Scott Scanlon v. Life Insurance Company of North America

In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 22-1121
SCOTT SCANLON,
Plaintiff-Appellant,
v.
LIFE INSURANCE COMPANY OF NORTH AMERICA,
Defendant-Appellee.
____________________
Appeal from the United States District Court for the
Northern District of Illinois, Eastern Division.
No. 1:20-cv-00744 — Charles R. Norgle, Judge.
____________________
ARGUED NOVEMBER 9, 2022 — AUGUST 31, 2023
____________________
Before ROVNER, JACKSON-AKIWUMI, and LEE, Circuit
Judges.
JACKSON-AKIWUMI, Circuit Judge. Scott Scanlon is a U.S.
Army veteran with a history of chronic pain and sleep disor-
ders. He sought long term disability benefits pursuant to his
employer’s group policy with the Life Insurance Company of
North America (“LINA”). When LINA denied his claim,
Scanlon sought de novo review in the district court under the
Employee Retirement Income Security Act of 1974, 29 U.S.C.
2 No. 22-1121
§ 1132. The district court found Scanlon not entitled to bene-
fits, so Scanlon filed this appeal. We conclude that the district
court clearly erred when it failed to consider Scanlon’s inabil-
ity to sit at his desk for eight hours a day as required by his
occupation and his inability to perform the cognitive require-
ments of his job during regular work hours. The district court
also erred in its treatment of certain medical records Scanlon
provided. We therefore vacate and remand.
I
In October 2017, Scanlon went on temporary leave from
his job as a Windows Systems Administrator at the McKesson
Corporation. He requested certain accommodations to return
to work; McKesson temporarily granted some, but not all, of
them. Scanlon did not return to work. Instead, Scanlon sought
long term disability insurance benefits pursuant to a
McKesson group policy underwritten, insured, and adminis-
tered by LINA.
To meet the definition of “disabled” under the policy, an
employee must be unable to: (1) perform the “material duties”
of the employee’s regular occupation and (2) earn 80% or
more of the employee’s indexed earnings from working in the
employee’s regular occupation. The policy defines “regular
occupation” as “[t]he occupation the Employee routinely per-
forms at the time the Disability begins.” In evaluating a disa-
bility claim, LINA “consider[s] the duties of the occupation as
it is normally performed in the general labor market in the
national economy,” as opposed to the roles and responsibili-
ties of an employee working for a specific employer.
LINA initially denied Scanlon’s request for disability ben-
efits because he did not provide sufficient evidence. It then
No. 22-1121 3
denied two administrative appeals after Scanlon supplied the
requested documentation. In the process, LINA asked two
medical examiners, Drs. Joseph Sentef and Krishna Padiyar,
to review Scanlon’s claims of disability. Both doctors con-
cluded that Scanlon was not entitled to long term disability
benefits.
Scanlon filed a complaint in the district court seeking de
novo review of LINA’s denial of benefits. Scanlon supplied
the court with the evidence presented to LINA during admin-
istrative adjudication, and with supplemental records. The
district court found that Scanlon suffered from myriad
chronic orthopedic and sleep disorders that cause him pain
and impact his daily life. Nevertheless, the court found
Scanlon ineligible for long term disability benefits under
LINA’s policy because Scanlon did not show, by a preponder-
ance of the evidence, that he cannot perform the material du-
ties of his job.
The district court described in detail the medical evidence
provided by Scanlon; we discuss only the evidence relevant
to the arguments the parties make on appeal. Broadly, how-
ever, Scanlon provided extensive medical history records in-
cluding: examination reports and letters from his treating pro-
viders; records from the Department of Veteran Affairs
(“VA”); an August 2018 residual functional capacity evalua-
tion performed by his treating medical provider, Jeffrey John-
son, who is a physician’s assistant working under the super-
vision of Drs. Arpan Patel and Omar Said; and a May 2019
functional capacity evaluation performed by licensed physi-
cal therapist Tarek El-Shikh.
4 No. 22-1121
II
Where the insurance plan administrator—here, LINA—
does not have discretionary authority to decide benefits eligi-
bility, district courts review ERISA plan benefit denials de
novo and independently decide the claimant’s eligibility. In
these cases, “the plaintiff bears the burden of proving not that
the plan administrator erred, but that []he is entitled to the
benefits []he seeks.” Dorris v. Unum Life Ins. Co. of Am., 949
F.3d 297, 299 (7th Cir. 2020). On appeal, we review the district
court’s findings of fact and application of law to those find-
ings for clear error. Marantz v. Permanente Med. Grp., Inc. Long
Term Disability Plan, 687 F.3d 320, 327 (7th Cir. 2012). We will
affirm the district court’s findings of fact if they are plausible
considering the entirety of the record. Dorris, 949 F.3d at 305.
Scanlon argues that the district court erred because it did
not appropriately consider and weigh the medical evidence,
and did not adequately address the nature and material du-
ties of his occupation. Scanlon further asserts that the district
court erroneously accepted Drs. Sentef and Padiyar’s conclu-
sions without question and gave them too much weight. We
agree with Scanlon in part and address his arguments below.
We begin our analysis by identifying Scanlon’s job in the na-
tional economy and describing its requirements—after all,
Scanlon’s eligibility for benefits turns on what his job is and
whether he can do it. We then turn to the district court’s treat-
ment of Scanlon’s functional capacity evaluation, his chronic
sleep disorders, and the other evidence in record in determin-
ing no benefits should issue.
No. 22-1121 5
III
The parties agree that Scanlon’s job as performed in the
national economy is that of a Systems Analyst, a job with both
physical and cognitive demands. The physical requirement
for a Systems Analyst is sedentary work. Such work “involves
sitting most of the time, but may involve walking or standing
for brief periods of time.” Dictionary of Occupational Titles,
Appendix C (4th ed. 1991) [hereinafter DOT, Appendix C]. A
job is sedentary when “standing is required less than or equal
to 1/3 of the work schedule or workday.” Factsheets: Strength
Levels, U.S. BUREAU OF LAB. STAT.,
https://www.bls.gov/ors/factsheet/strength.htm#_edn1 (last
accessed July 17, 2023); see also DOT, Appendix C (“[j]obs are
sedentary if walking and standing are required only occasion-
ally” and occasionally means “up to 1/3 of the time”). For an
eight-hour sedentary workday, this means no more than 2
hours and 40 minutes of standing. Other physical require-
ments for sedentary work include carrying, pushing, or pull-
ing objects, and lifting no more than 10 pounds at a time.
DOT, Appendix C.
Systems Analysts must also perform cognitive tasks.
These include reviewing and analyzing user requirements
and procedures, computer system capabilities, scheduling
limitations, and workflow to automate processing or improve
existing computer systems; studying existing systems to eval-
uate effectiveness; developing new, improved systems; per-
forming systems management and integration functions; up-
grading systems and correcting errors to maintain systems af-
ter implementation; and preparing technical reports, memo-
randa, and instructional manuals. Dictionary of Occupational
Titles 030.167-014. To perform these tasks, Systems Analysts
6 No. 22-1121
must confer with others, identify and troubleshoot problems
in a timely manner, and improve the systems as required. Id.
The district court focused on Scanlon’s ability to perform
the physical aspects of his Systems Analyst job. The court re-
lied in its analysis on Scanlon’s functional capacity evalua-
tion, residual functional capacity evaluation, records and let-
ters from his treating medical providers, records from the VA,
and assessments by LINA’s medical examiners. We see no is-
sue with the district court’s treatment of most of this evidence.
Our concern is primarily with the district court’s analysis of
the functional capacity evaluation, which documented that
Scanlon has physical limitations due to his chronic pain. Re-
call that, eligibility for disability benefits under the policy re-
quires two separate findings: an inability to perform the “ma-
terial duties” of the job and an inability to earn at least 80% of
regular earnings. In its discussion of the functional capacity
evaluation, the district court failed to appropriately consider
Scanlon’s inability to sit for extended periods of time, as re-
quired by his occupation, and did not explain how Scanlon
can earn 80% or more of his regular income.
Scanlon’s functional capacity evaluation was conducted
by El-Shikh, a licensed physical therapist. A “functional ca-
pacity examination consists of a battery of tests to assess a pa-
tient’s current physical and functional abilities and potential
to return to work.” Marantz, 687 F.3d at 331. El-Shikh con-
cluded that Scanlon’s sedentary occupational base is signifi-
cantly eroded because he can only sit 15 minutes and stand 45
minutes at a time; and in total, he can sit up to 2 hours 50
minutes and stand up to 4 hours 22 minutes in a day. Thus,
Scanlon is unable to work full time. El-Shikh also evaluated
Scanlon’s ability to lift (19.5 pounds overhead) and carry (29.5
No. 22-1121 7
pounds) items, his tolerance for static balance, gross coordi-
nation, pinching, and stair climbing (0-33% of the time), and
his tolerance for fine coordination, reaching, bending, grasp-
ing firmly, kneeling repetitively, squatting, and walking (34-
66% of the time).
The primary finding of the functional capacity
evaluation—that Scanlon cannot sit longer than 15 minutes at
a time and no more than approximately 3 hours a day in
total—goes to the heart of whether Scanlon can perform the
material duties of his occupation. But the district court
neglected to consider this information. In the court’s view, the
evaluation proved Scanlon “can perform the active physical
tasks that his sedentary job requires” because “he has a
medium lift capacity and can kneel, squat, climb stairs, walk,
and perform fine-motor tasks.” We agree the evidence
showed Scanlon’s capacity to perform these “active physical
tasks.” But those tasks are unrelated to his ability to sit at a
computer for eight hours a day, one of the main physical
requirements of his job. See Majeski v. Metro. Life Ins. Co., 590
F.3d 478, 483 (7th Cir. 2009) (an evaluation determining the
claimant could perform medium-level work did not address
the “critical qualification that [he] was nevertheless incapable
of typing and sitting”); McFarland v. Gen. Am. Life Ins. Co., 149
F.3d 583, 588 (7th Cir. 1998) (disability insurance coverage
available if claimant can show he is “unable to perform
enough of the tasks or to perform for a long enough period to
continue working at his regular occupation” where the policy
required claimant to show he could no longer perform the
“material and substantial” duties of his occupation). On
remand, the district court must consider Scanlon’s ability to
sit when analyzing the physical demands of his job.
8 No. 22-1121
Scanlon’s inability to sit is also relevant to whether he can
earn at least 80% of his indexed income as a Systems Analyst,
yet the district court’s analysis of this issue is wanting. The
district court found Scanlon could earn 80% or more of his
earnings even with his diminished capacity for sedentary
work. We are puzzled by this conclusion; Scanlon’s ability to
sit does not appear to come close to 80% of his full workday.
The district court observed that Scanlon could perform his job
6.5 hours a day, presumably because El-Shikh concluded
Scanlon could work for 6 hours and 43 minutes if he alternates
sitting with standing. But Scanlon’s job requires sitting and he
cannot do that for longer than 15 minutes at a time and 2
hours and 50 minutes in total in a day. And even if Scanlon
can “do his job for 6.5 hours per day” as the district court
found, we are unsure how the district court calculated
Scanlon’s ability to earn 80% or more of his earnings. The lack
of explanation for this conclusion is error. If the district court
on remand again finds that Scanlon can earn 80% or more of
his regular income, it must explain its reasoning.
LINA, recognizing that Scanlon’s inability to sit may be
enough to demonstrate he cannot perform the material duties
of his job or earn at least 80% of his regular income, posits the
work of a Systems Analyst can be performed without sitting
for prolonged periods of time or at all. It relies on Cheney v.
Standard Insurance Company, where we held that “being una-
ble to perform one task is [not] always sufficient for total dis-
ability, unless that task is essential to performing the job, as in
the case of a shortstop unable to throw or a barber who lost a
hand.” 831 F.3d 445, 452 (7th Cir. 2016). Cheney is inapposite
because LINA does not explain how Scanlon can perform his
job by standing as opposed to sitting when sedentary occupa-
tions like Scanlon’s involve limited amounts of standing (as
No. 22-1121 9
we noted, no more than 2.7 hours of standing in an eight-hour
workday, according to the Department of Labor) and, regard-
less, chronic pain impairs Scanlon’s ability to stand. Contrary
to LINA’s argument, the evidence demonstrates that Scanlon
was required to sit at his computer nearly all day for his sed-
entary job and chronic pain affected his ability to do so.
We turn our attention back to the functional capacity eval-
uation. So far, we have accepted its findings without question,
as the district court did at the outset of its analysis. But courts
are free to weigh the reliability of such evaluations “based on
the individual circumstances of the assessment—for example,
whether the results are consistent or conflicting with other
medical examinations; whether the evaluation took into ac-
count reports of pain during and after testing; and whether
the test assessed ability over time rather than at one particular
moment.” Marantz, 687 F.3d at 332. There are multiple factors
that influence the weight courts must give to functional ca-
pacity evaluations, and our analysis ultimately depends on
the total mix of facts in a particular case. Here, Scanlon’s func-
tional capacity evaluation included an observation that his
pain reports “may be considered unreliable” and may war-
rant further testing. Based on this observation, the district
court found that “multiple tests called the reliability of
[Scanlon’s] pain reports into question.” Scanlon argues the
district court misinterpreted the report because El-Shikh also
determined Scanlon’s pain ratings were reliable 75% of the
time and Scanlon put forth full effort during the evaluation.
We agree with Scanlon that despite expressing some reserva-
tions, El-Shikh ultimately concluded Scanlon’s pain reports
were reliable most of the time. Further, El-Shikh’s evaluation
of Scanlon’s functional limitations was largely supported by
the results of the residual functional capacity evaluation
10 No. 22-1121
performed by Jeffrey Johnson, a physician’s assistant who
treated Scanlon’s chronic pain for several years. The district
court failed to adequately support its finding that the pain re-
ports were not reliable.
The district court also questioned the reliability of the
functional capacity evaluation in part because none of
Scanlon’s treating medical providers “flatly stated that [he] is
unable to perform his regular occupation.” But we have never
required the treating physicians to “flatly” state the claimant’s
disability to find a functional capacity evaluation reliable. The
correct question to ask is “whether the results are consistent
or conflicting with other medical examinations.” Marantz, 687
F.3d at 332. As the district court recognized, Scanlon’s treating
providers consistently reported that he suffered from severe
chronic pain and sleep disorders “that cause him pain and im-
pact his daily life.” That is consistent with El-Shikh’s assess-
ment that Scanlon exhibited pain during the evaluations and
is unable to work full-time. On remand, the district court must
consider the degree to which the opinions of Scanlon’s medi-
cal providers are consistent with the results of the functional
capacity evaluation.
One last note relevant to Scanlon’s chronic pain. The dis-
trict court concluded that Scanlon “has obtained relief
through various treatments like painkillers and steroid injec-
tions.” This was error given that the district court also
acknowledged that Scanlon’s steroid injections, nerve abla-
tions, and physical therapy provided only temporary relief
and did not “eradicate” his pain. Considering the district
court’s own factual finding of “chronic pain caused by ortho-
pedic impairments,” its conclusion that Scanlon received re-
lief from pain is unsupported by the record.
No. 22-1121 11
We next turn to the district court’s treatment of Scanlon’s
chronic sleep disorder evidence. The court described the evi-
dence but did not analyze how the evidence affected
Scanlon’s ability to perform the cognitive requirements of a
Systems Analyst job. The district court acknowledged the
conclusion by clinical psychologist Dr. James Wyatt, Ph.D.,
that Scanlon’s “sleep and pain disorders impacted his cogni-
tion and verbal fluency in conversations.” Dr. Wyatt sup-
ported Scanlon’s request for accommodations at McKesson
and opined that Scanlon required shifted and limited work
hours, plus indirect (email only) communication with col-
leagues for routine matters. The district court also observed
that Dr. Colleen Durkin confirmed Dr. Wyatt’s diagnosis of
multiple chronic sleep disorders and documented that
Scanlon reported impact on his daily functioning, including
communication and cognition. Finally, the district court
noted that Dr. Theresa Clark, who reviewed Scanlon’s medi-
cal and service records for the VA, stated in part that Scanlon
was “very symptomatic from his incompletely treated se-
vere” sleep apnea, with “significant limitations in his daily
functioning due to nonrestorative sleep and excessive fa-
tigue.”
Despite having described all this evidence, the district
court did not consider the effect Scanlon’s chronic sleep dis-
orders had on his ability to perform the cognitive require-
ments of a Systems Analyst job. This was error. Scanlon’s oc-
cupation requires him to confer with others, think critically,
and make decisions in a timely and reliable manner. Yet there
is record evidence that Scanlon suffers cognitive and commu-
nicative impairments due to chronic sleep disorders that af-
fect his ability to perform these duties during regular work
hours. On remand, the district court must specifically address
12 No. 22-1121
Scanlon’s ability to perform the cognitive aspects of his job
with the limitations identified in the record.
To undermine Scanlon’s evidence of chronic sleep issues,
LINA argues Scanlon received accommodations under the
Americans with Disabilities Act from McKesson and that if
we consider these accommodations, Scanlon does not have
cognitive impairments to perform his job. But as the district
court correctly found, the insurance policy makes clear that
we must evaluate Scanlon’s job duties as they are performed
in the national economy—not according to how he personally
could perform them at McKesson with accommodations.
LINA’s argument ignores the clear language of the insurance
policy. And even if we were to consider the accommodations,
we are left with McKesson’s denial of Scanlon’s request “to
work at his own pace when required, as this was deemed a
vague and unreasonable request” because Scanlon’s role was
“often time-sensitive, and timely and efficient responses are
requirements for the role.” McKesson’s justification for deny-
ing Scanlon’s requested accommodation only underscores
Scanlon’s point that he cannot perform the cognitive require-
ments of his job. The district court did not err in its analysis
regarding possible accommodations.
IV
Scanlon criticizes other aspects of the district court’s deci-
sion, but his criticisms are unavailing. For example, he argues
that the district court erred when it afforded little weight to
the VA’s determination that Scanlon is totally and perma-
nently disabled because, in the court’s estimation, the VA’s
conclusion was largely grounded in psychiatric issues. But
the VA’s disability determination clearly places emphasis on
psychiatric conditions, even if it also considers Scanlon’s
No. 22-1121 13
chronic sleep and pain issues as a contributing factor. And
Scanlon did not base his claim with LINA on his psychiatric
medical conditions. There was no error in the district court’s
approach to the VA evidence.
Scanlon also asserts the district court improperly consid-
ered the dates of the functional capacity evaluation and the
VA records when weighing the evidence. But the district
court did not outright dismiss these records for timing rea-
sons; it merely considered their timing as a factor in evaluat-
ing the records. We see no error in the district court’s ap-
proach. The remainder of Scanlon’s arguments, including his
assertion that the district court erroneously accepted Drs.
Sentef and Padiyar’s conclusions without question and gave
them too much weight, similarly invite us to reweigh the evi-
dence, which we cannot do on appeal.
We pause to note that the district judge assigned to this
case has assumed inactive senior status. On remand, the case
will be reassigned to a different judge. Apart from the errors
we have identified in this opinion, the new judge is not bound
to weigh the evidence the same way the original judge did.
V
Scanlon’s pain and chronic sleep disorders affect his daily
life. The district court committed clear error when it failed to
consider Scanlon’s ability to sit at his desk for eight hours a
day and to perform the cognitive requirements of his job dur-
ing regular work hours. The district court also erred when it
found that Scanlon’s pain was relieved and his pain reports
were unreliable, and when it judged the reliability of the func-
tional capacity evaluation based on whether Scanlon’s treat-
ing providers had “flatly” found Scanlon to be disabled. We
14 No. 22-1121
find no error with the remainder of the district court’s analy-
sis. We therefore vacate and remand for further proceedings
consistent with this opinion.
VACATED and REMANDED.