New York court rules that MetLife abused discretion when it denied chronic fatigue claim (Part II)

Metropolitan Life Insurance Company (MetLife) began paying John Magee long-term disability benefits in December 2004 after he was diagnosed with chronic fatigue syndrome and disabling depression. Two years later, after conducting what it claimed was a thorough review, MetLife terminated his benefits because he no longer suffered from disabling depression and had not been able to supply objective proof that MetLife found acceptable and which confirmed his chronic fatigue syndrome. After MetLife denied his appeal on May 7, 2007, Magee had no choice but to take his claim before the U.S. District Court’s Southern District of New York. For a summary of the pre-suit events that led to Magee filing an ERISA disability law suit see MetLife denies chronic fatigue syndrome long term disability claim.

He needed an experienced disability attorney representing him, for MetLife has tremendous financial resources and extensive experience at defending disability claim denials. Because the long-term disability plan that Magee participated in was governed by the Employee Retirement Income Security Act (ERISA), the Court would be looking at MetLife’s denial using an insurance company friendly standard, known as the abuse of discretion standard of review (also known as the arbitrary and capricious standard in some U.S. District Courts.)

This standard of review only asks the Court to weigh the merits of the disability insurance plan administrator’s decision. If the evidence before the Court suggests that the facts would convince a reasonable mind that the information available to the Plan adequately supports the decision reached by the disability insurance plan, then the decision stands. There are several things the Court keeps in mind as it evaluates the administrator’s decision:

  1. Did MetLife consider all the relevant factors connected with Magee’s claim?
  2. Was the conclusion reached by MetLife rational and not arbitrary in light of these relevant factors?
  3. Was the review provided by MetLife full and fair, providing Magee with enough information to prepare an adequate appeal both before MetLife or if necessary before the Courts?

The Court would consider MetLife’s decision using these three questions to guide the review of MetLife’s denial of disability benefits.

Court considers right of MetLife to demand objective proof of disability

First, the Court considered MetLife’s requirement that Magee provide objective proof of his disability. Maniatty v. Unumprovident suggest that it was reasonable for MetLife to ask for objective proof. Yet, Connors v. Conn. Gen. Life Ins. Co. also recognized that “the subjective element of pain is an important factor to be considered in determining disability.” When the diagnosis is chronic fatigue syndrome or fibromyalgia, the Courts have recognized that the symptoms are entirely subjective, posing a unique issue for plan administrators. In Cook v. Liberty Life Assurance Co. of Boston, the Court “recognized that fibromyalgia is a disabling impairment and that there are no objective tests which can conclusively confirm the disease.”

In Williams v. Aetna Life Ins. Co., the Court recognized that there is a distinction “between the amount of fatigue and pain an individual experiences…” The Court recognized that pain “is entirely subjective, and how much an individual’s degree of pain or fatigue limits his functional capabilities, which can be objectively measured.” In Cook v. N.Y. Times Co. Long-Term Disability Plan, the Court determined that it is “”¦ reasonable to insist on some objective measure of a claimants’ capacity to work so long as that measure is appropriate.”

The question then before the Court was whether MetLife’s insistence upon some objective measure of Magee’s capacity to work was appropriate, for it was Magee’s failure to provide “objective evidence” that resulted in MetLife’s decision to terminate his disability benefits. After looking at the record, the Court saw in MetLife’s demand for objective proof circular reasoning. MetLife admitted in the record that there are no tests available to evaluate CFS, yet the disability insurance company refused to continue benefits for lack of testing. The Court found that this suggested a flawed arbitrary and capricious decision.

Court considers MetLife compliance with ERISA regulations

ERISA required MetLife to clearly state what information it was seeking and to tell Magee what criteria it was applying to that information. Yet, MetLife’s letters were ambiguous. MetLife told Magee that his file “lacked medical evidence of clinical findings that supported a severity of impairment that resulted in functional limitations.” Yet, nowhere did MetLife indicate what it considered “medical evidence of clinical findings.” Even if Magee had produced this “evidence”, MetLife failed to state how this evidence would support the severity of his impairment.

MetLife had acknowledged that CFS is a diagnosis of exclusion, then told Magee that he did not meet “the criteria for the syndrome.” Nowhere in the record did MetLife define the criteria its reviewing physicians applied. This inadequate denial letter, further suggested that MetLife’s decision was arbitrary and capricious.

Court considers evidence of CFS disability presented to MetLife

MetLife supported its decision to terminated Magee’s long-term disability benefits based on two independent physician reviews that it ordered. The Court found that the reports prepared by MetLife physicians Payne and Maslow were both seriously flawed. Dr. Payne agreed that Magee’s medical evidence met the criteria for a CFS diagnosis, yet denied that CFS could be the source of his pain. He also failed to consider hypovolumia and orthostatic hypotension reports in Magee’s file.

Likewise, Dr. Maslow’s report reflected a careless evaluation of the medical record. It ignored an MRI and exercise test, without explaining why. It arbitrarily chose to disregard a blood volume test due to a typographical error in which Magee was incorrectly identified as a female instead of a male. He claimed that two orthostatic tolerance tests conducted six days apart were inconsistent with each other, yet when the Court compared them, they were entirely consistent. He claimed that one SF-36 test was inadequate, ignoring that there had been three additional tests in the record spanning three years. He claimed that this one test could not establish CFS, yet Magee had provided no less than six types of tests to establish his disability. Dr. Maslow failed to explain why these additional tests were insufficient standing together to establish Magee’s CFS.

Court considers MetLife’s decision to terminate benefits because depression no longer exists

The record clearly indicated from the beginning that depression had been a secondary symptom. Even MetLife’s own consultant had agreed with this diagnosis. Dr. Maslow’s opinion, offered several years later, was inconsistent with the information provided by both Magee’s psychiatrist, Dr. Tariot, and MetLife’s psychiatrist, Dr. Gosline. Boffonge v. Prudential Ins. Co. of Am. ruled in 2005 that an “administrator’s decision must be reasoned to survive arbitrary and capricious review … and we cannot say that a decision based on multiple pieces of faulty evidence was reasoned.” Both Dr. Payne and Dr. Maslow had failed to consider all the pertinent information available to them, thus their decisions were faulty.

Court considers MetLife’s failure to consider Social Security disability approval

A Social Security disability determination does not bind an ERISA Plan or a district court to reaching the same conclusion. At the same time, the Court is not required to ignore an SSA decision. When a plan administrator, such as Met Life requires a claimant to apply for Social Security disability benefits in order to retain eligibility for benefits, the Court expects the insurance company to have an explanation for ignoring a positive Social Security disability decision.

In Magee’s case, MetLife chose to not consider the successful bid for Social Security disability benefits at all, even though this reduced the Plan’s financial obligations considerably. When MetLife tried to argue that Social Security’s Administrative Law Judge had rejected certain facts, which the disability insurance plan claimed justified ignoring the SSA decision, the Court refused to hear the argument. In Juliano, the Court made it clear that when an ERISA claimant, such as Magee, has been “denied the timely and specific explanation to which the law entitles them”, the Court will not allow the disability insurance plan to sandbag the claimant “by after-the-fact plan interpretations devised for purposes of litigation.” MetLife had failed to explain why it had not considered the Social Security decision proof of Magee’s disability, a fact which further supported the Court’s growing evidence that MetLife’s decision had been arbitrary.

Court considers the merit of the medical evidence

Black and Decker Disability Plan v. Nord clearly establishes the fact that a Plan administrator does not have to explain why it prefers to give credit to reliable evidence when it conflicts with the opinion of a treating physician. Yet, Nord also establishes the Court’s expectation that plan administrators will give credit to reliable evidence produced by a claimant.

MetLife was willing to give credit to some of Dr. Bell’s opinions, yet completely discounted others without explanation. The disability insurance plan used Dr. Bell’s opinion that Magee no longer suffered from depression as the reason they were terminating his benefits, while totally ignoring his expertise in the field of CFS. This, too, suggested that MetLife’s termination of Magee’s disability benefits was arbitrary and capricious.

Court considers MetLife’s multiple failures to prove it made a reasonable decision

The Court weighed six factors:

  1. the objective evidence requirement that could not be met,
  2. the inadequate explanation for why Magee’s benefits were being terminated,
  3. the flawed evidence MetLife relied on to make its decision,
  4. the failure to consider the objective evidence Magee did provide,
  5. MetLife’s failure to consider Social Security’s disability decision finding Magee disabled, and
  6. the inconsistent way in which MetLife applied Magee’s treating physicians opinions. The Court found MetLife’s decision was arbitrary and capricious.

Magee’s disability attorney had filed a motion for summary judgment in order to have the benefit denial reversed. The Court agreed that MetLife had acted arbitrary and instructed MetLife to reconsider their denial of LTD benefits. The court did not award disability benefits to Magee and he therefore remains subject to Metlife’s further review of his claim. This is a court victory for Magee, but it is possible that he could end up in court again if Metlife denies his claim again.

Court considers fair remedy for CFS claimant

Miller states that when “a district court concludes that the [Plan Administrator’s] decision was arbitrary and capricious, it must remand to the [Plan Administrator] with instructions to consider additional evidence unless no new evidence could produce a reasonable conclusion permitting a denial of the claim or remand would otherwise be a useless formality.”

Magee’s case was a close one, the Court chose to send Magee’s claim back to MetLife for reconsideration. This was primarily because the Court felt that some of the evidence had never been considered by MetLife. The Court ordered MetLife to handle Magee’s claim as if it were a new claim, seeking information as though it had never made an adverse determination.

The Court also considered whether Magee was entitled to compensation for disability attorney fees. Even though the Court had not chosen to issue summary judgment in Magee’s favor, the Court found that MetLife still had an obligation under ERISA to compensate him for the expenses incurred in bringing his claim before the Court. First, MetLife had denied Magee a full and fair review, leaving him no option but to bring a lawsuit. Second, MetLife’s review process had been flawed, nothing new within this particular U.S. District Court. Third, MetLife had the ability to pay the award of disability attorney fees.

Magee’s disability attorney was instructed to present MetLife with a bill for reasonable attorney’s fees and the costs connected with filing the lawsuit for those branches of Magee’s motions in which he prevailed. If MetLife was unable to reach an agreement with Magee’s disability insurance attorney, the Court ordered him to present sufficient documentation to allow the Court to determine the size of the award.

At the same time, the Court recognized that Magee still owed MetLife $16,831.21 from the Social Security disability retroactive payment received when Magee was found disabled by the SSA. The Court did issue summary judgment for MetLife for its counterclaim for this amount. MetLife will be allowed to subtract this amount from the amount Magee asks for his disability attorney’s fees.

There still remains a chance that John Magee may find himself in Court, yet again, but it would appear that the judge hearing this case, clearly felt that the evidence was so decidedly in Magee’s favor that he could expect MetLife to make the right decision. The decision still remains a victory for sufferers of chronic fatigue syndrome. As this mysterious, yet crippling disease, becomes better understood, disability attorneys will be working hard to see more CFS claimants succeed in securing their long-term disability benefits.

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