Court: District Court, M.D. Tennessee; December 14, 2016; Federal District Court
Three motions for judgment on the administrative record have been presented in this case. Eastman Chemical Company and the Eastman Chemical Company Welfare Benefit Program (collectively referred to as Eastman) filed a motion (Docket No. 38), to which plaintiff Gary Carty responded (Docket No. 49), and Eastman replied (Docket No. 50). Metropolitan Life Insurance Company (MetLife) also filed a motion (Docket No. 40), adopting Eastman's arguments, along with a reply (Docket No. 51) that similarly incorporates Eastman’s response. Carty filed a separate motion for judgment on the ERISA Record (Docket No. 41), with responses from Eastman (Docket No. 47) and MetLife (Docket No. 48), and a reply from Carty (Docket No. 52). The court has decided to deny the motions from Eastman and MetLife, grant Carty’s motion, and remand his claim to MetLife for further consideration.
The case arises under the Employee Retirement Income Security Act (ERISA) concerning the termination of Carty's long-term disability (LTD) benefits. Carty, a former employee of Eastman, is a beneficiary of the self-funded LTD Plan managed by MetLife, which is the claims administrator. Carty ceased working for Eastman on November 28, 2013, and began receiving LTD benefits on June 8, 2013. MetLife terminated these benefits on April 17, 2015. After exhausting administrative appeals, Carty initiated this action.
The LTD Plan is designed to provide income when an individual is unable to work due to extended disability and outlines specific criteria for continued eligibility after the first eighteen months of benefits. Notably, to maintain eligibility, a recipient must not earn more than 50% of pre-disability earnings from any employer and must be receiving "appropriate care and treatment" as defined by the Plan, which includes care from a qualified physician consistent with relevant medical guidelines.
Ongoing review of eligibility for long-term disability (LTD) benefits is mandated by the plan, with the Claims Administrator conducting periodic assessments. Claimants must comply with requests from the Claims Administrator regarding their claims. If a claimant is found ineligible, benefits cease at the end of that month. Immediate termination occurs if the claimant is no longer disabled due to gainful work or if they are not receiving Appropriate Care and Treatment. MetLife is granted discretionary authority to interpret the plan and determine eligibility, with decisions being final for all claimants. Eastman is responsible for funding any awarded benefits.
Carty, a former manager in Eastman’s IT department with a salary of $126,200, filed for LTD due to bipolar disorder, anxiety, and depression, conditions first treated in October 2011, leading to his disability on November 28, 2012. His treating physician, Dr. Ronald Smith, a board-certified psychiatrist, began seeing Carty in November 2011, diagnosing him with bipolar type two disorder and generalized anxiety disorder. In an August 2015 statement, Dr. Smith confirmed Carty's compliance with treatment, noting he attended therapy regularly, albeit with occasional missed appointments, and made adjustments to his medication regimen due to side effects.
Dr. Smith acknowledged that he initially found Carty's bipolar diagnosis unclear but later recognized mood cycling consistent with the disorder. Carty often questioned the need for mood stabilizers, attributing his issues mainly to depression and anxiety, yet his symptoms—irritability, racing thoughts, and sleep disturbances—would reemerge, necessitating a return to antipsychotic medications. Dr. Smith expressed doubts about Carty's ability to sustain employment due to overwhelming anxiety and depression triggered by external stressors. Although a medication regimen was eventually beneficial, Carty discontinued it due to cost. Dr. Smith referred Carty to Dr. Edward Latham for psychological support.
Dr. Latham, a clinical psychologist, first saw Carty on March 18, 2013, focusing on coping with bipolar disorder. Carty attended sessions regularly until June 2013, after which attendance decreased significantly, with numerous rescheduled and canceled appointments. Dr. Latham's sessions with Carty covered bipolar management and personal issues. Between March 2013 and May 2015, Carty had fourteen total sessions, with a notable pattern of missed commitments, sometimes leading to prolonged periods of inactivity. Dr. Latham noted that Carty's disagreements in discussions were not aggressive but stemmed from a bipolar-related inflated self-belief. During his testimony in August 2014, Dr. Latham confirmed Dr. Smith’s bipolar diagnosis and clarified that his treatment approach was centered on Carty's life circumstances and relationships.
Carty submitted his application for long-term disability (LTD) benefits on March 8, 2013, which MetLife reviewed by interviewing him and examining records from Dr. Smith. On April 21, 2013, MetLife's claims specialist determined that Carty's condition hindered his ability to perform job duties, leading to the approval of his claim, with formal notification sent on May 29, 2013. Throughout 2013 and into early 2015, MetLife regularly monitored Carty's treatment and status, supported by ongoing assessments from Dr. Smith and Dr. Latham, who reported symptoms indicative of his inability to fulfill work responsibilities.
In March 2015, due to the infrequency of Carty's appointments with Dr. Latham, MetLife’s senior psychological clinical specialist Kenneth Le-melle recommended a complete review of Carty’s case. Dr. Marcus Goldman, a consulting psychiatrist, evaluated the documentation and concluded that Carty did not exhibit severe psychiatric impairments that would prevent him from performing work tasks. He noted that while Carty may have personal challenges, there was no evidence of significant mental illness impacting his work capacity. Goldman criticized Carty's lack of regular therapy attendance as noncompliance and highlighted the absence of severe cognitive dysfunction or acute psychiatric symptoms.
In response, Dr. Latham faxed a rebuttal on March 31, 2015, arguing that Carty's cancellations were reflective of his bipolar and anxiety disorders rather than noncompliance.
Dr. Goldman raises concerns about the decision not to transfer the patient to a more intensive outpatient program (IOP), given the patient's high reactance and the focus on interpersonal issues rather than the bipolar and anxiety disorders being treated by Dr. Smith. Goldman questions how a more intense treatment would benefit the patient, considering the therapeutic focus. Following this, Goldman provided a faxed clarification detailing reasons for the patient's appointment cancellations, including weather-related issues, driving problems, a medication side effect, and a clerical error.
In response, Dr. Smith disputed Goldman’s assessment, asserting that the patient, Carty, struggles with significant symptoms of bipolar disorder, including anxiety, depression, and low energy, which impede his ability to maintain employment. Smith noted Carty's adherence to appointments and medication. Subsequently, MetLife communicated the termination of Carty’s long-term disability (LTD) benefits, claiming he no longer met the Plan’s disability definition based on updated medical information.
MetLife referenced evaluations from psychologist Dr. Edward Latham and psychiatrist Dr. Ronald Smith, suggesting that Latham viewed Carty’s symptoms as personality traits rather than indicators of a major mental illness. MetLife also argued that Dr. Smith’s observations of anxiety and depression were contradicted by a recent visit where no serious symptoms were documented. The termination letter concluded that the medical evidence did not support ongoing severe psychiatric impairment preventing Carty from working in any capacity.
Carty appealed his claim, submitting his medical records and recorded testimonies from Dr. Smith and Dr. Latham. MetLife referred the case to psychiatrist Randy Rummler for independent review. Dr. Rummler determined there was insufficient information to support Carty’s claimed impairment during the relevant period. He noted Carty’s argumentativeness reflected personality traits that could be addressed through ongoing therapy and criticized Carty for not attending therapy regularly. Dr. Rummler suggested that if Carty was too impaired to attend sessions, he required more intensive treatment, recommending weekly therapy sessions as the minimum standard of care, which Carty had not received. He concluded that Dr. Smith’s records failed to demonstrate manic symptoms or cognitive impairment, indicating a lack of severity to support claims of impairment.
MetLife shared Dr. Rummler's report with Carty for feedback from Dr. Smith and Dr. Latham. Dr. Smith clarified medication affordability issues, while Dr. Latham described Dr. Rummler's notes on his treatment as "accurate but incomplete," attributing Carty’s argumentativeness to anxiety, bipolar behaviors, and cognitive rigidity. He acknowledged seeing Carty irregularly and noted that Carty often missed appointments. On October 19, 2015, Dr. Rummler issued a revised report that incorporated feedback but maintained his original opinion. Subsequently, on October 23, 2015, MetLife upheld the termination of Carty’s benefits, citing infrequent therapy sessions and the absence of psychiatric functional limitations preventing Carty from working as of April 18, 2015. Carty filed a Complaint on November 9, 2015, leading to three motions for judgment on the record filed on May 31, 2016.
A denial of benefits under ERISA is reviewed de novo unless the benefits plan grants the administrator discretionary authority, in which case the review standard is "arbitrary and capricious." Courts uphold an administrator's decision if it is rational based on the plan’s provisions and supported by substantial evidence. The arbitrary and capricious standard is the least demanding form of review, requiring a deliberate reasoning process informed by the quality and quantity of medical evidence. If a reasonable explanation for a decision exists, it is not considered arbitrary or capricious. Courts are obligated to accept an administrator's rational decision even if an alternative interpretation by a participant is equally reasonable. Potential conflicts of interest, such as when a plan administrator evaluates and pays claims, are relevant in assessing decisions but do not alter the standard of review. These conflicts must be considered to determine if an administrator's decision was arbitrary and capricious.
Carty contends that MetLife misinterpreted the Plan's definition of disability by favoring the opinions of Dr. Goldman and Dr. Rummler over those of Dr. Smith and Dr. Latham, who conducted actual examinations. He also argues that MetLife incorrectly inferred that his missed appointments indicated a lack of appropriate care. In response, Eastman and MetLife assert that their decisions were discretionary and not arbitrary. Carty specifically challenges the interpretation of a provision stating that, after 18 months, a disabled individual may not earn more than 50% of their pre-disability earnings. He argues that "may not earn" implies a focus on actual earnings, claiming he never exceeded that threshold after ceasing work. MetLife counters that the provision requires an individual to be unable to earn above the threshold due to their disabling condition. Carty's interpretation is viewed as plausible in isolation but inconsistent with the Plan's overall context, which emphasizes the inability to work due to disability. The Plan's purpose is to provide income for those unable to work, and Carty's argument suggests a definition based on mere unemployment, contrary to the Plan's intent. Ultimately, the language was found to focus on the recipient's ability to work rather than their employment status, and it was determined that favoring the Plan's overarching purpose was not arbitrary or capricious, thus denying Carty's appeal against MetLife’s decision.
Carty contends that Dr. Goldman and Dr. Rummler’s lack of face-to-face evaluations hindered their ability to accurately assess his condition and impairments, arguing that MetLife acted arbitrarily and capriciously by favoring their opinions over those of Dr. Smith and Dr. Latham, who had substantial in-person experience with him. MetLife asserts that it considered all four doctors' opinions and acted within its discretion by valuing the assessments of those who relied on others' notes rather than conducting independent evaluations. Generally, a plan administrator's choice between medical opinions is not deemed arbitrary and capricious; however, the absence of a physical examination is a relevant factor in evaluating the administrator's decision-making process. The Sixth Circuit has emphasized the importance of in-person evaluations in psychiatric cases, as they are crucial for understanding patients' subjective symptoms. While in-person assessments are preferred, reliance solely on file reviews does not automatically indicate impropriety. MetLife's decision regarding Carty’s impairment raises concerns about whether it followed a thoughtful reasoning process, especially given the in-person evaluations by Dr. Smith and Dr. Latham. Furthermore, MetLife's communication regarding the denial of Carty's claim lacked clarity, failing to adequately explain the reasons for reclassifying his symptoms as character-related rather than stemming from his bipolar disorder. Dr. Latham has effectively argued that Carty’s behaviors are indicative of his underlying psychological issues, which the in-person evaluators support, highlighting a disconnect in MetLife's reasoning.
Dr. Goldman and Dr. Rummler fail to consider the full range of disabling symptoms identified by Dr. Smith and Dr. Latham. Dr. Goldman primarily lists symptoms that Carty does not exhibit, while Dr. Rummler narrowly evaluates Carty's attention and concentration issues. Their analyses do not provide sufficient justification to dismiss Carty's doctors' accounts regarding his difficulties in managing stress and maintaining attendance. The reliance on file reviewers who overlook pertinent evidence and present a selective interpretation of Carty's medical history raises concerns about the validity of their conclusions, as seen in Javery v. Lucent Techs. Inc.
MetLife's reviewers do not adequately explain how Carty, who struggles with basic household tasks and keeping appointments, could fulfill the demands of a job with strict hours and stress. Their failure to comprehensively address Carty's symptoms renders their conclusions arbitrary and capricious.
Additionally, MetLife suggests that Carty's termination may stem from a lack of appropriate care and treatment, asserting that treatment must align with national medical guidelines. While Dr. Rummler states that Carty needs weekly therapy and Dr. Goldman notes his history of missing appointments, neither provides authoritative guidelines to support their conclusions. Their lack of direct examination of Carty diminishes the credibility of their assessments. Dr. Latham, who has worked closely with Carty, explains that his missed appointments are often due to his symptoms, and he highlights Carty's unsuitability for more intensive treatment.
Moreover, Carty was not adequately informed that MetLife's termination decision would include new grounds beyond his level of impairment, limiting his ability to respond effectively. This lack of notice potentially violates ERISA provisions, as established in Wenner v. Sun Life Assur. Co. of Canada. While the reviewers raised questions about Carty’s therapy attendance, MetLife's initial denial was based solely on a perceived lack of severe psychiatric impairment.
Carty's treatment compliance issues were mentioned in a letter but were not formally addressed until the final denial on appeal. Although Carty and his doctors recognized concerns about his psychotherapy compliance with Dr. Latham, this issue is only a part of the broader evaluation of the appropriateness of Carty's overall treatment. This evaluation includes not only psychotherapy frequency but also the adequacy of psychiatric care provided by Dr. Smith and the division of responsibilities between the two doctors. Records indicate that Dr. Latham's focus on Carty's bipolar disorder fluctuated over time, whereas Dr. Smith consistently aimed at appropriate pharmaceutical interventions.
The court found that MetLife acted arbitrarily and capriciously by concluding Carty was no longer impaired and not receiving appropriate care. MetLife, while having discretion in administering the plan, failed to consider all of Carty's documented symptoms and did not provide him the opportunity to defend his treatment adequacy. The court deemed the opinions of MetLife’s reviewers, who did not conduct in-person evaluations and had potential conflicts of interest, as insufficient to support MetLife’s flawed analysis.
Carty requested either an approval of his ongoing benefits claim or a remand for further proceedings. The court determined that while Carty identified flaws in MetLife’s decision-making process, he did not conclusively prove entitlement to benefits, as questions about the appropriateness of his comprehensive care remain. Thus, the court will remand the case to MetLife for further review rather than granting immediate benefits. The motions for judgment by Eastman and MetLife will be denied, while Carty’s motion for judgment will be granted, leading to a remand for further assessment.
