Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_06-cv-00117/USCOURTS-caed-2_06-cv-00117-2/pdf.json

Nature of Suit Code: 791
Nature of Suit: Employee Retirement Income Security Act (ERISA)
Cause of Action: 42:1983 Civil Rights Act

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28 This matter was determined to be suitable for decision without *

oral argument. L.R. 78-230(h).

1

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF CALIFORNIA

 )

)

)

SUSAN SCHOFIELD, )

) 2:06-cv-117-GEB-GGH

Plaintiff, )

)

v. ) ORDER*

)

METROPOLITAN LIFE INSURANCE )

COMPANY; KAISER FOUNDATION HEALTH )

PLAN, INC.; and KAISER PERMANENTE )

FLEXIBLE BENEFITS PLAN, )

)

Defendants. )

)

Pending are cross motions for summary judgment.

BACKGROUND

Plaintiff worked as a Certified Registered Nurse

Anaesthetist (“CRNA”) at Kaiser for 22 years. (Pl.’s Statement of

Undisputed Facts (“Pl.’s SUF”) ¶ 1.) In 1999, Plaintiff began seeking

treatment for fibromyalgia and pain. (Id. ¶¶ 14, 22.) Plaintiff’s

physician, Dr. Heykes, diagnosed her with “fibromyalgia [and] some

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degree of depression and chronic fatigue.” (Admin. R. 342.) 

Plaintiff began Ibuprofen treatment for the pain and Dr. Heykes noted

it “did a fairly good job on pain control.” (Id. at 127.) Dr. Heykes

also “recommended a regular exercise program with Motrin and

antidepressant medication.” (Id. at 128.) 

Plaintiff is covered by a Long Term Disability Plan (“Plan”)

whereby participants are entitled to benefits if they become disabled. 

(Defs.’ Statement of Undisputed Facts (“Defs.’ SUF”) ¶ 2.) The Plan

grants Defendant Metropolitan Life full discretion to interpret the

terms of the Plan, construe Plan documents, and determine eligibility

for Plan benefits in accordance with the terms of the Plan. (Id.

¶¶ 5, 6; Pl.’s SUF ¶ 35.) 

Plaintiff began short term disability leave on March 24,

2001. (Pl.’s SUF ¶ 3.) Dr. Heykes completed a Disability Status Form

extending Plaintiff’s request for disability leave in September

of 2001. (Admin. R. at 342.) At that time, he only recommended

Plaintiff be absent from work for the remainder of the month. (Id.)

Dr. Heykes had not seen Plaintiff since May 2001. (Id.) 

Nevertheless, on September 6, 2001, Plaintiff filed a claim for long

term disability benefits under the Plan. (Defs.’ SUF ¶ 12; Pl.’s SUF

¶ 21.) 

Subsequently, Defendants had two independent reviews

performed of Plaintiff’s medical file. (Id. at 284.) Dr. Smith, one

of the independent reviewers, noted “the medical records support the

above diagnoses [of fibromyalgia, chronic fatigue, and depression],”

but concluded Plaintiff was “able to work within the restrictions

outlined.” (Id. at 128-129.) Dr. Moyer, the other independent

reviewer, noted there was nothing in the record that “would preclude a

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28 The standards applicable to motions for summary judgment are 1

well known and need not be repeated here.

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return to [Plaintiff’s] regular occupation.” (Id. at 284.) On

January 14, 2002, Defendants denied Plaintiff’s claim for benefits. 

(Pl.’s SUF ¶ 47.) Plaintiff filed an appeal and on April 18, 2002,

Defendants sent a final denial letter to Plaintiff. (Id. ¶¶ 64, 88.) 

DISCUSSION

I. Summary Judgment Motion1

A. Standard of Review

Plaintiff argues Defendants’ denial of benefits should be

reviewed de novo because Defendants have a conflict of interest. 

(Pl.’s Reply at 13.) Defendants rejoin the decision must be reviewed

for an abuse of discretion because the Plan provides Defendants “sole

and full discretionary authority.” (Defs.’ Opp’n at 4.)

When an insurer “acts as both the plan administrator and the

funding source for benefits [it] operates under what may be termed a

structural conflict of interest.” Abatie v. Alta Health & Life Ins.

Co., 458 F.3d 955, 965 (9th Cir. 2006). However, when “the plan does

confer discretionary authority . . . then the standard of review

shifts to abuse of discretion.” Id. at 963 (emphasis in original). 

Although the parties agree there is a structural conflict of interest,

that alone does not require a de novo review of Defendants’ decision. 

Id. at 967. 

Both parties agree the Plan specifies the “Plan

administrator and other Plan fiduciaries” have “discretionary

authority to interpret the terms of the Plan and to determine

eligibility for and eligibility to Plan benefits in accordance with

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It is unclear what “SPD” refers to. Plaintiff’s cite to the 2

Administrative Record leads to a document entitled “Benefits By Design.”

(Admin. R. at 605-661.)

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the terms of the Plan.” (Pl.’s SUF ¶ 35; Defs.’ SUF ¶ 5.) However,

Plaintiff contends a genuine issue of material fact exists concerning

whether “the reservation in the MetLife Policy and Plan document

controls here versus the SPD, which has no such reservation.” (Pl.’s 2

Opp’n at 11.) Plaintiff argues she was given a copy of the SPD but

not the Plan, and therefore, the terms of the Plan do not control. 

(Id.) However, the SPD specifically states in the introduction that

“[i]n case of any omission or conflict between what is written in this

book and in the [P]lan documents, insurance contracts, and service

agreements, the [P]lan documents, contract or agreement always

govern.” (Admin. R. 607.) Therefore, the terms of the Plan are

controlling. Since Plaintiff does not dispute that the Plan

unambiguously reserves full discretion for the Plan administrator, the

applicable standard of review is abuse of discretion.

i. Effect of Structural Conflict of Interest

Plaintiff argues very little weight should be given to

Defendants’ determination that Plaintiff was not entitled to benefits

under the Plan because of the structural conflict of interest. (Pl.’s

Reply at 16.) Defendants contend “the Court should afford a high

degree of deference” to the determination. (Defs.’ Mot. for Summ. J.

(“Defs.’ Mot.”) at 15.) 

Abatie discussed the level of deference that should be

accorded the Plan administrator’s decision:

A district court, when faced with all the facts

and circumstances, must decide in each case how

much or how little to credit the plan

administrator’s reasons for denying insurance

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coverage . . . . The level of skepticism with

which a court views a conflicted administrator’s

decision may be low if a structural conflict of

interest is unaccompanied, for example, by any

evidence of malice, of self-dealing, or of a

parsimonious claims-granting history. A court may

weigh a conflict more heavily if, for example, the

administrator provides inconsistent reasons for

denial, fails adequately to investigate a claim or

ask the plaintiff for necessary evidence, fails to

credit a claimant’s reliable evidence, or has

repeatedly denied benefits to deserving

participants by interpreting plan terms

incorrectly or by making decisions against the

weight of evidence in the record.

Abatie, 458 F.3d at 968-969. 

Plaintiff produced no evidence of malice, self-dealing,

inconsistent reasons for denial, or a parsimonious claims-granting

history by Defendants. Plaintiff asserts Defendants failed to

adequately investigate her claim because Defendants “took 44 days to

order any of [Plaintiff’s] medical records, and then only ordered and

obtained 9 illegible pages of [Plaintiff’s] large chart” and “made

only one attempt to call [Plaintiff’s] Kaiser PCP, and never called

back.” (Pl.’s Mot. for Summ. J. (“Pl.’s Mot.”) at 5.) However,

Defendants requested complete medical records from Plaintiff’s

treating physician and reviewed all documentation Plaintiff submitted

for her claim. (Admin. R. 117, 119, 122.) In addition, the Plan

specifies it is the employee’s burden to submit “Proof of Disability”

along with a claim for benefits. (Id. at 69.) Since Plaintiff was

required to submit proof of her disability and Defendants attempted to

obtain Plaintiff’s complete medical history, Plaintiff has not shown

that Defendants failed to adequately investigate her claim. See

Bratton v. Metropolitan Life Ins. Co., 439 F. Supp. 2d 1039, 1047

(C.D. Cal. 2006) (stating it is the plaintiff’s burden to “come

forward with material, probative evidence” defendants’ breached a

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fiduciary obligation in order to alter the deference afforded

defendants’ decision).

Nor has Plaintiff shown that Defendants failed to credit

Plaintiff’s reliable evidence. Both independent reviewers concluded,

based on a review of Plaintiff’s medical records, that Plaintiff’s 

“medical records support the above diagnoses as well as the major

depression.” (Id. at 128.) Therefore, Plaintiff has not shown

Defendants’ failed to credit Plaintiff’s reliable evidence.

Plaintiff has failed to present evidence that Defendants’

decision should not be given a high degree of deference. Defendants’

decision will be reviewed for an abuse of discretion.

ii. Procedural Violations

Plaintiff contends the standard of review should shift to de

novo because of Defendants’ “flagrant violations” including

Defendants’ failure to apply the “80% of earnings test” required under

the Plan. (Pl.’s Reply at 14.) Defendants do not assert they applied

the “80% of earnings test.” 

Abatie explained that when “an administrator engages in

wholesale and flagrant violations of the procedural requirements of

ERISA . . . we review de novo the administrator’s decision to deny

benefits.” 458 F.3d at 971. Plaintiff argues that failing to apply

the “80% of earnings” test rises to the level of a wholesale and

flagrant violation. (Pl.’s Reply at 14.) However, since Defendants

determined Plaintiff could continue working at her prior job at

Kaiser, there was no need for Defendants to determine whether

Plaintiff could make more than 80% of her previous salary. Under

Defendants’ determination, Plaintiff could make 100% of her previous

salary because she would be performing the exact job she had before

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submitting her claim for benefits. Therefore, Defendants’ failure to

apply the “80% of earnings” test was not a flagrant violation of

procedural requirements that would justify a de novo standard of

review.

B. Reviewing Defendants’ Determination

i. Medical Reports

Plaintiff argues the reports of Defendants’ independent

reviewers should not be considered for this motion because they

constitute hearsay. (Pl.’s Opp’n at 9.) Defendants rejoin the

reports are part of the administrative record and therefore, were

“properly considered by [Defendants] in making its determination, and

are properly considered by this Court in determining whether the

denial of Plan benefits was arbitrary and capricious.” (Defs.’ Reply

at 6.) 

When a district court reviews a plan administrator’s

decision for abuse of discretion, the court’s decision “must rest on

the administrative record.” Abatie, 458 F.3d at 970; see also Urbania

v. Cent. States, Se. & Sw. Areas Pension Fund, 421 F.3d 580, 586 (7th

Cir. 2005) (noting that “[d]eferential review of an administrative

decision means review on the administrative record” (internal

quotation marks omitted); Kosiba v. Merck & Co., 384 F.3d 58, 67 n.5

(3rd Cir. 2004) (noting that, “in general, the record for

arbitrary-and-capricious review of ERISA benefits denial is the record

made before the plan administrator”); Zervos v. Verizon N.Y.,

Inc., 252 F.3d 163, 173 (2d Cir. 2001) (noting that when review is for

abuse of discretion, the record consists of the administrative

record). Since the medical reports are part of the administrative

record, they are considered.

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ii. Defendants’ Conclusion

Plaintiff argues Defendants’ decision to deny benefits was

an abuse of discretion. (Pl.’s Reply at 17.) Defendants rejoin it

was not an abuse of discretion to credit the opinions of the two

independent reviewing physicians. (Defs.’ Reply at 6.)

Plaintiff’s supervisor at Kaiser filled out a Supervisor

Statement describing the specific activities required of Plaintiff as

a CRNA at Kaiser. (Admin. R. 340.) Based on this description of

Plaintiff’s job, Dr. Smith concluded Plaintiff was “able to work

within the restrictions outlined.” (Id. at 129.) In addition, Dr.

Moyer concluded the medical records did not reflect a disability that

would “prevent her from returning to her previous occupation.” (Id.

at 284.) Based on the analysis of the independent reviewers,

Defendants concluded that despite the diagnosis of fatigue and

fibromyalgia, “the records did not document disabling pain” and

therefore, “[t]he file did not contain medical evidence to support the

presence of limitations of such severity that they precluded

[Plaintiff] from performing the duties [of] her Own Occupation.” (Id.

at 124-125, 134.) 

Defendants were faced with conflicting determinations about

Plaintiff’s ability to return to her job at Kaiser. Plaintiff has not

shown it was an abuse of discretion for Defendants to credit the

conclusion of the two independent medical reviewers. 

/////

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CONCLUSION

Defendants’ motion for summary judgment on all claims is

granted. Plaintiff’s motion is denied. The clerk is directed to

enter judgment for Defendants.

IT IS SO ORDERED.

Dated: November 17, 2006

 

GARLAND E. BURRELL, JR.

United States District Judge

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