Wakkinen v. UNUM Life Ins.Co. of Amer.

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Wakkinen v. UNUM Life Ins.Co. of Amer., 2008 U.S.App.LEXIS 14208 (8th Cir. July 2, 2008)(Issue: Fibromyalgia). The plaintiff, a certified public accountant, was diagnosed with fibromyalgia in 1998. Ultimately, that condition, along with chronic fatigue syndrome and depression, caused Wakkinen to stop working in November 2001 after his condition became so acute that he was unable to take care of his basic hygiene and other activities of daily living. Wakkinen was then approved for short term disability benefits due to depression lasting six months; and during the STD period, he was treated for his other physical condition, including treatment by a physiatrist for fibromyalgia and by a pain specialist. When the STD benefits expired, though, Unum refused to approve the LTD benefits, claiming that Wakkinen failed to establish disability throughout the entire elimination period, focusing solely on his psychiatric impairment. Despite submission as part of a pre-suit appeal of evidence of his chronic pain and ongoing treatment with a variety of specialists, Unum maintained its denial. Unum's determination was supported by a nurse, review by an occupational medicine specialist and by a psychiatrist. A second appeal was submitted by an attorney, who provided additional medical reports along with witness statements, but Unum upheld its determination.

Applying a deferential standard of review, the district court and then the court of appeals upheld Unum's findings. The court pointed to explicit policy language, including an amendment that went into effect two days before the onset of the claimed disability, that unmistakenly established a reservation of discretion. The court also rejected the plaintiff's contentions that Unum should not be afforded deference due to evidence of a conflict of interest and serious procedural irregularities. As to the first point, the court of appeals cited Metropolitan Life Ins. Co. v. Glenn, U.S. , 2008 WL 2444796, at *5 (U.S. June 19, 2008), but pointed out that although the conflict of interest must be considered as a factor, it does not change the standard of review. The court also discussed Unum's regulatory problems and found them "troubling," but concluded "that there is not a sufficiently close balance for the conflict of interest to act as a tiebreaker in favor of finding that UNUM abused its discretion."

What clearly influenced the court was that none of the treating doctors gave an opinion until after the elimination period ended that Wakkinen was disabled. Nor did the court accept the plaintiff's argument that Unum's doctors lacked sufficient expertise to evaluate the evidence or that the Unum physicians were required to be independent.

The court then set forth the scope of its review, stating that under the abuse of discretion standard,

"we will not disturb the administrator's decision if it was reasonable. We measure reasonableness by whether substantial evidence exists to support the decision, meaning "more than a scintilla but less than a preponderance." Woo v. Deluxe Corp., 144 F.3d 1157, 1162 (8th Cir. 1998). We examine only the evidence that was before the administrator when the decision was made, and we are to determine whether a reasonable person could have -- not would have -- reached a similar decision. Phillips-Foster v. UNUM Life Ins. Co., 302 F.3d 785, 794 (8th Cir. 2002). *21.

Applying that template, the court looked at the evidence and found that the treating doctors' conclusions were not supported by their underlying notes, particularly one physician who encouraged Wakkinen to return to work just days before he did an about face and pronounced him disabled. The physiatrist's finding that Wakkinen was disabled due to fibromyalgia established an onset in August 2002 which was after the elimination period ended.

Discussion: The court's explanation of the scope of its review is contrary to Glenn (see note in this issue). The Glenn ruling appears to have eliminated the "reasonableness" test; and its citation to Universal Camera and Citizens to Preserve Overton Park , Inc. v. Volpe, 401 U.S. 402, 91 S.Ct. 814, 28 L.Ed.2d 136 (1971) signals that courts are to scrutinize the quality and quantity of the evidence presented. According to Overton Park, despite a "presumption of regularity" to which an underlying "administrative" decision is entitled, a court should nonetheless conduct a "substantial inquiry" and a "thorough, probing, in-depth review." 401 U.S. at 415. The court is not to "substitute its judgment for that of the agency," but is required to "consider whether the decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment;" the "inquiry into the facts is be searching and careful." Id. at 416. Moreover, by citing Professor Langbein's article twice in the majority opinion, the Court also implies that they are accepting of his philosophy:

Deciding a case on the merits is indeed more time consuming than presuming the correctness of somebody else's self-serving decision. Because, however, Congress determined to subject ERISA plan benefit denials to federal judicial review, and because ERISA's draconian preemption provision suppresses the state-law causes of action that existed for many such cases before ERISA, the proper role of the federal courts is to decide these cases fairly, and not slough them off on biased decision makers.

Langbein, "Trust Law As Regulatory Law: The UNUM/Provident Scandal and Judicial Review of Benefit Denials Under ERISA," 101 Nw. U. L. Rev. 1315, 1334 (2007). This ruling is inconsistent with the Supreme Court's directive.

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