Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_08-cv-03406/USCOURTS-cand-4_08-cv-03406-7/pdf.json

Nature of Suit Code: 791
Nature of Suit: Employee Retirement Income Security Act (ERISA)
Cause of Action: 29:1132 E.R.I.S.A.: Employee Benefits

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United States District Court

For the Northern District of California

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United States District Court

For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

PATRICIA FORTLAGE,

Plaintiff,

v

HELLER EHRMAN, LLP; HELLER EHRMAN

LONG-TERM DISABILITY PLAN and

UNITED MUTUAL LIFE INSURANCE CO

OF AMERICA,

Defendant.

 /

No C 08-3406 VRW

In the above-captioned ERISA action case for long-term

disability benefits, plaintiff Patricia Fortlage raises several

objections to the magistrate’s report and recommendation of

proposed findings of fact and conclusions of law addressing the

parties’ cross-motions for judgment. Doc ##77, 81. For the

reasons that follow, the court SUSTAINS IN PART plaintiff’s

objections, DECLINES TO RULE on the remainder of plaintiff’s

objections and REMANDS the claim to United Mutual Life Insurance

Company [“UNUM”], real party in interest, for further

consideration.

Case 4:08-cv-03406-SBA Document 85 Filed 04/27/10 Page 1 of 7
United States District Court

For the Northern District of California

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I

Plaintiff contends that she is disabled as a result of

various medical impairments, including ocular myasthenia gravis or

a left cranial nerve palsy (a visual impairment), neurocardiogenic

syncope (a heart condition) and Sjogren’s disease (an autoimmune

disorder). Plaintiff alleges that defendant, the Heller Ehrman

Long-Term Disability Plan, and the administrator of the plan, UNUM,

improperly denied the plaintiff disability benefits. This court

referred the parties’ cross-motions for judgment, Doc ##29 & 38, to

a magistrate for proposed findings of fact and recommendations. 

Doc #72. Pursuant to the court’s referral, the magistrate

conducted a hearing on November 17, 2009, Doc #76, at which

plaintiff clarified that she believed Sjogren’s disease to be the

unifying diagnosis for all of her symptoms, including her alleged

visual and heart problems and fatigue. After considering the

arguments of the parties, and reviewing the parties’ submissions

and all other evidence of record, the magistrate submitted a report

and recommendation that judgment be entered in favor of defendant. 

Doc #77.

II

Pursuant to 28 USC § 636(b)(1)(B), a district judge may

designate a magistrate judge to hear and file a recommendation for

disposition of matters dispositive of a party's claims or defenses,

and a party objecting to the recommendation may file a timely

objection. See Estate of Conners by Meredith v O'Connor, 6 F3d

656, 658 (9th Cir 1993). After receiving the magistrate’s report

Case 4:08-cv-03406-SBA Document 85 Filed 04/27/10 Page 2 of 7
United States District Court

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and recommendation the district judge must make a "de novo

determination of those portions of the report or specified proposed

findings or recommendations to which objection is made" and "may

accept, reject, or modify, in whole or in part, the findings or

recommendations made by the magistrate judge." 28 USC

§ 636(b)(1)(C).

III

Plaintiff makes several objections to Magistrate Judge

Chen’s report and recommendation. Doc #81. The court first

considers plaintiff’s objection to the magistrate’s recommendation

not to remand the matter to UNUM for further consideration.

In his report and recommendation, the magistrate found

that UNUM violated ERISA procedures when it failed to submit a 2008

report by Dr Carteron to UNUM’s medical department for review. Doc

#77 at 47. The magistrate, however, did not find it necessary to

remand the matter back to UNUM for consideration of the report:

In the instant case, the Court concludes that a remand is not

necessary. At best, the June 2008 report of Dr. Carteron,

which found, inter alia, a multi-system inflammatory

autoimmune disorder responsible for the cardiogenic syncopy,

might affect the conclusion that Ms. Fortlage’s conditions

were pre-existing. Dr. Carteron’s diagnosis, if correct, would

establish that Ms. Fortlage’s conditions were attributable to

a new disease (i.e., an autoimmune disorder rather than preexisting anxiety causing her cardiogenic syncopy) for which

she had not been treated during the look back period. 

But, as noted above, Unum Life denied benefits also because it

found that Ms. Fortlage’s symptoms did not prevent her from

working with reasonable restrictions and limitations. While

Ms. Fortlage focuses on the new diagnosis of Sjogren’s as a

cause of her symptoms, she fails to show how this diagnosis

would alter Unum Life’s conclusion that those impairments were

not disabling. The same exact symptoms and the correlative

restrictions and limitations allowing her to work would obtain

Case 4:08-cv-03406-SBA Document 85 Filed 04/27/10 Page 3 of 7
United States District Court

For the Northern District of California

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even if the new diagnosis were accepted. In short, the new

diagnosis is immaterial to the independent basis of Unum

Life’s denial – that Ms. Fortlage was not disabled under the

policy. Hence, remand would serve no purpose, and the Court

shall decide for itself whether the denial of benefits was

proper itself based on all the evidence of record, including

the new evidence.

Id at 49-50.

The magistrate correctly noted that, under Ninth Circuit

ERISA law, “the usual remedy for a violation of [section] 1133 is

to remand to the plan administrator so the claimant gets the

benefit of a full and fair review.” Chuck v Hewlett Packard Co,

455 F3d 1026, 1035 (9th Cir 2006) (internal quotation omitted); see

also Lafleur v La Health Serv & Indem Co, 563 F3d 148, 157-58 (5th

Cir 2009); Shelby County Health Care Corp v Majestic Star Casino,

LLC Group Health Ben Plan, 581 F3d 355, 373 (6th Cir 2009); Krauss

v Oxford Health Plans, Inc, 517 F3d 614, 630 (2d Cir 2008);

Gagliano v Reliance Std Life Ins Co, 547 F3d 230, 240 (4th Cir

2008); Caldwell v Life Ins Co of N Am, 287 F3d 1276, 1288 (10th Cir

2002). The “usual remedy” of remanding the action for further

consideration of the plan administrator, established by Chuck, was

undisturbed by the decision in Abatie one month later, which held: 

When a plan administrator has failed to follow a procedural

requirement of ERISA, the court may have to consider evidence

outside the administrative record. For example, if the

administrator did not provide a full and fair hearing, as

required by ERISA, 29 U.S.C. § 1133(2), the court must be in a

position to assess the effect of that failure and, before it

can do so, must permit the participant to present additional

evidence. We follow the Sixth Circuit in holding that, when an

administrator has engaged in a procedural irregularity that

has affected the administrative review, the district court

should “reconsider [the denial of benefits] after [the plan

participant] has been given the opportunity to submit

additional evidence.” VanderKlok v. Provident Life & Accident

Ins. Co., 956 F.2d 610, 617 (6th Cir. 1992).

As we noted earlier, if the plan administrator's procedural

Case 4:08-cv-03406-SBA Document 85 Filed 04/27/10 Page 4 of 7
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defalcations are flagrant, de novo review applies. And as we

also noted, when de novo review applies, the court is not

limited to the administrative record and may take additional

evidence.

Even when procedural irregularities are smaller, though, and

abuse of discretion review applies, the court may take

additional evidence when the irregularities have prevented

full development of the administrative record. In that way the

court may, in essence, recreate what the administrative record

would have been had the procedure been correct.

Abatie v Alta Health & Life Ins Co, 458 F3d 955, 973 (9th Cir 2006)

(finding that the district court erred by not considering new

evidence submitted by plaintiff). Similarly, the Ninth Circuit has

found error where the district court did not give the plaintiff a

“fair chance to present evidence on [a] point.” Saffon v Wells

Fargo & Co Long Term Disability Plan, 522 F3d 863, 871 (9th Cir

2008). 

For the reasons stated in the magistrate’s order, Doc

#77, UNUM’s decision not to submit Dr Carteron’s report to its

medical department for review was a clear procedural violation. 

This procedural violation provided the magistrate with the option

to consider evidence outside of the administrative record, or to

remand to UNUM for further consideration. 

While the magistrate, after considering the effect of the

Carteron report on plaintiff’s claim, found that remand was

unnecessary, Doc #77 at 49, the court sees no reason to depart from

the Ninth Circuit’s preferred “usual remedy” in this case. See

Chuck, 455 F3d at 1035. Such a departure might be appropriate in

several situations, including one in which the new evidence

unequivocally supports the court’s ultimate decision. That is to

say, where a party succeeds on the administrative record, it would

Case 4:08-cv-03406-SBA Document 85 Filed 04/27/10 Page 5 of 7
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For the Northern District of California

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be a waste of time and resources to remand the case for further

consideration of that party’s new, favorable medical evidence. 

That is not the case here, where the magistrate recommends for the

court to consider (allegedly) plaintiff-friendly evidence but

nonetheless to grant defendant’s motion for judgment. The court,

therefore, following the Ninth Circuit’s preferred “usual remedy,”

Chuck, 455 F3d at 1035, SUSTAINS plaintiff’s objection and REMANDS

the action to UNUM for further consideration.

IV

Because the court sustains plaintiff’s objection and

REMANDS to UNUM for consideration of the Carteron report, it

DECLINES TO RULE on plaintiff’s remaining objections.

V

As the Supreme Court recently reiterated, "ERISA law [is]

already complicated enough without adding special procedural or

evidentiary rules to the mix." Conkright v Frommert, ___ US ___, 5

(2010) (slip op) (citation and internal quotation omitted). When,

a plan administrator (or here, a plan’s clerical staff) makes a

simple mistake, the plan remains entitled to deference. Id at 5-6. 

This court, however, would face a difficult challenge evaluating

plaintiff's claims through such a deferential lense, while, at the

same time, independently scrutinizing the Carteron report. It is

thus appropriate, rather than to substitute its judgment for that

of the plan administrator or, perhaps more accurately, to adopt the

plan's post hoc rationales for why the Carteron report is of no

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United States District Court

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value, for the court to follow the Ninth Circuit's preferred "usual

remedy" in such circumstances and to remand the file for further

consideration for a full an fair review. 

Accordingly, the court SUSTAINS plaintiff’s objections IN

PART, DECLINES TO RULE on the remainder of plaintiff’s objections

and REMANDS the case to UNUM for full and fair review of the

administrative record supplemented by the Carteron report. The

clerk is directed to close the file administratively. 

IT IS SO ORDERED 

 

VAUGHN R WALKER

United States District Chief Judge

Case 4:08-cv-03406-SBA Document 85 Filed 04/27/10 Page 7 of 7