Here, DeLisle offers more than conclusory allegations of bias. Five of the six file reviewers Sun Life relied on were under regular contract with Sun Life. The record reveals that Sun Life’s in-house attorney told at least some of its medical file reviewers that DeLisle was “terminated for cause.” But that is not what Krandall told Sun Life . . .
Sun Life’s attorney’s characterization as “terminated for cause” discounts the possible conclusion that “she was not doing her job” because “sickness or injury” left her unable “to perform [her job’s] substantial and material duties.” Of course, DeLisle’s ability to perform her job was the very question Sun Life wanted the medical file reviewers to answer. Without more, the bald assertion that she was fired “for cause” gave the file reviewers incomplete and potentially prejudicial information, which should have been irrelevant to an impartial assessment of DeLisle’s ability to perform her job on a particular day. . . . These improper communications suggest “procedural unreasonableness” which “justifies the court in giving more weight to the conflict.”
Delisle v. Sun Life Assur. Co., 2009 FED App. 0082P (6th Cir.) (6th Cir. Mich. 2009)
The Sixth Circuit continues to develop an impressive body of law favorable to disability claims as Delisle v. Sun Life aptly demonstrates. This case offered the Court an opportunity to refine two independent trends, both advantageous to ERISA claimants.
First, the Court revisited its recently vindicated analysis of conflicts of interest. Second, it added to the growing body of post-Nord caselaw which weighs the “quantity and quality” of medical opinions and finds the treating physician opinions more reliable.
The disability claimant suffered serious injuries in two automobile accidents.
In 1998, DeLisle was involved in a car crash, suffering head, neck, and back injuries for which she underwent a full anterior spinal fusion. DeLisle was involved in a second car crash in 2000, in which she re-injured her spine and suffered a closed head injury. She continued working after these crashes, under the care of three healthcare providers. They included Dr. Ho, a neurosurgeon, Dr. Rudy, a doctor of osteopathy, and Diane Cushing, a licensed professional counselor who treated DeLisle for “cognitive behavioral therapy.”
DeLisle’s employer terminated her employment in 2002. An issue in the case turned on whether she was terminated because her disability restricted the hours she could work or some other reason. She was approved for SSD benefits in 2003.
SunLife denied DeLisle’s disability claim on the grounds that she was not actively at work at the time the disability arose. The district court found this decision arbitrary and capricous and remanded for further consideration.
The second decision also resulted in benefit denial. This time SunLife concluded that the evidence did not support the disability claim. SunLife’s decision was aided by a battery of 6 consultants, 5 of whom regularly worked for SunLife.
The district court was unimpressed by the panel of experts. It granted DeLisle’s motion for judgment on the administrative record on October 12, 2007 “because Sun Life’s denial of benefits was arbitrary and capricious. “DeLisle v. Sun Life Assurance Co. of Can., 2007 WL 3013075 (E.D. Mich. Oct. 12, 2007). The district court sent DeLisle’s claim back to Sun Life to determine her benefit amount, and it later ordered Sun Life to pay her attorneys’ fees.
Evidence of Bias
On appeal, Sun Life encountered several problems based on evidence of bias in the record. The Court faulted Sun Life’s objectivity for several reasons.
Contract Reviewers And “Improper Communications”
Five of the six file reviewers Sun Life relied on were under regular contract with Sun Life. The Court found this point particularly important in view of what it perceived as a comment on the question given to the reviewers by in house counsel:
The record reveals that Sun Life’s in-house attorney told at least some of its medical file reviewers that DeLisle was “terminated for cause.” But that is not what Krandall told Sun Life–the only information in the record about the reason for DeLisle’s firing is a transcribed telephone message taken by a Sun Life employee which reports that someone from Krandall said DeLisle was fired “because she was not doing her job.” There is no further documentation or explanation from Krandall about the circumstances surrounding the firing. Sun Life’s attorney’s characterization as “terminated for cause” discounts the possible conclusion that “she was not doing her job” because “sickness or injury” left her unable “to perform [her job’s] substantial and material duties.” Of course, DeLisle’s ability to perform her job was the very question Sun Life wanted the medical file reviewers to answer. Without more, the bald assertion that she was fired “for cause” gave the file reviewers incomplete and potentially prejudicial information, which should have been irrelevant to an impartial assessment of DeLisle’s ability to perform her job on a particular day.
Increased Risk Of Bias
The Court found “an increased risk of bias in the medical file review process when a conflicted plan administrator gives information to regular independent contractor-consultants that portrays the claimant in a negative light.” In effect, “[t]hese improper communications suggest “procedural unreasonableness” which “justifies the court in giving more weight to the conflict.” (quoting Met Life v.See Glenn, 128 S. Ct. at 2352.
We thus properly consider evidence of the “incentive” to make a finding of “not disabled” in determining whether Sun Life’s decision was arbitrary and capricious. Kalish, 419 F.3d at 508 (citing Nord, 538 U.S. at 832).
Neglect Of SSD Determination
A Social Security Disability award is not binding upon an ERISA plan. On the other hand, as in Glenn, the Court found the complete neglect of the findings problematic.
Here, the terms of Sun Life’s plan required that DeLisle apply for Social Security Disability benefits and to appeal the denial “to all administrative levels Sun Life deems necessary.” So, she was required, not merely encouraged to apply. Sun Life also received a financial offset from future liability based on DeLisle receiving Social Security Disability benefits. And none of the three denial letters [*11] Sun Life sent DeLisle mentions her Social Security determination as a factor that Sun Life considered in reaching its own determination. Only one of Sun Life’s file reviewers even acknowledged in his report that he was aware of the Social Security determination. Even though Sun Life did not have the opinion accompanying the notice of award, it still was well aware of the uniform federal standard that applies to Social Security claims. Sun Life’s silence here does not make its denial arbitrary per se, but is among those “serious concerns” that, “taken with some degree of conflicting interests,” provide a proper basis for concluding that the administrator abused its discretion. See Glenn, 128 S. Ct. at 2352.
Disregard Of Treating Physicians’ Opinions
This part of the opinion is particularly interesting. Sun Life’s experts ”largely agreed” with the diagnoses, but discounted the effect they had on DeLisle’s ability to work. Their conclusions were based more on inferences as to the implications of the diagnoses.
The Court rejected this approach, stating:
Although Sun Life does not owe special deference to the opinion of DeLisle’s treating physicians, see Black & Decker, 538 U.S. at 834, it may not arbitrarily ignore them. Glenn, 461 F.3d at 671. Notably, Sun Life’s medical professionals found support in DeLisle’s medical records for the disorders described above, but discredited the date of disability on the basis that the records did not demonstrate a change in condition around April 17. None of Sun Life’s reviewers confront Dr. Ho’s characterization of the “progressive nature of her medical conditions,” which would not manifest itself by a “significant change” on a particular date. And, as noted above, it is unclear whether Sun Life’s file reviewers knew of the Social Security determination of total disability, or were unfairly swayed by communications from Sun Life’s in-house attorney.
On this record, we find that the entirety of the medical evidence available to Sun Life was not reviewed in a “deliberate” or “principled” fashion, which is a factor suggesting that Sun Life’s ultimate determination was arbitrary