901 F.3d 944
8th Cir.2018Background
- Damon Zaeske, a Walmart project manager, stopped working April 4, 2014 due to chronic low back pain and applied for long-term disability under Walmart’s plan administered and insured by Liberty Life.
- Liberty Life initially approved benefits in June 2014 after an independent review (Dr. Shannon) concluded Zaeske was limited to sedentary work but likely to recover in 3–6 months; benefits began July 6, 2014 and were subject to periodic review.
- Liberty Life requested updated records; when it received none by December 11, 2014 it suspended and then denied benefits on December 12, 2014; updated records arrived December 15 and were reviewed by an independent physician (Dr. Glassman), leading to denial.
- Zaeske appealed and submitted further records (including a January 13, 2015 MRI showing herniation and severe stenosis); Liberty Life commissioned another independent review (Dr. Reecer) who also concluded Zaeske could work full-time; Liberty Life denied benefits on June 1, 2015.
- District court reversed, finding Liberty Life abused its discretion by relying on Dr. Glassman and Dr. Reecer (finding their opinions unreliable for ignoring herniation/stenosis, uncontrolled pain, and medication side effects); it awarded benefits and attorney’s fees.
- Eighth Circuit reversed: it held the insurer’s reliance on the consulting physicians was within the range of reasonableness and not an abuse of discretion; it vacated the fee award.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Liberty Life abused its discretion in denying LTD benefits | Zaeske: Liberty Life impermissibly relied on unreliable consulting opinions that ignored herniation/stenosis, uncontrolled pain, and medication side effects | Liberty Life: Consulting physicians’ opinions reasonably interpreted the available records; differences in opinions do not make denial arbitrary | Held for Liberty Life — its decision was supported by substantial evidence and not an abuse of discretion |
| Whether consulting physicians’ failure to note herniation/stenosis invalidated their opinions | Zaeske: Their diagnoses conflicted with medical records and MRI evidence | Liberty Life: Earlier records reflected bulging discs/stenosis and later MRI (showing herniation) postdated Glassman; diagnoses can be viewed as consistent under umbrella terms | Held for Liberty Life — opinions reasonably based on records available to reviewers |
| Whether reviewers ignored uncontrolled pain and medication side effects | Zaeske: Reviewers failed to account for treating physicians’ notes about constant/uncontrolled pain and medication impairment | Liberty Life: More recent treating notes did not document uncontrolled pain or side effects; reviewers reasonably discounted older or isolated statements | Held for Liberty Life — reviewers’ conclusions about pain control and side effects were supported by later treatment notes |
| Whether conflicting reliable medical opinions require administrator to accept earlier favorable opinion | Zaeske: Earlier consulting opinion (Dr. Shannon) supported benefits and later conflicting opinions should be rejected | Liberty Life: Administrator may choose between reliable but conflicting medical opinions, including its own consultants’ views | Held for Liberty Life — administrator may credit one reliable consultant over another; conflict alone does not mandate acceptance of earlier opinion |
Key Cases Cited
- McClelland v. Life Ins. Co. of N. Am., 679 F.3d 755 (8th Cir. 2012) (standard of review: abuse of discretion when plan grants administrator discretion)
- Black & Decker Disability Plan v. Nord, 538 U.S. 822 (2003) (administrator discretion governs review under ERISA if plan grants it)
- Johnson v. United of Omaha Life Ins. Co., 775 F.3d 983 (8th Cir. 2014) (decision is reasonable if supported by substantial evidence)
- Delta Family-Care Disability & Survivorship Plan v. Marshall, 258 F.3d 834 (8th Cir. 2001) (administrator may choose between two reliable but conflicting medical opinions)
- Dillard’s Inc. v. Liberty Life Assurance Co. of Boston, 456 F.3d 901 (8th Cir. 2006) (discussion relevant to attorney’s fees and standards on review)