Davies v. First Reliance Standard Life Insurance Co.
713 F. App'x 129
| 3rd Cir. | 2017Background
- Kristen Ann Davies, a pharmaceutical sales rep, stopped working in Aug. 2011 and was approved for long-term disability (LTD) benefits by First Reliance beginning Jan. 2012.
- Policy paid benefits for 24 months if unable to perform her regular occupation; beyond 24 months benefits required total inability to perform any occupation and excluded disabilities "caused by or contributed to by mental or nervous disorders."
- As the 24-month period neared its end, First Reliance ordered independent medical examinations (IME) by a physiatrist and later a rheumatologist, each concluding Davies could perform sedentary work and finding her complaints substantially psychological or not corroborated by objective musculoskeletal disease.
- First Reliance terminated benefits based on the IMEs and on treating physicians’ records indicating depression/anxiety were primary diagnoses contributing to disability.
- Davies appealed administratively, submitted treating physicians’ records and lay observations, then sued under ERISA after the denial; both parties moved for summary judgment in district court.
- The District Court granted summary judgment to First Reliance, finding the benefits termination was not arbitrary and capricious; the Third Circuit affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Proper standard of review for ERISA benefits denial | Apply heightened scrutiny due to structural conflict of interest | Apply deferential "abuse of discretion" because administrator has discretionary authority; consider conflict as a factor | Abuse-of-discretion standard governs; structural conflict considered but does not change standard |
| Whether Davies proved total disability from any occupation and avoided mental-disorder exclusion | Davies contends she is totally disabled by physical conditions; mental conditions are secondary or aggravated by pain and thus exclusion shouldn’t apply | First Reliance argues medical record shows depression/anxiety are primary contributors; even if physically limited, mental conditions contributed, so exclusion bars further benefits | Court held record shows depression/anxiety contribute to disability and IMEs/supporting evidence reasonably support termination; exclusion applies and termination was not arbitrary |
Key Cases Cited
- Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (standard of review for ERISA plan interpretations and administrator discretion)
- Metropolitan Life Ins. Co. v. Glenn, 554 U.S. 105 (consider administrator conflict of interest as factor in abuse-of-discretion review)
- Estate of Schwing v. Lilly Health Plan, 562 F.3d 522 (3d Cir. approach rejecting sliding-scale review for conflict of interest)
- Viera v. Life Ins. Co. of N. Am., 642 F.3d 407 (standard for reviewing district court ERISA decisions)
- Dowling v. Pension Plan for Salaried Emps. of Union Pac. Corp. & Affiliates, 871 F.3d 239 (conflict of interest justifies disturbing administrator decision only if it infected decisionmaking or is the last straw)