Court Opinion

ID: 2998265
Source: CourtListenerOpinion
Date Created: 2015-09-24 19:42:16.576739+00
Date Added: 2024-06-11T13:13:52.395699
License: Public Domain

In the
 United States Court of Appeals
              For the Seventh Circuit
                        ____________

No. 04-2689
JANET M. SCHNEIDER,
                                              Plaintiff-Appellant,
                               v.

SENTRY GROUP LONG TERM
DISABILITY PLAN, SENTRY GROUP
SUPPLEMENTAL DISABILITY
INSURANCE PLAN, and
SENTRY LIFE INSURANCE COMPANY,
                                           Defendants-Appellees.
                        ____________
           Appeal from the United States District Court
             for the Western District of Wisconsin.
             No. 03 C 721—John C. Shabaz, Judge.
                        ____________
     ARGUED MAY 12, 2005—DECIDED SEPTEMBER 7, 2005
                        ____________

 Before RIPPLE, ROVNER and SYKES, Circuit Judges.
  RIPPLE, Circuit Judge. Janet M. Schneider claimed that
defendants Sentry Life Insurance Company (“Sentry Life”),
Sentry Group Long Term Disability Plan and Sentry Group
Supplemental Disability Insurance Plan (collectively,
“Sentry”) violated the Employee Retirement Income
Security Act (“ERISA”), 29 U.S.C. § 1001 et seq., when her
disability benefits were terminated. The district court
2                                                No. 04-2689

granted Sentry’s motion for summary judgment. For the
reasons set forth in the following opinion, we reverse the
judgment of the district court and remand the case for
further proceedings consistent with this opinion.

                              I
                     BACKGROUND
A. Facts
  Ms. Schneider began working for Sentry Life in 1974. She
held various positions at Sentry Life, ultimately reaching the
position of “Director, Underwriting Services, National
Accounts.” R.2 at 4. As an employee of Sentry Life, Ms.
Schneider participated in the defendant plans, Sentry Group
Long Term Disability Plan and Sentry Group Supplemental
Disability Plan (collectively, “the Plan”). The Plan is an
employer-sponsored disability plan within the meaning of
ERISA. 29 U.S.C. § 1002.
  Ms. Schneider began treatment for depression in 1995,
and, in 1999, she came under the care of psychiatrist Dr.
Paul Samo. Dr. Samo diagnosed Ms. Schneider with recur-
rent major depressive disorder. Beginning in October 2001,
her depression prevented Ms. Schneider from performing
the duties of her job at Sentry Life. Accordingly, Dr. Samo
excused her from work beginning on or about October 29,
2001. At this time, Ms. Schneider notified Sentry that she
was disabled under the terms of the Plan. Initially, Ms.
Schneider continued to receive her wages under the
“Healthy Return Plan,” a wage continuation plan that
Sentry Life provided to its employees covering absence from
work due to illness or injury. R.18 at 2. The Healthy Return
Plan is not implicated in this action.
No. 04-2689                                                   3

  Prior to obtaining approval for her claim for disability
benefits under the Plan, Ms. Schneider underwent an
independent psychiatric medical evaluation (“IME”). Dr.
Bruce Heyl, who conducted Ms. Schneider’s IME, evaluated
Ms. Schneider and reviewed Dr. Samo’s records. Dr. Heyl
concluded that Ms. Schneider “ha[d] suffered major depres-
sive illness . . . that in the past and currently disables her
from performing the substantial duties of her regular
occupation.” R.12, Tab 4 at 2. In his report detailing the IME,
Dr. Heyl also advised Sentry that Ms. Schneider was
“currently improving in her clinical depression.” Id. He
predicted that “her short and long term prognosis . . . for
complete recovery” was “good” and anticipated that she
would be able to return to work in June 2002. Id. Dr. Heyl
also noted that, because a personality conflict with a
supervisor at work was contributing to her illness,
“[r]esolution of this relationship conflict would facilitate her
return to employment.” Id. at 3.
  In May 2002, Sentry informed Ms. Schneider that her
claim for disability benefits had been approved and she
began receiving benefits under the Plan. In June 2002, Sentry
notified Ms. Schneider that her disability had been verified
until July 31, 2002, and that the company would require
periodic updates regarding her medical condition from her
treating physician.
  On July 31, Dr. Samo recommended extending Ms.
Schneider’s disability leave through September 14, 2002,
and Dr. Heyl agreed that her leave should be extended until
September 2002. Dr. Samo also recommended extensions of
Ms. Schneider’s disability leave in September and October
2002. In November 2002, Dr. Samo recommended that
Sentry treat Ms. Schneider as “permanently restricted” from
work due to her depression. R.12, Tab 9 at 1. In a subse-
quent letter to Sentry supporting the permanent restriction
4                                                 No. 04-2689

recommendation, Dr. Samo noted that Ms. Schneider had
not continued to improve as quickly as he initially had
hoped she would and that she had experienced “a setback
in her progress.” R.12, Tab 10 at 1.
  In order to determine Ms. Schneider’s condition, Sentry
contracted with a company called PsyBar to conduct an
additional IME with respect to Ms. Schneider. The IME
was conducted by Dr. Michael J. Spierer, a psychologist,
on February 25, 2003.
   In February 2003, Dr. Samo wrote a letter (the “February
letter”) to Sentry describing Ms. Schneider’s condition. Dr.
Samo stated that Ms. Schneider’s recurrent major depressive
disorder was “currently mild.” R.12, Tab 12 at 1. He also
opined that “it would be unwise for her to return to her
prior job,” because “[i]f she were to do that it would be
likely that the depression would worsen.” Id. Instead, Dr.
Samo explained, “[o]ur goals would be for her to find
alternate employment.” Id.
  In March 2003, Dr. Spierer authored a report detailing
the results of Ms. Schneider’s IME. Dr. Spierer’s nine and
one-half page report surveyed Ms. Schneider’s medical
history and reviewed the findings of Dr. Samo and Dr. Heyl.
Ultimately, Dr. Spierer concluded that Ms. Schneider was
“capable of returning to work” as of the date of the report.
R.12, Tab 13 at 9. Dr. Spierer also indicated that Ms. Schnei-
der did not require “any special accommodations . . . in
order to be able to return to work,” but he noted that, if Ms.
Schneider were to work under the supervisor with whom
she had a personality conflict, she “very likely would
experience interpersonal conflict with him.” Id.
  Sentry sent a copy of Dr. Spierer’s IME report to Dr. Samo
to determine whether he agreed with the findings in the
report. In a letter to Sentry (the “March 24 letter”), Dr. Samo
No. 04-2689                                                       5

responded:
    I agree that Janet Schneider is now ready to return to
    work. She has made slow, gradual improvements in her
    condition with time. Before this point, however, I would
    have worried about her returning to work. Mrs. Schnei-
    der is interested in discussing possibilities at this time.
    She would be most interested in becoming an independ-
    ent consultant to Sentry Insurance. This may provide
    her with the flexible [sic] that she desires. Please contact
    Mrs. Schneider to discuss possible job opportunities at
    this time.
                   1
R.12, Tab 15 at 1.
  On April 23, 2003, Sentry sent a letter (the “April 23
letter”) to Ms. Schneider explaining that it had reviewed her
claim and had determined that her long-term benefits
should be terminated. The letter read, in relevant part:
    Based on the February 25, 2003 Independent Medical
    Exam report and Dr. Samo’s letter dated March 24, 2003
    you have recovered and can return to work. As a result

1
   Dr. Samo also sent a letter to Karen Roll, a registered nurse
hired by Sentry to keep track of Ms. Schneider’s claims, on June
3, 2003. In the letter, Dr. Samo stated that Ms. Schneider “has
been advised not to return to her previous position as this
was too stressful for her and would likely worsen her depres-
sion again.” R.12, Tab 23 at 1. He also indicated that he “would
not advise her to return to full-time work status in any position.”
Id. at 2. It is not clear whether this letter was a part of Sentry’s
final decision regarding Ms. Schneider’s appeal of the denial of
her benefits. In any event, the evidence of Dr. Samo’s June 3 letter
is relevant to Ms. Schneider’s contention that the termination of
her benefits was arbitrary and capricious, a submission that we
do not reach.
6                                                 No. 04-2689

    of this information, no further benefits are due.
      Dr. Samo indicates that you would be most interested
    in becoming an independent consultant to Sentry
    Insurance. If you wish to pursue this matter, please
    contact the Human Resources Department.
R.12, Tab 17 at 1.
  Ms. Schneider sent an e-mail on May 14, 2003 (the “May
14 e-mail”), to Gary Sopa, a Senior Disability Service
Representative for Sentry. She wrote:
    I have a few questions related to the termination of my
    disability. . . .
      Sentry’s IME (February) and my physician, Dr. Samo,
    concur that treatment has progressed to the point where
    a return to work is possible. . . . In Dr. Samo’s letter of
    March 24, he asked that you contact me to discuss the
    options available in returning to work. Your letter of
    April 23, 2003, simply indicates that, since I am now
    able to return to work, no more disability benefits are
    due to me. I did not receive any contact from Sentry to
    discuss options or the process of returning to work at
    that time.
      I contacted Sentry Human Resources on May 12,
    2003 . . . . The position I held at the time I became
    disabled no longer exists as the result of reorganizations
    that have taken place since then. Thus, I am now able to
    return to work, but have no work to which I can return.
    I am working with Liz McDonald, in Sentry Human
    Resources, to determine if other positions may suit my
    background and capabilities. I have also talked with Liz
    about job-hunting with other firms, as the outlook at
    Sentry is not very promising at this time.
      My status is, according to, [sic] Ms. McDonald, that of
No. 04-2689                                                   7

    a Sentry Employee.
       It seems to me that, given the circumstances, it is not
    acceptable for the Sentry Disability Plan to simply end
    the payment of benefits. As a result of my disability,
    I have no position in which a return to work is possible.
    I will gladly “Return To Work” if I can find a position,
    whether within Sentry or outside of Sentry. I would
    think, though, that assistance in returning to gainful
    employment should be provided, since the lack of a
    position for me to return to is the result of my long-term
    disability. I would also think that benefits, at some level,
    should continue until I am able to find work, or for
    some additional period of time while I search for a new
    position (something along the lines of the process
    described in the “Return To Work” section of the
    disability plan). Some Rehabilitation efforts may also be
    necessary if I need to change fields of work in order to
    find employment.
      A review of the decision to simply “terminate”
    benefits is in order . . . . Please let me know what
    “management” decides.
R.12, Tab 19 at 1.
  Sentry interpreted Ms. Schneider’s letter as an appeal. In
a “MANAGEMENT PROTOCOL” form, dated “5/16/03,”
that refers to Ms. Schneider as the “CLAIMANT,” it is noted
that Sentry employees are to “[d]iscuss 5/14/03 re-
quest”—presumably Ms. Schneider’s e-mail of May 14—and
that, after the discussion, an “appeal to [the] Plan adminis-
trator” was to be completed. R.12, Tab 20 at 1. Furthermore,
in an e-mail dated June 9, 2003, one Sentry employee noted
to another “the denial of the appeal from JS [Janet Schnei-
der] for continued LTD [long-term disability] benefits.”
R.12, Tab 21 at 1. The e-mail also noted that “JS will be
8                                                   No. 04-2689

informed of this decision in a letter dated and mailed
today.” Id.
  On June 9, 2003, Sentry sent Ms. Schneider a letter regard-
ing her purported appeal. The letter explicitly stated that it
was meant to “communicate[] the decision of the plan
administrator regarding [Ms. Schneider’s] appeal.” R.12,
Tab 22 at 1. The letter concluded:
      Based on both the recent independent medical evalua-
      tion and your attending physician’s statement, you are
      no longer disabled. As such, you no longer qualify for
      benefits under the disability plan. . . . Since you are
      not disabled, no further disability benefits are available.
        Upon review, the plan administrator finds that under
      the terms of the disability policy, no additional benefits
      are available to you as you are not disabled. The termi-
      nation of benefits is upheld.
Id.

B. District Court Proceedings
  Ms. Schneider filed this action, alleging that her long-term
disability benefits wrongfully had been terminated; that she
had not received adequate notice of the termination of her
benefits, as defined by 29 U.S.C. § 1133(1) and the regula-
tions interpreting it; and that the Plan Administrator had
failed to conduct a full and fair review of her claim for
benefits as required by § 1133(2). Ms. Schneider sought
relief in the form of either an award of her unpaid benefits
plus interest or, in the alternative, an order vacating the
termination of her long-term disability benefits and reinstat-
ing the benefits retroactively to April 17, 2003. She also
requested costs and attorneys’ fees. The parties submitted
No. 04-2689                                                   9

cross motions for summary judgment.
  The district court granted summary judgment for Sentry.
In its order, the district court first addressed Ms. Schneider’s
contention that Sentry’s initial notice of termination of her
disability benefits did not comply with ERISA’s statutory
and regulatory requirements for such notice. See 29 U.S.C.
§ 1133; 29 C.F.R. § 2560.503-1(g). The court concluded that,
even though Sentry had not effected strict compliance with
the applicable statutory and regulatory requirements for
notice, it had achieved “substantial compliance” with those
requirements. Halpin v. W.W. Grainger, Inc., 962 F.2d 685,
690 (7th Cir. 1992). Because Ms. Schneider ultimately did
take an appeal from the denial of benefits, the district court
deemed Sentry’s notice adequate, even though the April 23
letter did not state the plan provision on which the denial of
benefits was based and did not identify the steps to take an
appeal.
  Furthermore, the district court concluded that the decision
to terminate Ms. Schneider’s benefits was not arbitrary and
capricious. In making this determination, the district court
relied on the opinions of Drs. Spierer and Samo to the effect
that Ms. Schneider was able to return to work. The district
court also concluded summarily that Ms. Schneider received
a full and fair review of the initial decision to terminate her
benefits.

                              II
                       DISCUSSION
  Ms. Schneider takes issue with three aspects of the district
court’s disposition of her claims. First, she contends that the
district court erred in granting summary judgment to Sentry
on her claim that she was not provided with adequate notice
10                                                No. 04-2689

of the termination of her benefits. Second, she asserts that,
contrary to the district court’s determination, she did not
receive a full and fair review of her claim for benefits as
required by ERISA. Third, she submits that the termination
of her benefits was arbitrary and capricious.

A. Standard of Review
   We review de novo the district court’s grant of a motion
or cross-motion for summary judgment. Gazarkiewicz v.
Town of Kingsford Heights, Indiana, 359 F.3d 933, 939 (7th Cir.
2004). Summary judgment is to be granted “if the pleadings,
depositions, answers to interrogatories, and admissions on
file . . . show that there is no genuine issue as to any mate-
rial fact and that the moving party is entitled to judgment as
a matter of law.” Fed. R. Civ. P. 56. “In considering cross-
motions for summary judgment, we are obliged to view all
facts and draw all reasonable inferences in a light most
favorable to the party against whom the motion under
consideration is made.” Gazarkiewicz, 359 F.3d at 939.

B. Statutory Procedures and Requirements for Denial of
   Benefits
  Ms. Schneider submits that Sentry’s April 23 letter did not
meet ERISA’s statutory and regulatory notice requirements.
We first shall review those requirements before turning to
an assessment of whether the notice afforded to Ms. Schnei-
der in the present case was appropriate.
  ERISA mandates that specific reasons for the denial of
benefits be communicated to the claimant. See Militello v.
Cent. States, Se. and Sw. Areas Pension Fund, 360 F.3d 681, 688
(7th Cir.), cert. denied, 125 S. Ct. 106 (2004). The relevant
No. 04-2689                                                 11

section of ERISA provides:
    In accordance with regulations of the Secretary, every
    employee benefit plan shall—
      (1) provide adequate notice in writing to any partici-
      pant or beneficiary whose claim for benefits under the
      plan has been denied, setting forth the specific rea-
      sons for such denial, written in a manner calculated to
      be understood by the participant, and
      (2) afford a reasonable opportunity to any participant
      whose claim for benefits has been denied for a full
      and fair review by the appropriate named fiduciary of
      the decision denying the claim.
29 U.S.C. § 1133.
  Furthermore, federal regulations, promulgated pursuant
to ERISA and in force at the time the April 23 letter was
sent, set forth the following requirements for the notification
of an adverse benefit determination:
    The notification shall set forth, in a manner calculated
    to be understood by the claimant—
    (i) The specific reason or reasons for the adverse deter-
    mination;
    (ii) Reference to the specific plan provisions on which
    the determination is based;
    (iii) A description of any additional material or informa-
    tion necessary for the claimant to perfect the claim and
    an explanation of why such material or information is
    necessary;
    (iv) A description of the plan’s review procedures and
    the time limits applicable to such procedures . . . .
12                                                       No. 04-2689
                              2
29 C.F.R. § 2560.503-1(g).
  In assessing the notification which a plan has provided
regarding an adverse benefit determination, this court has
held that “substantial compliance [with the applicable
regulations] is sufficient.” Halpin, 962 F.2d at 690. Our
determination that substantial compliance is sufficient
to satisfy § 1133 was “guide[d]” by the “purpose of the
statute and regulations,” all of which “are designed to
afford the beneficiary an explanation of the denial of
benefits that is adequate to ensure meaningful review of
that denial.” Id. at 689-90. Thus, in asking whether substan-
tial compliance with the regulations governing notification
has been achieved, we consider: “[W]as the beneficiary
supplied with a statement of reasons that, under the
circumstances of the case, permitted a sufficiently clear

2
  Both the district court and Ms. Schneider apparently believe
that the applicable regulations are 29 C.F.R. § 2560.503-1(f).
However, based on the substance of Ms. Schneider’s submissions
to this court, the district court’s summary judgment order and
our review of the Code of Federal Regulations, it is clear that the
regulations that govern the circumstances of the present action
are (and have been, at all times relevant to this case) set forth at
29 C.F.R. § 2560.503-1(g). We suspect that the confusion stems
from the fact that the substantive regulations at issue in this case
were set forth at subsection (f) of 29 C.F.R. § 2560.503-1 at the
time Halpin v. W.W. Grainger, Inc., 962 F.2d 685, 690 (7th Cir.
1992), one of this circuit’s most detailed explanations of the
“substantial compliance” test, was decided. The substance of the
former subsection (f) has not changed since it has been located at
subsection (g). Cf. Militello v. Cent. States, Se. and Sw. Areas Pension
Fund, 360 F.3d 681, 687 n.6 (7th Cir.) (using Halpin’s “substantial
compliance” rule to determine whether section 2560.503-1(g) had
been satisfied), cert. denied, 125 S. Ct. 106 (2004). Therefore, we
shall consider section 2560.503-1(g) as it affects this case.
No. 04-2689                                                 13

understanding of the administrator’s position to permit
effective review”? Id. at 690.

C. Application to this Case
  The parties agree that the Plan did not comply strictly
with the governing regulations. Therefore, with the forego-
ing principles in mind, we now shall consider whether
Sentry’s April 23 letter substantially complied with the
statutory and regulatory requirements for notice.
  Ms. Schneider submits that Sentry’s April 23 letter failed
to comply substantially with section 2560.503-1(g). She
alleges that the April 23 letter did not set forth the specific
reasons for the denial of benefits, did not refer to the plan
provision on which the denial of benefits was based and did
not identify any information that would have allowed her
to perfect her claim. Ms. Schneider also contends that she
never had a chance to present her case for continuation of
benefits because Sentry’s April 23 letter did not include
information on how to submit her claim for appeal.
  Sentry, on the other hand, contends that substantial
compliance with section 2560.503-1(g) has been shown.
According to Sentry, the April 23 letter identified Dr.
Spierer’s report and Dr. Samo’s February letter as the basis
for the termination of benefits. Sentry submits that Ms.
Schneider’s contention regarding the failure of the April 23
letter to inform her of the Plan’s review procedures is
moot because, in Sentry’s opinion, Ms. Schneider appealed
the denial of benefits in her May 14 e-mail to Sentry.
  The notice that Sentry afforded Ms. Schneider was
indefensible as a matter of statute, regulation and case law.
In the first place, the April 23 letter failed to meet the
requirement, contained both in § 1133(1) and in section
14                                               No. 04-2689

2560.503-1(g)(I), that the notification set forth the specific
reasons for the termination of benefits. Ms. Schneider
was not provided with the nine and one-half page report
which Dr. Spierer prepared and on which Sentry insists it
based its decision to terminate benefits. Nor was she
provided with a summary of that report. Because Ms.
Schneider did not know what reasons motivated Dr.
Spierer’s conclusion that she was no longer disabled, she
could hardly seek review of that conclusion. Furthermore,
even a cursory reading of the April 23 letter reveals that it
did not identify the specific plan provision on which the
denial was based, as required by section 2560.503-1(g)(ii).
On the first two requirements set forth in section 2560.503-
1(g), then, Sentry’s notice did not permit Ms. Schneider
“a sufficiently clear understanding of the administrator’s
position to permit effective review.” Halpin, 962 F.2d at 690.
  We also must consider the requirements in section
2560.503-1(g)(iii) and (iv), which mandate that the notice
contain “[a] description of any additional material or
information necessary for the claimant to perfect the claim”
and “[a] description of the plan’s review procedures and the
time limits applicable to such procedures.” Certainly, the
April 23 letter made no mention of any information Ms.
Schneider could provide to perfect her claim or of the
channels through which she could seek review of the
decision to terminate her benefits. In evaluating the failure
of the April 23 letter to make reference to Sentry’s review
procedures, we especially note that Ms. Schneider’s May 14
e-mail—which Sentry interpreted as an appeal—stated, “[a]
review of the decision to simply ‘terminate’ benefits is in
order.” R.12, Tab 19 at 1. Obviously, such a bare request
could not permit a “meaningful review of [the] denial”
of her disability benefits. Halpin, 962 F.2d at 689. In
our opinion, the artlessness of Ms. Schneider’s request,
No. 04-2689                                                      15

rather than constituting proof that the April 23 letter was
adequate notification to Ms. Schneider of her right to
appeal, helps establish that the notification failed to give
Ms. Schneider access to the kind of “effective review” that
ERISA, its accompanying regulations and our cases contem-
plate. Id. at 690.
   In short, the April 23 letter did not fulfill the purpose
of the statute, which was to “afford the beneficiary an
explanation of the denial of benefits that is adequate to
ensure meaningful review of that denial.” Id. at 689-90. In
light of the foregoing analysis, we must conclude that
Sentry’s April 23 letter failed to comply substantially with
the requirements of section 2560.503-1(g). Because we
have determined that Sentry failed to provide Ms. Schneider
with an explanation that is adequate to ensure a meaningful
review of the termination of her benefits, we conclude that
Ms. Schneider is entitled to summary judgment on her claim
                                               3
that Sentry violated ERISA, 29 U.S.C. § 1133.

D. Remedy
  The parties dispute whether we should remand Ms.
Schneider’s claim to the plan administrator (in this case,
Sentry) or whether, instead, we should issue an order
vacating the termination of Ms. Schneider’s benefits and

3
  Ms. Schneider has asserted two other grounds for appeal: that
she did not receive a full and fair review of her claim for benefits
as required by ERISA and that the termination of her benefits was
arbitrary and capricious. Because we have determined that Sentry
violated § 1133 by failing to give Ms. Schneider adequate
notification of its decision to terminate her long-term disability
benefits, it is unnecessary for us to consider these issues.
16                                                No. 04-2689

reinstating retroactively those benefits. In fashioning re-
lief for a plaintiff who has sued to enforce her rights
under ERISA, see 29 U.S.C. § 1132(a)(1)(B), we have fo-
cused “on what is required in each case to fully remedy the
defective procedures given the status quo prior to the
denial or termination” of benefits. Hackett v. Xerox Corp.
Long-Term Disability Income Plan, 315 F.3d 771, 776 (7th Cir.
2003).
  Because of our emphasis on restoring the status quo prior
to the defective procedures, we have distinguished between
     a case dealing with a plan administrator’s initial denial
     of benefits and a case where the plan administrator
     terminated benefits to which the administrator had
     previously determined the claimant was entitled.
     Compare Wolfe v. J.C. Penney Co., Inc., 710 F.2d 388, 393-
     94 (7th Cir. 1983) (remanding to the administrator for
     new hearing where initial denial of benefits was not
     procedurally accurate) with Halpin, 962 F.2d at 697
     (affirming district court’s reinstatement of plan benefits
     where termination was not procedurally adequate).
Hackett, 315 F.3d at 775-76.
  In Halpin, we concluded that an employer-sponsored
disability plan had failed to comply substantially with
ERISA and its implementing regulations in terminating
the plaintiff’s benefits. On the question of remedy, we
held that a district court did not abuse its discretion when it
ordered the reinstatement of the plaintiff’s benefits as of the
date the benefits were terminated. Halpin, 962 F.2d at 697.
Furthermore, in other cases, we have suggested that
“retroactive reinstatement of benefits is the proper remedy”
when, for instance, a plan’s claims procedure “did not
comply with ERISA’s requirements for full and fair review.”
Quinn v. Blue Cross & Blue Shield Ass’n, 161 F.3d 472, 477 (7th
No. 04-2689                                                        17

Cir. 1998) (citing Grossmuller v. Int’l Union, United Auto.,
Aerospace & Agric. Implement Workers of America, UAW, 715
F.2d 853, 858-59 (3d Cir. 1983)).
                                                               4
  We believe that this case is comparable to Halpin. As
in Halpin, here, Ms. Schneider ceased receiving benefits
to which she had earlier been determined to be entitled after
the Plan utilized improper notification procedures. Thus, we
shall order the same relief directed in Halpin.
  Sentry argues that reinstating Ms. Schneider’s benefits
would provide her with “ ‘an economic windfall should
she be determined not disabled upon a proper reconsid-
eration.’ ” Hackett, 315 F.3d at 776 (internal quotation
omitted). However, we think that Sentry’s reliance on
Hackett for this point is improper. When read in context, the
language from Hackett to which Sentry has directed us
explicitly applies to those cases in which a plaintiff appeals
a plan administrator’s initial denial of benefits. See id. This
court’s opinion in Hackett then moves on to discuss “cases
where the plan administrator terminated benefits under
defective procedures” and concludes that the “continuation
of benefits” appropriately restores the status quo in such

4
  Unlike the circumstances in Wolfe v. J.C. Penney Co., Inc., 710
F.2d 388, 390 (7th Cir. 1983), in which a plaintiff was appealing
the initial denial of benefits, in this case, Ms. Schneider already
had been determined to be eligible for long-term disability
benefits under the Plan. Furthermore, unlike the circumstances in
Quinn v. Blue Cross & Blue Shield Association, 161 F.3d 472, 477 (7th
Cir. 1998), in which the plaintiff was facing a deadline upon
which her benefits were to be terminated, in this case, Ms.
Schneider was not facing any such deadline. Sentry has not
argued that Ms. Schneider was not scheduled to continue
receiving benefits.
18                                                No. 04-2689

cases. Id. (emphasis added). In light of our cases’ concern for
restoring the status quo prior to the procedural misstep,
reinstatement is in order in this case.
  In this case, prior to the termination of her benefits by
improper procedures, the status quo was that Ms. Schneider
was receiving long-term disability benefits from the Plan.
The appropriate remedy is an order vacating the termina-
tion of her benefits and directing Sentry to reinstate retroac-
tively the benefits. We point out that the decision
to terminate Ms. Schneider’s long-term disability benefits
was not accompanied by the proper procedural protections,
but it was not necessarily wrong. Sentry is free to revisit Ms.
Schneider’s eligibility for benefits.

                       Conclusion
  For the foregoing reasons, the judgment of the district
court is reversed and the case is remanded for further
proceedings consistent with this opinion.
                                   REVERSED and REMANDED
A true Copy:
        Teste:

                           _____________________________
                            Clerk of the United States Court of
                              Appeals for the Seventh Circuit

                     USCA-02-C-0072—9-7-05