Hegger v. UNUM Life Insurance Company of America et al
Filing
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FINDINGS OF FACT AND CONCLUSIONS OF LAW AFTER BENCH TRIAL by Judge Alsup denying 34 Motion for Summary Judgment; granting 36 Motion for Summary Judgment; deferring ruling on 53 Motion to Strike (whalc1, COURT STAFF) (Filed on 3/1/2013)
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IN THE UNITED STATES DISTRICT COURT
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FOR THE NORTHERN DISTRICT OF CALIFORNIA
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TAMI HEGGER,
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For the Northern District of California
United States District Court
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No. C 11-04229 WHA
Plaintiff,
v.
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UNUM LIFE INSURANCE COMPANY
OF AMERICA, MEDELA INC. LONG
TERM DISABILITY PLAN, AND
MEDELA INC. LIFE INSURANCE
WAIVER OF PREMIUM PLAN,
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Defendants.
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/
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INTRODUCTION
In this ERISA action, plaintiff alleges that defendants improperly denied her claims for
disability benefits. This order is the decision of the Court following a bench trial on the papers.
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FINDINGS OF FACT AND
CONCLUSIONS OF LAW
AFTER BENCH TRIAL
SUMMARY
This order assumes without deciding that the appropriate standard of review for the plan
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administrator’s denial of benefits is de novo review. After a thorough and independent review of
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the administrative record, this order holds that the greater weight of the evidence shows that
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plaintiff is not disabled under the Unum-administered insurance plans. This result does not
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change even if plaintiff’s extrinsic evidence is considered. Judgment will be entered for
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defendants.
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PROCEDURAL HISTORY
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Plaintiff Tami Hegger was previously employed by Medela Inc. as a medical device sales
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representative. Plaintiff left work on December 29, 2004, due to back and neck pain. While at
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Medela, plaintiff was covered by defendant Medela Inc. Long Term Disability Plan and
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defendant Medela Inc. Life Insurance Waiver of Premium Plan. Defendant Unum Life Insurance
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Company of America is the insurer of benefits under the plans and the plan administrator.
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In April 2005 Unum approved plaintiff’s claim for disability benefits. Unum continued
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to pay plaintiff disability benefits for five years. During this time, Unum periodically reviewed
plaintiff’s file and determined that plaintiff remained disabled. In November 2010, however,
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For the Northern District of California
United States District Court
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Unum terminated plaintiff’s disability benefits. Plaintiff appealed in February 2011, and the
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appeal was denied three months later.
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Plaintiff filed this action in August 2011 challenging Unum’s denial of disability
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benefits. Plaintiff seeks payment of benefits due, an order that she is entitled to immediate
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reinstatement of benefits, interest, and prevailing party attorney’s fees under ERISA. In the
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alternative, plaintiff requests a remand to the claims administrator.
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In lieu of a live bench trial, the parties agreed that the matter would be tried based on
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written trial briefs and a documentary trial record submitted by the parties (see Dkt. No. 43 ¶ 5).
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This agreement was reconfirmed by the parties at the hearing. The administrative record in this
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action is voluminous, totaling over 3,000 pages; the parties’ trial submissions and exhibits were
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also substantial. The administrative record previously lodged with the Court, together with the
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trial submissions and exhibits, constitute the complete trial record in this action.
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In addition to the trial briefing, defendants also made a motion to strike certain extrinsic
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evidence relied upon by plaintiff. For reasons explained below, it is unnecessary to rule on the
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motion to strike because consideration of plaintiff’s extrinsic evidence does not change the
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ultimate result.
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It is unnecessary for this order to cite the record for all of the findings herein. Citations
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will only be provided as to particulars that may assist the court of appeals. Any proposal in the
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parties’ trial briefs that has been expressly agreed to or adopted by the opposing side shall be
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deemed adopted (to the extent agreed upon) even if not expressly adopted herein. In the
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findings, the phrase “this order finds . . . ” is occasionally used to emphasize a point. The
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absence of this phrase, however, does not mean (and should not be construed to mean) that a
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statement is not a finding. All declarative statements set forth in the findings of fact are factual
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findings.
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For the Northern District of California
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STATEMENT OF FINDINGS OF FACT
Here are the findings of fact most important to the outcome of the case.
THE PLANS
Medela purchased long-term disability, life, and accident insurance from Unum to fund
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the long-term disability and life waiver of premium plans. The long-term disability plan
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provides Unum as the plan administrator with discretionary authority to review claims under the
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plan. Unum’s definition of disability states:
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You are disabled when Unum determines that:
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- you are limited from performing the material and substantial
duties of your regular occupation due to your sickness or injury;
and
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- you have 20% or more loss in your indexed monthly earnings due
to the same sickness or injury
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After 24 months of payments, you are disabled when Unum
determines that due to the same sickness or injury, you are unable
to perform the duties of any gainful occupation for which you are
reasonably fitted by education, training or experience. The loss of
a professional or occupational license or certification does not, in
itself, constitute disability.
The plan defines gainful occupation as a “means of occupation that is or can be expected
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to provide you with an income at least equal to your gross disability payment within 12 months
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of your return to work.” Because of a maximum benefit provision in the plan, plaintiff’s gross
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monthly benefits are capped at $6,000 per month. Thus, for plaintiff a job would be “gainful”
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under the plan if plaintiff could be expected to earn at least that much per month within twelve
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months of returning to work. “Material and substantial duties” means duties that “are normally
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required for the performance of your regular occupation; and cannot be reasonably omitted or
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modified.”
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The life waiver plan defines disability as follows:
You are disabled when Unum determines that: during the
elimination period, you are not working in any occupation due to
your injury or sickness; and after the elimination period, due to the
same injury or sickness, you are unable to perform the duties of
any gainful occupation for which you are reasonably fitted by
training, education and experience.
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The parties did not raise any issue with the definitions under the two plans, and this order
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finds that they do not conflict. Under the long-term disability plan, plaintiff is entitled to
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disability benefits for the duration of her disability so long as she meets the definition of
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as a consequence of her disability for as long as she remains disabled under the terms of the plan.
For the Northern District of California
United States District Court
disability under the plan. Under the life waiver plan, plaintiff is entitled to waiver of premiums
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MEDICAL EVIDENCE OF PLAINTIFF’S PHYSICAL CONDITION
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This section reviews the most salient facts from the extensive medical information in the
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administrative record.
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On December 22, 2004 plaintiff was treated by Dr. Vernon Williams, M.D., neurology,
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for lower back, neck, and shoulder pain. Dr. Williams noted that the factors that worsened the
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pain included “walking, sitting, motion of the painful limb/joint, lifting heavy object [sic],
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running, coughing, and sneezing.” Plaintiff reported her pain as constant, and rated the intensity
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as ten out of ten. She was diagnosed with lumbar degenerative joint disease and lumbar
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myofascial pain. Plaintiff left work one week later on December 29, 2004.
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On February 14, 2005, plaintiff underwent an MRI that revealed a 5-mm broad-based
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disc protrusion at L5-S1. On February 21, 2005, she retained and was treated by Dr. Jeffrey
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Olsen, M.D., pain management. Dr. Olsen diagnosed plaintiff with lumbar disc displacement
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and lumbago. Dr. Olsen specified that plaintiff could not walk long distances, carry heavy
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objects, or sit for long periods, and stated that plaintiff would be able to return to work after a
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period of three months (AR 205).1 In May 2005 Unum received a letter from Dr. Olsen stating
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that he was no longer treating plaintiff and that the last time he had seen her was on February 21.
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Dr. Olsen referred plaintiff to Dr. Stephan Barkow, M.D., who examined plaintiff on
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March 2, 2005. Plaintiff described her pain to Dr. Barkow as being in her gluteal region, the
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right side of her lower back, and in her right leg. She stated the her pain was typically a seven
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out of ten, but on that day it was a five out of ten. She reported that the pain was worsened by,
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among other things, walking, carrying objects, and extended driving. Dr. Barkow diagnosed
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plaintiff with right S1 radiculitis and sacroiliitis.
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On March 24, 2005, Dr. Barkow performed an epidural steroid injection and other
procedures. Prior to the treatment, plaintiff reported her pain intensity as five out of ten. In the
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For the Northern District of California
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recovery room after the treatment, she rated her pain as zero out of ten.
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In August 2005 plaintiff began treatment with a new attending physician, Dr. Mark
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Brown, M.D., orthopedic surgeon. Plaintiff reported pain in her neck, right shoulder, lower
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back, and in both hips. She reported that the pain increased with extended sitting, standing,
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walking, driving, and carrying over 15 pounds. Dr. Brown diagnosed plaintiff with cervical
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spine strain/sprain with underlying degenerative-disc disease at C5-6, right shoulder strain,
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lumbar spine strain/sprain with facet arthropathy at L5-S1, and intermittent sciatica. Dr. Brown
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concluded that plaintiff was temporarily totally disabled.
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Dr. Brown evaluated plaintiff again on November 30, 2005. Plaintiff reported pain in her
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neck, right shoulder, lower back, right leg, and knee. Dr. Brown’s diagnosis based on that visit
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did not change substantially from his prior diagnosis. Dr. Brown concluded based on that
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evaluation that plaintiff could return to work, but that she should avoid heavy work activities and
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work activities with prolonged neck motion, sitting, or standing (AR 560). Dr. Brown also
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recommended vocational rehabilitation.
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In a subsequent report to Unum, Dr. Brown confirmed that plaintiff had full-time work
ability. Specifically, Dr. Brown concluded that plaintiff could sit, stand, and walk intermittently,
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The parties submitted three different documentary records. All citations herein are to the primary
claim file numbered UA-CL-LTD 000001–002870 unless otherwise noted.
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but not continuously, over the course of an eight-hour work day (AR 465). He also concluded
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that plaintiff could occasionally (1–33% of the time) carry 21–50 pounds, and frequently
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(34–66%) carry lighter loads. Dr. Brown wrote in his report that plaintiff could work either in a
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sedentary activity or light activity level eight hours per day as long as she could sit, stand, or
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walk with a fifteen-minute break each hour (AR 465–66).
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Dr. Barkow evaluated plaintiff again on March 26, 2006. Plaintiff reported that the
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intensity of the pain in her lumbar spine was eight out of ten. She also reported pain radiating
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down her right leg. She reported exercising daily and Dr. Barkow recommended that she
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increase her physical activity.
On May 15, 2006, plaintiff was examined by Dr. Nial Morgan, M.D., an independent
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For the Northern District of California
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medical examiner, in connection with a workers compensation proceeding. Plaintiff reported
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neck pain with an intensity of four out of ten, shoulder pain ranging in intensity from four to ten,
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and back pain with an intensity of eight out of ten. Prolonged sitting, standing, walking, lifting,
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driving, and carrying all contributed to the pain. She reported going to the gym five times a
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week at the recommendation of her formal physical therapist. Her visits to the gym were for one
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and half hours at a time, during which she did cardio and strength training with free weights and
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an elliptical trainer. She stated that she did not engage in any sports activities.
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After reviewing plaintiff’s medical file, Dr. Morgan diagnosed plaintiff with cervical
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spondylosis of C4–5 and C5–6, a herniated fifth lumbar disc with right sciatic symptoms, and
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lumbar degenerative-disc disease at L5-S1. Dr. Morgan found no evidence of right shoulder
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orthopedic injury. Dr. Morgan concluded that plaintiff could return to her usual occupation if
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she so desired without restrictions or accommodations (AR 646–47).
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On May 5, 2007, plaintiff was evaluated by another independent medical examiner in
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connection with a Social Security proceeding: Dr. Sohelia Benrazavi, M.D., internal medicine.
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Dr. Benrazavi determined that plaintiff was able to work in a light capacity. Dr. Benrazavi
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reported that plaintiff could lift and carry 20 pounds occasionally, that she could lift and carry 10
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pounds frequently, and that she could sit, stand, and walk for six hours out of an eight-hour day.
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On June 19, 2007, plaintiff was evaluated by David Bradley, a physical therapist referred
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by her attending physician. Plaintiff reported neck pain with an intensity of six out of ten, and
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shoulder pain with an intensity of three out of ten.
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In February 2008 plaintiff began treatment with a new attending physician, Dr. Michael
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Weinstein, M.D., orthopedic surgeon. Plaintiff reported pain in her lower back, right buttock,
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and neck, with pain intensities reaching 8–9 out of 10. Plaintiff reported that the pain was
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aggravated by, among other things, sitting, straining, lifting, working at a computer, driving, and
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sports. She reported that she had to modify her activities to control her pain and could not do
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most things, though she did go to the gym for stretching and strengthening. She reported that her
last job “frequently” involved lifting 50–100 pound loads, and “continuously” involved lifting
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For the Northern District of California
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25–50 pound loads.
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Following a comparison of a recent back MRI with her MRI from 2005, Dr. Weinstein
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noted that the her back showed some disk dessication and degeneration, but was otherwise
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unremarkable, and that the disk bulge at L5–S1 had diminished.
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In June 2008 plaintiff was examined by another independent medical examiner in
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connection with a Social Security proceeding: Dr. Harlan Bleecker. Dr. Bleecker determined
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that plaintiff’s motor strength and range of motion in her joints and extremities were within
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normal limits. Dr. Bleecker concluded that plaintiff had a cervical spine disorder but could work
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in a light capacity with certain restrictions on reaching.
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Dr. Weinstein examined plaintiff again on July 29, 2008. In a report submitted to Unum,
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Dr. Weinstein diagnosed plaintiff with chronic neck and lower back pain with no evidence of
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radiculopathy or myelopathy. He stated that plaintiff’s MRIs showed disc dessication and
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degeneration but were otherwise unremarkable. Dr. Weinstein concluded that plaintiff would
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not be able to perform any kind of work, but did not explain the basis for this conclusion. He
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stated that plaintiff could be expected to return to work in February 2009 (AR 1048).
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In September 2008 plaintiff sought out and began treatment with Dr. Russell Petrie,
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M.D., orthopedist, for knee pain. Following an MRI, Dr. Petrie diagnosed her with degenerative
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joint disease in her knee. In October 2008 Unum received a report from Dr. Petrie. The report
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was limited to an assessment of plaintiff’s knees only, and concluded that she was completely
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unable to work. The report indicates that she could not carry or lift any amount of weight, bend,
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kneel, crawl, climb stairs, or push/pull more than five pounds. The report does not state the basis
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for these conclusions, nor how they can be reconciled with her contemporaneous workout
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regimen at the gym.
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On March 25, 2010, plaintiff’s file was reviewed by Dr. Robert Clinton, a doctor
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employed by Unum. Dr. Clinton concluded that plaintiff’s condition had improved significantly,
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and that the medical information available showed that she could stand, sit, and walk frequently.
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Dr. Clinton subsequently contacted plaintiff’s treating physician at the time, Dr. Weinstein, and
asked whether he concurred with the assessment. In response, Dr. Weinstein reconfirmed his
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prior recommendations: plaintiff was able to work full-time, subject to certain limitations (AR
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2109–10). She could lift 10 pounds frequently, but only occasionally over her head. She could
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occasionally lift 20 pounds. Sitting would be limited to no more than six hours per day, but she
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could stand and walk frequently.
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Unum contacted plaintiff on May 24, 2010, to discuss the concurrence of Dr. Clinton and
Dr. Weinstein. Plaintiff objected to the conclusions of her primary care physician.
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Three days later, plaintiff began treatment with a new attending physician, Dr. Scott
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Stoney, M.D., pain management. Plaintiff reported pain in her right shoulder blade region,
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anterior chest, mid-thoracic region, and right SI joint. Plaintiff did not report any knee pain.
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Plaintiff reported that all of this pain ranged in intensity from eight to ten out of ten, and that she
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could not conduct normal daily activities. She further reported that standing, sitting, driving, and
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lifting, among other things, aggravated her pain, but that walking improved her symptoms. In a
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report dated July 14, 2010, Dr. Stoney concluded that plaintiff was unable to work, but did not
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explain the basis for this conclusion in his report.
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In subsequent correspondence with Unum, Dr. Stoney stated that plaintiff could not drive
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for more than 30 minutes. On November 19, 2010, Dr. Susan Council, a medical consultant for
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Unum, reviewed plaintiff’s medical file. Dr. Council concluded that there was no physical
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reason for Dr. Stoney’s driving restriction of thirty minutes and that plaintiff was capable of
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working full-time in a light duty capacity.
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The description above covers evidence from seven of plaintiff’s own physicians
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(Williams, Olsen, Barkow, Brown, Bradley, Petrie, Stoney), three independent examiners
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(Morgan, Benrazavi, Bleecker), and two Unum doctors (Clinton, Council). Although plaintiff
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was examined by and her file was reviewed by other doctors after 2004, the assessments
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described above are the most significant.
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THE SOCIAL SECURITY DENIALS
Plaintiff filed a claim for Social Security disability benefits on March 28, 2007. That
claim was denied on May 16, 2007, on the basis that plaintiff had the residual functional capacity
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For the Northern District of California
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to perform light work — including her former occupation — with added restrictions of avoiding
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frequent climbing, stooping, crouching, and kneeling.
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On March 4, 2008, plaintiff filed an application for Social Security benefits. Following a
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hearing, an administrative law judge denied plaintiff’s claim on September 27, 2010. At the
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hearing, independent medical expert Joseph Jensen, M.D., and independent vocational expert
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Joseph Torres also appeared and gave testimony. The ALJ concluded that the medical record
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showed that plaintiff had cervical spondylosis and degenerative disc disease in her back, and
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degenerative joint disease in her right knee, but that the evidence did not establish that she had
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rheumatoid arthritis. The ALJ further found (AR 2517):
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claimant has the residual functional capacity to perform light work
which permits lifting and carrying 20 pounds occasionally and 10
pounds frequently; sitting for 6 hours, and standing/walking for 6
hours out of an 8 hour day except the claimant must change
positions for 2 to 3 minutes every 60 minutes at the worksite;
occasional climbing of stairs/ramps[;] . . . occasional stooping,
crouching and kneeling except crawling should be avoided;
frequent bilateral grasping and fine manipulation; occasionally
reaching at or above the shoulder bilaterally; and occasional use of
pedals with the lower right extremity.
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The ALJ further concluded that plaintiff’s medical conditions could reasonably be
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expected to produce her reported symptoms, but that plaintiff’s “statements concerning the
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intensity, persistence and limiting effects of these symptoms are not entirely credible to the
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extent they would preclude the residual functional capacity for . . . light work” (AR 2518).
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OTHER EVIDENCE OF PLAINTIFF’S PHYSICAL CONDITION
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Certain non-medical evidence in the record of plaintiff’s condition stands out. Most
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significantly, the administrative record shows that plaintiff took first place in a Tae Kwon Do
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martial arts tournament in early 2007 (AR 1303–1306). In a declaration submitted with
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defendant’s opposition trial brief — a document outside of the administrative record and targeted
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by defendants’ motion to strike — plaintiff admits that she attained a black belt rank in Tae
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Kwon Do prior to 2005. She admits that she has “occasionally” practiced her martial arts skills
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since allegedly becoming disabled, and that she also performed in a martial arts tournament in
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2008.
Plaintiff never reported participating in Tae Kwon Do to her doctors or to Unum. Indeed,
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For the Northern District of California
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she at times falsely reported that the she did not engage in any sports activities. While plaintiff
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was practicing her martial arts skills and performing in tournaments in 2007 and 2008, she was
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reporting to her doctors that she was suffering from extreme, debilitating levels of pain on a
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regular basis. Although plaintiff’s opposition brief argues that her 2008 tournament activity
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involved a “slow” form of activity, plaintiff’s own declaration does not so state.
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Unum conducted surveillance of plaintiff’s activities in 2008 and 2010. This surveillance
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included taking video footage of plaintiff’s activities in public. The most significant video
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shows that on one day in September 2010 plaintiff spent an extended period time away from her
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home totaling approximately 6.5 hours. Plaintiff left her home at 4:30 a.m. to go to the gym.
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After spending 90 minutes at the gym, she went to a physical therapy appointment. Following
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her physical therapy appointment, she went shopping. After returning home at 11:00 a.m.,
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plaintiff removed her groceries from her SUV by herself, including what appears to be a flat of
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small water bottles. In the most striking stretch of video, she reached over her head to close the
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trunk of her SUV while carrying what appears to be a flat of canned goods under her right arm
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balanced on her hip. She then opened the passenger side door, placed her purse in her right hand
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(beneath the flat of cans she is carrying under her arm), and then closed the passenger door to her
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SUV with her left hand while balancing the load.
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Other surveillance videos show plaintiff taking walks with her dogs and her husband for
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15 to 30 minutes at a time, and going to a matinee movie showing. She engages in all of these
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routine daily activities without any observable difficulty or discomfort.
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An investigator retained by Unum also reported that plaintiff was observed running on a
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treadmill during the course of the surveillance, but that she was not videotaped running. In a
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sworn declaration submitted in this action, plaintiff states that the investigator’s report is false
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because she has not jogged or engaged in running activities since 2004. This statement
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contradicts a letter plaintiff wrote to Unum in 2011 wherein she stated that she sometimes
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engages in a “slow” jog while using a treadmill at the gym.
The administrative record also shows that plaintiff engaged in substantial amounts of
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travel after leaving her work due to disability. Plaintiff traveled for work-related conferences,
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including trips to Phoenix, Orlando, and a trip to Las Vegas for a five-day convention while
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working for Hygeia, a competitor of her former employer. She has also been able to take
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vacations in Hawaii a couple of times per year.
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Finally, the evidence shows that plaintiff worked at least intermittently following her
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departure from Medela, and that she made false and misleading representations to Unum and her
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physicians regarding her work. Although plaintiff repeatedly told Unum that she was not
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working, she reported to a physical therapist on June 19, 2007 that she was “self-employed.”
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Unum followed up on this information and learned that plaintiff was a 50% owner with her
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husband of a business called the Hegger Insurance Agency. For the years 2004–07 plaintiff
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reported taxable self-employment income of $3,433, $10,950, $15,390, and $26,563,
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respectively. On March 28, 2008, Unum asked plaintiff whether she owned a business and was
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self-employed. Plaintiff denied that she was self-employed and stated that she had never owned
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a business. Thirteen days later plaintiff filed amended tax returns for 2005 and 2006 changing
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the classification of the self-employment income she had received for those years as non-taxable
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because “she was not active in the Hegger Insurance Agency” (AR 1463).
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After learning that plaintiff was working for Hygeia and had attended the conference in
Las Vegas in July 2008, Unum contacted plaintiff to ask whether she had returned to work.
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Plaintiff reported that she was not working and did not disclose that she had attended the
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conference in Las Vegas. When Unum later specifically asked plaintiff whether she had
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attended the conference in Las Vegas, plaintiff confirmed that she had, but claimed she was not
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paid for her work.
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In July 2009 plaintiff submitted a form to Unum reporting that she had returned to work
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but was not getting paid. In August 2009 plaintiff reported to Unum that although she was
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working for Hygeia part-time, she was only earning $30–40 per month. The evidence shows,
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however, that in 2009 plaintiff worked at home for Hygeia for 10 months on a flexible schedule
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and earned over $36,000. Unum did not learn this information until it was disclosed in the
ALJ’s social security denial.
UNUM’S VOCATIONAL ANALYSES
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For the Northern District of California
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Plaintiff worked for Medela, Inc. as a sales representative for over 20 years. At the time
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she stopped working, she was a field sales representative for Medela breastfeeding and OB/GYN
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products. Her work duties included office-based activities as well as driving in a car to and from
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clients. Plaintiff’s salary plus commissions totaled approximately $156,000 per year.
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During the five-year period that Unum paid plaintiff disability benefits, Unum regularly
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conducted vocational analyses and “roundtable” reviews to assess plaintiff’s ability to work in
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light of her medical conditions. The first vocational analysis in November 2006 assessed
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whether plaintiff could perform her prior job duties subject to several limitations, including
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occasionally lifting no more than 50 pounds and workdays limited to eight hours of light or
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sedentary activity with 15 minute breaks every hour. Unum concluded that plaintiff was able to
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work, but that the work would not meet the standard for a “gainful occupation” under the
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disability plan.
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The second vocational analysis was conducted between December 2008 and January
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2009. The analysis relied on information from plaintiff’s physicians showing that her back
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conditions had improved and she would not be precluded from working in a light capacity. Due
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to arthritis in her knee, the vocational assessment assumed that she could not engage in
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prolonged standing and walking. The assessment did not analyze whether plaintiff could engage
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in “any gainful occupation,” but rather whether she could engage in her prior occupation of field
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sales representative. Unum concluded she could not.
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In February 2009 plaintiff reported to Unum that she had been offered a full-time job as a
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medical device sales representative for Hygeia. During a subsequent communication, plaintiff
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reported that she also had begun working for Hygeia on a part-time basis in February. Unum
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conducted a third vocational assessment in May 2009. The vocational analysis concluded that
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plaintiff was still precluded from working in her former occupation as a field sales
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representative.
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Unum also conducted occupational analysis of the full-time position at Hygeia to
determine whether it would affect plaintiff’s disability benefits. The occupational analysis
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concluded that the position was equivalent to a regional sales manager. Unum concluded that
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plaintiff’s work for Hygeia would not affect her existing disability benefits under the plan.
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Plaintiff worked hours that were full-time or close to full-time for Hygeia through November
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2009. She then resigned from that position because it required extensive travel and because she
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felt unable to work a regular work day.
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In January 2010 Unum conducted a roundtable assessment wherein several Unum
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employees and consultants collaboratively reviewed plaintiff’s file. The review concluded that
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plaintiff remained precluded from performing the duties of her regular occupation. This review,
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however, noted certain conflicting information. Although her prior vocational assessment had
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assumed that she was limited from prolonged standing and walking based on her knee, her work
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with Hygeia — which was similar to her prior job at Medela — had required both. Plaintiff was
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no longer reporting her knee problems as a significant issue. Plaintiff also did not receive
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medical treatment or consume medication at levels consistent with the level of extreme pain that
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she had reported. The assessment recommended follow-up investigation with plaintiff’s
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physician.
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In early 2010 Unum investigated whether plaintiff was qualified for gainful employment
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other than her former occupation, as well as whether her 20 years of sales experience should
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affect the calculus. The third-party database usually used by Unum did not reveal any relevant
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occupations in her area that would meet the gainful occupation criteria. This was in part because
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sales personnel were not usually fully compensated for prior experience when they started, and
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because plaintiff had been out of work for six years.
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Unum conducted follow-up market survey research using from other sources, including
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plaintiff’s former employer and job postings available online. A subsequent vocational analysis
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in May 2010 determined that the third-party database information Unum previously relied on
7
was incorrect. Although plaintiff’s work experience should be heavily discounted, she could be
8
expected to earn $60,000 to $75,800 in her prior occupation and $41,000 in commissions. In
9
other words, her work could be “gainful” under the plan.
Unum conducted additional vocational analysis through the end of 2010. Using
11
For the Northern District of California
United States District Court
10
additional third-party data, the analysis again concluded that even after heavily discounting
12
plaintiff’s 20 years of experience, she could still be expected to meet the gainful criteria if she
13
returned to her former occupation. The analysis also updated the assessment of the physical
14
activity her prior job would require. In particular, it would include intermittent and protracted
15
periods of sitting, standing and walking; frequent travel; and occasional lifting up to 20 pounds.
16
Unum also determined that her car could modified if plaintiff’s knee conditions precluded her
17
from using her right foot to drive.
18
TERMINATION OF BENEFITS
19
Unum terminated plaintiffs benefits on November 24, 2010. The grounds for the
20
termination were that plaintiff was physically able to perform her own occupation as a field sales
21
representative, and that the occupation would provide her with a gainful wage as defined by the
22
plan. The termination letter expressly relied on the medical information in plaintiff’s file, the
23
results of the vocational analyses, the SSI denial, and the surveillance information.
24
Plaintiff appealed. After collecting a limited amount of additional evidence, Unum
25
denied plaintiff’s appeal in May 2011. As stated, plaintiff commenced this action in August of
26
2011.
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14
1
ANALYSIS AND CONCLUSIONS OF LAW
2
3
The default standard of review in a denial of disability benefits action under ERISA is de
benefits, however, then the standard of review shifts to abuse of discretion. Firestone Tire &
6
Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989). When the standard of review is de novo,
7
“district courts have a responsibility under the ERISA framework to undertake an independent
8
and thorough inspection of an administrator’s decision.” Silver v. Executive Car Leasing
9
Long-Term Disability Plan, 466 F.3d 727, 733 (9th Cir. 2006). Plaintiff carries the burden of
10
proof to show that she was entitled to benefits under the plan. Muniz v. Amec Const. Mgm’t,
11
For the Northern District of California
novo. If the plan confers discretion on the plan administrator to determine eligibility for
5
United States District Court
4
Inc., 623 F.3d 1290, 1294 (9th Cir. 2010).
12
Our court of appeals recently summarized a court’s role in reviewing a plan
13
administrator’s denial of disability under an abuse-of-discretion standard, with structural conflict
14
of interest, as follows:
15
16
17
18
19
20
21
22
23
24
25
26
27
Under this deferential standard, a plan administrator’s decision
will not be disturbed if reasonable. This reasonableness standard
requires deference to the administrator’s benefits decision unless it
is (1) illogical, (2) implausible, or (3) without support in inferences
that may be drawn from the facts in the record. This abuse of
discretion standard, however, is not the end of the story. Instead,
the degree of skepticism with which we regard a plan
administrator’s decision when determining whether the
administrator abused its discretion varies based upon the extent to
which the decision appears to have been affected by a conflict of
interest.
*
*
*
While not altering the standard of review itself, the existence of a
conflict of interest is a factor to be considered in determining
whether a plan administrator has abused its discretion. The weight
of this factor depends upon the likelihood that the conflict
impacted the administrator’s decisionmaking. Where, for example,
an insurer has taken active steps to reduce potential bias and to
promote accuracy, the conflict may be given minimal weight in
reviewing the insurer’s benefits decisions. In contrast, where
circumstances suggest a higher likelihood that the conflict affected
the benefits decision, the conflict should prove more important
(perhaps of great importance).
28
15
1
Stephan v. Unum Life Ins. Co. of America, 697 F.3d 917, 929 (9th Cir. 2012) (internal quotation
2
marks and citations omitted).
3
Procedural irregularities may also affect the standard of review. In the ordinary situation,
4
procedural errors are a matter to be weighed in deciding whether an administrator’s decision was
5
an abuse of discretion. If, however, the plan administrator’s procedural defalcations amount to a
6
wholesale violation of ERISA, de novo review applies. Abatie v. Alta Health & Life Ins. Co.,
7
458 F.3d 955, 971–74 (9th Cir. 2006).
8
9
Plaintiff claims that evidence of Unum’s conflict of interest should temper any
application of the abuse of discretion standard, and that Unum’s decision was tainted by
procedural irregularities. Plaintiff’s complaints in this regard are multiple. First, plaintiff
11
For the Northern District of California
United States District Court
10
contends that defendant added a new reason for terminating plaintiff’s benefits on appeal, which
12
deprived plaintiff of a full and fair review. Second, Unum used inconsistent criteria during the
13
many vocational analyses. Third, Unum failed to adequately investigate the salary information
14
used in the vocational analyses. Fourth, Unum has a history of improperly denying benefits that
15
is established in other ERISA actions. Fifth, because Unum withheld a document relating to its
16
termination decision on the basis of attorney-client privilege, it must admit that its interests
17
diverged from those of plaintiff.
18
It is not necessary to rule on the appropriate standard of review. This order assumes
19
without deciding that the appropriate standard of review is de novo. This is because, as
20
explained further below, the greater weight of the evidence in the record shows that plaintiff was
21
not disabled under the plan definition. This result pertains even if plaintiff’s extrinsic evidence
22
is received and considered. Thus, a fortiori, defendants would also prevail under the deferential
23
abuse-of-discretion standard.
24
PLAINTIFF IS NOT DISABLED UNDER THE PLAN
25
There is a clear medical consensus among nearly all of plaintiff’s numerous physicians
26
— whether retained by plaintiff, independent, or retained by Unum — that plaintiff was able to
27
work in a sedentary or light duty capacity. At least eight physicians arrived at this fundamental
28
conclusion. Although several physicians concluded at times that she was unable to work, these
16
1
diagnoses were expressly temporary. Most of the physicians concluded that plaintiff would be
2
subject to certain limitations when returning to work; the precise recommendations in this regard
3
varied.
4
The exceptions, and distinct minority, are Drs. Petrie and Stoney. Dr. Petrie’s October
5
2008 conclusion that plaintiff was totally unable to work is not persuasive. Above all, it
6
conflicts with the fact that plaintiff had already begun working for Hygeia by that time. Dr.
7
Petrie also based these conclusions solely on plaintiff’s knee, rather than a broader assessment of
8
plaintiff’s abilities, and did not explain the basis for his work recommendations. Dr. Petrie
9
specifically concluded that plaintiff could not carry or lift any amount of weight, bend, kneel,
crawl, climb stairs, or push/pull more than five pounds. These limitations are flatly inconsistent
11
For the Northern District of California
United States District Court
10
with plaintiff’s admitted other physical activities in the same general time frame, such as martial
12
arts practice and going to the gym five days a week.
13
Dr. Stoney’s reports are supported with explanations and merit some consideration.
14
However, they are outweighed by majority opinion that plaintiff was able to work. Dr. Stoney’s
15
conclusions are also contradicted by plaintiff’s athletic and work activities described above.
16
Defendants contend that the timing of plaintiff’s switches from doctor to doctor suggests
17
doctor-shopping. The record is ambiguous on this point. Nevertheless, it is noteworthy that
18
from 2005 onward, plaintiff was evaluated by numerous physicians other than the ones named
19
above for the same pain conditions described above, as well as for other complaints. The
20
parties’ submissions do not clearly reveal the contributions of these physicians (if any) to
21
plaintiff’s diagnoses and care regimen. The sheer number of physicians that plaintiff visited
22
over the years, however, does support an inference that plaintiff engaged in doctor-shopping.
23
The evidence establishes that plaintiff suffers from legitimate medical conditions and that
24
these conditions cause her some level of pain. She is not, however, disabled. Since leaving
25
work due to her alleged disability, she has not lived the life of a person who is suffers from
26
frequent, excruciating, and debilitating pain. Plaintiff has continued her advanced martial arts
27
training and even competed in Tae Kown Do tournaments. She goes to the gym, runs errands,
28
and carries her own groceries without assistance. Her trips outside the home involving walking,
17
1
driving, and standing exceed six hours in a stretch. She takes vacation trips to Hawaii a couple
2
of times each year. And, starting at least in 2008, plaintiff has intermittently worked in her prior
3
occupation of medical device sales.
4
Much of the evidence of plaintiff’s alleged disability comes from plaintiff’s own
Plaintiff made false and misleading statements to her own doctors and to Unum. At the same
7
time she told doctors that she did not participate in sports and that her level of pain prevented her
8
from engaging in normal life activities, she was continuing her training as a black belt in Tae
9
Kwon Do and competing in Tae Kwon Do tournaments. Right after representing Hygeia at a
10
medical device conference in Las Vegas, plaintiff falsely reported to Unum that she was not
11
For the Northern District of California
statements to her doctors and to Unum. Yet, plaintiff’s credibility withers under scrutiny.
6
United States District Court
5
working. After later admitting to Unum that she was working, plaintiff stated that she was
12
earning only 30–40 dollars a month, but eventually reported over $36,000 in income for the year
13
on her tax returns. Plaintiff represented to this Court in a declaration that she has not engaged in
14
jogging activities since 2004, but in a prior letter to Unum plaintiff stated that she sometimes
15
does jog while using a treadmill at the gym. There are more examples in the record. The record
16
is also replete with inconsistent characterizations by plaintiff of her level of pain and
17
impairment.
18
Plaintiff argues that the surveillance videos did not reveal any activities inconsistent with
19
plaintiff’s reported activities. This is true, as far as it goes. The surveillance information is
20
inconsistent, however, with plaintiff’s reports of debilitating, excruciating pain. It is also
21
inconsistent with the reports by Drs. Petrie and Stoney that plaintiff is totally unable to work.
22
Plaintiff correctly points out that 50 hours of surveillance and 12 minutes of video cannot
23
accurately represent her complete life activities since 2004. Nevertheless, the surveillance
24
evidence is entitled to some weight.
25
More generally, plaintiff argues that Unum cannot use the evidence it had while it was
26
paying disability benefits as evidence supporting a subsequent denial of benefits. Plaintiff cites
27
Fairbaugh v. LINA, 737 F. Supp. 2d 68, 81 (D. Conn. 2010) for the proposition that “it is error
28
18
1
for a claim administrator to rely upon evidence that it had when it approved the claim as a basis
2
for termination of benefits” (Plaintiff’s Br. 22). Fairbaugh does not stand for such a proposition.
3
To the extent that Fairbaugh questions plan administrator flip-flopping on the
4
significance of medical evidence, it comports with the law in this circuit. An initial grant and
5
payment of disability benefits may be evidence relevant to whether a claimant is disabled, but it
6
is not necessarily dispositive. See Muniz, 623 F.3d at 1296. Likewise, Unum’s five years of
7
payments to plaintiff weigh against the propriety of Unum’s subsequent denial of benefits, but
8
this fact alone is not dispositive. Unum is not precluded from changing its evaluation, taking a
9
fresh look at a claim file, or re-interpreting evidence in light of developments in the
administrative record over time.
PLAINTIFF CAN OBTAIN GAINFUL EMPLOYMENT
11
For the Northern District of California
United States District Court
10
12
The parties dispute the meaning of the plans’ definition of disability insofar as it applies
13
to plaintiff. Unum contends that under the plan language, it only needed to determine that
14
plaintiff could return to her former occupation. Although Unum also assessed whether her work
15
would be gainful, doing so was superfluous. Plaintiff responds that denying her disability
16
benefits under the plan required both a determination that plaintiff could return to work, and that
17
her work be gainful in the sense that she could earn more than $6,000 per month within 12
18
months.
19
Is not necessary to construe the Unum plan terms. Assuming, arguendo, that the Unum
20
must establish both requirements, this order finds that they are satisfied. The greater weight of
21
the evidence shows both that plaintiff was able to return to her former occupation of medical
22
device sales, and that plaintiff would earn a “gainful” salary under the plan if she did so.
23
As explained above, there is a clear medical consensus that plaintiff was able to work in a
24
sedentary or light duty capacity. Plaintiff’s medically-imposed work restrictions would limit her
25
ability to perform as a medical device sales representative somewhat. Over the long term, these
26
limitations could prevent her from rising as far or as quickly as others. The evidence shows,
27
however, that plaintiff remained employable as a medical sales representative after she left work.
28
19
1
Plaintiff’s recent, extended period of full-time work for Hygeia demonstrates in particular that
2
she remained employable.
3
The preponderance of evidence in the record also shows that plaintiff would be able to
4
find gainful employment as defined by the plan if she returned to work. This issue is a close
5
question, as the facts are somewhat sparse and conflicting. At the time Unum denied plaintiff’s
6
appeal, she had been out of work for many years, diminishing the value of her 20 years of sales
7
experience. Plaintiff also takes issue with the market survey Unum conducted to supplement the
8
information supplied by the third-party database. Although plaintiff’s objections to the quality
9
of the market survey are noted, Unum based its analysis on several sources. The preponderance
of the evidence shows that plaintiff could earn at least $6,000 per month within 12 months of
11
For the Northern District of California
United States District Court
10
resuming work as a medical device sales representative.
12
13
DEFENDANTS’ MOTION TO STRIKE
Ostensibly in support of her contentions that Unum’s decision was affected by its conflict
14
of interest, plaintiff submitted a variety of extrinsic evidence. Plaintiff also uses some of this
15
evidence on the merits. Defendant moves to strike plaintiff’s submissions.
16
As a general matter, when the standard of review is abuse-of-discretion the review of an
17
administrator’s denial of benefits is limited to the administrative record. However, if procedural
18
irregularities are present that have prevented full development of the administrative record, the
19
Court has discretion to take extrinsic evidence in order to recreate what the record would have
20
been had the procedure been correct. “[W]hen de novo review applies, the court is not limited to
21
the administrative record and may take additional evidence.” Abatie, 458 F.3d at 972–73.
22
Ruling on defendant’s motion to strike is unnecessary. Because this order assumes that
23
the appropriate standard of review is de novo, there is no need to admit the extrinsic evidence in
24
support of an alleged conflict of interest that would temper the abuse-of-discretion standard.
25
As to the merits, judgment for defendants can be sustained on the basis of the
26
administrative record alone. When all of plaintiff’s extrinsic submissions are considered, this
27
order holds that even if admitted, these submissions do not materially alter the results herein.
28
20
1
Defendants have also submitted extrinsic evidence. Plaintiff does not object to this
2
evidence on evidentiary grounds and it shall be admitted into the record. Upon consideration,
3
Defendant’s extrinsic evidence also does not materially affect any of the conclusions herein.
4
5
PLAINTIFF’S ALTERNATIVE REQUEST FOR A REMAND
In the alternative, plaintiff requests a remand back to the plan administrator in order to
6
challenge reasons for denying plaintiff disability benefits that Unum allegedly raised for the first
7
time on appeal. This order already applies a de novo standard of review that considers the
8
entirety of the record and finds in favor of defendants. A remand is therefore inappropriate and
9
plaintiff’s alternative request is DENIED.
CONCLUSION
11
For the Northern District of California
United States District Court
10
Following a thorough and independent review of the evidence, this order finds that
12
plaintiff was not disabled under the plan when Unum denied plaintiff’s appeal. Defendants’
13
motion for judgment is GRANTED. Judgment will be entered for defendants.
14
15
IT IS SO ORDERED.
16
17
Dated: March 1, 2013.
WILLIAM ALSUP
UNITED STATES DISTRICT JUDGE
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