Marconi v. Chicago Heights Police Pension Board

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The casenote of the month is from the Disability E-News Alert! a monthly newsletter describing new disability insurance developments. For subscription information, e-mail Mark DeBofsky or visit www.disabilityenewsalert.com .

Marconi v. Chicago Heights Police Pension Board, 2005 Ill.App.LEXIS 925 (1st Dist. 9/19/2005)( Issue Government Benefits) . The issue in this case has to do with the constitutionality of evidentiary requirements in a government pension plan. Under the Illinois Pension Code, a disability pension requires the unanimous concurrence of three physicians certifying the claimant's disability. The claimant, a police officer, alleged disability due to depression. His claim was supported by his treating psychiatrist as well as by two independent psychiatrists and a psychologist who had administered psychological testing. However, another psychiatrist disagreed and challenged the claimant's credibility and the consistency of the evidence. As a result of that doctor's opinion, benefits were denied. Seeking review under the Illinois Administrative Review Law, which requires that deference be given to the administrative agency's determination, the court explained that a disability pension determination "involves an examination of the legal effect of a given set of facts." Thus, as a mixed question of law and fact, it is reviewed under the clearly erroneous standard, which, while affording deference to the agency, requires reversal when the court is "left with the definite and firm conviction that a mistake has been committed."

The court found the evidence presented met that standard and that the claimant met the relevant test for an award of benefits, particularly since the claimant was removed from his position not of his own accord, but by his superiors in the police department. The court also appeared troubled that the same psychiatrist was involved in several other cases in which he gave the dissenting opinion. The main issue that concerned the court, though, was that the Illinois Pension Code requires three concurring opinions; however, the pension board involved in this claim chose not to obtain a certificate from the treating doctor, but sought yet another opinion. As applied, the court found the requirements of the pension code unconstitutional, ruling that applicants for government benefits have a substantive due process right to benefits. The court elaborated:

Although the Supreme Court has never definitively ruled that applicants for governmental benefits are "entitled" to those benefits in a sense that would entitle them to the same due process protections as the recipients whose benefits are being terminated, to hold otherwise would leave the applicants "without procedural safeguards against totally arbitrary actions by government administrators." 3 R. Rotunda and J. Nowak, Treatise on Constitutional Law § 17.5, at 71 (3d ed. 1999). Thus, federal circuits have held with virtual unanimity that where a statute purports to spell out an entitlement to governmental benefits, due process attaches not only to the determination of continued eligibility for benefits, but to the initial determination of eligibility as well. See, e.g., Kelly v. R.R. Retirement Board, 625 F.2d 486, 490 (3rd Cir. 1980); Mallette v. Arlington County Employees' Supplemental Retirement System II, 91 F.3d 630, 634, 637-38 (4th Cir. 1996); Holbrook v. Pitt, 643 F.2d 1261, 1278 n.35 (7th Cir. 1981); Schroeder v. City of Chicago, 927 F.2d 957, 963 (7th Cir. 1991) (Ripple, C.J., concurring); Daniels v. Woodbury County, 742 F.2d 1128, 1132-33 (8th Cir. 1984); Griffeth v. Detrich, 603 F.2d 118 (9th Cir. 1979), cert. denied, 445 U.S. 970, 64 L. Ed. 2d 247, 100 S. Ct. 1348 (1980). n7 We follow the majority view that applicants for governmental benefits must be afforded due process protections. *51-*52.

The court then ruled that the legislature cannot grant a benefit but condition that grant on fewer procedural safeguards than are required by due process. In ascertaining what process is due, the court found the failure in the pension code is that it gives too much discretion to the pension board to select which three doctors are to certify disability -

The certification requirement, on its face, gives the applicant no right to question the pension board's choice of doctors or set aside unfavorable certificates thus obtained. As pointed out in Coyne, in the event that the pension board's doctors do not unanimously certify the applicant as disabled, whatever meritorious arguments the applicant might raise at a hearing have no bearing on the outcome of his case because just one unfavorable certificate renders the entire proceeding pointless. In other words, although such applicant may have technically had a hearing, that hearing's negative outcome would have been predetermined before the hearing ever started since, in any event, the lack of unanimous certification by the three doctors would preclude the receipt of the pension. It has long been established, however, that a hearing with a predetermined outcome is no hearing at all. See Matthews v. Harney County, Oregon, School District No. 4, 819 F.2d 889, 893 (9th Cir. 1987); Continental Box Co. v. National Labor Relations Board, 113 F.2d 93, 95-96 (5th Cir. 1940) ("'It is a fundamental principle that no judicial or quasi judicial hearing is valid, where the maxim "audi alteram partem" [translated as "hear the other side"] is ignored, and it is therefore of the essence of a valid judgment that the body which pronounces it shall be unbiased, shall have no interest whatever in the outcome of the issue, and shall not have in any manner prejudged or predetermined it,'" quoting Local No. 7 of Bricklayers', Masons' & Plasterers' International Union of America v. Bowen, 278 F. 271, 278 (D.C. Tex. 1922)). As one court recently explained:

"It is clear that when the evidence establishes that the outcome of a *** hearing has been predetermined regardless of the proof presented, the concerns and goals of the *** hearing as set forth in Loudermill have not been met. Such a hearing *** is, in fact, nothing more than a sham proceeding. [Citation.] *** If countenanced by the court, [such a proceeding] would eviscerate the protections afforded *** under the Due Process Clause of the Fourteenth Amendment." Wagner v. City of Memphis, 971 F. Supp. 308, 318-19 (W.D. Tenn. 1997).

The constitutional infirmity of the certification requirement is thus intensified by the fact that the statute gives the Pension Board an absolute right to preselect those doctors whose negative position on the issue of disability has been firmly established, i.e., Dr. Harris, who had served the function as the sole dissenting doctor in several cases discussed so far, namely, Knight, Trettenero, and Coyne. Therefore, if unfavorable certificates are not challengeable, the applicant's right to a hearing can be effectively denied by the pension board's preselection of its doctors. *57-*58.

The court further held that the constitutional infirmity could not be cured by cross-examination because even if one of the certificates were invalidated, the claimant would be left with only two certificates and could not meet the statutory requirement of providing three supporting certificates. Accordingly, based on the court finding the statute unconstitutional, the court ordered payment of benefits due plus interest. The court found a remand would be pointless because the case reached the Appellate Court nine years after Marconi was removed from active duty and a current review would not be able to shed any light on Marconi's condition nine years ago. However, the court did remand for further proceedings as to whether the disability was one which occurred in the line of duty or a non-duty disability since the evidence was in conflict as to the cause of the depression. Of course, the court made it clear that the pension board was free to determine the claimant's ongoing entitlement to benefits.

Discussion: Although this ruling relates to government benefits, which are a property right under the Constitution, much of the court's reasoning would be applicable to ERISA claims as well. Benefits under ERISA are meaningless if the plan has the discretion to select the only doctor whose opinions will be considered in rendering a decision. The point made in the ruling about requiring the decision maker to consider all opinions is a key to a fair outcome. If the courts are going to analogize ERISA cases to administrative disputes, the principles applicable in administrative law must apply. Thus, it should be arbitrary and capricious for a plan to rely on an opinion without considering contrary findings, and no court should ever find that unquestioned reliance on a single opinion without weighing all of the evidence is free from the taint of arbitrary and capricious conduct. The district court in Crocco v. Xerox Corp., 956 F.Supp. 129 (D.Conn. 1997); aff'd in part, rev'd in part and remanded, 137 F.3d 105 (2d Cir. 1998) recognized this point when it rejected the plan's contention that it denied mental health treatment based on the advice of its consultant; and held that even though the plan administrator is not an expert, it is her job to weigh all of the opinions presented and not just accept the consultant's opinion without question.

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