Long-term disability insurance cases involving fibromyalgia present special difficulties because there are no objective tests for the condition other than a clinical "trigger-point" test. A recent ruling from California handled by attorney Michael McKuin and decided by Judge Dolly Gee presents an interesting and thorough discussion of such a claim that stands out in noting where the insurer, Liberty Life Assurance Company of Boston, a subsidiary of the Liberty Mutual Insurance Company, was found to have thwarted a legitimate claim by not sharing the evidence it developed while reviewing the claim denial.
In Collins v. Liberty Life Assur.Co. of Boston, 2013 U.S.Dist.LEXIS 174237 (C.D.Cal. December 11, 2013), after conducting a bench trial on the record, the court issued extensive findings of fact and conclusions of law in favor of the plaintiff, Robert Collins. Collins had worked for Sony Corporation as a supervisor in a technical support capacity until he became disabled in 2009 when he collapsed and was hospitalized for several days. Following the hospitalization, Collins complained of severe headaches with difficulties in concentration and memory. He was subsequently diagnosed with fibromyalgia. Collins applied for short-term disability benefits; and his claim was approved. Collins also received 24 months of long-term disability payments under the "own occupation" definition of disability. However, after Liberty conducted two peer reviews along with both an independent medical examination that could find no specific physical impairments, as well as a neuropsychological evaluation that found no specific abnormalities, benefits were terminated. Liberty also obtained multiple days of surveillance.
Collins appealed Liberty's decision; however, despite the submission of additional medical reports and evidence from a favorable Social Security disability determination, Liberty upheld its decision. Collins then filed suit.
Despite the application of a deferential standard of review, the court ruled for the plaintiff. The court found, based on the factors enunciated in Saffon v. Wells Fargo & Co. Long Term Disability Plan, 522 F.3d 863 (9th Cir. 2008), that there was cause to be skeptical of Liberty's decision based on its inherent conflict of interest. Those factors included whether the administrator:
- ignored Collins' self-reports that are inherently subjective and not easily determined by objective measurement
- had a meaningful dialogue with Collins in deciding whether to approve the benefits claim
- spoke with Collins' doctors without notifying him
- took Collins' doctors' statements out of context or otherwise distorted them, or
- conducted a "pure paper" review. Id. at 872-73; Montour, 588 F.3d at 635.
The court questioned the Liberty analysis, particularly the findings made by Dr. Attfield, who performed a file review and concluded "that Collins lacked 'objectively determined restrictions and limitations,' even though fibromyalgia is an illness that is diagnosed almost entirely through subjective reporting and manifests no outward symptoms." The court was also critical of the peer review doctors' note comparison, finding that "the review process was tainted with doctors in an echo chamber seeking objective indicia of disability despite the inherently subjective nature of Collins' chronic pain and headache complaints."
The court also noted the absence of a "meaningful dialogue." Plaintiff requested the neuropsychologist's raw data, which was never provided. Thus, the court concluded that "[b]y failing to disclose data on which it relied, Liberty failed to satisfy the requirement of 'meaningful diaglogue.'" (citing Saffon, 522 F.3d at 870). The court further elaborated:
Liberty argued that it relied on the test results rather than the raw data, but Liberty was required to disclose any document on which it relied or "generated in the course of making the benefit determination, without regard to whether [it] was relied upon in making the benefit determination." 29 C.F.R. ßß 2560.503-1(h)(2)(iii) & (m)(8)(ii). Any relevant data must be disclosed for Liberty to meet its communication requirement.
The court was also critical of Liberty's failure to disclose the medical reviews that it relied on in the final appeal and failed to inform the plaintiff that its doctors were contacting the plaintiff's doctors. As a result, the court found, "Collins would therefore have had no opportunity to ask his doctors for a clarification of any conflict between their initial reports and the summaries they signed, such as the difference between Dr. Telfer's signed summary stating Collins had no neurological impairments, and the earlier report that he could not return to work for a year." In addition, the court pointed to examples of Liberty's "distortion of doctors' statements." The court also criticized Liberty's efforts to raise the applicability of its mental illness limitation for the first time during the litigation. The court made it clear that "[a] defendant in an ERISA case may not assert new grounds for denial once litigation in federal court has begun." (citing Harlick v. Blue Shield of California, 686 F.3d 699, 719 (9th Cir. 2012), cert. denied, 133 S. Ct. 1492, 185 L. Ed. 2d 547 (2013) ("The general rule . . . in this circuit and in others, is that a court will not allow an ERISA plan administrator to assert a reason for denial of benefits that it had not given during the administrative process.")).
The court also picked apart other issues, such as Liberty raising questions about Collins's doctors telling him to exercise even though exercise is prescribed for fibromyalgia. But the court's greatest scorn was reserved for its rejection of Liberty's argument that Collins had a tendency to exaggerate. Liberty pointed to the surveillance as corroborative evidence of exaggeration - for example, he was depicted standing and waiting for a driver hired by Liberty to pick him up to take him home from an appointment that Liberty had arranged. The court wrote:
He was documented, on one day, sitting, standing, and pacing for a longer period of time than he said he could. Setting aside the fact that the man claims to be in pain and Liberty allowed him to sit/stand for over forty minutes, Liberty did not explain exactly what else Collins could have done other than either sit, stand, or pace while he waited for his ride to come transport him home. Would it have made more of a difference if Collins had writhed in pain on the pavement in front of the camera rather than as
soon as he returned home and could climb into his bed? The exaggeration rationale was supposedly also bolstered by footage of Collins driving after he said that he had stopped driving. But that alone is not enough to determine that he was malingering, especially because nothing in the record suggests that Collins was physically unable to drive at all, but rather that the DMV had suspended his license and issued a temporary restricted license and that Collins voluntarily stopped driving, especially without another adult present, because of his tendency to become confused. (C.F. 391.) In the end, the exaggeration rationale is thinly supported, and cannot be the entire reason to deny that Collins has limitations. Otherwise, Liberty did not attempt to explain why the assessments of the doctors that classified Collins as impaired were incorrect. The reviewing doctors did not have an adequate rationale to discount, let alone simply ignore, the assessments by Collins' doctors that he is impaired.
Liberty also ignored evidence submitted by the plaintiff; and its rationale for the denial kept shifting. The court viewed the shifting rationales as providing "some evidence that it desired a certain result and summoned up various rationales to reach it. This type of self-interested decision-making contravenes the purpose of ERISA and is the essence of an abuse of an insurance provider's discretion." (citing Saffon, 522 F. 3d at 872 ("[C]oming up with a new reason for rejecting the claims at the last minute suggests that the claim administrator may be casting about for an excuse to reject the claim rather than conducting an objective evaluation."); Abatie, 458 F.3d at 974 ("[A]n administrator that adds, in its final decision, a new reason for denial, a maneuver that has the effect of insulating the rationale from review, contravenes the purpose of ERISA."). Consequently, the court overturned the denial and awarded benefits.
Discussion: Liberty's chameleon-like approach to its evaluation of this claim obviously steered the court to rule in favor of the plaintiff. But where this decision truly stands out is in the discussion of the claim process and its critique of Liberty's behavior. The court's position that Liberty was obligated to turn over the raw psychological data and to give the plaintiff notice of communications with the treating doctors in order to correct possible misstatements or mischaracterizations prior to the final claim decision being rendered was the most important part of this decision.
- See more at: http://www.debofsky.com/2014/02/04/collins-v-liberty-life-assur-co-of-boston-2013-u-s-dist-lexis-174237-c-d-cal-december-11-2013/#sthash.yw9C12lZ.dpuf