Rowe v. United of Omaha Life Insurance Company (TV1)
MEMORANDUM AND OPINION - Signed by Chief District Judge Thomas A Varlan on 3/17/2017. (KMK, )
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF TENNESSEE
UNITED OF OMAHA LIFE
This Employee Retirement Income Security Act (“ERISA”) case is before the
Court on the Report and Recommendation (“R&R”) issued by United States Magistrate
Judge C. Clifford Shirley, Jr. [Doc. 22]. In the R&R, Judge Shirley recommends that
plaintiff’s Motion for Judgment on the Record [Doc. 16] be granted in part, and that
defendant’s Motion for Judgment on the Administrative Record [Doc. 14] be denied.
Defendant filed an objection to the R&R [Doc. 23], and plaintiff responded [Doc. 24].
Standard of Review
A court must conduct a de novo review of those portions of a magistrate judge’s
report and recommendation to which a party objects unless the objections are frivolous,
conclusive, or general. See 28 U.S.C. § 636(b)(1); Fed. R. Civ. P. 72(b)(3); Smith v.
Detroit Fed’n of Teachers, Local 231, 829 F.2d 1370, 1373 (6th Cir. 1987); Mira v.
Marshall, 806 F.2d 636, 637 (6th Cir. 1986). “Objections disputing the correctness of the
magistrate’s recommendation, but failing to specify the findings believed to be in error
are too general and therefore insufficient.” Stamtec, Inc. v. Anson, 296 F. App’x 516, 519
(6th Cir. 2008) (citing Spencer v. Bouchard, 449 F.3d 721, 725 (6th Cir. 2006)). The
Court “may accept, reject, or modify, in whole or in part, the findings or
recommendations” made by the magistrate judge. 28 U.S.C. § 636(b)(1).
This case arises from defendant’s decision to deny plaintiff long-term disability
benefits. In the R&R, Judge Shirley found that defendant’s decision to deny benefits
does not withstand the arbitrary and capricious standard of review and recommended that
the case be remanded for further consideration. Defendant raises four objections to the
Specifically, defendant objects to: (1) the application of the arbitrary and
capricious standard of review; (2) the finding that it is unclear which medical provider
opinion defendant credited; (3) the determination that plaintiff’s failure to apply for
Social Security benefits is not relevant; and (4) the recommendation that plaintiff be
given sixty days to supplement the Administrative Record with additional information on
Furthermore, in the event that the Court accepts Judge Shirley’s
recommendations, defendant seeks guidance on the remand process. The Court will
address each of these objections in turn.
The Court presumes familiarity with the R&R entered in this case [Doc. 22].
Application of the Arbitrary and Capricious Standard of Review
In its first objection, defendant argues that Judge Shirley failed to appropriately
apply the arbitrary and capricious standard of review. Specifically, defendant argues that
Judge Shirley failed to give defendant’s decision to deny benefits the extreme deference
required by Sixth Circuit precedent, and it also argues that certain cases that Judge
Shirley relied upon are distinguishable from this case. The Court will address each of
these arguments in turn.
Deference to Defendant’s Decision
In the R&R, Judge Shirley recommended that this case be remanded because he
could not determine based on the record whether defendant’s decision to deny benefits
“was the result of a deliberate, principled, reasoning process” [Doc. 22 p. 21].
particular, Judge Shirley found that it was unclear from the record to what extent
defendant credited and relied on the opinions of two nurse practitioners, each of whom
opined that plaintiff had, for medical reasons, certain workplace limitations.
Defendant makes several arguments in support of its contention that Judge Shirley
did not afford defendant’s denial decision the proper amount of deference.
defendant argues that Judge Shirley did not correctly apply the arbitrary and capricious
standard of review because he did not cite and follow McClain v. Eaton Corp. Disability
Plan, 740 F.3d 1059 (6th Cir. 2014), a recent Sixth Circuit decision that discusses and
applies the arbitrary and capricious standard of review.
In McClain, the Sixth Circuit noted that courts often describe the arbitrary and
capricious review as deferential but not “toothless,” and not being a mere “rubber stamp”
on the plan administrator’s decision. See id. The McClain court cautioned against the
“invocation of teeth and rubber stamps” and emphasized that the standard of review is
The Sixth Circuit further noted that “a decision
reviewed according to the arbitrary and capricious standard must be upheld if it results
from a deliberate principled reasoning process and is supported by substantial evidence.”
Id. at 1064–65.
The Court has considered this argument in light of the R&R, and finds that it is not
well taken. While it is true that the R&R does not cite to McClain, Judge Shirley cited
and discussed a number of cases that emphasize the deferential nature of arbitrary and
capricious review [See Doc. 22 p. 18 (citing Goetz v. Greater Ga. Life Ins. Co., 649 F.
Supp. 2d 802, 811 (E.D. Tenn. 2009) (“[T]he administrator’s benefit determination is
reviewed under the highly deferential arbitrary and capricious standard of review.”))].
Furthermore, although Judge Shirley did state that arbitrary and capricious review is not
“toothless,” he cited the Sixth Circuit decision Glenn v. Metlife, 461 F.3d 660 (6th Cir.
2006), for the proposition that an administrator’s decision will be upheld “if it is the
result of a deliberate, principled reasoning process and if it is supported by substantial
evidence.” Id. at 666. This language mirrors the language used by the Sixth Circuit in
McClain to describe the arbitrary and capricious standard.
See 740 F.3d at 1065.
Therefore, while Judge Shirley may not have directly cited to McClain, he cited other
Sixth Circuit caselaw that makes the same point—that arbitrary and capricious review is
highly deferential and that an administrator’s decision will be upheld “if it is the result of
a deliberate, principled reasoning process and if it is supported by substantial evidence.”
See id.; Glenn, 461 F.3d at 666.
Defendant next contends that Judge Shirley did not afford defendant’s decision the
proper deference because he focused on “how and the way” that defendant articulated its
denial of benefits decision, as opposed to the ultimate denial decision itself [Doc. 23 p.
4]. In support of this argument, defendant details the review process that plaintiff’s
request for benefits underwent, and notes that under Sixth Circuit precedent “the ultimate
issue in an ERISA denial of benefits case is not whether discrete acts by the plan
administrator are arbitrary and capricious but whether its ultimate decision denying
benefits was arbitrary and capricious.” McClain, 740 F.3d at 1066 (quoting Spangler v.
Lockheed Martin Energy Sys., Inc., 313 F.3d 356, 362 (6th Cir. 2002)). Defendant thus
appears to argue that Judge Shirley was incorrect to base his decision on the fact that
defendant did not clearly articulate in its denials which medical opinions it credited and
to what extent, because these were discrete acts in the decision-making process.
As an initial point, the Court notes that when a plan administrator does not
articulate which medical opinions were credited and the extent to which they were
credited, courts have found that the administrator’s decision is arbitrary and capricious.
For instance, in Bailey v. United of Omaha Life Insurance Co., the District Court for the
Western District of Tennessee found a plan administrator’s decision-making process
arbitrary and capricious where the administrator “spent a majority of [the denial letters]
explaining the plan terms and the medical evidence it reviewed,” and then simply stated
“that based on the above medical analysis, restrictions and limitations do not appear to be
supported.” See Bailey v. United of Omaha Life Ins Co., 938 F. Supp. 2d 736, 748–49
(W.D. Tenn. 2013).
In this case, although defendant’s denial letters included a review of some of the
relevant medical information, and analyzed the job responsibilities required for plaintiff’s
occupation, they did not specifically address to what extent defendant considered and
credited the opinions of the nurse practitioners.
These opinions each asserted that
plaintiff had some occupational limitations, as one nurse practitioner “specifically limited
sitting, standing and walking, and the other nurse practitioner stated that the plaintiff
needed routine position changes” [Doc. 22 p. 22]. The Court agrees with Judge Shirley
that defendant’s failure to articulate whether and to what extent these opinions were
credited, and to what extent the opined limitations impact the determination of whether
plaintiff is disabled under the plan, is indicative of defendant’s decision failing to result
from a “deliberate, principled reasoning process.” See McClain, 740 F.3d at 106; Bailey,
938 F. Supp. 2d at 749. As such, defendant’s argument that Judge Shirley was incorrect
to base his decision on the fact that defendant did not clearly articulate in its denials
which medical opinions it credited and to what extent is not well taken.
In sum, the Court finds that Judge Shirley applied the appropriate standard of
deference in considering defendant’s decision to deny benefits, and as such, will overrule
defendant’s objection in this regard.
Whether the Cases Relied Upon Are Distinguishable
Defendant next argues that Judge Shirley failed to apply the correct arbitrary and
capricious standard because two of the cases that Judge Shirley cited in the R&R,
Helfman v. GE Group Life Assur. Co., 573 F.3d 383 (6th Cir. 2009), and Elliot v. Metro
Life Insurance Co., 473 F.3d 613 (6th Cir. 2006), are distinguishable from this case.
Defendant appears to argue that these cases do not support the conclusion that
defendant’s denial decision was arbitrary and capricious.
The Court notes that while Judge Shirley did cite these cases, he did so for the
proposition that “if there is a problem with the plan administrator’s decision making
process, but it is not clear that the plan participant is entitled to benefits, the appropriate
remedy is remand” [Doc. 22 p. 25]. Thus, Judge Shirley does not appear to have relied
on these cases when determining whether or not defendant’s denial of benefits was
arbitrary and capricious, but rather appears to have relied on them only in determining the
proper remedy. Because defendant does not dispute that remand is the appropriate
remedy in the event that the Court finds defendant’s denial arbitrary and capricious, the
Court need not consider whether these cases are distinguishable for other reasons.
In sum, the Court finds that Judge Shirley correctly applied the arbitrary and
capricious standard of review, and the Court will overrule defendant’s objection in this
Whether it Is Clear from the Record Which Medical Providers
In its next objection, defendant argues that Judge Shirley was incorrect in
concluding that the record is unclear as to what extent defendant agreed or disagreed with
the opinions and limitations contained in the medical records.
In support of this
argument, defendant argues that because none of the relevant medical providers opined
that plaintiff was unable to work, and also because defendant discussed plaintiff’s job
requirements and the medical evidence in its denial letters, “it is reasonable to understand
[defendant’s] denial as interpreting, discussing, and analyzing the opinions and
limitations in the medical records” [Doc. 23 p. 10].
As an initial point, while neither nurse practitioner stated categorically that
plaintiff would be unable to work, as Judge Shirley noted in the R&R each nurse
practitioner indicated that plaintiff had certain medical workplace limitations.
The Court notes that defendant also argues that its denial should be upheld because it is
supported by substantial evidence. The Court will not consider this argument because Judge
Shirley based his decision on the fact that it is unclear from the record whether defendant
engaged in a deliberate, principled reasoning process, not whether defendant’s decision is
supported by substantial evidence. See McClain, 740 F.3d at 1064–65 (“[A] decision reviewed
according to the arbitrary and capricious standard must be upheld if it results from a deliberate
principled reasoning process and is supported by substantial evidence.”). Defendant also asserts
that the fact that Judge Shirley did not find plaintiff disabled indicates that defendant’s denial
decision was not arbitrary and capricious. This argument ignores the fact that courts frequently
remand cases for further review by the plan administrator where there is a problem with a plan
administrator’s decision making process but where the court “cannot say that [the plaintiff] is
clearly entitled to benefits.” See Elliott v. Metro Life Ins. Co., 473 F.3d 613, 623 (6th Cir. 2006).
Furthermore, without a more detailed discussion of to what extent defendant considered
and credited these limitations, it is unclear to the Court whether these limitations would
result in plaintiff being considered disabled under the plan. While defendant would have
the Court infer from defendant’s denial that it “interpreted, discussed, and analyzed” the
opinions and limitations, doing so would relieve defendant of the burden of applying a
“deliberate, principled reasoning process.” See McClain, 740 F.3d at 1065; Bennett v.
Kemper Nat. Servs., Inc., 514 F.3d 547, 556 (6th Cir. 2008) (“We finally register our
serious concern that the first denial letter fails to explain the reasons for its decision.”). A
denial, without more, “reads like a conclusion, not a deliberate, principled reasoning
process.” See Bailey, 938 F. Supp. 2d at 748–49 (quoting Bennett, 514 F.3d at 556)).
Therefore, the Court finds that Judge Shirley’s conclusion is not undermined by
the fact that neither nurse practitioner opined that plaintiff could not work, and that the
Court will not infer from defendant’s denial that it interpreted, discussed, and analyzed
the relevant opinions. As such, the Court will overrule defendant’s objection in this
Plaintiff’s Decision Not to Apply for Social Security Benefits
In the R&R, Judge Shirley declined to consider the fact that plaintiff did not apply
for Social Security benefits in his arbitrary and capricious analysis. In its objection,
defendant argues that Judge Shirley erred in refusing to do so, noting that the Sixth
Circuit has stated that “courts have recognized that a disability determination by the
Social Security Administration is relevant in an action to determine the arbitrariness of a
decision to terminate benefits under an ERISA plan.” See Glenn, 461 F.3d at 667.
Therefore, defendant argues that plaintiff’s failure to apply for social security benefits
should be considered by the Court as “evidence that she did not consider herself eligible
for such benefits,” and thus as relevant to the arbitrary and capricious analysis [Doc. 23 p.
The Court has considered this argument, and finds that it is not well taken. While
a disability determination made by the SSA is relevant, defendant has not cited, and the
Court is not aware of, any authority for the proposition that a failure to apply for benefits
is similarly relevant. Furthermore, in the R&R, Judge Shirley declined to consider that
plaintiff failed to apply for Social Security benefits in part because defendant “did not
consider plaintiff’s alleged failure to file for social security benefits at the administrative
level” [Doc. 22 p. 25]. Defendant does not dispute the veracity of this statement in its
objection, and offers no argument as to why the Court should consider the fact that
plaintiff did not apply for social security benefits when defendant did not consider that
fact as part of its administrative review. As such, the Court agrees with Judge Shirley
that plaintiff’s alleged failure to apply for social security benefits is not relevant to
whether defendant’s denial decision was arbitrary and capricious, and will overrule
defendant’s objection in this respect.
Whether Plaintiff Should Have an Opportunity to Supplement the
Record on Remand
In the R&R, Judge Shirley recommended that on remand plaintiff be allowed sixty
days to “file her position . . . and to provide any and all supporting documents” [Doc. 22
p. 26]. In its objection, defendant contends that, in the event that the Court order remand
in this case, plaintiff should not have the opportunity to supplement the administrative
As an initial point, the Court does not read the R&R as permitting plaintiff to
supplement the existing administrative record. Rather, the Court interprets the R&R as
allowing the plaintiff to make an argument to defendant on remand as to why she should
be found to be disabled under the plan using those materials already in the current
administrative record. To the extent that there is any dispute as to the meaning of the
R&R in this regard, the Court finds that on remand plaintiff may not supplement the
current administrative record, because the issue in this case is a flaw in defendant’s
decision-making process and not any inadequacy in the record. See Koning v. United of
Omaha Life Ins. Co., No. 1:13-cv-1005, 2016 WL 7971266, at *3 (W.D. Mich. May 3,
2016) (refusing plaintiff’s request to reopen the administrative record on remand, where
the basis for remand was that the plan administrator had “failed to adequately evaluate
the evidence presented”).
Furthermore, the Court notes that permitting plaintiff to supplement the
administrative record is particularly unwarranted in this case because plaintiff had the
opportunity, at defendant’s request, to submit additional documentation in connection
with her administrative appeal. As Judge Shirley noted in the R&R, plaintiff does not
deny that she failed to submit additional documentation in connection with defendant’s
request. While plaintiff appears to contend that she did not supplement her record on
appeal because she had no notice that defendant was reconsidering her physical ability,
Judge Shirley rejected this argument in the R&R on the grounds that defendant explicitly
requested additional medical records.3 The Court agrees with Judge Shirley that because
defendant requested that plaintiff submit additional documentation, plaintiff cannot be
said to have lacked notice.
As such, the Court finds that on remand plaintiff will have sixty days to submit to
defendant any argument as to why she should be considered disabled under the plan,
using any materials in the current administrative record. The Court also finds, however,
that plaintiff will not be permitted to reopen and supplement the administrative record.
Finally, in its objection, defendant sought an explanation from the Court as to how
the remand process will work. The Sixth Circuit has indicated that “where the problem is
with the integrity of the plan’s decision-making process, rather than that a claimant was
denied benefits to which he was clearly entitled, remand to the plan administrator is the
appropriate remedy.” See Cooper v. Life Ins. Co. of N. Am., 486 F.3d 157, 171 (6th Cir.
2007). The parties do not dispute that remand is the appropriate remedy in this case. On
remand, defendant must provide plaintiff with a “full and fair review” of her claim for
long-term disability benefits, and its review must consider those issues raised by Judge
Plaintiff also asserted in her response that defendant’s denial on appeal was based on a
different reason than was the initial denial. Plaintiff previously made this argument to Judge
Shirley, and Judge Shirley rejected it [See Doc. 22 p. 24].
Shirley in the R&R, and by the Court in this opinion. See Huizing v. Metro. Life Ins. Co.,
No. 1:08-cv-878, 2010 WL 1417728, at *6 (W.D. Mich. Mar. 31, 2010).
The Court will retain jurisdiction pending defendant’s review, but this case will be
Defendant shall notify the Court of any final decision on
remand, and should either party desire review of that final decision, that party shall file a
motion to reopen this case. See id. (stating that “the Court will retain jurisdiction of this
case pending further administrative review,” and also that “defendant shall notify the
Court . . . of any final decision on remand”).
For the reasons discussed herein, the Court will OVERRULE defendant’s
objection [Doc. 23]. Accordingly, the Court will ACCEPT IN WHOLE the R&R,
which the Court incorporates into its ruling. As such, the Court will DENY defendant’s
Motion for Judgment on the Administrative Record [Doc. 14] and GRANT in part
plaintiff’s Motion for Judgment on the Record [Doc. 16].
This case will be
REMANDED to the plan administrator for a full and fair review of plaintiff’s claim, and
the Clerk of Court will be directed to CLOSE this case.
s/ Thomas A. Varlan
CHIEF UNITED STATES DISTRICT JUDGE
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