Williams v. Reliance Standard Life Insurance
164 F. Supp. 3d 1230
D. Or.2016Background
- Plaintiff Randal Williams received long-term disability (LTD) benefits after July 2011 onset of recurrent visual disturbances, vertigo, nausea, and headaches; benefits were paid beginning January 16, 2012 following approval.
- Policy defined "Totally Disabled" as inability to perform Regular Occupation for first 24 months, then inability to perform Any Occupation thereafter; “Any Occupation” is based on education, training, experience.
- Treating providers (primary care and neurologist) and a neuro-ophthalmologist repeatedly found disabling episodic visual impairment; plaintiff was approved for Social Security disability.
- Defendant retained IME neurologists: Dr. Rosenbaum (June 2013) found migrainous visual phenomena and that plaintiff would require frequent breaks/hours off; Dr. Bell (April–May 2014) completed an objective-only Physical Capabilities form and suggested "rule out" somatoform disorder.
- Defendant terminated LTD benefits effective January 16, 2014 (after 24 months) concluding plaintiff could perform light work and three transferrable gas‑meter jobs; it relied on IME opinions and vocational analysis.
- Court reviewed under abuse-of-discretion with heightened skepticism due to insurer/administrator conflict and found the termination arbitrary and capricious.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standard of review / conflict of interest | Williams: apply heightened scrutiny to insurer because it both funds and administers benefits | Reliance on policy discretionary clause to apply abuse of discretion | Court applied abuse of discretion but weighed insurer conflict and applied additional skepticism |
| Sufficiency of evidence to terminate benefits after 24 months | Williams: subjective, consistent symptom reports + treating opinions support inability to perform Any Occupation; lack of objective tests is not dispositive | Reliance on lack of objective findings; IME and vocational opinions show capacity for light work | Court: insurer unreasonably discounted subjective limitations; policy does not require objective proof, so denial was arbitrary |
| Reliance on Dr. Bell’s IME and somatoform “rule out” | Williams: Dr. Bell’s assessment was objective-only, inconsistent with treating records, speculative, and not confirmed by psychiatric testing | Reliance on Dr. Bell and vocational analysis to support light-work conclusion | Court: reliance was unreasonable—Dr. Bell’s form excluded subjective symptoms, her somatoform suggestion was a non‑definitive "rule out," and her factual characterizations were unsupported |
| Consideration of SSA award and procedural adequacy of denial notice | Williams: SSA disability award and regulatorily required notice specifics should have been meaningfully addressed | Defendant: SSA standards differ and later letter referenced IMEs defendant possessed | Court: initial boilerplate treatment of SSA award and failure to identify specific additional information needed warranted heightened scrutiny; later letter partially remedied but did not cure arbitrariness |
Key Cases Cited
- Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (ERISA standard of review and grant of discretion analysis)
- Abatie v. Alta Health & Life Ins. Co., 458 F.3d 955 (9th Cir.) (effect of administrator conflict on abuse‑of‑discretion review)
- Montour v. Hartford Life & Acc. Ins. Co., 588 F.3d 623 (9th Cir.) (factors to weigh where administrator has structural conflict)
- Salomaa v. Honda Long Term Disability Plan, 642 F.3d 666 (9th Cir.) (arbitrary to require objective proof when condition lacks objective tests)
- Glenn v. Metropolitan Life Ins. Co., 554 U.S. 105 (conflict of interest does not strip administrator of discretion but is a factor)
- Conkright v. Frommert, 559 U.S. 506 (deference to plan administrator when discretion is granted)
- Stephan v. Unum Life Ins. Co. of Am., 697 F.3d 917 (9th Cir.) (summary judgment role where abuse‑of‑discretion standard applies)