Robert C. McGee v. Reliance Standard Life Insurance Company

Citations: 360 F.3d 921; 2004 U.S. App. LEXIS 3505; 2004 WL 483617Docket: 03-2372

Court: Court of Appeals for the Eighth Circuit; February 25, 2004; Federal Appellate Court

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Reliance Standard Life Insurance Company terminated Robert C. McGee's long-term disability benefits after concluding he was no longer disabled, prompting McGee to seek judicial review under ERISA (29 U.S.C. 1132(a)(1)(B)). Both parties filed for summary judgment, but the District Court ruled in favor of McGee. On appeal, the Eighth Circuit reversed this decision, finding no abuse of discretion in Reliance Standard's determination.

McGee, an employee of Hasco International, initially received short-term disability benefits from December 1999 to March 2000 due to major affective disorder, anxiety, and physical pains. Following the end of these benefits, he applied for long-term benefits based on the same conditions. Although initially approved, Reliance Standard later terminated these benefits based on medical evaluations suggesting he should have returned to work by June 1, 2000.

Key medical input came from psychologist Josephine Kelly, who reported varying Global Assessment of Functioning (GAF) scores for McGee. Initially, she assigned a GAF score of 70, indicating reasonable psychological functioning. Although she later reported increased scores after follow-up evaluations, in October 2000, she revised the score to 50 without providing objective evidence for this change. The court's review emphasized the lack of supporting data for Kelly's fluctuating assessments, leading to the conclusion that Reliance Standard acted within its discretionary authority in terminating McGee's benefits.

Reliance Standard reviewed the medical records of Mr. McGee, whose psychiatrist, Dr. John Canale, initially reported a GAF score indicating moderate impairment but expected Mr. McGee to return to work by June 1, 2000. By August 2000, despite acknowledging Mr. McGee's motivation, Dr. Canale noted severe psychosocial stressors and later declared him unable to work for an unspecified duration. Ultimately, in October 2000, Dr. Canale stated Mr. McGee would be disabled for three years, a determination made at Mr. McGee's request for his mortgage company.

In contrast, Dr. Gladys S. Fenichel, hired by Reliance Standard, found no significant psychiatric impairment that would hinder Mr. McGee’s work capability, and concluded he was not disabled. Based on the medical records from both doctors, Reliance Standard determined Mr. McGee was no longer disabled and terminated his long-term benefits. Mr. McGee subsequently sought judicial review under ERISA, leading the District Court to rule that Reliance Standard's decision was arbitrary and not supported by substantial evidence, granting summary judgment in favor of Mr. McGee.

On appeal, Reliance Standard contended that the District Court erred by substituting its judgment for theirs and argued that their termination decision was based on substantial evidence, including inconsistencies in medical records and Dr. Fenichel's opinion. The appellate court upheld Reliance Standard's decision, stating it was supported by substantial evidence, noting the lack of objective evidence from Mr. McGee's caregivers to substantiate the claim of long-term disability, thus affirming that it was reasonable for the plan administrator to deny benefits.

Reliance Standard was not required to give special weight to Dr. Canale's opinion, the treating physician, over the conflicting assessment from Dr. Fenichel, the reviewing physician, as established by the Supreme Court in Black & Decker Disability Plan v. Nord, which clarifies that the treating physician rule is not applicable in ERISA-covered disability determinations. Reliance Standard's decision to terminate Mr. McGee's long-term benefits was deemed reasonable, supported by substantial evidence, justifying the rejection of Dr. Canale's opinion in favor of Dr. Fenichel's. Consequently, the judgment of the District Court was reversed, directing entry of judgment in favor of Reliance Standard. The review standard applied to the plan administrator’s denial of benefits is essentially the same under the 'abuse of discretion' or 'arbitrary and capricious' standards.