Attorneys Mark DeBofsky and Bridget O’Ryan secured a victory in the U.S. Court of Appeals on May 18, 2017 in a disability benefit case involving fibromyalgia – Kennedy v. Lilly Extended Disability Plan, 2017 WL 2178091 (7th Cir. May 18, 2017)(available at Final Opinion). The court began its ruling by announcing that this case is about fibromyalgia, and then proceeds to explain the nature of the condition, its chronicity, and the severity of the pain it causes. Cathleen Kennedy was a senior human resources executive at Eli Lilly & Company, one of the world’s leading pharmaceutical companies, before she became disabled due to fibromyalgia. Lilly is very familiar with fibromyalgia since it markets Cymbalta to treat the disease. Lilly has also retained Dr. Daniel Clauw, a professor of rheumatology at the University of Michigan, as a consultant on fibromyalgia. Dr. Clauw has publicly stated that many persons who suffer from fibromyalgia “end up needing to stop working because of this condition” and has also remarked that fibromyalgia “is not only very common but is typically also very disabling.”
Despite Lilly’s initial approval of Kennedy’s claim for disability benefits, which she submitted when she stopped working in 2008 after a 26-year career of steady advancement at the company, benefits were terminated after several years following a determination that she was no longer unable “to engage, for remuneration or profit, in any occupation commensurate with the Employee’s education, training, and experience.” The district court overturned that finding; and the court of appeals affirmed the lower court.
The court ridiculed the evidence that Lilly cited in support of its conclusion. For example, Lilly made Kennedy travel more than 100 miles from her home to be examined by a doctor who performed a five minute examination and concluded Kennedy was not disabled based on a falsehood – a claim that the American College of Rheumatology “does not consider fibromyalgia to be disabling on a long-term basis.” That, as we know from our earlier quotation from the ACR is false; and Lilly itself appears not to have relied on Dr. Schriber’s opinion in its decision to terminate Kennedy’s benefits. Another doctor who was discredited was Dr. Dayton Payne, who performed a file review but did not examine Kennedy.Although he acknowledged that Kennedy’s record documented fatigue, irritable bowel, interstitial cystitis, depression, anxiety, attention deficit disorder, diffuse tenderness, and tender points, he maintained she was not disabled based on his conclusion that “all of the laboratory data in this file are normal.” The court agreed with the district court’s finding that “it is error to demand laboratory data to credit the symptoms of fibromyalgia–the crucial symptoms, pain and fatigue, won’t appear on laboratory tests.” (citing Hawkins v. First Union Corp. Long-Term Disability Plan, 326 F.3d 914, 919 (7th Cir. 2003)). The court also dismissed the reports of other doctors cited by Lilly.
The court then turned to the vocational aspects of the claim and pointed out that “Lilly has failed to indicate what job or kind of job, and at what level, Kennedy would be capable of performing if the company is permitted to cancel her benefits.”According to Kennedy’s treating doctor, she was limited to “a low stress, non-high cognitive functioning job at about 30 hours a week,” and would be even further limited by “‘flares’ that would prevent her from working for one or two days a month, further shrinking her job prospects and presumably her salary.” In revoking her benefits, Lilly informed Kennedy that she was qualified to work in “various non-executive positions in compensation, benefits, and other human resources fields,” which the court deemed “both vague and inconsistent with the medical evidence.” Since there was no evidence contradicting the treating doctor’s report about symptom flares, the court determined that “Kennedy wouldn’t be able to work any regular schedule.” The court also raised the question of whether Lilly’s decision was infected by a conflict of interest since it both adjudicated the claim and funded the benefits. The court observed, “By cutting off Kennedy’s benefits the company has saved itself about $2.5 million. Big as Lilly is, that’s not a trivial loss.”
A dissenting opinion was filed by Judge Daniel Manion.
The Kennedy decision is now the authoritative ruling on fibromyalgia and disability in its recognition of the symptoms of that condition and their impact on employability. While this was a relatively easy case because Lilly’s medical evidence was so weak and its vocational analysis hopelessly vague, the court missed an opportunity to provide a legal interpretation of Lilly’s disability standard of requiring the claimant to show an inability “to engage, for remuneration or profit, in any occupation commensurate with the Employee’s education, training, and experience.” Fortunately, guidance is offered by several court rulings that have addressed the point.
A seminal ruling on this issue is Erreca v. W. States Life Ins. Co., 19 Cal. 2d 388, 395, 121 P.2d 689, 694 (1942), which interpreted such a position to mean that “the insurer may reasonably be said to have contemplated that the insured would be totally disabled within the meaning of the policy if he were wholly incapacitated from conducting his ordinary employment, or such other employment as he might fairly be expected to follow in view of his station in life and his circumstances and capabilities.” Also see, Moore v. Am. United Life Ins. Co., 150 Cal. App. 3d 610, 618, 197 Cal. Rptr. 878, 882-83 (1984). Other key cases making the same point regarding “station in life,” i.e., level of earnings, include Mossa v. Provident Life and Cas. Ins. Co., 36 F. Supp. 2d 524, 530-531 (E.D.N.Y. 1999), Hoffert v. Commercial Ins. Co. of Newark, 729 F.Supp 201 (S.D.N.Y. 1990); Minn. Mutual v. Lawson, 377 F.2d 525 (9th Cir. 1967); Minn. Mut. v. Wright, 312 F.2d 655 (8th Cir. 1963); Weum v. Mut. Benefit Health and Accident, 54 N.W.2d 20 (Minn.); Blackwell v. Prudential Life Ins. Co. of America, 34 S.E.2d 57 (S.C. 1945), and Metropolitan Life Ins. Co. v. Hawley, 198 S.W.2d 171 (Ark. 1947). The Mossa ruling is particularly instructive in finding:
This Court adopts the reasoning of the majority of jurisdictions and finds that an ordinary person deciding whether to purchase such a disability insurance policy would reasonably expect that he was insuring against the inability to engage in a living wage, not merely a job paying any wage. See Mason v. Loyal Protective License Co., 249 Iowa 1167, 91 N.W.2d 389, 392 (1958); Kooker v. Benefit Ass’n of Ry. Employees, 246 N.W.2d 743, 745 (N.D. 1976). To hold otherwise would be to ignore the purposes for which individuals purchase disability insurance policies. Like the Hoffert court, therefore, this Court construes the plain meaning of the entire “other occupation” provision of the Policy to permit the factfinder to consider plaintiff’s salary history, as well as a wage analysis of other available occupations, to determine in what other “gainful occupation . . . [plaintiff] might reasonably be expected to engage because of [his] education, training or experience.”
It makes sense to interpret a policy or benefit plan in such a manner, although many policies utilize clearer terminology such as specifying a wage threshold that an alternate occupation must pay and thus avoid the issue altogether. The bottom line here, though, is that the court concluded that Cathleen Kennedy was unemployable in any capacity and thus entitled to benefits.