Opinion
No. 95 C 2389.
February 20, 2002
ORDER
Plaintiff Evelyn Houston has filed suit against defendant Provident Life and Accident Insurance Company ("Provident"), challenging the termination of her benefits under the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001-1461. Her amended complaint alleges violations of 29 U.S.C. § 1133, 1140, 1141, and 1144. On December 21, 2000, this court issued a memorandum opinion and order in which it denied Provident's motion for summary judgment. Houston v. Provident Life Accident Ins. Co., No. 95 C 2389, 2000 WL 1898591 (N.D.Ill. Dec. 21, 2000). Now before the court is Provident's motion to limit trial evidence to the administrative record. For the reasons set forth below, Provident's motion is granted.
Although the amended complaint alleges violations of 29 U.S.C. § 1133, 1140, 1141, and 1144, both parties have proceeded as though Houston's claim arises under § 1132. Since the § 1132 issue was raised "by express or implied consent of the parties," the court is treating the complaint as "constructively amended by the parties to add a claim under § 1132." Houston, 2000 WL 1898591, at *4 (citing Fed.R.Civ.P. 15(b); Walton v. Jennings Cmty. Hosp., Inc., 875 F.2d 1317, 1320 n. 3 (7th Cir. 1989)). In addition, in the parties' joint pre-trial order, Houston's proposed conclusions of law refer only to violations of § 1132. There is no mention of the other four ERISA sections in the pre-trial order, save for the undisputed jurisdictional statement. Thus, it appears that Houston has abandoned her claims under §§ 1133 (claims procedure), 1140 (interference with protected rights), 1141 (coercive interference), and 1144 (other laws). These claims may be vulnerable to a motion to dismiss pursuant to Fed.R.Civ.P. 41(b). The court invites Houston to voluntarily dismiss these claims by stipulation pursuant to Fed.R.Civ.P. 41(a)(1), or provide a brief as to why the court should not dismiss them sua sponte for failure to prosecute. Chambers v. Nasco, Inc., 501 U.S. 39, [ 501 U.S. 32] 49 (1991).
Turning to 29 U.S.C. § 1132, that section allows a participant or beneficiary of an ERISA plan to bring a civil action "to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan." 29 U.S.C. § 1132(a)(1)(B). The first step in such a claim is to determine the appropriate standard of review that the court should employ in evaluating the denial or termination of benefits. The United States Supreme Court has stated "that a denial of benefits challenged under § 1132(a)(1)(B) is to be reviewed under a de novo standard unless the benefit plan gives the administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe the terms of the plan." Firestone Tire Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989). If the plan does confer such discretion on the administrator or fiduciary, then the court will employ the more deferential "arbitrary and capricious" standard. See Wilczynski v. Kemper Nat'l Ins. Cos., 178 F.3d 933, 934 (7th Cir. 1999). In this case, both parties agree that the plan grants discretion to Provident, and that the "arbitrary and capricious" standard applies. (Def.'s Memo. Supp. Summ. J. at 2-4; Pl.'s Brief Opp. Summ. J. at 1.)
Under the "arbitrary and capricious" standard, the court will reverse Provident's decision only if it was "downright unreasonable." See Donato v. Metro. Life Ins. Co., 19 F.3d 375, 380 (7th Cir. 1994). If the decision to terminate was based on a permissible choice between the differing opinions of multiple medical experts, then the termination was not unreasonable. See id.; Allison v. Dugan, 951 F.2d 828, 833 (7th Cir. 1992). Nevertheless, the "arbitrary and capricious" standard is not simply a rubber-stamp of approval. See Donato, 19 F.2d at 380. Where, as here, the plan administrator or fiduciary rejects the findings of the claimant's treating physician, the court must examine "whether the administrators have provided a rational justification for their decision." Johnson v. Ameritech Sickness Accident Disability Benefit Plan, No. 97 C 0990, 1999 WL 199637, at *7 (N.D.Ill. Apr. 5, 1999).
The issue presently before the court is what evidence may permissibly be reviewed. Review under the "arbitrary and capricious" standard is also called "deferential review." Perlman v. Swiss Bank Corp. Comprehensive Disability Prot. Plan, 195 F.3d 975, 977 (7th Cir. 1999). "Deferential review of an administrative decision means review on the administrative record." Id. at 981-82. In other words, in a case such as this, the court may consider "only the evidence that was before the administrator when it made its decision." Hess v. Hartford Life Accident Ins. Co., 274 F.3d 456, 462 (7th Cir. 2001). There is an exception: "[D]iscovery may be appropriate to investigate a claim that the plan's administrator did not do what it said it did — that, for example, the application was thrown in the trash rather than evaluated on the merits." Perlman, 195 F.3d at 982. However, "when there can be no doubt that the application was given a genuine evaluation, judicial review is limited to the evidence that was submitted in support of the application for benefits." Id. Furthermore, "the mental processes of the plan's administrator are not legitimate grounds of inquiry." Id.
Houston does not explicitly claim that the administrator did not do what it said it did. However, Houston seeks to admit three pieces of evidence that were not part of the original administrative record: (1) Houston's personal employment file; (2) an MRI report dated August 2, 1993; and (3) an MRI report dated August 26, 1996. First, the court may not consider Houston's personal file in its review of Provident's decision to terminate Houston's benefits because it is not part of the administrative record. See Perlman, 195 F.3d at 981-82. However, there is an issue as to whether the MRI reports should be considered.
Houston argues that the MRI reports should be admitted into the record because, she claims, this court already ruled on their admissibility. Houston is mistaken. In its December 21, 2000 opinion denying Provident's summary judgment motion, the court held that "striking all reference to the MRI would be an unduly harsh remedy where the MRI creates a genuine issue of material fact sufficient to overcome summary judgment." Houston, 2000 WL 1898591, at *5. This, Houston argues, was a ruling that the MRI reports are admissible as evidence. However, in the opinion the court expressly stated that "it is not the MRI report itself, but rather Provident's knowledge that there was an MRI exam . . ., that is in issue." Id. Therefore, the court has never ruled that the MRI reports themselves are admissible; rather, the court held that it may consider references to those reports, as they may be relevant to the ultimate determination of reasonableness. Provident's motion to limit the trial evidence to the administrative record should be granted. However, the court must now determine whether the MRI reports should themselves be deemed part of that administrative record.
In terminating Houston's disability benefits, Provident claims that it relied at least partially on a report by Dr. James W. Ryan, which was completed before the MRI reports. Houston argues that Provident's reliance on Dr. Ryan's report was unreasonable because he did not consider the MRI reports. Provident replies that the MRI reports were not part of the administrative record, and therefore they cannot be considered by this court. However, in denying Provident's motion for summary judgment, this court inferred, in the light most favorable to Houston, that "[d]espite [Provident's] knowledge of the MRI exam, Provident did not seek to obtain the MRI report." Houston, 2000 WL 1898591, at *5. Specifically, the administrative record reveals that the MRI report of August 2, 1993 was mentioned at least three times: in Dr. Churl Soo Suk's letter dated September 16, 1994 (R. PLACL 00099-00100); in Dr. Ryan's report (R. PLACL 00067); and in a note written by Dr. Mahendra Patel (R. PLACL 00075-00076). Thus, the court denied Provident's motion for summary judgment because "Provident's reliance on Dr. Ryan's [pre-MRI] report might well have been unreasonable." Id. That is now one of the issues that must be resolved by this court when it renders a judgment in this case: whether Provident altogether disregarded the references to the MRI report in the administrative record, or whether Provident made any attempts to obtain the MRI report.
The only reference by Dr. Ryan to the MRI report was that Houston's physician wanted to order an MRI.
The resolution of this factual issue is significant. "[T]he fact that an administrator blatantly disregards an applicant's submissions can be evidence of arbitrary and capricious action." Hess, 274 F.3d at 463. In Hess, the Seventh Circuit held that where a claims examiner was alerted to the existence of an employment contract through the administrative record, "he easily could have obtained a complete copy through a simple phone call." Id. at 462. The court ultimately held that because the examiner overlooked pertinent evidence that indicated the significance of the contract, the contract was "properly a part of the administrative record the district court was entitled to consider." Id. at 463. Thus, in this case, if Provident clearly disregarded the references to the MRI reports, this could be evidence that its determination was unreasonable. However, if Provident actually requested the MRI reports during its determination, this would lessen the blow.
There are at least three possible factual scenarios: (1) Houston attempted to supplement the administrative record by submitting the MRI reports to Provident, only to be rebuffed; (2) Provident became aware of the MRI reports after reviewing the administrative record, but made no effort to obtain the reports; or (3) Provident asked Houston to provide the MRI reports, which Houston failed to do. The evidence in the current record is insufficient for the court to resolve this issue. Neither party has claimed that any one of these three scenarios occurred. Houston merely argues that Provident's determination was unreasonable because it did not consider the MRI reports; however, she does not claim that she tried to supply the reports to Provident. Provident has provided more specific arguments; however, they provide little help. First, Provident claims in the parties' joint pre-trial order that "[n]either Houston nor her physicians provided the August 2, 1993, MRI report to Provident." (Final Pretrial Order, Provident's Proposed Findings of Fact, ¶ 84.) In addition, Provident states that "the report was not furnished to Provident in discovery, nor was the report provided to Provident by Houston or her physicians despite Provident's request." (Id., Provident's Resp. to Houston's Proposed Findings of Fact ¶¶ 12, 13.) This ambiguous language sheds little if any light on whether Provident ever asked Houston to provide the MRI reports during her disability determination. The court requires more evidence before it can make a factual finding on this issue.
Therefore, Provident's motion to limit trial evidence to the administrative record is granted. However, the parties are requested to supply the court with cross-briefs, supported by sworn affidavits, addressing whether Provident altogether ignored Houston's MRI reports. The parties should submit their briefs within 10 days of this order.