Raybourne v. Cigna

Raybourne v. CIGNA Life Ins.Co. of N.Y., 2012 U.S.App.LEXIS 24018 (7th Cir. November 21, 2012)( Issues: Social Security; Attorneys' Fees). This case marks the culmination of a lengthy battle, including a prior trip to the court of appeals (576 F.3d 444 (7th Cir. 2009)). The first appeal reversed the district court's ruling upholding CIGNA's termination of Edward Raybourne's long-term disability benefits and remanded the matter for reconsideration. On remand, the district court found CIGNA's decision was arbitrary and capricious based on the insurer's conflict of interest. This ruling affirmed the district court's judgment in Raybourne's favor.

Raybourne worked as a quality engineer for Electrodynamics, Inc. for 23 years before becoming disabled on account of degenerative joint disease in his right foot that caused severe pain and necessitated four surgeries in an effort to treat the condition. CIGNA did not dispute that Raybourne was occupationally disabled and paid him benefits for 24 months. However, when the definition of disability transitioned to a more demanding requirement that Raybourne prove an inability to engage in any occupation, his benefits were terminated. Two pre-litigation appeals were unsuccessful, and litigation was commenced.

CIGNA won the first round; however, the court of appeals reversed the initial determination, asking the district court to reconsider its decision in light of Metro.Life Ins.Co. v. Glenn, 554 U.S. 105 (2008). Following remand, the district court gave CIGNA an opportunity to explain why its decision was not the product of its inherent conflict of interest as both the payor of benefits and the party deciding a claimant's entitlement to benefits. However, the court found the insurer's proffered explanation "unconvincing" and awarded benefits to Raybourne along with fees.

The court of appeals affirmed the decision in all respects. As to the merits, the court focused heavily on CIGNA's conflict of interest after acknowledging the similarities between the facts and circumstances of this case and those presented in Glenn. In both cases, the insurer encouraged an application for Social Security benefits, recommended a lawyer to the claimant, and then reaped the benefits of the award by recouping benefits that had already been paid out based on policy provisions coordinating Social Security and long-term disability benefits. In addition, in both cases, the insurer emphasized a particular medical report that favored the denial of benefits while de-emphasizing other contrary reports; and the insurer also "failed to provide its own vocational and medical experts with all of the relevant records." In this case, CIGNA hired Advantage 2000 Consultants, Inc. to assist Raybourne with his Social Security disability claim. Throughout the process, even though Social Security initially denied the claim, it nonetheless determined that Raybourne was incapable of performing the duties of his past job. Finally, at a hearing before an administrative law judge, Raybourne was also found incapable not only of performing the duties of his past job, but was also deemed disabled from working at any job. That result benefitted CIGNA, with the court noting:

Cigna had something to gain by providing this assistance to Raybourne in pressing his claim to
the SSA: once a participant qualified for benefits, the Plan paid the lesser of 60% of the claimant's
monthly earnings or $15,000, less any other income benefits received by the claimant, including
Social Security disability benefits. Thus, in May 2006, when the SSA granted Raybourne disability
benefits retroactive to the start of his disability, he was obliged to use the award of back benefits to
repay Cigna for amounts the insurer paid to him during the initial period of his disability.
(emphasis in original)

Although CIGNA had Raybourne undergo an independent medical examination that found him not disabled, the court pointed out in Footnote 5 to the opinion:

Dr. Player does not explain his seemingly paradoxical opinion that a person who requires a cane
to reduce weight-bearing forces is capable of lifting and carrying twenty pounds. Presumably, he
expected Raybourne to carry the load with the hand that was not employing the cane and believed
that the cane would adequately reduce the additional load. On summary judgment, that is the most
generous reading we can imagine for Dr. Player's opinion.

Two months after the examination with Dr. Player, Raybourne appeared at his social security disability hearing with CIGNA's vendor. A copy of the IME report was not provided to the Social Security ALJ, nor did CIGNA submit the treating doctor's rebuttal. However, three weeks before the Social Security hearing, CIGNA terminated Raybourne's benefits. That decision was affirmed three days after the Social Security hearing, despite the submission of additional evidence supporting Raybourne's claim. CIGNA's affirmance was based on a two-sentence handwritten note from an in-house non-examining physician, R. Norton Hall, who concluded there was "no documented clinical evidence to support the restrictions imposed." CIGNA also recouped benefits it had previously paid out as a result of the favorable Social Security decision. Raybourne submitted an additional appeal, supplying the favorable ALJ decision, the Advantage 2000 records, and a current functional capacity evaluation completed by Raybourne's treating doctor. Raybourne's argument was focused heavily on the ALJ's findings; however, CIGNA ignored those findings altogether and affirmed its decision based on another brief handwritten note from an in-house doctor.

When the district court gave CIGNA a chance to explain its findings after the court of appeals had remanded the claim, CIGNA furnished four reasons for denying the claim again, all of which were rejected by the district court and the court of appeals. First, CIGNA maintained that the Social Security and insurance policy definitions of "disability" differed; however, the district and appellate courts both found the definitions "functionally equivalent." Also rejected was CIGNA's explanation that the Social Security regulations differ from ERISA, pointing to Social Security's treating physician rule and the five-step Social Security sequential evaluation process. As the court pointed out, while the ALJ cited the relevant regulations, none were significant to the Social Security judge's analysis. He did not give more weight to the treating doctor's findings just because the physician was a treating doctor. Instead, more credit was given because they were consistent with the weight of the evidence "as a whole." Nor did the ALJ take Raybourne's age into consideration because he was younger than 50 as of the date on which his disability was established. Nor did the ALJ defer to the treating doctor's opinions on Raybourne's pain. Instead, the Social Security judge focused on Raybourne's credible subjective descriptions of his pain, the source of the pain, the claimant's willingness to undergo four surgeries to alleviate pain, his full compliance with treatment, and his strong work history. Hence, the court cited precedent in pointing out:

We do not suggest that a Social Security disability finding, multiple and unsuccessful surgeries for
pain relief, and a heavy pain medication regimen will together always compel an award of benefits.
But with this evidence in the record, a plan administrator must address it and provide a reasonable
explanation for discounting it. . . . In this case, the Social Security award, the surgeries, and the
medication provide strong evidence in support of a finding of continuing disability.
The administrator's] explanations for discounting them are not supported by the record.

Mark DeBofsky of Daley, DeBofsky and Bryant represented Mr. Raybourne.