Patrick BURELL; Aracelli Burell, Plaintiffs-Appellants, v. PRUDENTIAL INSURANCE COMPANY OF AMERICA, Defendant-Appellee.
No. 15-50035.
United States Court of Appeals, Fifth Circuit.
April 11, 2016.
Before STEWART, Chief Judge, and BARKSDALE and PRADO, Circuit Judges.
EDWARD C. PRADO, Circuit Judge:
Plaintiff-Appellant Patrick Burell filed a claim for long-term disability benefits with Defendant-Appellee Prudential Insurance Company of America (“Prudential“). Prudential denied Burell‘s initial claim and two subsequent appeals. Burell then filed suit against Prudential under the Employee Retirement Income Security Act (“ERISA“),
I. FACTUAL AND PROCEDURAL BACKGROUND
In 1985, Burell began working as an entry-level technician for Methodist Healthcare Systems (“MHS“). After 26 years, he ended his career as Director of Biomedical Services for all San Antonio MHS facilities. As an employee of MHS, Burell participated in the company‘s insurancе plan (“the Plan“), which is provided through HCA Management Services, L.P. Prudential acts as both administrator and insurer of the Plan. In order to qualify for long-term disability benefits, a claimant must meet the following definition of “disabled“: the claimant must (1) be “unable to perform the material and substantial duties of [his or her] regular occupation due to [his or her] sickness or injury“; (2) be “under the regular care of a doctor“; and (3) suffer “a 20% or more loss in [his or her] monthly earnings due to that sicknеss or injury.”
Burell was diagnosed with multiple sclerosis (“MS“) in 2008. Citing worsening symptoms of MS, in September 2011, Burell went on medical leave and filed for long-term disability benefits with Prudential, claiming that he qualified for benefits under the Plan due to MS, headaches, depression, and anxiety. In January 2012, he stopped working altogether, ending his employment with MHS. In support of his claim, Burell submitted medical records from his treating physicians and a psychiatrist. Prudential hired Heidi Garcia, a registered nurse, and Dr. Alan Neuren, who is board certified in neurology, to review Burell‘s claim. Dr. Neuren found that Burell‘s diagnosis of MS was unsupported by his medical records. He also found it unlikely that Burell suffered any cognitive impairments, opining that job stress is “likely the source of his complaints as opposed to a neurological disorder.” Garcia focused her review on Burell‘s claim of depression and anxiety, ultimately finding that any cognitive symptoms he was experiencing werе not sufficient to prevent him from working. Based on their reports and the medical records submitted, Prudential denied Burell‘s claim for long-term disability benefits.
Burell then appealed the decision through Prudential‘s internal review process. On appeal, his claim was reviewed by Dr. Stuart Isaacson, who is board certified in psychiatry and neurology, and Dr. James Boone, who is a clinical neuropsychologist. Dr. Isaacson found that Burell did not meet the diagnostic criteria for MS and did not have “any medically necessary restrictions and/or limitations from any one condition or combination of condi-
Burell next sent Prudential a letter demanding the benefits he believed he was owed under the Plan. Prudential treated this demand letter as a second appeal and had the claim further reviewed by Dr. Omuwunmi Osinubi, who is board certified in anesthesiology and occupational medicine, and Dr. Melvyn Attfield. Dr. Osinubi found that although Burell‘s medical records did in fact support a diagnosis of MS, he did not have any рhysical limitations due to the disease. Dr. Osinubi was unable to make a finding on Burell‘s alleged cognitive impairments and suggested an additional neuropsychological review be performed. Upon Dr. Osinubi‘s recommendation, Dr. Michael Chafetz, who is board certified in clinical neuropsychology, performed an independent neuropsychological evaluation, finding that Burell did not suffer any cognitive impairments. On the basis of these opinions and Burell‘s medical records, which included additional documentation submitted during the second appeal process, Prudential denied Burell‘s claim for a third time.
In April 2013, Burell filed suit against Prudential under
II. DISCUSSION
The district court had jurisdiction over this suit under
In ERISA actions, “[s]tandard summary judgment rules control.” Cooper v. Hewlett-Packard Co., 592 F.3d 645, 651 (5th Cir. 2009) (quoting Vercher v. Alexander & Alexander Inc., 379 F.3d 222, 225 (5th Cir. 2004)). This Court reviews a district court‘s grant of summary judgment de novo, viewing “all facts and evidence in the light most favorаble to the non-moving party.” Amerisure Mut. Ins. Co. v. Arch Specialty Ins. Co., 784 F.3d 270, 273 (5th Cir. 2015). Summary judgment is appropriate “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.”
A. Underlying Standard of Review
As a preliminary matter, Burell challenges the standard of review the district court used in analyzing Prudential‘s denial of his claim. The district сourt reviewed the denial for an abuse of discretion, while Burell argues that the court should have reviewed the denial de novo. “Whether the district court employed the appropriate standard in reviewing an eligibility determination made by an ERISA plan administrator is a question of law that we review de novo.” Green v. Life Ins. Co. of N. Am., 754 F.3d 324, 329 (5th Cir. 2014) (quoting Ellis v. Liberty Life Assurance Co. of Bos., 394 F.3d 262, 269 (5th Cir. 2004)).
Generally, in suits brought under
As the district court correctly explained, the terms of the Plan exprеssly give Prudential discretionary authority. Specifically, the Plan defines “Claim Fiduciary” as follows:
Claims Fiduciary means an individual or entity, designated in the Plan (including the Summary Plan Description, Insurance Contracts or appendices, which are part of the Plan) or otherwise appointed by the Plan Administration Committee, to have final discretionary authority to interpret the terms of the Plan and decide questions of fact, as necessary to make a determination as to whether the Claims presented to the Claims Fiduciary are payable, in whole or in part, in accordance with the terms of the Plan.
The Summary Plan Description (“SPD“) designates Prudential as the Claims Fiduciary: “All claims and appeals are handled by Prudential. Prudential has absolute discretion in deciding claims and appeals.” As the Plan expressly gives Prudential discretionary authority,1 the district court did not err in reviewing the denial of Burell‘s long-term disаbility-benefits claim under an abuse of discretion standard.
Burell argues that the district court improperly relied on language in the SPD. We find this argument unavailing. Typically, the terms of a SPD are not controlling unless the SPD is incorporated into the plan. See Engleson v. Unum Life Ins. Co. of Am., 723 F.3d 611, 620 (6th Cir. 2013); Eugene S. v. Horizon Blue Cross Blue Shield of N.J., 663 F.3d 1124, 1131-32 (10th Cir. 2011). In his brief, Burell concedes that “[o]nly the plan may subsume an [sic] SPD by integrating it in the plan‘s express terms.” In this case, the Plan expressly integrates the SPD in several places. For example, the Plan states that “[t]he Plan document is comprised of this Plan document and, with respect to, each benefit program included within the Plan, the summary plan description(s) applicable to that benefit program.” The definition of “Claims Fiduciary” above also expressly incorporates the SPD: “Claims Fiduciary means an individual or entity, designated in the Plan (including the Summary Plan Description, Insurance Contracts or appendices, which are part of the Plan).” Therefore, bеcause the Plan expressly incorporates the SPD, the district court did not err in relying on its language.
Second, Burell contends that the district court should have altered the standard of review because of Prudential‘s “flagrant procedural violations.” But, as Burell concedes, in Lafleur v. Louisiana Health Serv. and Indemnity Co., 563 F.3d 148, 159 (5th Cir. 2009), this Court specifically declined to “express [an] opinion on whether flagrant procedural violations of ERISA can alter the standard of review.” As none of Prudential‘s alleged procedural violations rise to the lеvel of flagrant, we again decline to address this question.
Therefore, because the Plan expressly grants Prudential discretionary authority, we hold that the district court correctly reviewed Prudential‘s denial for an abuse of discretion. As such, our de novo review of its summary judgment ruling will also apply the abuse of discretion standard. See Cooper, 592 F.3d at 651.
B. Denial of Long-Term Disability-Benefits Claim
Burell urges that even under an abuse of discretion standard, the district court should not have granted summary judgment in favor of Prudential. An abuse of discretion occurs when “the plan administrator acted arbitrarily or capriciously.” Meditrust Fin. Servs. Corp. v. Sterling Chems., Inc., 168 F.3d 211, 214 (5th Cir. 1999) (quoting Sweatman v. Commercial Union Ins. Co., 39 F.3d 594, 601 (5th Cir. 1994)). “A decision is arbitrary only if ‘made without a rational connection between the known facts and the decision or between the found facts and the evidence.‘” Id. at 215 (quoting Bellaire Gen. Hosp. v. Blue Cross Blue Shield of Mich., 97 F.3d 822, 828 (5th Cir. 1996)). Therefore, to survive summary judgment, Burell must raise a genuine dispute of material fact that Prudential‘s denial of his long-term disability-benefits claim was arbitrary or capricious. Because Burell hаs failed to do so, we affirm the district court‘s grant of summary judgment.
Burell argues that Prudential abused its discretion by ignoring the findings of his treating physicians, emphasizing the fact that his treating physicians diagnosed him with MS. But, in its letter denying Burell‘s second appeal, even Prudential concedes that “Burell may meet the clinical requirements for the diagnosis of MS.” Regardless of any disagreement between Prudential‘s claim reviewers, a diagnosis of MS is not sufficient on its own for Burell to qualify for lоng-term disability benefits under the Plan. To qualify,
Burell also аrgues that Prudential failed to give proper weight to the Social Security Administration‘s (“SSA“) determination that he was disabled and entitled to benefits. But, as the district court noted, the eligibility criteria for Social Security benefits differ from the eligibility criteria under the Plan. Despite this difference, during Burell‘s second appeal Prudential specifically requested that Burell submit documentation related to the SSA‘s benefit award for consideration in Prudential‘s review prоcess. Prudential‘s failure to give even further weight to the SSA‘s decision cannot be characterized as unreasonable.
As noted above, because Prudential is both the Plan administrator and the insurer, a structural conflict of interest exists. This conflict of interest influences our analysis of whether an abuse of discretion occurred. “[C]onflicts are but one factor among many that a reviewing judge must take into account” and “[a]ny one factor will аct as a tiebreaker when the other factors are closely balanced.” Truitt, 729 F.3d at 508 (quoting Glenn, 554 U.S. at 116-17). “The conflict of interest ... should prove more important (perhaps of great importance) where circumstances suggest a higher likelihood that it affected the benefits decision, including, but not limited to, cases where an insurance company administrator has a history of biased claims administration.” Id. at 508-09 (quoting Glenn, 554 U.S. at 117). Burell has failed to point to anything in the record that indiсates Prudential‘s conflict of interest actually affected the denial of his claim.
Relatedly, while not an independent basis for finding an abuse of discretion, procedural unreasonableness is a factor that informs whether the “reviewing court may give more weight to [the plan administrator‘s] conflict of interest.” Id. at 510 (quoting Schexnayder v. Hartford Life & Accident Ins. Co., 600 F.3d 465, 469-71 (5th Cir. 2010)). Even assuming that Burell‘s allegation of procedural irregularities is true, in light of Prudential‘s thorough claim review and appeal procеss, Burell has failed to demonstrate that this one factor is sufficient to raise a genuine dispute of material fact that Prudential abused its discretion. See Holland, 576 F.3d at 248-49.
Burell also argues that Prudential abused its discretion by ignoring and failing to properly investigate two grounds for long-term disability benefits—anxiety and depression. Prudential argues that Burell waived this argument by
Even assuming that the argument is not waived, we cannot say that Prudential acted arbitrarily or capriciously with regard to Burell‘s anxiety and depression claim, particularly in light of the fact that our “review of the administrator‘s decision need not be particularly complex or technical; it need only assure that the administrator‘s decision fall somewhere on a continuum of reasonableness—even if on the low end.” Corry v. Liberty Life Assurance Co. of Bos., 499 F.3d 389, 398 (5th Cir. 2007) (quoting Vega v. Nat‘l Life Ins. Servs., Inc., 188 F.3d 287, 297 (5th Cir. 1999), overruled on other grounds by Glenn, 554 U.S. 105). During each level of review, Prudential addressed Burell‘s depression and anxiety claim. In its first denial letter, Prudential acknowledged that Burell‘s medical records document “work related stress and anxiety since April 2011” but that Burell was under treatment from a psychiatrist and his symptoms were improving. In its letter denying Burell‘s first appeal, Prudential stated that “based on the medical evidence, functional impairment is not supported from a physical, psychological or cognitive persрective.” And in its final denial of the claim, Prudential stated that “[w]hile Mr. Burell does have depression and anxiety, typically depression and anxiety do not cause large changes in cognitive functioning, and in Mr. Burell‘s case there is no evidence of valid cognitive impairment from any source.”
In light of this record, Burell has failed to raise a genuine dispute of material fact that Prudential abused its discretion in denying his claim for long-term disability benefits.
III. CONCLUSION
For the foregoing reasons, the district court‘s grant of summary judgment is AFFIRMED.
RHESA HAWKINS BARKSDALE, Circuit Judge, dissenting:
For considering the summary judgment at issue, I agree with the majority that our de novo review is for a genuine dispute of material fact vel non for whether the plan administrator abused its discretion. But, I disagree with the majority‘s holding there was none. In that regard, it fails to “constru[e] all facts and evidence in the light most favorable to the non-moving party“: Burell. Amerisure Mut. Ins. Co. v. Arch Specialty Ins. Co., 784 F.3d 270, 273 (5th Cir. 2015). Our deferential standard of review, together with the rarity of an ERISA appeal‘s having a genuine dispute of material fact, must not obscure that, on this record, summary judgment should be denied and a trial held. Therefore, I must respectfully dissent.
Burell‘s action is distinguishable from those on which the majority relies, for which our court held a plan administrator‘s denial of benefits to be reasonable: that is,
For Burell, conversely, Prudential‘s reviewers disagreed among themselves regarding whether his MS amounted to disability under the long-term disability (LTD) plan. We have never addressed whether such a conflict was a “permissible choice“. Sweatman, 39 F.3d at 602. One оf Prudential‘s reviewers, Dr. Osinubi, confirmed a diagnosis of MS, as the majority notes; but, she also observed the “consensus amongst his treating providers that [MS] is impairing his ability to function at work, and the intensity of treatment with MS medications ... all tend to support the level of severity and functional impairment that the [claimant] is reporting and all of his healthcare providers are endorsing“. Moreover, Dr. Osinubi stated “there is scientific literature to indicate that the manifestation of MS may be ... variable[,] as there are significant individual differences in the cognitive presentation of MS“. The administrative record supports that statement; Dr. Attfield, the other third-round reviewer, reported “there is no indication [Burell] is frankly malingering“, contradicting the report of Prudential‘s previous reviewer, Dr. Boone, and next reviewer, Dr. Chafetz.
And, as the majority notes, because Prudential, as plan administrator, both evaluates claims and pays benеfits, there is an inherent conflict of interest. Truitt v. Unum Life Ins. Co. of Am., 729 F.3d 497, 508 (5th Cir. 2013), cert. denied, 134 S. Ct. 1761 (2014). “[W]here circumstances suggest a higher likelihood that [the conflict] affected the benefits decision“, structural conflict should weigh more heavily in the court‘s abuse-of-discretion analysis. Holland v. Int‘l Paper Co. Ret. Plan, 576 F.3d 240, 247 n. 3, 248-49 (5th Cir. 2009) (quoting Metro. Life Ins. Co. v. Glenn, 554 U.S. 105, 117, 128 S. Ct. 2343 (2008)). That is especially true in reviewing this summary judgment. In Holland, the claimant “adduced no evidence ... [the plan administrator‘s] conflict affected its benefits decision“; therefore, the administrator did not abuse its discretion in denying benefits. Id. at 249. On the other hand, the inconsistencies in Prudential‘s procedure point to a genuine dispute of material fact for whether Prudential‘s inherent conflict of interest affected its decision-making for Burell‘s claim.
Burell asserts Prudential‘s decision was procedurally unreasonable because Prudential failed to follow its own review procedures. Here, following Dr. Osinubi‘s review, Dr. Chafetz conducted an independent neurocognitive exam for Prudential. Similar to some of Prudential‘s previous reviewers, he was skeptical of whether Burell was presenting credibly, and stated the evidence in the record did not support functional impairment based on cognitive deficiencies.
But, Dr. Chafetz was the first reviewer who was not provided all of the reports of Prudential‘s previous reviewers; based on this summary-judgment record, it appears Dr. Chafetz did not receive for his review Drs. Osinubi and Attfield‘s reports, which suggested disability as a result of Burell‘s MS. By contrast, Prudential had provided to Dr. Boone the report by Dr. Isaacson,
Furthermore, although the district court ruled Drs. Osinubi and Attfield‘s conclusions “irrelevant” to Dr. Chafetz’ testing Burell‘s cognitive abilities (which, of course, is not considered in our de novo review of the summаry judgment), Burell v. Prudential Ins. Co. of Am., No. 5:13-CV-359 at 11 (W.D. Tex. 16 Dec. 2014), Drs. Isaacson and Boone received for their reviews arguably “irrelevant” reports from prior Prudential reviewers Dr. Neuren and Nurse Garcia. And, as Drs. Osinubi and Attfield were the first whose reports leaned in favor of Burell, and Dr. Chafetz was the first of Prudential‘s reviewers not to receive the reports of the previous reviewers, the independence of Prudential‘s procedural process is called seriously into question.
Additionally, Prudential‘s not adequately considering Burell‘s diagnoses of anxiety and depression points to a genuine dispute of material fact. The majority holds this assertion is waived for failure to adequately raise it in district court; however, as Burell asserts, he presented the issue in his response to Prudential‘s summary-judgment motion. Therefore, it is not waived. Drs. Chafetz and Isaacson and Nurse Garcia noted these diagnoses. Dr. Isaacson and Nurse Garcia deferred judgment on whether thеse cognitive issues resulted in disability; and, in part because Dr. Chafetz received no reports to the contrary (i.e. from Drs. Osinubi and Attfield), he found the record showed “extensive invalidity” as to impairment.
In addition, Prudential considered other grounds causing Burell‘s medical complaints that did not require it to provide LTD benefits, such as work stress, despite Burell‘s having been Director of Biomedical Services for all San Antonio hospital facilities since 1999, nine years before his MS diagnosis. When considered alongside the other factors pointing to Prudential‘s unreasonableness, its failure to consider alternative grounds provides further support for the requisite genuine dispute of material fact.
For the foregoing reasons, I would vacate the judgment and remand this action for trial. Because the majority holds otherwise, I must respectfully dissent.
Johnnie Paul HARDMAN, Plaintiff-Appellant, v. Carolyn W. COLVIN, Acting U.S. Commissioner of Social Security, Dеfendant-Appellee.
No. 15-30449.
United States Court of Appeals, Fifth Circuit.
April 11, 2016.