As a participant in Sears Long-Term Disability Plan, Frank Blankenship’s problems began when he suffered a heart attack in August 2003. The Plan administrator, Metropolitan Life Insurance Company (MetLife) initially approved Blankenship’s application for short-term disability but denied his application for long-term disability benefits five months later in January 2004.
Several months later, MetLife changed its decision and began paying long-term disability benefits, including retroactive payments for the months between when his short-term disability expired and his long-term benefits would have begun. Blankenship applied for Social Security disability benefits as the Plan required. When Social Security failed to find him disabled, MetLife also determined that it no longer needed to pay long-term disability benefits.
The disability insurance company reversed its denial yet again after Blankenship became disabled from a knee injury. These benefits continued until the “own occupation” phase of the disability Plan ended. Then MetLife terminated Blankenship’s benefits for a third time. The insurance company produced a vocational rehabilitation assessment that totally ignored Blankenship’s continued heart concerns and only accounted for the limitations imposed by his knees. Using this assessment MetLife informed Blankenship that he was not disabled under the “any occupation” clause of the policy.
Then Social Security changed its decision in July 2007. By this time, Blankenship had exhausted all his appeals with MetLife and had only one option left – take his claim to Court or lose his rights to benefits under the MetLife administered long-term disability insurance plan. He hired an experienced disability attorney who was well versed in ERISA litigation and filed suit in Alabama federal court.
For further history of this case please see our prior article: MetLife denies long term disability benefits to sears store manager with heart disease and knee problems.
Disability attorney turns down offer to conduct discovery.
The Judge originally slated to hear this case in Alabama’s Northern District was recused from the case – another way of saying his refusal to allow Blankenship’s attorney to conduct discovery into the issue of conflict of interest after the ruling in Metlife v. Glenn made him unfit to hear the case. The case was reassigned to Judge William M. Acker, Jr. This new Judge then offered the disability attorney the right to request discovery again. As an alternative, the judge offered to send his claim back to MetLife for reconsideration now that Social Security had reversed its decision.
Blankenship’s disability attorney denied both offers. Judge Acker expressed relief that the Court would only have to look at the evidence in the administrative record to determine if MetLife’s conflict of interest as administrator and funder of the plan was significant enough to impact the decision it made regarding Blankenship’s eligibility for benefits. At the same time, the Supreme Court decision rendered in Glenn involved this same disability insurance company on similar charges. This meant that the rule that “a reviewing court should consider that conflict as a factor in determining whether the plan administrator has abused its discretion in denying benefits; and that the significance of the factor will depend on the circumstances of the particular case” was especially valid for Blankenship’s lawsuit.
Court seeks to follow careful path in determining effect of MetLife’s conflict of interest.
Judge Acker set out to consider “the circumstances in Blankenship’s particular case.” Blankenship’s claim was not “light-as-a-feather.” It involved over $510,000 in back benefits plus potential future benefits. The Court looked to see if MetLife had presented any evidence to prove that it had taken measures to prevent or mitigate any effect the prospect of paying out such a large sum of money might have had upon MetLife’s decision to terminate Blankenship’s long-term disability benefits.
Despite the fact that many Courts had disagreed with the reasonableness of previous MetLife determinations, Judge Acker was determined to examine the evidence “thoroughly and dispassionately.” In order to be as objective as possible, he examined the entire administrative record. The first clue into whether MetLife’s conflict of interest had tainted its decision appeared in the December 22, 2004 denial letter – the Plan did not require “objective evidence” yet MetLife denied Blankenship’s application for long-term disability benefits because it lacked “objective medical (evidence) on file to support” his disability. The Court found that this revealed MetLife’s mindset.
MetLife’s denial offers first hint of conflict of interest.
Unfortunately, this assertion was inaccurate. Two reports had been filed by two separate treating physicians providing a valid reason for Blankenship’s inability to return to work – this debilitating cardiac condition and the fact that stress exacerbated his symptoms.
Judge Acker found it also interesting that MetLife reminded Blankenship of his need to apply for SSDI or it would reduce his benefits by an estimated amount. Then after his initial application was denied, MetLife terminated his benefits. Now that Blankenship was seeking the benefits MetLife had denied him, MetLife wanted to benefit from Social Security’s changed position and recover an overpayment of benefits.
Court finds paper reviews inadequate against three attending physician reports of disability.
Judge Acker found additional evidence to support a finding that MetLife abused its discretion. MetLife’s independent reviews had all been file or “paper” reviews. Each doctor was paid by MetLife to conduct the review, something that could clearly predispose the physicians to lean toward an insurance company friendly reading of the records.
Blankenship’s disability attorney had waived the right to explore how frequently MetLife used these physicians. Judge Acker seriously doubted that they were as completely unbiased as MetLife wanted him to think they were. Judge Acker seriously questioned the reliability of paper reviews when they presented opinions that were in direct opposition to three different attending physicians who had examined Blankenship.
Court finds failure to provide full information to vocational consultant suspicious.
Judge Acker also found strong evidence of a structural conflict of interest having an adverse influence on the MetLife claims review process. The disability insurance plan asked its vocational rehabilitation consultant to prepare a report on what jobs Blankenship would be able to perform, but only informed her of Blankenship’s knee problems. It completely left out any records of his heart condition. Then when the disability insurance plan sent Blankenship’s file to a cardiologist on its payroll, it did not ask the cardiologist to evaluate his treating physician’s primary reason for supporting his inability to return to work – the stress connection to his chest pains.
MetLife argued before the Court that it used the vocational report because Blankenship “had recovered from his cardiac condition,” so they didn’t need to give the consultant instructions to consider limitations that might arise from a cardiac condition. Yet, the fact that MetLife subsequently submitted Blankenship’s file to a cardiologist, suggested that the insurance company either realized that it should evaluate Blankenship’s condition or it was not conducting a sincere investigation. Neither, option looked good to the Court.
The Court found that MetLife had consistently steered its “independent” consultants away from the central medical issue – Blankenship’s heart condition. “Misdirecting the physicians upon whose opinions MetLife based its denial is the very definition of ‘arbitrary’,” according to Judge Acker.
Judge Acker found that the administrative record clearly demonstrated that MetLife’s decision to deny Blankenship’s claim for disability benefits was arbitrary and capricious. The Court declared that Blankenship was entitled to full benefits under the Sears Long-Term Disability Plan, less any SSDI payments which he had already received and would receive in the future as stipulated in the Plan.
Hiring an experienced long-term disability attorney paid off. The fact that Judge Acker was also a capable judge with clear insight into how to apply case law also assisted Blankenship in winning his claim. The court was able to see through MetLife’s biased medical reviews and make a finding that MetLife acted arbitrary and capricious in their rulings. It is good to see a Judge that holds MetLife’s feet to the fire and not let them get away with unreasonable disability claims handling practices.