Nugent v. Aetna Life Insurance Company

Filing 48

ORDER AND REASONS granting Aetna's 44 Motion for Summary Judgment, denying Nugent's 43 Motion for Summary Judgment. Signed by Judge Ivan L.R. Lemelle on 7/16/2013. (ijg, )

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA

SUSAN NUGENT

CIVIL ACTION

VERSUS

NO. 12-0065

AETNA LIFE INSURANCE COMPANY

SECTION “B”(5)

ORDER AND REASONS
Before the Court are Plaintiff, Susan Nugent's ("Nugent"),
and Defendant, Aetna Life Insurance Company's ("Aetna"), CrossMotions for Summary Judgment. (Rec. Doc. Nos. 43 & 44).
response, each party submitted

In

a Memorandum in Opposition to the

other party's Motion for Summary Judgment. (Rec. Doc. Nos. 46 &
47). Accordingly, and for the reasons articulated below,
IT IS ORDERED that Aetna's Motion for Summary Judgment is
GRANTED and Nugent's claim is DISMISSED. Nugent's Motion for
Summary Judgment is DENIED.1
PROCEDURAL AND FACTUAL HISTORY
Nugent was employed as a bookkeeper by Total Safety USA,
Inc.

and

pursuant

to

her

employment

purchased

a

policy

of

long-term disability insurance with the defendant, Aetna. (Rec.
Doc. No. 43-1 at 1; Rec. Doc. No. 44-1 at 2). After purchasing
this policy, Nugent was diagnosed with colorectal cancer for

1

We are grateful for the work on this case by Matt S. Landry, a Tulane
University Law School extern with our Chambers.

which she received chemotherapy treatment until October 2009.
(Rec. Doc. No. 44-1 at 2). Nugent filed a claim for long-term
disability benefits with Aetna based upon colorectal cancer and
residual

effects

neuropathy,

See

of

the

(Rec.

disease

Doc.

No.

and
44-1

surgery,
at

3).

id.,

including

Benefits

were

initially approved on April 30, 2009. (Rec. Doc. No. 43-1 at 1;
Rec. Doc. No. 44-1 at 2).
Some time afterwards, Aetna encouraged Nugent to apply for
disability

insurance

Administration, and

benefits

with

the

Social

Security

provided counsel to assist her in doing so.

(Rec. Doc. No. 43-1 at 1). On February 19, 2010, the Social
Security Administration ("SSA") determined Nugent to be disabled,
because a vocational expert testified that there are no jobs in
the national economy that Nugent could perform. (Rec. Doc. No.
44-1 at 4; Rec. Doc. No. 44-2 at 5). As a result, Aetna received
a credit for those benefits it paid Nugent. (Rec. Doc. No. 43-1
at 1).
On

October

6,

2009,

Nugent's

oncologist,

Dr.

Satti,

discontinued Nugent's chemotherapy. (Rec. Doc. No. 44-2 at 5). In
December 2009 and March 2010, PET scans confirmed that Nugent's
cancer was in remission.

(Rec. Doc. No. 44-1 at 3).

On February 8, 2011, Nugent reported to Aetna that she still

2

could not work.2 (Rec. Doc. No. 44-2 at 8-9).
Nonetheless, on May 10, 2011, Aetna notified Nugent that her
long-term

disability

("LTD")

benefits

would

be

terminated

effective May 9, 2011, (Rec. Doc. No. 44-1 at 4), reasoning that
she was no longer disabled as defined in her plan, as evidenced
by medical records of Nugent's condition after Nugent was awarded
disability by the SSA. (Rec. Doc. No. 43-1 at 1; Rec. Doc. No.
44-2 at 11; Rec. Doc. No. 46 at 3). Aetna concluded that Nugent
was no longer disabled under its policy because medical records
no longer contained evidence of functional impairment that would
preclude Nugent from performing her occupation as a bookkeeper.
(Rec. Doc. No. 44-1 at 3).
Nugent appealed Aetna's denial on June 21, 2011. (Rec. Doc.
No. 44-1 at 4). Aetna upheld the termination of benefits on
December 8, 2011, reasoning that medical evidence did not support
Nugent's claimed inability to perform her bookkeeper occupation.
Id.
Nugent filed suit against Aetna in this Court on January 10,
2012. Id. After Nugent's counsel discovered that a technical
glitch resulted in the failure to submit the full SSA decision to

2

Nugent claimed that she had severe neuropathy in her legs, that she was
never without pain, does not have control of her bowels and cannot go far from
her house for that reason, has pain with walking or sitting too long, and did
not think she could ever return to work and could not do her job due to her
problems with sitting and standing and being in the bathroom all the time.
(Rec. Doc. No. 44-2 at 8-9).

3

Aetna, the parties agreed to resubmit the claim to Aetna. Id.
Upon review, Aetna upheld its termination of Nugent's disability
benefits on November 5, 2012, and the case came back to this
Court. Id. Advising the Court that no general issues of material
fact remain, the parties agreed to submit the instant motions for
summary judgment to resolve the case. (Rec. Doc. No. 41 at 1).

LAW AND ANALYSIS
I. Standard of Review
Summary judgment is proper if the pleadings, depositions,
interrogatory
affidavits,

answers,

show

that

and
there

admissions,
is

no

together

genuine

issue

with
as

to

any
any

material fact and that the moving party is entitled to judgment
as a matter of law. Fed. R. Civ. P. 56(c); see also Celotex Corp.
v. Catrett, 477 U.S. 317, 327 (1986).
A deferential standard of review is appropriate for an
Employee Retired Income Security Act of 1974 ("ERISA") claim
appealing denial of plan benefits if the ERISA plan "grant[s]
'the

administrator

or

fiduciary

discretionary

authority

to

determine eligibility for benefits.'" Metropolitan Life Insurance
Company v. Glenn, 554 U.S. 105, 111 (2008) (citing Firestone Tire
& Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989)); Schexnayder v.
Hartford Life and Acc. Ins. Co., 600 F.3d 465, 468 (5th Cir.
2010)(citing

Wade

v.

Hewlett-Packard

4

Dev.

Co.

LP

Short

Term

Disability Plan, 493 F.3d 533, 537 (5th Cir. 2007))
Under

a

deferential

standard

of

review,

a

plan

administrator's decision will be upheld if it "is supported by
substantial

evidence3

and

is

not

arbitrary

and

capricious."

Schexnayder, 600 F.3d at 468 (citing Ellis v. Liberty Life Assur.
Co. of Boston, 394 F.3d 262, 273 (5th Cir. 2004)). "The court's
'review of the administrator's decision need not be particularly
complex

or

technical;

administrator's

decision

it

need

fall

only

somewhere

assure
on

a

that

continuum

the
of

reasonableness-even if on the low end.'" Holland v. International
Paper Co. Retirement Plan, 576 F.3d 240, 246 (5th Cir. 2009)
(citing Corry v. Liberty Life Assurance Co. of Boston, 499 F.3d
389, 398 (5th Cir. 2007).
II. Plan Administrator's Denial of an LTD Award
To determine whether a plan administrator's decision to deny
disability benefits is arbitrary and capricious or reasonable and
supported by substantial evidence, the Fifth Circuit conducts a
balancing analysis which examines multiple factors, including
medical evidence, structural conflicts of interest, and the SSA's
award. See Schexnayder, 600 F.3d at 469-71.

3

Substantial evidence is "more than a scintilla, less than a preponderance,
and is such relevant evidence as a reasonable mind might accept as adequate to
support a conclusion." Ellis, 394 F.3d at 273 (quoting Deters v. Secretary of
Health, Educ. & Welfare, 789 F.2d 1181, 1185 (5th Cir. 1986) (citing
Richardson v. Perales, 402 U.S. 389, 401 (1971))).

5

A. Medical Evidence
The

Supreme

Court

has

held

that

in

reviewing

medical

evidence, plan administrators need not "accord special weight to
the

opinions

of

a

claimant's

physician";

however,

a

plan

administrator may not arbitrarily refuse to include the opinions
of treating physicians. Schexnayder, 600 F.3d at 469 (citing
Black

&

Decker

Disability

Plan

v.

Nord,

538

U.S.

822,

834

(2003))(emphasis added). If reliable medical evidence contradicts
a plaintiff's treating physician's opinions, plan administrators
are "not required to give special deference to the treating
physicians," as long all evidence submitted by the plaintiff is
taken into account. Hamilton v. Stand. Ins. Co. No. 08B1717, 2010
WL 686399 (W.D. Louisiana February 23, 2010) (citing Nord, 538
U.S.

822(2003);

Love

v.

Dell,

Inc.,

551

F.3d

333

(5th

Cir.

2008)); aff'd by Hamilton v. Stand. Ins. Co. 404 Fed. Appx. 895,
898 (5th Cir. 2010). For example, in Hamilton v. Stand. Ins. Co.,
the court held that a plan administrator's decision to deny
disability benefits was not arbitrary and capricious when it
based

its

decision

on

the

fact

that

four

of

its

consulting

physicians opined that the records did not support a diagnosis of
fibromyalgia,
treating

in

contrast

physicians'

to

two

opinions

that

out
she

of

plaintiff's

was

suffering

fibromyalgia. Hamilton, 404 Fed. Appx. at 896-898.

6

three
from

Here, Aetna's decision was supported by substantial medical
evidence. Prior to the SSA's February 2010 decision to award
Nugent

disability

benefits,

Nugent

had

multiple

normal

neurological examinations, but one of her treating physicians
stated that Nugent "had no ability to work until sometime after
her surgery scheduled for April 4, 2009" (Rec. Doc. No. 44-2 at
3-5). Between February 2010 and when Aetna made its determination
in May 2011, Nugent saw several doctors who reported normal
neurological examinations. See (Rec. Doc. No. 44-2 at 6-13). Six
treating physicians opined about Nugent's neuropathy,

See (Rec.

Doc. No. 44-1 at 6-7; Rec. Doc. No. 44-2 at 3-16). Aetna's peer
medical reviews, which determined that Nugent could return to
work, only conflicted with two of these physicians' opinions, See
(Rec. Doc. No. 44-1 at 6-7; Rec. Doc. No. 44-2 at 9-13). One of
these physicians declared that his opinion that Nugent could not
perform her job was outside his "area of knowledge." (Rec. Doc.
No. 44-2 at 9-13). The other merely stated that he suspected it
would be difficult for Nugent to return to work, based on a
normal

neurological

administrators

are

evaluation.
permitted

to

Id.

at

10.

disagree

with

Because
a

plan

plaintiff's

treating physicians, see Hamilton, 404 Fed. Appx. at 898, and
Aetna only disagreed with one of several treating physician's
suspicion that Nugent could go to work, see (Rec. Doc. No. 44-1

7

at 6-7; Rec. Doc. No. 44-2 at 10), Aetna's conclusion about
Nugent's ability to return to work was based on substantial
medical evidence.
B. Conflict of Interest
The Supreme Court has held that conflicts of interest should
be weighed in determining whether a plan administrator's decision
is arbitrary and capricious. Schexnayder, 600 F.3d at 470 (citing
Metropolitan Life Insurance Company v. Glenn, 554 U.S. 105, 115
(2008)).

A

conflict

of

interest

occurs

when

an

entity

that

administers an employee benefit plan "both determines whether an
employee is eligible for benefits and pays benefits out of its
own pocket." Glenn, 554 U.S. at 108. This includes insurance
companies. Id. at 114-15.
A
factors

conflict

of

interest's

"depend[s]

upon

the

significance
circumstances

relative
of

the

to

other

particular

case." Glenn 554 U.S. at 108 (citing Firestone Tire & Rubber Co.
v.

Bruch,

489

U.S.

101,

115

(1989));

see

also

Holland

v.

International Paper Co. Retirement Plan, 576 F.3d 240, 247 (2009)
("[T]he

specific

facts

of

the

conflict

will

dictate

importance.") For example, a conflict of interest
should
prove
more
important
(perhaps
of
great
importance) where circumstances suggest a higher
likelihood that it affected the benefits decision,
including, but not limited to, cases where an insurance
company administrator has a history of biased claims
administration. (Omitted citation) It should prove less

8

its

important (perhaps to the vanishing point) where the
administrator has taken active steps to reduce
potential bias and to promote accuracy.
Metropolitan, 554 U.S. at 117. A conflict of interest should be
given more weight if the plan administrator evidences "procedural
unreasonableness."

See Schexnayder, 600 F.3d at 471 (citing

Glenn, 554 U.S. at 118). One way in which a plan administrator
demonstrates procedural unreasonableness is by failing to address
a

contrary

SSA

award.

Id.

Indeed, failure to address

(citing

Glenn,

554

U.S.

at

118).

an SSA award of disability suggests

financial bias may have affected a plan administrator's decision.
See id.
A conflict of interest exists in this case because Aetna
both determined whether Nugent was eligible for benefits and paid
her benefits. See Glenn, 554 U.S. at 108, 114-15. However, the
only claim made by either party as to whether this conflict of
interest should be given more or less weight is Nugent's claims
that Aetna made its decision in a "procedurally unreasonable"
manner by insufficiently considering the SSA's award. See (Rec.
Doc. 43-1 at 8). Because Aetna sufficiently considered the SSA's
award, as discussed below, see infra, no facts in this case
indicate that Aetna's conflict of interest should be given more,
rather than less, weight.

9

C. SSA Award
In addition to exacerbating or alleviating a conflict of
interest factor, failure to address an SSA award is "a factor in
its own right," and should therefore be considered as a third
factor,

in

interest.
factor

addition

to

Schexnayder,

will

only

"tip

medical

600

F.3d

the

evidence
at

balance"

and

471.
for

conflicts

Nevertheless,
"borderline

of
this

cases."

Raybourne v. Cigna Life Ins. Co. of New York, 576 F.3d 444, 450
(7th Cir. 2009)(citing Glenn, 554 U.S. at 117).
Although

a

determination,

plan

it

is

administrator

should

not

to

required

consider

concur

an

SSA

"because

the

eligibility criteria for SSA disability benefits differs from
that of ERISA plans." Hamilton v. Stand. Ins. Co., 404 Fed. Appx.
895, 898 (5th Cir. 2010)(citing Schexnayder, 600 F.3d at 471 n. 3
(5th Cir. 2010)).
Company

of

New

But see Raybourne v. CIGNA Life Insurance

York,

700

F.3d

1076,

1083,

1085

(7th

Cir.

2012)(declaring "functionally equivalent" the SSA's definition of
disability and the definition, "he or she is unable to perform
all the material duties of any occupation for which he or she may
reasonably become qualified").
Nugent points to Schexnayder to support the proposition that
failure to "really consider the rationale or make any meaningful
distinction between its decision and that of the Social Security

10

Administration"

amounts

to

"procedural

unreasonableness."

See

(Rec. Doc. No. 43-1 at 5). Although the Schexnayder Court held
that a claim administrator made a decision in a procedurally
unreasonable manner, the claim administrator in that case failed
to consider the SSA award entirely. See Schexnayder, 600 F.3d at
471 (explaining that "Hartford did not address the SSA award in
any of its denial letters"). Unlike the claim administrator in
Schexnayder, Aetna considered the SSA award. See (Rec. Doc. 42-1
at

10-13).

In

a

November

5,

2012

letter

to

Nugent,

Aetna

explained that it denied Nugent's disability benefits, because
(1) the SSA and Aetna's definitions differ in that a higher
degree of disability is required to meet Aetna's threshold ; and
(2) Aetna considered Nugent's ability to return to work over one
year later than the SSA, much further removed from when Nugent's
chemotherapy concluded. See id. Because Aetna considered the SSA
award, Schexnayder does not support Nugent's claim that Aetna's
decision was procedurally unreasonable.4
Nugent

also

points

to

a

recent

Seventh

Circuit

case,

Raybourne v. CIGNA Life Insurance Company of New York, 700 F.3d

4

To support its assertion that Aetna insufficiently considered the SSA's
award, Nugent points to another case, Moller v. El Campo Aluminum Company,
973 F.3d 85 (5th Cir. 1996), in which the court reversed because a decisionmaker failed to consider an SSA award. (Rec. Doc. No. 43-1 at 5). However, in
Moller, like in Schexnayder, and unlike Aetna in the instant matter, (Rec.
Doc. 42-1 at 10-13), the decision-maker completely neglected a contrary SSA
award, See Moller, 973 F.3d at 87-89 .

11

1076

(7th

Cir.

2012),

to

insufficiently

considered

similarity

SSA

of

and

support

SSA's
Aetna's

its

award

claim
by

that

Aetna

dismissing

definition

of

the

disability

requirements. See (Rec. Doc. No. 43-1 at 2-4). Although the Fifth
Circuit

has

held

that

"the

eligibility

criteria

for

SSA

disability benefits differs from that of ERISA plans," Hamilton
v.

Stand.

Ins.

Co.,

404

Fed.

Appx.

895,

898

(2010)(citing

Schexnayder, 600 F.3d at 471, n. 3), the Seventh Circuit, in
Raybourne,

held

that

"the

definitions

are

functionally

equivalent," Raybourne, 700 F.3d at 1085. Nevertheless, Aetna's
decision to treat the definitions as different is not arbitrary,
because a rational administrator could find that the definitions
had

different

meaning,

not

only

because

of

their

textual

dissimilarity, see (Rec. Doc. No. 43-2 at 1), but also because
the Fifth Circuit has held they are different, Hamilton, 404 Fed.
Appx. at 898 (citing Schexnayder, 600 F.3d at 471 n. 3). Thus,
Aetna's

decision

to

deny

Nugent

disability

benefits

was

not

procedurally unreasonable.
Balancing these three factors: (1) medical evidence; (2) the
relatively slight weight given to Aetna's conflict of interests;
and (3) sufficient consideration of the SSA's award; Aetna's
decision was rational, and supported by substantial evidence, as
the latter term is legally defined.

12

While contrary medical

evidence

makes

Aetna's

denial

of

benefits

debatable,

in

the

Court's opinion, it does not thereby show the decision to be
arbitrary and capricious.
New Orleans, Louisiana, this 16th day of July, 2013.

____________________________
UNITED STATES DISTRICT JUDGE

13