University of Wisconsin Hospital and Clinics, Inc. et al v. Air Products and Chemicals, Inc.

Filing 45

ORDER denying plaintiffs' 12 Motion for Judgment on the Pleadings; granting defendant's 18 Motion for Summary Judgment; denying as moot plaintiff's 24 Motion to Stay; and denying plaintiffs' 32 Motion for Partial Summary Judgment. Signed by District Judge William M. Conley on 5/1/2018. (jls) Modified on 5/1/2018. (arw)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF WISCONSIN
UNIVERSITY OF WISCONSIN HOSPITAL
AND CLINICS, INC., and UNIVERSITY OF
WISCONSIN MEDICAL FOUNDATION,
INC.,

v.

Plaintiffs,

AIR PRODUCTS AND CHEMICALS, INC.,
AS SUCCESSOR PLAN ADMINISTRATOR
TO EPCO CARBON DIOXIDE PRODUCTS,
INC., HEALTH PLAN,

OPINION AND ORDER
14-cv-803-wmc

Defendant.
After consuming a number of alcoholic drinks, Brennan Cain fell down the
basement stairs of his sister’s house in the early morning hours of December 25, 2010.
Despite receiving extensive treatment at the University of Wisconsin Hospital, Cain
tragically died from injuries resulting from that fall.

In an initial lawsuit before this

court, plaintiffs University of Wisconsin Hospital and Clinics, Inc. and University of
Wisconsin Medical Foundation, Inc. (collectively, “UWHC”), as assignees of his claims
for reimbursement, challenged the decision by the administrator of his employee health
benefits plan to deny coverage for Cain’s injuries. 1 See Univ. of Wis. Hosps. & Clinics
Auth. v. EPCO Carbon Dioxide Prods., Inc. Health Care Plan, No. 12-cv-031-wmc, slip op.
(W.D. Wis. Apr. 18, 2015).

In that case, the court remanded the administrator’s

decision for reconsideration, finding that the original denial under the coverage exclusion

1

Defendant does not challenge plaintiffs’ right to stand in the shoes of its insured.

for “accidental bodily Injury sustained or Illness contracted as a result of alcohol or drug
use” was arbitrary and capricious absent an investigation and ruling out of possible causes
for Cain’s fall and resulting injuries other than alcohol intoxication. (Id., dkt. #52.) In
this case, plaintiffs again challenge the denial of their claim under the Employee
Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001 et seq., this time
naming as defendant the administrator of the plan’s successor, defendant Air Products
and Chemicals, Inc. (“Air Products”). 2
Before the court are plaintiffs’ motion for judgment on the pleadings (dkt. #12),
defendant’s motion for summary judgment (dkt. #18), and plaintiffs’ motion for partial
summary judgment (dkt. #32). Based on the undisputed facts, the court finds that the
plan administrator has now sufficiently investigated the possible causes of Cain’s fall.
The court further finds that the administrator reasonably interpreted and applied the
facts to the relevant coverage exclusion. Accordingly, the plan’s denial of coverage was
not arbitrary and capricious, and the court will grant summary judgment to defendant.

Jurisdiction is proper in this court under 28 U.S.C. § 1331 and 29 U.S.C. § 1132(e)(1).
Because the alleged denial of benefits occurred in the Western District of Wisconsin, venue is also
proper under 28 U.S.C. § 1391 and 29 U.S.C. § 1132(e)(2). This decision is being issued long
after the filing of the pending motions due to an oversight, which was thankfully recently pointed
out by counsel for the plaintiff (dkt. #44) and for which the court apologizes sincerely.
2

2

UNDISPUTED FACTS 3
A.

The Plan
On December 25, 2010, Brennan Cain was an employee of EPCO Carbon Dioxide

Products, Inc. (“EPCO”) and an employee-participant of the EPCO Employee Health and
Welfare Plan (the “Plan”). After acquiring EPCO, Air Products became the administrator
of the Plan. Accordingly, Air Products handled Cain’s claim on remand.
The Plan grants its administrator, Ms. Elizabeth Reese, “sole authority and
discretion to interpret and construe the terms of the Plan and to determine any and all
questions in relation to . . . payment of benefits or claims under the Plan[.]”
B.

The injury
The afternoon of December 24, 2010, Cain worked at EPCO for a total of six

hours. Somewhere between 6:30 and 7:00 p.m., Cain and his girlfriend, Beth Sutton,
arrived at his sister and brother-in-law’s house. That night, Cain and Sutton went to two
bars with his sister and brother-in-law, Temple and Patrick Palmer, before returning
home sometime between 11:00 p.m. and midnight.
Around 12:30 a.m. on December 25, 2010, Cain went to the basement to sleep.
Having consumed “several” alcoholic drinks, Sutton recalled that he was “staggering a
little bit at that time.” At approximately 2:30 a.m., Cain returned upstairs to convince

From the parties’ complaint, answer, proposed findings of facts and responses, evidentiary
submissions (to the extent not contradicted) and the Administrative Record (“AR”) (dkt. #17),
the court finds the following facts undisputed for the purpose of deciding the present motions.

3

3

Sutton to come to bed. 4 She followed Cain to the basement stairs, but as he stepped
down from the threshold, Cain lost his balance, fell down the stairs and landed on the
floor, knocking himself unconscious. Cain received emergency medical treatment on the
scene and was then rushed to the University of Wisconsin Hospital.

There, he

underwent treatment for Level I head trauma, but never recovered. Cain passed away at
the hospital due to his injuries on October 5, 2011.
At the time he fell down the stairs, Cain was wearing slippers with rubber soles.
There were no objects lying on the stairs, although the first step leading down into the
basement was shorter than the rest, with a height of approximately three to four inches.
At 4:21 a.m., the hospital measured Cain’s blood alcohol content (“BAC”), which was
still 0.25g/dL, or roughly three times the legal driving limit in Wisconsin. 5
After Cain presented his claim for reimbursement, a third party claim manager,
Cottingham & Butler, reviewed the emergency room report and ruled out a stroke as the
cause of his fall. Eric Wiesemann, the administrator of the plan at that time, then denied
Cain’s claim under General Limitation 52, which excludes coverage for “accidental bodily
Injury sustained . . . as a result of alcohol or drug use.” In anticipation of litigation, the

According to the parties in the first lawsuit, Sutton and Temple Palmer thought that Cain
appeared sleepy but not obviously intoxicated when he came upstairs, as he was steady on his feet
and did not slur his speech. EPCO, No. 12-cv-031-wmc, at *3.
4

Plaintiffs dispute the value of Cain’s BAC by pointing out that the hospital measured his
“alcohol serum concentration” at 250 mg/dL. Since one can apparently move the decimal point
three places to the left in order to convert a measure of alcohol serum concentration to BAC, Cain
would still appear to have had a .25g/dL BAC. See Preeti Dalawari, Ethanol Level, Medscape, (Feb.
4, 2014), http://emedicine.medscape.com/article/2090019-overview.
In any event, because
plaintiffs do not provide any further explanation as to their asserted dispute of fact regarding
Cain’s BAC, the court remains satisfied that the administrator could have reasonably concluded
that Cain was heavily intoxicated at the time of his fall.
5

4

Plan also referred Cain’s claim to Dr. Christopher Long, a board-certified toxicologist,
who wrote a letter opining that Cain’s alcohol use was a cause of his injuries. After the
Plan Administrator denied Cain’s appeal, plaintiffs sued EPCO in state court. EPCO
then properly removed the case to this court because a federal question was presented
under ERISA.
C.

EPCO lawsuit
In the initial lawsuit involving Cain’s claim for benefits, the court granted

summary judgment to plaintiffs, explaining that, as the then administrator, EPCO did
not conduct a sufficient investigation into the circumstances surrounding Cain’s fall
before ruling that it resulted from his alcohol use. For example, the court found that the
administrator should have arranged for an examination of the allegedly irregular stairs at
Palmers’ house, inquired about Cain’s ability to traverse the stairs when sober, examined
the footwear Cain was wearing when he fell or at least spoke to Sutton, who witnessed
Cain’s fall. See EPCO, No. 12-cv-031-wmc, slip op. at *4, *7. Ordering that the matter
be remanded for further review, the court further noted that the plan administrator
should clarify his interpretation of the phrase “as a result of,” as found in the alcohol
exclusion. See id. at *7 n.3.

5

D.

The investigation on remand 6
On remand, Elizabeth Reese, the Plan’s new administrator for Air Products as

EPCO’s successor, conducted an additional investigation into the circumstances
surrounding Cain’s fall. Among other things, Reese interviewed Temple Palmer at her
home on August 7, 2014, who confirmed that: (1) no changes had been made to the
stairs since they were carpeted in the late 1990s; (2) Ms. Palmer’s family used the stairs
on a daily basis in various types of footwear; (3) Ms. Palmer’s insurance company told
her that the stairs were up to code and did not cause the accident; and (4) the slippers
Mr. Cain was wearing when he slipped had rubber soles and were in good condition. 7 At
Palmer’s home, Reese also walked the basement stairs and took pictures of them.
The administrator next considered an expert report prepared by Kenneth Graham,
Ph.D., a forensic toxicologist, who reviewed Cain’s claim at the request of the
administrator.

Dr. Graham opined that the “effects associated with Mr. Cain’s

significant alcohol intoxication were direct causes of his inability to safely negotiate the
flight of stairs . . . and the subsequent injuries he sustained from his fall.” In reaching his
On July 8, 2013, after the court remanded Cain’s claim to the plan administrator for
reconsideration and plaintiffs voluntarily stipulated to the dismissal of their appeal to the Seventh
Circuit Court of Appeals, UWHC’s counsel specifically asked Air Products who would be
handling Cain’s claim as the plan administrator, which set in motion correspondence between the
parties that lasted until plaintiffs filed their complaint in this case on November 20, 2014, five
days before the administrator issued her final decision. As reflected in the discussion above, it
appears that the administrator proceeded to do a thorough investigation in this case.
6

Plaintiffs dispute defendant’s recitation of what the administrator learned from her interview
with Palmer “to the extent that [it] only summarizes a recorded interview and does not compare
to the same sworn deposition taken by Mrs. Temple Palmer and incorporated into the
Administrative Record at [AR 691.]” Plaintiffs do not, however, identify any facts the
administrator learned from the Palmer interview that are actually disputed in the record, nor is it
apparent to the court that Palmer disputed any of them at her deposition. Accordingly, the court
finds these facts to be undisputed.
7

6

conclusion, Dr. Graham specifically dismissed the notion that Cain’s personal tolerance
for alcohol would have minimized the impairment of his executive functions required to
navigate safely a flight of stairs.
In addition, the administrator considered more than 3,553 pages of documents
that Mark Sweet, counsel for UWHC, submitted to supplement the record. Among these
documents were two expert reports prepared by Dr. Richard Tovar. In the first report,
Dr. Tovar concluded that after reviewing Cain’s records, “[a]lthough the alcohol played a
large roll in his fall, there were other factors such as potentially unfamiliar terrain such as
the stairs, and the use of foot appliances, that is the slippers, which could have enhanced
his lack of coordination resulting in a fall.” A week after his first report, Dr. Tovar also
submitted a second, in which he still opined that “the alcohol did play a role in his fall,
but [a] much more decreased [role than he had first opined] in light of the new
information by Ms. Sutton that Mr. Cain was a chronic drinker.”
Finally, the administrator also reviewed a report plaintiffs submitted from Robert
Wozniak, an engineer who examined the Palmers’ basement stairs. Wozniak noted in his
report that Cain’s slippers were in good condition, but stated that the stairs were not up
to code and may have contributed to Cain’s fall.
E.

The administrator’s decision after reconsideration

In a decision dated November 25, 2014, the administrator again denied Cain’s
claim for benefits. Specifically, Ms. Reese found:
The preponderance of the evidence supports that Mr. Cain’s
significant alcohol intoxication was the direct cause of his
inability to safely navigate the flight of stairs or quickly react
7

to his loss of footing, was the direct cause of the subsequent
injuries sustained from the fall, and that the accident would
not have occurred in the absence of alcohol. Thus, medical
expenses arising from such fall[s] are excluded from coverage
under Item 52 of the General Limitations Section of the Plan.
In her written decision, the administrator also attempted to address the two
primary concerns the court raised in the EPCO lawsuit.

First, the administrator

interpreted the “as a result of alcohol . . . use” coverage exclusion to mean that alcohol
need not be the “but for” cause of any accident.

The administrator reached this

conclusion after reviewing the text of other exclusions in the Plan. She reasoned that the
Plan uses “sole” or “solely” where a finding of “but for” causation is required, as opposed
to “as a result of” language in the relevant provision here.
Second, the administrator ruled out other possible causes for Cain’s fall. With
respect to the condition of the basement stairs, the administrator explained that she
personally walked them with no difficulty and further credited Ms. Palmer’s belief that
the stairs were safe. Additionally, concerning fatigue, the administrator noted that Cain
had been working only six hours the day before his fall, had never fallen due to fatigue at
any other time even when he worked more than six hours, and was not too tired to
socialize.

Finally, the administrator explained that Cain’s slippers did not appear

unusual, at least based on the pictures she reviewed and Ms. Palmer’s statement that
Cain had worn the rubber-soled slippers with no concern on other occasions.

8

OPINION
Because the Plan expressly grants the administrator discretionary authority to
interpret its terms and determine whether claims are eligible for benefits, the parties
agree that the arbitrary and capricious standard of review applies here. See Wetzler v. Ill.
CPA Soc. & Found. Ret. Income Plan, 586 F.3d 1053, 1057 (7th Cir. 2009) (citing Firestone
Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989)). Under this deferential standard,
“an administrator’s interpretation is given great deference and will not be disturbed if it is
based on a reasonable interpretation of the plan’s language.”

Id.

Only if an

administrator’s decision is “downright unreasonable” can the court reverse her decision.
Blickenstaff v. R.R. Donnelley & Sons Co. Short Term Disability Plan, 378 F.3d 669, 677 (7th
Cir. 2004). Still, because the administrator applied a provision excluding coverage for
benefits, defendant has the burden of showing that the exclusion applies. See, e.g., Fuja v.
Benefit Tr. Life Ins. Co., 18 F.3d 1405, 1408 (7th Cir. 1994).
The court is to consider “reasonableness” in light of the following factors: “the
impartiality of the decision making body, the complexity of the issues, the process
afforded the parties, the extent to which the decision makers utilized the assistance of
experts where necessary, and finally the soundness of the fiduciary’s ratiocination.”
Chalmers v. Quaker Oats Co., 61 F.3d 1340, 1344 (7th Cir. 1995). Rather than address
these factors head on, plaintiffs take a scatter-shot approach to challenging the
administrator’s decision on remand on both procedural and substantive grounds. While
keeping the applicable reasonable factors in mind, the court will address plaintiffs’
arguments in turn.
9

I.

Procedural Challenges
To begin, plaintiffs contend that the plan administrator committed a variety of

procedural errors.

As plaintiffs acknowledge, those purported errors would not

themselves entitle plaintiffs to a remedy or alter the standard of review. (Pls.’ Opp’n Br.
(dkt. #27) 13.) Instead, any procedural violations would be considered in determining
whether the plan administrator’s decision was arbitrary and capricious. See Weitzenkamp
v. Unum Life Ins. Co. of Am., 661 F.3d 323, 329 n.3 (7th Cir. 2011).
A.

Timing of the administrator’s decision

Plaintiffs first challenge the administrator’s compliance with 29 C.F.R. §
2560.503-1(f)(1), which states in pertinent part that:
if a claim is wholly or partially denied, the plan administrator
shall notify the claimant . . . of the plan’s adverse benefit
determination within a reasonable period of time, but not
later than 90 days after receipt of the claim by the plan,
unless the plan administrator determines that special
circumstances require an extension of time for processing the
claim. If the plan administrator determines that an extension
of time for processing is required, written notice of the
extension shall be furnished to the claimant prior to the
termination of the initial 90-day period.
Id.
The parties disagree about whether this provision applies to its decision on
remand. Defendant argues that the regulation provides time limits only for initial claim
determinations and appeals. In reply, plaintiffs contend that because the court vacated
the administrator’s decision, the provision should apply. Plaintiffs’ position has some
support in the case law, while defendant’s does not. See Solnin v. Sun Life & Health Ins.
10

Co., 766 F. Supp. 2d 380, 392-94 (E.D.N.Y. 2011) (citing other case law in finding that
the ERISA time regulations apply to a plan administrator’s review after remand). Even if
the court were to find the circumstances on remand to further investigate Cain’s claim
and issue her final decision justified some extension of the 90-day limit, the time it took
for the administrator -- more than one year after the parties stipulated to the dismissal of
plaintiffs’ appeal to the Seventh Circuit and more than 300 days after plaintiffs’ counsel
submitted documents supplementing the administrative record -- strikes the court as
unreasonable, particularly given that she was tasked with a well-defined set of
responsibilities on remand.
With that being said, the plan administrator’s delay here factors little into the
court’s determination whether her decision was arbitrary and capricious. 8

While the

parties attempt to place blame on one another for the administrator’s delay, whether
plaintiffs’ counsel or the administrator was more culpable, the record reflects that
plaintiffs share some responsibility for the extended period of time it took for the
administrator to issue her decision. For instance, plaintiffs concede that their counsel:
(1) requested, and was granted by the administrator, two multi-week extensions for time
to supplement the administrative record (Pls.’ Resp. to Def.’s PFOF (dkt. #28) ¶¶ 46,
51); (2) on multiple occasions acknowledged his delay in responding to the
administrator’s requests (id. at ¶¶ 53, 58, 59); and (3) submitted 3,553 pages of

Defendant points out that amendments to the ERISA regulations that removed the “deemed
denied” language suggest that a plan administrator retains her discretionary authority in making
her final determination even when an administrator’s delay results in all administrative remedies
being deemed exhausted. See Wedge v. Shawmut Design and Constr. Grp. Long Term Disability Plan,
No. 12 Civ. 5645(KPF), 2013 WL 4860157, at *7 (S.D.N.Y. Sept. 10, 2013).
8

11

documents for the administrator to review (id. at ¶ 55). At most, the record indicates not
that the administrator dragged her feet on Cain’s claim, such that her delay should weigh
heavily toward a finding that her decision was arbitrary and capricious, but rather that
both she and plaintiffs’ counsel did not consider handling Cain’s claim on remand to be
an urgent matter. Accordingly, while a consideration favoring plaintiffs, the court will
not penalize the administrator substantially for the delay in issuing her decision on
remand.
B.

Dr. Graham’s CV
Plaintiffs contend, and defendant does not dispute, that the administrator did not

provide Dr. Graham’s credentials in the form of his curriculum vitae (“CV”) during the
course of reconsideration of Cain’s claim.

Plaintiffs argue this failure renders the

administrator’s decision unreasonable, because they had no opportunity to challenge
Graham’s fitness as an expert.
As an initial matter, plaintiffs cite no case law suggesting that a plan administrator
must provide a claimant with an expert report, let alone expert’s qualifications, before the
administrator reaches a final decision.

To the contrary, the ERISA regulations only

contemplate that following the issuance of an adverse decision by the plan administrator,
a claimant be given the opportunity to “review and rebut medical opinions generated on
administrative appeal.” See Midgett v. Wash. Grp. Int’l Long Term Disability Plan, 561 F.3d
887, 895 (8th Cir. 2009); see also Metzger v. UNUM Life Ins. Co. of Am., 476 F.3d 1161,
1166 (10th Cir. 2007) (stating that holding otherwise “would set up an unnecessary
cycle of submission, review, re-submission, and re-review”); Glazer v. Reliance Std. Life Ins.
12

Co., 524 F.3d 1241, 1246 (11th Cir. 2008) (“Documents produced before a decision is
made would not assist a claimant in deciding whether to pursue an appeal because the
claimant would not yet know if there has been an adverse determination.”). Accordingly,
the plan administrator cannot be faulted for not allowing plaintiffs to challenge Dr.
Graham’s report while Cain’s claim was pending on remand.
On the other hand, as plaintiffs insist, there is room to argue that they were
deprived a full and fair review when there is nothing in the administrative record
establishing the qualifications of an expert on whose opinion a plan administrator relied.
The Seventh Circuit has repeatedly stated that the “persistent core requirements” of full
and fair review include “having an opportunity to address the accuracy and reliability” of
evidence upon which the decision-maker relied. Militello v. Cent. States, Se. & Sw. Areas
Pension Fund, 360 F.3d 681, 690 (7th Cir. 2004). Moreover, defendant’s explanation for
the absence of Graham’s qualifications is underwhelming.

It may be true that, as

defendant asserts, plaintiffs’ effort to strike Dr. Graham’s report from the record fails
because Federal Rule of Evidence 702 and the Daubert standard do not bind a plan
administrator, but that says little about whether plaintiffs were ultimately afforded a
meaningful opportunity to challenge the minimum procedure they are guaranteed.
As with the delay before the administrator issued her decision, plaintiffs share
some responsibility for the uncertainty regarding Dr. Graham’s qualifications. Although
they maintain that “[d]efendant refused to agree to discovery in the parties[’] joint
pretrial report” (Pls.’ Reply Br. (dkt. #38) 3), it is not clear that they specifically
requested discovery as to Graham’s qualifications, as the parties’ joint preliminary
13

pretrial conference report merely states that “Plaintiffs desire discovery into . . . the
Plan’s expert, Dr. Kenneth Graham.” (Joint Prelim. Pretrial Conference Report (Dkt.
#10) 5.) Even assuming that defendants did reject plaintiffs’ specific proposal for limited
discovery into Dr. Graham’s qualifications, plaintiffs could have asked the court to
resolve the parties’ dispute. By deciding to forego reasonable efforts to seek information
about Dr. Graham’s qualifications through discovery, plaintiffs again bear some
responsibility for the record being incomplete.
In support of their challenge to Dr. Graham’s report, plaintiffs argue that the
absence of his CV in the administrative record fatally undermines the administrator’s
decision because the letterhead on his report does not constitute substantial evidence
adequate to support his purported credentials as an expert forensic toxicologist. Plaintiffs
also cite White v. Airline Pilots Association, International, 364 F. Supp. 2d 747 (N.D. Ill.
2005), which found a plan administrator’s decision was arbitrary and capricious.

In

White, the district court stated:
It is true that seeking independent expert advice is evidence
of a thorough investigation. However, in order for that expert
advice to have any credible weight, the insurer must
“investigate the expert’s background, provide the expert with
complete and accurate information, and determine that
reliance on the expert’s advice is reasonably justified under
the circumstances.”
Id. at 765 (internal citations omitted) (quoting Hightshue v. AIG Life Ins. Co., 135 F.3d
1144, 1148 (7th Cir. 1998)).

The White court went on to hold that remand was

unnecessary because the record clearly favored plaintiffs, and because the insurer’s
review, in relying heavily on a medical expert with whom it did not provide important
14

information and restricted the expert from speaking with the treating physician, was
“patently unreasonable.” See id. at 765-66.
Here, the facts are more analogous to those in Grossman v. Wachovia Corp., No.
Civ.A. 04-3701, 2005 WL 2396793 (E.D. Pa. Sept. 27, 2005). In that case, the district
court stated that it “acknowledges that it is suspect that Defendants’ counsel has failed to
provide Plaintiff and the Court with [the medical expert’s] CV.” Id. at *8. Still, the
Grossman court found that “Defendant Liberty’s reliance on a physician with suspect
qualifications goes to whether Defendant Liberty acted arbitrarily and capriciously, and is
not a procedural irregularity warranting a heightened standard of review[.]”

Id.

Accordingly, while the court faults defendant for failing to supplement the record with
Dr. Graham’s CV, without a suggestion that Dr. Graham is not qualified to offer an
expert opinion about the extent to which alcohol use played a role in Cain’s fall, the
absence of Graham’s CV in the record does not compel a heightened standard of review,
although it is a consideration under the process, along with the delay, in evaluating
whether the administrator’s decision was arbitrary and capricious. 9

While the court limits its review to the evidence that was before the administrator when she
made her decision, see Gutta v. Standard Select Tr. Ins. Plans, 530 F.3d 614, 619 (7th Cir. 2008),
from the limited information available in the record (namely, the letterhead of his report
reflecting his address in Phoenixville, Pennsylvania (AR 4272)), it appears that Dr. Graham has
the requisite specialized experience to qualify him as an expert. See DUI: Effects of Alcohol on
Metabolism Webinar, The TASA Group, http://www.tasanet.com/knowledgeCenterDetails.
aspx?docTypeID=3&docCatID=6&docID=256 (last visited April 30, 2018) (“Kenneth D.
Graham, Ph.D. is an independent forensic toxicologist and pharmacologist located in suburban
Philadelphia, Pennsylvania.”).
9

15

II.

Substantive Challenges
Plaintiffs’ additional substantive challenges to the administrator’s denial of

benefits fall into four categories: (1) the administrator’s interpretation of “as a result of”
was so incomplete as to be unreasonable; (2) her interpretation of that phrase is also
unreasonable because it brings the alcohol exclusion into conflict with another provision
in the Plan itself; (3) Dr. Graham’s report was so flawed as to make the administrator’s
reliance on it unreasonable; and (4) the administrator’s reliance on her personal
assessment of the safety of the stairs was unreasonable. For the reasons that follow, the
court finds none of these categories, even when considered altogether, along with the
process considerations, rise to the level of arbitrary and capricious.
A.

Interpretation of the alcohol exclusion
Plaintiffs argue that the administrator’s interpretation of “as a result of” is

inconsistent with the court’s directions on remand, rendering it unreasonable for failing
to define what degree of causation is sufficient to apply the exclusion. Put differently,
plaintiffs argue that the administrator’s determination that alcohol need not be a “but
for” cause is “arbitrary and capricious because while it establishes an upper limit (i.e., not
but for causation), it does not give a lower threshold.” (Pls.’ Opp’n Br. (dkt. #27) 6
(emphasis added).)
In this court’s initial review and remand, the administrator had defined “as a
result of” to mean that alcohol use was “a cause or substantial cause” of the injury.
EPCO, No. 12-cv-031-wmc, at *6-7. The court remarked that this interpretation was not
arbitrary on its face, provided that “cause” meant “actual cause,” rather than simply
16

meant “to make the injury more likely in the abstract.” Id. at *7 (internal quotation
marks omitted). The court added:
On the other hand, the [alcohol exclusion] does not say “the
result of,” arguably suggesting that more than one factor may
contribute to the injury. The plan administrator does not
explain which of these interpretations he adopted, and why,
nor will the court do so in the first instance given that a
remand is required for further inquiry into the accident’s
cause in any event.
Id. at *7 n.3 (emphasis in original).
On remand, the administrator looked at the text of other exclusion provisions in
the Plan that required her to evaluate causation in order to determine “how closely
connected the cause must be to the effect [under the alcohol exclusion].” (AR 4260-61.)
Observing that the plan uses “sole” or “solely” where the administrator must find a but
for cause, she concluded that alcohol use need not be the but for cause of Cain’s injury.
(Id. at 4261.) Nevertheless, in her decision, the administrator concluded that: Cain’s
alcohol use was “the direct cause” of his fall and resulting injuries; and “the accident
would not have occurred in the absence of alcohol.” (Id. at 4264.)
Plaintiffs’ attempt to paint the administrator’s interpretation of the relevant plan
language as arbitrary and capricious by attempting to distinguish between an upper and
lower bounds of causation is mainly sophistry.

As an initial matter, the deferential

arbitrary and capricious standard applies to the administrator’s interpretation because
the Plan grants her sole authority to interpret its terms. See Marrs v. Motorola, Inc., 577
F.3d 783, 786 (7th Cir. 2009). Moreover, neither the Plan nor the court required the
administrator to interpret “as a result of” to the level of specificity to which plaintiffs
17

now argue, nor does that phrase lend itself to such precision. On the contrary, the court
previously rejected plaintiffs’ contention that it would be arbitrary and capricious for the
plan to apply the alcohol exclusion when other factors “may have contributed to [Cain’s]
fall.” EPCO, No. 12-cv-031-wmc, at *10 n.5.
While plaintiffs correctly point out that it is not their responsibility to provide an
interpretation of the alcohol exclusion to the administrator, they tellingly offer no example
of what they would consider a reasonable interpretation with both an “upper limit” and a
“lower threshold” of causation. Regardless, on remand, the administrator appropriately
looked at the text related to causation in other exclusion provisions of the Plan, and she
reasonably concluded that alcohol use need not be the “but for” cause of Cain’s fall. To
be fair, the administrator could have been more specific in her decision -- adopting
something akin to the alternative interpretation that the court discussed in EPCO
(alcohol use was the actual or substantial cause of Cain’s fall) -- but her decision makes
clear that she adopted a defensible standard and found after applying the facts that
Cain’s fall well exceeded that necessary to be subject to exclusion, particularly given the
deference that the administrator is owed.
Accordingly, the court cannot hold that the administrator’s interpretation of the
alcohol exclusion is arbitrary and capricious.
B.

Conflict with another provision
Plaintiffs purport to raise an additional challenge to the administrator’s

interpretation of the alcohol exclusion, although as set forth in the direct passage setting

18

forth their argument below, it reads as more of a rule of construction than a basis to
finding that defendant’s interpretation was arbitrary and capricious:
UWHC contends that the administrator’s interpretation of
the alcohol exclusion is unreasonable because it would both
vitiate other coverage provisions in the Plan and, in turn, take
the Plan out of compliance with the Mental Health Parity
and Addiction Equity Act of 2008 [MHPAEA]. The Plan
specifically provides for counseling benefits, including an
express provision governing alcohol and substance abuse
problems. Because such services would directly result from
alcohol use, there would be no such coverage available. See,
e.g., Costantino v. Wash. Post Multi-Option Benefits Plan, 404 F.
Supp. 2d 31, 42 (D.D.C. 2005) (appropriate to consider
whether interpretation is reasonable based on, among other
factors, whether the interpretation renders other provisions of
the plan superfluous).
This would read out of the plan the following relevant
provision [describing eligible expenses]:
....
Charges in relation to individual and group Psychiatric Care
(treatment of a psychiatric condition, alcoholism, substance
abuse or drug addiction). A psychiatric condition includes
but is not limited to anorexia nervosa and bulimia,
schizophrenia, and depressive disorders including but not
limited to manic depression.
....
Indeed, this Plan even limits the exclusion of self-inflicted
injuries to those unrelated to a mental or physical condition. 10
Another result would be the differential treatment of various
forms of mental health counseling as counseling not directly
cause[d] by alcohol or drug use would still be covered. Such
differentiation calls into question the Plan’s compliance with
The actual language of the Plan provides an exclusion for: “[c]harges in relation to self-inflicted
Injury or self-induced Illness, unless the result of a medical condition whether mental or
physical.” (Pls.’ Reply PFOF (dkt. #39) ¶ 26.)

10

19

the Mental Health Parity and Addiction Equity Act of 2008
[“MHPAEA”]. See, e.g, Coalition for Parity, Inc. v. Sebelius¸709
F. Supp. 2d 10 (D.D.C. 2010) (discussing Act and its effort
to end discrimination in the provision of coverage for mental
health and substance use disorders as compared to medical
and surgical conditions in health plans).
(Pls.’ Opening Br. (dkt. #33) 5-6 (emphasis in original) (internal citation omitted).)
Before getting to the substance of plaintiffs’ argument, defendant raises its own
procedural hurdle, arguing that plaintiffs’ waived the right to advocate for an alternate
interpretation by failing to assert it before the administrator issued her decision. While
the court agrees this would have certainly been preferable, rather than arguably waiting in
the wings, the court is disinclined to find waiver, especially when defendant has had an
opportunity to defend its interpretation now. As to the merits of plaintiffs’ challenge to
the administrator’s interpretation of “as a result of” in the alcohol exclusion as overbroad
and in conflict with other Plan provisions, the court finds little merit. In their reply brief,
plaintiffs’ final effort to present their argument illustrates how strained the argument is:
To use a different hypothetical, assume Mr. Cain sought
treatment for liver problems and that his physician
determined he had developed cirrhosis of the liver because of
alcohol use. Presumably, under the Plan administrator’s
interpretation of the alcohol exclusion, Mr. Cain would not
be entitled to payment of his health expenses related to this
illness upon a finding it was directly related to alcohol use.
(Pls.’ Reply Br. (dkt. #38) 5.)
Contrary to the suggested conflict in this example, the plain meaning of the Plan
language making eligible for coverage expenses related to “treatment of . . . alcoholism” is
in no meaningful tension with the exclusion language her for expenses related to
“accidental bodily Injury sustained or Illness contracted as a result of alcohol or drug
20

use.” First, treatment for alcoholism cannot reasonably be read as equivalent to accidental
injury or illness resulting from alcohol use. Second, even if mental and physical treatment for
the long-term ravages of alcoholism were intended to be covered by this provision, rather
than treatment of alcoholism as a disease itself, “accidental injury or illness”
contemplates by its terms the sudden or unexpected event precipitated by a fall and not
the slow deterioration of mind and body from the deliberately destructive drinking over
decades.
The other provision plaintiffs reference is even more of a stretch: “alcohol use” in
the exclusion cannot reasonably be read as a “medical condition whether mental or
physical.”

Regardless, the administrator could conceivably either provide or deny

coverage for treatment of liver problems related to cirrhosis without doing any violence to
her interpretation of the alcohol exclusion. Finally, resolving plaintiffs’ hypothetical is
unnecessary because they have not demonstrated that the administrator’s interpretation
of the alcohol exclusion under the facts of this case conflicts with the provisions to which
they refer. Indeed, even construing plaintiffs’ arguments generously, the court can find
nothing about the administrator’s interpretation of the alcohol exclusion for accidental
injury or illness that puts it in conflict with other provisions of the Plan without
extremely straining the plain meaning of the Plan’s language. Nor is this a role the court
can take on under the deferential standard due the plan’s administrator here. See Sisters
of the Third Order of St. Francis v. SwedishAmerican Grp. Health Benefit Tr., 901 F.2d 1369,
1372-73 (7th Cir. 1990).

In short, because plaintiffs have not shown that the

21

administrator’s interpretation affects other provisions of the Plan, they cannot
demonstrate that it does not comply with ERISA as amended by MHPAEA.
C.

The Cromer Study
Next, plaintiffs contend that the administrator’s reliance on Dr. Graham’s report

renders her decision arbitrary and capricious because he supposedly misinterpreted one of
the medical studies on which he relied. Specifically, plaintiffs asks the court to take
judicial notice of four material facts about “the Cromer Study,” which they then suggest
do not squarely apply to Cain’s fall:
1) The study examined the effects of alcohol on “executive
functions,” defined in the study as the tasks that “require
complex decision making or problem solving.”
2) The study did not measure balance while intoxicated.
3) The study did not measure coordination while intoxicated.
4) The study specifically excluded heavy drinkers.
(Pl.’s Opening Br. (dkt. #13) 19-20 (footnotes omitted).) Plaintiffs stress the first and
last facts, claiming that the Cromer Study is inapplicable because Cain was a heavy
drinker and traversing stairs is not an executive function as defined by the study.
Even crediting all four facts to be true, and that doing so establishes that the
Cromer Study was largely, if not completely, inapplicable to the circumstances
surrounding Cain’s fall, however, is different than showing that Dr. Graham’s findings
were generally suspect. Without evidence that Graham relied so heavily on the Cromer
Study as to make Graham’s conclusions entirely unreliable, it is far from apparent that
Dr. Graham’s reliance on the Cromer Study is fatal to defendant. Additionally, to the
22

extent that plaintiffs contend the administrator should have credited their expert, Dr.
Tover, over Dr. Graham, the court must defer to the administrator’s choice because
evidence in the record supports Dr. Graham’s conclusion. See Black v. Long Term Disability
Ins., 582 F.3d 738, 745 (7th Cir. 2009) (“[W]e must defer to [the insurer’s] choice
between medical opinions so long as it is rationally supported by record evidence.”).
Admittedly, when uncertainty about Dr. Graham’s specific qualifications is combined
with his apparent reliance on a distinguished study, the question is closer than it ought to
be.

Even so, the court still cannot find the administrator’s decision is “downright

unreasonable.” Blickenstaff, 378 F.3d at 677.
D.

The administrator’s personal assessment of the stairs
Finally, plaintiffs argue that the administrator failed to sufficiently “rebut the

expert testimony by Mr. Wozniak indicating that the condition of the stairway may have
contributed to Mr. Cain’s falling, along with other factors then existing including his
intoxication.” (Pls.’ Reply Br. (dkt. #22) 6.) The core of plaintiffs’ argument is that it is
unreasonable for the administrator to credit her personal, lay assessment of the basement
stairs in the face of a report about the stairs prepared by an engineering expert. As an
initial matter, it is not obvious why the administrator might not be allowed to rely on her
own investigation of the stairs, or to conclude that any irregularity in the stairs was not
enough to account for Cain’s fall, especially when this is a matter that would appear to
rest comfortably within the life experience of a lay person. Cf. Taylor v. Ill. Cent. R.R. Co.,
8 F.3d 584, 585-86 (7th Cir. 1993) (“This issue . . . boils down to whether a pile of large
rocks is harder to stand on than a pile of smaller rocks. Notwithstanding [the purported
23

expert’s] lengthy experience in the railway industry, any lay juror could understand this
issue without the assistance of expert testimony.”).
In fairness, defendant offers no response to plaintiffs’ argument to the contrary,
but this does not mean plaintiffs were denied a full and fair review of the administrator’s
decision, especially when plaintiffs’ expert merely concluded:
the condition and design of the Palmer residence stairway
may have contributed to Mr. Cain’s stairway fall accident.
Had a stairway fall occurred on the Palmer basement stairway
without the involvement of alcohol I would still hold the
opinion that the condition and design of the stairway may
have contributed to a stairway fall.
(AR 3524 (emphasis added).) Accordingly, even if the administrator were required to
credit Wozniak’s report, her reaching the same decision on Cain’s claim would not
necessarily have been arbitrary and capricious. 11
III.

Discovery Regarding Conflict of Interest
In the alternative to reversal, plaintiffs also argue that summary judgment for

defendant is still premature because discovery into the circumstances surrounding a
possible conflict of interest is necessary. A plan administrator’s conflict of interest must
be weighed in determining whether she abused her discretion. See Metro. Life Ins. Co. v.
Glenn, 554 U.S. 105, 111 (2008) (internal citations and quotation marks omitted).
Plaintiffs represent that the extent to which the administrator had a conflict of interest
remains unknown, although they do suggest a conflict exists because: (1) the Plan both
determines eligibility for benefits and pays benefits out of its own pocket; (2) the
In addition, Ms. Palmer told the administrator that her insurance company found that the
stairs were up to code and did not cause the accident.
11

24

administrator is an employee of Air Products; and (3) the Plan is “subject to stop-loss
coverage issued by SISCO.”

(Pls.’ Opp’n Br. (dkt. #27) 12.)

Because Cain’s claim

exceeds $500,000, plaintiffs argue, “discovery of the exposure of the plan versus its
stop-loss carrier is unknown and highly relevant to the Plan’s potential exposure[.]” (Id.)
Defendant acknowledges that a conflict of interest exists because the Plan both
determines eligibility for benefits and pays them, but emphasizes that the conflict should
weigh little into the court’s analysis because it is a large corporation that can easily
absorb Cain’s claim for benefits.

See Mers v. Marriott Int’l Grp. Accidental Death &

Dismemberment Plan, 144 F.3d 1014, 1020-21 (7th Cir. 1998) (“The impact of granting
or denying [$200,000 of] benefits in this case is miniscule compared to AIG’s bottom
line.”); Chalmers v. Quaker Oats Co., 61 F.3d 1340, 1344 (7th Cir. 1995) (“[Quaker] is a
corporation which generates revenues of nearly $6 billion annually and is therefore not
likely to flinch at paying out $240,000.”).
While Cain’s claim for benefits may exceed $500,000 (Pls.’ Opening Br. (dkt.
#13) 2), even with Wisconsin’s cap on loss of life damages, the record indicates that Air
Products is ranked number 276 on the Fortune 500 list, and it enjoyed $10.4 billion in
sales in 2014 (Aff. of Meredith Degner, Ex. 1 (dkt. #15-1) 1), making it unlikely that the
administrator’s decision to grant or deny benefits would have more than a miniscule
impact on Air Products’ bottom line, assuming it could even be held liable directly. Less
clear, however, are the effects on the Plan’s funds or on the administrator. 12

Plaintiffs leave unclear whether they believe the Plan’s stop-loss provision applies, which they
state “would cap the amount paid out for Cain’s claim from the general assets of EPCO,” creates a
conflict of interest concern. (Pls.’ Opening Br. (dkt. #33) 7.) If true, the stop-loss provision
12

25

The Seventh Circuit has recognized that conflicts of interest for plan
administrators exist in degrees, remarking that “[i]t is [] not the existence of a conflict of
interest -- which is a given in almost all ERISA cases -- but the gravity of the conflict, as
inferred from the circumstances, that is critical.”

Marrs, 577 F.3d at 789.

Having

neither sought from this court an order compelling production of, nor presenting
evidence that the administrator labored under a conflict of interest sufficient to call into
question the reasonableness of her decision, plaintiffs are not entitled to another
opportunity to take discovery. 13 See Semien v. Life Ins. Co. of N. Am., 436 F.3d 805,
814-15 (7th Cir. 2006) (announcing that the standard for a claimant to seek limited
discovery into a conflict of interest “presents a high bar for individuals whose claims have
been denied by a plan administrator with discretionary authority.”); see also Dennison v.
MONY Life Ret. Income Sec. Plan for Emps., 710 F.3d 741, 747 (7th Cir. 2013)
(acknowledging a “softening, but not a rejection, of the standard announced in Semien”).

ORDER
IT IS ORDERED that:
1) Plaintiffs University of Wisconsin Hospital and Clinics, Inc. and University of
Wisconsin Medical Foundation, Inc.’s motion for judgment on the pleadings
(dkt. #12) is DENIED.
would only seem to limit Air Product’s exposure to Cain’s claim and thereby further diminish its
conflict of interest.
As with the issue concerning Dr. Graham’s CV, plaintiffs took the risk that the court would
deny their prayer for discovery when they decided not to serve discovery requests on defendant
or, if necessary, involve the court in a discovery dispute between the parties. Indeed, they
concede as much by stating that “[o]nce dispositive motions were filed, there was no reason to
press the discovery issue given the possible resolution on the record.” (Pls.’ Reply Br. (dkt. #38)
6.)
13

26

2) Defendant Air Products and Chemicals, Inc.’s motion for summary judgment
(dkt. #18) is GRANTED.
3) Plaintiffs’ motion to stay the proceedings (dkt. #24) is DENIED as moot.
4) Plaintiffs’ motion for partial summary judgment (dkt. #32) is DENIED.
5) The clerk of court is directed to enter judgment in favor of defendant and close
this case.
Entered this 1st day of May, 2018.
BY THE COURT:

/s/
__________________________________
WILLIAM M. CONLEY
District Judge

27