TALANA ORZECHOWSKI v. BOEING COMPANY; AETNA LIFE INSURANCE COMPANY,

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
TALANA ORZECHOWSKI,
Plaintiff-Appellant,
v.
THE BOEING COMPANY NON-UNION
LONG-TERM DISABILITY PLAN, Plan
Number 625, an ERISA Plan;
BOEING COMPANY; AETNA LIFE
INSURANCE COMPANY,
Defendants-Appellees.
No. 14-55919
D.C. No.
8:12-cv-01905-
CJC-RNB
OPINION
Appeal from the United States District Court
for the Central District of California
Cormac J. Carney, District Judge, Presiding
Argued and Submitted August 30, 2016
Pasadena, California
Filed May 11, 2017
Before: Alex Kozinski and Jay S. Bybee, Circuit Judges,
and Donald E. Walter,* District Judge.
Opinion by Judge Bybee
* The Honorable Donald E. Walter, United States District Judge for
the Western District of Louisiana, sitting by designation.
ORZECHOWSKI V. BOEING CO. NON-UNION
LONG-TERM DISABILITY PLAN
2
SUMMARY**
Employee Retirement Income Security Act
The panel reversed the district court’s judgment, after a
bench trial, in favor of the defendants in an ERISA action
challenging a decision to terminate the plaintiff’s long-term
disability benefits.
The district court reviewed the benefits decision for an
abuse of discretion because the ERISA plan gave defendants
discretionary authority. The panel held that de novo review
was required under California Insurance Code § 10110.6,
which voided the discretionary clause contained in the plan.
The panel held that § 10110.6 is not preempted by
ERISA because it falls within the savings clause set forth in
29 U.S.C. § 1144(b)(2)(A). Agreeing with the Seventh
Circuit, the panel concluded that § 10110.6 is directed toward
entities engaged in insurance, and it substantially affects the
risk-pooling arrangement between the insurer and the insured.
The panel held that § 10110.6 applied to the plaintiff’s
claim because the relevant insurance policy renewed after the
statute’s effective date. The panel remanded the case to the
district court.
** This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
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COUNSEL
Russell George Petti (argued), Law Offices of Russell G.
Petti, La Canada, California; Glenn R. Kantor and Peter S.
Sessions, Kantor & Kantor LLP, Northridge, California; for
Plaintiff-Appellant.
Ronald Keith Alberts, Matthew G. Kleiner, Jessica Wolff,
Michelle L. Steinhardt, and Adelle Greenfield, Gordon &
Rees LLP, Los Angeles, California, for Defendants-
Appellees.
OPINION
BYBEE, Circuit Judge:
Talana Orzechowski challenges Aetna Life Insurance
Company’s (Aetna) decision to terminate her long-term
disability benefits under a plan created by her employer, The
Boeing Company (Boeing). Under the Employee Retirement
Income Security Act of 1974 (ERISA), we may review a
denial of benefits. Where a plan grants discretion to an
administrator to determine benefits, we ordinarily review for
abuse of discretion. By statute, however, California has
voided such provisions conferring discretionary authority to
ERISA plan administrators such as Aetna. Cal. Ins. Code
§ 10110.6(a). The district court held that California’s statute
did not apply to Boeing’s plan and upheld Aetna’s denial of
benefits to Orzechowski. We disagree and hold that
§ 10110.6(a) applies here. We reverse the district court’s
judgment and remand the case to the district court to review
Aetna’s decision de novo.
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I. BACKGROUND
A. Boeing’s ERISA Plan
The lawsuit arises from Aetna’s termination of
Orzechowski’s benefits under a health and welfare benefits
plan that Boeing offers to its non-union employees (the Plan),
which is governed by ERISA. The principal plan document
is The Boeing Company Master Welfare Plan (Master Plan).
This document provides general information about the
various benefit plans Boeing offers, but does not detail the
various benefits payable through the Plan. The Master Plan
has a broad grant of discretionary authority, which has been
delegated to a service representative, Aetna.1 This grant
includes the power to “determine all questions that may arise
including all questions relating to the eligibility of Employees
and Dependents to participate in the Plan and amount of
benefits to which any Participant or Dependent may become
entitled.”
The Master Plan incorporates by reference various
component benefit programs and the applicable Governing
Documents describing the entitlement to benefits under those
programs. One such benefit program is The Boeing
Company Non-Union Long-Term Disability Plan (PN 625) at
issue in this case. The Summary Plan Description, a
Governing Document, is a description of the plan which the
Plan Administrator is required to provide under ERISA.
1 Orzechowski disputes whether Boeing actually delegated its
discretionary authority to Aetna. This argument is raised for the first time
on appeal, and we will not consider it. Smith v. Marsh, 194 F.3d 1045,
1052 (9th Cir. 1999).
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29 U.S.C. § 1022. Boeing’s Summary Plan Description
explains that insured employees are eligible for long-term
benefits when they become disabled. For the first 24 months,
“disabled” is defined as the employee’s inability to perform
“the material duties of [the employee’s] own occupation” due
to an injury or illness. (Emphasis added). After 24 months,
disability is redefined so that an employee is disabled if she
is “unable to work at any reasonable occupation for which
[she] may be fitted by training, education, or experience.”
(Emphasis added). There are exclusions or limitations on the
payment of long-term benefits. Relevant here, the long-term
benefits plan covers conditions for a maximum of 24 months
if the “primary cause” of the disability is “mental illness.”
Aetna issued two documents, a policy and a certificate,
which fund the disability benefits and are Governing
Documents incorporated into the Master Plan.2 Through the
Aetna Life Insurance Company Group Life and Accident and
Health Insurance Policy No. 000707 (Policy) issued to
Boeing, Aetna agreed to fund and administer long-term
disability benefits to employees insured under the Boeing
2 Aetna argues the Policy is not a Governing Document. A Governing
document is defined as
the applicable certificate of insurance booklets issued
by an insurance company, summary plan descriptions
or other documents distributed by the Company and
intended by the Plan Administrator to be Governing
Documents, including summaries of material
modification, applicable trust agreements or other
funding vehicles . . . .
The Policy in question is clearly a “funding vehicle” and meets the
definition.
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plan. The Policy includes a grant of discretionary authority
to Aetna to “review all denied claims,” “determine whether
and to what extent employees and beneficiaries are entitled to
benefits,” and “construe any disputed or doubtful terms of the
policy.” The Policy further specifies that “Aetna shall be
deemed to have properly exercised such authority unless
Aetna abuses its discretion by acting arbitrarily and
capriciously.”
B. Orzechowski Becomes Disabled
Talana Orzechowski worked at Boeing until February 27,
2009. In 2004, she was diagnosed with fibromyalgia and
chronic fatigue syndrome. In January and February 2009,
Orzechowski began suffering memory problems and
increases in fatigue. Orzechowski suffered from a number of
serious symptoms of largely unknown cause, including
fatigue, loss of motor control, spinal and joint pain, and loss
of cognitive functioning. Some of the symptoms appeared to
be psychological in nature, including depression, obsessive
compulsions, and suicidal thoughts. Other symptoms were
more typical of physical illness, such as profuse sweating,
muscle and nerve pains, and lung weakness. She also
suffered from a wide range of other physical ailments,
including fatigue, headaches, tiredness, extended periods of
sleeping, asthma, decreasing muscle tone, and nausea.
Orzechowski saw numerous doctors to attempt to
diagnose and address these issues. In February 2009,
Orzechowski applied for short-term disability benefits under
Boeing’s employee benefits plan, which Aetna approved for
the maximum duration of six months (26 weeks), until July
28, 2009. Aetna then completed a long-term disability
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review, and approved long-term disability benefits under the
“own occupation” definition of disability effective July 29,
2009. This benefits period would run through July 28, 2011.
In 2010, Aetna informed Orzechowski that the definition
of disability would change from the “own occupation” to
“any reasonable occupation” standard after her current benefit
period ended. Aetna requested documentation to support her
disability claim under the new standard.
Aetna received substantial medical records prepared by
Orzechowski’s physicians. It then sent Orzechowski’s file to
two physicians to review, a psychiatrist and a neurologist.
Neither examined her. The psychiatrist agreed with
Orzechowski’s physicians that she could perform no work,
including “even simple, routine and repetitive work duties
reliably and safely.” His conclusion was based on her
psychiatric impairments, and the report noted that “potential
physical impairment [was] outside the scope of [his]
expertise.” The neurologist acknowledged her extensive
diagnoses, including “chronic fatigue, mood disorder, adrenal
disorder and inflammatory polyarthropathy,” and her
symptoms of “fatigue, depression, memory impairment . . .
loss of motor strength [and] deteriorating motor and cognitive
skills,” but he, however, concluded she had “[n]o functional
limitations” on her ability to work and that she “can likely
perform own occupation (light)” with “[n]o limitations or
restrictions.” Based on these reports, Aetna denied
Orzechowski’s claim.
In a response to Aetna’s reviewers, Orzechowski’s own
treating physician wrote a letter formally disagreeing:
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It is concerning to me that a simple common
sense review of the multiple historic findings
detailed thoroughly in my monthly hour long
evaluations of the patient would make it quite
clear that this patient is not able to perform
any level of work. She has not been able to
care for herself without assistance and is
unable to even administer her own medication
. . . .
And while no specific neurological cause had been
discovered for her condition, he noted that “if the patient has
no neurological disorder, why has she remained so
neurologically and functionally impaired? It is clear in this
case that the absence of evidence does not constitute evidence
of absence.”
Aetna asked its outside reviewing neurologist to examine
her file again. After a peer-to-peer conference with her
doctors, he again concluded that Orzechowski’s symptoms
must be psychiatric in origin because there is no definite
evidence of a neurologic diagnosis. In July 2011, Aetna
terminated payment of Orzechowski’s long-term disability
benefits based on its determination that her disability is
caused by a mental condition, more specifically depressive
disorder and mood disorder, which falls under the Plan’s 24-
month mental health limitation. Aetna determined she was
physically capable of “light work.”
Orzechowski’s attorney appealed Aetna’s denial and
provided additional documentation showing that
“Orzechowski’s depression and anxiety symptoms are clearly
secondary to her medical conditions.” Aetna referred
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Orzechowski’s evidence to yet a third reviewer. He found
that Ms. Orzechowski had “no functional impairment” that
would preclude her ability to perform any reasonable
occupation.
Orzechowski’s primary physician sent another letter in
disagreement and pointed out the problems with attempting
to diagnose Orzechowski’s medical condition based only on
a paper review and suggested Aetna examine the patient in
person:
[B]asing your assessment solely on the
“provided documentation” is as silly as trying
to assess the quality of a meal at a restaurant
by reading the menu’s description without
actually tasting the dish.
He also attacked Aetna’s attempts to evaluate the severity of
the chronic fatigue Orzechowski experienced, through
objective evidence, when, by definition, there is no objective
evidence of chronic fatigue.
In June 2012, Aetna upheld its decision to terminate
Orzechowski’s long-term disability benefits, stating that
“there was insufficient medical evidence to support
[Orzechowski’s] continued disability for the period of July
29, 2011, and beyond based upon any physical conditions.”
C. Orzechowski Appeals to the District Court
Orzechowski sought district court review under ERISA,
29 U.S.C. § 1132, of Aetna’s determination that she fell into
the mental health exception and was not totally disabled, as
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required for a continuation of benefits under Boeing’s long
term disability plan. Following a bench trial, the district
court ruled in favor of Boeing.
The district court applied an abuse of discretion standard
of review to Orzechowski’s claim, rather than a de novo
standard. Orzechowski argued that California Insurance
Code § 10110.6 voided the discretionary clause contained in
the Plan. The district court, however, held that § 10110.6
does not apply retroactively, and found that the Master Plan
was last issued or renewed January 1, 2011, a year before the
statute became effective. Therefore, it held that the statute
did not render any provision of the Master Plan void and so
abuse of discretion was the appropriate standard of review.
Applying that standard, the District Court held that “Aetna’s
decision to terminate Ms. Orzechowski’s [long-term] benefits
was supported by substantial evidence in the record and was
not an abuse of discretion.”
This appeal followed.
II. STANDARD OF REVIEW
“We review de novo the district court’s choice and
application of the standard of review to decisions by ERISA
fiduciaries . . . .” Pannebecker v. Liberty Life Assurance Co.
of Bos., 542 F.3d 1213, 1217 (9th Cir. 2008).
III. DISCUSSION
A denial of ERISA benefits challenged under 29 U.S.C.
§ 1132 “is to be reviewed under a de novo standard unless the
benefit plan gives the administrator or fiduciary discretionary
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authority to determine eligibility for benefits or to construe
the terms of the plan.” Firestone Tire & Rubber Co. v.
Bruch, 489 U.S. 101, 115 (1989). If an insurance contract has
a valid discretionary clause, the decisions of the insurance
company are reviewed under an abuse of discretion standard.
See id. at 111; Stephan v. Unum Life Ins. Co. of Am., 697 F.3d
917, 928 (9th Cir. 2012).
We previously observed that discretionary clauses have
been the subject of much controversy. See Standard Ins. Co.
v. Morrision, 584 F.3d 837, 840–41 (9th Cir. 2009)
(explaining arguments for and against discretionary clauses).
Opponents believe such clauses lead to inappropriate claim
practices, as insurers may use them as a shield to deny valid
claims. Id. Supporters, meanwhile, argue they keep
insurance costs manageable. Id. Resolving the merits of
discretionary clauses is thankfully not before us; individual
states make that policy determination for themselves. In
response to a particularly notorious example of an insurer
who had used discretionary clauses to boost its profits by
intentionally denying valid claims, a number of states acted
via statute, regulation, or administrative action to ban or limit
discretionary clauses. See Saffon v. Wells Fargo & Co. Long
Term Disability Plan, 522 F.3d 863, 867 (9th Cir. 2008).
California Insurance Code § 10110.6 is one such example
of state legislation limiting discretionary clauses. Section
10110.6 provides in relevant part:
(a) If a policy, contract, certificate, or
agreement offered, issued, delivered, or
renewed, whether or not in California, that
provides or funds life insurance or disability
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insurance coverage for any California resident
contains a provision that reserves
discretionary authority to the insurer, or an
agent of the insurer, to determine eligibility
for benefits or coverage, to interpret the terms
of the policy, contract, certificate, or
agreement, or to provide standards of
interpretation or review that are inconsistent
with the laws of this state, that provision is
void and unenforceable.
(b) For purposes of this section, “renewed”
means continued in force on or after the
policy’s anniversary date.
Cal. Ins. Code § 10110.6(a), (b). The statute, which became
effective on January 1, 2012, is “self-executing”; thus, if any
discretionary provision is covered by the statute, “the courts
shall treat that provision as void and unenforceable.” Id.
§ 10110.6(g).
Orzechowski argues that the district court erred when it
refused to apply § 10110.6(a) to Boeing’s Plan and,
accordingly, applied the wrong standard of review. Boeing
has two responses. First, it argues that ERISA preempts the
California statute. Second, following the district court,
Boeing argues that even if § 10110.6(a) is not preempted, it
does not apply retroactively to Boeing’s Plan. For the
reasons explained below, we conclude that § 10110.6(a) is
not preempted and applies to Boeing’s Plan; the district court
should have reviewed Orzechowski’s claim de novo.
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A. California Insurance Code § 10110.6 Is Saved from
ERISA Preemption
ERISA preempts “any and all State laws insofar as they
may now or hereafter relate to any employee benefit plan.”
29 U.S.C. § 1144(a). Nevertheless, ERISA also has a saving
clause that saves from preemption “any law of any State
which regulates insurance, banking, or securities.” Id.
§ 1144(b)(2)(A). So, although ERISA has broad preemptive
force, its “saving clause then reclaims a substantial amount of
ground.” Rush Prudential HMO, Inc. v. Moran, 536 U.S.
355, 364 (2002).
No one disputes that the California law comes within the
broad terms of the preemption clause because it “relate[s] to
any employee benefit plan.” 29 U.S.C. § 1144(a). In order
to take advantage of the saving clause in § 1144(b)(2)(A),
California’s statute must satisfy the two-part test set forth in
Kentucky Ass’n of Health Plans v. Miller, 538 U.S. 329, 342
(2003). First, the law must be “specifically directed toward
entities engaged in insurance,” and second, it “must
substantially affect the risk pooling arrangement between the
insurer and the insured.” Id. at 342. Section 10110.6 meets
both prongs of the Miller test.
1. The statute is directed toward entities engaged in
insurance
A law is specifically directed toward entities engaged in
insurance if it is “grounded in policy concerns specific to the
insurance industry.” UNUM Life Ins. Co. of Am. v. Ward,
526 U.S. 358, 372 (1999) (noting that was “key” to its
decision). Boeing asks us to read “insurance industry”
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literally: “Boeing, a leading aerospace company, is not
engaged in the business of insurance” and its Master Plan is
“not insurance.” The argument is not without some logic, but
we think the Supreme Court’s decision in Miller and our
decision in Morrison foreclose it.
In Miller, the Court considered preemption of Kentucky’s
“Any Willing Provider” (AWP) laws, which prevent health
insurers from discriminating against providers within their
area who are willing to meet the terms and conditions of
participation. Miller, 538 U.S. at 332. The insurance
companies argued that the Kentucky law swept too broadly
because “the AWP laws equally prevent providers from
entering into limited network contracts with insurers, just as
they prevent insurers from creating exclusive networks in the
first place.” Id. at 334. However, the Court found that the
saving clause nonetheless applied because “[r]egulations
‘directed toward’ certain entities will almost always disable
other entities from doing, with the regulated entities, what the
regulations forbid; this does not suffice to place such
regulation outside the scope of ERISA’s saving clause.” Id.
at 335–36. ERISA’s saving clause “saves laws that regulate
insurance, not insurers.” Id. at 334.
In Morrison, we gave effect to a Montana statute that
required the State Auditor to disapprove insurance contracts
with a discretionary clause. The insurance company
challenging the statute argued that the law was preempted
because it was “not specifically directed at insurance
companies,” but was “instead directed at ERISA plans,” and
thus “ha[d] an effect on third parties.” Morrison, 584 F.3d at
842. We rejected the attempt to distinguish between a law
directed at insurance companies and a law directed at ERISA
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plans and procedures. Id. We explained that ERISA plans
“are a form of insurance,” even when issued by a corporation
whose principal business is not insurance. Id. Citing Miller,
we held: “That an insurance rule has an effect on third parties
does not disqualify it from being a regulation of insurance.”
Id.
Our decision is consistent with holdings of other circuits.
The Seventh Circuit recently addressed an Illinois statute
similar to § 10110.6 in Fontaine v. Metropolitan Life
Insurance Co., 800 F.3d 883 (7th Cir. 2015). MetLife, the
ERISA plan administrator for a law firm, denied long-term
benefits to one of the firm’s partners. As in this case, “[b]oth
sides presented extensive medical evidence” and “[t]he
standard of review [was] the pivotal issue.” Id. at 885–86.
MetLife argued that the Illinois statute was “not specifically
directed toward entities engaged in insurance because it
prohibits a plan sponsor . . . from delegating discretionary
authority to the insurer of an employee benefit plan.” Id. at
887. Applying Miller and citing our decision in Morrison
with approval, the court held:
While [the law firm] is not an insurer and is
nevertheless affected by [the discretionary
clause prohibition], that does not mean that
[the law] is not specifically directed toward
entities engaged in insurance. The Supreme
Court rejected essentially the same too-clever
argument in Miller . . . . Prohibitions on
discretionary clauses, like any-willingprovider
laws, have similarly inevitable
effects on “entities outside the insurance
industry.” Just as in Miller, that does not
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change their character as insurance
regulations.
Id. (internal citation omitted). The court also rejected the
argument that because “the discretionary clause in this case
is not actually in an insurance policy but in an ERISA plan
document,” the statute was not a law specifically directed
towards entities engaged in insurance. The Seventh Circuit
termed it a “hyper-technical argument”:
Whether a provision for discretionary
interpretation is placed in an insurance policy
or in a different document is arbitrary and
should make no legal difference. If MetLife’s
interpretation of ERISA’s saving clause were
correct, then states “would be powerless to
alter the terms of the insurance relationship in
ERISA plans; insurers could displace any
state regulation simply by inserting a contrary
term in plan documents. This interpretation
would virtually ‘read the saving clause out of
ERISA.’”
Id. at 888 (quoting Ward, 526 U.S. at 376); see also Am.
Council of Life Insurers v. Ross, 558 F.3d 600, 602 (6th Cir.
2009) (holding that Michigan’s regulation banning
discretionary clauses was saved from preemption).
We too conclude that § 10110.6(a) regulates “entities
engaged in insurance,” Miller, 538 U.S. at 342, even if they
are not insurance companies. Section 10110.6 is directed at
“insurance, not insurers,” id. at 334, because it covers “a
policy, contract, certificate, or agreement . . . that provides or
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funds life insurance or disability insurance coverage,” Cal.
Ins. Code § 10110.6(a).
2. The statute substantially affects the risk-pooling
arrangement
California’s law substantially affects the risk-pooling
arrangement between the insurer and the insured, satisfying
the second part of Miller. This requirement is aimed at
ensuring that the laws in question are “targeted at insurance
practices, not merely at insurance companies.” Morrison,
584 F.3d at 844.
As we recognized in Morrison, bans on discretionary
clauses, such as § 10110.6, clearly alter “the scope of
permissible bargains between insurers and insureds.” Id.
(quoting Miller, 538 U.S. at 338–39). In Morrison, we held
that a regulation disapproving of discretionary clauses
“substantially affect[ed] the risk pooling arrangement” by
narrowing “[t]he scope of permissible bargains between
insurers and insureds.” Id. at 844–45. Here, as in Morrison,
the “disapproval of discretionary clauses ‘dictates to the
insurance company the conditions under which it must pay
for the risk it has assumed.’” Id. at 845 (citation omitted).
“By removing the benefit of a deferential standard of review
from insurers, it is likely that the [California law] will lead to
a greater number of claims being paid. More losses will thus
be covered, increasing the benefit of risk pooling for
consumers.” Id.; see also Fontaine, 800 F.3d at 889
(concluding that “a state law prohibiting discretionary clauses
squarely satisfies this requirement”); Am. Council, 558 F.3d
at 607 (same).
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Section 10110.6(a) satisfies both of the Miller prongs.
Having determined that it is saved from ERISA preemption,
we must resolve whether the statute applies to Orzechowski’s
claim against Boeing.
B. Section 10110.6 Applies
As we have quoted above, § 10110.6 voids any “provision
that reserves discretionary authority to the insurer, or an agent
of the insurer.” Cal. Ins. Code § 10110.6(a). The statute
applies to any “policy, contract, certificate, or agreement
offered, issued, delivered, or renewed.” Id. “‘[R]enewed’
means continued in force on or after the policy’s anniversary
date.” Id. § 10110.6(b). Thus, for § 10110.6 to void the
discretionary clauses in question, “a policy, contract,
certificate, or agreement” must have been “offered, issued,
delivered, or renewed” after the statute’s effective date of
January 1, 2012. See Stephan v. Unum Life Ins. Co. of Am.,
697 F.3d 917, 927 (9th Cir. 2012) (“The law in effect at the
time of renewal of a policy governs the policy . . . .”).
Boeing argues, and the district court agreed, that
§ 10110.6 did not apply to Orzechowski’s claim because its
Master Plan was dated January 1, 2011.3 There is no dispute
that Boeing’s Policy—which is different from its Plan—had
an anniversary date of January 1, 2012, and renewed
accordingly. We think this is sufficient to invoke the statute.
The statute makes clear that it applies when the “policy”
3 Boeing states that the Plan was amended effective January 1, 2013,
but that 2013 Plan amendment did not apply to Orzechowski’s claim
because it was first denied in 2012.
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renews. When the definition of “renewed” found in
§ 10110.6(b) is inserted into section (a), the statute reads:
If a policy, contract, certificate, or agreement
offered, issued, delivered, or [continued in
force on or after the policy’s anniversary
date], . . . contains a provision that reserves
discretionary authority to the insurer . . . that
provision is void and unenforceable.
Cal. Ins. Code § 10110.6(a). A document (not just a policy,
but also the contract, certificate, or agreement) is “renewed”
if it “continue[s] in force on or after the policy’s anniversary
date.” Id. § 10110.6(b). Boeing’s Policy here “renewed”
when it continued in force beyond its anniversary date of
January 1, 2012 and, accordingly, the Master Plan similarly
“renewed” when it continued in force beyond the Policy’s
anniversary date.
Boeing argues that § 10110.6(b) must refer only to
insurance policies and not other plan documents. Thus,
claims Boeing, the discretionary clause in the Master Plan
survives and applies to Orzechowski’s claim. This is a
variation on the prior argument that ERISA’s saving clause
applies only to insurance companies, and not to insurance
provided or funded by other companies. The argument fares
no better the second time. By its terms, § 10110.6 covers not
only “policies” that provide or fund disability insurance
coverage but also “contracts, certificates, or agreements” that
“fund” disability insurance coverage. “An ERISA plan is a
contract,” Harlick v. Blue Shield of Ca., 686 F.3d 699, 708
(9th Cir. 2012), and thus the Master Plan falls under
§ 10110.6.
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IV. CONCLUSION
Because California Insurance Code § 10110.6 applies to
Boeing’s Master Plan and Summary Plan Description, the
district court should have voided the discretionary clauses and
reviewed Orzechowski’s claim de novo. On de novo review,
the district court should give appropriate consideration to
Orzechowski’s fibromyalgia and chronic fatigue syndrome
diagnoses, which were ignored by Aetna in its denial of
benefits based on file reviews. Aetna demanded that
Orzechowski produce objective evidence showing that her
disability was caused by a non-psychological condition. But
as we have previously acknowledged, fibromyalgia and
chronic fatigue syndrome are not established through
objective tests or evidence. See Salomaa v. Honda Long
Term Disability Plan, 642 F.3d 666, 678 (9th Cir. 2011)
(citing Jordan v. Northrop Grumman Corp. Welfare Benefit
Plan, 370 F.3d 869, 877 (9th Cir. 2004), overruled on other
grounds, Abatie v. Alta Health & Life Ins. Co., 458 F.3d 955
(9th Cir. 2006) (en banc)). We remand to the district court for
review in accordance with this opinion.
REVERSED AND REMANDED.

LTD/STD Basics

 

Long-Term Disability Insurance Basics

Long-term disability insurance (LTD) is an insurance policy that protects an employee from loss of income in the event that he or she is unable to work due to illness, injury, or accident for a long period of time.

Some estimates state that the average employee with a long-term disability or illness misses 2.5 years of work. This can devastate a family financially without the safety net provided by a long-term disability insurance policy.

Long-term disability insurance does not provide insurance for work-related accidents or injuries that are covered by workers’ compensation insurance. But, they do cover an employee in the event of a personal accident such as a car accident or a fall.

However, long-term disability insurance ensures that an employee will still receive a percentage of their income if they cannot work due to sickness or a disabling injury. Long-term disability insurance is an important protection for employees when the U.S. Census Bureau estimates that an employee has a one in five chance of becoming disabled.

 

Why Employers Should Offer Long-Term Disability Insurance for Employees

Employees use the type of benefits supplied by a potential employer as one of the key decision factors that govern their choice of employment. As such, employers who want to become an employer of choice and win the talent war for the best employees will offer a benefits package that attracts and retains employees.

Offering long-term and short-term disability insurance are also ways in which employers can express their regard and respect for the people they employ. No thoughtful, forward-looking employer wants to see their employees devastated by the effects of a long-term serious illness or accident.

 

How Employers Should Offer Long-Term Disability Insurance for Employees

Long-term disability insurance is usually provided and paid for by employers, and there are a variety of different plans available for employers to offer as part of a comprehensive employee benefits package. If a company doesn’t offer long-term disability insurance or if an employee wants additional coverage, he or she has the option of purchasing an individual long-term disability plan from an insurance agent.

Most frequently, though, long-term disability insurance is available through the employer; it is expensive to purchase as an individual employee. Consequentially, some employers, if they do not provide long-term disability insurance will develop a relationship with a long-term disability insurance company to create an employee discount for their staff who choose to purchase a long-term disability policy.

Long-term disability insurance is also often available through an employee’s professional associations at a discounted rate.

Long-term disability insurance, provided by an employer, may be inadequate to meet a disabled employee’s needs. This is the second reason employees might want to consider purchasing supplemental long-term disability insurance.

Additionally, payments to the employee from their employer’s long-term disability insurance are taxable income whereas payments from an employee purchased plan are usually not.

 

Long-Term Disability Insurance Plan Coverage

Long-term disability insurance (LTD) begins to assist the employee when short-term disability insurance (STD) benefits end. Once the employee’s short-term disability insurance benefits expire (generally after three to six months), the long-term disability insurance pays an employee a percentage of their salary, typically 50-70 percent.

Long-term disability payments to the employee, in some policies, have a defined period of time, for example, two-ten years. Others pay an employee until he or she is 65 years old; this is the preferred long-term disability policy.

Each long-term disability insurance policy has different conditions for payout, diseases or pre-existing conditions that may be excluded, and various other conditions that make the policy more or less useful to an employee.

Some policies, for example, will pay disability benefits if the employee is unable to work in his or her current profession; others expect that the employee will take any job that the employee is capable of doing—that’s a big difference and consequential.

Long-term disability insurance is an important component of a comprehensive employee benefits package. In fact, according to experts, long-term disability insurance coverage is as important to an employee as life insurance.

Employees are responsible for examining their employer’s policy to ensure that it meets their needs. If not, employees are responsible for purchasing their own expanded coverage which may be available at a somewhat reduced rate through their employer’s insurance carrier.

You know your health history, your ancestry, and your family’s history of diseases. Keep all of this in mind when you look at the amount of long-term disability insurance that you need to carry. Further, if you stay in touch by visiting your doctor regularly, you can often determine what’s going on with any health issues before they require you to use long-term disability funds.

 

Short-Term Disability Insurance Overview

Short-term disability insurance is an insurance policy that protects an employee from loss of income in the case that he or she is temporarily unable to work due to illness, injury, or accident.

Short-term disability insurance does not protect against work-related accidents or injuries, as noted above, because these would be covered by workers’ compensation insurance.

However, short-term disability insurance ensures that an employee will still receive a percentage of income if they cannot work due to sickness or a disabling injury. This is an important protection for employees.

Just like long-term disability insurance, short-term disability insurance is usually provided by employers for the same reasons—to demonstrate the care and respect of the employer and to attract and retain talent. A variety of different plans are available for employers to offer their employees. Employees can provide group insurance packages as part of a benefits package.

If a company doesn’t offer short-term disability insurance or if an employee wants additional coverage, he or she has the option of purchasing an individual plan from an insurance agent. Most commonly, though, the insurance is available through the employer.

 

Eligibility to Collect Short-Term Disability Insurance

Most short-term disability insurance plans include certain specifications regarding the employee’s eligibility to receive benefits. For example, some plans indicate a minimum service requirement or the minimum length of time that a worker must have been employed for, and may require that the employee works full-time or has worked consecutively for a certain period of time.

In addition to these requirements, some employers specify that an employee must use all of their sick days before becoming eligible for short-term disability benefits. Employers may also require a doctor’s note to verify an employee’s affliction, commonly including illnesses such as arthritis or back pain, cancer, diabetes, or other non-work related injuries.

 

Short-Term Disability Insurance Plan Coverage

Short-term disability insurance benefits vary by plan. Typically, a package offers about 64 percent (usual range: 50-70 percent) of an employee’s pre-disability salary, as evident in the Bureau of Labor Statistics–Fixed Percent of Earning analysis.

Short-term disability insurance plans may provide benefits for as few as ten weeks, but most commonly provide benefits for 26 weeks, according to the Bureau of Labor Statistics–Duration of Benefits. However, short-term disability insurance plans vary by company, and the amount of the benefits received, may also vary based on an employee’s position or the amount of time he or she has worked for the employer.

Following the expiration of insurance benefits, many employers offer their employees access to the benefits available from a long-term disability insurance provision.

Short-term disability insurance is an appreciated employee benefit for employees and their family members. Short-term disability insurance provides a welcome financial cushion, a safety net, in the event of an employee’s short-term disability.

Disclaimer: Please note that the information provided, while authoritative, is not guaranteed for accuracy and legality. The site is read by a world-wide audience and ​employment laws and regulations vary from state to state and country to country. Please seek legal assistance, or assistance from State, Federal, or International governmental resources, to make certain your legal interpretation and decisions are correct for your location. This information is for guidance, ideas, and assistance.

Smith v. Texas Children’s Hospital

Our law firm fights on behalf of individuals to obtain their long-term disability benefits.
If you believe you have been wrongfully denied your ERISA, or non-ERISA, long-term disability benefits, give us a call for a free lawyer consultation. You can reach Cody Allison & Associates, PLLC at (615) 234-6000 OR Nationwide Toll Free 844-LTD-CODY. We are based in Nashville, Tennessee; however, we represent clients in many states (Tennessee, Kentucky, Georgia, Alabama, Texas, Mississippi, Arkansas, North Carolina, South Carolina, Florida, Michigan, Ohio, Missouri, Louisiana, Virginia, West Virginia, New York, Indiana, Massachusetts, Washington DC (just to name a few). We will be happy to talk to you no matter where you live. You can also e-mail our office at cody@codyallison.com. Put our experience to work for you. For more information go to www.LTDanswers.com.

United States Court of Appeals,Fifth Circuit.

Jackie SMITH, Plaintiff-Appellee, v. TEXAS CHILDREN’S HOSPITAL, Defendant-Appellant, UNUM Life Insurance Company, Defendant.

No. 95-20415.

    Decided: May 15, 1996

Texas Children’s Hospital appeals the district court’s order remanding to state court a state-law fraudulent-inducement claim.   We must decide whether Smith has preserved a fraudulent-inducement claim, and, if so, whether it is nevertheless preempted by the broad federal reach of ERISA.   We conclude that Smith’s claim may escape ERISA preemption if preserved, but vacate and remand because of uncertainties in the proceedings below as to whether Smith has actually preserved it.

I.

Jackie Smith alleges the following.   She started working at St. Luke’s Hospital in February 1991 and qualified for insurance benefits with St. Luke’s by May 1991, after the elimination period for preexisting conditions.   Later that year, Texas Children’s Hospital, a sibling corporation of St. Luke’s, persuaded Smith to transfer her employment to Texas Children’s by promising more pay, a supervisory position, and the transfer of all of her employment benefits, including long-term disability benefits.   According to Smith, Texas Children’s made such assurances both orally and in certain written documents.   Smith transferred to Texas Children’s on October 1, 1991.

In October 1991, Smith was diagnosed with multiple sclerosis.   She was disabled by September 1992.   Around August or September of 1992, Smith’s supervisor suggested to Smith that it was unsafe for her to continue working at Texas Children’s, and that she would not have trouble acquiring long-term disability benefits from UNUM Life Insurance Company, the claims adjuster for Texas Children’s.   Smith stopped working and was put on long-term disability in September 1992.   She was terminated from employment in April 1993.

In January 1993, Smith received her first benefit check for the period of December 11, 1992, to January 1, 1993.   Immediately thereafter, UNUM called Smith and told her not to cash the check.   UNUM had determined that the last day of Smith’s elimination period was December 31, 1991.   UNUM found that Smith’s multiple sclerosis, which was diagnosed in October 1991, was a preexisting condition as of December 31.   Hence, UNUM determined that Smith did not qualify for benefits from Texas Children’s.

Smith sued Texas Children’s in Texas state court, alleging state-law claims of fraudulent inducement and breach of contract.   Texas Children’s removed the case to federal court on the ground that Smith’s claims arose under ERISA.   Texas Children’s then moved for summary judgment, whereupon the district court ordered Smith to amend her complaint to conform to an ERISA claim and to join any additional parties.   Smith complied and filed her First Amended Complaint, asserting ERISA claims and naming UNUM as a defendant.   In their answers to this amended complaint, Texas Children’s and UNUM asserted the affirmative defense of ERISA pre-emption and argued that Smith’s claims were not cognizable under ERISA.

In April 1995, the district court entered final judgment for Texas Children’s on Smith’s ERISA and common law estoppel claims, but remanded her fraudulent-inducement claim to state court.   Texas Children’s filed a motion under Rule 59(e) seeking reconsideration of the order of remand and dismissal of Smith’s suit against Texas Children’s in its entirety.   The district court denied this motion.   The defendants now appeal the district court’s remand order.

II.

We first address our jurisdiction.   The district court’s Summary Judgment Memorandum explained its order as follows:

[T]he Court remands the case to state court because the plaintiff’s claims for damages for fraudulent inducement survives the ERISA defense.   This is so because the plaintiff was entitled to rely upon the representation that benefits were available to her, if such representations were made.   Because she did not qualify for the benefit that was promised, she is entitled to maintain her suit against Texas Children’s Hospital separate and apart from ERISA.

We interpret this explanation to say that the district court was exercising its discretion not to retain jurisdiction over Smith’s pendent state claims after having granted summary judgment for Texas Children’s on her federal ERISA claims.   We therefore have jurisdiction to review the district court’s remand order.   See Burks v. Amerada Hess Corp., 8 F.3d 301, 303-04 (5th Cir.1993).

III.

Texas Children’s argues that Smith’s First Amended Complaint did not restate a fraudulent-inducement claim, and, alternatively, that any such claim is preempted by ERISA.   As we will explain, we are persuaded that Smith’s amended complaint alleges facts that may give rise to a fraudulent-inducement claim that is not preempted by ERISA.   However, since it is not clear whether Smith has adequately preserved her state-law fraudulent-inducement claim, we remand this case to the district court for a decision on whether to allow Smith to amend her complaint to clarify her allegations.

A.

While a district court may exercise its discretion to remand a case if it determines that federal jurisdiction has disappeared, it “has no discretion to remand a case in which a federal claim still exists.”  Burks, 8 F.3d at 304.   We review as a matter of law the question whether ERISA preempts Smith’s fraudulent-inducement claim.   See id.   Remand is appropriate only if a set of facts can be adduced under the allegations in Smith’s First Amended Complaint that give rise to a state-law claim not preempted by ERISA.

ERISA by its terms expressly “supercede[s] any and all State laws insofar as they may now or hereafter relate to any employee benefit plan.”   29 U.S.C. § 1144(a).  “A state law ‘relates to’ an employee benefit plan ‘if it has a connection with or reference to such plan.’ ”  Rozzell v. Security Servs., Inc., 38 F.3d 819, 821 (5th Cir.1994) (quoting Shaw v. Delta Air Lines, 463 U.S. 85, 96-97, 103 S.Ct. 2890, 2900, 77 L.Ed.2d 490 (1983)).   Thus, ERISA preempts a state law claim “if (1) the state law claim addresses an area of exclusive federal concern, such as the right to receive benefits under the terms of an ERISA plan;  and (2) the claim directly affects the relationship between the traditional ERISA entities-the employer, the plan and its fiduciaries, and the participants and beneficiaries.”  Hubbard v. Blue Cross & Blue Shield Ass’n, 42 F.3d 942, 945 (5th Cir.1995).

ERISA’s preemption language “is deliberately expansive, and has been construed broadly by federal courts.”  Id.  “Nevertheless, the reach of ERISA preemption is not limitless.”  Rozzell, 38 F.3d at 822.  “[S]ome state actions may affect employee benefit plans in too tenuous, remote, or peripheral a manner to warrant a finding that the law ‘relates to’ the plan.”  Shaw, 463 U.S. at 100 n. 21, 103 S.Ct. at 2901 n. 21.   Thus, if Smith’s fraudulent-inducement claim is based upon a state law that “has a connection with or reference to” her ERISA plan with Texas Children’s, ERISA preempts it.   On the other hand, if her claim affects that plan “in too tenuous, remote, or peripheral a manner,” it is not preempted.

To the extent that Smith is claiming that she is entitled to disability benefits under Texas Children’s ERISA plan, her claim is preempted.   Our case law teaches that a state-law claim by an ERISA plan participant against her employer is preempted when based upon a denial of benefits under the defendant’s ERISA plan.   See Cefalu v. B.F. Goodrich Co., 871 F.2d 1290, 1292-97 (5th Cir.1989);  Christopher v. Mobil Oil Corp., 950 F.2d 1209, 1217-20 (5th Cir.1992);  Perdue v. Burger King Corp., 7 F.3d 1251, 1255-56 (5th Cir.1993).

Here, however, Smith’s fraudulent-inducement claim is not based solely upon Texas Children’s denial of benefits to her under its ERISA plan.   Rather, Smith also alleges that she gave up her accrued benefits at St. Luke’s in reliance upon Texas Children’s alleged misrepresentations.   Though ERISA preempts Smith’s claim seeking benefits under Texas Children’s ERISA plan, she may have a separate claim based upon the benefits that she had at St. Luke’s and relinquished by leaving.   The difficulty here arises in that Texas Children’s allegedly promised that Smith would have the same benefits at Texas Children’s as she had at St. Luke’s, so the measure of her injury is the same regardless of whether she pursues recovery of benefits relinquished or of benefits denied.   Stated another way, because of the nature of Texas Children’s alleged assurance-that she would keep the same disability benefits after she transferred to St. Luke’s-the value of the benefits that she gave up by leaving St. Luke’s is equal to the value of any benefits that she could claim under Texas Children’s ERISA plan.   But, to the extent that Texas law permits a plaintiff asserting fraudulent-inducement to recover for value relinquished in addition to value not received, Smith may also have a claim based upon the disability benefits relinquished, separate from her claim for benefits under Texas Children’s ERISA plan.   The Texas state court can decide the grounds for relief available to Smith under Texas law;  we need only decide whether ERISA preempts such a claim for recovery based upon the benefits that Smith gave up by leaving St. Luke’s.

We are persuaded that ERISA preemption would not apply to such a claim.   Smith alleges that, because she relied upon misrepresentations by Texas Children’s, she lost a quantifiable stream of income that she would now be receiving had she never left St. Luke’s.   Such a claim escapes ERISA preemption because it does not necessarily depend upon the scope of Smith’s rights under Texas Children’s ERISA plan.   For example, if Texas Children’s did not have any benefits plan, ERISA would not apply, leaving Smith with a non-preempted claim based upon the benefits relinquished.   That Texas Children’s has such an ERISA plan does not alter the nature of her claim, which is based upon benefits given up for purposes of ERISA preemption.   The ultimate question of Texas Children’s liability for fraudulently inducing Smith to leave St. Luke’s turns not on the quantum of benefits available at Texas Children’s, but on the question whether Texas Children’s misled Smith when it told her that she would keep what she had.

Though Cefalu illustrates the difficulty of preemption issues under ERISA, we are persuaded that Cefalu does not mandate that ERISA preempts Jackie Smith’s fraudulent-inducement claim against Texas Children’s.   Roy Cefalu was terminated from his employment with B.F. Goodrich Company after Tire Center, Inc., purchased that division.   Because Cefalu had participated in Goodrich’s retirement benefits plan, a qualified ERISA plan, accepting a job with Tire Center meant that, under the terms of Goodrich’s ERISA plan, he would have been entitled to a continuation of his benefits under the Tire Center’s ERISA plan.  Cefalu, 871 F.2d 1290.   According to Cefalu, however, he instead chose to become an franchised operator of a Goodrich retail center in reliance upon Goodrich’s oral assurance that he would receive the same benefits as a franchisee as he would as a Tire Center employee.   But while Cefalu did retain some retirement benefits under Goodrich’s Special Deferred Vested Pension Plan, made available in connection with his termination, Goodrich later informed him that he would not be entitled to the additional benefits.

Cefalu sued Goodrich for breach of contract.   We found that ERISA preempted his claim, emphasizing:

[Cefalu’s] claim has a definite connection to an employee benefit plan.  [He] concedes that if he is successful in this suit his damages would consist of the pension benefits he would have received had he been employed by TCI.   To compute these damages, the Court must refer to the pension plan under which [Cefalu] was covered when he worked for Goodrich.   Thus, the precise damages and benefits which [Cefalu] seeks are created by the Goodrich employee benefit plan.   To use any other source as a measure of damages would force the Court to speculate on the amount of damages.

Cefalu, 871 F.2d at 1294.   In short, Cefalu sought recovery from Goodrich based upon retirement benefits that he claims he should have received as a Goodrich franchisee, which allegedly equaled the benefits that he would have received had he accepted a job with Tire Center.   The amount of those benefits not received could only be measured by reference to the benefits that Cefalu did have under his original ERISA plan with Goodrich, his former employer.   We concluded that his breach-of-contract claim against Goodrich was related to Goodrich’s ERISA plan and therefore preempted.

Significantly, Cefalu sought recovery pursuant to an allegedly valid oral contract;  he sought to bind Goodrich to its oral contract to extend him benefits that he would have received had he accepted a job with Tire Center.   Cefalu could not have asserted a claim based upon benefits given up, since his termination, not Goodrich’s misrepresentation, caused the loss of additional benefits that he previously had under Goodrich’s plan.   Put another way, Cefalu was no longer entitled to the continuation of full benefits under Goodrich’s original ERISA plan the moment he was terminated from Goodrich as part of the Tire Center purchase, since the cessation of benefits occurred regardless of what Goodrich did next.   Rather, ERISA preempted Cefalu’s claim because he sought to hold Goodrich liable in contract for additional benefits beyond what he had under Goodrich’s ERISA plan, on the ground that Goodrich had allegedly promised him that his benefits as a franchisee would equal what he could have received had he joined Tire Center.   Since Tire Center employees received a continuation of the benefits that they had under Goodrich’s ERISA plan, Cefalu’s claim was for a like continuation of the benefits that he had under Goodrich’s original ERISA plan.   See, e.g., Rozzell, 38 F.3d at 822 (cautioning that Cefalu “does not, and can not, mean that any lawsuit in which reference to a benefit plan is necessary to compute plaintiff’s damages is preempted by ERISA and is removable to federal court”).   ERISA thus preempted Cefalu’s claim because he sought recovery of retirement benefits that Goodrich allegedly owed him as a continuation of its ERISA plan.

Here, by contrast, Smith’s fraudulent-inducement claim leaves open the possibility that she may obtain recovery from her second employer, Texas Children’s, based upon her relinquishment of the payments that she would now be receiving had she remained with a different first employer, St. Luke’s.   Smith is not suing for disability benefits that Texas Children’s owes her under its ERISA plan.   Nor is she suing St. Luke’s for benefits that St. Luke’s allegedly owes her under its benefits plan.   Rather, Smith is suing Texas Children’s for vested benefits that she had acquired while employed with her original employer, but then relinquished in reliance upon Texas Children’s alleged misrepresentations.

Thus, for example, had Smith had no benefits before joining Texas Children’s, she could only claim relief based upon benefits to which she was entitled under Texas Children’s ERISA plan.   ERISA would preempt such a claim.   But, on the other hand, suppose that Smith turned down a $10,000 annual bonus by leaving St. Luke’s, and that she could show that she left St. Luke’s in reliance upon Texas Children’s promise that she would be qualifying for benefits under Texas Children’s ERISA plan valued at approximately $12,000.   Then, though a claim for $12,000 in benefits would again be preempted by ERISA, she still might have a non-preempted claim for the $10,000 relinquished bonus if her allegations indicated that Texas Children’s either had no plan or otherwise knew that Smith could not possibly have been covered under whatever plan it did have.   Thus, Smith’s entitlement to benefits under Texas Children’s ERISA plan can be considered separately from the question whether Texas Children’s misled her into believing that she would be entitled to benefits under that plan;  the former question requires reference to Texas Children’s plan, while the latter focuses on what Texas Children’s told her.

B.

Though we conclude that Smith’s allegations leave room for a fraudulent-inducement claim that is not preempted by ERISA, we are not certain at this time whether she has adequately preserved such a claim in her First Amended Complaint.   Because there are some ambiguities regarding the course of the proceedings below as well as the nature of Smith’s state-law claims, and given the possible relevance of the Supreme Court’s recent decision in Varity Corp. v. Howe, 516 U.S. 489, 116 S.Ct. 1065, 134 L.Ed.2d 130 (1996), we vacate the district court’s remand order and remand to the district court.   On remand, Smith may move for leave to amend her complaint to clarify her allegations and assert her fraudulent-inducement claim, whereupon, if the district court grants leave to amend, it can consider the issue of ERISA preemption and the Supreme Court’s decision in Varity Corp.

IV.

For the foregoing reasons, we VACATE the district court’s order remanding a fraudulent-inducement claim to state court and REMAND for proceedings consistent with this opinion.

PATRICK E. HIGGINBOTHAM, Circuit Judge:

Strong ERISA Opinion by the Sixth Circuit

 

United States Court of Appeals, Sixth Circuit.

BRUCE COREY, Plaintiff-Appellant, v. SEDGWICK CLAIMS MANAGEMENT SERVICES, INC.; EATON CORPORATION; EATON CORPORATIONDISABILITY PLAN FOR U.S. EMPLOYEES; EATON HEALTH AND WELFARE ADMINISTRATIVE COMMITTEE, Defendants-Appellees.

No. 16-3817

    Decided: June 08, 2017

 

OPINION

Plaintiff Bruce Corey worked as a machine operator in Eaton Corporation’s Northern Ohio factory. Corey has long suffered from cluster headaches—extremely painful attacks that strike several times per day for weeks on end. In 2014, Corey applied for short-term disability benefits under Eaton’s disability plan after a bout of headaches forced him to miss work. After granting a period of disability, the third party administering Eaton’s disability plan (“the Administrator”) discontinued benefits because Corey failed to provide objective findings of disability.

Under the plan, “[o]bjective findings include ․ [m]edications and/or treatment plan.” Corey’s physicians treated his headaches by prescribing prednisone, injecting Imitrex (a headache medication), administering oxygen therapy, and performing an occipital nerve block. We must decide whether Corey’s medication and treatment plan satisfy the plan’s objective-findings requirement. We hold that it does and therefore REVERSE the district court’s contrary decision.

I.

Plan Terms. Eaton’s disability plan accords the Administrator discretion to interpret the plan’s terms and determine benefits eligibility. Under the plan’s terms, an employee is eligible for short-term disability benefits if he has “a covered disability,” which the plan defines as “an occupational or non-occupational illness or injury [that] prevents [the employee] from performing the essential duties of [the employee’s] regular position with the Company or the duties of any suitable alternative position with the Company.”

Relevant here, the plan also requires medical documentation of a disability:

Objective findings of a disability are necessary to substantiate the period of time your health care practitioner indicates you are unable to work because of your disability. Objective findings are those your health care practitioner observes through objective means, not your description of the symptoms. Objective findings include:

• Physical examination findings (functional impairments/capacity);

• Diagnostic test results/imaging studies;

• Diagnoses;

• X-ray results;

• Observation of anatomical, physiological or psychological abnormalities; and

• Medications and/or treatment plan.

Treatment History. In April 2014, cluster headaches forced Corey to leave work. A few days later Corey visited a neurologist, Dr. Rorick, who noted that the headaches occurred several times per day, typically lasted one to two hours, and were extremely painful. Dr. Rorick’s notes reported that Corey took prednisone and injected Imitrex to treat the headaches, and explained that supplemental oxygen therapy “can help, but makes the headaches more frequent.” Dr. Rorick further certified that Corey could return to work on May 7 with no restrictions.

Unfortunately, Corey’s headaches persisted after May 7. Over the next few weeks, Corey visited Dr. Rorick three times. Each time, Dr. Rorick observed that Corey’s headaches remained “very severe and incapacitating”; the headaches made Corey nauseated, dizzy, and occasionally rendered him unconscious. Dr. Rorick noted that Corey “is unable to drive to/from work [due to] pain when he has headaches,” and that “[d]uring cluster headache exacerbation [periods] he needs to be off work.” For treatment, he prescribed prednisone, lamotrigine (a prescription anticonvulsant), and Imitrex injections.

Corey also visited a headache specialist, Dr. Baron, who reported that Corey suffered from “chronic cluster headaches with frequent exacerbations which impair working ability,” that the condition caused episodic flare-ups preventing Corey from working, and that it was medically necessary for Corey to miss work during the flare-ups. Somewhat inconsistently, Dr. Baron checked “no” in the box next to: “Is the employee unable to perform any of his/her job functions due to the condition[?]”

Finally, in July, Corey consulted a surgeon to consider occipital nerve stimulation. The surgeon’s report detailed Corey’s treatment history, including his use of supplemental oxygen, Imitrex injections, and prednisone. The report related that a recent occipital nerve block temporarily relieved Corey’s headaches. After discussing the risks, benefits, and alternatives, Corey decided to proceed with occipital nerve stimulation.

Denial of Short-Term Benefits. The Administrator initially approved Corey’s short-term disability application. Because Dr. Rorick certified Corey as disabled only through May 7, however, the Administrator denied benefits after that date. Corey appealed that denial and supplemented his application with additional doctors’ notes.

The Administrator referred Corey’s application to an independent file reviewer, who determined that Corey was not disabled because cluster headaches do “not result in any neurological, physical exam abnormalities.” The Administrator then denied his application due to a lack of “objective findings contained in the medical documentation.”

When Corey appealed again, the Administrator sent his application to another independent file reviewer, who also found “no objective evidence” of disability. The Administrator then issued a final denial. After reciting the plan language, it concludes:

The substantial weight, [sic] of the medical documentation provided by you, your treating health care providers and the independent physician reviewers, supports the conclusion that for the time period from May 7, 2014 to present your disability is not covered as required by the Plan.

The denial offers no other explanation or analysis.

II.

The Employee Retirement Income Security Act grants a plan participant the right “to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan.” 29 U.S.C. § 1132(a)(1)(B). When the plan vests the administrator with discretion to interpret the plan (as is undisputed in this case), the court reviews the benefits denial under the “arbitrary and capricious” standard. Spangler v. Lockheed Martin Energy Sys., Inc., 313 F.3d 356, 361 (6th Cir. 2002) (citation omitted). The court must uphold the administrator’s decision “if it is the result of a deliberate, principled reasoning process and if it is supported by substantial evidence.” Glenn v. MetLife, 461 F.3d 660, 666 (6th Cir. 2006) (citation omitted). The court reviews only the evidence available to the administrator at the time it made the final decision. Shaw v. AT&T Umbrella Benefit Plan No. 1, 795 F.3d 538, 547 (6th Cir. 2015) (citing McClain v. Eaton Corp. Disability Plan, 740 F.3d 1059, 1064 (6th Cir. 2014)).

III.

Corey contends that the Administrator failed to engage in a deliberate, principled reasoning process because it disregarded his medications and treatment plan. Corey’s argument is straightforward: the plan lists medications and treatment plan as examples of “objective findings”; Corey furnished physician notes detailing his cluster-headache medication and treatment plan; yet the Administrator rejected his application due to a lack of objective findings. Neither the Administrator nor the independent examiners discussed whether Corey’s medications and treatment plan substantiated the presence of cluster headaches (though the record is unclear whether the Administrator provided either independent examiner with the plan’s “objective findings” definition).

The Administrator replies that it interpreted the plan’s language to require either 1) that a medication’s side effects cause the disability, or 2) that a medication or treatment plan “objectively confirm that the individual is unable to work.” According to the Administrator, it is irrelevant that Corey’s medication and treatment history verify the existence of cluster headaches.

We agree with Corey that his medication and treatment history satisfy the plan’s objective-findings definition. Indeed, the plan is clear and unambiguous: “Objective findings include ․ [m]edications and/or treatment plan.” The Administrator’s additional requirement that the medication and treatment plan either cause the disability or confirm the applicant’s inability to work finds no support in the plan’s terms.

Furthermore, the plan’s surrounding language confirms that the prescription of medication and a treatment plan may evidence an underlying disability. The five preceding examples—physical-examination findings; diagnostic test results/imaging studies; diagnoses; x-ray results; and observation of anatomical, physiological, or psychological abnormalities—are used to verify a medical condition. None of the examples causes disability or objectively confirms the employee’s inability to work.

An illustration from the Administrator’s brief illustrates how its interpretation here does not fit with the plan’s other examples:

For example, a prescribed regimen of pain medication may serve to indicate the existence of a back condition. Standing alone, however, the prescription of such medication does not indicate that one is unable to work for a period of time because of that condition. Indeed, some individuals experiencing back pain are readily able to continue work.

But an x-ray showing nerve compression suffers from the same defect: it bespeaks the existence of a back condition, but doesn’t demonstrate whether the condition prevents the employee from working. So too with every other example in the plan.

The Administrator’s response leans heavily on the plan’s grant of interpretive discretion. But the record leaves us guessing as to how the Administrator interpreted the plan’s objective-findings definition. The Administrator’s denial letters simply quote the plan language and then conclude Corey’s evidence fails to suffice. Although the Administrator enjoys interpretive latitude, we defer only to its actual interpretations—it can’t issue a conclusory denial and then rely on an attorney to craft a post-hoc explanation. See Univ. Hosps. of Cleveland v. Emerson Elec. Co., 202 F.3d 839, 848 n.7 (6th Cir. 2000).

Furthermore, the Administrator relies on two cases, Scott v. Eaton Corp. Long Term Disability Plan, 454 F. App’x 154 (4th Cir. 2011) (per curiam), and McGruder v. Eaton Corp. Short Term Disability Plan, No. 3:06-418-CMC, 2006 WL 3042798 (D.S.C. Oct. 23, 2006), neither of which persuades us. In both cases, the employees argued that a pain medication’s side effects prevented them from working. Both courts denied the applicants’ claims due to inadequate evidence corroborating their respective medication’s side effects. These cases have little pertinence here because Corey argues that he is disabled due to his cluster headaches, not his reaction to treatment.

In sum, the plan identifies “[m]edications and/or treatment plan” as examples of “objective findings.” Corey’s physicians supplied evidence detailing his cluster-headache treatment. Yet the Administrator denied Corey’s application due to a lack of objective findings. It never explained why his medications and treatment plan failed to satisfy the plan’s objective-findings definition. Nor did its rejection letters offer any other explanation for the benefits denial. Accordingly, the Administrator’s decision was arbitrary and capricious.

IV.

For these reasons, we VACATE the district court’s judgment and REMAND to the district court with instructions to remand the case to the Administrator for a full and fair review consistent with this opinion.

COOK, Circuit Judge.