Wanda Glenn v. Metlife (Metropolitan Life Insurance Company) and Long Term Disability Plan for Associates of Sears, Roebuck and Company
Docket: 05-3918
Court: Court of Appeals for the Sixth Circuit; September 1, 2006; Federal Appellate Court
Wanda Glenn filed an ERISA lawsuit against Metropolitan Life Insurance Company (MetLife), the plan administrator for Sears, after her long-term disability benefits were terminated, with MetLife asserting that her condition had improved beyond 'total disability.' The district court upheld this decision, ruling it was not arbitrary or capricious, and granted summary judgment to MetLife. However, the Court of Appeals for the Sixth Circuit found that MetLife's denial lacked a deliberative process and was not supported by substantial evidence. Consequently, the appellate court reversed the lower court's judgment and remanded the case for further proceedings. Glenn, a former sales manager at Sears, took medical leave due to severe dilated cardiomyopathy, as documented by her physician, who stated she could not handle any job requiring significant physical or psychological stress. Glenn's claim was initially approved under Sears's long-term disability plan, which defined 'total disability' in two stages: the inability to perform her regular job duties for the first 24 months, and subsequently, the inability to perform any gainful work considering her qualifications.
In August 2000, Glenn applied for Social Security disability benefits upon the recommendation of plan administrators, who referred her to Kennedy Associates. Initially denied by the Social Security Administration, her claim was later approved by an administrative law judge, determining she was totally disabled as of April 30, 2000, with benefits retroactive to October 2000. Consequently, MetLife sought reimbursement for overpayments, recovering $13,502.50 based on Glenn's awarded Social Security benefits.
On May 20, 2003, MetLife informed Glenn that to continue receiving long-term disability benefits, she needed to demonstrate she met the plan's second definition of total disability, which required proof she was incapable of performing the material duties of any gainful occupation. MetLife indicated it would review her vocational and medical information, alongside her specific restrictions supported by objective medical evidence.
Glenn's medical history included hypertension since the early 1980s and a near-fatal cardiac incident in 1989, leading to the implantation of a defibrillator. By 2000, she experienced worsening symptoms, including chest tightness, fatigue, and leg edema attributed to her work environment. Dr. Patel, her cardiologist, referred her for a potential heart transplant due to her progressive ventricular dysfunction and diagnosed her with severe dilated cardiomyopathy after an angiogram. He noted her work stress as a significant issue and recommended medical leave, which she took at the end of April 2000. Following her leave, she underwent extensive treatment, including multiple medications, and Dr. Patel observed improvements linked to reduced work-related stress. However, by November 2000, he declared her totally disabled from any occupation and did not anticipate her return to work.
In March 2001, Glenn's cardiomyopathy evaluation revealed a 'mildly reduced' ejection fraction and some improvement in left ventricular function. Despite increased exercise tolerance through a walking regimen, she experienced fatigue and shortness of breath, particularly under psychological stress. Dr. Patel advised her to continue her medication regimen. By March 2002, Dr. Patel completed a MetLife evaluation form indicating Glenn could occasionally lift 20 pounds, perform repetitive movements, and work in a sedentary capacity, but did not clarify any work restrictions or whether she was fit to return to work. In a subsequent evaluation on June 12, 2002, his responses remained consistent, except he noted 'No emotional stress/No heavy exertion.' However, just six days later, Glenn reported back to Dr. Patel with complaints of fatigue, shortness of breath, and significant anxiety regarding her disability and potential return to work. Dr. Patel expressed that Glenn would struggle with stress related to her job and recommended she remain on disability.
In a letter dated July 22, 2002, Dr. Patel detailed Glenn's ongoing difficulties with exertion and psychological stress, stating she should not return to any work, even sedentary, due to her deteriorating condition. On August 28, 2002, MetLife informed Glenn that her long-term benefits would terminate on September 16, 2002, citing a lack of medical documentation supporting exacerbation of her cardiac condition due to work-related stress. The notice highlighted prior evaluations indicating Glenn's clinical stability and suggested she could return to work, failing to address Dr. Patel's July 22 letter advising against her return.
Glenn appealed the denial of her disability benefits, which was initially based on an evaluation by Dr. Patel, who asserted that she could not return to full-time work due to her cardiac condition, specifically cardiomyopathy. He emphasized that while previous assessments indicated fitness for sedentary work, her current clinical state indicated a high risk of decompensation under stress, and he deemed her completely disabled. In response, MetLife referred the case to an Independent Physician's Consultant Board, where Dr. Pujara reviewed Glenn's medical records. He noted improvements in her ejection fraction but concluded she was unable to engage in any exertional physical activity. His evaluation suggested that the effect of emotional stress on her condition was unclear, yet he proposed she might be a candidate for sedentary work on a trial basis, depending on the job's stress level.
Despite the ambiguity in Dr. Pujara's findings and acknowledgment of Dr. Patel's February 2003 letter reiterating Glenn's disability, MetLife issued a final denial on May 20, 2003, citing insufficient documentation to support her claim. This denial relied on prior evaluations, including Dr. Patel's June 2002 assessment, but did not reference Dr. Patel's July 2002 letter, which echoed his February 2003 opinions. After exhausting administrative remedies, Glenn filed a civil action under ERISA. The district court denied her motion for judgment on the administrative record and granted MetLife's cross-motion, leading to the current appeal. The standard of review applied by the district court was "arbitrary and capricious," given that the plan conferred discretionary authority to the administrator, and this was uncontested by Glenn.
The administrator's decision will be upheld if it results from a deliberate reasoning process and is supported by substantial evidence. However, this review is not merely formal; it involves assessing the quality and quantity of medical evidence and opinions on both sides. A conflict of interest arises when the plan administrator, responsible for determining eligibility for benefits, also pays those benefits. In this case, MetLife's dual role creates an apparent conflict, which the district court identified as relevant in evaluating potential abuse of discretion. Nevertheless, the court's analysis did not adequately consider how this conflict may have influenced MetLife's decision-making.
Additionally, the district court failed to properly consider the Social Security Administration's award of disability benefits to the plaintiff. MetLife had informed the plaintiff that long-term disability payments would be reduced based on other income, including Social Security benefits, and subsequently deducted these amounts from her payments while demanding a refund of $13,500. Despite relying on the Social Security Administration's finding of total disability in its calculations, MetLife argued the plaintiff could perform sedentary work when denying her ERISA benefits, reflecting a significant inconsistency in its positions.
The district court identified an inconsistency regarding MetLife's and the Social Security Administration's conclusions about Glenn's disability status but chose not to apply the doctrine of estoppel. While this decision was deemed technically correct, two implications arise for the appeal: first, MetLife aided Glenn in obtaining Social Security benefits and benefited financially when successful; second, MetLife did not address Social Security's conflicting determination when denying Glenn's long-term benefits. These factors are significant in assessing whether MetLife's decision was arbitrary and capricious, as recognized by courts, which view Social Security disability determinations as pertinent in ERISA benefit termination cases.
In Ladd v. ITT Corp., the Seventh Circuit reversed a denial of benefits when it found that the insurer had supported the plaintiff's Social Security application, which resulted in her being deemed totally disabled. Judge Posner noted that while judicial estoppel did not technically apply, the inconsistency in legal positions must be considered in reviewing the administrator's decision for arbitrariness. The grant of Social Security benefits indirectly impacted the case, as it reduced Ladd's claim against the employee welfare plan. The essence of judicial estoppel aims to prevent parties from contradicting their prior positions to gain an advantage, which is relevant here. MetLife had initially supported Ladd's claim of total disability to the Social Security Administration but later denied her total disability claim, raising doubts about the evaluation of her claim despite not providing an independent basis for rejecting that evaluation.
The court adopted the Seventh Circuit's 'penumbra' rationale from Darland v. Fortis Benefits Insurance Co., where the ERISA plan administrator requested the claimant, Darland, to apply for Social Security disability benefits to reduce monthly payments and simultaneously sought reimbursement for overpayments while trying to terminate his benefits on grounds of non-disability. It concluded that denying benefits when the Social Security Administration had found the applicant totally disabled can be deemed arbitrary and capricious, especially since the Social Security standard is stricter than that of the insurance policy. The district court recognized MetLife's involvement in assisting Wanda Glenn with her Social Security disability application but distinguished her case on two points. First, it noted the absence of a key report from Dr. Patel at the time of the administrative decision, although Dr. Patel later clarified he never deemed Glenn capable of full-time work, and there was no indication that her government benefits were discontinued. Second, the court incorrectly suggested uncertainty regarding MetLife's financial benefit from Glenn's Social Security payments, despite clear evidence of her reimbursement to MetLife for overpayments linked to those benefits. The court emphasized that MetLife should have given appropriate weight to the Social Security determination. The ruling referenced Calvert v. Firstar Finance, Inc., highlighting that a plan administrator's disregard for a Social Security finding of total disability can render a denial of long-term disability benefits arbitrary and capricious. Unlike in Calvert, where the administrator relied on a physician’s file review without a physical examination and ignored significant medical evidence, here, it was clear that MetLife was aware of the Social Security determination. While not binding, the Social Security finding is significant and should have been considered in MetLife's decision-making process.
The plan administrator's failure to consider Dr. Patel's letters from July 22, 2002, and February 12, 2003, which indicated that Glenn was not capable of returning to work, is notable. In contrast, MetLife heavily relied on a physical capacity assessment form completed by Dr. Patel on March 13, 2002, where he stated that Glenn could sit for eight hours, stand for four hours, and walk for two hours, and affirmed her ability to work in a sedentary role. This assessment is inconsistent with Dr. Patel's other medical evidence over three years, suggesting it is an outlier. MetLife's initial reliance on this assessment to consult a transferable skills analyst, who suggested clerical jobs, is acknowledged, but the analyst did not consider the broader medical context or Dr. Patel's opposing views on Glenn's ability to work. The August 28, 2002, denial of long-term benefits did not address the Social Security Administration's determination of total disability for Glenn. Additionally, the plan administrator referenced a June 12, 2002, physical capacities evaluation that, while consistent with previous assessments, did not recommend Glenn return to work and failed to mention Dr. Patel's July 22 letter detailing Glenn's significant exertional difficulties and the exacerbating effects of work-related stress on her cardiovascular condition. Dr. Patel concluded that Glenn should be considered completely disabled due to her health issues.
Dr. Patel's assessment of Glenn's cardiomyopathy indicated that she could not handle workplace stress and would be better suited for disability. Following the termination of her benefits by MetLife, Glenn appealed the decision, which was re-evaluated internally. On May 20, 2003, MetLife denied her appeal, relying on earlier evaluations and two additional documents: Dr. Patel's February 12, 2003 letter and a report from consultant Dr. Pujara dated May 2, 2003. Dr. Patel's prior letter from July 2002, clearly stating Glenn's inability to return to work, was not referenced in the appeal decision. The appeal acknowledged that Dr. Patel had previously indicated Glenn was fit for sedentary work but emphasized that he ultimately deemed her completely disabled due to her condition. Dr. Pujara's file review did not involve an examination and concluded that Glenn had a stable cardiac status, but did not assert she could return to work. He noted that significant emotional stress could lead to permanent disability. Notably, Dr. Pujara did not receive Dr. Patel's July 2002 and February 2003 letters, which contained crucial information about Glenn's inability to perform even sedentary work. MetLife's decision to conduct a file review rather than a physical examination of Glenn does not inherently render its denial arbitrary, but it contributes to the overall evaluation of its decision-making. Importantly, MetLife's final rejection of Glenn's claim did not address or justify the disregard of Dr. Patel's letters, raising concerns about the consideration given to the opinions of treating physicians.
The district court concluded that MetLife did not abuse its discretion in viewing Dr. Patel's recantation skeptically, as he had previously stated that the plaintiff was fit for sedentary work. The court referenced United States v. Willis to support this skepticism regarding recantations of testimony. However, this application was deemed inappropriate, as Willis pertains to criminal trial testimony, while Dr. Patel's follow-up letters aligned with his earlier assessments and should be seen as clarifications, not recantations. The court identified a significant inconsistency between Dr. Patel's earlier detailed assessments and his later brief check-off forms, noting that MetLife failed to explain its reliance on the latter while disregarding the former. This lack of explanation rendered MetLife's final denial of benefits arbitrary and capricious. The court emphasized that it should review the basis for the actual decision made, rather than create a rationale where none existed. Furthermore, Dr. Patel consistently highlighted psychological stress as a critical factor affecting Glenn's ability to work, citing specific instances where stress directly impacted her condition and recovery. MetLife's legal representation in a related Social Security claim acknowledged Dr. Patel's analysis of stress's effects on Glenn's health, despite MetLife's apparent disregard for this crucial information.
Dr. Patel's consistent references to stress as a significant factor in Glenn's cardiac condition were dismissed by MetLife in their final denial of benefits. MetLife claimed a lack of supportive medical documentation linking Glenn's stress to his worsening condition, implying that Dr. Patel's observations were not legitimate medical evidence. However, the benefits plan does not limit the types of evidence required to establish total disability, only that it must be current and supported by a qualified physician's treatment plan. The plan administrator's rejection of Dr. Patel's assessment was deemed arbitrary, echoing precedents in similar ERISA cases, such as Evans v. Unumprovident Corp., where insurers unreasonably disregarded a treating physician's opinion on stress despite its medical relevance.
MetLife's argument, referencing Eastover Mining Co. v. Williams, suggested that treating physicians may possess biases that non-treating doctors do not. However, the plan in question does not exclude subjective factors like stress from consideration, nor does it assign them lesser importance. Thus, dismissing stress as an irrelevant factor in Glenn's disability determination was deemed unreasonable.
A presumption of deference to treating physicians is inappropriate when the physician-patient relationship is brief or when a specialist has superior expertise. MetLife's denial of Glenn's disability claim lacks a principled reasoning process, particularly given Dr. Patel's extensive experience treating her condition. Although MetLife is not required to provide heightened justification for decisions contrary to treating physician opinions, their decision appears flawed. The potential for Glenn to return to work under limited circumstances does not fulfill the requirements of the Sears ERISA plan, especially when considering her qualifications and overwhelming evidence against her ability to work.
The review process under ERISA necessitates an evaluation of the medical evidence quality, lest courts merely endorse plan administrator decisions based on minimal evidence. MetLife's denial of Glenn's long-term benefits lacked a thoughtful analysis, was influenced by a conflict of interest, and contradicted the Social Security Administration's disability determination. MetLife failed to adequately consider Dr. Patel's detailed reports and neglected to account for the significant role of stress in Glenn's condition. This selective review of medical records and disregard for critical factors led to a conclusion that MetLife's decision was arbitrary and capricious.
The judgment of the district court is reversed, and the case is remanded with instructions to reinstate Glenn's long-term disability benefits retroactively to the termination date and to provide any further appropriate relief. The plan stipulates that after 24 months, benefits are granted only if the individual is completely unable to perform any work for which they are reasonably qualified, considering their training, education, and experience. The Social Security Administration has different criteria, focusing on the individual's ability to engage in any substantial gainful work in the national economy, irrespective of local job availability.
Defendants conceded that Glenn was not offered a part-time position at Sears, and that her potential employment elsewhere would not affect her benefits under the Sears ERISA plan. The court criticized MetLife's reliance on a physician's report, which was deemed aberrational, as it conflicted with the physician's prior assessments indicating Glenn's inability to work. This case parallels previous rulings where benefits were remanded due to arbitrary decision-making by the plan administrator.
Additionally, a reviewing doctor suggested Glenn might be suitable for trial employment in sedentary positions, and the long-term benefits plan includes a rehabilitative employment provision. It remains uncertain if this option is still applicable. The court emphasized that exploring rehabilitative employment earlier could have facilitated Glenn's return to work while minimizing MetLife's financial obligations. The concurring opinion calls for a hearing to examine this option further.
