ELLEN V. ELLIS, Plaintiff-Appellant, v. METROPOLITAN LIFE INSURANCE COMPANY, Defendant-Appellee.
No. 96-2711
United States Court of Appeals for the Fourth Circuit
September 10, 1997
Argued: July 18, 1997. Appeal from the United States District Court for the Eastern District of Virginia, at Norfolk. Robert G. Doumar, Senior District Judge. (CA-95-1003-2)
Affirmed by published opinion. Judge Ervin wrote the opinion, in which Senior Judge Butzner and Senior Judge Phillips joined.
COUNSEL
OPINION
ERVIN, Circuit Judge:
Plaintiff-Appellant Ellen V. Ellis (Ellis) appeals from an order granting Defendant-Appellee Metropolitan Life Insurance Company‘s (MetLife) cross-motion for summary judgment and denying her own. Ellis had sought review in district court of MetLife‘s final determination that she was ineligible for long-term disability benefits under an employee welfare benefit plan governed by the Employee Retirement Income Security Act of 1974 (ERISA),
I.
Ellis was a branch manager for NationsBank Corporation whose principal duties related to originating mortgage loans. She participated in NationsBank‘s Long Term Disability Plan (Plan). The Plan is an employee welfare benefit plan governed by ERISA, and it is funded by MetLife.
The Plan vests MetLife, a fiduciary under the Plan, with
discretionary authority to interpret the terms of the plan and to determine eligibility for and entitlement to plan benefits in accordance with the terms of the plan. Any interpretation or determination made pursuant to such discretionary authority shall be given full force and effect, unless it can be shown that the determination was arbitrary and capricious.
J.A. at 101. The terms of the Plan provide, in pertinent part, that a participant is “disabled” if
due to an Injury or Sickness, [the participant] require[s] the regular care and attendance of a Doctor . . . and:
(1) [the participant is] unable to perform each of the material duties of [her] regular job . . . .
J.A. at 92.
In August 1993, Ellis submitted a long-term disability claim form in which she declared that she suffered from blurred vision, balance problems, and chronic pain which precluded her from driving, reading, sitting, or standing for any length of time without rest. She indicated that she believed her disability arose from a dental visit procedure that occurred in April 1992, five days after which she admitted herself to a hospital. MetLife subsequently initiated its review procedure.
At MetLife‘s request, Ellis‘s health care providers submitted medical information relating
In November 1993, MetLife referred Ellis‘s claim file to the Independent Board Certified Physicians Roundtable (Roundtable), an independent medical consulting group, for an assessment of Ellis‘s condition. The Roundtable members who reviewed Ellis‘s file consisted of an internal medicine and neurology specialist, an internal medicine and cardiology specialist, and an orthopedic surgeon. This panel concluded that no medical diagnosis for her condition could be confirmed. The panel suggested the possibility of an underlying psychiatric disorder, but no such evidence had been submitted to them. Functional ability on the basis of a psychiatric disorder could not be assessed. Nonetheless, assuming that each of Ellis‘s symptoms were present, the panel concluded that Ellis ought to be able to lift various weights, to walk or stand for three to four hours a day in divided periods, and to sit for eight to ten hours a day.
Based on the Roundtable‘s findings, MetLife denied Ellis‘s claim in a letter dated December 9, 1993. MetLife explained why her claim was denied, informed her of the Roundtable‘s conclusions, notified her that she could request further review within 60 days, and explained that additional documentation could be submitted for review.
Ellis did seek further review, and Porvaznik compiled additional medical reports and information. Porvaznik himself characterized Ellis‘s problem as severe and disabling but admitted that the etiology remained unclear. Reports by other providers, however, were again inconclusive. A neurobehavioral profile revealed that Ellis possessed “considerable strengths in the majority of skills assessed, including sensory-perceptual abilities, general intellectual abilities, and executive functioning skills.” J.A. at 167. That report concluded that “[a]lthough her symptoms are very real, and do apparently preclude her resumption of her previous lifestyle, it is difficult to pinpoint etiology of symptoms with any degree of certainty.” J.A. at 168. A further head and neck examination, MRI, audiogram, and otoscopic examination yielded normal results. A physical therapist reported that Ellis‘s performance on one test was consistent with a patient who has sensory organization dysfunction. Another report suggested that Ellis appears to have a predisposition to fibromyalgia and recommended a treatment of progressive aerobic exercise. And yet another report could find no evidence of neurological disease but admitted that the reported symptoms were incapacitating.
MetLife submitted this new material to the Roundtable, which added a psychiatrist to the panel of the original three members. Based on all the information supplied, the Roundtable, in a May 16, 1994, report, suggested that there was a reasonable basis for a probable diagnosis of fibrositis or fibromyalgia but that it could not be confirmed.1 Still, assuming that fibrositis or fibromyalgia was present, as well as a memory deficit, a peripheral vestibular disorder, and some element of depression or dysthymia,2 the Roundtable determined that there
was no incompatibility between Ellis‘s functional capacity and her work requirements, even though her functional limitations could have been over-estimated.
Rather than continue to deny Ellis‘s claim based on this report, MetLife instead provided copies of the report to Ellis‘s health care providers to seek their comments. In particular, MetLife requested that they address whether Ellis was totally disabled with respect to her occupation of bank branch manager and to submit objective medical evidence of her continuing disability. Only a few of the health care providers responded.
MetLife submitted all of this data for a third time to the Roundtable. In place of the specialist in internal medicine and cardiology, a specialist in internal medicine and rheumatology was substituted; the three other panel members remained the same as on the second panel. In a report of February 4, 1995, the panel concluded that a diagnosis of fibrositis remained probable. But again, assuming that diagnosis, as well as symptoms of muscle tightness, pain, and ocular convergence, the panel determined that Ellis ought to be able to lift even greater weights than indicated before, walk and stand six to eight hours a day, and sit for eight to ten hours a day. This functional capacity was yet again found not to be medically incompatible with Ellis‘s work requirements.
Following this review of its earlier denial, MetLife informed Ellis on March 28, 1995, that its decision remained the same and that her file was closed.
Ellis filed this action on October 12, 1995, alleging (1) that MetLife had failed to give her adequate written notice of the reasons for its denial of her claim, (2) that she was not given a full and fair review, and (3) that the denial violated the terms of the Plan and ERISA. Following cross-motions for summary judgment, the district court granted MetLife‘s motion and denied Ellis‘s. The court determined that, considering the inconclusive evidence of the conflicting reports of Ellis‘s own health care providers as well as the three determinations of the Roundtable, substantial evidence supported MetLife‘s denial decision. MetLife, therefore, had not abused the discretion vested in it by the Plan, notwithstanding the slight possibility of a financial conflict of interest. The court also concluded that MetLife had substantially complied with the applicable regulations interpreting ERISA in its denial letters and that, because MetLife had done more than was required to permit Ellis to present her claim, there was no question that she had received a full and fair review.
This appeal followed.
II.
Over the last few years, we have developed a well-settled framework for review of the denial of benefits under ERISA plans. Where a plaintiff is appealing the grant of summary judgment, we engage in a de novo review, applying the same standards that the district court employed. See Brogan v. Holland, 105 F.3d 158, 161 (4th Cir. 1997). In cases where the benefit plan grants the administrator or fiduciary discretionary authority to determine eligibility or to construe the terms of the plan, the denial decision must be reviewed for abuse of discretion. See Firestone Tire and Rubber Co. v. Bruch, 489 U.S. 101, 111, 115 (1989); Brogan, 105 F.3d at 161; Bedrick v. Travelers Ins. Co., 93 F.3d 149, 152 (4th Cir. 1996); Bernstein v. CapitalCare, Inc., 70 F.3d 783, 787 (4th Cir. 1995); Doe v. Group Hospitalization & Medical Servs., 3 F.3d 80, 85 (4th Cir. 1993). Under this deferential standard, the administrator or fiduciary‘s decision will not be disturbed if it is reasonable, even if this court would have come to a different conclusion independently. See Bruch, 489 U.S. at 115; Brogan, 105 F.3d at 161; Haley v. Paul Revere Life Ins. Co., 77 F.3d 84, 89 (4th Cir. 1996); Bernstein, 70 F.3d at 787; Fagan v. National Stabilization Agreement of the Sheet Metal Indus. Trust Fund, 60 F.3d 175, 180 (4th Cir. 1995); Doe, 3 F.3d at 85. Such a decision is reasonable if it is “the result of a deliberate, principled reasoning process and if it is supported by substantial evidence.” Brogan, 105 F.3d at 161 (quoting Bernstein, 70 F.3d at 788).
Ellis argues, however, that we should determine her eligibility for benefits de novo because MetLife, as both fiduciary of the Plan‘s beneficiaries and the Plan‘s insurer, suffers from a conflict of interest. Again, we have established a well-developed framework for considering such conflicts of interest in a court‘s reviewing calculus. The Supreme Court has recognized that where a plan administrator or fiduciary is vested with discretionary authority and is “operating under a conflict of interest, that conflict must be weighed as a ‘factor[ ] in determining whether there is an abuse of discretion.‘” Bruch, 489 U.S. at 115 (quoting Restatement (Second) of Trusts § 187 cmt. d (1959)). Because ERISA plans are governed by trust principles, this factor is just one of several that a court should consider in determining whether an administrator or fiduciary has abused the discretion vested in it. We have recently stated that a reviewing court should consider, to the extent relevant,
(1) the scope of the discretion conferred; (2) the purpose of the plan provision in which the discretion is granted; (3) any external standard relevant to the exercise of that discretion; (4) the administrator‘s motives; and (5) any conflict of interest under which the administrator operates in making its decision.
Haley, 77 F.3d at 89 (citing Restatement (Second) of Trusts § 187 cmt. d (1959)). As we recently explained in Bedrick v. Travelers Insurance Company, the court applies the conflict of interest factor, on a case by case basis, to lessen the deference normally given under this standard of review only to the extent necessary to counteract any influence unduly resulting from the conflict:
[W]hen a fiduciary exercises discretion in interpreting a disputed term of the contract where one interpretation will further the financial interests of the fiduciary, we will not act as deferentially as would otherwise be appropriate. Rather, we will review the merits of the interpretation to determine whether it is consistent with an exercise of discretion by a fiduciary acting free of the interests that conflict with those of the beneficiaries. In short, the fiduciary decision will be entitled to some deference, but this deference will be lessened to the degree necessary to neutralize any untoward influence resulting from the conflict.
Bedrick, 93 F.3d at 152 (harmonizing Bruch and circuit law and quoting Bailey v. Blue Cross & Blue Shield, 67 F.3d 53, 56 (4th Cir. 1995) (quoting Doe, 3 F.3d at 87), cert. denied, 116 S. Ct. 1043 (1996)); see also Martin v. Blue Cross & Blue Shield of Va., Inc., 115 F.3d 1201, 1206 (4th Cir. 1997).
It therefore appears that in no case does the court deviate from the abuse of discretion standard. Instead, the court modifies that abuse of discretion standard according to a sliding scale. The more incentive for the administrator or fiduciary to benefit itself by a certain interpretation of benefit eligibility or other plan terms, the more objectively reasonable the administrator or fiduciary‘s decision must be and the more substantial the evidence must be to support it.
In the instant case, it is clear that an administrator or fiduciary, free of MetLife‘s conflict of interest, would have been more than reasonable in exercising its discretion to deny Ellis benefits under the circumstances of this case. The decision maker had before it three separate reports of the independent Roundtable.3 Each of these reports
concluded that there was no conclusive diagnosis of Ellis‘s condition. Each also assessed her functional limitations, even assuming her
But MetLife had before it not just these reports by the Roundtable specialists but also all the data submitted by Ellis and her health care providers. Although Ellis‘s osteopath, Porvaznik, as well as several other health care providers, opined that Ellis was, in fact, disabled, there was no consensus on a diagnosis of Ellis‘s condition or even on whether there was a medical cause for her symptoms. Indeed, a number of her examiners indicated that she retained “executive functioning skills,” that she could engage in various forms of physical exercise, and that she could return to work on a reduced schedule. One report even suggested that the possibility that Ellis was embellishing her symptoms for potential secondary gain warranted serious consideration. Based on this conflicting data, but supported by the independent medical assessment of the Roundtable, MetLife determined that Ellis was not “unable to perform each of the material duties of [her] regular job” “due to an injury or sickness” and thus that she was not disabled within the meaning of the Plan.4 Despite MetLife‘s conflict of interest, which, as the district court noted, was greatly mitigated by its substantial reliance on the evaluations of the independent Roundtable, we conclude that MetLife did not abuse its discretion in denying Ellis benefits. MetLife‘s decision was based on substantial evidence, and its lengthy and thorough review evinces a deliberate, principled reasoning process.
As fiduciary, MetLife must serve the best interests of all Plan beneficiaries, not just the best interest of one potential beneficiary. Faced with conflicting evaluations by the claimant‘s own health care providers, no conclusive diagnosis, and three separate reports of an independent panel of medical specialists finding no incompatibility between her functional limitations and her job requirements, a fiduciary free of any conflict of interest would have been more than reasonable in rejecting Ellis‘s claim and preserving the Plan‘s funds for those beneficiaries who satisfy the Plan‘s definition of “disabled.”
III.
In addition to challenging MetLife‘s denial of benefits, Ellis also alleged procedural errors in contravention of ERISA‘s statutory law and its applicable regulations. Section 503 of ERISA requires that an adequate notice, “setting forth the specific reasons for [the] denial, written in a manner calculated to be understood by the participant,” as well as the opportunity for a full and fair review, must be given to any participant whose claim is denied.
A.
ERISA regulations elaborate specifically what a denial notice must contain:
(1) The specific reason or reasons for the denial;
(2) Specific reference to pertinent plan provisions on which the denial is based;
(3) A description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why such material or information is necessary; and
(4) Appropriate information as to the steps to be taken if the participant or beneficiary wishes to submit his or her claim for review.
In the instant case, MetLife‘s denial letter of December 9, 1993, explained that Ellis‘s claim was denied because her functional limitations did not adversely impact her ability to perform the duties of her job, quoted the relevant Plan language defining “totally disabled,” informed her of the Roundtable‘s conclusions, notified her that she could request further review within 60 days, and explained that additional documentation could be submitted for review.5 In all material
respects, MetLife substantially complied with each of the ERISA regulation‘s requirements.
Ellis argues that the denial notice was deficient because it failed to inform her of the information she needed to provide in order to perfect her claim. In particular, she asserts that the Roundtable‘s report, which was not provided to her with the denial letter, but which she later obtained, apparently during discovery, states that “additional diagnosis and evaluations would be of merit or merit consideration.” Br. of Appellant at 41. Her argument is that, had she known this information, she would have known what medical proof she needed in order to prove her disability. Ellis‘s argument is fundamentally flawed in two respects.
relatively good relief of dizziness and nausea by meclizine, the absence of any balance, coordination or vestibular abnormalities on clinical exam, the absence of any neurologic abnormalities of the facial or trigeminal nerve on clinical exam, and the lack of any medical indication of loss of higher cognitive function.
Based on the above information, we are unable to give this claim favorable consideration from the claim effective date of August 31, 1993.
We want you to understand that our decision in this matter has been based solely upon information contained in our file. As such, we are willing to answer any questions or to review any further material you would care to submit which may have an effect upon consideration given to this claim.
[. . .]
You may request a review of the claim within 60 days of the denial date by writing directly to Group Insurance Claims Review, Metropolitan Life Insurance Company, at the address indicated in this letter. . . . When requesting this review, you should state the reason you believe the claim was improperly denied and you may submit any data, questions or comments to Metropolitan you deem appropriate. Metropolitan will reevaluate all the data and you will be informed in a timely manner of our findings.
J.A. at 159-60 (bold and underlining in original).
First, Ellis entirely misconstrues what the Roundtable report says. That report actually states:
The above functional capacities do not assume that any major improvement has occurred with treatment. However, such might be obtainable with additional diagnosis. As noted above, the fluctuating visual field loss may be due to migraine phenomena, which have specific treatments for prevention that have not been used. Evaluation for significant postural hypotension, and its treatment if found, may also be of merit. The other alternative, of psychiatric cause, also may merit consideration.
J.A. at 146. The report does not say that if Ellis were diagnosed or evaluated for certain
Second, and more importantly, MetLife, in its denial letter, informed Ellis of what she needed to do in order to obtain a review of her claim pursuant to
B.
Ellis also alleged that the review she obtained was not full and fair. The applicable regulation provides that every ERISA plan must establish procedures under which a full and fair review may be obtained. These procedures must, at a minimum, permit the claimant to
(i) Request a review upon written application to the plan;
(ii) Review pertinent documents; and
(iii) Submit issues and comments in writing.
[t]he decision on review shall be in writing and shall include specific reasons for the decision, written in a manner calculated to be understood by the claimant, as well as specific references to the pertinent plan provisions on which the decision is based.
It appears that neither party really comprehends what these regulations require. MetLife argues, and the district court agreed, that the review of Ellis‘s claim that it provided was more than eminently full and fair. MetLife, for example, sent the Roundtable‘s second report to Ellis‘s health care providers and allowed them the opportunity to critique it. It subsequently repeatedly extended the deadline for Ellis‘s providers to submit evidence on her behalf, and then submitted all the data to the Roundtable yet a third time before it finally decided to uphold its original denial and close Ellis‘s case. Ellis for her part argues that she never received any of the Roundtable‘s reports and that the third report in particular was crucial since she claims the Roundtable specifically requested that Ellis be psychiatrically evaluated according to a list of questions it prepared. Both miss the point.
The full and fair review procedural requirements serve two complementary purposes. They are designed to permit a plan‘s administrators to resolve disputes in an efficient, streamlined, non-adversarial manner. At the same time, the procedures ensure that a plan participant is protected from arbitrary or unprincipled decision-making. See Weaver v. Phoenix Home Life Mut. Ins. Co., 990 F.2d 154, 157 (4th Cir. 1993). Both the specific minimum procedural review requirements of subsection (g)(1) and the notice requirements of the decision on review of subsection (h)(3) have been read as ensuring that a full and fair review is conducted by the
What Ellis fails to understand is that the initial decisional process and the subsequent review process are distinct. While it appears that Ellis did request a review in writing and submit her disputed issues in writing in accordance with
The notice requirement for the decision on review must be every bit as explicit as an initial denial notice in terms of providing specific reasons for the continued denial and specific references to the pertinent plan provisions. Compare
MetLife‘s “decision on review” letter of March 28, 1995, states in toto:
Your request for a subsequent review of your Long Term Disability termination of benefits has been completed.
This reply constitutes our final response in your ERISA appeal.
Review of your claim under ERISA has previously been completed and our decision remains the same.
Your Long Term Disability file remains closed.
Should you have any questions or concerns, you may contact us at the listed number.
J.A. at 269. On its face, this letter is baldly deficient in specific references to the reasons for the decision and contains no references to the pertinent Plan provisions.
It is plain that MetLife has not followed the letter of the applicable ERISA regulations concerning its review of Ellis‘s claim denial. In the first place, MetLife ought to have informed Ellis that she could review the documentary evidence that MetLife relied upon in reaching its initial decision. In this particular case, the most critical document was the Roundtable‘s first report. In the
Were the regulations to be strictly construed as written, then, due to these procedural defects, Ellis did not receive a full and fair review. What is not written, however, but what is implicit in their nature, is that there must be a causal connection between these defects and the final denial of a claim. Although Ellis did not review the first Roundtable report, she informs us that what is important about that document is that the Roundtable believed that certain diagnoses would have merited consideration. However, as explained above, Ellis entirely misconstrues what that report says. It is apparent that had Ellis had the report, the data she could have submitted to MetLife would not have materially affected the Roundtable‘s subsequent analyses. Two additional factors, beyond her misunderstanding of the report‘s contents, make this plain. First, Ellis was, in fact, examined by a variety of different specialists who sought to make diagnoses of her condition, including psychologists and psychiatrists. By her (mis)-understanding, the Roundtable sought evaluations by psychologists or psychiatrists, and she acquired that evidence independently. Evidently, she was not prejudiced by not reviewing the report. Second, MetLife provided a copy of the Roundtable‘s second report to Ellis‘s health care providers. This second report was even more detailed than the first, and it made clear that the available data on her functional limitations did not preclude her from engaging in the physical tasks of her profession. By providing this second report for critique and permitting Ellis and her health care providers to submit additional data in response, MetLife, in effect, neutralized any harm it may have caused by not informing Ellis that she could have reviewed the first report. We can see no causal link between MetLife‘s failure to inform Ellis that she could review pertinent documents and the ultimate denial of her claim.
Similarly, although MetLife‘s “decision on review” letter appears woefully deficient on its face, it does state that the “decision remains the same.” We note that the purpose of the specificity requirements in the notice provision is to permit the claimant to adequately prepare an appeal to the federal courts and for those courts to properly review the decision. See Wilczynski, 93 F.3d at 402 n.3; Collins v. Central States, Southeast and Southwest Areas Health and Welfare Fund, 18 F.3d 556, 561 (8th Cir. 1994); Halpin, 962 F.2d at 693. Because the record before us, as before the lower court, contains all of the documentary evidence that MetLife relied upon in reaching its decision, and it is clear, as discussed above, that MetLife did not abuse its discretion in denying Ellis‘s claim based upon that evidence, Ellis has in no way been prejudiced by the deficiencies in MetLife‘s “decision on review” letter. Indeed, the district court interpreted the conclusion that MetLife‘s “decision remain[ed] the same” as making it plain to Ellis that the lack of medical documentation of her affliction was the cause of the denial. Whether this be so, these deficiencies obviously are not causally related to MetLife‘s ultimate denial, and Ellis has been able to effectively prosecute her appeal in the federal courts. Moreover, it would be pointless for us to vacate the decision below and remand with instructions to the lower court that it should, in turn, remand this matter to MetLife with instructions that it provide Ellis with the specific reasons for its continued denial, since those reasons are now apparent to all. Lex non praecipit inutilia, quia inutilis labor stultus.
We do not believe that this disposition makes the review procedures of
Although we do not say that
IV.
Based on the foregoing analysis of Ellis‘s three allegations, we affirm the grant of summary judgment to MetLife and its denial to Ellis.
AFFIRMED
ERVIN
CIRCUIT JUDGE
Notes
The policy states:
“Total Disability” or “Totally Disabled” means the Employee:
- is completely and continuously unable to do each of the material duties of his job; and
- requires the regular care and attendance of a Physician.
[. . .]
We have reviewed the extensive medical information submitted by your physicians, Michael Porvaznik, M.D. [sic], Francis Hunter, M.D., and Robert Allen, M.D. and subsequently, referred their reports to a Board Certified Physicians Roundtable. This Roundtable was unable to support your claim of inability to perform the duties of your own occupation. This is based entirely on the physicians’ evidence submitted on the restrictions/limitations you claim to have from headaches, vertigo, and syncopal spells.
According to the medical records available, no specific cause of continued syncopal spells exists. These records indicate the prior