Hamburg v. Life Insurance Company of North America
Filing
22
ORDER & REASONS A judgment will be entered for LINA, dismissing plaintiffs suit with all costs taxed to the plaintiff. Signed by Judge Martin L.C. Feldman on 8/29/2011.(caa, )
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
KAI HAMBURG
CIVIL ACTION
VERSUS
NO. 10-3071
LIFE INSURANCE COMPANY OF
NORTH AMERICA
SECTION "F"
ORDER & REASONS
Before the Court are merits briefs addressing the question of
whether
Life
Insurance
Company
of
North
America
abused
its
discretion when it denied Kai Hamburg’s request for long-term
disability benefits.
The Court finds that it did not.1
Background
This case arises out of defendant’s denial of long-term
disability benefits.
Tulane
University,2
Kai Hamburg, a data-control specialist with
claims
that
he
became
disabled
after
a
work-related car accident on February 16, 2007, which left him with
injuries to his neck, back, and right shoulder.
He also suffers
from depression.
After Life Insurance Co. of North America (LINA) denied him
long-term disability benefits under a group disability insurance
policy it issued and administered for Tulane, Hamburg sued.
1
This
The parties agree that this case may be resolved on the
briefs.
2
His position requires him to occasionally lift, carry,
push, or pull ten pounds, but otherwise requires “mostly
sitting,” and “may involve standing or walking for brief periods
of time.”
Court must resolve the lawsuit under the Employee Retirement Income
Security Act: did LINA abuse its discretion in denying Hamburg
benefits?
I.
The Plan
The
plan
under
which
Hamburg
seeks
benefits
defines
“disabled”:
The Employee is considered Disabled if, solely
because of Injury or Sickness, he or she is
either:
1) unable to perform the material duties of
his or her Regular Occupation or a Qualified
Alternative; or
2) unable to earn 80% or more of his or her
Indexed Earnings.
The plan defines “regular occupation” as “the occupation the
Employee routinely performs at the time the Disability begins.
In
evaluating the Disability, [LINA] will consider the duties of the
occupation as it is normally performed in the general labor market
in the national economy.”
A qualified alternative is
An occupation that meets all of the following
conditions:
(1) the material duties of the occupation can
be performed by the Employee based on his or
her training, experience or education;
(2) it is within the same geographic area as
the Regular Occupation the Employee holds with
the Employee on the date the Employee’s
Disability begins;
(3) a job in that occupation is offered to the
Employee by the Employer; and the wages for
that occupation, including commissions and
bonus are 80% or more of the Employee’s
2
Indexed Covered Earnings.
A claimant must be continuously “disabled” under the policy
for a 90-date period before disability benefits may be payable.
Once this 90-day period is satisfied, a claimant is temporarily
entitled to long-term disability benefits.3
II.
Denial of Benefits
Hamburg submitted a claim for long-term disability benefits on
December 11, 2007.
He described his condition as “Cervical and
Lumbar (including L5 nerve root) injuries/radioculapathies and
related pains.” He listed his date of injury as February 16, 2007,
and his last day worked as November 16, 2007.
He described his
cause of injury as “Car Accident// Rear Ended on I-10W” and
indicated that he was receiving worker’s compensation benefits in
the amount of $610.00 a week beginning on November 19, 2007.
Early
records
show
that
Hamburg
suffered
from
a
lumbar
radiculopathy on the right side involving the L5 nerve root.
Dr.
Charles Billings, an orthopedic surgeon who was the treating
physician, summarized some of the early facts of Hamburg’s injury:
he was struck in the rear while stopped in traffic; the airbag did
not deploy. Hamburg did not seek emergency room treatment. He was
not in a formal therapy program.
A steroid injection was of some
3
Once a claimant has received 60 months of long-term
disability benefits, the claimant must meet a more restrictive
definition of “disabled” to continue receiving benefits.
3
help at some point in the months after his accident, but an October
2007 steroid injection did not help.
On November 16, 2007, Dr. Billings further evaluated Hamburg’s
symptoms as “severe in nature” and recommended that he undergo
formal physical therapy. He cautioned that Hamburg would be unable
to work at least until the therapy was complete.
Physical therapy notes from Tulane University Hospital and
Clinic reflect Hamburg’s treatment between November 26, 2007 and
December 19, 2007.
On November 26, 2007, Hamburg rated his pain
level as 8 out of 10 and complained of increased anxiety in
response to manual therapy targeted at his cervical spine.
therapist
noted
that
Hamburg
would
“benefit
from
The
cont[inued]
skilled care to meet goals [and decrease] pain for [an increase] in
function.”
By December 5, 2007, Hamburg was “walking faster,
better,” rating his leg pain only as 6.5-7 out of 10.
He “move[d]
[his] neck freely during conversation,” and the “motion look[ed]
very good,” despite neck pain reported at 9 out of 10.
“very
unusual
presentation.”
complaints
today,
which
do
not
Hamburg had
match
clinical
On December 19, 2007, it was decided that Hamburg
would see a new therapist on his next visit.
“befuddled as to next step”:
That therapist was
Hamburg seemed to need manual
therapy, but he was not responding well to the current course.
From Dr. Billings’ January 3, 2008 clinic note:
No medical contraindication to part-time light
or sedentary work activities, but considering
4
past history and findings as well as
diagnostic study results, unlikely to be able
to complete a full 8 hour work day. Permanent
restrictions anticipated. No heavy lifting,
repetitive bending or stooping as well as
prolonged sitting or standing regardless of
type of treatment elected or clinic course
exhibited.
Hamburg was “anxious and tearful.”
Dr. Billings also provided a “Medical Request Form” and a
“Physical Ability Assessment Form” on January 4, 2008 at the
defendant’s request.
His primary diagnoses were “Cervical disc
disease” and “Lumbar disc disease.”
He advised that Hamburg was
“able to attempt return to light sedentary type work.” Hamburg was
taking Vicodin and Sinequan and his treatment plan included a
psychiatric evaluation.
Rina Rivera, a Nurse Case Manager, reviewed Hamburg’s file on
January 30, 2008 at LINA’s request.
She noted Hamburg’s diagnosis
to be mild to moderate cervical and lumbar disc disease; he had
continued to work from February 16, 2007, the date of his injury,
to November 17, 2007.
Rivera explained that Hamburg’s medical
records failed to contain any pathological reflex results. Hamburg
did “not demonstrate any weakness evidenced by Loss of coordination
in
arms,
Bilateral
lower
extremity
BLE
weakness/instability,
Varying degrees of spasticity, or Impairment of proprioception.”
LINA
denied
benefits
some
time
after
January
30,
2008,
determining that Hamburg’s injuries did not leave him “disabled” as
defined by the plan:
5
In summary, you claimed you were unable to
work fulltime in your regular occupation as a
result of neck, back, right shoulder and right
leg pain.
However, as explained above, the
medical evidence contained in your file lacks
clinical measurements to support your reported
complaints. While we understand you may have
symptoms, the medical evidence on file does
not
substantiate
significant
impairment.
There are no positive clinical measurements to
support a degree of functional impairment that
would prevent you from returning to work in
your regular occupation.
III.
Appeal
Hamburg appealed LINA’s decision on July 29, 2008. In support
of his appeal, Hamburg supplemented his file with recent MRI
results and also a November 19, 2008 report from Dr. Gary Glynn, a
physical and medical rehabilitation specialist.
A cervical MRI
showed “significant increase in the asymmetric disc bulge on the
left C5-6, now with a more focal protrusion causing cord contact
and anterior nerve root with deformity.”
A lumbar MRI included a
new finding that the “right neural foramen at L5-S1 which appears
to be narrowed due to the disc bulge and hypertrophic facet
arthropathy.”
Dr. Glynn had reviewed plaintiff’s medical records from Dr.
Waring, Dr. Billings, Kevin Bianchini, a clinical psychiatrist, and
Corales, along with Hamburg’s MRI results and examined him for
approximately two-and-a-half hours. Dr. Glynn, noting that Hamburg
was continuing to work four hours a day in the same department at
6
Tulane, surmised:
I agree with Dr. Corales’ suggestion that this
is “probably more musculoligametous”. It is
quite likely that there are psychological
factors
as
defined
by
Dr.
Bianchini’s
evaluation
but
the
evaluation
strongly
suggests an excellent effort on the part of
the patient and the fact that the exaggeration
is somatization and not intentional.
I do
believe that these are soft tissue problems
with some component of myofascial involvement
with trigger points. I think it is relatively
unlikely that his primary symptoms are related
to the disc disease or radiculopathy. I do
not believe he is at [maximum medical
improvement].
. . .
It has been somewhat reassuring to him that it
is quite likely that we can improve his
symptoms significantly.
I do think it is
important that he continue to be allowed to
work, even if it is four hours per day. We
also had a lengthy discussion about the
difference between “hurt” and “harm”.
He
seems to have gotten something out of that
discussion.
LINA also reviewed an evaluation conducted by Dr. Bianchini,
which had been requested as part of Hamburg’s worker’s compensation
claim in April 2008:
The results of the [personality inventory] are
suggestive of psychological complication in
the
presentation
of
physical
symptom
complaints.
That is, this patient has
elevated levels of symptom complaints like
those seen in patients who have poor outcomes
due
to
the
presence
of
psychological
complication. This seems consistent with some
of the comments made by Dr. Billings. There
is not any indication of elevated levels of
depression or anxiety.
It
was
Dr.
Bianchini’s
impression
7
that
Hamburg’s
possible
exaggeration of pain was unintentional but might be suggestive of
an unconscious psychological overlay.
He advised a specific plan
for a work return.
In processing the appeal, LINA sent the entire file to Dr.
Renat Sukhov for an independent peer review.
certified
by
the
American
Board
of
Dr. Sukhov,
Physical
who is
Medicine
and
Rehabilitation, explained that claimants react in different ways to
their illness: some make light of their symptoms, shrugging them
off and avoiding care; at the other extreme, others respond to the
slightest twitches of the pain or discomfort quickly seeking
medical attention. Dr. Sukhov explained that subjective complaints
experienced
by
Hamburg
could
be
reported functional limitations.
considered
in
assessing
his
Dr. Sukhov observed:
From period 11/16/0[7]-2/15/08 reasonable
restrictions for the claimant's diagnosis of
chronic
low
back
pain
with
probable
electro-diagnostic evidence of right L5
radiculopathy would include provisions such as
avoiding excessive lifting for more than 20lbs
and pushing and pulling heavy loads above
30-35 lbs frequently. There was no physician
supported evidence of functional deterioration
from 2/16/08 and beyond.
Dr. Sukhov completed an addendum to clarify his proposal on
Hamburg’s work restriction:4
4
Dr. Sukhov summarized what he understood Dr. Billings’
January 4, 2008 recommendation to be: “No overhead work, no work
with arms extended, no prolonged sitting or standing, limited
computer work, no lifting greater than 10 pounds. [H]e may be
able to attempt to return to work in a light or sedentary
capacity, however medication may impair work. (Vicodin for pain
8
Based on review of the medical information
relating to the neck, back and shoulder pain,
restrictions and limitations, as noted by Dr.
Billings, are supported for the time period of
11/16/07-2/15/08.
The claimant is not
functionally capable of full time sedentary
capacity from 11/16/07-2/15/08. The claimant
is functionally capable of performing full
time sedentary work from 2/16/08 forward.
LINA sent Hamburg’s file to Dr. John Mendez for an internal
physical assessment and review.
original
assessment
concurrent
objective
was
Dr. Mendez concluded that the
correct,
medical
as
there
documentation
remained
to
no
support
timethe
restrictions for the time period of November 16, 2007 through
February 16, 2008 and forward.
Dr. Mendez explained:
Examples of this could include range of motion
inclinometry
and/or
significant
muscle
strength deficits by manual muscle testing.
Dr. Billing’s 11/5/07 note describes reduced
cervical spine range of motion/ROM, not
otherwise quantified. His 1/4/08 note lists
multiple restrictions, but no supporting
documentation of measured cervical or lumbar
or extremity strength deficits.
He notes
medication may impair work, but does not
provide supporting clinical measurement of
this,
as
could
be
obtained
from
a
comprehensive mental status exam. Absent such
documentation, no work restrictions are
medically supported.
On April 4, 2009, LINA notified Hamburg that it affirmed its
decision to deny benefits.
and Sinequan for depression and anxiety).”
9
IV.
Lawsuit
After exhausting all administrative appeals, Hamburg sued LINA
on September 15, 2010.
This case must be evaluated on the basis of
the administrative record.5
The only question to be resolved is
whether LINA acted with an abuse of discretion in denying Hamburg
long-term disability benefits.
Their dispute turns on LINA’s
finding that Hamburg is not “disabled.”
Law & Analysis
I.
ERISA “permits a person denied benefits under an employee
benefit
plan
to
challenge
that
denial
in
federal
court.”
Metropolitan Life Ins. Co. v. Glenn, 554 U.S. 105, 108 (2008)
(citing 29 U.S.C. § 1001 et seq.; § 1132(a)(1)(B)). When reviewing
a denial of benefits made by an ERISA plan administrator, the Court
applies a de novo standard of review, “unless the benefit plan
gives the administrator or fiduciary discretionary authority to
determine eligibility for benefits or to construe the terms of the
plan.”
Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115
5
The parties disputed whether a Social Security
Administration decision finding the plaintiff disabled should be
part of the administrative record. The Court rejected Hamburg’s
argument that the Court, during its review, should supplement the
record with the SSA decision or, alternatively, should remand the
entire case for LINA’s belated consideration of the SSA decision.
Instead, the Court found that the administrative record is
complete and that supplementation of the record on the eve of
merits resolution would be improper.
10
(1989).
The parties agree that the plan here empowers LINA with
discretionary authority to determine eligibility for benefits and
to construe the plan's terms.
Accordingly, this Court must apply
an abuse of discretion standard to review LINA’s decision to deny
Hamburg’s claim for long-term disability benefits.6
See id.
In analyzing whether LINA as plan administrator abused its
discretion,
“the
law
requires
only
that
substantial
evidence
support a plan fiduciary's decision, not that substantial evidence
exists to support the employee's claim of disability.”
See Ellis
v. Liberty Life Assurance Co. of Boston, 394 F.3d 262, 274 (5th
Cir. 2005).
“If the plan fiduciary's decision is supported by
substantial evidence and is not arbitrary or capricious,” the Fifth
Circuit instructs, “it must prevail.”
(citation omitted).
Corry, 499 F.3d at 398-99
The Fifth Circuit counsels reasonableness:
Substantial evidence is more than a mere
scintilla, less than a preponderance, and is
such relevant evidence as a reasonable mind
might accept as adequate to support a
conclusion. . . . An arbitrary decision is one
made without a rational connection between the
known facts and the decision or between the
facts and the evidence. . . . Ultimately,
“[the Court's review] of the administrator's
6
Different terms have been used to describe what amounts
the same standard. Some courts refer to the standard as
“arbitrary and capricious,” or an inquiry into whether the
administrator's decision was “reasonable and impartial.” The
Court does not find a material difference in how the caselaw has
used these terms. See MediTrust Fin. Servs. v. The Sterling
Chems., 168 F.3d 211, 214-15 (5th Cir. 1999) (“In applying the
abuse of discretion standard, we analyze whether the plan
administrator acted arbitrarily or capriciously”).
11
decision need not be particularly complex or
technical; it need only assure that the
administrator's decision fall somewhere on a
continuum of reasonableness-even if on the low
end.”
Id. (internal citations omitted).
II.
A.
Hamburg presses that the evidence available to LINA both
before and after its decision to deny benefits supports the
conclusion that he cannot perform either his “regular occupation”
with the employer or a “qualified alternative,” as those terms are
defined in the plan.
Hamburg maintains that the decision to deny
long-term benefits flouts the opinion of his treating physician,
Dr. Billings, and improperly relies upon the opinion of a peerreview
physician
who
arbitrarily
concluded
that
Hamburg
was
incapable of full-time sedentary work only during the 90-day
period, and not after.
Hamburg stresses that had the peer-review
physician found that he was disabled after February 16, 2008, the
last
day
of
the
90-day
period,
LINA
would
have
had
to
pay
benefits.7
7
Hamburg urges that the Court must measure the conflict of
interest that arises from the dual role of an entity acting as an
ERISA plan administrator and also as a payer of plan benefits, as
here, as a factor in determining whether the plan administrator
has abused its discretion in denying benefits. Glenn, 554 U.S.
at 109-10; see Conkright v. Frommert, 130 S. Ct 1640, 1647 (2010)
(noting that under Glenn, “a systemic conflict of interest does
not strip a plan administrator of deference.”). But the U.S.
Court of Appeals for the Fifth Circuit instructs that a conflict
12
of interest is just one factor this Court must consider when
reviewing LINA’s denial of benefits:
In reviewing the plan administrator's
decision, we take into account . . . several
different considerations. These factors are
case-specific and must be weighed together
before determining whether a plan
administrator abused its discretion in
denying benefits. Any one factor may act as
a tiebreaker when the other factors are
closely balanced, the degree of closeness
necessary depending upon the tiebreaking
factor's inherent or case-specific
importance.
The interaction between the factors and the
substantial evidence test is a relatively new
issue after the Supreme Court's decision in
Glenn. We have considered the interplay in
only one prior published decision—Holland—in
which we found that the conflict of interest
was a minimal factor and that the evidence
was more than sufficient to support the
denial of benefits. However, a reviewing
court may give more weight to a conflict of
interest, where the circumstances surrounding
the plan administrator's decision suggest
“procedural unreasonableness.”
Schexnayder v. Hartford Life & Accident Ins. Co., 600 F.3d 465,
465 (5th Cir. 2010) (finding procedural unreasonableness where
plan administrator failed to consider Social Security
Administration timely provided to it and thus deciding to give
more weight to the conflict of interest).
Hamburg presses that the Court should consider LINA’s
financial interest in its decision to deny benefits, in light of
the fact that LINA elicited a seemingly favorable opinion from
the peer-review doctor by asking him to comment upon disability
during time periods based on the elimination period, thus,
Hamburg urges, suggesting the desired response. Although the
potential narrow conflict he raises differs from those considered
within this circuit, see id. at 469; Holland v. Int’l Paper Co.,
576 F.3d 240, 251 (5th Cir. 2009) (finding insufficient conflict
of interest where plan administrator established trust to pay
benefits to which it made periodic, irrevocable, non-reversionary
payments), the Court “need not decide how much weight should be
13
B.
LINA emphasizes that the administrative record in this matter
lacks objective medical evidence to support a finding that Hamburg
is
incapable
specialist.
of
performing
his
occupation
as
a
data-control
Numerous physicians, including Hamburg’s treating
physicians, have concluded that he was capable of performing his
sedentary occupation.
Even Dr. Billings noted that as of January
4, 2008 Hamburg was “able to attempt return to light sedentary type
work.”
LINA stresses that ERISA does not require it to blindly rely
on subjective assessments made by Dr. Billings regarding Hamburg’s
ability to work.
This is especially true in this case, LINA
asserts, because other physicians and experts have all indicated
that he is capable of performing a sedentary occupation.
LINA
maintains that Hamburg cannot rely solely on his diagnosis of
degenerative disc disease as sufficient proof that he meets the
definition of “disabled” under the policy. Not only have Hamburg’s
treating physicians concluded that his pain is unlikely to be
associated with degenerative disc disease, but regardless, LINA
asserts, a diagnosis of a medical condition alone does not always
given to this potential conflict here because it is clearly
outweighed by the substantial evidence supporting LINA's
decision.” Crowell v. CIGNA Group Ins. Co., 410 F. App’x 788,
794 (5th Cir. 2011).
14
merit disability benefits.
The Court agrees.
III.
Based on LINA’s reviews and the evidence in the administrative
record before LINA at the time it made the final decision to deny
Hamburg’s claims for benefits, the Court finds that LINA did not
act with an abuse of discretion.
ERISA permits LINA to review the
record as a whole, including contradictory evidence, and then to
reach a decision—any decision—that is not arbitrary or capricious.
And that is what LINA did here.
The substantial evidence before
the Court supports LINA’s finding that Hamburg could perform his
“regular occupation” and ultimately shows that LINA’s decision to
deny benefits was not arbitrary or capricious:
LINA conducted
several reviews, including obtaining an independent physician’s
opinion, as well as conducting an internal physician’s review, and
a
number
of
doctors,
including
Hamburg’s
own,
indicated
his
improvement and ability to perform light-duty sedentary work.
Accordingly,
IT
IS
ORDERED:
A
judgment
will
be
entered
for
LINA,
dismissing plaintiff’s suit with all costs taxed to the plaintiff.
New Orleans, Louisiana, August 29, 2011.
______________________________
MARTIN L. C. FELDMAN
UNITED STATES DISTRICT JUDGE
15
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