MEMORANDUM
I. INTRODUCTION
This is an action under the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. §§ 1001-1461. Dr. Julie Colby (“Dr. Colby”) filed suit against the defendants, Assurant Employee Benefits, Fortis Benefits Insurance Company, Management Company for Merrimack Anesthesia Associates Long Term Disability Plan, and Union Security Insurance Company and Management Company for Merrimack Anesthesia Associates Long Term Disability Plan (collectively “USIC”), to recover long-term disability benefits (“LTD benefits”) allegedly denied to her by USIC in violation of 29 U.S.C. § 1132(a)(1)(B), as well as attorneys’ fees and costs.
In 2004, Dr. Colby, working as an anesthesiologist, began using Fentanyl, a
The parties filed cross motions for summary judgment and agreed to resolve the dispute as a case stated. ECF Nos. 15, 20. This Court held that USIC had acted in an arbitrary and capricious manner, and remanded the case to USIC with instruction to consider Dr. Colby’s risk of drug abuse relapse as a long-term disability if the risk was found to be sufficiently high. USIC again denied Dr. Colby’s claim for relief and Dr. Colby appealed twice further, submitting additional evidence regarding her risk of drug abuse relapse. USIC denied both appeals, maintaining that the risk of drug abuse relapse was not a qualifying disability under the Plan. USIC also concluded that Dr. Colby’s condition could be mitigated by a reasonable accommodation, precluding the need for LTD benefits.
Dr. Colby instituted the present proceedings in 2009, reopening the administratively closed case. Both parties again have filed motions for summary judgment on the record and agreed to resolve the dispute as a case stated. “When deciding a ease stated, a court draws such inferences as are reasonable to resolve the case, rather than drawing all inferences against each moving party as it would when evaluating cross-motions for summary judgment.” Dickerson v. Prudential Life Ins. Co. of Am.,
II. FACTS
The facts of the case prior to 2009 were presented in a more thorough fashion in Colby v. Assurant Employee Benefits (“Colby I”),
A. Dr. Colby’s History of Back Issues, Substance Abuse, and Treatment
Dr. Colby became a partner at Merrimack Valley Anesthesia Associates in 1988
Dr. Colby began to experience back pain and numbness in her leg in the summer of 2000. Id. at US001406. She was diagnosed with a herniated disc and underwent a discectomy in September 2001. Id. at US001407. Her symptoms continued, however, and Dr. Colby was diagnosed with degenerative disc disease. Id. She began to self-medieate using Fentanyl, a powerful opioid administered during surgeries, taking the leftover narcotics from the operating room. Id. at US001408. Within a short time period, Dr. Colby became addicted to and dependent on Fentanyl. Id. at US001325. In July 2004, Dr. Colby was discovered asleep on a table in the hall of the hospital. Id. She submitted to a requested drug screen, tested positive for Fentanyl, and voluntarily agreed not to practice medicine for six months.
In addition to opioid dependence, staff physicians at Talbott diagnosed Dr. Colby with dysthymic disorder, a history of major depressive disorder, and compulsive and avoidant personality traits. Id. at US002019-24. Dr. Colby was also provided with instruction on treating her back pain, which she rated a six out of ten on the Mankoski pain scale when she checked into Talbott. Id. at US002019-24. Dr. Colby engaged in a rigorous exercise program for two to three hours per day while at Talbott. By the time of her discharge, Dr. Colby’s back pain had reduced to a one or two out of ten on the Mankoski pain scale. Id. Dr. Colby’s mental health also improved, due to daily group meetings at which she discussed her addiction. Id. at US002020. Eventually, she received permission to stop taking the antidepressant drug, Zoloft, which she had been taking since 2003. Id.
Her discharge summary stated that she “explored the idea of returning to school and finding an area of medicine where she would not be exposed to her drug of choice.” Id. at US002023. Michael Wilkerson, M.D. (“Dr. Wilkerson”), the supervising physician at her intake and discharge examinations, nonetheless recommended “that she not return to the practice of medicine for six months to allow her to continue to work on her recovery and stabilize her home situation.” Id. at US002024.
B. Dr. Colby’s Application for LTD Benefits and USIC’s Subsequent Termination
Dr. Colby initially applied for LTD benefits under the Plan on September 24, 2004, while she was a patient at Talbott. Id. at US002270. Relying on an Attending Physician Statement and a Supplementary Attending Physician Report, both filed by Dr. Wilkerson, USIC granted disability benefits to Dr. Colby for the period of November 8, 2004, to November 20, 2004, ceasing upon Dr. Colby’s discharge from Talbott. Id. at US002236.
After granting Dr. Colby LTD benefits for this twelve-day period, USIC conducted a more thorough analysis of Dr. Colby’s disability. USIC gathered records from a
Karen Sherwood, M.D. (“Dr. Sherwood”), a staff vocational consultant for USIC, reviewed Dr. Colby’s record to determine her occupation and material duties (“Sherwood Review”). Id. at US1393-94. Without elaborating further, Dr. Sherwood concluded that Dr. Colby’s job fell “within the occupation of Physician,” rather than within the occupation of anesthesiologist. Id. at US1393.
Allen J. Parmet, M.D. (“Dr. Parmet”), conducted an independent review at the request of USIC to determine whether Dr. Colby suffered from any “physical limitations” (“Parmet Review”). Id. at US92022. Dr. Parmet first noted that Dr. Colby faced a practical barrier to returning to employment since her license had been suspended indefinitely. Id. at US922. He also stated that although she suffered from degenerative disc disease, the condition “pre-existed the current events” and “did not impose any limitations.” Id. Dr. Par-met concluded that no physical limitations existed to prevent Dr. Colby from returning to work. Id.
Mike Jones, Ph.D. (“Dr. Jones”), a staff psychologist at USIC, conducted a Behavioral Health Services Assessment of Dr. Colby to determine whether Dr. Colby suffered from any psychological limitations (“Jones Review”). Id. at US1386-92. Dr. Jones noted Dr. Colby’s myriad psychological issues, but stated that Dr. Colby’s discharge summary from Talbott did not indicate that any of these diagnosed mental illnesses prevented Dr. Colby from returning to work. Id. at US1391. Dr. Jones saw no indication in the records of direct treatment for mental health issues following Dr. Colby’s discharge from Talbott, but recommended that additional records be obtained in order to render a more informed determination. Id.
On July 26, 2005, Dr. Colby received a notice letter stating that USIC was denying her claim for LTD benefits beginning November 20, 2004. Id. at US000562-63. Classifying her occupation as a “physician,” as opposed to an anesthesiologist, and methodically listing and analyzing each of her conditions, the letter stated that none of Dr. Colby’s conditions prevented her return to work. Id. Consequently, USIC denied LTD benefits for the period following Dr. Colby’s discharge from Talbott. Id.
C. Dr. Colby’s First Appeal and USIC’s Subsequent Denial
On January 19, 2006, Dr. Colby appealed USIC’s decision to terminate her LTD benefits. Id. at US001315. Dr. Colby submitted additional medical records, including a treatment summary from her therapist, Patricia Dell-Ross (“Dell-Ross”), a licensed social worker.
James T. Parker (“Parker”), a licensed rehabilitation counselor and certified vocational expert, conducted an independent vocational review of Dr. Colby (“Parker Review”). Id. at US001696-702. First, Parker classified Dr. Colby as an anesthesiologist, rather than a physician, id. at US001700, stating that USIC’s use of the term “physician” was “overly broad and inappropriately group[ed] distinct occupations into a single occupation.” Id. He also took issue with Dr. Sherwood’s review, stating that because USIC does not publish its occupational definition methodology, it is of “unknown validity and reliability.” Id. Finally, Parker concluded that Dr. Colby’s conditions prevented her from performing “the executive level requirements ... of the occupation of anesthesiologist.” Id.
Alan Wartenberg, M.D. (“Dr. Wartenberg”), an addiction specialist, conducted an independent, in-person examination of Dr. Colby (“Wartenberg Review”). Id. at US001688-92. Based on a his review, Dr. Wartenberg concluded that “[i]t is [his] belief, to a reasonable degree of medical certainty, that Dr. Colby is at high risk of relapse,” and that she should not return to any occupation where she could access anesthetic opioids. Id. at US001691. He also stated that if Dr. Colby were to return to practice as an anesthesiologist, her risk of relapse would be even greater. Id.
USIC also had two additional assessments conducted, a Behavioral Health Services Assessment by Patricia Neubauer, Ph.D. (“Dr. Neubauer”), a staff psychologist at USIC, id. at US1379-85, and a Clinical Services Review by Nina C. Smith, M.D. (“Dr. Smith”), a consulting doctor, id. at US386-89.
Dr. Neubauer conducted an analysis of each of Dr. Colby’s conditions and concluded that none prevented Dr. Colby from returning to the occupation of anesthesiologist or physician (“Neubauer Review”). Id. at US1379-85. As to Dr. Colby’s issues specifically with “opioid related addictive disorder,” Dr. Neubauer asserted that “[a] diagnosis of drug addiction does not indicate impairment. Generally, claimants who are recovering and able to maintain sobriety with community support ... should be able to resume activities of daily living including work.” Id. While Dr. Colby’s exposure to opioids at the workplace creates the potential for relapse, Dr. Neubauer opined that this potential is not the same as a current disability and does not prevent Dr. Colby from performing the duties of her occupation. Id. at US1382.
Dr. Smith conducted a review of Dr. Colby’s records to determine whether her degenerative disc disease prevented her return to work (“Smith Review”). Id. at US386-89. Dr. Smith found that “the medical evidence does not support any physical limitations and restrictions from her own occupation.” Id. at US388. Dr. Smith also noted that Dr. Colby’s degenerative disc disease seemed to respond well to exercise and anti-inflammatory medication. Id.
On July 6, 2006, USIC denied Dr. Colby’s first appeal. Id. at US001954. The denial letter classified Dr. Colby as a phy
(1) Ability to work on a full-time basis, as defined by the policy, if the worker was a full-time employee. (2) Review and evaluate medical records. (3) Diagnose medical condition of the patient. (4) Express an opinion on or prescribe, diagnostic measures and treatment. (5) Record and/or report on facts and findings.
Id. at US001956. With respect to her physical conditions, the denial letter stated that the “pain from [Dr. Colby’s] back is not in and of itself a limiting condition,” and as such, her degenerative disc disease did not rise to the level of a disability that would merit LTD benefits under the Plan. Id. With respect to Dr. Colby’s mental conditions, including her opioid addiction, the denial letter stated:
[I]t appears her claim is based primarily on her and her provider’s plan for her to avoid her specialty as an anesthesiologist due to her risk of relapse rather than the current presence of drug use or symptoms and conditions that would preclude working in her occupation. While Dr. Colby may choose to avoid that specialty, the potential for relapse is not the same as a current disability.
Id. at US001957. Having found that “there is no evidence to suggest that Dr. Colby was unable to perform the material duties of her regular occupation as of November 20, 2004,” USIC denied Dr. Colby’s appeal. Id. at US001958.
D. Dr. Colby’s Second Appeal and USIC’s Subsequent Denial
After her first appeal was denied, Dr. Colby filed a second administrative appeal. Id. at US001896-99. In support of her position, Dr. Colby submitted a letter from her attorney, Mala M. Rafik (“Rafik”), critiquing Dr. Smith and Dr. Neubauer’s assessments, as well as a supplemental letter from Dell-Ross addressing USIC’s assessment of Dr. Colby’s claim. Id. at US001315-53. Specifically, Rafik’s letter on behalf of Dr. Colby outlined the manner in which USIC’s assessment mischaracterized the relationship between Dr. Colby’s back pain and the stress of returning to work, her access to opioids, and her risk of relapse. Id. at US001316. Dell-Ross’s report discussed Dr. Colby’s vulnerability to relapse in light of the confluence of her past drug dependence, depressive symptoms, and lack of sufficient emotional supports. Id. at US001337.
On April 5, 2007, USIC upheld its previous denial of Dr. Colby’s claim for LTD benefits. Id. at US001861. USIC determined that Dr. Colby did not meet the Plan’s definition of disabled and therefore was not entitled to continued benefits. Id. at US001865. The denial letter stated: “The Committee noted that while Dr. Colby may choose to avoid the specialty of anesthesiology, because of her exposure to opiates, the risk for relapse is not the same as a current disability.” Id. Following receipt of the denial letter, Dr. Colby filed an action in federal district court.
E. Colby I
In Colby I, the Court reasoned that the operative question of the case was whether USIC acted arbitrarily and capriciously or abused its discretion by categorically excluding the risk of drug abuse relapse from qualifying impairments under the Plan.
In reaching this result, the Court looked to the plain language of the Plan, which did not distinguish between physical and mental disabilities. The Court held that
Moreover, USIC acknowledged that if an individual was currently able to perform the duties of her occupation, but doing so would greatly increase the risk of a complication or relapse of a physical ailment, that individual would qualify for LTD benefits under the Plan. Id. For example, USIC conceded that an “individual suffering from a ... coronary disease, who could literally perform the tasks required of his occupation but whose return to work would create a dangerously high risk of a heart attack, would be covered by the Plan and receive disability benefits.” Id. This admission by USIC is paramount, since there is no meaningful difference in the Plan between physical and mental ailments. Therefore, this Court held that the plan administrator (“Administrator”) was precluded, as matter of law, from denying LTD benefits for the sole reason that Dr. Colby suffered from a drug addiction rather than a physical ailment subject to relapse. The case was remanded to USIC for reconsideration of Dr. Colby’s claim under an interpretation of the Plan consistent with the Court’s decision. Id. at 245-46.
F. USIC’s Denial of LTD Benefits Post-Colby I
USIC had an additional assessment conducted prior to its decision in the remanded matter. Marcus J. Goldman, M.D. (“Dr. Goldman”), prepared an independent review of Dr. Colby’s records (“Goldman Review”). Admin. R. at US000975-83. Dr. Goldman concluded that Dr. Colby’s psychiatric functionality was limited through December 2005 due to continuing drug addiction-related issues. Id. at US000982. Dr. Goldman supported this conclusion by referencing Dr. Colby’s May 2005 Driving Under the Influence charge and Dell-Ross’s session notes. Id. at US000981-82. Dr. Goldman stated that nothing in the records, however, supported a conclusion of major affective anxiety disorder or drug addiction past December 2005. Id. Dr. Goldman also noted that there were no narrative progress notes on Dr. Colby past mid-2005. Id. at US000981.
On June 24, 2009, USIC again denied Dr. Colby’s claim. Id. at US000932. USIC “respectfully disagreefd] with the Court’s conclusion,” and stated that “risk of a potential future disability is not considered a current disability for which benefits are available.” Id. at US000934-35. USIC asserted that while, “as a recovering drug addict, [Dr. Colby] may have been at risk of relapsing into active addiction sometime in the future, that possibility alone does not constitute a disability under the plain language in the [Plan], and her claim must be denied.” Id. at US000935.
USIC raised a separate ground for its denial based on the Occupation Test requirements under the Plan. Id. at US000936-37. Under the Occupation Test, an individual only qualifies for LTD benefits if “after 36 months of disability ... a [condition] prevents] [the individual] from performing at least one of the material duties of each gainful occupation for which [his or her] education, training, and experience qualifies [that individual].” Id. at US000006, US000933 (emphasis in original). In other words, as of August 10, 2007, if Dr. Colby could perform the tasks of any gainful occupation for which she is qualified, then she would not be “disabled” under the Plan. Id. at US000936. USIC relied on the Sherwood Review, which as
G. Dr. Colby’s First Appeal Post-Colby I
On December 18, 2009, Dr. Colby appealed USIC’s denial, submitting a lengthy and detailed letter. Id. at US000804-30. Dr. Colby asserted that, in light of this Court’s order in Colby I, USIC had no legal basis to deny her LTD benefits on the ground that the risk of drug abuse relapse did not qualify as a disability. Id. at US000804-09. Dr. Colby submitted a medical review conducted by William Land, M.D. (“Dr. Land”), an independent medical consultant with significant experience in substance abuse issues (“Land Review”). Id. at US000809-16. After a full review of the record, Dr. Land diagnosed Dr. Colby with opioid dependence, post-traumatic stress disorder, major depressive disorders, and dysthymia. Id. at US000836-40. Dr. Land noted the severity of Dr. Colby’s risk of relapse, stating that “there are multiple significant factors that placed Dr. Colby at significant and substantial risk of relapse from November, 2004 until December of 2007.” Id. at US000844. Dr. Land also reviewed Dell-Ross’s session notes and highlighted inconsistencies between the Dell-Ross Review and the Goldman review. Id. at US000848-54. Dr. Land concluded that “Dr. Colby’s risk of relapse prevented her from performing at least one, if not more, of these material duties from atleast [sic] November, 2004 through December, 2007.” Id. at US000856.
H. USIC’s Denial of Dr. Colby’s First Post -Colby I Appeal
On March 25, 2010, USIC denied Dr. Colby’s appeal and declined to grant her LTD benefits for the period after her discharge from Talbott. Id. at US000744. USIC disagreed with this Court’s order in Colby I, stating: ‘We respectfully assert that [the Court] was mistaken in [its] opinion that our company makes a distinction between physical and mental conditions in applying policy terms to risk of relapse.” Id. at US000749. USIC also denied Dr. Colby’s claim on the ground that Dr. Colby could perform the material duties of her occupation with a “reasonable accommodation.” Id. at US000751. This was the first instance where USIC discussed the possibility of a reasonable accommodation for Dr. Colby. USIC relied on a review by Milton Jay, M.D. (“Dr. Jay”), a consulting neuropsychologist and addiction specialist (“Jay Review”). Id. at US000751. Dr. Jay’s report raised the viability of a “shadow,” an employee of the hospital assigned to watch Dr. Colby when she is in the presence of narcotics, as a reasonable accommodation under the Plan. Id. at US000769. Dr. Jay diagnosed Dr. Colby with a “moderate severity relapse risk profile,” id. at US000720, but concluded that Dr. Colby was not disabled due to her risk of relapse, and that even if she were, a shadow would constitute a reasonable accommodation that would disqualify her from receiving LTD benefits under the Plan. Id. at US000752.
I.Dr. Colby’s Second Appeal Post-Colby I
On September 21, 2010, Dr. Colby appealed USIC’s second post-Colby I denial. Id. at US000643-53. Dr. Colby’s letter reiterated her previous argument, asserting that USIC’s determinations are inconsistent with this Court’s holding in Colby I that risk of drug abuse relapse ought not be categorically excluded from qualifying disabilities under the Plan. Id. at US000648. In order to address the reasonable accommodation ground raised by USIC in its denial, Dr. Colby initiated a reexamination by Dr. Land, as well as an
Dr. Land reviewed Dr. Jay’s recommendation for a reasonable work accommodation. Dr. Land stated that “based on [his] clinical experience working in several hospitals and from [his] forensic training, [he does] not believe that [a shadow] is a practical or realistic accommodation for Dr. Colby.” Id. at US000657. Sargent also reviewed Dr. Jay’s recommendation for a reasonable work accommodation and concluded that a “shadowing clinician is not a reasonable accommodation for a physician,” based on the steep “accommodation expense” of such an arrangement. Id. at US000705, US000710 (internal quotation marks omitted). In addition, Sargent observed, and Dr. Colby argued in her appeal, that there is no record that USIC evaluated the cost of the proposed accommodation or contacted Dr. Colby’s prior employer to determine if such an accommodation would be' considered. Id. at US000648, US000711.
J. USIC’s Denial of Dr. Colby’s Second Post-Colby I Appeal
On November 2, 2010, USIC denied Dr. Colby’s appeal. Id. at US000634. USIC, again, “respectfully disagree[d] with the Court’s finding.” Id. at US000639. USIC asserted that, even if the risk of drug abuse relapse constituted a disability, USIC had identified a reasonable accommodation that would disqualify Dr. Colby from receiving LTD benefits under the Plan. Id. at US000639. The denial letter concluded that after her discharge on November 20, 2004, Dr. Colby did not meet the applicable test for disability. Id. at US000640. After this final denial, Dr. Colby reopened the administratively closed record and initiated the present action before this Court.
III. RULINGS OF LAW
A. Standard of Review
Dr. Colby and USIC submitted cross motions for summary judgment based on the administrative record and have agreed to resolve the dispute as a case stated. As such, rather than drawing all inferences against each moving party, the Court is empowered to resolve both issues of law and disputed issues of material fact. Brotherhood of Locomotive Eng’rs v. Springfield Terminal Ry. Co.,
1. Arbitrary and Capricious
In an ERISA case, “trial is usually not an option: in a very real sense, the district court sits more as an appellate tribunal than as a trial court. It does not take evidence, but, rather, evaluates the reasonableness of an administrative determination in light of the record compiled before the plan fiduciary.” Leahy v. Raytheon Co.,
“The operative inquiry under arbitrary, capricious or abuse of discretion review is ‘whether the aggregate evidence ... could support a rational determination that the plan administrator acted arbitrarily in denying the claim for benefits.’” Wright,
2. Metropolitan Life Insurance Co. v. Glenn
In 2008, the United States Supreme Court altered the “arbitrary and capricious” standard as it applies to ERISA cases. See Metropolitan Life Ins. Co. v. Glenn,
In the instant case, USIC is both the insurer and the administrator of the Plan. Therefore, the following analysis applies the arbitrary and capricious standard of review while taking into account the directive of Glenn with respect to USIC’s inherent conflict of interest.
B. USIC’s Arbitrary and Capricious Determination After Colby I
As this Court held in Colby I,
1. USIC’s Exclusion of Risk of Relapse
Under the Occupation Test in the Plan, an individual is entitled to LTD benefits if “[d]uring the first 36 months of a period of disability (including the qualifying period), an injury, sickness, or pregnancy requires that [the claimant] be under the regular care and attendance of a doctor, and prevents [the claimant] from performing at least one of the material duties of [his or her] regular occupation.” Admin. R. at US000006.
This Court in Colby I unequivocally held that the Plan does not permit USIC to categorically exclude the risk of drug abuse relapse from its disability analysis.
In Colby I, USIC cited case law from other circuits to support its interpretation of the Plan. In particular, USIC relied on the Fourth Circuit’s holding in Stanford v. Continental Casualty Co.,
The Stanford court rejected the plaintiffs argument, reasoning that a high-stress environment causes a cardiac event, whereas a drug-filled environment only encourages relapse.
[The majority’s reasoning necessarily] rest[s] on moral considerations of choice and temptation on the one hand, and medical considerations of physical inability on the other, neither of which are to be found in the language of a Plan that puts addiction squarely on all fours with other impairments. The moral and medical choices are not this court’s to make. They belong to those who bargained for the Plan — and who have something at stake in it.
The Court in Colby I asserted that it is a “moralistic error” to distinguish the risk of drug abuse relapse for a recovering addict from a physical ailment.
Instead, this Court chose to follow “more persuasive” case law that recognizes that a risk of drug abuse relapse could satisfy a LTD plan’s definition of disability if the probability of relapse was “sufficiently high.”
2. Intervening Case Law Since Colby I
In its motion for summary judgment, USIC cites two ERISA eases that were decided after Colby I, arguing that each renders deficient the Colby I holding. Def.’s Mem. Mot. Summ. J. (“Def.’s Mem. Summ. J.”) 16, ECF No. 52. USIC first cites Conkright v. Frommert, — U.S. -,
In Conkright, employees appealed a plan administrator’s allegedly improper calculation of their retirement benefits.
The Supreme Court held that the district court should have applied a deferential standard of review to the plan administrator’s interpretation, pursuant to Firestone Tire & Rubber Co. v. Bruch,
USIC cites Conkright for the general proposition that the Administrator’s interpretation of the Plan is entitled to deference. See Def.’s Mem. Summ. J. 11-12, 14, 16. This Court does not disagree with the Conkright proposition, but it also does not find it to be relevant to the issue at hand. In reviewing the Administrator’s interpretation of the Plan, this Court applied a deferential standard of review both in Colby I and in the present action, disturbing the Administrator’s determination only where it was held to be arbitrary, capricious, or an abuse of discretion. Colby I,
As the Supreme Court asserted, “[ajpplying a deferential standard of review does not mean that the plan administrator will prevail on the merits. It means only that the plan administrator’s interpretation of the plan ‘will not be disturbed if reasonable.’ ” Conkright,
b. Hinkle ex rel. Estate of Hinkle v. Assurant, Inc.
In Hinkle, an unpublished opinion, the Third Circuit affirmed that a plan administrator’s interpretation of “accidental” death under the policy was not arbitrary and capricious.
As this Court stated in Colby I, whether the risk of drug abuse relapse is a qualifying disability under a plan that does not otherwise exclude it is a matter of first impression in the First Circuit.
Similarly, this Court is now entitled to, and hereby does, disagree with and decline to follow the Third Circuit’s decision in Hinkle, a decision not selected for publication in the Federal Reporter, but rather only printed in the Federal Appendix. The Hinkle court’s holding would effectively bind the hands of district courts to apply the arbitrary and capricious standard. The Hinkle reasoning creates an anomalous result: where two circuits have disagreed on the reasonableness of an administrator’s interpretation of a policy, and a district court sits in a different circuit which has not yet spoken on the issue, the district court could not hold the administrator’s interpretation to be anything other than reasonable. This result wrongfully extends the precedential weight of circuit court decisions outside their proper boundaries. Therefore, this Court rejects the holding of Hinkle and will review the Administrator’s interpretation of the Plan under the deferential standard of review as provided in Firestone,
C. USIC’s Disregard for This Court’s Mandate in Colby I
This Court was explicit in its holding in Colby I that if a risk of drug abuse relapse would render Dr. Colby unable to perform at least one of the material duties of her occupation, then she must be considered disabled under the Plan.
USIC’s position directly contravenes this Court’s holding in Colby I that it was an error as matter of law for USIC to categorically exclude the risk of drug
Moreover, the Administrator failed to engage in a factual analysis, as was directed by this Court in Colby I, id. at 247, of whether Dr. Colby’s risk of relapse was sufficiently high such that she could not perform at least one material duty of her occupation. Had USIC performed this analysis and concluded, based on the evidence in the record, that Dr. Colby’s risk of drug abuse relapse did not meet this threshold, this factual determination would have been deferentially reviewed by the Court.
Since USIC explicitly excluded the risk of drug abuse relapse from its analysis, however, the Court will not now perform an evidentiary review of the Administrator’s decision to deny Dr. Colby’s claim. Such a review is moot.
After this Court decided Colby I, USIC denied Dr. Colby’s remanded claim on the additional ground that she was not “disabled” under the Plan because she could have performed the material aspects of her job with a reasonable accommodation. Admin. R. at US000751. This was the first time in the proceedings that USIC raised the issue of reasonable accommodation for Dr. Colby. It did so citing the Occupation Test which states that if “[the claimant] can perform the material duties of [his or her] regular occupation with reasonable accommodation(s), [the claimant] will not be considered disabled.” Id. at US000933. USIC proposed an accommodation by which the hospital would assign a health care professional to “shadow” Dr. Colby throughout her workday during those times when she potentially would have access to narcotics. Id. at US000751.
USIC’s post hoc suggestion that a “shadow” would have been a reasonable accommodation, disqualifying Dr. Colby from receiving LTD benefits, contravenes the guidelines set forth in USIC’s “Master List of Rules, Guidelines, Protocols” (“Master List”). Id. at US002280-87. USIC’s Master List defines “reasonable accommodation” as “any modification(s) to the worksite, the job, or employment practices, which would allow you to perform the material duties of the occupation and which would not create an undue hardship for the employer.” Id. at US002340. The Master List provides a formal procedure for USIC’s determination of whether a reasonable accommodation is available for a particular claimant. Once USIC identifies a potential accommodation, USIC calls both the claimant and the policyholder, i.e., the employer, “to discuss the applicability and availability” of the accommodation. Id. at US002341. USIC’s Vocational Services staff then makes a determination as to the “effectiveness each accommodation would have in enabling performance of the essential functions of the position.” Id. at US002342. Once the determination is made, USIC makes a follow-up call to the claimant and the policyholder “to facilitate the selection of an accommodation that meets both of their needs.” Id.
USIC, in its own administrative guidelines, thus explicitly assumes the burden of working constructively with the claimant and the employer to find an appropriate accommodation.
The Plan’s requirements under the “Occupation Test” change after thirty-six months: “[i]f, after 36 months of a period of disability, [the claimant] can perform a gainful occupation for which [his or her] education, training, and experience qualifies [the claimant], with reasonable accommodation(s), [he or she] will not be considered disabled.” Id. at US000006 (emphasis in original omitted). In other words, while in the first thirty-six months of a claimant’s disability the claimant must be able to perform the material duties of his or her “regular occupation,” after that period, the standard broadens to each “gainful occupation” for which the claimant is qualified. Id.
There are many occupations for which Dr. Colby’s education, training, and experience qualifies her that do not place her in close proximity to opioids. USIC, in its brief suggests several of these possible occupations, see Def.’s Mem. Opp’n 11, and this Court agrees with this assessment. Therefore, under the “any gainful occupation” standard, Dr. Colby’s eligibility for LTD benefits shall be capped at thirty-six months.
F. Remedy
1. Retroactive Reinstatement of Benefits
As the First Circuit has established, “[o]nce a court finds that an administrator has acted arbitrarily and capriciously ... the court can either remand the case to the administrator for a renewed evaluation of the claimant’s case, or it can award a retroactive reinstatement of benefits.” Cook v. Liberty Life Assurance Co. of Bos.,
In Colby I, this Court held that remand was appropriate “[b]ecause USIC categorically excluded risk of relapse as a basis for disability,” and thus “USIC never conducted the appropriate analysis.”
2. Attorneys’ Fees
It is also within the Court’s discretion to grant Dr. Colby, as the prevailing party, attorneys’ fees and costs. 29 U.S.C. § 1132(g)(1). The First Circuit has rejected a presumption in favor of awarding fees to a prevailing plaintiff in ERISA benefits cases, and has instead create a five-factor test to guide district courts in these matters. See Cottrill v. Sparrow, Johnson, & Ursillo, Inc.,
The non-exhaustive list of factors to be considered are as follows: (1) the degree of culpability or bad faith attributable to the losing party; (2) the depth of the losing party’s pocket, i.e., his or her capacity to pay an award; (3) the extent, if at all,
Under the first factor, USIC has conducted itself in bad faith, summarily denying Dr. Colby benefits pursuant to an unreasonable interpretation of the Plan. The second factor is of negligible importance, for although USIC certainly has the financial resources to pay Dr. Colby’s attorneys’ fees and costs, “the capacity to pay, by itself, does not justify an award.” Cottrill,
The third factor, combined with USIC’s bad faith under the first factor, most strongly justifies the award of fees in this case. Requiring USIC to pay fees will deter other LTD plan administrators from discriminating between policyholders with physical and psychological impairments when such a distinction is not supported by the language of the policy. As was the case in Colby I, the deterrent value of a fee award is considerable. As in Colby I, the fourth factor reinforces the third: policyholders benefit from plan administrators’ equal treatment of claims arising from physical and mental disabilities. To the extent the Court’s holding alters USIC’s approach to claims of mental disability generally and drug addiction in particular, all of USIC’s policyholders stand to benefit.
Over seven years, Dr. Colby has filed four administrative appeals and has sought relief in this Court twice in order that USIC would evaluate her claim for disability benefits thoroughly and in good faith. Dr. Colby ought not be the party to bear the burden of USIC’s principled stand. Consequently, the Court orders that USIC pay Dr. Colby reasonable attorneys’ fees and costs incurred from February 23, 2009, the date of the Colby I decision, until the present. The Court orders that the parties confer and, if possible, file a joint proposed order regarding the extent of attorneys’ fees and costs that USIC will pay to Dr. Colby.
IV. CONCLUSION
For the reasons stated, the Court, in its Order dated September 30, 2011, GRANTED Dr. Colby’s Motion for Summary Judgment on the Record, DENIED USIC’s Cross Motion for Summary Judgment on the Record, and entered judgment for Dr. Colby as to Counts I and II of Dr. Colby’s First Amended Complaint. Specifically, this Court ordered that:
(1) Dr. Colby is awarded thirty-six months of retroactively reinstated LTD benefits pursuant to the Plan less any benefits already received, and
(2) USIC shall pay Dr. Colby for the reasonable attorneys’ fees and costs incurred from February 23, 2009, until the present.
Notes
. Unless otherwise indicated, all citations are to the administrative record, prepared by USIC. The pages in that record are identified by the prefix "US” and the Court has adopted the same convention. The pagination of the record for Colby v. Assurant Employee Benefits ("Colby I ”),
. In 2005, Dr. Colby's medical license was suspended indefinitely. Admin. R. at US922.
. Dr. Colby began therapy sessions with Dell-Ross in October 2003. Id. at US001665. With the exception of the time that Dr. Colby spent at Talbott, Dr. Colby met with Dell-Ross at least once per month. Id. at US000859-69, US001665-73, US001883-85 (collectively, "Dell-Ross Review”). Dell-Ross's session notes indicated that Dr. Colby was very concerned about returning to work, so much so that they discussed the issue at nearly every meeting. Id. The notes indicated that Dr. Colby was particularly concerned about how her return to work would make her vulnerable to drug abuse relapse. Id.
. USIC argues in its opposition brief and in its motion to reconsider the February 23, 2009, Order, that it never conceded this point. Def.'s Mem. Opp’n Pl.'s Mot. J.R. ("Def.'s Mem. Opp’n”) 3-5, ECF No. 61; Def.’s Mem. Opp’n Pl.'s Mot. Att’ys Fees Costs Cross-Mot. Recons. Pursuant Rule 60, ECF No. 36. While the Court acknowledges that USIC did not expressly state that a risk of relapse of a physical ailment would be covered, it certainly impliedly averred this in its Cross-Motion for Judgment on the Record of June 20, 2008. Def.'s Mem. Cross Mot. J.R. Opp’n Pl.’s Mot. J.R. ("Def.'s Mem. Cross Mot.”) 15, ECF No. 21. If USIC’s policy was never to provide LTD benefits for a relapse of any ailment, be it mental or physical, USIC would have raised this much stronger argument in its denial of Dr. Colby's benefits. Instead, USIC relied on Stanford v. Continental Casualty Co.,
. It bears mentioning that Colby I was also determined on the independent ground that the Administrator’s interpretation of the Plan was arbitrary and capricious based on the terms of the Plan itself, rather than the relevant legal doctrine.
. As this Court will discuss infra at Section III.D, Dr. Colby is only entitled to LTD benefits for the first thirty-six months of her disability, as to which the "regular occupation” standard of the Occupation Test applies. Admin. R. at US000006.
. As this Court stated in Colby I, the record contained "substantial evidence that, viewing Dr. Colby’s constellation of health issues collectively, her return to full time work as a physician posed a dangerously high risk of her relapsing into active abuse of Fentanyl or other opioids.”
. At oral argument on November 17, 2008, and again in its opposition brief to Dr. Colby’s motion for judgment on the record, USIC cited the First Circuit decision in Boardman v. Prudential Insurance Co. of America,
The Colby I Court concluded that USIC made an error of law by categorically excluding Dr. Colby's condition from the Plan. This Court did not grant USIC any evidentiary deference because it was clear from USIC's interpretation of "disability” that no amount of medical testimony to the contrary was going to change USIC’s determination. A ruling that USIC had acted contrary to law is different from an evaluation of a determination based on conflicting evidence, and, as such, Boardman is not instructive in the present matter.
.This Court anticipates that USIC may argue on appeal that this portion of the holding is effectively stripping the Administrator of its
. In its opposition brief, USIC argues that the burden is on Dr. Colby to show that no reasonable accommodation was possible, and implies she ought have sought an accommodation independently. Def.'s Mem. Opp’n 12. USIC cites the language of the Occupation Test, which is ambiguous, at best, in placing such a burden on Dr. Colby. See Admin. R. at US000006. Any such ambiguity is clarified by the explicit language in the Master Plan, in which USIC lays out procedures for proposing and implementing an accommodation. Id. at US002341-43. USIC cannot therefore shift a burden to Dr. Colby that it has itself assumed.