Opinion ID: 2966248
Heading Depth: 2
Heading Rank: 3

Heading: Cook's Lawsuit

Text: Cook brought suit against Liberty in Hillsborough County (New Hampshire) Superior Court, alleging state law violations and breach of contract claims arising from Liberty's termination of Cook's benefits. Liberty removed the action to the federal district court of New Hampshire on the ground that Cook's state law claims were preempted by ERISA, and Cook agreed that the court should construe the allegations and claims in her state law complaint as a claim for benefits under ERISA § 502 (a)(1)(B), 29 U.S.C. § 1132(a)(1)(B) (2001). (6) Although only Liberty moved for summary judgment, the parties agreed that the lawfulness of Liberty's termination decision [was] ripe for disposition on the administrative record. Cook v. Liberty Life , No. 00-408-B, slip op. at 2 (D.N.H. Jan. 15, 2002). The district court ruled that Liberty's termination of Cook's long-term disability benefits was arbitrary and capricious. It found that Liberty based its decision to terminate benefits on Dr. Blackwood's statement that Cook was able to work forty hours a week and Carol Vroman's vocational analysis showing that there were a number of jobs Cook could take. The obvious flaw in Liberty's reasoning, the court concluded, is that it overlooks the fact that Dr. Blackwood informed Liberty shortly after it terminated Cook's benefits that it could not rely on either his March 24, 1997 medical certificate or his response to Liberty's August 18, 1998 letter because neither document reflected his views concerning Cook's ability to work. Id. at 14. Liberty ignored this retraction, and failed to point to any other evidence to contradict the medical evidence that Cook produced to support her disability claim. Id. at 14-15. Its termination of her benefits, therefore, was an abuse of its discretion as a plan administrator. (7) Although Liberty pointed to other evidence in the administrative record to support its decision, the court declined to review it, concluding that it could not review decisions that Liberty never made. Id. at 15. Based on this decision, the court entered judgment for Cook for benefits owed under the plan. Id. In response to this ruling, Liberty argued that the court should remand the case back to the plan administrator to reconsider whether Cook was disabled in October 1998 (when it terminated her benefits), or at any time between October 1998 and the district court's judgment. The court found that such an exercise was unnecessary, given that the only rational decision that [Liberty] could have reached on the administrative record it developed was that Cook's disability benefits should continue. Cook v. Liberty Life , No. 00-408-B, slip op. at 12 (D.N.H. Mar. 29, 2002). The district court summarized the facts that it took into consideration when making its decision: (1) Liberty initially found Cook to be disabled and never suggested that its initial decision was erroneous; (2) the relevant documentation contained in the administrative record (as opposed to the non-probative evidence Liberty manufactured from Dr. Blackwood's error) did not suggest any material change in Cook's condition at or around the time Liberty terminated her benefits; and (3) Liberty never offered a reasoned explanation as to why the administrative record failed to demonstrate that Cook remained disabled. Id. at 12. The court recognized that the case law was divided on whether a court should award benefits and reinstatement if it found a plan's decision to terminate benefits to be arbitrary and capricious, or whether it should remand to the plan for a new determination of the participant's disability status. However, it concluded that the better reasoned cases do not require remand where, as here, the claimant was receiving benefits and had her benefits arbitrarily terminated without any record evidence supporting the termination. Id. at 13. Finally, the court decided that it would have been inequitable ... to permit Liberty to terminate Cook's benefits as of some date after October 31, 1998 but prior to now on grounds that Cook cannot now prove that she was disabled at all times during the past three-plus years that her administrative appeals and litigation were pending. Id. at 13-14. The court recognized that Liberty's termination could make the presentation of such proof even more difficult: [a]n arbitrary termination of disability benefits to a disabled claimant could well starve the claimant of the resources necessary to generate evidence of continuing disability.... Id. at 14 n.7. On that basis, the district court awarded Cook 42 months of back benefits, reinstatement to the plan as of May 1, 2002 (two days after it entered judgment), attorney's fees, and prejudgment interest. Liberty filed this timely appeal.