125 F. Supp. 3d 200
D.D.C.2015Background
- Kelly Foster, a former SunTrust mortgage loan closer, sued under ERISA after Sedgwick (the plan claims administrator) denied her short-term disability (STD) and long-term disability (LTD) benefit claims.
- SunTrust’s STD plan pays benefits from the employer’s general assets and is treated as a payroll practice; the LTD plan is funded through a separate trust and is ERISA-governed.
- Foster filed an STD claim (Aug. 20, 2012); Sedgwick denied it for lack of satisfactory objective medical documentation. Two treating physicians submitted attending-physician statements; later functional-capacity and neuropsychological tests were submitted on appeal.
- Foster’s employment was terminated Sept. 25, 2012. She then filed an LTD claim that Sedgwick denied because she failed to meet the 180-day LTD waiting-period requirements (including maintaining entitlement to STD benefits during that period).
- Foster sued under 29 U.S.C. § 1132(a)(1)(B). The district court considered defendants’ summary-judgment motion and reviewed the LTD denial under the arbitrary-and-capricious standard (deferential review) because the plan delegated discretionary authority to the claims administrator.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the STD plan is governed by ERISA | Foster sought ERISA review of STD denial and wanted broader discovery since plan isn’t ERISA | STD is a payroll-practice plan funded from employer assets and thus not an ERISA "employee welfare benefit plan" | Court: STD plan is not ERISA-governed; Foster did not plead non-ERISA/state claims, so court cannot review STD denial under ERISA |
| Standard of review for LTD denial | Implicitly argued for less deference (or challenged administrator’s decision) | LTD plan vests claims administrator (Sedgwick) with authority to determine eligibility; deferential review applies | Court: Plan grants Sedgwick discretionary authority; review is arbitrary-and-capricious |
| Whether Foster satisfied the 180‑day LTD waiting period (including entitlement to STD) | Foster contends she was entitled to STD during waiting period and thus satisfied LTD requirement | Sedgwick denied STD; Foster did not show entitlement to STD for entire waiting period; thus she failed LTD waiting-period requirement | Court: Material ambiguity in counting absence days but Foster failed to show entitlement to STD during waiting period; denial was not arbitrary or capricious |
| Conflicts, FMLA/EIB inconsistency, and weight of medical evidence | Foster argued conflict of interest, that EIB/FMLA grants show disability, and that Sedgwick ignored her tests | EIB/FMLA have different, lower standards; independent physicians reasonably evaluated record; conflict of interest considered but not outcome-determinative | Court: EIB/FMLA results do not establish STD/LTD eligibility; Sedgwick permissibly relied on independent reviews; alleged conflict does not overcome deferential review |
Key Cases Cited
- Aetna Health Inc. v. Davila, 542 U.S. 200 (ERISA §502(a) allows participants to sue to enforce plan benefits)
- Massachusetts v. Morash, 490 U.S. 107 (payroll-practice plans funded from employer assets fall outside ERISA)
- Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (standard of review depends on whether plan grants discretionary authority)
- Metropolitan Life Ins. Co. v. Glenn, 554 U.S. 105 (conflict of interest is a factor in abuse-of-discretion review)
- Pettaway v. Teachers Ins. & Annuity Ass’n, 644 F.3d 427 (D.C. Cir.: ERISA review framework and deference to plan language delegating discretion)
- Block v. Pitney Bowes Inc., 952 F.2d 1450 (focus on breadth of administrator’s authority when assessing discretion)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (summary judgment standard)
- Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment burden-shifting)