White v. Eaton Corp Short

Filing 920090121

Opinion

UNPUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT

No. 07-2010

CHRIS WHITE, Plaintiff - Appellee, v. EATON CORPORATION SHORT TERM CORPORATION LONG TERM DISABILITY PLAN, DISABILITY PLAN; EATON

Defendants - Appellants.

Appeal from the United States District Court for the District of South Carolina, at Anderson. Henry F. Floyd, District Judge. (8:04-cv-01848-HFF)

Argued:

October 29, 2008

Decided:

January 21, 2009

Before WILLIAMS, Chief Judge, MICHAEL, Circuit Judge, and John T. COPENHAVER, JR., United States District Judge for the Southern District of West Virginia, sitting by designation.

Affirmed by unpublished per curiam opinion.

ARGUED: Anna K. Raske, BENESCH, FRIEDLANDER, COPLAN & ARONOFF, L.L.P., Cleveland, Ohio, for Appellants. Robert Edward Hoskins, FOSTER LAW FIRM, L.L.P., Greenville, South Carolina, for Appellee. ON BRIEF: Jeffrey D. Zimon, BENESCH, FRIEDLANDER, COPLAN & ARONOFF, L.L.P., Cleveland, Ohio, for Appellants.

Unpublished opinions are not binding precedent in this circuit.

2

PER CURIAM: This ("Eaton") benefits case to of involves terminate one of its the the decision short of Eaton Corporation ("STD") White.

term

disability Christopher

former

employees,

White received STD benefits under the Eaton Corporation Short Term Disability Program (the "Plan") from June 27, 2003 through November 12, 2003, at which time Eaton determined that White was capable of returning to work as a machinist and terminated his benefits. After exhausting Eaton's internal appeals process,

White brought suit in federal district court, arguing that Eaton abused its discretion in denying further STD benefits. The

district court concluded that Eaton did abuse its discretion and that White was entitled to further STD benefits. We affirm.

I. White began working for Eaton as a machinist on January 29, 2001. He began experiencing back pain in 2002 and underwent

surgery to repair a herniated disk on August 23 of that year. Dr. Michael Kilburn performed the surgery, and by November of 2002 it appeared that White's back pain was no longer an issue. White's back pain resumed the following summer, however, and on June 26, 2003, he ceased his employment with Eaton. He then

returned to Dr. Kilburn on July 8, 2003 and again on July 17,

3

2003.

These visits resulted in Dr. Kilburn providing White with

a lumbar epidural steroid injection and a work release. On August 19, 2003, White visited Dr. Kilburn again, but this time White informed the doctor that he was in litigation with Eaton about a possible worker's compensation claim. Dr.

Kilburn noted that White was "doing well" and "no longer [had] any appreciable pain in his left leg," but chose to refer him to another doctor, Dr. Kevin Kopera, because an appraisal of

White's workplace duties was "outside the realm of [Kilburn's] expertise." (J.A. at 527.) Dr. Kopera evaluated White on

September 9, 2003 and made the following observations: Mr. White was limited greatly in terms of flexion and extension at the waist and both of these movements tended to aggravate his low back pain. Lateral bending in each direction appeared to be less restricted but also produced some amount of discomfort. . . . Mr. White did have some increased symptoms with the left straight leg raise test in a sitting position in terms of increased discomfort. (J.A. at 592.) that White was These observations led Dr. Kopera to conclude suffering disc from "[c]hronic and low back pain with left

lumbar

degenerative

disease

possible

residual

sided lumbar radiculopathy." ability to work, Dr. Kopera

(J.A. at 592.) observed that

Concerning White's White "appear[ed]

limited in his ability to bend and lift and seems to be limited at this point primarily to sedentary work activities." 592.) (J.A. at

Ten days after the visit with Dr. Kopera, White visited

4

his primary care physician, Dr. Oliver Willard, who noted that a July 3, 2003 left MRI & of right White's of back at showed L5-S1" "recurrent and a disc

extrusions

center

"[s]mall

posterolateral disc protrusion L4-5."

(J.A. at 594.)

On October 30, 2003, White performed a Functional Capacity Evaluation ("FCE") arranged by the Plan's Claims Administrator, Broadspire Services, Inc. ("Broadspire"). The purpose of the

FCE was to establish "[White's] physical status, [as well as] restrictions and limitations" on his ability to return to work as a machinist. (J.A. at 532.) Importantly, the FCE concluded

that White "did not demonstrate ability to meet the following job demand categories: 532.) Walk and Reach Immediate." (J.A. at

Despite this observation, the FCE ultimately found that

White's "[p]hysical abilities do match the job description of a machinist." "demonstrated modifications." (J.A. at 533.) the ability It therefore concluded that White to physically return without

(J.A. at 533.)

Eaton denied White's claim for continued STD benefits on November 12, 2003, in reliance upon the conclusions of the FCE. White exercised his right to appeal this determination, asked for additional time to prepare his appeal and submitted

additional evidence in support of his appeal.

This additional

evidence consisted of affidavits from White and Dr. Kopera, as well as medical records from 5 Dr. Kopera, Dr. Willard, and

physicians at Piedmont Internal Medicine ("PIM"). submitted his MRI results from 2002 and 2003.

White also

Dr. Kopera's and White's affidavits both described White's symptoms and concluded that he was unable to return to work. In

particular, Dr. Kopera noted that White "suffers from a number of back problems including degenerative disc disease, left (J.A.

lumbar radiculopathy, and severe and chronic back pain." at 569.) disabled"

He concluded that White was "completely and totally based on White's "physical problems and the side

effects of his prescription medications."

(J.A. at 573.)

White also submitted his MRI from July 3, 2003, the report for which stated "[t]here is some degeneration of the L5-S1 disc as previously demonstrated with some chronic discovertebral (J.A. at the "L4-5

changes in the endplates surrounding the L5-S1 disc." 604.) In addition, the report remarked that

demonstrates a very small left posterolateral disc protrusion with no nerve root impairment" and that the L5-S1 had "recurrent disc extrusions." (J.A. at 604.) There was also evidence of an

"asymmetric left posterolateral disc bulge or broad-based disc protrusion at this level, which does not appear to impinge on the left L5 nerve root in the neutral foramen." This reviewer, information Dr. Michael was forwarded D.O., to for a (J.A. at 604.) Broadspire peer-

Goldman,

further

evaluation.

Dr. Goldman, who did not examine White personally, concluded 6

that

White

"has that

no

specific would

neuromuscular

or his

musculoskeletal returning He to

definitions occupational

contraindicate (J.A. at

activities."

612.)

summarized:

"Therefore, based on my review of all of the medical records available to me, it is my opinion that the medical records as reviewed fail to support functional impairment that preclude the claimant from returning to his occupational activities from

11/12/03 to the present time." By White letter it dated was February

(J.A. at 612-13.) 14, the 2004, Broadspire decision informed to deny

that

upholding

original

continuation of his short-term disability benefits. stated its conclusion as follows:

The letter

While the affidavits of Dr. Kopera and your client state general complications of his medications preclude his return to work, there was insufficient objective, quantifiable medical evidence presented to substantiate this assertion. There were no specific neuromuscular, musculoskeletal or cognitive deficits confirmed that would preclude your client from performing his normal job duties. (J.A. at 615.) a final appeal This letter also informed White of his right to within 180 days. White again requested

additional time to appeal, but never filed additional medical evidence in support of his claim. On April 16, 2004, as part of

the final appeal, Broadspire employed another peer reviewer, Dr. Robert Ennis, to examine all of White's medical documentation. Dr. Ennis concluded "the claimant's medical records do not

7

support

a

functional

impairment

that

would

prevent

him

from

working between 11/13/03 and the present time."

(J.A. at 623.)

Finally, Broadspire submitted White's file to the Medical Review Institute of America (MRIoA) for independent review. In

its May 12, 2004 report, the MRIoA concluded that "[a] review of the records does not support the patient's claim of disability. He has continuing complaints of back pain, but multiple physical exams have shown limited objective findings. . . . Most

importantly, the FCE ­ the best test of his functional abilities ­ demonstrates that he is capable of performing his regular

work."

(J.A. at 512.)

Eaton issued White a final determination letter on June 3, 2004, upholding Broadspire's denial of benefits for White

effective November 13, 2003. its conclusion as follows:

The determination letter stated

The objective findings described in the medical records, functional capacity evaluation, peer reviews and the independent medical reviews do not support a finding of ongoing disability which would prevent Mr. White from performing the essential duties of his regular position as a machinist as of November 13, 2003. In addition, each medical reviewer of Mr. White's information concluded that the objective information did not support a finding that Mr. White was unable to perform the essential duties of his job. The functional capacity evaluation performed on October 30, 2003, specifically concluded that "physical abilities do match the job description of machinist."

8

(J.A. at 509.) the Employee

White responded by filing a civil action, under Retirement Income Security Act ("ERISA"), 29

U.S.C.A. § 1132(a)(1)(B) (West 1999), on June 10, 2004 in the United States District Court for the District of South Carolina. On September 4, 2007, the district court entered an opinion and order, granting summary judgment in favor of White. The

district court determined that Eaton abused its discretion by relying on the FCE, which the district court claimed suffered from an "internal contradiction." (J.A. at 721.) The district

court was also troubled by Eaton's treatment of White's MRI ­ it noted that "[d]efendants' rejection of the findings of the

abnormalities observed above, without any explanation as to why they were doing so, was not the result of a deliberate and principled reasoning process." district court ordered Eaton (J.A. at 724.) Consequently, the to pay White STD benefits from

November 13, 2003 onward.

(J.A. at 705.)

II. A. We review a district court's decision to grant summary

judgment de novo, and we employ the same legal standards applied by the district court. 605 (4th Cir. 1999). Elliot v. Sara Lee Corp., 190 F.3d 601, When, as in this case, an ERISA benefit

plan vests discretionary authority to make benefits eligibility 9

determinations with the plan administrator, a reviewing court evaluates standard. 1 a denial of benefits under an abuse of discretion

Ellis v. Metropolitan Life Ins. Co., 126 F.3d 228, Under this standard, an administrator's

232 (4th Cir. 1997).

decision "will not be disturbed if it is reasonable," even if we "would have come to a different conclusion independently." To be reasonable, the decision must be "the result of Id. a

deliberate principled reasoning process" and be "supported by substantial evidence." (4th Cir. 1997) Brogan v. Holland, 105 F.3d 158, 161 quotation marks omitted). This

(internal

reasonableness inquiry is guided by eight non-exclusive factors: (1) the language of the plan; (2) the purposes and goals of the plan; (3) the adequacy of the materials considered to make the decision and the degree to which they support it; (4) whether the fiduciary's interpretation was consistent with other provisions in the plan and with earlier interpretations of the plan; (5) whether the decisionmaking process was reasoned and principled; (6) whether the decision was consistent with the procedural and substantive requirements of ERISA; (7) any external standard relevant to the exercise of discretion; and (8) the fiduciary's motives and any conflict of interest it may have. 2

The Plan provides: "The Plan Administrator shall have discretionary authority to determine eligibility for benefits and to construe any and all terms of the Plan, including, but not limited to, any disputed or doubtful terms." (J.A. at 496.) We note that a conflict of interest can no longer operate to reduce the deference given to a fiduciary's discretionary decision to deny benefits. See Champion v. Black & Decker (U.S.) Inc., No. 07-1991, slip op. at 8 (4th Cir. Dec. 19, 2008) (Continued) 10
2

1

Booth v. Walmart Stores, Inc., 201 F.3d 335, 342-43 (4th Cir. 2000). We turn now to the merits of Eaton's appeal. B. In Donovan v. Eaton Corp., 462 F.3d 321 (4th Cir. 2006), we affirmed a district court's grant of long-term disability

benefits to another Eaton employee.

In that case, as here,

Eaton claimed that there was a lack of objective evidence of disability and denied benefits. decision unreasonable, however, Id. at 324-26. because of We found that "wholesale Id. at by the of

Eaton's

disregard" of evidence supporting the employee's claim. 329. Specifically, doctor Eaton focused on a was statement still

employee's

that

suggested

she

capable

performing sedentary activities, without addressing a subsequent statement by the same doctor in which the doctor determined that the employee was totally disabled. Id. We also observed that

Eaton's in-house peer reviewers ignored evidence favorable to Donovan's claim, including Donovan's own statements regarding

her pain levels and ability to engage in everyday activities. Id. at 327.

(addressing the impact of Metropolitan Life Ins. Co. v. Glenn, 128 S. Ct. 2343 (2008), on our standard of review when a conflict of interest exists). When there is a conflict of interest, we must apply the abuse of discretion standard and treat the conflict of interest as only one factor among the several that we examine in a reasonableness determination. Id.

11

We Donovan.

believe

that

this

case

is

substantially

similar

to

In both cases, Eaton has either failed to elaborate

on, or outright ignored, evidence favorable to the claimant. These deficiencies in the in Plan's decision-making of process FCE, are its job

reflected failure to

especially address and

its

treatment

White's of

conflicting failure

explanations to adequately

White's

requirements,

its

address

medical

evidence supporting White's claims. shortcomings below.

We address each of these

First, the Plan relied heavily on White's FCE in making its determination requirements. that White was capable of performing his job

In the final determination letter provided to

White, Eaton specifically referenced the FCE: The functional capacity evaluation performed on October 30, 2003 specifically concluded that "physical abilities do match the job description of a machinist. Therefore, the evaluee has demonstrated the ability to physically return without modifications." The conclusions of the functional capacity evaluation were based on the results of objective, physical tests. (J.A. at 509.) The FCE's conclusion that White was capable of

meeting the job description of a machinist does not comport with its actual observations of White's physical abilities. The FCE

specifically concluded that White could not fulfill his job's walking that requirements, could and the the FCE's subsequent of determination his job is

White

fulfill

requirements

12

irreconcilable with this observation. of this fact in its final determination. The Plan's failure to

The Plan made no mention

account

for

the

internal

inconsistencies in the FCE is especially problematic due to the reliance evaluated Goldman placed White's Dr. on the FCE The by the medical peer the reviewers reviews by who Dr.

claim. Ennis both

in-house

and

referenced

FCE's

conclusions

regarding White's ability to return to work. Dr. Goldman remarked:

In his review,

The result of [the FCE] suggested that the claimant gave a reliable effort. His functional abilities demonstrated that his abilities met specific job demands in the following categories: High lift, mid lift, low lift, carry up to 20 pounds, push cart up to 40 pounds, pull cart up to 40 pounds and standing. . . . The conclusion was that his physical abilities did match the job description of a machinist; therefore the claimant had demonstrated the physical ability to return without modifications. 3 (J.A. at 612.) Dr. Ennis remarked that the FCE "indicate[d]

that the claimant was able to perform work activities, which were consistent with his job description as a machinist . . ." (J.A. at 623.) Finally, the opinion provided by the independent It

medical reviewer appears to have given the FCE great weight. explained:

"Most importantly, the FCE ­ the best test of his

We note that Dr. Goldman did not mention that the FCE demonstrated that White's abilities did not meet the specific job demands in the walking category.

3

13

functional

abilities

­

demonstrates

that

he

is

capable

of

performing his regular work."

(J.A. at 512.)

None of these

doctors noted the discrepancies in the FCE or suggested that such discrepancies were accounted for in how they incorporated the FCE into their ultimate conclusions. And, there is no

indication that the Plan considered the reviewers' failure to account for the inconsistencies in the FCE when the Plan relied on the reviewers' conclusions in denying White's claim. Second, Eaton's final determination also failed to address conflicting explanations of White's job requirements. White's

FCE showed that White was capable of lifting one to ten pounds constantly, eleven to twenty-five pounds frequently, and twentyone to fifty human pounds occasionally. department A worksheet that completed White's by job

Eaton's

resources

stated

required that he lift up to 100 pounds.

But, on November 6,

2003 ­ less than one week after White's FCE limited his lifting ability to fifty pounds or less ­ Eaton's human resources

department sent an e-mail clarifying that White "in reality" never lifted more than fifty pounds. (J.A. at 553.) The e-mail

was sent by Susan Watts, the same Eaton employee who signed off on the original worksheet indicating that White did in fact have to lift more than fifty pounds. these different descriptions of The final determination recites White's lifting requirements,

14

but fails to acknowledge the clear inconsistency between the two. The final determination also failed to even mention White's affidavit, which described his job duties. averred: As a machinist and production worker I was required to set up wheel changes on machine production runs. My job entailed was that I was required to lift the wheels which weighed up to 100 lbs. with a crane which meant I had to climb into the machine, hook the wheel up to the crane, and operate the crane to pull the wheels out. I was also required to climb up onto tables which were approximately four and a half (4 1/2) feet tall. I was also required to climb onto machines that were approximately five (5) feet tall in order to get into the machine to change the wheels. I was also required to run a machine which required that I load the feeder then once the parts move through the machine they were then placed in a bin at the end of the machine. I was then required to lift that bin and place the parts in a drier. Once the parts were dried I had to remove them from the drier and put them in a bin and move the parts to the next part of production. In that job I was required to lift from 50 to 100 lbs. and sometimes over 100 lbs. (J.A. at 564-65.) The affidavit testimony and the human Specifically, White

resources worksheet are consistent and clear: lift over 50 lbs. as part of his job.

White did have to Yet, the final

determination letter did not mention the affidavit or address its impact on the Plan's decision to credit the November 6 email as the authoritative description of White's lifting duties. The Plan's failure to explain why it credited the November 6 email instead of the original worksheet is a glaring omission

15

considering that, based on his FCE, White would be able to meet one of these sets of lifting requirements, but not the other. Third, the Plan's final determination letter failed First,

adequately to address medical evidence in White's favor.

the final determination contained absolutely no discussion of the fact that White had undergone serious back surgery in 2002. Cf. Evans v. Eaton Corp., 514 F.3d 315, 323 (4th Cir. 2008) (no abuse of discretion tone, in a case where Eaton's Evans's reports serious used a

"measured

which

acknowledges

medical

problems without a hint of dismissiveness").

It also credited

the independent reviewer's opinion that White's MRI findings are "unimpressive," despite the fact that the MRI clearly evidenced abnormalities, including "degeneration," a "very small left

posterolateral disc protrusion with no nerve root impingement" of the L4-5, and an "asymmetric left posterolateral disc bulge or broad-based disc protrusion" of the L5-S1. (J.A. at 604.)

Finally, and significantly, the Plan discounted the affidavit of Dr. Kopera. It concluded that "the Affidavit . . . did not (J.A. at 509.) diagnosis that

provide any objective findings of disability." Dr. Kopera's affidavit, from a however, number included of back his

White

"suffers

problems

including

degenerative disc disease, left lumbar radiculopathy, and severe and chronic back pain." rundown of White's (J.A. at 569.) prescription 16 He also provided a drug medications.

numerous

Eaton's dismissal of Dr. Kopera's affidavit cannot be reconciled with the Plan's own medical information requirements. Medical

diagnoses and medications are objective findings under the terms of the Plan. 4 C. In sum, the Plan failed to address evidence favorable to White "thoughtfully and at length." Evans, 514 F.3d at 326.

It relied on a fundamentally flawed FCE, based its determination on a description of White's lifting duties that was contradicted by evidence in the record and disregarded medical evidence

favorable to White, even though the evidence met the Plan's own definition of "objective findings." Eaton's failure to

seriously engage in a discussion of White's favorable evidence suggests that, as in Donovan, Eaton abused its discretion by denying White benefits. See Donovan, 462 F.3d at 329 (finding

an abuse of discretion where there was a "wholesale disregard" of evidence in the claimant's favor); Glenn v. Metropolitan Life Ins. Co., 461 F.3d 660, 672 (6th Cir. 2006) (finding an abuse of discretion in a case where the administrator "offered no

The plan lists the following as examples of objective findings: "physical examination findings (functional impairments/capacity); diagnostic test results/imaging studies; diagnosis; X-ray results; observation of anatomical, physiological or psychological abnormalities; and medications and/or treatment plan." (J.A. at 488.)

4

17

explanation evidence]

for or,

its for

resolution that matter,

of

[an

inconsistency it was

in

the any

whether

given

consideration at all"), aff'd, 128 S. Ct. 2343 (2008). 5

III. For finding the an above of reasons, the by district Eaton court's decision White

abuse

discretion

and

granting

benefits is hereby AFFIRMED.

We also note that the final Booth factor ­ the existence of a conflict of interest ­ weighs in White's favor because Eaton both funds and administers the Plan. See Booth v. Walmart Stores, Inc., 201 F.3d 335, 343 (4th Cir. 2000). "In such a circumstance, `every dollar provided in benefits is a dollar spent by . . . the employer; and every dollar saved . . . is a dollar in [the employer's] pocket'." Glenn, 128 S. Ct. at 2348 (quoting Bruch v. Firestone Tire & Rubber Co., 828 F.2d 134, 144 (3d Cir. 1987)). Thus, Eaton was operating under a conflict of interest when it denied White's benefits claim. A conflict of interest "should prove more important (perhaps of great importance) where circumstances suggest a higher likelihood that it affected the benefits decision, including, but not limited to, cases where an . . . administrator has a history of biased claims administration." Glenn, 128 S. Ct. at 2351. White argues that Eaton has shown a history of biased claims administration and that Eaton's conflict of interest should therefore weigh heavily in our balancing of the Booth factors. Because we do not consider Eaton's conflict of interest central to our conclusion that it abused its discretion in denying White's benefits, we decline to address how much importance to give the conflict in this case.

5

18