Julie Harder v. Bristol-Myers Squibb Company Long Term Disability Plan

Filing 45

FINDINGS OF FACT AND CONCLUSIONS OF LAW signed by Judge Percy Anderson: The Court concludes that Plaintiff has met her burden of proof to establish that the Plans termination of her disability benefits beginning on May 2, 2014, was arbitrary and ca pricious. Plaintiff is therefore entitled to reinstatement of her long-term disability benefits under the Plan beginning on May 2, 2014. Plaintiff shall submit a proposed Judgment by no later than December 13, 2017. Defendants objections to the proposed Judgment, if any, shall be filed no later than December 20, 2017. The Court will issue a separate order with the deadlines and procedures for the filing of a Motion forAttorneys Fees. (lc)

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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 JULIE HARDER, 12 13 14 15 16 Plaintiff, No. CV 17-1426 PA (GJSx) FINDINGS OF FACT AND CONCLUSIONS OF LAW v. BRISTOL-MYERS SQUIBB COMPANY LONG TERM DISABILITY PLAN, Defendant. 17 18 This is an Employee Retirement Income Security Act (“ERISA”) action for recovery 19 of long-term disability benefits. Plaintiff Julie Harder (“Plaintiff” or “Harder”) seeks 20 benefits from defendant Bristol-Myers Squibb Company Long Term Disability Plan 21 (“Defendant” or the “Plan”). The Plan is sponsored and funded by Harder’s former 22 employer Bristol-Myers Squibb Company (“BMS”). 23 Plaintiff filed the Administrative Record (“AR”) (Docket No. 29). Following the 24 filing of the parties’ Opening and Responsive Trial Briefs, the submission of their respective 25 Proposed Findings of Fact and Conclusions of Law, and their objections to each other’s 26 Proposed Findings of Fact and Conclusions of Law, the Court, sitting without a jury, 27 conducted a bench trial on December 5, 2017. 28 1 Having considered the materials submitted by the parties and after reviewing the 2 evidence, the Court makes the following findings of fact and conclusions of law pursuant to 3 Federal Rule of Civil Procedure 52(a). Any finding of fact that constitutes a conclusion of 4 law is hereby adopted as a conclusion of law, and any conclusion of law that constitutes a 5 finding of fact is hereby adopted as a finding of fact. 6 I. 7 Findings of Fact 1. This is an action for recovery of long-term disability benefits under ERISA. 8 This Court has jurisdiction of this matter pursuant to 29 U.S.C. §§ 1132(a), (e), (f) and (g), 9 as well as 28 U.S.C § 1331. 10 11 12 13 14 2. Venue is proper in this district because a substantial part of the events giving rise to the claim occurred within the Central District of California. 28 U.S.C. § 1391(b)(2). 3. Harder began working for BMS in 1989. Within two years, BMS promoted her to senior clinical site manager. 4. As a BMS employee, Harder was eligible to participate in the Plan. (AR 15 4091.) The Plan, which BMS self-funds (AR 5893), provides long-term disability benefits 16 and defines “Total Disability” as: 17 1.6.1 during the first year of an Employee’s disability 18 (which shall include 26 weeks of “Disability” pursuant to the 19 Short Term Disability Plan, as defined therein, and the first 26 20 weeks of Total Disability pursuant to this Plan) an Employee is 21 absent from work because of the presence of an impairment for 22 which there is material objective medical evidence that prevents 23 the Employee from performing the essential functions of his own 24 occupation or any other job that the Company offers him, with or 25 without any reasonable accommodations that the Employee 26 requests, other than a Temporary Alternative Work Duty 27 assignment, for which he is reasonably qualified by reason of his 28 education, training, or experience; and -2- 1 1.6.2 after the Employee’s first year of disability, as 2 defined in Section 1.6.1, an Employee is absent from work 3 because of the presence of an impairment for which there is 4 material objective medical evidence that prevents the Employee 5 from engaging in any occupation, with or without reasonable 6 accommodations, for which he is reasonably qualified by 7 education, training or experience. 8 (AR 5894-5895.) 9 5. The Plan provides: 10 The determination of whether an Employee is Totally Disabled 11 shall be made in the sole discretion of the Plan Administrator, or 12 in the sole discretion of the Claims Administrator if the Plan 13 Administrator has delegated his power to make such 14 determination to the Claims Administrator, based upon the 15 material objective medical evidence that the Plan Administrator 16 or Claims Administrator determines to be relevant to the 17 Employee’s claim. 18 19 20 21 (AR 5899.) 6. Plan benefits continue until the “Employee ceases to be Totally Disabled” or fails “to submit evidence of continuing Total Disability.” (AR 5899; see also AR 5915.) 7. BMS has contracted with Aetna Life Insurance Company (“Aetna”) to provide 22 claims administration services for the Plan. (AR 5958.) Pursuant to their contract, BMS 23 “delegates to Aetna complete discretionary authority and duty to Aetna to make all claim 24 determinations under the Disability plans.” (AR 5967.) The agreement between BMS and 25 Aetna provides that, “[t]o the extent applicable, Aetna will process the claims for Plan 26 benefits . . . using Aetna’s normal claim determination, payment and audit procedures and 27 applicable cost control standards in a manner consistent with the terms of the Plan, the 28 Services Agreement, and applicable law.” (AR 5974.) -3- 1 8. In November 2010, Harder’s doctors determined that she was no longer able to 2 work due to her medical conditions, which included anxiety disorder and depression. (AR 3 527.) 4 9. Harder submitted a claim for short-term disability benefits and Aetna agreed 5 that she was disabled under the terms of the Plan. Harder received short-term disability 6 benefits through May 1, 2011. 7 8 9 10. Harder applied for long-term disability benefits under the Plan. Aetna approved long-term disability benefits beginning May 2, 2011. (AR 901.) 11. In an October 10, 2011 letter, Aetna concluded that Harder qualified for 10 disability benefits under the Plan’s “any occupation standard” applicable after one year of 11 disability. (AR 932.) 12 12. In May 2012, Aetna arranged a psychological Independent Medical 13 Examination (“IME”) for Harder with Dr. Kathi Studden. (AR 4345.) Tests administered 14 by Dr. Studden resulted in a diagnosis of “Major Depression, recurrent, severe, without 15 psychotic features, Generalized Anxiety Disorder, Posttraumatic Stress Disorder Avoidant, 16 Dependent and Schizoid Personality Traits.” (AR 4347.) Dr. Studden’s test results reflected 17 “no indication of malingering.” (Id.) 18 13. On June 20, 2012, Harder was reassessed by Dr. David Freeman, whom 19 Harder had first met with for an “agreed” psychological evaluation in February 2011, and for 20 subsequent evaluations in August and December 2011. (AR 4671.) In a 110 page report 21 dated June 20, 2012, Dr. Freeman concluded that Harder “has undergone an intensification 22 of psychological symptomology such that our original diagnosis of Anxiety Disorder NOS 23 has developed into a Major Depressive Disorder, Single Episode with Anxious Features.” 24 (AR 4777.) Dr. Freeman’s review of Harder’s medical records, including from Harder’s 25 treating mental health professionals, noted: 26 Per treating psychologist Shannae Anderson, Ph.D.’s treatment 27 notes dated March 1, April 1, and April 3, 2011 reveals that the 28 claimant’s emotional condition has deteriorated subsequent to -4- 1 the February 16, 2011 loss of her job. In particular, Ms. Harder 2 was noted to be easily overwhelmed, labile, tearful, and 3 distractible with high anxiety and sadness, ongoing panic 4 attacks, distractibility, and passive suicidal ideation without plan. 5 Similarly, in her May 9, 2011 report, Ellen Shirman, PsyD noted 6 substantial sadness, crying spells, anxiety and tension, 7 heightened emotionality concentration and memory problems, 8 anger and agitation regarding her occupational situation. Dr. 9 Shirman also observed that Ms. Harder was easily overwhelmed 10 and reported an increase in weight, problems with sleeping, 11 nightmares, changes in sexual functioning due to physical 12 limitation, and social withdrawal as well as diminished 13 motivation and self-confidence. At the conclusion of her 14 examination of the claimant, Dr. Shirman also found that Ms. 15 Harder’s symptom pattern was consistent with a Major 16 Depressive Disorder. 17 (AR 4777-78.) Dr. Freeman assessed Harder as having a Global Assessment of Functioning 18 (“GAF”) of 55 on a 100 point scale, which is “warranted when there are moderate 19 symptoms.” (AR 4771.) 20 14. In July 2012, Aetna arranged for an IME with Dr. Lorin Lindner. Dr. 21 Lindner’s report, dated August 4, 2012, stated that Harder “did not demonstrate ‘emotional 22 decontrol’ at any time during the evaluation” and noted that there “were no dramatic 23 emotional shifts, and only once did she begin to cry and she recovered very quickly (within 24 2-3 seconds) with minimal effort and answered the question at hand.” (AR 4129.) Dr. 25 Lindner concluded that the tests she administered demonstrated that Harder suffered from no 26 cognitive impairment or any clinically significant behavioral impairment. (Id.) 27 28 15. On March 3, 2013, Aetna sent a letter to Harder in which Aetna “determined that you no longer meet the definition of disability.” (AR 946.) Aetna stated that Harder -5- 1 would receive a final disability payment for March 2013, and that her “claim will be closed 2 effective 04/01/2013.” (AR 947.) 3 16. Harder, represented by counsel, appealed Aetna’s decision on August 19, 4 2013. (AR 4211.) On September 18, 2013, in support of Harder’s appeal, her counsel 5 provided Aetna with records, including reports from her treating physicians, and a letter with 6 counsel’s argument in support of Harder’s continued disability. (AR 4217-25.) 7 8 9 17. Among the materials provided by Harder’s counsel was an April 19, 2013 letter from Dr. Anderson, in which Dr. Anderson stated: After reviewing the psychological evaluation and meeting with 10 Julie, I am puzzled as to why you have chosen to stop her 11 long-term disability. As numerous evaluations have noted, Julie 12 has a consistent ability to “pull it together” for the examiner 13 when evaluated. The greater issue for Julie is being able to cope 14 under medium to high stress conditions for lengthy periods of 15 time as would be necessary if she returned to full-time work. 16 Julie’s history throughout our work together has been one of 17 taking a few steps forward and then a few steps back. She may 18 be able to function better for short periods of time, but she 19 quickly unravels and regresses back to where she started. She is 20 still experiencing significant symptoms of anxiety and 21 depression including insomnia, shortness of breath, panic, and 22 high anxiety that often renders her frozen to complete even 23 simple tasks. I am concerned about her ability to return to work 24 full-time at this time. I am recommending that she be able to 25 continue with her disability while returning to work on a 26 part-time basis so that she can slowly ease back into the demands 27 of work while integrating that stress into her daily life. I fear if 28 she is required to return to work on a full-time basis, that it -6- 1 would be a set up for failure for her and once again she would 2 regress back to an anxiety-ridden paralyzed state. As it is she is 3 barely able to tackle the necessary demands of dealing with her 4 disability denial, her workman’s comp situation, and managing 5 daily life. A very slow return to work with a minimally stressful 6 work environment is required for Julie to succeed after this time 7 on disability. 8 (AR 4353.) 9 18. Dr. Studden, whom Aetna had arranged to conduct an IME in May 2012 10 before becoming one of Harder’s treating mental health professionals in June 2013, 11 supported Harder’s appeal with a September 13, 2013 letter. According to Dr. Studden, 12 Harder was “working on issues of anxiety, panic, posttraumatic stress disorder and 13 depression subsequent to extreme work stress at her previous employment.” (AR 4349.) Dr. 14 Studden’s opinion was “that Ms. Harder is unable to work due to her significant symptoms.” 15 (Id.) 16 19. Aetna obtained “paper reviews” from doctors specializing in physical 17 medicine and rehabilitation and psychology. The reviewing psychologist, Dr. Leonard 18 Schnur, concluded there was a “lack of examination findings to substantiate the presence of 19 a functional impairment across cognitive, emotional, and behavioral spheres for the time 20 period of 4/1/2013 through 10/4/2013 which would have precluded the claimant from 21 performing the work of any occupation.” (AR 3939.) 22 23 24 20. Aetna issued a letter dated October 30, 2013, in which it upheld its original decision to terminate Harder’s benefits effective April 1, 2013. (AR 966-68.) 21. Harder, again through counsel, filed a second appeal on April 24, 2014. The 25 second appeal included a letter from counsel (AR 3941-55) and additional reports from 26 Harder’s physicians, including letters from Harder’s psychiatrist, Dr. Martin Schuster, dated 27 March 17, 2017, and April 10, 2014, letters from Dr. Studden dated February 13, 2014, and 28 April 21, 2014, and a March 21, 2014 letter from Dr. Alvin Mahoney, whom Harder had -7- 1 been seeing weekly at the Mission Community Hospital Turning Point Intensive Outpatient 2 Psychiatric Program beginning in August 2013. (Id.) 3 4 22. In his March 17, 2014 letter, Dr. Schuster states: Ms. Harder came to me to discuss high work stress and 5 requested that I see her as a patient to help her in managing 6 medication for increasing anxiety and depression that she began 7 to experience with extreme work demands. Several psychotropic 8 medications and several psychiatric follow-up appointments later 9 it is clear that Ms. Julie Harder had a diagnosis of Bipolar 10 Disorder II, Mixed. Her response to antidepressants was initially 11 fair-good; however, she always continued with a disabling 12 degree of anxiety which was felt to be caused by her need to 13 manage pain related to Worker’s Compensation injury and in her 14 clinical presentation (i.e. her concerns of inability to complete 15 work under the high stress that was required at work). She 16 continues to experience nightly insomnia without medication and 17 becomes tearful with anxiety and panic like reactions when 18 faced with deadlines or high work demands. She was unable to 19 focus on tasks indicating that even managing requirements of 20 this LTD case add high anxiety to her life. 21 At no time in my clinical care of Ms. Harder it was felt 22 she could perform her habitual work duties, because of her 23 disabling condition, i.e. chronic pain, severe anxiety, severe 24 insomnia, lack of concentration, restlessness, inattention, etc. in 25 fact these symptoms led her to start drinking alcohol to self 26 medicate. This clearly brought very negative consequences to 27 her family life, downhill to her marriage and relationship with 28 her children. Almost to the point of alienating herself from -8- 1 them. The pain this cause in her was something she still carries 2 and prevents her from adequately functioning. She started an 3 outpatient psychiatric program at Mission Community Hospital 4 not just to deal with this disastrous situation in her life but a fair 5 support system as well. 6 7 (AR 3956). 23. Dr. Studden’s February 13, 2014 letter stated that Harder “continues to exhibit 8 and experience symptoms of Posttraumatic Stress Disorder and Major Depressive Disorder. 9 These symptoms include hopelessness, psychomotor retardation, excessive crying, 10 difficulties with attention and concentration, difficulties with sleep and appetite, increased 11 startle response, and intrusive flashbacks. These symptoms would most certainly interfere 12 with any ability to perform in a work situation.” (AR 3976.) According to Dr. Studden: 13 “[A]t the present time, Ms. Harder is unable to perform in an employee capacity.” (Id.) 14 24. Dr. Studden’s April 21, 2014 letter stated: 15 It is my opinion that Ms. Harder continues to meet the 16 diagnosis of Major Depression, Posttraumatic Stress Disorder 17 and Generalized Anxiety Disorder. Despite her high cognitive 18 functioning, she continues to have the symptoms of mood 19 swings, frequent crying, feelings of hopelessness, significant 20 weight loss, very poor sleep, irritability, extreme distractibility, 21 problems with memory and concentration, low motivation and 22 impaired activities of living. She displays an inability to 23 complete even simple tasks and she has impaired judgment. 24 This has impacted her ability to work and has had a significant 25 impact on her relationships with her family and friends. 26 27 It is my strong opinion that Ms. Harder has consistently remained unable to work and that this condition was present 28 -9- 1 from my initial meeting with her in May of 2012, and has 2 persisted until the present time. 3 In April of 2014, I repeated the Millon Clinical Multy- 4 Axial Inventory to ascertain Ms. Harder’s level of functioning. 5 She displays very high scores on depression, Posttraumatic 6 Stress Disorder and anxiety, indicating consistency of her 7 condition. 8 9 10 (AR 3983-84.) 25. Dr. Mahoney’s March 21, 2014 letter stated: Ms. Harder attends Turning Point Intensive Outpatient 11 Psychiatric Program weekly since August 13, 2013. Ms. Harder 12 is learning effective coping skills to manage symptoms 13 associated with anxiety, depression and cumulated stress 14 reportedly from prior work. Ms. Harder continues to present 15 with intense levels of anxiety, bouts of crying, difficulty 16 focusing on tasks, and feeling panicked when triggered, with 17 excessive rumination and worry. Ms. Harder reports that when 18 faced with having to do tasks, such as “phone calls, paperwork, 19 documentation or opening mail” that she is often flooded with 20 emotions and “reliving past work trauma related to years of 21 trying to obtain unrealistic work demands.” Ms. Harder receives 22 support in regaining task management skills, with emphasis on 23 emotion regulation and decreasing panic, when feeling flooded. 24 Ms. Harder reports that her chronic pain, “due to prior 25 work related injuries, such as bilateral knee pain with instability 26 and back pain” increases her anxiety and limits her coping 27 mechanisms. Ms. Harder is receiving support to learn 28 alternative, safe coping skills to effectively manage mood related -10- 1 symptoms associated with her pain and subsequent physical 2 limitations. 3 Based upon our clinical observations of Ms. Harder’s 4 fragility under stressful situations, returning to work may 5 exacerbate her symptoms and contribute to a decline in the 6 progress she is currently making. It is my recommendation, at 7 this time, that Ms. Harder not return to work and be reinstated 8 for long term disability. 9 10 (AR 3977.) 26. In considering Harder’s second appeal, Aetna obtained paper reviews from Dr. 11 Alison Netski, a psychiatrist, and Angela Stillwagon, D.O., who specializes in physical 12 medicine and rehabilitation. Dr. Elana Mendelssohn, an Aetna in-house psychologist, 13 participated on Aetna’s appeal committee and also reviewed the file. 14 27. According to Dr. Netski, “[b]ased on the record provided for review, 15 restrictions and limitations from occupational functioning are supported from 4/12/13 16 through 3/7/14.” (AR 3930.) Dr. Netski also stated that “[t]he severity of symptoms have 17 necessitated intensive outpatient treatment/partial hospitalization. The claimant does not 18 have the persistence and pace needed for occupational functioning and lacks emotional 19 control.” (Id.) Dr. Netski concluded that she was “in agreement with the opinion of the 20 treating provider that she is unable to function in the occupational setting during this 21 timeframe.” (Id.) 22 28. From a physical standpoint, Dr. Stillwagon opined that from “6/27/09 to 23 present, restrictions in regards to musculoskeletal complaints would include: no repetitive 24 kneeling, squatting, crawling or climbing. No other restrictions would be permanent.” (AR 25 3921.) Dr. Stillwagon did not address “restrictions for her psychological complaints . . . as 26 this is outside my realm of expertise.” (Id.) 27 28 29. Dr. Mendelssohn and Aetna’s appeal committee noted, on July 24, 2014, that the last medical record on file was dated April 21, 2014, which would make sense because -11- 1 Harder filed her appeal on April 24, 2014. (AR 771.) Dr. Mendelssohn concluded that the 2 information in Harder’s record “would support a functional impairment from a mental health 3 perspective 04/01/13-05/01/14.” (Id.) 4 30. In a July 24, 2014 letter, Aetna “partially overturned” the original decision to 5 terminate Harder’s disability benefits effective April 1, 2013. (AR 982.) According to 6 Aetna’s letter: 7 [T]he Aetna Appeals Committee . . . have determined that from a 8 mental health perspective there is clinical data that would have 9 prevented Ms. Harder from performing the material duties of her 10 own occupation from April 01, 2013 through May 01, 2014, 11 only. However, there is a lack of medical information (i.e. 12 progress notes documenting abnormal physical exam supporting 13 a functional impairment that would have prevented her from 14 performing work at any reasonable occupation as of May 01, 15 2014 only. LTD benefits will remain terminated effective May 16 02, 2014. According to [Harder’s] group plan, this decision is 17 final and is not subject to further review. 18 (AR 984.) 19 31. Harder commenced an action, Case No. CV 14-6922 PA (SHx), in this Court 20 on September 5, 2014, in which she sought relief from Aetna’s decision to terminate benefits 21 effective May 1, 2014. 22 32. After reviewing the parties’ Joint 26(f) Report in Case No. CV 14-6922, the 23 Court ordered the parties to show cause why the matter should not be remanded to the 24 ERISA administrator because Aetna’s July 24, 2014 decision was based on different facts 25 and conclusions than its March 2013 termination decision, and Harder had not had an 26 opportunity to administratively appeal the July 2014 decision. (Docket No. 22 in Case No. 27 CV 14-6922.) 28 -12- 1 2 33. In response to the Court’s order to show cause, the parties stipulated to dismiss Case No. CV 14-6922 without prejudice. (Docket No. 24 in Case No. CV 14-6922.) 3 34. Pursuant to the agreement of the parties, Harder’s counsel filed an appeal in 4 July 2015 of Aetna’s July 24, 2014 decision to terminate Harder’s benefits. (AR 3853-57.) 5 That appeal was supported by approximately 882 pages of documents. (Id.) 6 35. On November 5, 2015, Aetna issued a decision in which it “agreed with the 7 original decision to terminate the benefit as of May 2, 2014.” (AR 1004.) According to 8 Aetna’s November 5, 2015 denial of Harder’s appeal: 9 When we approved Ms. Harder’s LTD benefits through May 1, 10 2014, we had medical information that supported functional 11 impairments that would prevent Ms. Harder from performing the 12 material duties of her own and any reasonable occupation due to 13 a mental health condition. The level of symptoms reported 14 including poor stress intolerance, high anxiety, and insomnia 15 necessitate an elevated level of care with intensive 16 outpatient/partial hospitalization programs. However, more 17 recent medical information has been reviewed which does not 18 demonstrate the same level of impairment as previously 19 reported. 20 (AR 1005.) 21 36. In support of its conclusion, Aetna cited, among other records, treatment notes 22 from the Mission Community Hospital Turning Point Intensive Outpatient Psychiatric 23 Program from July 25, 2014,1/ letters and reports from Dr. Mahoney dated January 22, 2015, 24 February 12, 2015, March 19, 2015, April 30, 2015, May 12, 2015, May 28, 2015, June 9, 25 26 27 28 1/ Aetna’s letter wrongly states that Harder started attending the outpatient program on July 15, 2014. (AR 1005.) Harder actually started attending that program in August 2013. (AR 3977.) -13- 1 2015, and July 15, 2015, and notes from Dr. Schuster dated December 11, 2014, and March 2 10, 2015. (AR 1005-06.) 3 37. Aetna’s letter states: 4 The treatment notes do not describe psychiatric 5 symptomatology based on behavioral observations other than 6 that she is noted to be depressed and anxious, however, there is 7 no information regarding frequency, intensity or duration 8 provided. It is noted that she had some difficulties in performing 9 specific tasks such as driving in heavy traffic or reading and 10 following directions which is based on her self-report but there 11 is no support based or clinical evidence provided. 12 Ms. Harder has not undergone mental status examinations 13 or objective assessments of cognitive functioning by a qualified 14 professional. Mood was typically noted to be stable, with some 15 episodes of tearfulness related to discussion of difficult or 16 painful topics. The psychologist-reviewer opined there is no 17 evidence in the documents submitted for review to support a 18 conclusion of functional impairment for the time period, May 2, 19 2014 forward. In the opinion of the psychologist-reviewer, the 20 medical evidence submitted for review does not support a 21 conclusion of severe impairment that precludes full-time 22 employment. Ms. Harder appeared to be able to complete a daily 23 routine effectively and is reported to be participating in a 24 volunteer program providing equine experiences to autistic 25 children, which is presumed to require patience, focus, stress 26 tolerance, flexibility, and problem solving. 27 (AR 1006-07.) 28 -14- 1 38. Aetna’s letter did not cite to scores of other treatment notes from the Mission 2 Community Hospital Turning Point Intensive Outpatient Psychiatric Program from the April 3 2014 through June 2015 time period in which Harder’s mood and affect were described as 4 “sad,” “anxious,” “dysphoric,” “agitated,” and “tearful,” among other similar terms. (AR 5 1312-1402 & 1965-2190.) 6 7 8 9 39. In addition to the treatment notes from the outpatient program, Dr. Mahoney submitted a letter in support of Harder’s appeal, dated July 15, 2015, in which he states: I am writing on behalf of Ms. Julie Harder, who has been under my care while attending Turning Point Intensive 10 Out-Patient Program since August 13, 2013. Ms. Harder 11 continues work on identifying triggers and applying coping 12 techniques to better manage her debilitating anxiety and panic 13 attacks related to PTSD, secondary to work stress and chronic 14 pain following work related injury. Ms. Harder reports that she 15 experiences severe anxiety and panic attacks when faced with 16 complex tasks, when needing to drive in heavy traffic and when 17 needing to address mail and phone calls. Ms. Harder becomes 18 distracted easily, unable to read without re-reading lines several 19 times. Her comprehension is also effected, making reading and 20 following written instructions to be anxiety producing. 21 In both group therapy and in my private sessions, Ms. 22 Harder continues to demonstrate tearful episodes and flooding 23 when faced with complex tasks. Ms. Harder reports that she 24 becomes frozen, confused and overwhelmed if needing to 25 address any type of documentation, filling out forms and/or in 26 just completing serried tasks (including ADLs). Ms. Harder 27 continues to attend the Turning Point twice per week (Tues and 28 Thurs) where she attends six group therapy sessions/week -15- 1 (including Stress management, Symptom Management, 2 Dialectical Behavioral Therapy, Cognitive Behavior Therapy, 3 Seeking Safety and Grief and Loss) and she meets with me 4 monthly. Ms. Harder has a private Psychiatrist that she sees 5 outside of Turning Point who manages her medications. Ms. 6 Harder is working individually with her Case Manager, and 7 within group therapy, to early identify anxiety triggers and to 8 continue practice of coping skills to assist her in reaching her 9 goal of returning to her best self and participating actively in life 10 without restricting anxiety and panic. 11 It is my clinical opinion that Julie Harder should remain 12 13 14 on disability at this time. (AR 1311.) 40. Harder’s counsel filed a second appeal on May 3, 2016. (AR 2798-13.) In 15 support of that appeal, Harder’s counsel submitted to Aetna 587 additional pages of records 16 in support of the appeal in addition to the 882 pages of documents submitted in support of 17 the July 2015 appeal. (AR 2789.) 18 41. On August 11, 2016, Aetna issued a decision on Harder’s second appeal in 19 which it “agreed with the original decision to terminate the benefit as of May 2, 2014.” (AR 20 1022.) According to Aetna, “the majority of the medical documentation submitted for 21 consideration are with regards to her treatment protocol in 2013” (Id.) even though Harder 22 submitted hundreds of pages concerning her treatment in 2014 and 2015. Aetna’s letter 23 conveyed the opinion of the psychology reviewer it retained, who opined that “[s]ymptoms 24 are not of a severity that would impact work activity from May 02, 2014 through the present 25 time” and “found no support for a functional impairment due to any mental or emotional 26 diagnosis or symptoms.” (Id.) 27 28 42. Having exhausted her administrative remedies for a second time, Plaintiff commenced this action on February 22, 2017. -16- 1 II. 2 Conclusions of Law 1. A “denial of benefits challenged under 29 U.S.C. § 1132(a)(1)(B) is to be 3 reviewed under a de novo standard unless the benefit plan gives the administrator or 4 fiduciary discretionary authority to determine eligibility for benefits or to construe the terms 5 of the plan.” Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115, 109 S. Ct. 948, 956- 6 57, 103 L. Ed. 2d 80 (1989); Saffon v. Wells Fargo & Co. Long Term Disability Plan, 522 7 F.3d 863, 866 (9th Cir. 2008). Where the plan vests such discretionary authority in the 8 administrator or fiduciary, the Court reviews the denial of benefits under the plan for an 9 abuse of discretion. Firestone, 489 U.S. at 115, 109 S. Ct. at 957. However, in order for the 10 abuse of discretion standard to apply, the Plan must unambiguously grant discretion to the 11 administrator or fiduciary. Kearney v. Standard Ins. Co., 175 F.3d 1084, 1089 (9th Cir. 12 1999). 13 2. 14 5899 & 5967.) 15 3. The Plan confers discretionary authority on the administrator and Aetna. (AR Once the Court concludes that the policy vests discretionary authority in the 16 administrator or fiduciary, the Court must determine whether the administrator or fiduciary 17 is operating under a conflict of interest. In recent decisions, first the Ninth Circuit, and then 18 the Supreme Court, determined that the abuse of discretion standard still applies even when 19 the administrator has a conflict of interest. See Metro. Life Ins. Co. v. Glenn, 128 S. Ct. 20 2343, 2346, 171 L. Ed. 2d 299 (2008) (“Often the entity that administers the plan, such as an 21 employer or an insurance company, both determines whether an employee is eligible for 22 benefits and pays benefits out of its own pocket. We here decide that this dual role creates a 23 conflict of interest; that a reviewing court should consider that conflict as a factor in 24 determining whether the plan administrator has abused its discretion in denying benefits; and 25 that the significance of the factor will depend upon the circumstances of the particular 26 case.”); Abatie v. Alta Health & Life Ins. Co., 458 F.3d 955, 965 (2006) (“Abuse of 27 discretion review applies to a discretion-granting plan even if the administrator has a conflict 28 -17- 1 of interest. But Firestone also makes clear that the existence of a conflict of interest is 2 relevant to how a court conducts abuse of discretion review.”). 3 4. “What the district court is doing in an ERISA benefits denial case is making 4 something akin to a credibility determination about the insurance company’s or plan 5 administrator’s reason for denying coverage under a particular plan and a particular set of 6 medical and other records.” Abatie, 458 F. 3d at 969. In other words, “[a] district court, 7 when faced with all the facts and circumstances, must decide in each case how much or how 8 little to credit the plan administrator’s reason for denying insurance coverage.” Id. at 968; 9 Saffon, 522 F.3d at 868-69. “The district court may, in its discretion, consider evidence 10 outside the administrative record to decide the nature, extent, and effect on the 11 decision-making process of any conflict of interest; the decision on the merits, though, must 12 rest on the administrative record once the conflict (if any) has been established, by extrinsic 13 evidence or otherwise.” Abatie, 458 F.3d at 970. 14 5. Here, Aetna is not the funding source for the plan. It therefore does not 15 operate under a structural conflict of interest. Nevertheless, it promised to apply, “to the 16 extent applicable,” its “normal claim determination, payment and audit procedures, and cost 17 control standards in a manner consistent with the terms of the Plan, the Services Agreement, 18 and applicable law.” (AR 5957.) Although the Court’s ultimate determination would be the 19 same even if it applied no skepticism at all to Aetna’s decision to terminate Harder’s 20 benefits, the Court concludes that a minimal level of skepticism is appropriate in these 21 circumstances to inform its review of Aetna’s determinations under the abuse of discretion 22 standard. 23 6. “[T]he test for abuse of discretion in a factual determination (as opposed to 24 legal error) is whether ‘we are left with a definite and firm conviction that a mistake has 25 been committed,’ and we may not merely substitute our view for that of the fact finder. To 26 do so, we consider whether application of a correct legal standard was ‘(1) illogical, (2) 27 implausible, or (3) without support in inferences that may be drawn from the facts in the 28 record.’ That standard makes sense in the ERISA context, so we apply it, with the -18- 1 qualification that a higher degree of skepticism is appropriate where the administrator has a 2 conflict of interest.” Salomaa v. Honda Long Term Disability Plan, 642 F.3d 666, 676 (9th 3 Cir. 2011) (quoting United States v. Hinkson, 585 F.3d 1247, 1262 (9th Cir. 2009)). 4 “Applying a deferential standard of review does not mean that the plan administrator will 5 prevail on the merits. It means only that the plan administrator’s interpretation of the plan 6 ‘will not be disturbed if reasonable.’” Conkright v. Frommert, 559 U.S. 506, 521, 130 S. Ct. 7 1640, 1651, 176 L. Ed. 2d 469 (2010) (quoting Firestone, 489 U.S. at 111, 109 S. Ct. at 8 954)). The deference accorded to administrators “does not suddenly disappear simply 9 because a plan administrator has made a single honest mistake.” Id. at 518, 130 S. Ct. at 10 1649. 11 7. “[C]onditioning an award on the existence of evidence that cannot exist is 12 arbitrary and capricious.” Salomaa, 642 F.3d at 678. The “continual shifting” of a plan’s 13 grounds for denial may “also suggest abuse of discretion.” Id. at 679. 14 8. Where an administrator denies a claim for benefits “based on absence of some 15 sort of medical evidence or explanation,” the administrator is “obligated to say in plain 16 language what additional evidence it needed and what questions it needed answered in time 17 so that the additional material could be provided.” Id. at 680. “An administrator does not do 18 its duty under the statute and regulations by saying merely ‘we are not persuaded’ or ‘your 19 evidence is insufficient.’ Nor does it do its duty by elaborating upon its negative answer 20 with meaningless medical mumbo jumbo.” Id. 21 9. “[T]he burden of proof continues to lie with the plaintiff when disability 22 benefits are terminated after an initial grant. . . . That benefits had previously been awarded 23 and paid may be evidence relevant to the issue of whether the claimant was disabled and 24 entitled to benefits at a later date, but that fact should not itself shift the burden of proof.” 25 Muniz v. Amec Constr. Mgm’t, Inc., 623 F.3d 1290, 1296 (9th Cir. 2010). 26 III. 27 28 Analysis The Court concludes, after reviewing the Administrative Record, and considering the arguments and Trial Briefs submitted by the parties, that Plaintiff satisfied her burden to -19- 1 establish that she remained totally disabled as defined by the Plan beyond May 1, 2014, and 2 that Aetna’s decision to terminate benefits as of May 2, 2014, was arbitrary and capricious. 3 Specifically, by concluding that its July 24, 2014 decision “partially overturning” its 4 termination of benefits was based on “a lack of medical information (ie. progress notes 5 documenting abnormal physical exam supporting a functional impairment that would have 6 prevented her from performing work at any reasonable occupation as of May 01, 2014 only,” 7 Aetna abused its discretion. (AR 984.) That determination is illogical because Harder 8 submitted her appeal and supporting documentation on April 24, 2014. (AR 3941-55.) As a 9 result, it was impossible for Harder to submit evidence to support her continued disability 10 beyond May 1, 2014. 11 As Aetna’s decision “partially overturning” its previous termination of benefits 12 acknowledges, the evidence submitted by Harder as of that date supports the conclusion that 13 her disability continued at least through May 1, 2014. At the time Aetna terminated her 14 benefits beginning on May 2, 2014, Aetna was not in possession of any evidence that 15 Harder’s condition had improved after the submission of her appeal on April 24, 2014. 16 Aetna’s abuse of discretion is compounded by the fact that although it overturned its 17 previous termination of benefits beginning on April 1, 2013, it originally provided her with 18 no opportunity to appeal its new decision to terminate her benefits as of May 1, 2014. 19 Aetna’s decisions in the second round of appeals, issued on November 5, 2015, and 20 August 11, 2016, affirmed the original July 24, 2014 decision. Although those decisions did 21 provide Harder with an opportunity to provide additional evidence in support of her 22 contention that she remained disabled beyond May 1, 2014, and Aetna and its reviewers did 23 consider at least most of that additional evidence, those reviews did not cure the arbitrariness 24 of the original July 24, 2014 decision. Aetna’s selective reliance on a small number of the 25 voluminous treatment notes submitted by Harder’s mental health providers, and particular 26 reliance on notes and letters from December 11, 2014, January 22, 2015, February 12, 2015, 27 March 10, 2015, March 19, 2015, April 30, 2015, May 12, 2015, May 28, 2015, June 9, 28 2015, and July 15, 2015 (AR 1005-06), may provide some support for a conclusion that -20- 1 Harder was not totally disabled by sometime in late 2014 or mid-2015,2/ but that evidence 2 does little to support Aetna’s conclusion that Harder was no longer disabled as of May 2, 3 2014. Moreover, the erroneous statements by Aetna and its reviewers concerning the dates 4 during which Harder participated in the Mission Community Hospital Turning Point 5 Intensive Outpatient Psychiatric Program, and her ability to maintain full-time employment 6 while receiving treatment twice each week for “her debilitating anxiety and panic attacks 7 related to PTSD, secondary to work stress and chronic pain following work related injury” 8 confirms Aetna’s decisions on appeal were arbitrary and capricious. The reasons for 9 Aetna’s denials, and the type of evidence Aetna deemed important, also shifted as Harder’s 10 counsel responded in the appeals to the stated bases of the prior denials. The Court therefore 11 concludes that Aetna abused its discretion when it terminated Harder’s benefits beginning on 12 May 2, 2014. 13 Conclusion 14 For all of the foregoing reasons, the Court concludes that Plaintiff has met her burden 15 of proof to establish that the Plan’s termination of her disability benefits beginning on May 16 2, 2014, was arbitrary and capricious. Plaintiff is therefore entitled to reinstatement of her 17 long-term disability benefits under the Plan beginning on May 2, 2014. Plaintiff shall 18 submit a proposed Judgment by no later than December 13, 2017. Defendant’s objections to 19 the proposed Judgment, if any, shall be filed no later than December 20, 2017. The Court 20 will issue a separate order with the deadlines and procedures for the filing of a Motion for 21 Attorneys’ Fees. 22 IT IS SO ORDERED. 23 DATED: December 6, 2017 24 ___________________________________ Percy Anderson UNITED STATES DISTRICT JUDGE 25 26 27 28 2/ Because the only issue before the Court is whether Aetna abused its discretion by terminating Harder’s disability benefits beginning on May 2, 2014, the Court makes no determination whether Harder ceased being disabled under the Plan at some later date. -21-

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