Mark D. DeBofsky is a name partner of DeBofsky Sherman Casciari Reynolds P.C. He handles civil and appellate litigation involving employee benefits, disability insurance and other insurance claims and coverage, and Social Security law. He can be reached at [email protected].
A recent decision issued by the 7th U.S. Circuit Court of Appeals offers valuable insight into the meaning of the de novo standard of judicial review in claims brought under the Employee Retirement Income Security Act.
The opinion in Dorris v. Unum Life Insurance Company of America, 2020 WL 524726 (7th Cir., Feb. 3, 2020), begins by explaining: “At least in this circuit, ERISA de novo review requires no review at all, but an independent decision. In such a case, the plaintiff bears the burden of proving not that the plan administrator erred, but that she is entitled to the benefits she seeks.”
The court found for the defendant after determining that Stephanie Dorris “did not fully recognize her burden.” The plaintiff’s litigation efforts were focused on proving that Unum’s decision was wrong, but she failed to prove she was entitled to benefits.
Although Dorris received disability benefits for nearly 20 years due to two medical conditions, improvement in one of those conditions led Unum to question the plaintiff’s ongoing entitlement to benefits.
When Unum inquired of the plaintiff’s treating physician as to whether Dorris could perform a job at the “light” or “sedentary” levels of exertion, the doctor reported she could perform a sedentary job for up to four hours a day with frequent breaks and absences.
However, the doctor failed to identify specific limitations, although he later referenced “extreme fatigue” and “major memory and cognitive issues.” He also advised that the stress of working could lead to an exacerbation of her condition.
Unum’s doctors disagreed and maintained that Dorris could return to her past work as the president of a business, leading to a termination of benefits. Although Dorris challenged the benefit termination prior to bringing suit, her appeal was unsuccessful.
Shortly after filing suit, Dorris sought to take several depositions, but a magistrate judge found the requested discovery duplicative of what was already in the record. Dorris failed to appeal to the U.S. District Court judge from the magistrate judge’s order and did not seek further discovery. Nor did she submit additional evidence beyond what was contained in the claim record.
Although the district court gave more weight on de novo review to the treating doctor’s opinions and concluded that Unum’s finding that Dorris could perform the duties of her regular occupation was mistaken, the plaintiff still lost because she failed to meet her burden of proving an inability to perform any alternative occupations. Despite expressing concern that Unum had not performed a vocational analysis, the court concluded that it was Dorris’ burden to supply such evidence.
The court explained the result was dictated by the de novo standard of judicial review. Under that standard, “The court can limit itself to deciding the case on the administrative record but should also freely allow the parties to introduce relevant extra-record evidence and seek appropriate discovery” (citations omitted).
Because the plaintiff retained the ultimate burden of proof in establishing her disability, though, “any gaps in the record cut against her claim” (citations omitted).
In contrast, under the arbitrary and capricious standard of review, the court limits the scope of its review to the evidence the plan administrator considered and “[i]n such a case, it is the administrator’s burden to provide an explanation for its decision consistent with the record and ERISA” (citations omitted).
However, the typical resolution of claims adjudicated under that standard is that “[i]f the administrator did not explore an issue that it should have, a court typically does not enter final judgment on the underlying claim but remands so that the administrator can reconsider.”
Dorris’ failure to introduce vocational evidence was thus fatal to her claim even though the court observed: “Dorris may be right that the district court could have ruled in her favor even absent vocational evidence. If the medical evidence showed that Dorris was utterly immobile and incoherent, we would not affirm the denial of benefits simply because a vocational expert never opined that mobility and coherence are valued in the job market. To demonstrate clear error, though, it is not enough for an appellant to point to evidence in the record that supports her claim.”
The court did note, however: “Given the complete lack of vocational evidence here, we need not consider how far a claimant’s burden goes on an ‘any occupation’ standard or whether the burden would ever shift to the administrator to identify a job the plaintiff could perform.”
That issue was left for another day.
There is a lot to unpack in this instructive ruling, but it is interesting to contrast the finding here with Social Security disability claims, where the burden shifts to the Social Security Administration to identify other jobs a claimant can perform once the claimant proves an inability to perform past relevant work.
Such a rule might be beneficial in ERISA cases, where plan administrators are under fiduciary obligations to claimants that require them to utilize “higher-than-marketplace quality standards” in the adjudication of benefit disputes. Metropolitan Life Insurance Co. v. Glenn, 554 U.S. 105, 115 (2008).
Similarly, Gaither v. Aetna Life Insurance Co., 394 F.3d 792, 807-808 (10th Cir. 2004), explained: “Aetna’s position seems to be that as a plan fiduciary, it plays a role like that of a judge in a purely adversarial proceeding, where the parties bear almost all of the responsibility for compiling the record, and the judge bears little or no responsibility to seek clarification when the evidence suggests the possibility of a legitimate claim.…
“While a fiduciary has a duty to protect the plan’s assets against spurious claims, it also has a duty to see that those entitled to benefits receive them. It must consider the interests of deserving beneficiaries as it would its own. An ERISA fiduciary presented with a claim that a little more evidence may prove valid should seek to get to the truth of the matter. See Toland, 499 F.Supp. at 1193 (relying on analogous principles governing judicial review of administrative agency decisions).”
Thus, after Dorris submitted a report from her doctor describing her as incapable of doing more than minimal work-related tasks, if Unum disagreed, it could have obtained its own vocational evaluation. Instead, Unum’s determination was focused on a conclusion that Dorris could return to her past work.
Dorris successfully challenged that finding but failed to take the next step, though, to prove there were no jobs she could perform. In retrospect, proactively obtaining such evidence would have been prudent and she suffered harsh consequences for her failure to do so.
This article was originally published in The Chicago Daily Law Bulletin on March 5, 2020.