Summary
holding plan fiduciary need not consider SSA findings; further holding no inference of conflict to be drawn from failure to consider such findings
Summary of this case from Troutman v. Unum Life Insurance Company of AmericaOpinion
No. CIV 04-492 PHX RCB.
December 12, 2005
ORDER
Plaintiff Carol Ann Wallace challenges the rejection of her claim for long-term disability ("LTD") benefits under the Intel Corporation Long-Term Disability Plan (the "Plan" or "LTD Plan"). Following the denial of benefits, and an unsuccessful appeal, Plaintiff commenced this action pursuant to 29 U.S.C. § 1132 on March 11, 2004 (doc. # 1).
On September 28, 2004, the Court issued a scheduling order (doc. # 20) pursuant to which all dispositive motions in this case were required to be filed by May 31, 2005. On May 25, 2005, Defendants Intel Corporation ("Intel"), Matrix Absence Management, Inc. ("Matrix" or the "Administrator"), and the Plan filed a motion for summary judgment (doc. # 33). Plaintiff then filed a motion (doc. # 35) seeking an extension of time to file a cross-motion for summary judgment concurrent with her response to Defendants' motion. The Court granted this request, extending the time for Plaintiff to file her motion until June 24, 2005, on the condition that no reply to any response to that motion would be permitted without further order of the Court. Order (doc. # 46). As such, Defendants' pending motion for leave to file a sur-reply in opposition to that enlargement (doc. # 39) is denied and dismissed as moot.
On June 24, 2005, Plaintiff filed her cross-motion for summary judgment and response to Defendants' motion for summary judgment (doc. # 41), and on July 26, 2005, Defendants filed their response to Plaintiff's cross-motion and reply in support of their motion (doc. # 54). Plaintiff then requested leave to file a reply in support of her motion (doc. # 50). That request was denied. Order (doc. # 53). Having carefully considered the arguments raised by the parties in support of their respective motions for summary judgment, the Court now rules.
I. BACKGROUND
Plaintiff began her employment with Intel on June 14, 1999. Defs.' Statement of Facts (doc. # 34) ("DSOF"), Ex. 1 ¶ 2. Suffering from chronic migraine headaches, she took a medical leave of absence and, on October 22, 2001, applied for benefits pursuant to an ERISA Short Term Disability Plan established by Intel. Id., Ex. 7, Doc. 379. Her application stated that she experienced chronic migraine headaches for which she required treatment several times a week. Id.
On April 12, 2002, Matrix asked Dr. Keith Nachmanson to conduct an independent medical examination ("IME") of Plaintiff, and to provide an evaluation of her disability under the Short-Term Disability Plan. Id., Ex. 6, Attach. A. That plan defines "disability" as "any illness or injury that is substantiated by objective medical findings and which renders a participant incapable of performing work." In his written report of June 13, 2002, Dr. Nachmanson concluded that Plaintiff was "totally disabled from any type of occupation." Id., Ex. 6, Attach. B at 8.
Unlike the LTD Plan, the Short-Term Disability Plan does not separately define the phrase "objective medical findings."
Prior to applying for benefits under the LTD Plan, claimants are required to exhaust disability benefits under the Short-Term Disability Plan. Id., Ex. 1 ¶ 5. Plaintiff's short-term disability benefits were due to expire on October 11, 2002. See id., Ex. 7, Doc. 318. On February, 19, 2002, Matrix sent Plaintiff a letter explaining the LTD Plan along with an enclosed application for LTD benefits and forms for her physicians to complete. Id., Ex. 7, Docs. 318-20. Matrix sent a second letter and copy of the LTD package on March 21, 2002, and requested a response by April 19, 2002. Id., Ex. 7, Docs. 316-17. On September 5, 2002, Matrix received Plaintiff's application for LTD benefits, identifying Drs. Stuart Hetrick, Susan Wojcik, Michael Castillo, and Philip Ku as her treating physicians.Id., Ex. 7, Doc. 321. Matrix then sent each of the listed providers the Plan's definitions of "disability" and "objective medical findings," and requested information to aid its determination of Plaintiff's eligibility for LTD benefits. Id., Ex. 7, Docs. 293-98, 304-06. Matrix also transmitted a Physical Capacities Assessment Form for each provider to complete, and requested all medical records for the period of October 15, 2001 through Plaintiff's last office visit.Id., Ex. 7, Docs. 300-03. All medical documents received before December 1, 2002 were included in the claim file. See id., ¶¶ 20-21; id., Ex. 7, Docs. 6-183.
The LTD Plan defines disability as "any illness or injury that is substantiated by objective medical findings." DSOF, Ex. 1, Attach. A at 1. The phrase "objective medical findings" is further defined as follows:
"Objective Medical Findings" means a measurable abnormality which is evidenced by one or more standard medical diagnostic procedures including laboratory tests, physical examination findings, X-rays, MRI's, EEG's, "Catscans" or similar tests that support the existence of a disability or indicate a functional limitation. . . . To be considered an abnormality, the test result must be clearly recognizable as out of the range of normal for a healthy population; the significance of the abnormality must be understood and accepted by the medical community.Id. at 4. As the administrator and fiduciary of the Plan, Intel has "the sole discretion to interpret the terms of the Plan and to determine eligibility for benefits." Id. at 13. Pursuant to a provision of the Plan allowing Intel to delegate certain fiduciary responsibilities, Intel delegated its authority in these areas to Matrix in a written Service Agreement. Id., Ex. 1, Attach. A at 14; id., Ex. 2, Attach. A at 1-4.
Based on the information before it, Matrix concluded that Plaintiff's file did not support the finding of a "disability" substantiated by "objective medical findings" as those terms are defined in the Plan. Id., Ex. 7, Docs. 240-46. Matrix explained this as the reason for its denial in a letter dated December 2, 2002, which reviewed Plaintiff's medical history and the operative terms of the Plan. See id., Ex. 7, Docs. 240-43. In that letter, Matrix also apprised Plaintiff of her right to appeal the denial decision, and provided her a copy of Intel's disability appeal procedure. Id., Ex. 7, Docs. 240-46. Under the appeal procedure, a claimant may appeal an adverse benefit determination within 180 days of the Administrator's decision.Id., Ex. 7, Doc. 244.
On December 10, 2002, Plaintiff notified Matrix of her decision to appeal its decision, and requested a thirty-day extension of time in which to submit additional documents for the Appeals Committee's (the "Committee") consideration. Id., Ex. 7, Docs. 262-63. Matrix granted the requested extension of time. Id., Ex. 7, Docs. 255-59. A second extension was granted on January 8, 2003, extending the deadline to February 12, 2003. Id., Ex. 7, Docs. 247-48. During this time, Plaintiff submitted a letter from Dr. Castillo, a list of medications dated February 11, 2003, a Physical Capacities Assessment Form by Dr. Castillo, and a letter from Dr. Muriel McClellan. Id., Ex. 7, Docs. 190-201.
On December 23, 2002, Matrix requested an independent review of Plaintiff's claim file by a neurologist selected by CORE, an independent clearinghouse for medical peer reviews with no affiliation with either Matrix or Intel. Id., Ex. 7, Docs. 249-50. The Peer Review Analysis Case Report of Dr. Dennis Nitz acknowledged Dr. Walker's findings of hypomobility and spasm on the left side of Plaintiff's upper cervical spine, as well as X-ray indications of facet arthrosis in the lumbar spine, but noted that Plaintiff's neurological examinations and MRI's produced normal results. Id., Ex. 7, Docs. 2-5. Based on his review of the claim file, Dr. Nitz concluded that "[Plaintiff's] subjective complaints are not corroborated by any significant objective findings." Id., Ex. 7, Doc. 4.
On February 20, 2003, the Committee reviewed the original claim file, Dr. Nitz's independent peer review report, as well as all documents received from Plaintiff prior to that date. Id., Ex. 2 ¶ 19. The Committee determined that Matrix's initial denial of benefits was proper, because the record did not present evidence of a "disability" substantiated by "objective medical findings" as those terms are defined in the Plan. Id., Ex. 2, Attach. C. As before, the Committee explained this as the basis for its decision in a letter dated March 11, 2003 reviewing Plaintiff's medical history and the operative terms of the Plan. Id. This letter also apprised Plaintiff of her rights under ERISA. Id.
On March 11, 2004, Plaintiff filed a complaint (doc. # 1) in this Court, later amended on August 9, 2004 (doc. # 14), seeking retrospective and prospective relief under 29 U.S.C. § 1132.
II. STANDARD OF REVIEW
Summary judgment is appropriate "when there is no genuine issue of material fact" such that "the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56. In determining whether to grant summary judgment, a district court must view the underlying facts and the inferences to be drawn from those facts in the light most favorable to the nonmoving party. See Matsushita Elec. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).
If a party will bear the burden of proof at trial as to an element essential to its claim, and fails to adduce evidence establishing a genuine issue of material fact with respect to the existence of that element, then summary judgment is appropriate.See Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). Not every factual dispute is capable of defeating a properly supported motion for summary judgment. Rather, the party opposing the motion must show that there is a genuine issue ofmaterial fact. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). A factual dispute is genuine if the evidence is such that a rational trier of fact could resolve the dispute in favor of the nonmoving party. Id. at 248. A fact is material if determination of the issue might affect the outcome of the case under the governing substantive law. Id. Thus, a party opposing a motion for summary judgment cannot rest upon bare allegations or denials in the pleadings, but must set forth specific facts demonstrating a genuine issue for trial. See id. at 250. If the nonmoving party's evidence is merely colorable or not significantly probative, a court may grant summary judgment. See id. at 249; accord Cal. Architectural Build. Prods., Inc. v. Franciscan Ceramics, 818 F.2d 1466, 1468 (9th Cir. 1987).
Finally, the fact that both parties have moved for summary judgment does not alter these standards. "It is well settled that a court's duty to ascertain whether facts remain in contention is not obviated by cross motions for summary judgment." Eby v. Reb Realty, Inc., 495 F.2d 646, 649 (9th Cir. 1974). . . .
III. DISCUSSION
A. Standard of Judicial Review in § 1132 Actions
Although ERISA creates private rights of action allowing plan participants and beneficiaries to challenge benefit eligibility determinations, the statute does not set out the standard of judicial review for such actions. See 29 U.S.C. § 1132. While many federal courts initially filled this gap by adopting the deferential arbitrary and capricious standard of review applied in actions under the Labor Management Relations Act, see, e.g., Jung v. FMC Corp., 755 F.2d 708, 711-12 (9th Cir. 1985), the Supreme Court has since stated that the determination of the appropriate standard of for § 1132 actions should be guided by principles of trust law. See Firestone Tire Rubber, Co. v. Bruch, 489 U.S. 101, 107-111 (1989). Thus, if a plan confers discretion on its administrator to interpret the plan's terms or to make benefit eligibility determinations, the administrator's decisions are entitled to deference, and are reviewed for abuse of discretion. Id. at 111-15. Absent such discretionary authority, courts must review the administrator's decisions de novo. Id. at 115.
However, even if a plan administrator has discretionary authority, a court may engage in a more searching review if the administrator's decision was tainted by a conflict of interest.Id. "Because the great deference accorded a plan administrator arises in part from the assumption of trust law that the trustee has no pecuniary interest in his decisions, proof that the trustee does have such interest correspondingly strengthens the court's level of review." Bogue v. Ampex Corp., 976 F.2d 1319, 1325, n. 29 (9th Cir. 1992). In Firestone, the Supreme Court noted that if an administrator is "operating under a conflict of interest, that conflict must be weighed as a factor in determining whether there is an abuse of discretion." Firestone, 489 U.S. at 115 (internal quotations omitted). The Ninth Circuit has interpreted this language as requiring "heightened scrutiny" of decisions made by conflicted plan administrators. Atwood v. Newmont Gold Co., 45 F.3d 1317, 1322 (9th Cir. 1995).
The Ninth Circuit has repeatedly used a two-part test in deciding whether to invoke "heightened scrutiny," noting that the appearance of conflict alone is not sufficient. See, e.g., Friedrich v. Intel Corp., 181 F.3d 1105 at 1109-10 (9th Cir. 1999). First, the beneficiary must produce "material, probative evidence" tending to show that the administrator's apparent conflict actually caused a breach of a fiduciary duty owed to the beneficiary. Atwood, 45 F.3d at 1322. If the beneficiary makes this showing, the burden shifts to the plan administrator to demonstrate that its decision was not tainted by the apparent conflict. Id. If the plan fails to meet its burden, the administrator's decision is reviewed de novo. Id.
In their respective motions for summary judgment, Plaintiff argues for de novo review of her § 1132 claim under the "heightened scrutiny" test, while Defendants argue for more deferential review under the abuse of discretion standard. Pl.'s Mot. (doc. # 41) at 15-18; Defs.' Mot. (doc. # 33) at 9-10. In order to succeed on summary judgment in establishing "heightened scrutiny" as the appropriate standard of review, Plaintiff must adduce "material, probative evidence" that Matrix's denial decision was colored by conflict, and this evidence must go unrebutted by Matrix. Likewise, to succeed on summary judgment in establishing abuse of discretion as the appropriate standard of review, Matrix must show that (1) the Plan vests it with discretionary authority in construing the Plan's terms and making benefits determinations, and (2) Plaintiff has failed to establish a genuine issue of material fact as to whether its denial decision was colored by conflict. See Celotex Corp., 477 U.S. at 322-23.
In the present case, it is uncontested that the Plan grants Intel, the named fiduciary for plan administration, the discretion to interpret the terms of the Plan and to determine eligibility for benefits. DSOF ¶ 2; Pl.'s Controverting Statement of Facts (doc. # 43) ("PCSOF") ¶ 2. Nevertheless, Plaintiff contends that the Court should invoke "heightened scrutiny," because Intel's dual role as plan administrator and sponsor poses an inherent conflict of interest. Pl.'s Mot. (doc. # 41) at 15-18. Plaintiff argues that there is ample evidence that this apparent conflict influenced the denial of benefits, because (1) Matrix failed to provide Plaintiff's complete medical records to Dr. Nachmanson, and subsequently relied on his IME report in reaching its decision; (2) Matrix did not correctly interpret and apply the Plan's definitions of "disability" and "objective medical findings" in reaching its decision; and (3) Matrix failed to consider Plaintiff's Social Security Disability award in considering Plaintiff's eligibility for benefits. Id. at 17-18.
In an effort to preclude any inquiry into "heightened scrutiny," Defendants argue that Intel's dual role as plan sponsor and administrator fails to manifest even an appearance of conflict, because Intel had contractually delegated its authority to review claims and grant plan benefits to Matrix. Reply (doc. # 54) at 5-6. Defendants cite no law in support of this view. Although a similar question was raised in Eley v. Boeing Co., 945 F.2d 276 (9th Cir. 1991), the Ninth Circuit decided that case on separate grounds, leaving the issue unresolved. See id. at 278. In the present case, it is sufficient to note that Intel's delegation of authority to Matrix does not negate the appearance of conflict, because Intel's financial influence over Matrix under the Service Agreement renders Matrix susceptible to the taint of Intel's conflict. See DSOF, Ex. 2, Attach. 1 at 3 (providing for payment by Intel of $294,356 in fees to Matrix during the initial one-year term of the Service Agreement). Accordingly, the fact of Intel's contract with Matrix is more appropriately considered as one factor in determining whether the Administrator's decision was actually tainted by conflict.
1. Provision of Limited Records to IME Physician
Plaintiff asserts that Matrix's limited provision of medical records to Dr. Nachmanson is similar to Intel's conduct inFriedrich, where the Ninth Circuit affirmed the district court's application of de novo review based, in part, on the administrative record's lack of written reports by the beneficiary's treating physicians. Id. at 15; see Friedrich, 181 F.3d at 1110.
However, the claim administration problems in Friedrich ran much deeper than the quantum of information made available to IME physicians, and the quality of information considered by the plan administrator. In Friedrich, the Ninth Circuit observed the following additional evidence of conflict: (1) Intel failed to give Friedrich a LTD claim packet that would have put him on notice of the application requirement and the criteria for benefits determinations; (2) Intel provided Friedrich with insufficient notice of the denial of his claim; and (3) Intel's review procedure unfairly deprived Friedrich of the opportunity to demonstrate disability. Id. Indeed, a review of the district court's factual findings reveals the extent to which Intel's apparent conflict infected its claim handling in that particular case:
. . .
On February 19, 1993, [the plan administrator] wrote a letter to Friedrich notifying him that he was not eligible for Long Term Disability Benefits based upon her review of his medical records, and told him that his [short term disability] benefits would cease in May 1993. . . . Friedrich had not even applied for Long Term Disability benefits when Intel deemed him to have applied and then denied such benefits without even telling him whether Intel needed more information before it could make a reasoned decision as to his entitlement.Friedrich v. Intel Corp., 21 Employee Benefits Cases (BNA) 2203, 2205 (E.D. Cal. 1997) (emphasis added).
Although Plaintiff claims that Matrix's failure to provide Dr. Nachmanson with her complete medical records prior to his IME "is similar to the action taken be Intel" in Friedrich, see Pl.'s Mot. (doc. # 41) at 17, the instant case lacks many of the disturbing details that informed the court's finding of conflict in Friedrich. Unlike Intel's conduct in Friedrich, Matrix twice notified Plaintiff of her opportunity to file her claim for LTD benefits, and both times furnished her with a claim filing packet detailing the Plan's terms and eligibility criteria.Id., Ex. 7, Docs. 318-20, 316-17. In addition, Matrix solicited and considered numerous other medical records, including written reports from Plaintiff's treating physicians. Id., Docs. 293-98, 304-06. Dr. Nachmanson's report was only one of many reports reviewed and relied upon by Matrix. Moreover, Matrix initially requested Dr. Nachmanson's IME report to confirm Plaintiff's eligibility for short-term disability benefits, not LTD benefits, and the report was actually favorable to Plaintiff in that regard by finding her eligible. See DSOF, Ex. 2 ¶ 9;id., Ex. 6, Attach. B. Therefore, Matrix's failure to furnish Dr. Nachmanson with Plaintiff's complete records at the time of his evaluation does not tend to show that Matrix breached any fiduciary duty owed to Plaintiff.
Alternatively, Plaintiff's argument may be fairly interpreted as suggesting that Matrix's failure to provide her complete medical records to Dr. Nachmanson evinces an effort to sculpt the administrative record and thereby justify its denial of LTD benefits. However, this argument also fails. Apparently, to avoid the appearance of conflict under this theory, Matrix should either have excluded the initial IME report from the file when reviewing Plaintiff's application for LTD benefits, or ordered a new IME for determining eligibility for LTD benefits. Of course, Matrix was under no obligation to do either. Indeed, it would have been more troubling had Matrix excluded Dr. Nachmanson's report, as the report was actually favorable with respect to Plaintiff's eligibility for short term disability benefits.
Therefore, the Court concludes that no reasonable trier of fact could find that Matrix's omission amounted to "material, probative evidence" of a decision tainted by conflict.
2. Erroneous Interpretation and Application of Plan Terms
Plaintiff claims that Matrix strayed from the Plan's terms by premising its denial letter on a lack of "substantial" findings, rather than a lack of "objective medical findings," arguing that this proves that the denial was colored by conflict. Pl.'s Mot. (doc. # 41) at 17-18. The evidence repudiates this. Matrix's denial letter not only quotes the Plan's definition of "objective medical findings," but states that the claim was denied because the Administrator had "determined that objective medical findings do not support a disability as defined by the Plan. . . ." DSOF, Ex. 7 at 240-242. (emphasis added).
There is no mention of "substantial" findings anywhere in Matrix's letter — only a statement that "[t]he Plan requires that a Participant's inability to work be substantiated by objective medical findings as defined in the Plan document." Id. at 242 (emphasis added). Properly understood, this phrase does not reflect a subjective standard as Plaintiff suggests, see Pl.'s Mot. (doc. # 41) at 17-18, but merely reiterates the Plan's definition of "disability." See DSOF, Ex. 7 at 240, 242; DSOF, Ex. 1, Attach. 1 at 1-2.
Alternatively, Plaintiff argues that Matrix "deliberately ignored or inadequately considered the evidence of record" in determining that there were no "objective medical findings" to substantiate her disability. Pl.'s Mot. (doc. # 41) at 17. In particular, she notes that an abnormal polysomnography report demonstrates the existence of severe obstructive sleep disordered breathing, and claims that her X-ray and MRI present evidence of straightening of the cervical lordosis caused by muscled spasms — all of which Dr. Nachmanson has opined to be objective findings substantiating chronic cervicogenic headaches.Id. at 13; id., App. 18 at 12-13, 19-20. For the following reasons, the Court does not agree that Matrix's review of the record was so inadequate as to establish a breach of fiduciary duty to Plaintiff.
Plaintiff also notes that she had an elevated SED rate, but admits that the elevation, according to her neurologist's finding, is not significant. See Pl.'s Mot. (doc. # 41) at 12, n. 3, 13. Under the Plan, "objective medical findings" must be "clearly recognized as out of range for a normal healthy population." DSOF, Ex. 1, Attach. A at 1, 4. Therefore, it does not appear that her elevated SED rate would constitute an "objective medical finding" under the Plan so as to support the claim that Matrix inadequately considered the evidence of record.
First, Plaintiff's abnormal polysomnography report was not obtained until February 14, 2004 — after the Committee had reviewed her appeal — and therefore, was never part of the administrative record. Compare id., App. 12 (polysomnography indicatingmild obstructive sleep disordered breathing conducted on April 17, 2002) with id., App. 16 (polysomnography indicating severe obstructive sleep disordered breathing conducted on February 14, 2004). Because Plaintiff's argument takes issue with Matrix's allegedly inadequate consideration of the "evidence of record," the Court finds it entirely appropriate to limit its review to the administrative record in evaluating this argument. It is too obvious to merit extended discussion why Matrix could not reasonably have been expected to consider a report that did not even exist at the time of its review.
The Court's review in an ERISA action is not axiomatically limited to the administrative record. Although Defendants correctly note that evidence outside the administrative record is irrelevant to whether an administrator abused its discretion, this rule is predicated on the Court's adoption of the abuse of discretion standard. See Reply (doc. # 54) at 16; Taft v. Equitable Life Assurance Soc'y, 9 F.3d 1469, 1471-72 (9th Cir. 1993) (the rule avoids the anomalous conclusion that an administrator abused its discretion by failing to consider evidence that was never before it). The Court is therefore not limited to the administrative record in its "heightened scrutiny" analysis, which inherently precedes any determination that the plan administrator is entitled to deferential review. Tremain v. Bell Indus., Inc., 196 F.3d 970, 976-77 (9th Cir. 1999). In the instant case, however, Plaintiff argues that Matrix inadequately considered the evidence of record, requiring the Court to limit its review to the administrative record.
Second, as to the X-ray and MRI images showing straightening of the cervical lordosis, the administrative record appears at best to be conflicted as to whether those studies present "objective medical findings" substantiating a disability. Even Plaintiff's treating physicians disagreed on the issue. For example, Dr. Castillo concluded that these studies presented "objective medical findings" of Plaintiff's incapacitating headaches, while Dr. Hetrick found that "[n]one of these studies were able to provide a clue of the etiology of her head pain." PCSOF, App. 3; DSOF, Ex. 7 at 16. The fact that Matrix apparently did not give as much weight to the report most favorable to the claimant does not, by itself, suggest that it reviewed the record with a deliberately blind eye bent on denying the claim. To hold otherwise, would invite "heightened scrutiny" in nearly every case in which a plan administrator reaches a decision adverse to the claimant. Such an extension of "heightened scrutiny" would swallow the rule ofFirestone, in which the Supreme Court established abuse of discretion as the standard of review for decisions of administrators vested with discretionary authority. Furthermore, the mere fact of an adverse decision does not, by itself, establish breach of fiduciary duty. See Atwood, 45 F.3d at 1323.
Therefore, the Court cannot conclude that Matrix's allegedly inadequate consideration of the evidence of record constitutes "material, probative evidence" tending to show that its decision was swayed by an apparent conflict of interest.
3. Failure to Consider Social Security Disability Award
Finally, Plaintiff argues that Matrix's failure to consider her Social Security disability award is evidence that Matrix's denial decision was swayed by self interest. Pl.'s Mot. (doc. # 41) at 18. This argument is unpersuasive for two reasons.
First, Plaintiff cites Riedl v. General Am. Life Ins. Co., 248 F.3d 753 (8th Cir. 2001) for the proposition that courts have held that a Social Security disability award "should be considered by [an] insurer." Pl.'s Mot. (doc. # 41) at 18 (emphasis added). Plaintiff construes Riedl too broadly. InRiedl, the court merely stated that "[a]lthough the Social Security Administration's determination is not binding, it is admissible evidence to support an ERISA claim." See Riedl, 248 F.3d at 759, n. 4. The statement, appearing in footnote, does not impose an affirmative obligation on either the courts or plan administrators to consider such evidence in every ERISA case. The statement is not even directed toward plan administrators. Rather, the remark simply affirmed the admissibility of evidence, which the court considered in applying the de novo standard of review. See id. at 756, 759, n. 4. Furthermore, the court adopted the de novo standard in that case, because the administrator lacked discretionary authority under the plan, and not because of any evidence that it acted as a conflicted fiduciary. See id. at 755-56. Therefore, there is nothing in Riedl to suggest that an administrator should consider a Social Security disability award in determining eligibility for plan benefits, or that the failure to do so would constitute a breach of fiduciary duty.
Likewise, no such mandatory duty arises under the earlier Eighth Circuit case upon which Riedl relied. See Duffie v. Deere Co., 111 F.3d 70, 74, n. 5 (observing that findings of the Social Security Administration are admissible, but not binding, in ERISA cases).
Similarly in Duffie, the predecessor case to Riedl, the Eighth Circuit found that de novo review should apply, because the administrator lacked discretion, and not because of any apparent conflict. See Duffie, 111 F.3d at 72.
Although Riedl does not establish a basis for applying "heightened scrutiny," the Court considers independently whether Matrix's failure to consider Plaintiff's Social Security disability award constitutes material evidence of a conflicted fiduciary. Due to notable differences between the Social Security Act and the Plan, the Court finds that it does not. For example, while mental impairment may be a basis for Social Security disability benefits, it is specifically excluded from eligibility under the Plan. See 42 U.S.C. § 423(d); see also DSOF, Ex. 1, Attach. A at 5-6. Moreover, Social Security disability benefits determinations are made in view of the combined effect of all impairments from which an individual may suffer. See 42 U.S.C. § 423(d). This cumulative approach is precluded by the Plan's narrower definition of disability in the singular as "any illness or injury that is substantiated by objective medical findings."See DSOF, Ex. 1, Attach. A at 1.
In noting this distinction, the Court makes no finding as to whether Plaintiff's cervicogenic headaches constitute a physical or mental impairment.
In light of the differences between the Plan and the Social Security Act, the Court cannot find Matrix's failure to consider Plaintiff's Social Security Award to be "material, probative evidence" that it acted as a conflicted fiduciary in denying her claim. There is simply no requirement that a plan administrator, vested with discretionary authority in its determinations, must give weight to factual findings made by different bodies under disparate standards in order to shield its own determination from more searching review by the courts.
All of Plaintiff's foregoing arguments, considered independently or together, fail to raise any genuine issue of material fact as to whether Matrix's decision was infected by conflict, and so, do not satisfy her initial burden under the Ninth Circuit's "heightened scrutiny" test. Furthermore, because it is undisputed that the Plan grants discretionary authority to the Administrator in construing the Plan's terms and determining eligibility for benefits, the Court finds that it is appropriate to adopt the abuse of discretion standard on Defendants' motion for summary judgment.
B. Whether Matrix Abused Its Discretion
An ERISA plan administrator abuses its discretion if (1) it renders a decision without any explanation, (2) it construes provisions of the plan in a way that conflicts with the plain language of the plan, or (3) it relies on clearly erroneous findings of fact in making benefit determinations. Taft, 9 F.3d at 1472-73. Because an administrator cannot abuse its discretion by failing to consider evidence that was never before it, the district court's review is limited to evidence that was part of the administrative record. Id. at 1471-72. For the reasons below, the Court finds that there is no genuine issue of material fact on the issue of whether Matrix abused its discretion in determining Plaintiff's eligibility for LTD benefits.
First, Matrix's detailed denial letter of December 2, 2002 clearly sets forth the reasons for its decision by reviewing Plaintiff's medical history and the operative terms of the Plan in three-and-a-half single-spaced pages. DSOF, Ex. 7 at 240-43. Likewise, the Appeals Committee's written letter of March 11, 2003 affirming that decision similarly explains the basis for the denial. Id., Ex. 2, Attach. C at 1-4. Therefore, it cannot be said that Matrix abused its discretion by rendering a decision without explanation.
Second, Matrix's conclusion that Plaintiff was not disabled did not conflict with the plain language of the Plan. The LTD Plan defines disability as "any illness or injury that is substantiated by objective medical findings." DSOF, Ex. 1, Attach. A at 1. The phrase "objective medical findings" is further defined as follows:
"Objective Medical Findings" means a measurable abnormality which is evidenced by one or more standard medical diagnostic procedures including laboratory tests, physical examination findings, X-rays, MRI's, EEG's, "Catscans" or similar tests that support the existence of a disability or indicate a functional limitation. . . . To be considered an abnormality, the test result must be clearly recognizable as out of the range of normal for a healthy population; the significance of the abnormality must be understood and accepted by the medical community.Id. at 4 (emphasis added). As discussed in Part II.A.3,supra, there was ample evidence in the record to support Matrix's conclusion that there were no "objective medical findings" as defined in the plan. For instance, although Plaintiff had undergone MRI's, spinal taps, and other laboratory studies, Dr. Hetrick, admitted in his October 15, 2002 letter that "[n]one of these studies were able to provide a clue of the etiology of her head pain." DSOF, Ex. 7 at 16. Indeed, many of her test results at the time of Matrix's review were within normal limits, and thus, not indicative of a "measurable abnormality." For example, her comprehensive metabolic panel yielded results within the reference range, and in a report dated July 11, 2002, Dr. Hetrick noted that her brain MRI was "entirely within normal limits." Id. at 32, 50. Accordingly, there is no indication that Matrix abused its discretion by departing from the plain terms of the Plan.
Finally, there is no indication that Matrix relied on clearly erroneous findings of fact in reaching its decisions. Plaintiff does not dispute the validity or accuracy of the evidence in the record. Instead, she argues that Matrix "ignored or inadequately considered the evidence" in determining that there were no "objective medical findings." Pl.'s Mot. (doc. # 41) at 17. To prevail on this argument, Plaintiff must show either (1) that the administrative record is at least substantially inconsistent with Matrix's conclusion, or (2) that the evidence upon which Matrix relied was clearly erroneous. Neither is the case here. First, as discussed above, the administrative record contains ample evidence to support Matrix's conclusion that Plaintiff's chronic migraine headaches were not substantiated by "objective medical findings." Second, the Court has thoroughly reviewed the administrative record submitted by the parties, and cannot say that the factual findings were so clearly erroneous that Matrix abused its discretion in relying on them.
Although Plaintiff initially raised this argument in an effort to show a conflict of interest under the "heightened scrutiny" test, see Pl.'s Mot. (doc. # 41) at 17, she has also argued that she should prevail under the abuse of discretion standard of review. See id. at 18. Therefore, the Court will also construe this as an argument that Matrix abused its discretion by relying on clearly erroneous findings of fact in denying Plaintiff benefits.
Because Plaintiff has failed to establish a genuine issue of material fact as to whether Matrix abused its discretion in denying her LTD benefits, the Court must grant Defendant's motion for summary judgment.
IV. CONCLUSION
In light of the forgoing analysis,
IT IS ORDERED that Defendants' motion for leave to file surreply to Plaintiff's reply to Defendants' response to Plaintiff's motion of an extension of time to file her cross-motion for summary judgment (doc. # 39) is DENIED and dismissed as moot.
IT IS FURTHER ORDERED that Defendants' motion for summary judgment (doc. # 33) is GRANTED.
IT IS FURTHER ORDERED that Plaintiff's motion for summary judgment (doc. # 41) is DENIED.
IT IS FURTHER ORDERED directing the Clerk of Court to enter judgment in favor of Defendants and terminate this case.