Lee v. Kaiser Foundation Health Plan Long Term Disability Plan

Filing 85

ORDER GRANTING IN PART DEFENDANTS' MOTION FOR SUMMARY JUDGMENT AND DENYING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT(SI, COURT STAFF) (Filed on 9/19/2011)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

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PAMELA LEE,

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United States District Court
For the Northern District of California

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Plaintiff,

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ORDER GRANTING IN PART
DEFENDANTS’ MOTION FOR
SUMMARY JUDGMENT AND DENYING
PLAINTIFF’S MOTION FOR SUMMARY
JUDGMENT

v.
KAISER FOUNDATION HEALTH PLAN
LONG TERM DISABILITY PLAN,
Defendant.
/

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No. C 09-02176 SI

METROPOLITAN LIFE INSURANCE
COMPANY,
Real Party in Interest.
/

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Currently before the Court are the parties’ cross motions for summary judgment. As discussed

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below, the Court GRANTS in part the motion by defendant Kaiser Foundation Health Plan and real

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party in interest Metropolitan Life Insurance Company (collectively “defendants” or “MetLife”), and

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DENIES plaintiff’s motion for summary judgment.

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BACKGROUND

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Plaintiff was a recruiting coordinator at Kaiser Foundation Health Plan, Inc. Administrative

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Record (“AR”) 2332. She suffered from “acute stress/depression,” for which she was treated in May

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2003. AR 769. Plaintiff also suffered two workplace injuries. In June 2004, she slipped and fell in the

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lobby of the building where she worked. AR 2241. She was diagnosed with “cervical spine strain,

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bilateral trapezius strain” as well as “right knee strain/contusion, bilateral wrist strain.” AR 774. She

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complained of headaches, ringing in the left ear, left side pain, right arm pain, as well as pain in both

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legs, both wrists, and both ankles. AR 782. At the end of June 2004, she was complaining that her left

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hand digits were numb, that she had continuing headaches, loss of balance, and loss of sense of

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direction. AR 790. She complained that the left side of her body was weak and that she could not

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remember things that she knew that she should know. AR 790. She was diagnosed with left wrist sprain

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and possible tendinitis, and her physician noted that she was improving more slowly than expected. AR

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791. She worked for one week during August, but otherwise was on total temporary disability until

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October 15, 2004. AR 2241.

United States District Court
For the Northern District of California

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Plaintiff was injured again on October 27, 2004, when she was hit by a door. AR 2241. Plaintiff

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stopped working on February 28, 2005, and submitted a claim for disability benefits in August 2005.

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AR 2331–33. She did not complete required documentation for her claim right away. AR 2329. In

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October 2005, she sent an employee statement in support of her claim. She identified February 28, 2005

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as her last day of work, stated that she was disabled as of June 4, 2005, and explained that she could not

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work due to “repetition/pain/stress/depression/memory problems.” AR 2323. In December, MetLife

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received an attending physician’s statement. AR 2320–22. The physician had advised plaintiff to return

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to work as of October 18, 2005. AR 2321. Three days after receiving the physician statement, on

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December 8, 2005, MetLife informed plaintiff that it could not make a claim determination if she did

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not file additional requested documentation. AR 2319.1

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Both parties agree that in November 2006 plaintiff was fired from Kaiser, having been accused

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of “blowing up” at a coworker. See Plaintiff’s Motion at 18; MetLife Reply at 11. On April 12, 2007,

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The AR shows that plaintiff was working or released back for work at various points in 2005
and 2006. See, e.g., AR 2255 (plaintiff on modified duty on August 10, 2005); AR 2251 (treating
physician released plaintiff to work as of October 3, 2005); AR 2321 (advised to return to work on
October 18, 2005); AR 2238 (after being out of work for a week, on February 16, 2006 physician
considered plaintiff able to work and notes plaintiff wanted to return to work); AR2151 (on November
9, 2006, plaintiff was on return to modified work status, but noting that plaintiff was recently fired); AR
2149 (on November 22, 2006 physician noted plaintiff was on return to modified work status). Plaintiff
recognizes that the record has “a lot of return to work/modified work attempts, but no coherent list of
when Ms. Lee was working and not working.” Plaintiff’s Motion at 13 fn. 8. Despite this recognition,
plaintiff did not provide the Court with a list of – or at least her version of – the periods when she was
at work, at work with modified conditions, or off work due to limitations from 2004 through 2007.
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plaintiff had cervical fusion surgery. AR 2095. Plaintiff reopened her claim in August 2007. AR 199.

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She informed MetLife that she had been fired from Kaiser and was currently receiving worker’s

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compensation. AR 198–99. She submitted some supporting documentation. AR 2303–17; 2287–2300;

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2225–82.
On November 21, 2007, MetLife denied her claim, explaining that plaintiff’s medical records

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did not establish that she was disabled under the Plan. AR 2219–24. Plaintiff submitted additional

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documentation. AR 2197–2200, 2206–18. On January 15, 2008, MetLife again sent plaintiff a letter

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saying that her claim was being denied. AR 2094–96. In that letter, MetLife stated: “Disability is

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supported from April 12, 2007, the date of the cervical fusion, through September 11, 2007.” AR 2095.

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United States District Court
For the Northern District of California

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However, still using plaintiff’s originally-identified February 28, 2005 date as plaintiff’s last day of

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work, MetLife explained that this period of disability “began after [plaintiff’s] eligibility for LTD

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insurance ended as [she was] previously off work for over two years.” Id.

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On July 10, 2008, plaintiff appealed and sent over 1500 pages of supporting documentation. AR

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631–2093. MetLife retained three independent physician consultants (“IPCs”) to provide medical

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opinions as to plaintiff’s restrictions and limitations. One of the IPCs, Dr. Topper, concluded that

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plaintiff suffered some physical limitations on her ability to work between March 1, 2005 and April 12,

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2007. He found that she would have been totally disabled for the two month following her surgery, until

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June 12, 2007, and that her radicular symptoms were completely resolved following the surgery. AR

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599–601. The second IPC, Dr. Murphy, concluded that psychiatric records supported a conclusion that

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plaintiff suffered from psychiatric impairment from February 28, 2005 onward. A third IPC, Dr.

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Schroeder, agreed. AR 442–50.

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Ultimately, MetLife determined that plaintiff was disabled by a psychiatric condition and not

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unable to work due to a continuous physical impairment. AR 424, 429. Under the terms of the plan,

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this entitled plaintiff to 24 months of benefits and no more. MetLife then conducted a separate

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employability analysis, to see if plaintiff could qualify for ongoing benefits after the 24 month period

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based on physical impairments. She would have needed to be unable to perform any occupation, not

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merely her own. The analysis identified four suitable occupations in addition to plaintiff’s own

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occupation. AR 428–29.
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On February 9, 2009, MetLife informed plaintiff of its conclusions: that she was disabled as of

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March 1, 2005 due to a psychiatric condition, which meant that she would receive LTD benefits from

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August 27, 2005 (the end of the Elimination Period) until August 27, 2007. AR 424–30. But she was

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not physically disabled. Although in a previous letter, MetLife had stated that disability was supported

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“from April 12, 2007, the date of the cervical fusion, through September 11, 2007,” AR 2095, it now

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determined that the cervical fusion disability lasted only through June 12, 2007 and that plaintiff could

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not recover any additional benefits. AR 426.
Plaintiff filed this lawsuit, asking for review of MetLife’s denial of benefits. She argues that her

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chronic depression and the two injuries she sustained combined to produce “co-morbid physical

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United States District Court
For the Northern District of California

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impairments, including post-concussion syndrome, cervical disc degeneration including C5-6

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radiculopathy (for which she underwent [a spinal] fusion), chronic and disabling headaches (either post-

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concussive or cervicogenic in nature), and chronic neck, back and shoulder pain.” Plaintiff’s Motion

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at 2. Thus, she is not disabled only because of a psychiatric condition and the 24-month limitation of

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benefits does not apply.

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MetLife has moved for summary judgment, arguing that its decisions should be affirmed under

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the abuse of discretion standard and arguing that summary judgment should be entered on MetLife’s

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counterclaim seeking repayment of benefit overpayments made to plaintiff in light of her workers

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compensation payments.

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DISCUSSION
I.

Standard of review

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The threshold issue is whether the Court should review the decision to deny further benefits de

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novo or under the abuse of discretion standard.2 The Court reviews benefits denials de novo “unless the

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Plaintiff has filed a motion for summary judgment, but argues that the standard of review is
de novo. De novo review on ERISA benefits claims is typically conducted as a bench trial under Rule
52. See, e.g., Lafferty v. Providence Health Plans, 706 F. Supp. 2d 1104, 1109 (D. Or. 2010) (“Under
Rule 52, the court conducts what is essentially a bench trial on the record, evaluating the persuasiveness
of conflicting testimony and deciding which is more likely true.”). Defendant and MetLife state that
they have filed their motion under Rule 52, but ask the court to affirm that the denial of benefits was not
an abuse of discretion. “When the decision to grant or deny [ERISA] benefits is reviewed for abuse of
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benefit plan gives the administrator or fiduciary discretionary authority to determine eligibility for

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benefits”; if the plan does grant such discretionary authority, the Court reviews the administrator’s

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decision for abuse of discretion. See Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989);

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Salomaa v. Honda Long Term Disability Plan, 637 F.3d 958, 965 (9th Cir. 2011). Under the abuse of

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discretion standard, a decision is not “arbitrary and capricious,” unless it is “‘not grounded on any

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reasonable basis.’” Id. (as amended by Salomaa v. Honda Long Term Disability Plan, 2011 U.S. App.

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LEXIS 10890 (May 26, 2011) (quoting Horan v. Kaiser Steel Retirement Plan, 947 F.2d 1412, 1417

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(9th Cir. 1991)).
However, where the administrator of the benefits plan has a conflict of interest, the abuse of

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United States District Court
For the Northern District of California

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discretion review is further modified and the Court must review the benefits decision “skeptically.” A

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conflict of interest arises where:

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the same entity makes the coverage decisions and pays for the benefits. This dual role always
creates a conflict of interest, [citing Metro. Life Ins. Co. v. Glenn, 554 U.S. 105, 108 (2008)],
but it is “more important . . . where circumstances suggest a higher likelihood that it affected the
benefits decision.” [Glenn, 554 U.S. at 117]. The conflict is less important when the
administrator took “active steps to reduce potential bias and to promote accuracy,” id., such as
employing a “neutral, independent review process,” or segregating employees who make
coverage decisions from those who deal with the company’s finances. [Abatie v. Alta Health &
Life Ins. Co., 458 F.3d 955, 969 n.7 (9th Cir. 2006) (en banc).] The conflict is given more
weight if there is a “history of biased claims administration.” Glenn, 554 U.S. at 117. Our
review of the administrator’s decision is also tempered by skepticism if the administrator gave
inconsistent reasons for a denial, failed to provide full review of a claim, or failed to follow
proper procedures in denying the claim. (citations omitted).
Harlick v. Blue Shield, 2011 U.S. App. LEXIS 17844, *12-13 (9th Cir. Aug. 26, 2011).
The “skeptical” abuse of discretion standard has been explained by the Ninth Circuit as follows:
[W]e consider whether application of a correct legal standard was “(1) illogical, (2) implausible,
or (3) without support in inferences that may be drawn from the facts in the record.” [quoting
United States v. Hinkson, 585 F.3d 1247, 1262 (9th Cir. 2009)]. That standard makes sense in
the ERISA context, so we apply it, with the qualification that a higher degree of skepticism is
appropriate where the administrator has a conflict of interest.
Salomaa, 637 F.3d at 967.
discretion, a motion for summary judgment is merely the conduit to bring the legal question before the
district court and the usual tests of summary judgment, such as whether a genuine dispute of material
fact exists, do not apply.” Bendixen v. Standard Ins. Co., 185 F.3d 939, 942 (9th Cir. 1999), overruled
on other grounds in Abatie v. Alta Health & Life Ins. Co., 458 F.3d 955, 966-69 (9th Cir. 2006) (en
banc)); Hughes v. Unumprovident Corp., No. C 07-4088 PJH, 2008 WL 4452140, * 4 (N.D. Cal. 2008).
The Court, therefore, will determine what standard of review applies. If abuse of discretion applies, the
Court will treat the parties’ motions as ones for summary judgment under Rule 56.
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A.

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Here, the Administrative Record contains a Certificate of Insurance (“COI”, AR 1–34)3, a

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Summary Plan Description (“SPD”) (AR 44–194), and a Plan document (“Welfare Benefits Plan” or

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“WBP,”AR 538–50).4 The WBP provides that the Plan fiduciary “shall have full and complete

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discretionary authority with respect to its responsibilities under the Plan . . . .

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interpretations, and decisions of a Named Fiduciary or a delegate thereof shall be conclusive and binding

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on all persons and shall be given the maximum possible deference allowed by law.” AR 544. Similarly,

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the “additional information section” attached to the Certificate of Insurance states that:

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All actions,

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[i]n carrying out their respective responsibilities under the Plan, the Plan Administrator and other Plan
fiduciaries shall have discretionary authority to interpret the terms of the Plan and to determine
eligibility for and entitlement to Plan benefits in accordance with the terms of the Plan. Any
interpretation or determination made pursuant to such discretionary authority shall be given full force
and effect, unless it can be shown that the interpretation or determination was arbitrary and capricious.

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AR 41; see also AR 34 (“This is the end of the certificate. The following is additional information.”).

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Both parties admit that the Summary Plan Description is silent as to discretion.5

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United States District Court
For the Northern District of California

Discretion is Conferred on MetLife

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Following oral argument, the parties submitted supplemental briefing and evidence regarding the

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standard of review. As part of its submission, defendant filed a “Supplemental Declaration of Joanne

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Carroll re Documents Applicable to Long Term Disability Benefits.”

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supplemental declaration Ms. Carroll explains that plaintiff’s long-term disability benefits were provided

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under the Kaiser Permanente Flexible Benefits Plan (“Flexible Benefits Plan” or “FBP”), and supplement

Docket No. 79.

In her

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In her opening brief, plaintiff recognized that the Certificate of Insurance is logged at AR 1.
In her reply brief and opposition to MetLife’s cross motion, however, plaintiff argues that the record
does not demonstrate what the document that starts at AR 1 actually is. On AR 2, however, the
document clearly states that it is a Certificate of Insurance. The Supplemental Carroll Declaration
makes it clear that the document at AR1 - 34 is an amended exhibit to the MetLife group policy that
provided LTD coverage to plaintiff and that document includes the COI applicable to Ms. Lee’s claim.
Supp. Carroll Decl. ¶ 17 & Ex.K.
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In her opening brief, plaintiff recognized that the WBP at AR 538 is the Plan at issue. In her
reply brief and opposition to the cross motion, however, plaintiff argues that the WBP is only an
umbrella plan and it does not provide the LTD benefits at issue. In light of this argument, the Court
allowed the parties to submit additional briefing and evidence regarding what plans and documents are
at issue in this case.
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In her supplemental declaration, Ms. Carroll admits that defendant produced the incorrect SPD
in the administrative record and attaches the correct one at Exhibit M. Plaintiff does not argue that the
correct SPD attempts to withdraw discretion provided in the WBP and COI. Instead, the newly
produced SPD is, like the one in the AR, silent on the issue of discretion.
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and amendments which made the FBP applicable to plaintiff’s work unit. See Supp. Carroll Decl., ¶¶3-6

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and Exs. A-D thereto. Carroll also states that when an employee selects benefits under the FBP the

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employee “thereby” becomes a participant in the “umbrella” Kaiser Permanents Welfare Benefits Plan.

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Id., ¶¶ 9-11 & Exs. E-G thereto. The Welfare Benefits Plan is the Plan produced at AR 538-50 and, as

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discussed above, confers discretion for determining eligibility on the Plan administrator. See AR at 544.

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In addition to Carroll’s assertion that employees selecting benefits under the Flexible Benefits

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Plan “thereby” become participants in the Welfare Benefits Plan – and covered by the discretion provided

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by the WBP – the appendices to the WBP support MetLife’s argument. Specifically, Appendix A at AR

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550 to the WBP lists the “benefit programs” that are part of the Plan and includes “Metropolitan Life

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United States District Court
For the Northern District of California

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Insurance Company Contract #95910, 95911.” Carroll’s supplemental declaration attaches the MetLife

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policy insuring group long term disability, and the group policy number, as amended, is “95910-G.”

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Carroll Decl., 14-15 & Exs.I-J; see also id., Exs. K-L (the original and amended “Your Employee Benefit

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Plan Kaiser Foundation Health Plan, Inc., Long Term Disability Benefits,” document incorporating the

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certificates of insurance). This evidence establishes that plaintiff’s LTD benefits are covered by the

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WBP.

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Plaintiff’s main response is that nothing in the record – other than Ms. Carroll’s declaration –

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supports tying plaintiff’s LTD benefits under Flexible Benefits Plan to the discretion provided in the

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Welfare Benefits Plan. However, as noted above, the Appendix to the Welfare Benefits Plan at AR 550

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lists the MetLife policy number providing the LTD benefits. Those benefits were offered under the

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“cafeteria-style” Flexible Benefits Plan, but the FBP is itself included under the umbrella of the WBP.

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Plaintiff also challenges Ms. Carroll’s declaration and the authenticity of the documents she submits in

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order to argue that the WBP’s express discretion should not apply to plaintiff’s claim. See Plaintiff’s

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Supp. Reply Re Standard of Review (Docket No. 80) at 9-13. However, the authenticity of the records

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at issue – including the determinative the WBP and the COI which were produced in the administrative

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record – is sufficiently established by Ms. Carroll’s declarations made in her capacity as a

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Benefits/Consultant who was involved with the creation of the WBP and familiar with Kaiser’s employee

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benefit plans.6 See Carroll Decl., ¶ 1; Supp. Carroll Decl., ¶ 1; see also Fed. Rule of Evid. 902(11).

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The Court also notes that the certificate of insurance supports giving discretion to MetLife as

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claims administrator. As noted above, the document containing the certificate effective as of December

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1, 2004, provides in its “additional information” section that discretion is provided to the administrator

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to determine eligibility. AR 41. Plaintiff attempts to undermine this fact by arguing that the discretion

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language is not in the certificate of insurance itself – which ends at AR 34 – and notes that the prior

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certificate of insurance, see Carroll Decl., Ex K, provided for discretion on the face of the certificate.

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Id., pg. ii. The Court agrees that, standing alone, the certificate of insurance document would not be

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enough to confer discretion on MetLife, but finds it is consistent with and supports the provision of

United States District Court
For the Northern District of California

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discretion granted in the Welfare Benefits Plan.7

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Additionally, the Court concludes that the SPD and the Flexible Benefits Plan’s silence does not

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create a conflict with the Welfare Benefits Plan and Certificate of Insurance. In the Ninth Circuit, where

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the terms of different plan documents are in conflict, the document granting the most protection to the

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insured governs. See Bergt v. Retirement Plan for Pilots Employed by MarkAir, Inc., 293 F.3d 1139,

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1145 (9th Cir. 2002). This rule applies when documents are affirmatively in conflict, not necessarily

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when one document is silent. See Lafferty v. Providence Health Plans, 706 F. Supp. 2d 1104, 1111 (D.

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Or. 2010) (“The Ninth Circuit, and the majority of other jurisdictions which have considered this issue,

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Plaintiff also challenges the authenticity of the Appendices attached at AR 500 to the Welfare
Benefits Plan, noting that Appendices A and B first appear at AR 549 and are blank, but then
subsequently appear filled out at AR 550 without an internal page number or date on the page. See
Plaintiff’s Supp. Reply at 11. The WBP and all of its appendices were produced as part of
administrative record. The document was clearly central to defendant’s position regarding discretion
and plaintiff had the opportunity to explore issues concerning the initial blank appendix page and the
subsequently completed appendix page at AR 550. Having failed to do so, she cannot now attempt to
defeat summary judgment on this ground.
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Plaintiff also argues that because the California Insurance Commissioner withdrew approval
of similar discretionary language in certificates in 2004, the Court should disregard that language.
Plaintiff, however, does not demonstrate that the California Insurance Commissioner’s decisions are
binding in the ERISA context. See, e.g., Saffon v. Wells Fargo, 522 F.3d 863 (9th Cir. 2008)
(questioning whether federal law permitted states to nullify an ERISA plan’s grant of discretionary
authority). Moreover the Court notes that the language is included only in the “additional information”
section of the certificate and standing alone would not confer discretion. As it is not relying on
plaintiff’s evidence regarding the Commissioner’s actions, the Court need not consider MetLife’s
objections to that evidence. Similarly, the Court has not relied on the other evidence MetLife objects
to in the Padway Declarations, and therefore overrules defendants’ other objections. Docket Nos. 60,
75.
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have concluded that silence in the SPD regarding language contained within the plan is not necessarily

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a conflict.”), reversed on other grounds, 2011 U.S. App. LEXIS 11682 (9th Cir. Or. June 7, 2011); Daic

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v. Metro. Life Ins. Co., 458 F. Supp. 2d 1167, 1173 & n.5 (D. Hawaii 2006) (“The Plaintiff has cited no

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statute or caselaw that requires particular language to be in a particular place in the ERISA plan.”); cf.

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Atwood v. Newmont Gold Co. Inc., 45 F.3d 1317, 1321 (9th Cir. 1995) (silence regarding discretion in

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an SPD is acceptable, since the summary is required only “to describe accurately the circumstances or

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actions which could affect an employee’s eligibility for benefits”), overruled on other grounds by Abatie,

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458 F.3d at 966.
Plaintiff points to language in the SPD that she believes makes the SPD’s silence regarding

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United States District Court
For the Northern District of California

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discretion into an actual conflict with the terms of the other Plan documents. The SPD states that a

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disability claimant must provide Kaiser with “medical documentation certifying [her] disability”; then

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it provides that MetLife has the right to require evidence that the claimant has applied for other benefits

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for which she is eligible. AR 183. Plaintiff argues that this is an express limitation on MetLife’s role

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— that all she had to do was provide certain required documents and that MetLife may not deny benefits

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merely because it disagrees with the medical documentation. Plaintiff does not explain who has the right

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to determine whether the medical documentation actually certifies a qualifying disability, however, and

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it is not obvious from the SPD that MetLife does not have that discretion. While the statement in the

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SPD would not be enough to lead the Court to grant abuse of discretion review on its own, it certainly

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does not conflict with the terms of the WBP and COI.

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Finally, plaintiff argues that the standard of review in this case is controlled by Grosz-Salomon

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v. Paul Revere Life Ins. Co., 237 F.3d 1154 (9th Cir. 2001). In that case, the claims administrator

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attempted to confer discretion upon itself by issuing a revised SPD granting discretion where the

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underlying Plan did not provide discretion. The Ninth Circuit rejected that attempt, noting that because

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the Plan contained an integration clause the SPD could not alter a substantive provision of the Plan, e.g.,

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providing no discretion to the claims administrator. Id. at 1161. The Court also held that even absent

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the integration clause, the SPD could not confer discretion upon the administrator where the SPD was

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not adopted in conformance to the Plan’s requirements (as in that case, the plan required that any

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amendments be signed by both parties, but the SPD was issued and signed only by the administrator).
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Id. Here, however, the WBP provides discretion. The WBP includes within its umbrella the provision

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of LTD benefits under the FBP and MetLife contract. See AR 550. The additional information attached

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to the COI also provides discretion. The SPD and the FBP are both silent on discretion. Grosz-Salomon,

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therefore, is inapposite as MetLife is not unilaterally attempting to provide itself with discretion through

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subsequent amendments to Plan documents.

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For the foregoing reasons, the Court concludes that the relevant Plan documents at issue confer

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discretion on MetLife as the claims administrator to determine eligibility for benefits. As such, this

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Court’s review is for abuse of discretion.

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United States District Court
For the Northern District of California

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B.

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Having determined abuse of discretion is the standard, the Court must next determine if it applies

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that standard skeptically in light of a conflict of interest. As MetLife is the entity that makes coverage

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decisions and pays for the benefits, a conflict exists. Harlick v. Blue Shield, 2011 U.S. App. LEXIS

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17844, *12. This conflict is given less weight if the administrator undertook a neutral, independent

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review process. Id. at *12-13. The conflict is given more weight if there is a history of biased claims

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administration, if the administrator gave inconsistent reasons for a denial, if the administrator failed to

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provide a full review of a claim, or failed to follow proper procedures in denying the claim. Id., at *13;

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see also Glenn, 554 U.S. 118.

Conflict of Interest

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Plaintiff makes two arguments in support of her contention that MetLife’s review was biased and

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should be heavily scrutinized. First, plaintiff argues that MetLife has not affirmatively shown that its

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claim administrative process is fair and neutral. Second, in her reply plaintiff argues that the reports of

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two of the MetLife IPCs – Dr. Topper and Dr. Murphy – show that they are biased in favor of denying

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claims. The Court rejects both of these arguments for the reasons discussed below.

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i.

Claims Administration Process

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Plaintiff first argues that 29 C.F.R. § 2560.503-1(b)(5) requires MetLife to have “administrative

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processes and safeguards designed to ensure and to verify that benefit claim determinations are made in

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accordance with governing plan documents and that, where appropriate, the plan provisions have been
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applied consistently with respect to similarly situated claimants”; (2) that 29 C.F.R. § 2560.503-1(m)(8)

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makes clear that documentation of these processes and safeguards is “relevant” to the claim; (3) that 29

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C.F.R. § 2560.503-1(h)(2)(iii) requires such documentation be produced upon the request of the

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beneficiary following an adverse benefit determination; and (4) that 29 C.F.R. § 2560.503-1(h)(2) makes

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clear that MetLife’s failure to produce documents regarding its internal claims processing procedures

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means that the “claims procedures will not be deemed to provide a claimant with a reasonable

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opportunity for a full and fair review.” MetLife responds that these regulations apply to plans not to

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third-party claim administrators (such as MetLife), and that all of the Plan’s claims procedures were

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disclosed to plaintiff. The Court agrees with MetLife’s understanding of 29 C.F.R. § 2560.503-1(b)(5),

United States District Court
For the Northern District of California

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which is clearly directed at “[e]very employee benefit plan.” Therefore, plaintiff’s argument fails.8

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Second, plaintiff points to MetLife’s failure to disclose its quality control protocol and the

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procedures by which MetLife ensures that its claim reviewers decide claims accurately. Motion at 6; see

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also Docket No 48 at 5 (granting plaintiff’s motion to compel MetLife to produce documents re quality

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control). Plaintiff argues that because MetLife has produced nothing in response to this Court’s order

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granting plaintiff’s motion to compel (MetLife asserted no responsive documents existed), MetLife has

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failed to show it maintains reasonable claim procedures. Motion at 6 (citing Montour v. Hartford Life

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& Accident Ins. Co., 588 F.3d 623, 634 (9th Cir. 2009)). However, there is nothing in the administrative

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record itself that discloses that plaintiff did not receive a fair review or that MetLife otherwise maintains

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unreasonable claims procedures. But see Montour, 588 F.3d at 633-35 (fact that defendant failed to

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present extrinsic evidence regarding efforts to ensure an accurate claims process, where significant

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evidence in the record established bias in that process, was factor against deference to administrator’s

22
8

23
24
25
26
27
28

Relatedly, plaintiff also asserts that MetLife’s failure to disclose under 29 C.F.R. §
2560.503-1(m)(8) the Reed Review Guidelines relied on by Dr. Topper prevents MetLife from arguing
that it has demonstrated that its claims procedures are fair. MetLife argues that the Guidelines are “not
a MetLife document” and “not part of the administrative record” and thus did not need to be disclosed.
The Court finds that the Guidelines are one document removed from what was in the administrative
record. That is to say, MetLife considered the report of Doctor Topper (and, in fact, agreed with all of
its conclusions), and Dr. Topper in turn relied on the Guidelines “to support [his] final opinion.” AR
604. The Court suspects that Dr. Topper also relied on his medical training, including textbooks he read
in medical school, and also perhaps treatises that he consulted while reviewing plaintiff’s case. Whether
or not the regulations would consider the guidelines to be a “relevant” document that should have been
disclosed, the Court is unwilling to find on the basis of MetLife’s decision not to disclose this document,
that the claims procedures in this case failed to provide plaintiff with a full and fair review.
11

1

decision).9

2

The administrative record undisputedly shows that plaintiff filed an original claim (in August

3

2005), but she failed to provide information necessary to substantiate her claim. Plaintiff sought to and

4

MefLife allowed her to reopen her claim in August 2007, following her cervical fusion surgery. MetLife

5

reviewed the claim and, after denying it, considered plaintiff’s appeal. MetLife considered the 1,500

6

pages of additional documents she submitted in support of her appeal and hired the three IPCs to review

7

her claim. MetLife shared the IPC reports with plaintiff’s physicians for their response, as well as her

8

attorney, and concluded that plaintiff had been disabled by her mental condition but not disabled pursuant

9

to a physical disability. The claim procedures implemented by MetLife in reviewing plaintiff’s claim

United States District Court
For the Northern District of California

10

do not appear to be unreasonable.10

11
12

ii.

Bias of Dr. Topper and Dr. Murphy

13

In her reply, plaintiff raises the additional argument that MetLife abused its structural conflict by

14

employing biased consultants, specifically Drs. Topper and Murphy. See Plaintiff’s Reply at 12-16. The

15

bias of these consultants is established, plaintiff argues, by the fact that in the 25 Dr. Topper reports

16

produced by MetLife, Dr. Topper agreed with a treating physician that a claimant was disabled only once

17

and Dr. Topper earns approximately $500,000 a year from MetLife. Plaintiff’s Reply at 14. For Dr.

18
19
20
21
22
23
24

9

Plaintiff also complains that MetLife has refused to produce the instructions it provides to its
IPCs, despite being ordered by the Court to do so. See Reply at 13-14. Plaintiff argues that the Court
should assume those standards are unreasonable and/or lead to biased decisions. Id. The Court did
order MetLife to produce documents reflecting the standards to be applied by its reviewers in assessing
specific disability claims. See July 14, 2010 Order at 3-4, Docket No. 48. MetLife admits it has not
produced these documents, because the parties could not agree to a stipulated protective order. See
MetLife Motion at 14, n.6. If MetLife was in violation of this Court’s order due to its failure to disclose
the documents and seek entry of a protective order, it was Plaintiff’s burden to raise this issue to the
Court (e.g., through a formal request for issue preclusion sanctions, a Rule 56(f) motion, etc.). Plaintiff
has failed to do so. The Court, therefore, will not assume the non-disclosed documents support plaintiff.
10

25
26
27
28

Plaintiff challenges some of the decisions reached by the IPCs who reviewed plaintiff’s
records and discussed her claims with her treating physicians, arguing that the IPCs failed to adequately
address the diagnoses of her treating physicians. See, e.g., Motion at 21-23. However, these arguments
go to the merits of the Court’s review of the administrator’s decision and do not establish that anyone
at MetLife took an “advocacy” position or otherwise exhibited bias that would call into question the
reasonableness of MetLife’s review of plaintiff’s claim. But see Montour, 588 F.3d at 634 (noting nurse
working for administrator advocated for physicians to agree with administrator’s decision to deny
benefits).
12

1

Murphy, plaintiff argues that his bias is demonstrated because plaintiff estimates that Dr. Murphy earns

2

almost $400,000 annually from MetLife. Id., at 15-16. With respect to the conclusions reached by Dr.

3

Topper in his review of other claimants’ files, MetLife disputes plaintiff’s analysis and contends that Dr.

4

Topper concluded in fifteen reports that claimants had no restrictions/limitations; eight reports showed

5

restrictions/limitations but those would not preclude work; and two reports found claimants could not

6

work. More fundamentally, MetLife argues there is nothing in these reports that shows bias, because

7

each report is based on the specific facts and evidence of the individual case. In the absence of plaintiff’s

8

citation to case law or statutory support that would allow the Court to view only the statistics regarding

9

Dr. Topper’s conclusions in 25 reports, ignoring the facts underlying those reports, to reach a

United States District Court
For the Northern District of California

10

determination that his reports demonstrate bias, the Court agrees with defendants.

11

Moreover, the fact that plaintiff has assumed11 that Doctors Topper and Murphy earn substantial

12

amounts of money from MetLife annually for their review of MetLife claims, does not automatically

13

establish bias. Plaintiff cites no ERISA benefits case on this point, much less a case where the fact that

14

an IPC who reviewed a claimant’s file earned significant income from the benefits administrator was

15

sufficient by itself to establish bias. Cf. Magera v. Lincoln Nat’l Life Ins. Co., 2009 U.S. Dist. LEXIS

16

106440 (M.D. Pa. Nov. 16, 2009) (where reviewers received compensation regardless of the conclusion

17

reached in their reports, possibility for any potential conflict in the review process was lowered). The

18

Court recognizes that having significant and repeat business with one benefits administrator could – in

19

conjunction with other evidence of structural bias in the process or actual bias in an individual case – call

20

into question the neutrality of an IPC, but plaintiff has not made that showing here.

21

In sum, the Court will review the administrator’s decision with skepticism in light of MetLife’s

22

structural conflict, but in the absence of evidence of inadequate claims procedures or a history of biased

23

claim decisions, that conflict is given less weight.

24
25
26
27
28

11

Plaintiff takes the number of reports produced to her for a discrete period of time, as well as
the amount charged by the doctors for completing specific reports, and extrapolates them to annualized
figures. See Plaintiff’s Reply at 14-15.
13

1

II.

Determination of Eligibility by MetLife
According to the terms of the Plan, “Monthly Benefits are limited to 24 months during your

3

lifetime if you are Disabled due to a Mental or Nervous Disorder or Disease, unless the Disability results

4

from: . . . schizophrenia . . . bipolar disorder . . . dementia; or . . . organic brain disease.” AR 27.

5

“Mental or Nervous Disorder or Disease” is defined as “a medical condition of sufficient severity to meet

6

the diagnostic criteria established in the current Diagnostic And Statistical Manual of Mental Disorders

7

[“DSM”].” Id., 28. Plaintiff argues that: (1) the limitation is ambiguous, because it does not clearly

8

specify how to address a disability that is only partly due to a mental or nervous disorder; (2) that the

9

limitation cannot, therefore, be applied if the disability is only partly due to a mental or nervous disorder;

10
United States District Court
For the Northern District of California

2

and (3) therefore, that MetLife’s determination that her monthly benefits were limited to 24 months was

11

arbitrary and capricious. She cites as her primary support a case in which the Ninth Circuit reversed a

12

denial of benefits under the arbitrary and capricious standard because the term “mental disorders” was

13

ambiguous. Patterson v. Hughes Aircraft Co., 11 F.3d 948 (9th Cir. 1993). As such, the Court applied

14

the doctrine of contra proferentem to construe the plan in favor of the insured, and remanded for a

15

determination of whether the plaintiff’s physical condition (headaches) contributed to his disability, or

16

was a cause or symptom of his depression, in either case entitling him to coverage notwithstanding the

17

“mental disorder” limitation. Id., at 950. Plaintiff also relies on Schwartz v. Metro. Life Ins. Co., 463

18

F. Supp. 2d 971, 985-86 (D. Ariz. 2006). There the Court found that the term “mental illness” was

19

ambiguously defined as a “mental, emotional or nervous condition of any kind,” and since the Plan did

20

not specify whether a condition classified as “mental” is determined by looking to the cause or to the

21

symptoms, the Court construed the term in favor of the insured to cover a disability that arguably resulted

22

from the combined impact of physical and mental conditions. Id.

23

MetLife argues that Patterson and Schwartz are inapposite here because the term “Mental or

24

Nervous Disorder or Disease” is expressly defined as a condition sufficient to meet the diagnostic criteria

25

in the DSM. AR 28. As such, MetLife argues that contra proferentem does not apply and its decision

26

here – finding that plaintiff is only disabled in light of her mental condition and that benefits for that

27

condition were limited to 24 months – should be upheld. See Simonia v. Hartford Ins. Co., 606 F. Supp.

28

2d 1091 (C.D. Cal. 2009) (finding “mental disorder” defined by DSM not ambiguous and refusing to
14

1

apply a contra proferentem analysis, even where plaintiff contended his mental disorder was caused by

2

physical ailments); affirmed by Simonia v. Glendale Nissan/Infiniti Disability Plan, 378 Fed. Appx. 725

3

(9th Cir. 2010).12 Met Life also argues that Patterson is not relevant because in Patterson the plaintiff

4

was disabled because of headaches—a physical condition—and the court was concerned by the

5

determination that headaches caused by mental health problems clearly fall within the mental health

6

limitation. Here, the disability was a mental health problem (depression) – which predated her physical

7

conditions – and there was no testimony that her physical conditions were disabling in and of

8

themselves.13
The Court agrees with MetLife and finds Patterson and Schwartz distinguishable because the Plan

10
United States District Court
For the Northern District of California

9

here provides a precise definition of what constitutes a mental disease or condition. AR 28. Plaintiff’s

11

attempt to avoid this result by arguing that her disabling condition is the result of the combined impact

12

of her mental and physical conditions is, therefore, unavailing. On this point, plaintiff also rests a great

13

deal of weight on the fact that Dr. Kirkjian diagnosed plaintiff as having “mood disorder with mixed

14

features of depression and anxiety secondary to cumulative medical condition, code 283.93.” AR 633.

15

Plaintiff argues that this DSM diagnosis demonstrates that Ms. Lee’s depression was exacerbated by her

16

chronic pain. Plaintiff’s Motion at 20. However, the fact that Ms. Lee was diagnosed with a mental

17

disorder under the DSM standards simply serves to bring that diagnosis within the express terms of the

18

Plan’s mental disease exclusion.

19

Finally, reviewing the evidence in the administrative record under the somewhat skeptical abuse

20

of discretion standard required, the Court finds that MetLife’s determination should be upheld. As noted

21

above, MetLife had ample evidence – from plaintiff’s treating physicians and the IPCs – to conclude she

22
23
24
25
26

12

Plaintiff also cites to Schwartz where the Court, in conducting a de novo review, relied on the
testimony of a MetLife employee that a mental condition limitation in the plan at issue was not applied
to claimants who were disabled by both mental and physical conditions, though neither alone is
disabling. Id., at 985. This discussion in inapposite not only because of the abuse of discretion review
in this case, but also as the mental condition limitation at issue in Schwartz is not similar to the one at
issue here. See id., at 973-74.
13

27
28

Plaintiff repeatedly asserts that her physical symptoms, such as chronic pain and postconcussive syndrome “both operate to impair her independently of her depression.” Plaintiff’s Motion
at 10. However, plaintiff cites no evidence in the AR to support that contention or, more importantly,
demonstrate that plaintiff was unable to work because of her physical symptoms.
15

was disabled and unable to work as a result of her mental condition. Plaintiff does not dispute that she

2

was thereby entitled to the 24 months of LTD benefits that MetLife paid her. MetLife also was acting

3

reasonably within its discretion in concluding that plaintiff’s physical limitations were not so disabling

4

that they prevented plaintiff from working in “any occupation.” While the record has substantial

5

evidence that plaintiff suffered from significant physical ailments following her 2004 accidents, including

6

headaches, post-concussive syndrome and cervical pain which led to her April 2007 surgery (assuming

7

the necessity of that operation was related to the injuries she sustained in 2004) – there is no evidence,

8

even from plaintiff’s own treating physicians, that she was disabled and unable to work given those

9

physical ailments. See AR502-03 (treating physician Kurkjian noted in November 2008 that plaintiff’s

10
United States District Court
For the Northern District of California

1

inability to work on consistent basis was “a result of the widely recognized symptoms of depression.”).

11

The closest plaintiff comes to evidence of physical conditions causing her to be unable to work is the

12

December 10, 2008 opinion of Dr. Behravan which notes that while plaintiff suffers from depression

13

“equally important factors keeping Ms. Lee from work are the combination of her chronic pain syndrome

14

and headaches and [mild] post-concussion syndrome.” AR 488-89. The doctor asserts that these

15

conditions provide plaintiff with “some” unspecified restrictions on her ability to work, and that her

16

depression provides her with “additional restrictions.” AR 489. This, however, does not establish that

17

plaintiff could not work because of her physical conditions.

18

Viewing the decision under the somewhat skeptical abuse of discretion standard, the Court finds

19

sufficient evidence to uphold MetLife’s decision to limit plaintiff’s benefits to 24 months under the

20

mental impairment limitation and its conclusion that plaintiff is not unable to work as a result of her

21

physical conditions.

22
23

III.

Summary Judgment on MetLife’s Counterclaim

24

MetLife also moves for summary judgment, arguing that it is entitled to reimbursement for

25

overpayments in the amount of $9,015.09 to offset workers compensation benefits paid during the same

26

period. AR 283–84. Plaintiff opposes judgment on the counterclaim, arguing and submitting evidence

27

in the form of a MetLife “explanation of benefits letter” that MetLife already reduced the amount of

28

benefits it paid plaintiff in light of the workers compensation payments. See Declaration of Pamela Lee
16

1

& Ex. 1 (Docket No. 71).14

2

The Court finds there is a disputed issue of material fact on MetLife’s counterclaim precluding

3

summary judgment.15 The April 23, 2009 MetLife letter in the administrative record does not adequately

4

explain how the additional overpayment amount was calculated. See AR 283-84. The April 7, 2009

5

letter received by Ms. Lee, in contrast, explains the figures MetLife calculated for her “monthly benefit

6

amount,” “gross payment,” the “excess workers comp” adjustment, and the “net payment.” Without

7

additional information from MetLife to support its counterclaim, e.g., a declaration explaining why

8

additional deductions were necessary and how those deductions were calculated, summary judgment is

9

not appropriate.

United States District Court
For the Northern District of California

10
11

CONCLUSION

12

For the foregoing reasons and for good cause shown, the Court hereby GRANTS in part

13

defendant and real party in interest’s motion for summary judgment and DENIES plaintiff’s cross-motion

14

for summary judgment.

15
16
17

IT IS SO ORDERED.
Dated: September 19, 2011
SUSAN ILLSTON
United States District Judge

18
19
20
21
22
23
24
25
26
27
28

14

MetLife objects to plaintiff’s declaration and her exhibit on the grounds that Ms. Lee is not
competent to testify about how MetLife calculates monthly benefits and she cannot authenticate the
document. The Court OVERRULES MetLife’s objection.
15

Neither party addresses the standard of review the Court should apply to this aspect of
MetLife’s determination. To the extent abuse of discretion applies, the Court finds that the
administrator’s decision is not reasonably supported by the administrative record, as Ms. Lee was not
provided with an adequate explanation of how MetLife decided to further reduce her award to
compensate for alleged overpayments.
17