White v. Eaton Corporation Short Term Disability Plan ( 2009 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 07-2010
CHRIS WHITE,
Plaintiff − Appellee,
v.
EATON CORPORATION SHORT TERM DISABILITY PLAN; EATON
CORPORATION LONG TERM DISABILITY
PLAN,
Defendants − Appellants.
Appeal from the United States District Court for the District of
South Carolina, at Anderson. Henry F. Floyd, District Judge.
(8:04-cv-01848-HFF)
Argued: October 29, 2008 Decided: January 21, 2009
Before WILLIAMS, Chief Judge, MICHAEL, Circuit Judge, and John
T. COPENHAVER, JR., United States District Judge for the
Southern District of West Virginia, sitting by designation.
Affirmed by unpublished per curiam opinion.
ARGUED: Anna K. Raske, BENESCH, FRIEDLANDER, COPLAN & ARONOFF,
L.L.P., Cleveland, Ohio, for Appellants. Robert Edward Hoskins,
FOSTER LAW FIRM, L.L.P., Greenville, South Carolina, for
Appellee. ON BRIEF: Jeffrey D. Zimon, BENESCH, FRIEDLANDER,
COPLAN & ARONOFF, L.L.P., Cleveland, Ohio, for Appellants.
Unpublished opinions are not binding precedent in this circuit.
2
PER CURIAM:
This case involves the decision of Eaton Corporation
(“Eaton”) to terminate the short term disability (“STD”)
benefits of one of its former employees, Christopher White.
White received STD benefits under the Eaton Corporation Short
Term Disability Program (the “Plan”) from June 27, 2003 through
November 12, 2003, at which time Eaton determined that White was
capable of returning to work as a machinist and terminated his
benefits. After exhausting Eaton’s internal appeals process,
White brought suit in federal district court, arguing that Eaton
abused its discretion in denying further STD benefits. The
district court concluded that Eaton did abuse its discretion and
that White was entitled to further STD benefits. We affirm.
I.
White began working for Eaton as a machinist on January 29,
2001. He began experiencing back pain in 2002 and underwent
surgery to repair a herniated disk on August 23 of that year.
Dr. Michael Kilburn performed the surgery, and by November of
2002 it appeared that White’s back pain was no longer an issue.
White’s back pain resumed the following summer, however, and on
June 26, 2003, he ceased his employment with Eaton. He then
returned to Dr. Kilburn on July 8, 2003 and again on July 17,
3
2003. These visits resulted in Dr. Kilburn providing White with
a lumbar epidural steroid injection and a work release.
On August 19, 2003, White visited Dr. Kilburn again, but
this time White informed the doctor that he was in litigation
with Eaton about a possible worker’s compensation claim. Dr.
Kilburn noted that White was “doing well” and “no longer [had]
any appreciable pain in his left leg,” but chose to refer him to
another doctor, Dr. Kevin Kopera, because an appraisal of
White’s workplace duties was “outside the realm of [Kilburn’s]
expertise.” (J.A. at 527.) Dr. Kopera evaluated White on
September 9, 2003 and made the following observations:
Mr. White was limited greatly in terms of flexion and
extension at the waist and both of these movements
tended to aggravate his low back pain. Lateral
bending in each direction appeared to be less
restricted but also produced some amount of
discomfort. . . . Mr. White did have some increased
symptoms with the left straight leg raise test in a
sitting position in terms of increased discomfort.
(J.A. at 592.) These observations led Dr. Kopera to conclude
that White was suffering from “[c]hronic low back pain with
lumbar degenerative disc disease and possible residual left
sided lumbar radiculopathy.” (J.A. at 592.) Concerning White’s
ability to work, Dr. Kopera observed that White “appear[ed]
limited in his ability to bend and lift and seems to be limited
at this point primarily to sedentary work activities.” (J.A. at
592.) Ten days after the visit with Dr. Kopera, White visited
4
his primary care physician, Dr. Oliver Willard, who noted that a
July 3, 2003 MRI of White’s back showed “recurrent disc
extrusions left & right of center at L5-S1” and a “[s]mall
posterolateral disc protrusion L4-5.” (J.A. at 594.)
On October 30, 2003, White performed a Functional Capacity
Evaluation (“FCE”) arranged by the Plan’s Claims Administrator,
Broadspire Services, Inc. (“Broadspire”). The purpose of the
FCE was to establish “[White’s] physical status, [as well as]
restrictions and limitations” on his ability to return to work
as a machinist. (J.A. at 532.) Importantly, the FCE concluded
that White “did not demonstrate ability to meet the following
job demand categories: Walk and Reach Immediate.” (J.A. at
532.) Despite this observation, the FCE ultimately found that
White’s “[p]hysical abilities do match the job description of a
machinist.” (J.A. at 533.) It therefore concluded that White
“demonstrated the ability to physically return without
modifications.” (J.A. at 533.)
Eaton denied White’s claim for continued STD benefits on
November 12, 2003, in reliance upon the conclusions of the FCE.
White exercised his right to appeal this determination, asked
for additional time to prepare his appeal and submitted
additional evidence in support of his appeal. This additional
evidence consisted of affidavits from White and Dr. Kopera, as
well as medical records from Dr. Kopera, Dr. Willard, and
5
physicians at Piedmont Internal Medicine (“PIM”). White also
submitted his MRI results from 2002 and 2003.
Dr. Kopera’s and White’s affidavits both described White’s
symptoms and concluded that he was unable to return to work. In
particular, Dr. Kopera noted that White “suffers from a number
of back problems including degenerative disc disease, left
lumbar radiculopathy, and severe and chronic back pain.” (J.A.
at 569.) He concluded that White was “completely and totally
disabled” based on White’s “physical problems and the side
effects of his prescription medications.” (J.A. at 573.)
White also submitted his MRI from July 3, 2003, the report
for which stated “[t]here is some degeneration of the L5-S1 disc
as previously demonstrated with some chronic discovertebral
changes in the endplates surrounding the L5-S1 disc.” (J.A. at
604.) In addition, the report remarked that the “L4-5
demonstrates a very small left posterolateral disc protrusion
with no nerve root impairment” and that the L5-S1 had “recurrent
disc extrusions.” (J.A. at 604.) There was also evidence of an
“asymmetric left posterolateral disc bulge or broad-based disc
protrusion at this level, which does not appear to impinge on
the left L5 nerve root in the neutral foramen.” (J.A. at 604.)
This information was forwarded to a Broadspire peer-
reviewer, Dr. Michael Goldman, D.O., for further evaluation.
Dr. Goldman, who did not examine White personally, concluded
6
that White “has no specific neuromuscular or musculoskeletal
definitions that would contraindicate his returning to
occupational activities.” (J.A. at 612.) He summarized:
“Therefore, based on my review of all of the medical records
available to me, it is my opinion that the medical records as
reviewed fail to support functional impairment that preclude the
claimant from returning to his occupational activities from
11/12/03 to the present time.” (J.A. at 612-13.)
By letter dated February 14, 2004, Broadspire informed
White that it was upholding the original decision to deny
continuation of his short-term disability benefits. The letter
stated its conclusion as follows:
While the affidavits of Dr. Kopera and your client
state general complications of his medications
preclude his return to work, there was insufficient
objective, quantifiable medical evidence presented to
substantiate this assertion. There were no specific
neuromuscular, musculoskeletal or cognitive deficits
confirmed that would preclude your client from
performing his normal job duties.
(J.A. at 615.) This letter also informed White of his right to
a final appeal within 180 days. White again requested
additional time to appeal, but never filed additional medical
evidence in support of his claim. On April 16, 2004, as part of
the final appeal, Broadspire employed another peer reviewer, Dr.
Robert Ennis, to examine all of White’s medical documentation.
Dr. Ennis concluded “the claimant’s medical records do not
7
support a functional impairment that would prevent him from
working between 11/13/03 and the present time.” (J.A. at 623.)
Finally, Broadspire submitted White’s file to the Medical
Review Institute of America (MRIoA) for independent review. In
its May 12, 2004 report, the MRIoA concluded that “[a] review of
the records does not support the patient’s claim of disability.
He has continuing complaints of back pain, but multiple physical
exams have shown limited objective findings. . . . Most
importantly, the FCE – the best test of his functional abilities
– demonstrates that he is capable of performing his regular
work.” (J.A. at 512.)
Eaton issued White a final determination letter on June 3,
2004, upholding Broadspire’s denial of benefits for White
effective November 13, 2003. The determination letter stated
its conclusion as follows:
The objective findings described in the medical
records, functional capacity evaluation, peer reviews
and the independent medical reviews do not support a
finding of ongoing disability which would prevent Mr.
White from performing the essential duties of his
regular position as a machinist as of November 13,
2003. In addition, each medical reviewer of Mr.
White’s information concluded that the objective
information did not support a finding that Mr. White
was unable to perform the essential duties of his job.
The functional capacity evaluation performed on
October 30, 2003, specifically concluded that
“physical abilities do match the job description of
machinist.”
8
(J.A. at 509.) White responded by filing a civil action, under
the Employee Retirement Income Security Act (“ERISA”), 29
U.S.C.A. § 1132(a)(1)(B) (West 1999), on June 10, 2004 in the
United States District Court for the District of South Carolina.
On September 4, 2007, the district court entered an opinion and
order, granting summary judgment in favor of White. The
district court determined that Eaton abused its discretion by
relying on the FCE, which the district court claimed suffered
from an “internal contradiction.” (J.A. at 721.) The district
court was also troubled by Eaton’s treatment of White’s MRI – it
noted that “[d]efendants’ rejection of the findings of the
abnormalities observed above, without any explanation as to why
they were doing so, was not the result of a deliberate and
principled reasoning process.” (J.A. at 724.) Consequently, the
district court ordered Eaton to pay White STD benefits from
November 13, 2003 onward. (J.A. at 705.)
II.
A.
We review a district court’s decision to grant summary
judgment de novo, and we employ the same legal standards applied
by the district court. Elliot v. Sara Lee Corp., 190 F.3d 601,
605 (4th Cir. 1999). When, as in this case, an ERISA benefit
plan vests discretionary authority to make benefits eligibility
9
determinations with the plan administrator, a reviewing court
evaluates a denial of benefits under an abuse of discretion
standard. 1 Ellis v. Metropolitan Life Ins. Co., 126 F.3d 228,
232 (4th Cir. 1997). Under this standard, an administrator’s
decision “will not be disturbed if it is reasonable,” even if we
“would have come to a different conclusion independently.” Id.To be reasonable, the decision must be “the result of a
deliberate principled reasoning process” and be “supported by
substantial evidence.” Brogan v. Holland, 105 F.3d 158, 161
(4th Cir. 1997) (internal quotation marks omitted). This
reasonableness inquiry is guided by eight non-exclusive factors:
(1) the language of the plan; (2) the purposes and
goals of the plan; (3) the adequacy of the materials
considered to make the decision and the degree to
which they support it; (4) whether the fiduciary's
interpretation was consistent with other provisions in
the plan and with earlier interpretations of the plan;
(5) whether the decisionmaking process was reasoned
and principled; (6) whether the decision was
consistent with the procedural and substantive
requirements of ERISA; (7) any external standard
relevant to the exercise of discretion; and (8) the
fiduciary’s motives and any conflict of interest it
may have. 2
1
The Plan provides: “The Plan Administrator shall have
discretionary authority to determine eligibility for benefits
and to construe any and all terms of the Plan, including, but
not limited to, any disputed or doubtful terms.” (J.A. at 496.)
2
We note that a conflict of interest can no longer operate
to reduce the deference given to a fiduciary’s discretionary
decision to deny benefits. See Champion v. Black & Decker
(U.S.) Inc., No. 07-1991, slip op. at 8 (4th Cir. Dec. 19, 2008)
(Continued)
10
Booth v. Walmart Stores, Inc., 201 F.3d 335, 342-43 (4th Cir.
2000). We turn now to the merits of Eaton’s appeal.
B.
In Donovan v. Eaton Corp., 462 F.3d 321 (4th Cir. 2006), we
affirmed a district court’s grant of long-term disability
benefits to another Eaton employee. In that case, as here,
Eaton claimed that there was a lack of objective evidence of
disability and denied benefits. Id. at 324-26. We found that
decision unreasonable, however, because of Eaton’s “wholesale
disregard” of evidence supporting the employee’s claim. Id. at
329. Specifically, Eaton focused on a statement by the
employee’s doctor that suggested she was still capable of
performing sedentary activities, without addressing a subsequent
statement by the same doctor in which the doctor determined that
the employee was totally disabled. Id. We also observed that
Eaton’s in-house peer reviewers ignored evidence favorable to
Donovan’s claim, including Donovan’s own statements regarding
her pain levels and ability to engage in everyday activities.
Id. at 327.
(addressing the impact of Metropolitan Life Ins. Co. v. Glenn,
128 S. Ct. 2343 (2008), on our standard of review when a
conflict of interest exists). When there is a conflict of
interest, we must apply the abuse of discretion standard and
treat the conflict of interest as only one factor among the
several that we examine in a reasonableness determination. Id.11
We believe that this case is substantially similar to
Donovan. In both cases, Eaton has either failed to elaborate
on, or outright ignored, evidence favorable to the claimant.
These deficiencies in the Plan’s decision-making process are
reflected especially in its treatment of White’s FCE, its
failure to address conflicting explanations of White’s job
requirements, and its failure to adequately address medical
evidence supporting White’s claims. We address each of these
shortcomings below.
First, the Plan relied heavily on White’s FCE in making its
determination that White was capable of performing his job
requirements. In the final determination letter provided to
White, Eaton specifically referenced the FCE:
The functional capacity evaluation performed on
October 30, 2003 specifically concluded that “physical
abilities do match the job description of a machinist.
Therefore, the evaluee has demonstrated the ability to
physically return without modifications.” The
conclusions of the functional capacity evaluation were
based on the results of objective, physical tests.
(J.A. at 509.) The FCE’s conclusion that White was capable of
meeting the job description of a machinist does not comport with
its actual observations of White’s physical abilities. The FCE
specifically concluded that White could not fulfill his job’s
walking requirements, and the FCE’s subsequent determination
that White could fulfill the requirements of his job is
12
irreconcilable with this observation. The Plan made no mention
of this fact in its final determination.
The Plan’s failure to account for the internal
inconsistencies in the FCE is especially problematic due to the
reliance placed on the FCE by the medical reviewers who
evaluated White’s claim. The in-house peer reviews by Dr.
Goldman and Dr. Ennis both referenced the FCE’s conclusions
regarding White’s ability to return to work. In his review,
Dr. Goldman remarked:
The result of [the FCE] suggested that the claimant
gave a reliable effort. His functional abilities
demonstrated that his abilities met specific job
demands in the following categories: High lift, mid
lift, low lift, carry up to 20 pounds, push cart up to
40 pounds, pull cart up to 40 pounds and standing. . .
. The conclusion was that his physical abilities did
match the job description of a machinist; therefore
the claimant had demonstrated the physical ability to
return without modifications. 3
(J.A. at 612.) Dr. Ennis remarked that the FCE “indicate[d]
that the claimant was able to perform work activities, which
were consistent with his job description as a machinist . . .”
(J.A. at 623.) Finally, the opinion provided by the independent
medical reviewer appears to have given the FCE great weight. It
explained: “Most importantly, the FCE – the best test of his
3
We note that Dr. Goldman did not mention that the FCE
demonstrated that White’s abilities did not meet the specific
job demands in the walking category.
13
functional abilities – demonstrates that he is capable of
performing his regular work.” (J.A. at 512.) None of these
doctors noted the discrepancies in the FCE or suggested that
such discrepancies were accounted for in how they incorporated
the FCE into their ultimate conclusions. And, there is no
indication that the Plan considered the reviewers’ failure to
account for the inconsistencies in the FCE when the Plan relied
on the reviewers’ conclusions in denying White’s claim.
Second, Eaton’s final determination also failed to address
conflicting explanations of White’s job requirements. White’s
FCE showed that White was capable of lifting one to ten pounds
constantly, eleven to twenty-five pounds frequently, and twenty-
one to fifty pounds occasionally. A worksheet completed by
Eaton’s human resources department stated that White’s job
required that he lift up to 100 pounds. But, on November 6,
2003 – less than one week after White’s FCE limited his lifting
ability to fifty pounds or less – Eaton’s human resources
department sent an e-mail clarifying that White “in reality”
never lifted more than fifty pounds. (J.A. at 553.) The e-mail
was sent by Susan Watts, the same Eaton employee who signed off
on the original worksheet indicating that White did in fact have
to lift more than fifty pounds. The final determination recites
these different descriptions of White’s lifting requirements,
14
but fails to acknowledge the clear inconsistency between the
two.
The final determination also failed to even mention White’s
affidavit, which described his job duties. Specifically, White
averred:
As a machinist and production worker I was required to
set up wheel changes on machine production runs. My
job entailed was that I was required to lift the
wheels which weighed up to 100 lbs. with a crane which
meant I had to climb into the machine, hook the wheel
up to the crane, and operate the crane to pull the
wheels out. I was also required to climb up onto
tables which were approximately four and a half (4
1/2) feet tall. I was also required to climb onto
machines that were approximately five (5) feet tall in
order to get into the machine to change the wheels. I
was also required to run a machine which required that
I load the feeder then once the parts move through the
machine they were then placed in a bin at the end of
the machine. I was then required to lift that bin and
place the parts in a drier. Once the parts were dried
I had to remove them from the drier and put them in a
bin and move the parts to the next part of production.
In that job I was required to lift from 50 to 100 lbs.
and sometimes over 100 lbs.
(J.A. at 564-65.) The affidavit testimony and the human
resources worksheet are consistent and clear: White did have to
lift over 50 lbs. as part of his job. Yet, the final
determination letter did not mention the affidavit or address
its impact on the Plan’s decision to credit the November 6 e-
mail as the authoritative description of White’s lifting duties.
The Plan’s failure to explain why it credited the November 6 e-
mail instead of the original worksheet is a glaring omission
15
considering that, based on his FCE, White would be able to meet
one of these sets of lifting requirements, but not the other.
Third, the Plan’s final determination letter failed
adequately to address medical evidence in White’s favor. First,
the final determination contained absolutely no discussion of
the fact that White had undergone serious back surgery in 2002.
Cf. Evans v. Eaton Corp., 514 F.3d 315, 323 (4th Cir. 2008) (no
abuse of discretion in a case where Eaton’s reports used a
“measured tone, which acknowledges Evans’s serious medical
problems without a hint of dismissiveness”). It also credited
the independent reviewer’s opinion that White’s MRI findings are
“unimpressive,” despite the fact that the MRI clearly evidenced
abnormalities, including “degeneration,” a “very small left
posterolateral disc protrusion with no nerve root impingement”
of the L4-5, and an “asymmetric left posterolateral disc bulge
or broad-based disc protrusion” of the L5-S1. (J.A. at 604.)
Finally, and significantly, the Plan discounted the affidavit of
Dr. Kopera. It concluded that “the Affidavit . . . did not
provide any objective findings of disability.” (J.A. at 509.)
Dr. Kopera’s affidavit, however, included his diagnosis that
White “suffers from a number of back problems including
degenerative disc disease, left lumbar radiculopathy, and severe
and chronic back pain.” (J.A. at 569.) He also provided a
rundown of White’s numerous prescription drug medications.
16
Eaton’s dismissal of Dr. Kopera’s affidavit cannot be reconciled
with the Plan’s own medical information requirements. Medical
diagnoses and medications are objective findings under the terms
of the Plan. 4
C.
In sum, the Plan failed to address evidence favorable to
White “thoughtfully and at length.” Evans, 514 F.3d at 326.
It relied on a fundamentally flawed FCE, based its determination
on a description of White’s lifting duties that was contradicted
by evidence in the record and disregarded medical evidence
favorable to White, even though the evidence met the Plan’s own
definition of “objective findings.” Eaton’s failure to
seriously engage in a discussion of White’s favorable evidence
suggests that, as in Donovan, Eaton abused its discretion by
denying White benefits. See Donovan, 462 F.3d at 329 (finding
an abuse of discretion where there was a “wholesale disregard”
of evidence in the claimant’s favor); Glenn v. Metropolitan Life
Ins. Co., 461 F.3d 660, 672 (6th Cir. 2006) (finding an abuse of
discretion in a case where the administrator “offered no
4
The plan lists the following as examples of objective
findings: “physical examination findings (functional
impairments/capacity); diagnostic test results/imaging studies;
diagnosis; X-ray results; observation of anatomical,
physiological or psychological abnormalities; and medications
and/or treatment plan.” (J.A. at 488.)
17
explanation for its resolution of [an inconsistency in the
evidence] or, for that matter, whether it was given any
consideration at all”), aff’d, 128 S. Ct. 2343 (2008). 5
III.
For the above reasons, the district court’s decision
finding an abuse of discretion by Eaton and granting White
benefits is hereby
AFFIRMED.
5
We also note that the final Booth factor – the existence
of a conflict of interest – weighs in White’s favor because
Eaton both funds and administers the Plan. See Booth v. Walmart
Stores, Inc., 201 F.3d 335, 343 (4th Cir. 2000). “In such a
circumstance, ‘every dollar provided in benefits is a dollar
spent by . . . the employer; and every dollar saved . . . is a
dollar in [the employer’s] pocket’.” Glenn, 128 S. Ct. at 2348(quoting Bruch v. Firestone Tire & Rubber Co., 828 F.2d 134, 144
(3d Cir. 1987)). Thus, Eaton was operating under a conflict of
interest when it denied White’s benefits claim.
A conflict of interest “should prove more important
(perhaps of great importance) where circumstances suggest a
higher likelihood that it affected the benefits decision,
including, but not limited to, cases where an . . .
administrator has a history of biased claims administration.”
Glenn, 128 S. Ct. at 2351. White argues that Eaton has shown a
history of biased claims administration and that Eaton’s
conflict of interest should therefore weigh heavily in our
balancing of the Booth factors. Because we do not consider
Eaton’s conflict of interest central to our conclusion that it
abused its discretion in denying White’s benefits, we decline to
address how much importance to give the conflict in this case.
18