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06-5100-cv(L) McCauley v. First Unum Life Ins. Co. 1 2 UNITED STATES COURT OF APPEALS 3 4 FOR THE SECOND CIRCUIT 5 6 August Term 2007 7 8 (Argued:February 7, 2008 Decided:December 24, 2008) 9 10 Docket Nos 06-5100-cv(L), 06-5529-cv (Con) 11 12 13 -----------------------------------------------------x 14 15 JOHN E. MCCAULEY, 16 17 Plaintiff-Appellant, 18 19 -- v. -- 20 21 FIRST UNUM LIFE INSURANCE COMPANY, 22 23 Defendant-Appellee, 24 25 SOTHEBY’S HOLDINGS INC., SOTHEBY’S INC., and 26 SOTHEBY’S SERVICE CORP., 27 28 Defendants. 29 30 -----------------------------------------------------x 31 32 B e f o r e :WALKER, B.D. PARKER, and HALL, Circuit Judges. 33 34 Plaintiff-Appellant John McCauley appeals from an order of 35 the United States District Court for the Southern District of New 36 York (Lawrence M. McKenna, J.) dismissing his complaint 37 challenging the decision by his ERISA plan administrator, First2 1 Unum Life Insurance Co., to deny his claim for long-term 2 disability benefits. Applying the Supreme Court’s framework from 3 Metropolitan Life Insurance Co. v. Glenn, 128 S. Ct. 2343 (2008), 4 we find that the plan administrator abused its discretion in 5 denying plaintiff’s claim. The district court’s dismissal is 6 REVERSED, and the case is REMANDED for the district court to 7 enter summary judgment in favor of appellant and for calculation 8 of benefits, costs, and attorney fees to be awarded to appellant. 9 EUGENE R. ANDERSON,(Dona S. Kahn, 10 on the brief), Anderson Kill & 11 Olick, P.C., New York, N.Y., for 12 Plaintiff-Appellant. 13 14 PATRICK W. BEGOS,(Evan L. Gordon, 15 New York, N.Y., on the brief), 16 Begos Horgan & Brown, LLP, 17 Westport, Conn., for Defendant18 Appellee. 19 20 21 22 JOHN M. WALKER, JR., Circuit Judge: 23 In light of the Supreme Court’s decision in Metropolitan 24 Life Insurance Co. v. Glenn, 128 S. Ct. 2343 (2008), we must 25 reassess our standard of review governing cases such as this one 26 that challenge an Employee Retirement Income Security Act 27 (“ERISA”) plan administrator’s decision to deny disability 28 benefits, where the administrator has a conflict of interest3 1 because it has both the discretionary authority to determine the 2 validity of the employee’s claim and pays the benefits under the 3 policy. Our current standard of review allows a court to review 4 de novo the administrator’s decision when it is shown that a 5 conflict of interest actually influenced that decision. See 6 Sullivan v. LTV Aerospace & Defense Co., 82 F.3d 1251, 1255-56 7 (2d Cir. 1996). We find this standard to be inconsistent with 8 the Supreme Court’s instructions in Glenn and abandon it. We now 9 adhere to the Supreme Court’s clarified explication of the 10 standard of review governing such cases, which is that such a 11 conflict of interest is to be “weighed as a factor in determining 12 whether there [wa]s an abuse of discretion,” Glenn, 128 S. Ct. at 13 2348 (quotation marks omitted) (emphasis in original). After 14 applying this standard, we hold that, as a matter of law, the 15 plan administrator abused its discretion in denying plaintiff’s 16 claim for long-term disability benefits. 17 BACKGROUND 18 Plaintiff-Appellant John McCauley (“McCauley”) was a Senior 19Vice President and Director of the Tax Department at Sotheby’s 20 Service Corporation in April 1991, when he was diagnosed with 21 advanced colon cancer. On April 24, 1991, he underwent a 22 radical hemicolectomy and experimental chemotherapy, in which4 1 several gallons of special chemotherapy drugs were inserted into 2 his peritoneal cavity to “bathe all the organs in the stomach 3 cavity.” McCauley’s treatment also included intravenous 4 chemotherapy and chemo catalyst drugs. These drastic procedures 5 saved McCauley’s life. From April 1991 through July 1991, 6 McCauley took short-term disability leave because of his cancer 7 treatment. 8 In December 1991, McCauley accepted a transfer within 9 Sotheby’s to Hamilton, Bermuda, where he worked as Senior Vice 10 President and Chief Executive Officer of Fine Art Insurance, 11 Ltd., a subsidiary of Sotheby’s. Over the course of the next 12 three years, McCauley continued to experience other health 13 problems and took short term disability leaves. Specifically, in 14 September 1992, McCauley had part of his liver removed because 15 his cancer had metastasized there. By December 1992, he suffered 16 from a severe liver infection, and in April 1994, he underwent 17 surgery to repair a hernia. 18 In November 1994, after notifying Sotheby’s that he could no 19 longer work, McCauley requested disability benefits. At that 20 point, McCauley took short term disability leave one final time 21 for a period of three months. Although McCauley’s cancer 22 treatment was successful, the procedures had taken a toll on his5 1 body. In particular, McCauley suffered from chronic diarrhea, 2 chronic and acute renal impairment, incontinence, progressive 3 vascular sclerosis, high cholesterol, insomnia, depression, and 4 incisional scarring and pain. Defendant-Appellee First Unum Life 5 Insurance Company (“First Unum”) was Sotheby’s disability 6 insurance provider. Under the disability plan, First Unum was 7 both the administrator and ultimate payor of benefits. 8 On May 19, 1995, First Unum denied McCauley’s claim, and on 9 June 14, 1995, McCauley appealed the decision and submitted 10 additional information for First Unum to consider. On September 11 18, 1995, First Unum rejected McCauley’s appeal. After this 12 denial, McCauley, attempting to return to the workforce, accepted 13 employment as General Counsel of IBJ Schroeder, Ltd. in Bermuda. 14 Despite paying premiums on McCauley’s policy with First Unum 15 during his absence from the workforce, Sotheby’s informed 16 McCauley that it would stop paying those premiums now that he had 17 other employment; however, Sotheby’s informed McCauley that he 18 was eligible to convert the policy and make future payments, 19 which he did. McCauley’s symptoms and health problems persisted. 20 After working at several jobs for short periods of time, McCauley 21 realized that he was not able to work. On January 16, 1996, he 22 applied for long term disability benefits under his conversion6 1 policy. First Unum denied this claim on the basis that 2 McCauley’s employment with Sotheby’s had terminated on November 3 26, 1994, and, therefore, that he had exercised his conversion 4 after the allowable period. 5 McCauley then brought this action alleging that First Unum 6 had denied his claims under the original and conversion policies 7 in bad faith. After taking discovery, First Unum moved for 8 judgment on the administrative record. At the same time, 9 McCauley moved for summary judgment under Federal Rule of Civil 10 Procedure 56. Treating both requests as motions for summary 11 judgment, the District Court for the Southern District of New 12 York (Lawrence M. McKenna, J.) denied McCauley’s motion and 13 granted summary judgment in favor of First Unum, finding that a 14 de novo standard of review was not applicable and that First 15 Unum’s actions were neither arbitrary nor capricious. McCauley 16 v. First UNUM Life Ins. Co., No. 97 Civ. 7662, 2006 WL 2854162 17 (S.D.N.Y. Oct. 5, 2006). McCauley appeals from that dismissal. 18 19 DISCUSSION 20 I.Legal Standard 21 We review de novo a district court’s decision granting 22 summary judgment in an ERISA action based on the administrative7 1 record and apply the same legal standard as the district court. 2 Pagan v. NYNEX Pension Plan, 52 F.3d 438, 441 (2d Cir. 1995); see 3 also Glenn v. MetLife, 461 F.3d 660, 665 (6th Cir. 2006). 4 “Summary judgment is appropriate only where the parties’ 5 submissions show that there is no genuine issue as to any 6material fact and the moving party is entitled to judgment as a 7 matter of law.” Fay v. Oxford Health Plan, 287 F.3d 96, 103 (2d 8 Cir. 2002). 9 The standard governing the district court’s review, and 10 accordingly our review here, of an administrator’s interpretation 11 of an ERISA benefit plan was first articulated by the Supreme 12 Court in Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 13 (1989). The Court explained that “a denial of benefits . . . is 14 to be reviewed under a de novo standard unless the benefit plan 15 gives the administrator . . . authority to determine eligibility 16 for benefits or to construe the terms of the plan.” Id. at 115. 17 Where such authority is given, the administrator’s interpretation 18 is reviewed for an abuse of discretion. Id. Furthermore, “if a 19 benefit plan gives discretion to an administrator or fiduciary 20 who is operating under a conflict of interest, that conflict must 21 be weighed as a ‘facto[r] in determining whether there is an 22 abuse of discretion.’” Id. (quoting Restatement (Second) of8 1 Trusts § 187, cmt. d (1959)) (alteration in original). 2 Following the Court’s instructions, we held in Pagan that in 3 cases in which an abuse of discretion standard of review applies, 4 because “written plan documents confer upon a plan administrator 5 the discretionary authority to determine eligibility, we will not 6 disturb the administrator’s ultimate conclusion unless it is 7 ‘arbitrary and capricious.’” 52 F.3d at 441. We further noted 8 that a possible conflict of interest would not alter the standard 9 of review where the plaintiff “fails to explain how such an 10 alleged conflict affected the reasonableness of the 11 [administrator’s] decision.” Id. at 443. In Pagan, however, we 12 did not address how a conflict of interest should be accounted 13 for where it does affect the reasonableness of an administrator’s 14 interpretation. We answered that question in Sullivan v. LTV 15 Aerospace & Defense Co., 82 F.3d at 1255-56, explaining that: 16 [I]n cases where the plan administrator is shown to have 17 a conflict of interest, the test for determining whether 18 the administrator’s interpretation of the plan is 19 arbitrary and capricious is as follows: Two inquiries 20 are pertinent. First, whether the determination made by 21 the administrator is reasonable, in light of possible 22 competing interpretations of the plan; second, whether 23 the evidence shows that the administrator was in fact 24 influenced by such conflict. If the court finds that the 25 administrator was in fact influenced by the conflict of 26 interest, the deference otherwise accorded the 27 administrator’s decision drops away and the court 28 interprets the plan de novo.9 1 2 Id. 3 Sullivan implied that, in the absence of something more, the 4 existence of a conflict of interest would not change the standard 5 of review. And we squarely held in Pulvers v. First Unum Life 6 Insurance Co., 210 F.3d 89, 92 (2d Cir. 2000), that the arbitrary 7 and capricious standard continues to apply when the only evidence 8 of a conflict of interest is that an insurer acts as both 9 adjudicator and payor of claims. 10 Read together then, our case law made clear that the 11 arbitrary and capricious standard applies “unless the [plaintiff] 12 can show not only that a potential conflict of interest exists, . 13 . . but that the conflict affected the reasonableness of the 14 [administrator’s] decision.” Sullivan, 82 F.3d at 1259 (internal 15 quotation marks omitted). However, upon a showing that “the 16 conflict affected the choice of a reasonable interpretation,” the 17 court interprets the plan de novo. Id. at 1255. 18A.The District Court’s Decision 19 Following this precedent, the district court turned to the 20 question of whether de novo review was appropriate here. 21 McCauley argued that certain procedural irregularities that 22 occurred in the handling of his claim demonstrated that First10 1 Unum’s conflict of interest had affected its decision to deny him 2 benefits. These alleged irregularities included contentions that 3 one document was missing from the administrative record and that 4 First Unum had incorrectly told McCauley that his claim had been 5 reviewed by a medical doctor when in fact it been reviewed by a 6 nurse. 7 The district court found these allegations insufficient to 8 warrant de novo review. McCauley, No. 97 Civ. 7662, 2006 WL 9 2854162, at *6.It noted that McCauley had failed to show any 10 evidence indicating that First Unum lost the missing document in 11 bad faith. Id. at *7. Regarding the discrepancy over whether a 12 doctor or nurse reviewed the file, the district court found that, 13 in denying his benefits, First Unum had principally relied on the 14 recommendation of McCauley’s own physician that McCauley should 15 not engage in heavy lifting or extreme physical exertion. This 16 finding settled any concerns the district court had over whether 17 First Unum consulted a physician before denying McCauley’s claim. 18 Id. 19 The district court next addressed whether McCauley had 20 demonstrated that First Unum’s decision was arbitrary and 21 capricious. Id. at *8-9.After concluding that “documents 22 submitted by [McCauley]’s own physician indicated that [McCauley]11 1 was not fully disabled,” the district court held that, as a 2 matter of law, First Unum’s decision was reasonable. The 3 district court therefore awarded summary judgment in its favor. 4 Id. at *15. 5 McCauley then brought this appeal. While the appeal was 6 pending in this court, the Supreme Court decided Glenn. 7 B. Metropolitan Life Insurance Co. v. Glenn 8 In Glenn, the Supreme Court clarified its earlier decision 9 in Firestone. The Court noted that Firestone set forth four 10 principles of review: 11 (1) In determining the appropriate standard of review, a 12 court should be guided by principles of trust law . . . [;] 13 (2) Principles of trust law require courts to review a 14 denial of plan benefits under a de novo standard unless the 15 plan provides to the contrary[;] 16 (3) Where the plan provides to the contrary by granting the 17 administrator or fiduciary discretionary authority to 18 determine eligibility for benefits, trust principles make a 19 deferential standard of review appropriate[; and] 20 (4) If a benefit plan gives discretion to an administrator 21 or fiduciary who is operating under a conflict of interest, 22 that conflict must be weighed as a factor in determining 23 whether there is an abuse of discretion. 24 25 Glenn, 128 S. Ct. at 2347-48 (citing Firestone, 589 U.S. at 111- 26 15) (quotation marks and alterations omitted) (emphasis in 27 original). 28 After acknowledging these principles, the Court “directly 29 focus[ed] upon the application and the meaning of the fourth12 1 [principle].” Id. at 2348. Addressing the question of “whether 2 the fact that a plan administrator both evaluates . . . and pays 3 benefits claims creates the kind of ‘conflict of interest’ to 4 which Firestone’s fourth principle refers,” the Court concluded 5 that “it does.” Id. at 2348. The Court reasoned that 6 [i]n such a circumstance, every dollar provided in 7 benefits is a dollar spent by the employer; and every 8 dollar saved is a dollar in the employer’s pocket. The 9 employer’s fiduciary interest may counsel in favor of 10 granting a borderline claim while its immediate financial 11 interest counsels to the contrary. Thus, the employer 12 has an interest conflicting with that of the 13 beneficiaries, the type of conflict that judges must take 14 into account when they review the discretionary acts of a 15 trustee of a common-law trust. 16 17 Id. (internal quotation marks, alterations, and citations 18 omitted). The Court then addressed the question of how this 19 conflict should be taken into account upon judicial review of a 20 discretionary benefit determination. See id. at 2350. 21 The Court clarified that under Firestone, such a “conflict 22 should be weighed as a factor in determining whether there is an 23 abuse of discretion.” Id. (internal quotation marks omitted). 24 In doing so, the Court rejected the notion that the conflict of 25 interest justifies changing the standard of review from 26 deferential to de novo. Id. It reasoned that “[t]rust law 27 continues to apply a deferential standard of review to the13 1 discretionary decisionmaking of a conflicted trustee, while at 2 the same time requiring the reviewing judge to take account of 3 the conflict when determining whether the trustee, substantively 4 or procedurally, has abused his discretion.” Id. The Court saw 5 “no reason to forsake Firestone’s reliance upon trust law in this 6 respect.” Id. Additionally, the Court noted that it is neither 7 “necessary [n]or desirable for courts to create special burden8 of-proof rules, or other special procedural or evidentiary rules, 9 focused narrowly upon the evaluator/payor conflict.” Id. at 10 2351. 11 Our previous standard is now inconsistent with these 12 instructions in one set of cases: When a plaintiff proves both 13 that a conflict of interest exists and that this conflict 14 affected the reasonableness of the administrator’s discretionary 15 decision. See Sullivan, 82 F.3d at 1255-56. We thus abandon the 16 use of de novo review in these cases and set forth, in accordance 17 with Glenn, the appropriate standard to be used in future cases. 18 C.The New Standard 19 According to principles of trust law, a benefit 20 determination is a fiduciary act, and courts must review de novo 21 a denial of plan benefits unless the plan provides to the 22 contrary. See Glenn, 128 S. Ct. at 2347-48. However, where the14 1 plan grants the administrator discretionary authority to 2 determine eligibility benefits, a deferential standard of review 3 is appropriate. See id. at 2348. Under the deferential 4 standard, a court may not overturn the administrator’s denial of 5 benefits unless its actions are found to be arbitrary and 6 capricious, meaning “without reason, unsupported by substantial 7 evidence or erroneous as a matter of law.” Pagan, 52 F.3d at 8 442. “Where both the plan administrator and a spurned claimant 9 offer rational, though conflicting, interpretations of plan 10 provisions, the administrator’s interpretation must be allowed to 11 control.” Pulvers, 210 F.3d at 92-93 (internal quotation marks 12 and alteration omitted). “Nevertheless, where the administrator 13 imposes a standard not required by the plan’s provisions, or 14 interprets the plan in a manner inconsistent with its plain 15 words, its actions may well be found to be arbitrary and 16 capricious.” Id. at 93 (internal quotation marks and alteration 17 omitted). 18 Following Glenn, a plan under which an administrator both 19 evaluates and pays benefits claims creates the kind of conflict 20 of interest that courts must take into account and weigh as a 21 factor in determining whether there was an abuse of discretion, 22 but does not make de novo review appropriate. See Glenn, 128 S.15 1 Ct. at 2348. This is true even where the plaintiff shows that 2 the conflict of interest affected the choice of a reasonable 3 interpretation. See id. 4 “[W]hen judges review the lawfulness of benefit denials, 5 they [should] take account of several different considerations of 6 which a conflict of interest is one.” Id. at 2351. The weight 7 given to the existence of the conflict of interest will change 8 according to the evidence presented. “[W]here circumstances 9 suggest a higher likelihood that [the conflict] affected the 10 benefits decision, including, but not limited to, cases where an 11 insurance company administrator has a history of biased claims 12 administration,” the conflict of interest 13 should prove more important (perhaps of great importance) . 14 . . . It should prove less important (perhaps to the 15 vanishing point) where the administrator has taken active 16 steps to reduce potential bias and to promote accuracy, for 17 example, by walling off claims administrators from those 18 interested in firm finances, or by imposing management 19 checks that penalize inaccurate decisionmaking irrespective 20 of whom the inaccuracy benefits. 21 22 Id. (citation omitted). As the Supreme Court has said, this 23 “kind of review is no stranger to the judicial system,” and 24 judges will be able “to determine lawfulness by taking account of 25 several different, often case specific, factors, reaching a 26 result by weighing all together.” Id.16 1 In light of these changes, the question McCauley raised of 2 whether the district court erred in refusing to review the 3 benefit denial de novo is no longer pertinent. The question 4 remains, however, whether the district court erred in finding 5 that, as a matter of law, First Unum’s denial was not arbitrary 6 or capricious. We now turn to that question. 7 II.Weighing the Factors 8A.The First Benefit Denial 9 First Unum’s long-term disability policy defines 10 “disability” and “disabled” as follows: 11 “Disability” and “disabled” mean that because of injury 12 or sickness: 13 14 1.the insured cannot perform each of the material 15 duties of his regular occupation; or 16 17 2.the insured, while unable to perform all of the 18 material duties of his regular occupation on a full 19 time basis, is: 20 21 a.performing at least one of the material duties 22 of his regular occupation or another occupation 23 on a part-time or full-time basis; and 24 25 b.earning currently at least 20% less per month 26 than his indexed pre-disability earnings due to 27 that same injury or sickness. 28 29 When McCauley first applied for long term disability 30 benefits, First Unum requested additional information from his 31 treating physician about his ability to perform his job duties in1 We note that the physician’s letter states that McCauley was 1 2 restricted “to” heavy lifting and “to” extreme workload, which we 3 can only presume was meant to read “from” heavy lifting and 4 “from” extreme workload. Like the district court (and the 5 subsequent First Unum letter to McCauley), we take the phrases to 6mean that McCauley was restricted from such activities. 17 1 order to ascertain whether he qualified as disabled under the 2 policy’s definition. In response, McCauley’s physician wrote 3 that: 4 (1) [McCauley] is restricted to heavy lifting and extreme 5 physical exertion. He also has limitations on increased 6 workload secondary to fatigue syndrome, occasional nausea 7 and pain in the right upper abdominal quadrant secondary 8 to hepatic resection. 9 10 (2) [McCauley] is limited to extreme workload and 11 increased hours due to fatigue, nausea and intermittent 12 pain.1 13 14 The medical records before the administrator also showed that 15 McCauley was “chronically stable” and that there was no “evidence 16 of active cancer.” Upon reviewing this information, a nurse 17 employed by First Unum determined that the medical record “does 18 not support total impairment.” First Unum therefore concluded 19 that McCauley was not disabled because his regular occupation as 20 a tax attorney was sedentary. First Unum communicated this 21 conclusion to McCauley in a letter stating: 22 [T]he medical information does not support an impairment 23 of such severity that would preclude your ability to 24 perform your occupation. [Your physician] restricted you 25 from heavy lifting and extreme physical exertion. He18 1 also limited increased workload and increased hours. 2 These restrictions and limitations would not prevent you 3 from performing the material duties of your sedentary 4 occupation. 5 6 Like the district court, we conclude that First Unum’s 7 initial denial is supported by the correspondence from McCauley’s 8 physician and other medical information in the administrative 9 record. The record before First Unum at the time of the denial 10 indicated that McCauley’s cancer had been treated successfully 11 and that his restrictions were limited to extreme workload, 12 increased hours, heavy lifting, and extreme physical exertion. 13 First Unum’s denial under those circumstances was therefore not 14 arbitrary and capricious. 15 First Unum’s response also invited McCauley to send “new, 16 additional information to support [his] request for disability 17 benefits.” First Unum stated that a request for review of its 18 decision should be accompanied by his “comments and views of the 19 issues, as well as any documentation [he] wish[es] First UNUM to 20 consider.” First Unum thus allowed McCauley to appeal its 21 decision directly to First Unum and permitted him to submit 22 additional information in support of his appeal. Accordingly, 23 McCauley requested a review of the benefits denial, which was 24 processed internally by a First Unum claims appeal specialist in19 1 coordination with the First Unum nurse who originally recommended 2 that McCauley’s claim be denied. 3 B.McCauley’s Appeal of the First Denial to First Unum 4 In support of his appeal to First Unum, McCauley submitted a 5 letter challenging First Unum’s findings. He made clear that he 6 was not disabled because of active cancer but as a result of “the 7 drastic measures used to effect a cure.” Further, McCauley 8 submitted additional evidence of his current medical issues in 9 the form of a memorandum that he asserted was submitted with his 10 physician’s full knowledge and approval. 11 Specifically, McCauley’s memorandum lists his medical issues 12 as (1) chronic diarrhea, (2) chronic and acute renal impairment, 13 (3) progressive vascular sclerosis, (4) high cholesterol, (5) 14 insomnia, and (6) incisional scarring and pain. With regard to 15 his diarrhea, the memorandum states that McCauley is only able to 16 control bowel movements by carefully timing his food ingestion 17 and lists a number of ways in which this limits his daily 18 activities. Respecting his renal impairment, the memorandum 19 explains that McCauley has chronic blood in the urine and pain in 20 the kidney area and that he forms a kidney stone every two weeks. 21 As a result, his physician recommends that he not sit for long 22 periods of time. Moreover, the memorandum states that during the20 1 acute phase of his renal impairment, “it is impossible for the 2 patient to perform at any level.” As to his vascular sclerosis, 3 the memorandum explains that McCauley’s vascular system was 4 permanently damaged by the chemotherapy treatments and that he 5 suffers “severe chronic headaches at the base of the skull, 6 resulting in an inability to focus eyesight and a lack of 7 concentration.” His insomnia is described as “chronic and 8 recurring,” resulting in a “general feeling of lethargy and 9 malaise” and leaving him with a “need to take naps during the 10 day.” The memorandum also states that McCauley “is in pain on an 11 almost constant basis” and takes Percocet, an opiate, to manage 12 that pain. 13 After receiving this information, First Unum again rejected 14 McCauley’s application. The nurse reviewing McCauley’s file 15 stated that “[n]o new medical ha[d] been submitted” and that the 16memorandum was “not an official document from [an] attending 17physician.” However, when communicating this decision 18 to McCauley, First Unum stated that it had rejected the health 19problems listed in McCauley’s memorandum because “these 20 conditions were acknowledged by your physician on the initial 21 application and in his narrative letter of March 1995.” 22 The reason First Unum gave to McCauley for rejecting the21 1 information provided in McCauley’s memorandum was unreasonable 2 and deceptive. Even the most cursory comparison with McCauley’s 3 earlier submission by a competent reviewer would have revealed 4 the myriad of details about his condition, absent from the 5 earlier submission, severely affecting his ability to work. And 6 contrary to First Unum’s representation, it appears the 7 information was afforded little if any weight by the nurse 8 considering his appeal because the memorandum was not signed by a 9physician. The rejection mischaracterizes the quality and detail 10 of the evidence McCauley had submitted on appeal. This is so 11 particularly because the new submission purported to be 12 information that the physicians at Sloan-Kettering believed 13 justified McCauley’s request for disability. 14 First Unum never told McCauley that the absence of a 15physician’s signature was a reason for rejecting his information. 16 See Juliano v. Health Maint. Org. of N.J., Inc., 221 F.3d 279, 17 289 (2d Cir. 2000) (finding an insurer’s failure to communicate 18 the reason for denying coverage sufficient evidence to warrant de 19novo review of the administrator’s decision under our old 20 standard). First Unum’s response to McCauley implies that it 21 would have been pointless to undertake any efforts to sort out 22 the obvious and facial discrepancies in his record. Hiding22 1 behind a terse initial response to a set of questions it posed 2 three months earlier, First Unum blithely ignored detailed 3 descriptions constituting clear proof of total disability-- 4 apparent even to a lay person--purporting to be the views of 5McCauley’s physicians. 6 Taken in combination, these factors are plainly exacerbated 7by First Unum’s conflict of interest, as both administrator and 8payor, for what else would have influenced First Unum to avoid 9 following up on simple inquiries prompted by McCauley’s June 10 submission? For example, had McCauley been informed that his 11 physician’s signature at the bottom of the memorandum was what 12was needed for First Unum’s nurse to consider the information, he 13 could have easily cured that defect. Additionally, McCauley’s 14physician clarified in a deposition that he agreed with the 15 health issues and limitations set forth in the memorandum, 16 finding it to be “a very appropriate review of [McCauley’s] 17medical status.” Had he been apprised of them, McCauley plainly 18would have had no trouble addressing First Unum’s undisclosed and 19uninvestigated concerns. 20 First Unum argues that it considered the information 21 McCauley submitted, although it admits the nurse assigned to 22 evaluate the claim on its medical merits did not consider the23 1 information. According to First Unum, the memorandum was 2 accounted for by the claims appeal specialist, whose rejection of 3 the memorandum was reasonable in light of McCauley’s physician’s 4earlier letter indicating that McCauley was only restricted from 5 extreme workload and physical exertion. However, that letter, 6which simply provided brief answers to First Unum’s medical 7 questionnaire, differs starkly from the severe limitations and 8 conditions depicted in the memorandum, which McCauley’s physician 9 later confirmed as accurate. The memorandum flatly contradicts 10 First Unum’s finding that McCauley was capable of performing a 11 sedentary occupation and completing the ordinary tasks of a tax 12 attorney. Instead, the memorandum stated that McCauley (1) was 13 in constant pain, (2) had no control of his bowels, (3) was 14discouraged from sitting for long periods of time, (4) was unable 15 to read for long periods of time, (5) required naps in the middle 16 of the day, (6) passed two kidney stones per month at which time 17he would be unable to perform at any level, and (7) was required 18 to take an opiate to manage his pain. First Unum never explained 19how McCauley could continue to perform the material duties of a 20 tax lawyer despite these restrictions. Although First Unum 21 stated that these issues described in the memorandum were 22 considered in the original denial, the record plainly reflects24 1 that they were not. 2 The district court found that First Unum reasonably believed 3 that McCauley’s physician was aware of the conditions described 4 in the memorandum at the time he set out McCauley’s limitations 5 in his letter to First Unum, and thus, that the document did not 6 constitute new information. McCauley, No. 97 Civ. 7662, 2006 WL 7 2854162, at *10. For the reasons stated above, we disagree. It 8was unreasonable for First Unum to conclude that the conditions 9 described in the memorandum were equivalent to those described in 10McCauley’s first application. It was also unreasonable for First 11 Unum to conclude that the conditions described in the memorandum 12 did not render McCauley disabled from performing his regular 13 occupation. In sum, we do not believe that a rational claims 14 administrator could have reviewed the limitations and symptoms 15 listed in the memorandum and found that the physician’s earlier 16narrative comported with those medical conditions. At a minimum, 17 further investigation was required. 18 Instead, First Unum seized upon the earlier questionnaire 19 and ignored the memorandum. This kind of wholesale embrace of 20 one medical report supporting a claim denial to the detriment of 21 a contrary report that favors granting benefits was determined in 22 Glenn to be indicative of an administrator’s abuse of discretion.25 1 See 128 S. Ct. at 2352. The Glenn Court noted that there the 2 insurance company unreasonably “emphasized a certain medical 3 report that favored a denial of benefits [and] had deemphasized 4 certain other reports that suggested a contrary conclusion.” Id. 5 The Court went on to find that this factor, in combination with 6 the presence of a conflict of interest and other serious 7 concerns, warranted setting aside the administrator’s 8 discretionary decision. Like the Court in Glenn, we find First 9Unum’s reliance on the earlier narrative to be indicative of an 10 abuse of discretion. 11 First Unum compounded its deception by representing to 12McCauley that the records submitted in support of his claim 13 including the memorandum were reviewed by First Unum’s on-site 14physician, who concluded that the restrictions and limitations 15would not preclude McCauley from performing his occupation. In 16 fact, no records were reviewed by a physician at First Unum. 17 These deceptions constitute additional powerful evidence that 18 First Unum’s denial of McCauley’s appeal was arbitrary and 19 capricious. 20C. First Unum’s Past History 21 This case also involves another relevant consideration 22 specifically referenced in Glenn: “[W]here an insurance company26 1 administrator has a history of biased claims administration.” 2 Id. at 2351. First Unum is no stranger to the courts, where its 3 conduct has drawn biting criticism from judges. A district court 4 in Massachusetts wrote that “an examination of cases involving 5 First Unum . . . reveals a disturbing pattern of erroneous and 6 arbitrary benefits denials, bad faith contract 7misinterpretations, and other unscrupulous tactics.” Radford 8 Trust v. First Unum Life Ins. Co., 321 F. Supp. 2d 226, 247 (D. 9Mass. 2004), rev’d on other grounds, 491 F.3d 21, 25 (1st Cir. 10 2007). That court listed more than thirty cases in which First 11 Unum’s denials were found to be unlawful, including one decision 12 in which First Unum’s behavior was “culpably abusive.” Id. at 13 247 n.20. Also, First Unum’s unscrupulous tactics have been the 14 subject of news pieces on “60 Minutes” and “Dateline,” that 15 included harsh words for the company. Id. at 248-49. First Unum 16has fared no better in legal academia. See John H. Langbein, 17 Trust Law as Regulatory Law: The Unum/Provident Scandal and 18 Judicial Review of Benefit Denials Under ERISA, 101 Nw. U. L. 19Rev. 1315 (2007). In light of First Unum’s well-documented 20history of abusive tactics, and in the absence of any argument by 21 First Unum showing that it has changed its internal procedures in 22 response, we follow the Supreme Court’s instruction and emphasize27 1 this factor here. Accordingly, we find First Unum’s history of 2 deception and abusive tactics to be additional evidence that it 3 was influenced by its conflict of interest as both plan 4 administrator and payor in denying McCauley’s claim for benefits. 5D.Summary Judgment 6 After reviewing all the evidence, we conclude that First 7Unum’s denial of McCauley’s appeal to First Unum was arbitrary 8 and capricious. We thus find that the district court erred in 9 granting summary judgment to First Unum and vacate the judgment. 10While ordinarily it would be appropriate for us to vacate and 11 remand for further proceedings, there is no need to do so here 12because the evidence in the record conclusively shows that 13McCauley is entitled to judgment as a matter of law. See Glenn, 14 461 F.3d at 675 (reversing district court’s award of summary 15 judgment in favor of insurance company, granting summary judgment 16 in favor of insured, and remanding to the district court for the 17 reinstatement of retroactive benefits); Travelers Cas. & Sur. Co. 18v. Gerling Global Reins. Corp. of America, 419 F.3d 181, 194 (2d 19 Cir. 2005) (same but without mentioning retroactive benefits). 20 In addition to the memorandum’s description of McCauley’s severe 21 and debilitating health problems, the only physician’s 22 recommendation in the record--that made by Dr. Daugherty--28 1 supports a finding of disability. 2 To recap, we conclude the following: (1) First Unum 3 operated under a conflict of interest because it was both the 4 claims administrator and payor of benefits; (2) First Unum’s 5 reliance on one medical report in support of its denial to the 6detriment of a more detailed contrary report without further 7 investigation was unreasonable; (3) First Unum deceptively 8 indicated to McCauley that the medical professional assigned to 9 review his records was a medical doctor when the individual was 10 in fact a nurse, failed to obtain a physician’s recommendation, 11 and mischaracterized its rationale for continuing to deny 12benefits; (4) First Unum has a well-documented history of abusive 13 claims processing; and (5) observations (2), (3), and (4), above, 14 collectively lead to the conclusion that First Unum was in fact 15 affected by its conflict of interest. In light of these 16 observations, we find that a reasonable trier of fact could only 17 come to one conclusion: First Unum’s denial was arbitrary and 18 capricious. We award McCauley summary judgment in his favor. He 19 is entitled to benefits and interest to run from September 18, 20 1995, the date on which First Unum rejected his appeal. 21 CONCLUSION 22 For the foregoing reasons, the judgment of the district29 1 court is REVERSED, and the cause is REMANDED to the district 2 court to enter summary judgment in favor of appellant and for the 3 calculation of benefits to be awarded to appellant. Costs of the 4 appeal and attorney fees incurred in pursuit of benefits are 5 awarded to appellant. 6