On January 24, 2014, the Sixth Circuit Court of Appeals in McClain v. Eaton Corp. Disability Plan, et al. affirmed the district court’s finding that a plan administrator did not act arbitrarily and capriciously in denying an ERISA long term disability claim. In that claim, Ms. McClain’s physicians opined that she could not work at full-time employment, but could work a part-time schedule. The Plan Administrator identified several positions accommodating Ms. McClain’s restrictions and denied the claim finding she was not totally disabled. On administrative appeal, the Plan Administrator had a non-examining orthopedic physician review the file and find Ms. McClain could return to sedentary work.
On the second level administrative appeal, the Plan Administrator had the file reviewed by a neurosurgeon and an orthopedic surgeon, both of which opined that the treating physician’s limitations were overly restrictive and that Ms. McClain could engage in sedentary labor. The Plan Administrator denied the claim again and Ms. McClain filed suit in federal district court.
The Sixth Circuit noted the onerous burden (though they would not describe it as such) on Plaintiff’s trying to prevail in an ERISA disability action.
When reviewing a denial of benefits under ERISA, a court may consider only the evidence available to the administrator at the time the final decision was made. Wilkins v. Baptist Healthcare Sys., Inc., 150 F.3d 609, 618 (6th Cir. 1998) (citing Rowan v. Unum Life Ins. Co., 119 F.3d 433, 437 (6th Cir. 1997)). This limitation applies to both an arbitrary and capricious and a de novo standard of review. Miller, 925 F.2d at 986 (citations omitted).Under the arbitrary-and-capricious standard, the determination of an administrator will be upheld if it is “rational in light of the plan’s provisions.” Marks, 342 F.3d at 457 (quoting Borda v. Hardy, Lewis, Pollard & Page, P.C., 138 F.3d 1062, 1066 (6th Cir. 1998)).Finally, on appeal, we review de novo the district court’s finding that the administrator’s denial was not arbitrary and capricious. Killian v. Healthsource Provident Administrators, Inc., 152 F.3d 514, 520 (6th Cir. 1998) (citing Miller, 925 F.2d at 986).
Fifteen years ago, the Seventh Circuit correctly stated that review under the arbitrary and capricious “standard is extremely deferential and has been described as the least demanding form of judicial review.” Cozzie v. Metropolitan Life Ins. Co., 140 F.3d 1104, 1107-08 (7th Cir. 1998) (citing Trombetta v. Cragin Fed. Bank for Sav. Employee Stock Ownership Plan, 102 F.3d 1435, 1438 (7th Cir. 1996)). This is true, and the “least demanding form of judicial review” should not be exacting to apply. But, in Cozzie, after explaining the “extreme deference” due to the administrator, the Seventh Circuit continued to state that the standard “is not, however, without some teeth,” and cited an earlier Seventh Circuit case for the proposition that the court should not merely “rubber stamp” plan administrator decisions that run contrary to the plain meaning of a disability plan. Id. at 1108 (citing Swaback v. American Info. Techs. Corp., 103 F.3d 535, 540 (7th Cir. 1996)). This language—memorable as it is, and certainly appropriate in some cases—seems to have become the cri de guerre of ERISA plaintiffs nearly every time the arbitrary and capricious standard is at hand. In recent years, the standard is seldom recited in this circuit without the invocation of teeth and rubber stamps. (See, e.g., Appellant’s Br. at 4.) These cautionary metaphors, at times, may have even eclipsed the meaning of the standard and rendered arbitrary and capricious review nearly indistinguishable from the competing, and more demanding, de novo review standard. But, even the Seventh Circuit, in the case which crafted the language, concluded its opinion by upholding the administrator’s decision, “[g]iven the extremely deferential standard of review that must govern our adjudication,” and finding that it could not be determined that the administrator “reached an unreasonable result on the facts of this particular case.” Cozzie, 140 F.3d at 1111.
In other words, though the standard is not without some teeth, it is not all teeth. An “extremely deferential review,” to be true to its purpose, must actually honor an “extreme” level of “deference” to the administrative decision. “A decision reviewed according to the arbitrary and capricious standard must be upheld if it results from a deliberate principled reasoning process’ and is supported by `substantial evidence.'” Schwalm v. Guardian Life Ins. Co. of America, 626 F.3d 299, 308 (6th Cir. 2010) (quoting Baker v. United Mine Workers of Am. Health & Ret. Funds, 929 F.2d 1140, 1144 (6th Cir. 1991)). “When it is possible to offer a reasoned explanation, based on the evidence, for a particular outcome, that outcome is not arbitrary or capricious.” Shields v. Reader’s Digest Ass’n, Inc., 331 F.3d 536, 541 (6th Cir. 2003) (quoting Davis v. Kentucky Fin. Cos. Ret. Plan, 887 F.2d 689, 693 (6th Cir. 1989)). Defendants’ decision to deny benefits in this case easily clears this hurdle.
ERISA long term disability claims are always tough claims when the insurance company takes the time to “dot all the I’s and cross all the T’s.” Here, they rebutted the opinion evidence from treating physicians with bought opinions and that is good enough most of the time.
If you need more information about a Social Security Disability/SSI matter, personal injury matter (car wreck, boating accident, slip and fall, etc.), EEOICPA claim, long or short-term disability, VA disability, Railroad Retirement Board disability, or a workers compensation matter, please contact the Law Offices of Tony Farmer and John Dreiser for a free case evaluation. We can be reached at (865) 584-1211 or (800) 806-4611, through Facebook, or through our website. Our office handles claims throughout East Tennessee, including Knoxville, Chattanooga, Kingsport, Bristol, Johnson City, Morristown, Maryville, Rogersville, Dandridge, Tazewell, New Tazewell, Jefferson City, Strawberry Plains, Sevierville, Gatlinburg, Loudon, Kingston, Halls, Maynardville, Crossville, Cookeville, Jamestown, Sweetwater, Lenoir City, Athens, Oak Ridge, Clinton, LaFollette, Lake City, Jacksboro, Bean Station, Cosby, Newport, White Pine, Mosheim, Wartburg, Sunbright, Pigeon Forge, Greeneville, Harriman, Dayton, Spring City, and Deer Lodge.