaintiff's prescription medication and Dr. Burnstein's diagnosis of rhupus, (5) had no reasonable basis to conclude Plaintiff was no longer disabled, (6) required Plaintiff to prove her disability by objective evidence and (7) unreasonably relied on the biased opinions of Drs. Payne and Lumpkins. The Court will address each of Plaintiff's objections independently and in turn.
Section 503(1) of ERISA requires, in pertinent part, that a plan administrator, upon denying a benefits claim, must furnish the claimant with "adequate notice in writing ... setting forth the specific reasons for such denial, written in a manner calculated to be understood by the
Presently, Plaintiff alleges that Sedgwick's termination letter failed to properly advise her on what precise information she must provide to prove her claim. In response, Defendant contends Sedgwick complied with ERISA's notice requirements. The Court disagrees. Sedgwick's October 24, 2008 denial letter does not satisfy the requirements of 29 C.F.R. § 2560.503-1(g)(1)(iii). Not only does the letter fail to specifically advise Plaintiff how she may perfect her claim, but it also neglects to adequately explain why such information is necessary.
Sedgwick's denial letter informed Plaintiff that her "medical information ... does not contain sufficient findings subjectively or objectively that would support total disability" from her occupation. Doc. 30, Exhibit 2, AR 137. Although this statement implies that the information Plaintiff provided was insufficient to establish her disability, it does not explain what evidence she must submit to prove her disability or express why this additional information is necessary. See DellaValle v. The Prudential Ins. Co. of Am., No. 05-273, 2006 WL 83449, at *8 (E.D.Pa. Jan. 10, 2006) (finding that the general statement that medical information in the file does not establish disability does not comply with 29 C.F.R. § 2560.503-1(g)(1)(iii)). Furthermore, the information Sedgwick provided was not "precise." At best, it required Plaintiff to "read between the lines" and discern, without any guidance, the quantity, type or detail of the information she must provide Sedgwick.
Compliance with the requirements of § 2560.503-1(g)(1)(iii) is even more critical because of the unique facts of this case. Sedgwick terminated Plaintiff's LTD benefits because her "medical information ... does not contain sufficient findings subjectively or objectively that would support total disability" from her occupation. Doc. 30, Exhibit 2 at AR 137. Although the reasonable inference from the aforementioned statement is that Plaintiff must provide further objective evidence of disability, the specific facts of this case render it difficult for her to determine how to proceed to perfect her claim. In support of her initial LTD benefits claim, Plaintiff submitted medical documentation from Dr. Burnstein. This documentation included both objective and subjective evidence of Plaintiff's disability.
Without further guidance, it was impossible for Plaintiff to know exactly what type of objective evidence Sedgwick required her to submit so she could perfect her claim. As the above-mentioned facts indicate, Sedgwick initially accepted Plaintiff's evidence of her disability. Then, approximately one year later, it found essentially the same evidence insufficient. Such a decision, without giving any specific indication of what objective evidence Plaintiff must provide, violates § 2560.503-1(g)(iii) because it makes it difficult, if not impossible, for Plaintiff to understand or challenge Sedgwick's termination decision. Plaintiff is left at a loss to comprehend why essentially the same evidence that was originally sufficient to support her claim was now deficient. Without any type of guidance or explanation, Plaintiff could not have possibly ascertained what constituted acceptable evidence.
"An administrator's failure to address all relevant diagnoses in terminating a claimant's benefits ... suggests the decision may have been arbitrary and capricious." Miller, 632 F.3d at 853. "It follows that if a reviewing court errs by failing to address a plaintiff's multiple conditions, the court should give little deference to a plan administrator's decision which also fails to take multiple conditions into account." Kosiba v. Merck & Co., No. 98-3571, 2011 WL 843927, at *13 (D.N.J. March 7, 2011).
In the present matter, Sedgwick's termination letters did not include any reference to why it discredited Dr. Burnstein's rhupus diagnosis. Therefore, the Court must examine whether the independent medical physicians' reports sufficiently scrutinized the diagnosis. See Miller, 632 F.3d at 853. After review of Drs. Payne and Lumpkins' reports, the Court concludes Sedgwick failed to adequately address Plaintiff's rhupus diagnosis.
With respect to Dr. Payne's report, he noted that Plaintiff had no objective signs of systemic lupus other than a positive ANA. In his review of her medical records, he noted the absence of any evidence of weakness, atrophy or synovitis and joint damages or destruction. Based upon these findings, he concluded Plaintiff's symptoms were "not consistent with a connective tissue process." Doc. 30, Exhibit 2 at AR 128-29. Notably absent from his findings, however, was any discussion of whether Plaintiff suffered from rhupus.
Albeit more comprehensive than Dr. Payne's report, Dr. Lumpkins's report was equally deficient. Although she mentioned Dr. Burnstein's rhupus diagnosis, she did not explain or elaborate upon it or his findings. Her only references to rhupus were in the context of describing the contents of Dr. Burnstein's medical records and diagnoses. See Miller, 632 F.3d at 855 (holding that a mere reference to a diagnosis without further explanation
Notably, Dr. Lumpkins's conclusions were specifically limited to the lupus and rheumatoid arthritis portions of Dr. Burnstein's diagnosis. In other words, she analyzed whether the medical evidence indicated that Plaintiff was disabled because of lupus or rheumatoid arthritis, not some combination of the two. Dr. Burnstein's diagnosis, however, was that Plaintiff suffered from rhupus, mild cases of both lupus and rheumatoid arthritis, and it was the combination of these two diseases which caused the severity of Plaintiff's disability. Dr. Lumpkins's analysis was deficient because she failed to consider whether the combined effect of lupus and rheumatoid arthritis was severe enough to prevent Plaintiff from employment as branch manager III. Instead, Dr. Lumpkins only addressed each disease separately and independently. A line in her report glaringly highlights this error. When demonstrating why the medical records failed to substantiate Plaintiff's disability, Dr. Lumpkins utilized the term "or" to indicate that Plaintiff's "systemic lupus erythematosus
An award of social security disability (hereinafter "SSD") benefits by the SSA "may be considered as a factor in evaluating whether a plan administrator has acted arbitrarily and capriciously in
Even though a plan administrator is not required to adhere to an award of SSD benefits, it is also not free to entirely ignore the SSA's determination of benefits. "[I]f the plan administrator (1) encourages the applicant to apply for SSD payments; (2) financially benefits from the applicant's receipt of Social Security; and then (3) fails to explain why it is taking a position different from the SSA on the question of disability, the reviewing court should weigh this in favor of a finding that the decision was arbitrary and capricious." Kosiba, 2011 WL 843927 at *18 (quoting Curry v. Eaton Corp., 400 Fed.Appx. 51, 68 (6th Cir.2010) (quoting Bennett v. Kemper Nat'l Servs., Inc., 514 F.3d 547, 553 (6th Cir.2008))); see Glenn, 554 U.S. at 118, 128 S.Ct. 2343 (remarking that the plan administrator's failure to address the SSA's award of benefits "suggested procedural unreasonableness" when the plan administrator encouraged the claimant to seek SSD benefits).
In the present matter, as a condition of her continued receipt of LTD benefits, Sedgwick required Plaintiff to apply for SSD payments.
With respect to the third factor, the Court reiterates that Sedgwick need not adhere to the decision of the SSA, it must only explain why it did not follow the administration's decision. However, neither Sedgwick's denial letters nor anywhere in the administrative record, did it review, consider or address the SSA's decision. In Sedgwick's defense, Defendant argues that Sedgwick reviewed Plaintiff's entire administrative file, which included the decision by the SSA. This contention is insufficient.
The Third Circuit has held that "[a]n administrator's reversal of its decision to award a claimant benefits without receiving any new medical information to support this change in position is an irregularity that counsels towards finding an abuse of discretion." Miller, 632 F.3d at 848; see Pinto v. Reliance Standard Life Ins. Co., 214 F.3d 377, 393 (3d Cir.2000), overuled on other grounds by Glenn, 554 U.S. 105, 128 S.Ct. 2343 (2008) (noting that "[i]nconsistent treatment" of "the same facts" should be viewed with "suspicion"). This ruling, of course, does not prohibit a plan administrator from ever terminating benefits. Miller, 632 F.3d at 849. Rather, it requires that any decision to terminate benefits be based on additional medical evidence not originally reviewed. See Hoch v. Hartford Life & Acc. Ins. Co., No. 08-4805, 2009 WL 1162823, at *17 (E.D.Pa. Apr. 29, 2009) (finding that the plan administrator's decision to terminate benefits was not arbitrary and capricious when the reversal occurred after "the test changed from own-occupation to any-occupation"). In determining whether benefits were improperly terminated, courts must "focus on the events that occurred between the conclusion that benefits were owing [sic] and the decision to terminate them." McOsker v. Paul Revere Life Ins. Co., 279 F.3d 586, 590 (8th Cir.2002).
In a letter dated March 15, 2007, Sedgwick informed Plaintiff that her application for LTD benefits was approved because "[m]edical information indicates" that, as a result of lupus, she cannot continue her employment. Doc. 30, Exhibit 3 at AR 277. At this time, Plaintiff was also told that her continued receipt of benefits was conditioned on her ongoing ability to meet the Plan's definition of "Total Disability" and that "[o]n a periodic basis" Sedgwick would request "information from you and your attending physicians" to "verify your ongoing eligibility for benefits." Id. at 278. On November 21, 2007, Sedgwick informed Plaintiff that it "formally suspended" her claim due to "a lack of current treatment information on file supportive of continuing total disability." Id. at 243. In response, Plaintiff submitted medical records from Dr. Burnstein that were
Several months later, in July and August 2008, in preparation for the change of Plaintiff's LTD eligibility from "regular occupation" to the more broad "any occupation", Sedgwick again requested additional medical information from Plaintiff documenting her disability. Dr. Burnstein again submitted medical documentation that was essentially identical to the evidence submitted in response to Sedgwick's November 21, 2007 inquiry. Apparently unsatisfied that the evidence it received sufficiently supported her continued disability, Sedgwick, on October 24, 2008, concluded Plaintiff was no longer "eligible for continued LTD benefits." Doc. 30, Exhibit 2 at AR 135.
Plaintiff claims Sedgwick, without receipt of any new medical evidence, arbitrarily and capriciously reversed its prior decision awarding her benefits. This contention is correct.
As a result, the information Sedgwick relied on to terminate Plaintiff's LTD benefits was the same type of documentation it utilized to support a disability finding in March 2007 and again in December 2007 as justification of the reinstatement of her benefits. Consequently, because Dr. Burnstein's records did not differ in any material aspect, his subsequent submissions did not provide Sedgwick with any new medical information. The records
Neither can Defendant claim that the reports of Drs. Payne and Lumpkins constituted new medical information. These reports were not new information because neither doctor physically examined Plaintiff, conducted any tests on her or even spoke with Dr. Burnstein about her condition. Rather, to reach their conclusions that Plaintiff was not disabled, both physicians merely reviewed the medical files of Dr. Burnstein and Plaintiff's submissions.
Plaintiff opines that Sedgwick improperly dismissed her LTD claim on the basis that she did not provide any objective evidence of the severity of her disability. According to Plaintiff, Sedgwick's actions were improper because the Plan does not require her to prove her disability or its severity with objective evidence. Courts in this district, however, have held that "[b]ecause a reasonable person could find... objective evidence helpful in establishing a standard measurement of the extent or severity of a claimant's symptoms and disability ... requiring such evidence was not arbitrary and capricious." Kao, 647 F.Supp.2d at 413 (quoting Sarlo v. Broadspire Servs., Inc., 439 F.Supp.2d 345, 362 (D.N.J.2006) (citing Nichols v. Verizon Commc'ns, Inc., 78 Fed.Appx. 209, 212 (3d Cir.2003))). The Court is in agreement, and Plaintiff has not cited any case law to the contrary. Therefore, Sedgwick's decision to require objective evidence as proof of Plaintiff's disability and its severity was not unreasonable. The Court will weigh this factor in favor of upholding Sedgwick's determination.
Plaintiff contends Sedgwick unreasonably relied upon the biased opinions of Drs. Payne and Lumpkins to deny her LTD claim. According to Plaintiff, a conflict of interest existed between Sedgwick and Drs. Payne and Lumpkins because they received payment for their consulting services. Although Sedgwick did not directly pay the physicians, Plaintiff postulates
In support of this argument, Plaintiff relies upon Scotti v. Prudential Welfare Benefits Plan, No. 08-3339, 2009 WL 2243959, at *3 (D.N.J. July 23, 2009). In Scotti the district court acknowledged "[t]he mere fact that Defendants paid" independent medical consultants "for their medical expertise does not alone render their professional determinations irrational or without substantial evidentiary basis." Scotti v. Prudential Welfare Benefits Plan, No. 08-3339, 2009 WL 2243959, at *3 (D.N.J. July 23, 2009). The court, however, then concluded that the medical consultants "were not entirely disinterested arbiters" because they knew "that their client stood to gain by disputing Plaintiff's asserted medical condition." Id.
The Scotti decision on this point appears to turn on a lingering concern on the facts of that case of a conflict of interest in the decision making process despite certain structural safeguards. We do not discern any similar structural bias in this case, nor has Plaintiff argued that one exists.
Here, despite her assertions to the contrary, Plaintiff failed to provide any evidence that Drs. Payne and Lumpkins were biased or that they received more referrals from PNC or Network Medical Review as a result of their decisions.
Furthermore, as another court in this district noted, "it would be reasonable to assume that most, if not all, medical consults and reviewers used by ERISA plan administers ... are paid for their services." Zurawel v. Long Term Disability
"To decide whether an administrator's termination of benefits is arbitrary and capricious, we `determine lawfulness by taking account of several different, often case-specific, factors, reaching a result by weighing all together.'" Miller, 632 F.3d at 855 (quoting in part Glenn, 554 U.S. at 117, 128 S.Ct. 2343). Presently, the Court gives significant weight to its conclusion that Sedgwick reversed its initial decision that Plaintiff was disabled and terminated her benefits without receiving any additional medical evidence that differed from the evidence it previously considered. See Id. at 856 (giving this factor "significant weight"). Also significant was Sedgwick's failure to address Plaintiff's rhupus diagnosis and the decision of the SSA awarding Plaintiff SSD benefits. See Kosiba, 2011 WL 843927, at *20 (giving significant weight to the plan administrator's failure to address the plaintiff's diagnosis). The Court finds equally troubling Sedgwick's failure to comply with ERISA's notice requirements under § 503. See Miller, 632 F.3d at 856 (finding the plan administrator's noncompliance with ERISA's notice requirements as "troubling"). Finally, Sedgwick's reliance on the opinions of Drs. Payne and Lumpkins and its requirement that Plaintiff provide objective evidence weigh in favor of upholding Sedgwick's determination to terminate her LTD benefits.
Viewing these factors in their totality, however, the Court concludes Sedgwick's decision to deny benefits "was not the product of reasoned decision-making and substantial evidence." Id. Rather, the irregularities and errors gives the Court "reason to doubt [Sedgwick's] fiduciary neutrality." Id. (quoting Post, 501 F.3d at 165). The Court, therefore, concludes Sedgwick's improper termination of Plaintiff's benefits was an abuse of discretion.
Prior to the Third Circuit's decision in Miller, the remedy for an improper termination of LTD benefits claim under § 502(a)(1)(B) was unclear. Kosiba, 2011 WL 843927 at *21. In Miller, however, the Court opined that:
Miller, 632 F.3d at 856 (internal citations removed). Here, Sedgwick approved Plaintiff's LTD claim on March 15, 2007. Approximately a year and half later, it determined Plaintiff was no longer eligible for payments. As discussed above, based upon the totality of the facts, we concluded Sedgwick improperly terminated Plaintiff's LTD benefits. Since Plaintiff's benefits were unlawfully terminated, in order to return her to the status quo, the Court must retroactively reinstate her benefits from the date of her October 1, 2008 denial to January 8, 2009.
It would be inappropriate for the Court to retroactively reinstate Plaintiff's LTD benefits post January 8, 2009 because there is no evidence in the administrator record, nor has the plan administrator ever considered, whether Plaintiff's disability will preclude her from employment in a "gainful occupation for which ... she is reasonable fitted by training, education or experience." Therefore, the Court will remand this issue to the Plan Administrator for a determination of whether Plaintiff is entitled to LTD benefits with respect to the period postdating January 8, 2009.
In addition to its Cross-Motion for Summary Judgment, Defendant also filed two motions to seal [Docs. 31 & 34]. Defendant's first Motion seeks to Seal its memorandum in support of its Cross-Motion for Summary Judgment [Doc. 28], its Statement of Undisputed Material Facts in Support of its Motion [Doc. 29] and the administrative record, Exhibit A [Doc. 30]. Defendant's second Motion seeks to Seal its memorandum in Reply to Plaintiff's Opposition to Defendant's Motion for Summary Judgment [Doc. 35] and its Reply to Plaintiff's Response to Defendant's Statement of Undisputed Material Facts [Doc. 36].
Defendant contends that the aforementioned documents contain confidential information,
Local Rule 5.3(c) provides that in order to place a docket entry under seal, the motion to seal must be publicly filed and "shall describe (a) the nature of the materials or proceedings at issue, (b) the legitimate private or public interests which warrant the relief sought, (c) the clearly defined and serious injury that would result if the relief sought is not granted, and (d) why a less restrictive alternative to the relief sought is not available." L. Civ. R. 5.3(c).
After review of the documents Defendant seeks to seal, the Court concludes a less restrictive alternative is available— Defendant can file unsealed redacted copies. Therefore, Defendant shall, within 14 days of the Order accompanying this Opinion, file on the docket publicly accessible redacted versions of all materials it desires sealed. With respect to the redactions, Defendant shall not redact any of Plaintiff's medical records, financial information or specific documentation Sedgwick utilized or relied upon to conclude Plaintiff was not disabled.
For the reasons expressed above, Plaintiff's Motion for Summary Judgment [Doc. 23] will be granted in part and denied in part, Defendant's Cross-Motion for Summary Judgment [Doc. 27] will be denied and Defendant's Motions to Seal [Docs. 31 & 34] will be granted in part and denied in part.
An appropriate order will be entered.