CONNOR v. SEDGWICK CLAIMS MANAGEMENT SERVICES, INC.
Filing
38
OPINION. Signed by Judge Noel L. Hillman on 6/24/2011. (TH, )
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
GAIL A. CONNOR,
Plaintiff,
v.
SEDGWICK CLAIMS MANAGEMENT
SERVICES, INC., et al.,
Defendants.
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Civil Action No.
09-cv-1140 (NLH)
OPINION
APPEARANCES:
STEPHEN R. BOSIN
70 GRAND AVENUE
RIVER EDGE, NJ 07661-0201
Attorney for Plaintiff Gail A. Connor
IVAN R. NOVICH
EDWARDS, ANGELL, PALMER & DODGE, LLP
ONE GIRALDA FARMS
MADISON, NJ 07940
Attorney for Defendant PNC Corp. & Affiliates Long Term
Disability Plan
HILLMAN, District Judge
Plaintiff, Gail A. Connor, seeks reinstatement of her long
term disability benefits from Defendant PNC Corp. & Affiliates
Long Term Disability Plan (hereinafter “Defendant”).
The long
term disability plan at issue is an employee welfare benefit plan
governed by the Employee Retirement Income Security Act
(hereinafter “ERISA”), 29 U.S.C. § 1001 et seq..
The Court is
called upon to determine whether the denial of Plaintiff’s long
term disability benefits was arbitrary and capricious, and,
therefore, unlawful pursuant to 29 U.S.C. § 1132(a)(1)(B).
Plaintiff moves for summary judgment [Doc. 23] and Defendant
cross-moves for summary judgment1 [Doc. 27].
For the reasons
expressed below, the Court will grant in part and deny in part
Plaintiff’s Motion and deny Defendant’s Cross-Motion.
I.
JURISDICTION
Plaintiff brought his claims pursuant to ERISA and this
Court has jurisdiction over her claims under 28 U.S.C. § 1331 and
29 U.S.C. § 1132(d)(e)&(f).
II.
BACKGROUND
Plaintiff, Gail A. Connor, worked for PNC Bank Corp.2
(hereinafter “PNC”) as a “Branch Manager III” from September 27,
2004 through October 10, 2006.
As an employee of PNC, Plaintiff
participated in the PNC Corp. & Affiliates Long Term Disability
Plan (hereinafter “Plan”).
This Plan, an employee welfare
benefits plan, is governed by ERISA and provides long term
disability (hereinafter “LTD”) benefits, of up to 70% of their
base salary, to employees of PNC who are out of work for longer
than ninety (90) days.
Under the Plan, a claimant is entitled to
1
In addition to its Cross-Motion for Summary Judgment,
Defendant also filed two motions to seal [Docs. 31 & 34] seeking
to seal its motion papers and supporting documentation, including
the administrative record.
2
The PNC Financial Services Group, Inc. is successor to
PNC Bank Corp.
2
receive LTD benefits when, after the expiration of ninety (90)
days, he or she is “Totally Disabled” or has a “Total
Disability.”
Under the Plan a covered person is “Totally
Disabled” and has a “Total Disability” when “because of Injury or
Sickness: [t]he participant cannot perform each of the materials
duties of his or her regular occupation; and [a]fter benefits
have been paid for 24 months, the participant cannot perform each
of the material duties of any gainful occupation for which he or
she is reasonably fitted by training[,] education or experience.”
Plan, Doc. 30, Exhibit 4 at AR 333.
The Plan identified PNC as the Plan Administrator, and gave
it discretionary authority to interpret the terms of the Plan and
administer benefits.
In addition, the Plan contained a provision
that permitted the Plan Administrator to “appoint or employ
individuals or firms to assist in the administration of the Plan
. . .”. Plan, Doc. 30, Exhibit 4 at AR 344.
Pursuant to this
provision, PNC entered into an Administrative Services Agreement
with a third party company, Sedgwick Claims Management Services,
Inc. (hereinafter “Sedgwick”).
In the agreement, PNC expressly
delegated to Sedgwick its discretionary authority to determine a
claimant’s eligibility for LTD benefits.3
3
Plaintiff disputes this construction of the Plan and
contends, as discussed in detail below, that the Plan did not
permit PNC to delegate its discretionary authority to a third
party.
3
On or about January 17, 2007, more than ninety (90) days
after her last day of active employment, Plaintiff filed her
application for LTD benefits with Sedgwick.4
On her application,
Plaintiff stated that she stopped working because of Systemic
Lupus Erythematosus (hereinafter “lupus”) and Raynaud’s disease.
She specifically complained that her disability caused
“difficulty with movements such as walking, bending, sitting . .
. standing, lifting” and using her hands. Employee Application
for Benefits, Exhibit 4 at AR 307.
In support of Plaintiff’s
application, Stephen L. Burnstein, D.O. (hereinafter “Dr.
Burnstein”), her rheumatologist, submitted a Treating Physician’s
Statement (hereinafter “Statement”).5
This Statement indicated
Plaintiff’s primary diagnosis as lupus and secondary diagnosis as
Raynaud’s Disease.
Dr. Burnstein also noted that the limitations
or restrictions that prevent Plaintiff from performing the
essential functions of her job occur “if she is exposed to cold
temperatures or cold drafts or UV light stress physical/emotional.” Treating Physician’s Statement, Doc. 30,
Exhibit 4 at AR 312.
4
Defendant asserts that Plaintiff’s application was
untimely because the Plan states that a claim for benefits must
be filed no later than ninety (90) days following the date of
disability. In this matter, Plaintiff’s date of disability was
her last day of active employment, October 10, 2006.
5
This form was completed after Plaintiff’s January 12,
2007 appointment.
4
As further evidence of Plaintiff’s disability, Dr. Burnstein
submitted to Sedgwick a letter he sent to her primary care
physician.
In this letter, he concluded Plaintiff has rhupus6, a
condition that is a combination of rheumatoid arthritis and
lupus.
To support this diagnosis, Dr. Burnstein provided both
objective and subjective evidence of Plaintiff’s disability.
He
specifically noted that laboratory studies completed several
months ago revealed that Plaintiff’s double-stranded DNA was
“mildly” elevated and her ANA was “positive.”7 Doc. 30, Exhibit 4
at AR 314.
In his description of her current condition he
reported “[t]here is no weakness or atrophy.
abnormal NP findings.
Exhibit 4 at AR 315.
There are no
There are no FMS tender points.”8 Doc. 30,
Although Dr. Burnstein’s physical
examination did not reveal that Plaintiff had any tenderness,
swelling, deformity or limitation of motion, his January 12, 2007
medical records noted Plaintiff’s subjective complaints of joint
pain, swelling, fatigue and weakness.
Finally, Dr. Burnstein
indicated that in an eight-hour day Plaintiff could sit for three
hours, stand for two hours, walk for one hour and view a computer
6
“Rupus” is also an acceptable spelling of the term
“rhupus.”
7
The Antinuclear Antibody Test or ANA is used as a
diagnostic test for autoimmune diseases like lupus.
8
FMS is a shorthand term for the medical disorder known as
fibromylagia.
5
screen for two hours.9
On March 15, 2007, Sedgwick informed Plaintiff that her
“[m]edical information indicates” she is “unable to continue” her
employment and that her benefits were approved on the “basis” of
her “medical restrictions and limitations associated, but not
limited to, the current diagnosis of Lupus.”10 Doc. 30, Exhibit 3
at AR 277.
The letter also conditioned Plaintiff’s further
receipt of benefits on her continued ability to meet the Plan’s
definition of “Total Disability.”
It informed her that “[o]n a
periodic basis” Sedgwick “will need to verify your ongoing
eligibility for benefits” by “requesting information from you and
your attending physicians.” Id. at 278.
Several months later, on November 21, 2007, Sedgwick
informed Plaintiff that “based upon a lack of current treatment
information on file supportive of continuing total disability”
her “claim for Long Term Disability benefits was formally
9
Based upon this observation, he concluded Plaintiff was
only capable of working four hours a day and needed a break every
two hours.
10
Sedgwick’s determination that Plaintiff was disabled was
with respect to the “regular occupation” definition of “Total
Disability.” It did not determine whether Plaintiff was
incapable of performing “each of the material duties of any
gainful occupation for which . . . she is reasonably fitted by
training[,] education or experience.” Plan, Doc. 30, Exhibit 4 at
AR 333.
6
suspended.”11 Doc. 30, Exhibit 3 at AR 243.
This suspension was
in effect until Plaintiff or Dr. Burnstein submitted proof that
she was “Totally Disabled.”
On November 27, 2007, Dr. Burnstein
replied to Sedgwick’s letter and identified Plaintiff’s prognosis
for full or part-time employment as “poor.”12 Doc. 30, Exhibit 1
at AR 059.
In support this determination, he provided medical
records from March 5, 2007, June 5, 2007, August 23, 2007,
October 9, 2007 and November 2, 2007.
Dr. Burnstein’s March 5, 2007 records indicated Plaintiff
complained of morning stiffness, headaches, fatigue and some
nausea.
Her physical examination revealed some warmth, swelling
and tenderness in the joints of her hands and feet.
Dr.
Burnstein’s records, however, did not note any limitations on
Plaintiff’s ability to stand, sit or walk, nor did he mention any
other limitations of Plaintiff.
The medical records from June 5, 2007 noted Plaintiff
complained of fatigue, but admitted it was better with
medication.
Plaintiff failed to report any dizziness, numbness
or weakness, and her physical examination did not reveal any pain
11
On February 5, 2007, May 29, 2007, October 2, 2007,
November 8, 2007 and November 12, 2007 Sedgwick requested from
both Plaintiff and Dr. Burnstein additional information
supportive of Plaintiff’s continued disability. Plaintiff and
Dr. Burnstein failed to respond to the requests.
12
In this letter, however, Dr. Burnstein failed to respond
to Sedgwick’s inquiry regarding Plaintiff’s functional status,
last office visit and frequency of office visits.
7
or swelling.
Dr. Burnstein’s records did not indicate any
limitations on Plaintiff’s ability to stand, sit or walk, nor did
he mention any other limitations of Plaintiff.
The physician
concluded that Plaintiff’s rhupus was “stable” with methotrexate
and plaquenil.13 Doc. 30, Exhibit 1 at AR 071.
Plaintiff’s August 23, 2007 medical records indicated she
complained of fatigue.
She, however, did not report any
dizziness, headache, numbness or weakness to Dr. Burnstein, nor
did his physical examination of her reveal any pain or swelling.
The records also failed to note any limitations on Plaintiff’s
ability to stand, sit or walk.
Dr. Burnstein’s October 9, 2007 medical records mentioned a
rheumatoid arthritis “flare up” and that Plaintiff reported
fatigue, morning stiffness, soreness in shoulders and that
methotrexate was “not doing anything.” Doc. 30, Exhibit 1 at AR
063.
The physical examination revealed some swelling and
tenderness in the joints of Plaintiff’s hands and feet.
Dr.
Burnstein’s records, however, did not note any limitations on
Plaintiff’s ability to stand, sit or walk, nor did he indicate
any other limitations of Plaintiff.
Dr. Burnstein’s November 2, 2007 medical records do not
contain any noteworthy observations.
On December 10, 2007,
Sedgwick, after receipt of Dr. Burnstein’s medical records,
13
Methotrexate and plaquenil are both medications.
8
informed Plaintiff that it would reinstate her LTD benefits.
On February 6, 2008, Plaintiff forwarded Sedgwick medical
records from her December 19, 2007 visit with Dr. Burnstein.
These records indicated Plaintiff reported headaches and morning
stiffness lasting approximately two hours.
Dr. Burnstein’s
physical examination revealed some swelling in the joints of
Plaintiff’s hands and feet.
Plaintiff also mentioned she
experienced daily pain in the range of 6-7 on a scale of ten, but
“feels better.”
Doc. 30, Exhibit 1 at AR 078.
Dr. Burnstein’s
records did not discuss any limitations on Plaintiff’s ability to
stand, sit or walk, nor did he indicate any other limitations of
Plaintiff.
On July 9, 2008 and again on August 6, 2008, Sedgwick
reminded Plaintiff that the definition of “Total Disability” and
“Totally Disabled” changes after benefits have been paid for
twenty-four (24) months.14
According to Sedgwick, Plaintiff’s
eligibility for LTD benefits “in accordance with the ‘Own
Occupation’ . . . definition of total disability will end” on
January 8, 2009.
Doc. 30, Exhibit 3 at AR 227 & AR 229.
The
letter further stated that beginning on January 9, 2009, in order
14
For the first twenty-four (24) months of disability,
Plaintiff needed only demonstrate that she cannot perform the
duties of her “regular occupation.” After benefits have been
paid for twenty-four (24) months, however, Plaintiff must prove
that she “cannot perform each of the material duties of any
gainful occupation” of which she is qualified. Doc. 30, Exhibit 3
at AR227 & AR229.
9
to continue her receipt of LTD benefits, Plaintiff must establish
eligibility under the “Any Occupation” definition of total
disability. Id.
In preparation for this change, Sedgwick
requested that Plaintiff provide additional medical information
documenting her disability.
In response, Plaintiff submitted a Report of Disability
dated July 30, 2008.
condition.
AR 093.
This report indicated “no changes” in her
PNC LTD Report of Disability, Doc. 30, Exhibit 1 at
The submission to Sedgwick also contained a July 29,
2008 Report of Disability from Dr. Burnstein.
This report
indicated Plaintiff’s objective symptoms of disability were
“tender hand joints.” LTD Report of Disability, Exhibit 1 at AR
095.
Dr. Burnstein further noted that in an eight-hour workday,
Plaintiff could sit, stand and walk for one hour and that her
restricted actions included “lifting/carrying, use of hands in
repetitive actions, use of feet in repetitive movements, reaching
above shoulder level, bending, squatting [and] crawling.” Id.
On September 10, 2008, Sedgwick again requested an update
from Dr. Burnstein.
Several days later, on September 18, 2008,
Dr. Burnstein replied and essentially reiterated the same
information he previously provided Sedgwick.
According to Dr.
Burnstein, Plaintiff has morning stiffness, cannot sit or stand
for more than 1-2 hours a day, has arm stiffness, has restricted
motion in joints and has difficulty with fine grasping and
10
manipulation.
He then expressed his doubt that Plaintiff could
return to gainful employment.
Dr. Burnstein also sent to
Sedgwick the records from Plaintiff’s June 23, 2008 office
visit.15
Her medical records indicated that she complained of
fatigue, morning stiffness for approximately two hours and that
she “gets more frequent infections.”16
114.
Doc. 30, Exhibit 2 at AR
Plaintiff, however, did not report any headaches,
dizziness, numbness or weakness.
Her physical examination
revealed tender points in the joints of her hands.
The records,
however, did not note any limitations on Plaintiff’s ability to
stand, sit or walk, nor did Dr. Burnstein mention any other
limitations of Plaintiff.
Shortly after receiving Dr. Burnstein’s report, Sedgwick
contacted a third-party, Network Medical Review, to independently
review Plaintiff’s LTD claim.
This company subsequently assigned
physician Dennis Payne, Jr. M.D.17 (hereinafter “Dr. Payne”) to
15
The record is partially unclear when these medical notes
were submitted to Sedgwick. Sedgwick, however, did not log them
until September 18, 2008. The Court will, therefore, infer that
it did not consider the June 23, 2008 records until September 18,
2008.
16
The records also noted Plaintiff experienced daily pain
in the range of 5-6 on a scale of 10.
17
According to Plaintiff, from January 1, 2005 to October
7, 2008, Dr. Payne only approved 1 of 5 claims, or 20% of all
claims submitted to him.
11
review the LTD claim.18
Although he never examined Plaintiff,
Dr. Payne reviewed her medical files.
After this review, he
concluded that “[t]he medical record data do[es] not contain
specific details of any objective findings of systemic lupus.”
Doc. 30, Exhibit 2 at AR 128.
In reaching this conclusion, Dr.
Payne considered that Plaintiff had a positive ANA and positive
double-stranded DNA, but that the overall “symptomatology
described” was “not consistent with a connective tissue process.”
Id. at 128-29.
Therefore, according to the physician, Plaintiff
presented no medical evidence that she was disabled from lupus or
any other rheumatological disease.19
Dr. Payne’s report did not
specifically discuss the rhupus diagnosis.
On October 24, 2008, Sedgwick informed Plaintiff that, as of
September 30, 2008, she was no longer eligible to receive LTD
benefits because she was no longer “Totally Disabled” under the
terms of the Plan.
The denial letter reiterated the findings of
Dr. Payne’s report and largely focused on his conclusion that
Plaintiff lacked objective medical evidence of a disability.
18
Dr. Payne’s Report contains a conflict of interest
statement indicating that his compensation is not dependent on a
specific outcome of the review.
19
Dr. Payne never spoke with Dr. Burnstein concerning
Plaintiff’s condition. When Dr. Payne contacted Dr. Burnstein,
he was told that he needed Plaintiff’s written authorization to
speak with Dr. Burnstein about her medical history. Apparently,
Dr. Payne never received the authorization and did not directly
speak with Dr. Burnstein about Plaintiff’s condition.
12
Although Sedgwick’s letter informed Plaintiff that she had a
right to appeal within 180 days, it did not specifically inform
her what type of evidence she must present on appeal to perfect
her LTD claim.20
Shortly after the receipt of Sedgwick’s denial letter
Plaintiff retained counsel.
On January 16, 2009, Plaintiff’s
attorney appealed Sedgwick’s October 24, 2008 decision.
In
addition to the appeal letter, Plaintiff submitted (1) a letter
from Dr. Burnstein dated December 23, 2008,21 (2) a decision of
the Social Security Administration (hereinafter “SSA”) dated
April 7, 2008, granting Plaintiff disability benefits,22 (3) a
copy of Plaintiff’s prescription records and (4) a statement from
20
After an inquiry from Plaintiff’s counsel, Sedgwick told
him that Plaintiff should provide “any medical records - such as
office visits, test results, lab work, diagnostic studies, xrays, MRI’s, blood work, etc, not have been provided during the
claim review.” Doc. 30, Exhibit 2 at AR 152.
21
This letter essentially reiterated the same findings Dr.
Burnstein previously made. He opined that Plaintiff does not
merely have systemic lupus, but rather “a combination of systemic
lupus and rheumatoid arthritis.” Doc. 30, Exhibit 2 at AR 160-61.
In support of this assertion, Dr. Burnstein detailed the
objective symptoms of Plaintiff’s rhupus, which included the
presence of anticardiolipin antibodies, positive antinuclear
antibody, positive double stranded DNA antibody, swelling,
tenderness and stiffness.
22
On May 1, 2007, the SSA informed Plaintiff she was not
eligible to receive disability payments because she was not
disabled. However, approximately one year later on April 7,
2008, an administrative law judge reversed the agency’s decision
and concluded Plaintiff was disabled and entitled to disability
benefits.
13
Plaintiff containing her self-reported subjective side effects
from her medications.
After receipt of Plaintiff’s appeal, Sedgwick again
contacted Network Medical Review to independently review her LTD
benefits claim.
The company assigned Dr. Tanya Lumpkins, M.D.23
(hereinafter “Dr. Lumpkins”) to conduct the review.24
Although
she never examined Plaintiff, Dr. Lumpkins concluded, after a
through review of her medical history, that Plaintiff was not
disabled because her medical records failed to “substantiate the
severity of either systemic lupus erthematosus or rheumatoid
arthritis.” Doc. 30, Exhibit 2 at AR 200.
In support of this
conclusion, Dr. Lumpkins focused on a lack of objective evidence
about the severity of Plaintiff’s lupus and rheumatoid arthritis.
On March 6, 2009, Sedgwick upheld its denial of Plaintiff’s
appeal.
Approximately one week later, on March 12, 2009,
Plaintiff initiated this lawsuit.
moved for summary judgment.
Over one year later Plaintiff
Shortly thereafter, Defendant filed
its cross-motion for summary judgment.
23
According to Plaintiff, from January 1, 2005 to February
10, 2009, Dr. Lumpkins only approved 3 of 11 claims, or 27.7% of
all claims submitted to her. Based upon this calculation and the
approval rate of Dr. Payne, Plaintiff concluded that a claimant
has only a 5.5% chance of being approved by both reviewers.
24
Dr. Lumpkins’s Report contained a conflict of interest
statement indicating that her compensation was not dependent on a
specific outcome of the review.
14
III. DISCUSSION
A.
Standard for Summary Judgment
Summary judgment is appropriate where the Court is satisfied
that “the pleadings, depositions, answers to interrogatories, and
admissions on file, together with the affidavits, if any, show
that there is no genuine issue as to any material fact and that
the moving party is entitled to a judgment as a matter of law.”
Celotex Corp. v. Catrett, 477 U.S. 317, 330 (1986); Fed. R. Civ.
P. 56(c).
An issue is “genuine” if it is supported by evidence such
that a reasonable jury could return a verdict in the nonmoving
party’s favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248
(1986).
A fact is “material” if, under the governing substantive
law, a dispute about the fact might affect the outcome of the
suit. Id.
In considering a motion for summary judgment, a
district court may not make credibility determinations or engage
in any weighing of the evidence; instead, the nonmoving party’s
evidence “is to be believed and all justifiable inferences are to
be drawn in his favor.” Marino v. Indus. Crating Co., 358 F.3d
241, 247 (3d Cir. 2004) (quoting Anderson, 477 U.S. at 255).
Initially, the moving party has the burden of demonstrating
the absence of a genuine issue of material fact. Celotex Corp.,
477 U.S. at 323.
Once the moving party has met this burden, the
nonmoving party must identify, by affidavits or otherwise,
15
specific facts showing that there is a genuine issue for trial.
Id.
Thus, to withstand a properly supported motion for summary
judgment, the nonmoving party must identify specific facts and
affirmative evidence that contradict those offered by the moving
party. Anderson, 477 U.S. at 256-57.
A party opposing summary
judgment must do more than just rest upon mere allegations,
general denials, or vague statements. Saldana v. Kmart Corp., 260
F.3d 228, 232 (3d Cir. 2001).
B.
Timeliness of Plaintiff’s Claim
Defendant contends summary judgment should be entered on its
behalf because Plaintiff filed her initial claim for LTD benefits
approximately eight days late.
Thus, according to Defendant, she
failed to timely file her claim, as required by the Plan.
Plaintiff seemingly acknowledges her untimeliness.
She argues,
however, that because her failure to timely file the benefits
claim never formed a basis for Sedgwick’s denial of the claim,
Defendant is barred from raising untimeliness as a post hoc
justification for the denial of the LTD benefits.
In response,
Defendant postulates that, in an attempt to modify the terms of
the Plan, Plaintiff’s argument improperly raises principles of
waiver and estoppel.
The Court disagrees with Defendant’s characterization of the
timeliness issue.
Our role in the present matter is to determine
whether Sedgwick abused its discretion and improperly denied
16
Plaintiff’s LTD benefits claim.
To resolve this inquiry, the
Court examines Sedgwick’s rationale for denying the benefits
claim, as evidenced by the administrative record and explained in
its denial letters to Plaintiff.
Although Defendant now attempts
to raise a timeliness issue with Plaintiff’s claim, Sedgwick
never denied her claim on that basis.
Rather, it was denied on
substantive grounds entirely unrelated to timeliness.
Furthermore, any concern over timeliness is absent from the
administrative record and both of the denial letters sent to
Plaintiff. See Haisley v. Sedgwick Claims Mgmt. Servs., Inc.,
____ F. Supp.2d ____, No. 08-1463, 2011 WL 818669, at * 12
(W.D.Pa. March 2, 2011) (concluding that no finding of
untimeliness was made by the plan administrator during the
administrative proceedings, and therefore, defendant cannot now
“turn around and rely on [untimeliness] as a basis for defeating”
the ERISA claims).
The Court will not permit Defendant to utilize a timeliness
argument now, at this stage of the litigation, as a post hoc
rationalization for Sedgwick’s denial of benefits. See Skretvedt
v. E.I. DuPont de Nemours & Co., 268 F.3d 167, 178 n. 8 (3d Cir.
2001) (“[I]t strikes us as problematic to . . . allow the
administrator to ‘shore up’ a decision after-the-fact by
testifying as to the ‘true’ basis for the decision after the
matter is in litigation, possible deficiencies in the decision
17
are identified, and an attorney is consulted to defend the
decision by developing creative post hoc arguments that can
survive deferential review . . . . To depart from the
administrative record in this fashion would, in our view, invite
more terse and conclusory decisions from plan administrators,
leaving room for them-or, worse yet, federal judges-to brainstorm
and invent various proposed ‘rational bases’ when their decisions
are challenged in ensuing litigation”) (quoting Univ. Hosps. of
Cleveland v. Emerson Elec. Co., 202 F.3d 839, 848 n. 7 (6th Cir.
2000)); see also Nair v. Pfizer, Inc., No. 07-5203, 2009 WL
1635380, at * 10 (D.N.J. June 10, 2009) (“[T]he legal authority .
. . militates against permitting defendant employers to ‘shore
up’ a denial of benefits with additional bases after the employee
has initiated suit under ERISA to recover those benefits”).
The
time to deny Plaintiff’s claim on the basis of untimeliness has
come and has long gone. See O’Hara v. Nat’l Union Fire Ins. Co.
of Pittsburgh, PA, 697 F. Supp.2d 474, 478 (W.D.N.Y. 2010),
overuled on other grounds ____ F.3d _____, 2011 WL 1405448 (2nd
Cir. 2011) (concluding that the plan administrator’s failure to
raise plaintiff’s “allegedly untimely notice of claim as a
defense, despite having all of the relevant facts before it and
ample opportunities to assert it . . . did operate as a knowing
waiver of that defense”).
The Court, therefore, concludes
Defendant cannot raise a timeliness defense because Plaintiff’s
18
claim was never denied on that basis.
C.
Standard of Review for Plaintiff’s Claim
ERISA provides that a plan participant or beneficiary may
bring a suit “to recover benefits due to him under the terms of
his plan, to enforce his rights under the terms of the plan, or
to clarify his rights to future benefits under the terms of the
plan.” 29 U.S.C. § 1132(a)(1)(B).
The statute, however, does not
specify a standard of review for an action brought pursuant to §
1132(a)(1)(B). Mitchell v. Eastman Kodak Co., 113 F.3d 433, 437
(3d Cir. 1997).
The Supreme Court addressed this issue and
opined that “a denial of benefits challenged under §
1132(a)(1)(B) is to be reviewed under a de novo standard 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 (1989).
When the plan affords the
administrator with discretionary authority, courts must review
the benefit decision for an abuse of discretion.25 Firestone Tire
& Rubber Co., 489 U.S. at 115.
In the present matter, Plaintiff contends the abuse of
discretion standard is inappropriate because PNC, the Plan
25
Courts in this Circuit have referred to this standard of
review as “arbitrary and capricious” or “abuse of discretion.”
Both standards of review are essentially identical and the Court
views, and will use these terms, as interchangeable. See Howley
v. Mellon Fin. Corp., 625 F.3d 788, 793 n. 6 (3d Cir. 2010).
19
Administrator, did not make the decision regarding Plaintiff’s
LTD benefits eligibility.
Rather, a claims management company,
Sedgwick, made the determination, and, according to Plaintiff,
only decisions of the Plan Administrator are entitled to the
deferential abuse of discretion standard of review.
In response,
Defendant opines that the Plan vests PNC with broad discretionary
authority, including the ability to delegate that authority to a
third party to assist with the review and administration of
benefit claims.
According to Defendant, PNC entered into an
agreement that transferred its discretionary authority to
Sedgwick.
Plaintiff retorts that this agreement was contrary to
the provisions of the Plan.
To determine the appropriate standard of review, the Court
must first examine the language of the plan and ascertain whether
it gives the plan administrator discretionary authority to decide
eligibility benefits or interpret terms of the plan. See
Firestone Tire & Rubber Co., 489 U.S. at 115; see also Luby v.
Teamsters Health, Welfare, & Pension Trust Funds, 944 F.2d 1176,
1180 (3d Cir. 1991) (“Whether a plan administrator’s exercise of
power is mandatory or discretionary depends on the terms of the
plan”). The Plan provides:
V. . . .
3.
Plan Administrator.
a. . . . The Company [PNC] shall be the Plan
20
Administrator and the ‘named fiduciary’ under
ERISA. The [Plan] Administrator shall be vested
with all the power, authority and discretion
necessary to supervise and control the operation
of the Plan. . . . Such powers include, but not by
way of limitation, the following: . . .
(1) To establish and enforce such rules,
regulations and procedures as it shall deem
necessary and proper for the efficient
operation and administration of the Plan;
(2) To interpret the Plan, and the rules and
regulations . . .
(3) To determine the eligibility and status
of any Employees with respect to Plan
participation;
(4) To determine questions of fact, law and
mixed questions of fact and law;
(5) To compute and estimate for payment the
amount of benefit payable to any persons in
accordance with the terms of the Plan; and
(6) To appoint or employ individuals or
firms to assist in the administration of the
Plan and any other agent or agents it deems
advisable.
b. The [Plan] Administrator shall have complete
and sole discretion with regard to each of the
powers listed . . . and no decision of the [Plan]
Administrator shall be overturned unless the
decision is arbitrary and capricious.
Plan, Doc. 30, Exhibit 3 at AR 343-44.
This provision not only
vested discretionary authority with PNC, but also identified it
as the Plan Administrator.26
Even though the Plan does not specifically identify Sedgwick
or directly vest it with any discretionary authority, the Court
26
Plaintiff concedes that at all relevant times the Plan
identified PNC as the Plan Administrator, and it possessed
discretionary authority to administer the Plan.
21
may still review Sedgwick’s decision under the abuse of
discretion standard.
Neither the Supreme Court nor the Third
Circuit has ever limited the “deferential standard of review to
[only] ERISA fiduciaries.” Marx v. Meridian Bancorp, Inc., 32
Fed. Appx. 645, 650 (3d Cir. 2002); Geddes v. United Staffing
Alliance Employee Medical Plan, 469 F.3d 919, 925 (10th Cir.
2006) (noting that the Supreme Court has “declined to limit how
an ERISA plan administrator . . . may exercise its discretionary
authority”).
In fact, ERISA explicitly permits a “named
fiduciary”, such as the plan administrator, to delegate its
fiduciary responsibilities to a non-fiduciary. Marx, 32 Fed.
Appx. at 650 (citing 29 U.S.C. 1105(c)(1) (“The instrument under
which a plan is maintained may expressly provide for procedures .
. . for named fiduciaries to designate persons other than named
fiduciaries to carry out fiduciary responsibilities . . . under
the plan”)).
In other words, “[o]nce a health plan administrator
. . . has been delegated discretionary authority under the terms
of the ERISA plan, nothing prevents that administrator from then
delegating portions of its discretionary authority to
non-fiduciary third parties.” Geddes, 469 F.3d at 926; see Lee v.
MBNA Long Term Disability & Benefit Plan, 136 Fed. Appx. 734, 742
(6th Cir. 2005) (“It is well established that an ERISA fiduciary
may delegate its fiduciary responsibilities to either another
named fiduciary or a third party if the plan establishes
22
procedures for such delegation”).
In the instances where a plan
administrator delegates its discretionary authority to a third
party, that third party’s decision is then reviewed under the
abuse of discretion standard. See e.g. Marx, 32 Fed. Appx. at
649-50; Geddes, 469 F.3d at 927 (“Decisions made by an
independent, non-fiduciary third party at the behest of the
fiduciary plan administrator are entitled to Firestone deference
because the third parties act only as agents of the fiduciary”).
As a prerequisite for a plan administrator to assign its
fiduciary responsibilities to a third party, the plan must
authorize the delegation. See Geddes, 469 F.3d at 926 (noting it
“is especially true” that a plan administrator may delegate its
discretionary authority when “such delegation is explicitly
authorized by the plan document”); see also Marx v. Meridian
Bancorp, Inc. Long Term Disability Plan, No. 99-4484, 2001 WL
706280, at * 3 (E.D.Pa. June 20, 2001), aff’d, 32 Fed. Appx. 645
(3d Cir. 2002) (holding that the plan document authorized the
plan administrator to delegate “the review of a denial of
benefits” to a third party).
However, the plan need not provide
the specific details of the delegation.
The responsibilities and
duties of the assignee may be defined in other documentation,
such as an administrative services agreement or a summary of plan
description. See Marx, 2001 WL 706280, at * 3, aff’d, 32 Fed.
Appx. 645 (3d Cir. 2002) (relying upon the details contained
23
within the administrative services agreement to conclude that the
plan administrator granted discretionary authority to a third
party to adjudicate the disability claims for the plan); see also
Costantino v. Washington Post Multi-Option Benefits Plan, 404 F.
Supp.2d 31, 39-41 (D.D.C. 2005) (relying upon the details
contained within the summary of plan description to conclude that
the plan administrator granted discretionary authority to a third
party to adjudicate the disability claims for the plan).
In the present matter, Plaintiff’s primary contention is
that the Plan did not permit PNC to delegate its discretionary
authority to Sedgwick.
According to Plaintiff, the Plan only
bestowed the authority upon PNC to appoint a third party to
assist with the administration of the Plan.
Although the Plan
does not specifically utilize the term “delegate,” there are no
“magic words” for delegation. See Marx, 32 Fed. Appx. at 649
(quoting Ludy, 944 F.2d at 1180, (quoting de Nobel v. Vitro
Corp., 885 F.2d 1180, 1187 (4th Cir. 1989))) (noting that with
respect to discretionary authority, “no ‘magic words’ . . . need
by expressly stated in order for the plan to accord the
administrator discretion to interpret plan terms . . . so long as
the plan on its face clearly grants such discretion”)).
Furthermore, a reasonable interpretation of the term ‘assist’
permits delegation.
‘Assist’ is a very broad term.
If a plan
administrator delegates to a third party its discretionary
24
authority to adjudicate disability claims, that third party, in
turn, assists the plan administrator.
Consequently, ‘delegate’
and ‘assist’ are not mutually exclusive.
The Court, therefore,
concludes that the Plan, specifically Section V(3)(a)(6),
permitted Defendant to delegate its discretionary authority to
Sedgwick.
This interpretation of the Plan is further buttressed by the
Service Agreement.
Attachment B of the Service Agreement
outlined in substantial detail the responsibilities of Sedgwick.
These responsibilities included, for example, “claims
administration for any employee applying for LTD” and the
“determination of eligibility for benefit on all LTD claims.”
Service Agreement with Sedgwick Claims Management Services, Inc.
on behalf of The PNC Financial Services Group, Inc., Doc. 30,
Exhibit 3 at AR 370.
These provisions clearly indicated a grant
of discretionary authority to Sedgwick. See Haisley, 2011 WL
818669 at *10 (finding that the exact same language as present in
the pending matter was “clear and unambiguous” and mandated the
abuse of discretion standard).
Consequently, the Court will
apply the abuse of discretion standard.
D.
Abuse of Discretion Analysis
Under the abuse of discretion standard of review, “the
Court’s role is not to interpret ambiguous provisions de novo,
but rather to ‘analyze whether the plan administrator’s
25
interpretation of the document is reasonable.’” Brunswick
Surgical Ctr., L.L.C. v. Cigna Healthcare, No. 09-5857, 2010 WL
3283541, at * 14 (D.N.J. Aug. 18, 2010) (quoting Bill Gray
Enters. Inc. Employee and Health Welfare Plan v. Gourley, 248
F.3d 206, 218 (3d Cir. 2001)).
A decision is considered
arbitrary and capricious “if it is without reason, unsupported by
substantial evidence or erroneous as a matter of law.” Abnathya
v. Hoffman-La Roche, Inc., 2 F.3d 40, 45 (3d Cir. 1993).
To
determine whether a plan administrator abused its discretion, the
Court must focus “on how the administrator treated the particular
claimant.” Miller v. Am. Airlines, Inc., 632 F.3d 837, 845 (3d
Cir. 2011) (quoting Post v. Hartford Ins. Co., 501 F.3d 154, 162
(3d Cir. 2007)).
“Specifically, in considering the process that
the administrator used in denying benefits, we have considered
numerous irregularities to determine whether . . . the
administrator has given the court reason to doubt its fiduciary
neutrality.” Id. (internal quotations omitted).
This is
accomplished “by taking account of several different, often
case-specific, factors, reaching a result by weighing all
together.” Id. (quoting Metropolitan Life Ins. Co. v. Glenn, 554
U.S. 105, 117 (2008)).
The scope of our review, however, “is
narrow, and the court is not free to substitute its own judgment
for that of the plan administrator in determining eligibility for
plan benefits.” Cardiology Consultants of North Morris v. UFCW
26
Local 464A Health Reimbursement Welfare Fund, No. 06-5557, 2007
WL 4570160, at * 2 (D.N.J. Dec. 21, 2007).
In other words, the
plaintiff retains the burden to prove that he is entitled to
benefits, and that the plan administrator’s decision was
arbitrary and capricious.
Section 502(a)(1)(B) of ERISA permits a participant to file
suit to recover benefits due under the terms of the plan. 29
U.S.C. § 1132(a)(1)(B).
Plaintiff asserts that Sedgwick’s
termination of her LTD benefits was arbitrary and capricious
because Sedgwick (1) failed to comply with ERISA’s notice
provisions, (2) resorted to ‘cherry picking’ to affirm its
decision, (3) failed to consider the decision of the SSA granting
Plaintiff disability benefits, (4) failed to consider the side
effects of Plaintiff’s prescription medication and Dr.
Burnstein’s diagnosis of rhupus, (5) had no reasonable basis to
conclude Plaintiff was no longer disabled, (6) required Plaintiff
to prove her disability by objective evidence and (7)
unreasonably relied on the biased opinions of Drs. Payne and
Lumpkins.
The Court will address each of Plaintiff’s objections
independently and in turn.
1.
Compliance with ERISA’s Notice Requirements
Section 503(1) of ERISA requires, in pertinent part, that a
plan administrator, upon denying a benefits claim, must furnish
27
the claimant with “adequate notice in writing . . . setting forth
the specific reasons for such denial, written in a manner
calculated to be understood by the participant.” 29 U.S.C. §
1133(1).27
Administrative regulations promulgated in furtherance
of § 503(1) provide additional clarification as to what
constitutes adequate notice.
These regulations state that the
plan administrator shall furnish the claimant with a “description
of any additional material or information necessary to perfect
the claim and an explanation of why such material or information
is necessary.” 29 C.F.R. § 2560.503-1(g)(1)(iii).
In Miller, the
Third Circuit recently opined that § 2560.503-1(g)(1)(iii)
requires that the termination letter provide the “precise
information necessary to advise” a plaintiff “how to perfect his
claim.” Miller, 632 F.3d at 852.
In other words, the denial
letter must detail how the claimant “could achieve a favorable
disability determination.” Id.
Presently, Plaintiff alleges that Sedgwick’s termination
letter failed to properly advise her on what precise information
she must provide to prove her claim.
In response, Defendant
contends Sedgwick complied with ERISA’s notice requirements.
Court disagrees.
The
Sedgwick’s October 24, 2008 denial letter does
27
In Miller, the Third Circuit determined that even though
a plaintiff initiated suit under § 502, “an administrator’s
compliance with § 503 in making an adverse benefit determination
is probative of whether the decision to deny benefits was
arbitrary and capricious.” Miller, 632 F.3d at 852.
28
not satisfy the requirements of 29 C.F.R. §
2560.503-1(g)(1)(iii).
Not only does the letter fail to
specifically advise Plaintiff how she may perfect her claim, but
it also neglects to adequately explain why such information is
necessary.
Sedgwick’s denial letter informed Plaintiff that her
“medical information . . . does not contain sufficient findings
subjectively or objectively that would support total disability”
from her occupation. Doc. 30, Exhibit 2, AR 137.
Although this
statement implies that the information Plaintiff provided was
insufficient to establish her disability, it does not explain
what evidence she must submit to prove her disability or express
why this additional information is necessary. See DellaValle v.
The Prudential Ins. Co. of Am., No. 05-273, 2006 WL 83449, at * 8
(E.D.Pa. Jan. 10, 2006) (finding that the general statement that
medical information in the file does not establish disability
does not comply with 29 C.F.R. § 2560.503-1(g)(1)(iii)).
Furthermore, the information Sedgwick provided was not “precise.”
At best, it required Plaintiff to “read between the lines” and
discern, without any guidance, the quantity, type or detail of
the information she must provide Sedgwick.
Compliance with the requirements of § 2560.503-1(g)(1)(iii)
is even more critical because of the unique facts of this case.
Sedgwick terminated Plaintiff’s LTD benefits because her “medical
29
information . . . does not contain sufficient findings
subjectively or objectively that would support total disability”
from her occupation. Doc. 30, Exhibit 2 at AR 137.
Although the
reasonable inference from the aforementioned statement is that
Plaintiff must provide further objective evidence of disability,
the specific facts of this case render it difficult for her to
determine how to proceed to perfect her claim.
In support of her
initial LTD benefits claim, Plaintiff submitted medical
documentation from Dr. Burnstein.
This documentation included
both objective and subjective evidence of Plaintiff’s
disability.28
After receiving this information, on March 15,
2007, Sedgwick approved Plaintiff’s LTD benefits claim.
Several
months later, on November 21, 2007, Sedgwick suspended
Plaintiff’s claim because she failed to provide further evidence
of her disability.29
In response, Plaintiff submitted medical
records from five office visits with Dr. Burnstein.
These
records also contained both objective and subjective evidence of
28
With respect to objective evidence, Dr. Burnstein
specifically noted that laboratory studies revealed that
Plaintiff’s double-stranded DNA was “mildly” elevated and her ANA
was “positive.” Doc. 30, Exhibit 4 at 314. These objective
findings are indicative of lupus. Also included within the
documentation were Plaintiff’s subjective complaints of joint
pain, swelling, weakness and fatigue.
29
Under the terms of the Plan, Plaintiff had an ongoing
obligation to provide evidence of her disability.
30
her disability.30
Significantly, the medical evidence provided,
in response to Sedgwick’s November 21, 2007 letter, was
essentially identical to the medical evidence initially given to
Sedgwick in support of Plaintiff’s disability claim.31
Upon
Sedgwick’s receipt of these records, it reviewed them and,
subsequently, informed Plaintiff that it would reinstate her LTD
benefits.
Approximately one year later, in July, August and
September 2008, Sedgwick again requested that Plaintiff provide
additional medical information documenting her disability.
In
response, Dr. Burnstein provided a report and documentation from
an office visit that contained essentially the same objective and
subjective evidence of Plaintiff’s disability that he provided
Sedgwick in response to its November 21, 2007 letter.32
After an
independent review of the evidence, Sedgwick terminated
Plaintiff’s LTD benefits.
Without further guidance, it was impossible for Plaintiff to
know exactly what type of objective evidence Sedgwick required
30
Dr. Burnstein specifically noted Plaintiff’s subjective
complaints of fatigue, headaches, and morning stiffness, and his
objective findings of swelling and tenderness in the joints of
her hands and feet.
31
The only distinction is that the records from the five
subsequent office visits did not contain any indication of
whether any recent laboratory studies were conducted.
32
With respect to objective findings, Dr. Burnstein
indicated Plaintiff had tender hand joints. His subjective
notations included Plaintiff’s complaints of morning stiffness,
fatigue and of more frequent infections.
31
her to submit so she could perfect her claim.
As the above-
mentioned facts indicate, Sedgwick initially accepted Plaintiff’s
evidence of her disability.
Then, approximately one year later,
it found essentially the same evidence insufficient.
Such a
decision, without giving any specific indication of what
objective evidence Plaintiff must provide, violates §
2560.503-1(g)(iii) because it makes it difficult, if not
impossible, for Plaintiff to understand or challenge Sedgwick’s
termination decision.
Plaintiff is left at a loss to comprehend
why essentially the same evidence that was originally sufficient
to support her claim was now deficient.
Without any type of
guidance or explanation, Plaintiff could not have possibly
ascertained what constituted acceptable evidence.33
33
Under these
Defendant further postulates that even if the denial
letter was deficient, Sedgwick complied with ERISA’s notice
requirements because, on December 10, 2008, it mailed Plaintiff’s
counsel a letter detailing the types of medical documentation
that would be necessary for Plaintiff to submit to perfect her
claim. According to Sedgwick, this documentation included
“medical records - such as office visits, test results, lab work,
diagnostic studies, x-rays, MRI’s, blood work, etc.” which had
not “been provided during the [initial] claim review.” Doc. 30,
Exhibit 2 at AR 152. Although this type of information detailed
in the December 10, 2008 letter would generally be sufficient to
comply with § 2560.503-1(g)(1)(iii), see Kao v. Aetna Life
Insurance Co., 647 F. Supp.2d 397, 411 - 12 (D.N.J. 2009)
(holding that a denial letter that told a plaintiff she needed to
provide quantitative data and clinical evidence in support of her
appeal was sufficient to comply with the notice requirements),
the Court finds it insufficient in this case. As discussed in
the preceding paragraphs, Sedgwick’s decision to credit and then
subsequently discredit Plaintiff’s medical evidence required them
to, in greater detail, explain what evidence Plaintiff must
provide to perfect her claim. The December 10, 2008 letter is
32
circumstances, where the plan administrator in essence reverses
its own decision on identical evidence it previously considered
sufficient, it must provide Plaintiff with more detailed
information indicating what specifically she must supply to prove
her claim.
The Court, therefore, concludes Sedgwick failed to
satisfy the notice requirements of ERISA and comply with 29
C.F.R. § 2560.503-1(g)(iii).34
Sedgwick’s failure to provide the
precise information necessary on how Plaintiff could achieve a
favorable result weighs in favor of finding that its decision to
terminate her LTD benefits was arbitrary and capricious.
2. Analysis of All Relevant Diagnoses, including
RHUPUS and medication35
“An administrator’s failure to address all relevant
diagnoses in terminating a claimant’s benefits . . . suggests the
not helpful in that endeavor because it does not provide
sufficient guidance to alert Plaintiff as to the precise
information she must provide.
34
Although Defendant states that failure to comply with §
2560.503-1(g)(iii) requires remand, the Third Circuit has
specifically concluded that a plan administrator’s failure to
comply with § 2560.503-1(g)(iii) “in making an adverse benefit
determination is probative of whether the decision to deny
benefits was arbitrary and capricious.” Miller, 632 F.3d at 851.
Consequently, the Court will not remand this matter on that basis
alone.
35
The Court combines Plaintiff’s second and fifth argument
because they are essentially identical. In Plaintiff’s second
point she argues that Sedgwick failed to consider the side
effects of her medication, and, in her fifth point, argues that
Sedgwick failed to consider the side effects of her medication
and ignored Dr. Burnstein’s diagnosis of rhupus.
33
decision may have been arbitrary and capricious.” Miller, 632
F.3d at 853. “It follows that if a reviewing court errs by
failing to address a plaintiff’s multiple conditions, the court
should give little deference to a plan administrator’s decision
which also fails to take multiple conditions into account.”
Kosiba v. Merck & Co., No. 98-357, 2011 WL 843927, at * 13 (March
7, 2011).
In the present matter, Sedgwick’s termination letters did
not include any reference to why it discredited Dr. Burnstein’s
rhupus diagnosis.
Therefore, the Court must examine whether the
independent medical physicians’ reports sufficiently scrutinized
the diagnosis. See Miller, 632 F.3d at 853.
After review of Drs.
Payne and Lumpkins’ reports, the Court concludes Sedgwick failed
to adequately address Plaintiff’s rhupus diagnosis.
With respect to Dr. Payne’s report, he noted that Plaintiff
had no objective signs of systemic lupus other than a positive
ANA.
In his review of her medical records, he noted the absence
of any evidence of weakness, atrophy or synovitis and joint
damages or destruction.
Based upon these findings, he concluded
Plaintiff’s symptoms were “not consistent with a connective
tissue process.” Doc. 30, Exhibit 2 at AR 128-29.
Notably absent
from his findings, however, was any discussion of whether
Plaintiff suffered from rhupus.
Albeit more comprehensive than Dr. Payne’s report, Dr.
34
Lumpkins’s report was equally deficient.
Although she mentioned
Dr. Burnstein’s rhupus diagnosis, she did not explain or
elaborate upon it or his findings.
Her only references to rhupus
were in the context of describing the contents of Dr. Burnstein’s
medical records and diagnoses. See Miller 632 F.3d at 855
(holding that a mere reference to a diagnosis without further
explanation “casts doubt on the reasonableness” of the plan
administrator’s decision); see also Lamanna v. Special Agents
Mut. Benefits Ass’n, 546 F. Supp 2d. 261, 294 (W.D.Pa. 2008) (“We
cannot agree that [independent medical file reviewers] simply
summarizing another physician’s findings is the same as
‘specifically discussing’ why they disagree”).
Even though Dr.
Lumpkins acknowledged that Plaintiff’s “medical record supports
that she has serologies consistent with the diagnosis of systemic
lupus erythematosus or the positive ANA, a positive doublestranded DNA, and a positive IgM anticardiolipin antibody,” Doc.
30, Exhibit 3 at AR 201, she concluded that “[t]he medical
records fail to substantiate the severity of either systmeic
lupus erythematosus or rheumatoid arthritis.” Doc. 30, Exhibit 2
at AR. 200.
To reach this conclusion, Dr. Lumpkins relied upon
the lack of objective medical evidence indicating the severity of
Plaintiff’s disability. See Id. (noting that Plaintiff’s file
contains a lack of “radiographic findings or imaging studies that
support that the claimant has significant range of motion
35
restrictions or any significant musculosketeal deficits” and the
file also “fails to demonstrate significant internal organ
involvement” that would preclude Plaintiff from working as a
Branch Manager III).
Notably, Dr. Lumpkins’s conclusions were specifically
limited to the lupus and rheumatoid arthritis portions of Dr.
Burnstein’s diagnosis.
In other words, she analyzed whether the
medical evidence indicated that Plaintiff was disabled because of
lupus or rheumatoid arthritis, not some combination of the two.
Dr. Burnstein’s diagnosis, however, was that Plaintiff suffered
from rhupus, mild cases of both lupus and rheumatoid arthritis,
and it was the combination of these two diseases which caused the
severity of Plaintiff’s disability.
Dr. Lumpkins’s analysis was
deficient because she failed to consider whether the combined
effect of lupus and rheumatoid arthritis was severe enough to
prevent Plaintiff from employment as branch manager III.
Instead, Dr. Lumpkins only addressed each disease separately and
independently.
error.
A line in her report glaringly highlights this
When demonstrating why the medical records failed to
substantiate Plaintiff’s disability, Dr. Lumpkins utilized the
term “or” to indicate that Plaintiff’s “systemic lupus
erythematosus or rheumatoid arthritis” (emphasis added) was not
sufficiently severe as to restrict her from working. Id.
Consequently, Sedgwick’s failure to address the rhupus diagnosis
36
in its termination letters, and the failure of Drs. Payne and
Lumpkins to discuss it in their reports, provide evidence that
Sedgwick did not fully consider all of Plaintiff’s diagnoses.
The Court will, therefore, weigh this factor in favor of
concluding that Sedgwick’s decision to deny Plaintiff LTD
benefits was arbitrary and capricious.36
(3) Consideration of the SSA’s Decision Awarding
Plaintiff Disability Benefits
An award of social security disability (hereinafter “SSD”)
benefits by the SSA “may be considered as a factor in evaluating
whether a plan administrator has acted arbitrarily and
capriciously in reviewing a plaintiff’s claim.” Marciniak v.
Prudential Fin. Ins. Co. of Am., 184 Fed. Appx. 266, 269 (3d Cir.
2006).
It is well established, however, that an award of SSD
benefits does not in itself establish “that an administrator’s
decision was arbitrary and capricious.” Kosiba, 2011 WL 843927,
at * 17.
“The legal principles controlling the Social Security
analysis differ from those governing the ERISA analysis, and,
36
Sedgwick did not need to specifically address whether
Plaintiff was disabled due to the side effects of her
medications. First, Dr. Burnstein’s medical records did not note
any significant lasting side effects from the medication.
Second, despite Plaintiff’s contention that she provided Sedgwick
with information about her side effects, the information
submitted was insufficient to require a response. Plaintiff only
submitted a list of medications and a typed document indicting
what side effects she experienced. Sedgwick’s decision not to
credit these types of complaints was not arbitrary and
capricious.
37
thus, the SSA’s determination of disability is not binding on an
ERISA benefit plan.” Id.; see Pokol v. E.I. Du Pont De Nemours &
Co., Inc., 963 F.Supp. 1361, 1380 (D.N.J. 1997) (“[I]t is not
inherently contradictory to permit an individual to recover
benefits pursuant to the Social Security Act while being denied
benefits pursuant to a private ERISA benefit plan”).
Even though a plan administrator is not required to adhere
to an award of SSD benefits, it is also not free to entirely
ignore the SSA’s determination of benefits.
“[I]f the plan
administrator (1) encourages the applicant to apply for SSD
payments; (2) financially benefits from the applicant’s receipt
of Social Security; and then (3) fails to explain why it is
taking a position different from the SSA on the question of
disability, the reviewing court should weigh this in favor of a
finding that the decision was arbitrary and capricious.” Kosiba,
2011 WL 843927 at * 18 (quoting Curry v. Eaton Corp., 400 Fed.
Appx. 51, 68 (6th Cir. 2010) (quoting Bennett v. Kemper Nat’l
Servs., Inc., 514 F.3d 547, 553 (6th Cir.2008))); see Glenn, 544
U.S. at 118 (remarking that the plan administrator’s failure to
address the SSA’s award of benefits “suggested procedural
unreasonableness” when the plan administrator encouraged the
claimant to seek SSD benefits).
In the present matter, as a condition of her continued
receipt of LTD benefits, Sedgwick required Plaintiff to apply for
38
SSD payments.37 See Haisley, 2011 WL 818669 at *15 (holding that
it was unreasonable for defendants to ignore an award of SSD
benefits when it required the plaintiff to apply for benefits).
On April 7, 2008, Plaintiff’s SSD claim was approved for $1865.00
per month. Doc. 30, Exhibit 3 at AR 235 & AR 237.
Consequently,
under the terms of the Plan, this award financially benefitted
Sedgwick because Plaintiff’s LTD benefits were offset by any
payment she received from the SSA.
Prior to this decision
granting benefits, Plaintiff received $4141.67 per month from
Sedgwick. Id. at AR 237 & AR 277.
After SSD benefits were
approved, Sedgwick was only responsible to pay Plaintiff $2276.67
per month. Id. at AR 237.
With respect to the third factor, the Court reiterates that
Sedgwick need not adhere to the decision of the SSA, it must only
explain why it did not follow the administration’s decision.
However, neither Sedgwick’s denial letters nor anywhere in the
administrative record, did it review, consider or address the
SSA’s decision.
In Sedgwick’s defense, Defendant argues that
Sedgwick reviewed Plaintiff’s entire administrative file, which
included the decision by the SSA.
37
This contention is
On May 1, 2007, the SSA initially informed Plaintiff that
she was ineligible to receive disability payments. The record
reveals that after her claim was denied, Sedgwick contracted with
Allsup, a social security disability insurance representation
service, to assist Plaintiff with securing SSD benefits. Doc. 30,
Exhibit 3 at AR 235, AR 275 and AR 276.
39
insufficient.38
Sedgwick, in its denial letter, needed to
address the SSA’s decision and explain why it chose not to credit
the decision. See Kao 647 F. Supp.2d at 420 (noting that the plan
administrator did not ignore the award of SSD benefits because it
recited correspondence with the SSA in its termination letter as
one of the documents it considered in resolving the appeal); see
also Funk v. Cigna Group Ins., No. 08-5208, 2010 WL 3522085, at *
3 n.8 (D.N.J. Aug. 31, 2010) (concluding that a plan
administrator’s failure to reconcile an award of SSD benefits
with its determination that the plaintiff was not disabled was a
factor which indicated the plan administrator’s decision was
arbitrary and capricious, especially because the plan
administrator assisted the plaintiff in filing for benefits).
The Court, therefore, concludes that Sedgwick’s failure to
address the decision of the SSA granting Plaintiff SSD benefits
weighs in favor of finding that its decision to terminate her LTD
38
Defendants rely upon Stith v. Prudential Ins. Co. of Am.,
356 F. Supp.2d 431, 440 n.4 (D.N.J. 2005) in support of their
assertion that the plan administrator need not specifically refer
to the SSA’s decision. Defendant’s reliance on this case is
misplaced for two reasons. First, unlike in the present matter,
the Court’s opinion in Stith does specifically indicate whether
the plan administrator required Defendant to obtain SSD benefits
or whether it would benefit from an award of SSD. Second, the
holding of Stith is undermined by the Supreme Court’s decision in
Glenn, which indicated that the plan administrator’s failure to
address the SSA’s award of benefits “suggested procedural
unreasonableness” when the plan administrator encouraged the
claimant to seek social security disability benefits. Glenn, 544
U.S. at 118.
40
benefits was arbitrary and capricious.
4. Reasonable Basis to Conclude Whether Plaintiff was
no Longer Disabled
The Third Circuit has held that “[a]n administrator’s
reversal of its decision to award a claimant benefits without
receiving any new medical information to support this change in
position is an irregularity that counsels towards finding an
abuse of discretion.” Miller, 632 F.3d at 848; see Pinto v.
Reliance Standard Life Ins. Co., 214 F.3d 377, 393 (3d Cir.
2000), overuled on other grounds by Glenn, 544 U.S. 105 (2008)
(noting that “[i]nconsistent treatment” of “the same facts”
should be viewed with “suspicion”).
This ruling, of course, does
not prohibit a plan administrator from ever terminating benefits.
Miller, 632 F.3d at 849.
Rather, it requires that any decision
to terminate benefits be based on additional medical evidence not
originally reviewed. See Hoch v. Hartford Life & Acc. Ins. Co.,
No. 08-4805, 2009 WL 1162823, at * 17 (E.D.Pa. Apr. 29, 2009)
(finding that the plan administrator’s decision to terminate
benefits was not arbitrary and capricious when the reversal
occurred after “the test changed from own-occupation to
any-occupation”).
In determining whether benefits were
improperly terminated, courts must “focus on the events that
occurred between the conclusion that benefits were owing [sic]
and the decision to terminate them.” McOsker v. Paul Revere Life
41
Ins. Co., 279 F.3d 586, 590 (8th Cir. 2002).
In a letter dated March 15, 2007, Sedgwick informed
Plaintiff that her application for LTD benefits was approved
because “[m]edical information indicates” that, as a result of
lupus, she cannot continue her employment. Doc. 30, Exhibit 3 at
AR 277.
At this time, Plaintiff was also told that her continued
receipt of benefits was conditioned on her ongoing ability to
meet the Plan’s definition of “Total Disability” and that “[o]n a
periodic basis” Sedgwick would request “information from you and
your attending physicians” to “verify your ongoing eligibility
for benefits.” Id. at 278.
On November 21, 2007, Sedgwick
informed Plaintiff that it “formally suspended” her claim due to
“a lack of current treatment information on file supportive of
continuing total disability.” Id. at 243.
In response, Plaintiff
submitted medical records from Dr. Burnstein that were
substantially similar to the evidence she submitted in support of
her initial claim.
After receipt of this documentation Sedgwick
reinstated her benefits.
Several months later, in July and August 2008, in
preparation for the change of Plaintiff’s LTD eligibility from
“regular occupation” to the more broad “any occupation”, Sedgwick
again requested additional medical information from Plaintiff
documenting her disability.
Dr. Burnstein again submitted
medical documentation that was essentially identical to the
42
evidence submitted in response to Sedgwick’s November 21, 2007
inquiry.
Apparently unsatisfied that the evidence it received
sufficiently supported her continued disability, Sedgwick, on
October 24, 2008, concluded Plaintiff was no longer “eligible for
continued LTD benefits.” Doc. 30, Exhibit 2 at AR 135.
Plaintiff claims Sedgwick, without receipt of any new
medical evidence, arbitrarily and capriciously reversed its prior
decision awarding her benefits.
This contention is correct.39
The records Sedgwick received in response to their July, August
and September 2008 letters did not differ in any material aspect
from either (1) the records Dr. Burnstein submitted in response
to Sedgwick’s November 21, 2007 inquiry or (2) the records he
submitted in March 2007 that supported Sedgwick’s initial
disability determination.
Each report mirrored the next with
39
In its brief for summary judgment Defendant essentially
proves Plaintiff’s argument. For several pages Defendant
highlights the similarity among Dr. Burnstein’s submissions to
Sedgwick. Although Defendant’s point is that Dr. Burnstein’s
medical records did not substantiate a finding that Plaintiff was
disabled, in making this argument, Defendant all but concedes the
inconsistency of Sedgwick’s treatment of Dr. Burnstein’s records.
In essence, Defendant argues that all of Dr. Burnstein’s
submissions were similar and that he never provided any objective
medical evidence of Plaintiff’s disability. This dissimilar
treatment of essentially identical evidence was precisely the
type of conduct that the Third Circuit, in Miller, found to be
arbitrary and capricious. See Miller, 632 F.3d at 849 (holding
that “in the absence of any meaningful evidence to support a
change in position,” a plan administrator’s “abrupt reversal” of
a prior award of benefits is arbitrary and capricious when the
plan administrator justifies its reversal on the same type of
medical evidence which it intially used as justification for an
award of benefits).
43
respect to the details of Plaintiff’s objective and subjective
symptoms of rhupus.
For example, the information submitted in
response to the November 21, 2007 inquiry contained Dr.
Burnstein’s objective findings of swelling and tenderness in the
joints of Plaintiff’s hands and feet and detailed her subjective
complaints of headaches, dizziness and morning stiffness.
Later,
in response to the July, August and September 2008 requests, Dr.
Burnstein submitted essentially the same information that was
already on the record: his objective findings of tender hand
joints and Plaintiff’s subjective complaints of morning stiffness
and fatigue.
Dr. Burnstein additionally included his conclusions
about the severity of Plaintiff’s condition, which echoed the
evidence submitted in support of Plaintiff’s initial application
for LTD: disabled because Plaintiff cannot sit or stand for more
than 1-2 hours a day, has restricted motions in her joints and
has difficulty grasping and with finger manipulation.
As a result, the information Sedgwick relied on to terminate
Plaintiff’s LTD benefits was the same type of documentation it
utilized to support a disability finding in March 2007 and again
in December 2007 as justification of the reinstatement of her
benefits.
Consequently, because Dr. Burnstein’s records did not
differ in any material aspect, his subsequent submissions did not
provide Sedgwick with any new medical information.
The records
were “only ‘new’ to the extent that they had not been received
44
before,” Miller, 632 F.3d at 849, and contained more recent,
albeit essentially identical to the prior submissions, evidence
of Plaintiff’s disability. See Haisley, 2011 WL 818669, at * 13
(concluding that “Sedgwick retroactively determined that an award
of LTD benefits was not warranted in the first place” was
“inconsistent treatment of the same medical information” and a
factor that its decision to deny benefits was arbitrary and
capricious).
With respect to actual evidence, the records failed
to provide new information.
Neither can Defendant claim that the reports of Drs. Payne
and Lumpkins constituted new medical information.
These reports
were not new information because neither doctor physically
examined Plaintiff, conducted any tests on her or even spoke with
Dr. Burnstein about her condition.
Rather, to reach their
conclusions that Plaintiff was not disabled, both physicians
merely reviewed the medical files of Dr. Burnstein and
Plaintiff’s submissions.40
After their review of this evidence,
Drs. Payne and Lumpkins concluded Plaintiff was not sufficiently
disabled so as to preclude her from working as a branch manager
III.
This new conclusion, however, is not new medical evidence.
The only new aspect of their reports was their interpretation of
previously considered evidence.
A second and different
40
The Court concluded in the aforementioned paragraph that
these materials were not in and of themselves new medical
evidence.
45
interpretation of evidence does not constitute new medical
evidence - a new opinion by a new physician does not create new
medical evidence when the physician based his conclusion solely
upon previously considered evidence.
Therefore, the Court
concludes that Sedgwick’s abrupt reversal of its prior decision
awarding benefits weighs heavily in favor of finding that its
termination decision was arbitrary and capricious.
(5) Reliance on Non-Existent Plan Requirements Objective Evidence
Plaintiff opines that Sedgwick improperly dismissed her LTD
claim on the basis that she did not provide any objective
evidence of the severity of her disability.
According to
Plaintiff, Sedgwick’s actions were improper because the Plan does
not require her to prove her disability or its severity with
objective evidence.
Courts in this district, however, have held
that “[b]ecause a reasonable person could find . . . objective
evidence helpful in establishing a standard measurement of the
extent or severity of a claimant’s symptoms and disability . . .
requiring such evidence was not arbitrary and capricious.” Kao,
647 F. Supp.2d at 413 (quoting Sarlo v. Broadspire Servs., Inc.,
439 F. Supp.2d 345, 362 (D.N.J. 2006) (citing Nichols v. Verizon
Commc’ns Inc., 78 Fed. Appx. 209, 212 (3d Cir. 2003))).
The
Court is in agreement, and Plaintiff has not cited any case law
to the contrary.
Therefore, Sedgwick’s decision to require
46
objective evidence as proof of Plaintiff’s disability and its
severity was not unreasonable.
The Court will weigh this factor
in favor of upholding Sedgwick’s determination.
(6) Reliance on the Opinions of Drs. Payne and Lumpkins
Plaintiff contends Sedgwick unreasonably relied upon the
biased opinions of Drs. Payne and Lumpkins to deny her LTD claim.
According to Plaintiff, a conflict of interest existed between
Sedgwick and Drs. Payne and Lumpkins because they received
payment for their consulting services.
Although Sedgwick did not
directly pay the physicians, Plaintiff postulates that Drs. Payne
and Lumpkins both possessed a financial incentive to deny her LTD
claim because they were “more likely to generate more referrals,”
Pl. Oppn. Br. 5, from Network Medical Review, the independent
company Sedgwick contracted, if they denied Plaintiff’s claim.
In support of this assertion, Plaintiff states that from January
1, 2005 to October 7, 2008, Dr. Payne denied four out of five
claims, or 20% of all claims he reviewed, and from January 1,
2005 to February 10, 2009, Dr. Lumpkins denied three out of
eleven claims, or 27.7% of all claims she reviewed.
In support of this argument, Plaintiff relies upon Scotti v.
Prudential Welfare Benefits Plan, No. 08-3339, 2009 WL 2243959,
at * 3 (D.N.J. July 23, 2009).
In Scotti, the district court
acknowledged “[t]he mere fact that Defendants paid” independent
47
medical consultants “for their medical expertise does not alone
render their professional determinations irrational or without
substantial evidentiary basis.” Scotti v. Prudential Welfare
Benefits Plan, No. 08-3339, 2009 WL 2243959, at * 3 (D.N.J. July
23, 2009).
The court, however, then concluded that the medical
consultants “were not entirely disinterested arbiters” because
they knew “that their client stood to gain by disputing
Plaintiff’s asserted medical condition.” Id.
The Scotti decision on this point appears to turn on a
lingering concern on the facts of that case of a conflict of
interest in the decision making process despite certain
structural safeguards.
We do not discern any similar structural
bias in this case, nor has Plaintiff argued that one exists.41
We do not assume that merely because a doctor is paid by the
insurance company, he will cast aside his oath to the medical
profession, disregard a plaintiff’s medical evidence and render
judgment in favor of the insurance company because of a financial
incentive.
Without any evidence to suggest the aforementioned
behavior occurred, we do not believe such an presumption by the
court is warranted.
Here, despite her assertions to the contrary, Plaintiff
41
Of course, we recognize our obligation to consider
conflicts of interest in applying the abuse of discretion
standard. Metro. Life Ins. Co. v. Glenn, 554 U.S. 105, 128 S.Ct.
2342, 2348 (2008).
48
failed to provide any evidence that Drs. Payne and Lumpkins were
biased or that they received more referrals from PNC or Network
Medical Review as a result of their decisions.42 See Semien v.
Life Ins. Co. of N. Am., 436 F.3d 805, 814 (7th Cir. 2006) (“The
fact that a plan administrator has compensated physicians for
their consulting services is not, in and of itself, sufficient to
establish a conflict of interest . . . .
Although a plan
administrator’s self interest may be a “factor” to “weigh” in
evaluating plan determinations, there is no reason to assume
independent consultants are not impartial when evaluating medical
records”).
Furthermore, as another court in this district noted, “it
would be reasonable to assume that most, if not all, medical
consults and reviewers used by ERISA plan administers . . . are
paid for their services.” Zurawel v. Long Term Disability Income
Plan for Choices Eligible Employees of Johnson & Johnson, No. 075973, 2010 WL 3862543, at * 12 (Sept. 27, 2010) (noting that it
42
Plaintiff opines that the low denial rates of Drs. Payne
and Lumpkins indicate their bias. We, however, do not find this
argument persuasive. Their rate of finding that a claimant is
not disabled is not evidence of whether Plaintiff’s claim would
be denied. Each claim the physicians review involves different
plaintiffs, issues, facts and evidence. Whether the physicians
concluded on past claims that the plaintiff was not disabled has
no baring on what they will conclude with respect to Plaintiff.
To the extent Drs. Payne and Lumpkins denial rates are indicative
of a pattern of denial, the Court finds Plaintiff failed to
provide sufficient evidence to establish any type of pattern.
49
could not find a “single case within the Third Circuit holding
that a paid consultant gives rise to an inference of
impropriety”).
For the Court to find a conflict of interest or
bias, Plaintiff must prove that the reviewers acted with “actual
impropriety.” Id.
Consequently, the mere fact that an
independent medical consultant received money is insufficient to
cast doubt on their determinations and raise an inference of
conflict, bias or impropriety. Id.
The Court, therefore,
concludes that the opinions of Drs. Payne and Lumpkins were not
biased and it was entirely reasonable for Sedgwick to rely upon
their determinations.43
We will weigh this factor in favor of
upholding Sedgwick’s determination.
E.
Weighing of Factors
“To decide whether an administrator’s termination of
benefits is arbitrary and capricious, we ‘determine lawfulness by
43
Plaintiff also asserts that it was unreasonable for
Sedgwick to accept Drs. Payne and Lumpkins’ opinions over the
conclusions of Dr. Burnstein and the SSA. This argument is
without merit. It is well established that a plan administrator
need not defer to the opinions of a plaintiff’s treating
physician or the findings of the SSA. See Black & Decker
Disability Plan v. Nord, 538 U.S. 822, 834 (2003) (“But, we hold,
courts have no warrant to require administrators automatically to
accord special weight to the opinions of a claimant’s physician;
nor may courts impose on plan administrators a discrete burden of
explanation when they credit reliable evidence that conflicts
with a treating physician's evaluation”); see also Marciniak, 184
Fed. Appx. at 269 (“However, a Social Security award does not in
itself indicate that an administrator's decision was arbitrary
and capricious, and a plan administrator is not bound by the SSA
decision”).
50
taking account of several different, often case-specific,
factors, reaching a result by weighing all together.’” Miller,
632 F.3d at 855 (quoting in part Glenn, 544 U.S. at 117).
Presently, the Court gives significant weight to its conclusion
that Sedgwick reversed its initial decision that Plaintiff was
disabled and terminated her benefits without receiving any
additional medical evidence that differed from the evidence it
previously considered. See Id. at 856 (giving this factor
“significant weight”).
Also significant was Sedgwick’s failure
to address Plaintiff’s rhupus diagnosis and the decision of the
SSA awarding Plaintiff SSD benefits. See Kosiba, 2011 WL 843927,
at * 20 (giving significant weight to the plan administrator’s
failure to address the plaintiff’s diagnosis).
The Court finds
equally troubling Sedgwick’s failure to comply with ERISA’s
notice requirements under § 503. See Miller, 632 F.3d at 856
(finding the plan administrator’s noncompliance with ERISA’s
notice requirements as “troubling”).
Finally, Sedgwick’s
reliance on the opinions of Drs. Payne and Lumpkins and its
requirement that Plaintiff provide objective evidence weigh in
favor of upholding Sedgwick’s determination to terminate her LTD
benefits.
Viewing these factors in their totality, however, the Court
concludes Sedgwick’s decision to deny benefits “was not the
product of reasoned decision-making and substantial evidence.”
51
Id.
Rather, the irregularities and errors gives the Court
“reason to doubt [Sedgwick’s] fiduciary neutrality.” Id. (quoting
Post, 501 F.3d at 165).
The Court, therefore, concludes
Sedgwick’s improper termination of Plaintiff’s benefits was an
abuse of discretion.44
F.
Remedy
Prior to the Third Circuit’s decision in Miller, the remedy
for an improper termination of LTD benefits claim under §
502(a)(1)(B) was unclear. Kosiba, 2011 WL 843927 at * 21.
In
Miller, however, the Court opined that:
retroactive reinstatement of a claimant’s benefits is
the proper remedy when the administrator’s termination
decision was unreasonable. In deciding whether to
remand to the plan administrator or reinstate benefits,
we note that it is important to consider the status quo
prior to the unlawful denial or termination. As such,
an important distinction emerges between an initial
denial of benefits and a termination of benefits after
they were already awarded. In a situation where
benefits are improperly denied at the outset, it is
appropriate to remand to the administrator for full
consideration of whether the claimant is disabled. To
restore the status quo, the claimant would be entitled
to have the plan administrator reevaluate the case
using reasonable discretion. In the termination
context, however, a finding that a decision was
arbitrary and capricious means that the administrator
terminated the claimant’s benefits unlawfully.
Accordingly, benefits should be reinstated to restore
44
The Court notes that its conclusion that Plaintiff’s LTD
benefits were improperly terminated is limited to the Plan’s
“regular occupation” requirement. The Court does not address nor
is this Opinion intended to limit Sedgwick’s ability to determine
whether Plaintiff can prove she is disabled under the Plan’s “any
occupation” requirement.
52
the status quo.
Miller, 632 F.3d at 856 (internal citations removed).
Here,
Sedgwick approved Plaintiff’s LTD claim on March 15, 2007.
Approximately a year and half later, it determined Plaintiff was
no longer eligible for payments.
As discussed above, based upon
the totality of the facts, we concluded Sedgwick improperly
terminated Plaintiff’s LTD benefits.
Since Plaintiff’s benefits
were unlawfully terminated, in order to return her to the status
quo, the Court must retroactively reinstate her benefits from the
date of her October 1, 2008 denial to January 8, 2009.
It would be inappropriate for the Court to retroactively
reinstate Plaintiff’s LTD benefits post January 8, 2009 because
there is no evidence in the administrator record, nor has the
plan administrator ever considered, whether Plaintiff’s
disability will preclude her from employment in a “gainful
occupation for which . . . she is reasonable fitted by training,
education or experience.”
Therefore, the Court will remand this
issue to the Plan Administrator for a determination of whether
Plaintiff is entitled to LTD benefits with respect to the period
postdating January 8, 2009.
IV. DEFENDANT’S MOTIONS TO SEAL
In addition to its Cross-Motion for Summary Judgment,
Defendant also filed two motions to seal [Docs. 31 & 34].
53
Defendant’s first Motion seeks to Seal its memorandum in support
of its Cross-Motion for Summary Judgment [Doc. 28], its Statement
of Undisputed Material Facts in Support of its Motion [Doc. 29]
and the administrative record, Exhibit A [Doc. 30].
Defendant’s
second Motion seeks to Seal its memorandum in Reply to
Plaintiff’s Opposition to Defendant’s Motion for Summary Judgment
[Doc. 35] and its Reply to Plaintiff’s Response to Defendant’s
Statement of Undisputed Material Facts [Doc. 36].45
Defendant contends that the aforementioned documents contain
confidential information, including (1) Plaintiff’s personal and
confidential medical information, (2) Plaintiff’s confidential
financial information, (3) confidential information concerning
the Plan and the administration of LTD benefit claims under it,
(4) confidential information concerning the relationship between
PNC and Sedgwick and (5) confidential and proprietary business
information concerning Sedgwick’s process for administering LTD
claims.
Local Rule 5.3(c) provides that in order to place a docket
entry under seal, the motion to seal must be publicly filed and
“shall describe (a) the nature of the materials or proceedings at
issue, (b) the legitimate private or public interests which
45
The Court briefly pauses to note that Plaintiff’s Motion
for Summary Judgment and its supporting documentation was not
filed under seal. These materials included some of the very same
items Defendant now attempts to seal.
54
warrant the relief sought, (c) the clearly defined and serious
injury that would result if the relief sought is not granted, and
(d) why a less restrictive alternative to the relief sought is
not available.” L. Civ. R. 5.3(c).
After review of the documents Defendant seeks to seal, the
Court concludes a less restrictive alternative is available Defendant can file unsealed redacted copies.
Therefore,
Defendant shall, within 14 days of the Order accompanying this
Opinion, file on the docket publicly accessible redacted versions
of all materials it desires sealed.
With respect to the
redactions, Defendant shall not redact any of Plaintiff’s medical
records, financial information or specific documentation Sedgwick
utilized or relied upon to conclude Plaintiff was not disabled.46
If, within the prescribed time, Defendant fails to file on the
docket redacted copies of all materials it desires to seal, the
Court will unseal the documents that do not have a corresponding
redacted version.
46
This information need not be redacted because Plaintiff,
in her briefing, never filed her motions under seal or attempted
to seal her own personal information. Moreover, in her
opposition to Defendant’s request to seal, Plaintiff acknowledged
that “in the interest of a free and open court system,” she is
prepared to disclose some of her personal information. Doc. 33.
With regard to the materials Sedgwick utilized to conclude
Plaintiff was not disabled, these documents shall not be sealed
because (1) they are central to the resolution of this case and
(2) Defendant failed to clearly define the type of serious injury
it would incur if the documentation relating to Plaintiff’s
benefits determination was publicly accessible.
55
V. CONCLUSION
For the reasons expressed above, Plaintiff’s Motion for
Summary Judgment [Doc. 23] will be granted in part and denied in
part, Defendant’s Cross-Motion for Summary Judgment [Doc. 27]
will be denied and Defendant’s Motions to Seal [Docs. 31 & 34]
will be granted in part and denied in part.
An appropriate order will be entered.
Date: June 24, 2011
At Camden, New Jersey
s/ Noel L. Hillman
NOEL L. HILLMAN, U.S.D.J.
56
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