Number 625, an ERISA Plan;
No. 14-55919
D.C. No.
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.
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.
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
Ronald Keith Alberts, Matthew G. Kleiner, Jessica Wolff,
Michelle L. Steinhardt, and Adelle Greenfield, Gordon &
Rees LLP, Los Angeles, California, for Defendants-
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.
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
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).
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
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
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
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:
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
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
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
[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
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.
“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).
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
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
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.
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
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”
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
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.”
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
change their character as insurance
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
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
funds life insurance or disability insurance coverage,” Cal.
Ins. Code § 10110.6(a).
2. The statute substantially affects the risk-pooling
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).
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.
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.
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.

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.


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.


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).


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.


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.


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.


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.


Strong ERISA Opinion by the Sixth Circuit


United States Court of Appeals, Sixth Circuit.


No. 16-3817

    Decided: June 08, 2017



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.


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.


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)).


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.


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.

Discovery in ERISA Lawsuits

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.



Submitted by the Insurance PAC

By: Emilia A. Quesada, Esq., Sanchez-Medina, Gonzalez, Quesada, et al. (SMGQ Law) in Miami, Florida

Review of an administrator’s benefit determination under the Employment Retirement Income Security Act (“ERISA”) when the arbitrary and capricious standard of review applies is ordinarily limited to the administrative record, however, a recent trend in Florida district courts is allowing limited discovery in these cases. This article sets out the standard of review in ERISA benefits determination cases and analyzes the decisions of Florida district courts that permit discovery.


In reviewing an ERISA benefits determination, the Eleventh Circuit has established a multi-step framework to guide courts in reviewing an ERISA plan administrator’s benefits decisions.[1] The first five steps have remained unchanged since the court established the framework in Williams.[2] But the sixth step, listed below, reflects a more recent change based on the Glenn decision.[3]

In Blankenship, the Eleventh Circuit cited to its opinion in Doyle v. Liberty Life Assurance Co. of Boston to explain how it modified the sixth step’s ‘heightened’ review and shifted the burden of proof regarding the influence of a conflict of interest from the administrator to the prospective beneficiary.[4]

For a court reviewing a plan administrator’s benefits decision, the present Williams test requires:

(1) Apply the de novo standard to determine whether the administrator’s benefits-denial decision is “wrong” (i.e., the court disagrees with the administrator’s decision); if it is not, then end the inquiry and affirm the decision.

(2) If the administrator’s decision is, in fact, “de novo wrong,” then determine whether the administrator was vested with discretion in reviewing claims; if not, end judicial inquiry and reverse the decision.

(3) If the administrator’s decision is “de novo wrong” and the administrator was vested with discretion in reviewing claims, then determine whether “reasonable” grounds supported the decision (hence, review the administrator’s decision under the more deferential arbitrary and capricious standard).

(4) If no reasonable grounds exist, then end the inquiry and reverse the administrator’s decision; if reasonable grounds do exist, then determine if the administrator operated under a conflict of interest.

(5) If there is no conflict, then end the inquiry and affirm the decision.

(6) If there is a conflict, the conflict should merely be a factor for the court to take into account when determining whether an administrator’s decision was arbitrary and capricious.[5]


A court which reviews a benefits determination under the arbitrary and capricious standard of review is limited to the information the administrator had when the administrator made its decision.

While the Eleventh Circuit has not definitively ruled on the scope of discovery permitted when a court reviews a benefits determination, it has affirmed a lower court’s decision to refuse to permit discovery in the ERISA context.[6] In Eldridge, the Eleventh Circuit held that discovery was unnecessary because the record was restricted to the evidence that was before the administrators.[7] This is in line with a string of Eleventh Circuit decisions that hold, in part, that a court’s review of an administrator’s decision is limited to the records and facts before the administrator when the decision was made. In Townsend v. Delta Family-Care Disability & Survivorship Plan, the Eleventh Circuit turned to the question of what records the court may consider in reviewing the committee’s determination. The Townsend court determined that a district court may only consider the documents that were before the administrator, and held that the district court properly sustained the defendant’s objection to the plaintiff’s submission of documents outside the administrative record.[8] Similarly, in Glazer v. Reliance Standard Life Ins. Co. and Richards v. Hartford Life & Accident Ins. Co., the court held that, in ERISA cases, review is confined to the evidence that was before the administrator when the claim for benefits was denied.[9] This has been the standard since the Eleventh Circuit held that “when conducting a review of an ERISA benefits denial under an arbitrary and capricious standard … the function of the court is to determine whether there was a reasonable basis for the decision, based upon the facts as known to the administrator at the time the decision was made.”[10]


Nonetheless, despite the Eleventh Circuit’s rulings, a trend has developed in the federal district courts of Florida wherein the district courts are allowing discovery in ERISA cases on a limited basis. For example, the Middle District of Florida has held that discovery in an ERISA disability case is permissible on a limited basis, with focus on the claim administrator’s decision making and the appropriate standard of review.[11] This expanded view of discovery was elaborated upon in Cerrito v. Liberty Life Assur. Co. of Boston, where the Middle District of Florida found that “courts have generally permitted discovery, even in instances in which an ‘arbitrary and capricious’ standard applies, in order to assist the court in evaluating certain matters.[12]

Defendants in ERISA cases have attempted to equate the Eleventh Circuit’s decree limiting the court’s review to the facts known to the administrator to be synonymous with the information contained in the administrative record.[13] However, it is important to note that the district courts in Florida have not adopted this limited definition as the standard.[14] Despite the recent trend by the Florida district courts in permitting discovery, such discovery is limited. Although the Florida district courts have allowed limited discovery in order to determine the appropriate standard of review in ERISA cases and in the five areas identified in Cerrito, the discovery is limited.[15] In Barron, for instance, the Middle District of Florida limited the plaintiff’s proposed discovery, which included ten depositions in five different states, holding it was too broad.[16]


ERISA defendants that are facing discovery requests cloaked as ‘conflict discovery’ should argue that any discovery beyond the administrative record is not allowed pursuant to Eleventh Circuit precedent, which limits a court’s review of a benefits decision to only the documents that were before the administrator at the time the decision to approve or disprove the benefit was made. ERISA defendants, however, must be mindful that, until the Eleventh Circuit issues a definitive ruling on the scope of discovery in ERISA cases, there is a myriad of decisions rendered by Florida federal district courts which have allowed limited discovery in certain areas of inquiry, even under the arbitrary and capricious standard of review.

Emilia A. Quesada, Esq. is a founding partner of Sanchez-Medina, Gonzalez, Quesada, et al. (SMGQ Law) in Miami, Florida, where she practices in the areas of complex commercial litigation, insurance defense including life, health, disability, and ERISA disputes, banking litigation and products liability matters. She is a certified FINRA arbitrator.


A Great ERISA Decision – Seventh Circuit Court of Appeals

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,Seventh Circuit.

Brenda MOTE, Plaintiff-Appellant, v. AETNA LIFE INSURANCE COMPANY and Arthur Andersen LLP Group Long Term Disability Insurance Plan, Defendants-Appellees.

No. 06-4127.

    Decided: September 12, 2007


Brenda Mote sued Aetna Life Insurance Co. (“Aetna”) and the Arthur Andersen Long-Term Disability Plan (the “Plan”) under the Employment Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1001 et seq., alleging that Aetna and the Plan arbitrarily and capriciously terminated her disability benefit payments and that they should be estopped from terminating her disability benefits because the Social Security Administration found her “disabled” under its regulations.   The district court dismissed Mote’s claims against Aetna upon finding that Aetna was not a proper party to the action, denied Mote’s motion for summary judgment against the Plan, and granted summary judgment to the Plan on all of Mote’s claims against it.   Mote appeals.   We affirm.


Brenda Mote was a human resource generalist with Arthur Andersen LLP until she ceased working on April 10, 1998, due to back pain and physical complications, including fibromyalgia,1 stemming from an August 1997 accident.   On the day that Mote stopped working for Arthur Andersen, she applied for long-term disability benefits under the Plan, which was administered by Aetna.   The Plan states that for purposes of ERISA, Aetna shall act as the Plan’s fiduciary and be vested with “discretionary authority” both to “determine whether and to what extent employees and beneficiaries are entitled to benefits;  and construe any disputed or doubtful terms of this policy.” Specifically, Mote applied for long-term disability benefits under the Plan’s “own occupation” definition of disability.   That provision states that an employee is “totally disabled” if the insured employee is unable “[d]uring the first 5 years of disability to perform the material duties of the employee’s own occupation.”   The Plan approved Mote’s application, and on July 10, 1998, she began receiving long-term disability benefits.   Following the Plan’s approval of her application, Mote continued to receive medical care for her back pain and fibromyalgia, and the Plan periodically reassessed her condition to ensure that she remained eligible for long-term disability benefits.

After Mote had been receiving long-term disability benefits for five years, on December 8, 2003, the Plan notified her that it recently had reevaluated her claim under its stricter, five-year definition of “totally disabled” and determined that she no longer qualified for long-term disability benefits.   Under the Plan, while an employee only needs to demonstrate that he is unable to “perform the material duties of [his] own occupation” during the first five years of his disability, after five years the employee must demonstrate that he is unable to “work at any occupation for which [he] is, or may reasonably become, fitted by education, training or experience.”   In its letter to Mote, the Plan stated that it reached its decision after reviewing the office notes of Mote’s treating physicians, various lumbar MRIs, CT scans, and surgical procedures, as well as statements by Mote’s physicians regarding her physical limitations and restrictions.   The letter also informed Mote that the Plan had hired an independent investigator who, in January 2003, videotaped her engaging in activities that she stated on her April 30, 2003, Claim Questionnaire that she was unable to perform.   The Plan’s letter further stated that it based its decision on the results of Mote’s November 11, 2002, functional capacity examination and her September 15, 2003, independent medical examination, both of which found that Mote was capable of performing sedentary work.   The letter also noted that the Plan’s consulting physicians reviewed Mote’s medical information on two recent occasions and reached the same conclusion.

Mote requested that the Plan review its decision.   In support of her request for review, Mote submitted additional medical evidence from her treating physicians, including her primary care physician, Terry West, M.D., and her pain management specialist, James Gruft, M.D. Dr. West opined that Mote was suffering from a “class 5” physical impairment, which rendered her “incapable of minimal (sedentary) activity.”   He further noted that, in his opinion, “maximum medical improvement has [been] achieved.   I don’t believe she can ever work again.”   In a letter dated August 10, 2004, Dr. West stated that Mote suffers from fibromyalgia and chronic back pain, which remain unchanged, and he concluded that Mote “is still unable to work at this time, due to limitations of motion and need for sedating pain medication.”   Dr. Gruft also opined that Mote was incapable of sedentary activity, and that he believed that Mote’s condition had “retrogressed.”

Upon its receipt of Mote’s additional information, the Plan informed Mote that it referred her file for an independent medical review.   The Plan retained William Hall, M.D., to conduct its review. In his September 2, 2004, report, Dr. Hall stated that he reviewed Mote’s medical history and opined:

I must conclude that the weight of the medical credibility be given to the opinions of [Mote’s] treating physicians and that, absent medical or personal information regarding [Mote] to the contrary, her subjective musculoskeletal symptoms are of such severity to be totally medically limiting.

However, during his initial review of Mote’s medical records, Dr. Hall was unaware of the videotaped evidence of Mote’s daily activities that the Plan obtained from its independent investigator.   The independent investigator recorded the videotapes between January 29, 2003, and February 4, 2003.   Dr. Hall subsequently viewed selected portions of the videotapes, which showed Mote running errands, driving an elderly relative to doctors’ appointments, and loading groceries into her car.   Upon reviewing the videotape evidence of Mote’s functional abilities, Dr. Hall changed his opinion regarding Mote’s level of disability, stating:

After viewing surveillance videos of [Mote’s] activities for the dates and durations noted, I do not agree with assessments of severity or with medically limiting conclusions by [Mote’s] treating physicians.   I am not able to identify an objective or absolute impediment to [Mote] pursuing sustained and otherwise unrestricted activities at a light level of exertion.

In a letter dated September 28, 2004, the Plan notified Mote that, after a “full and fair review of the decision to terminate [her] claim,” it was upholding its decision to terminate her long-term disability benefits.2  The Plan’s letter cited a long list of materials that it reviewed in reaching its decision, and stated that “the weight of the medical information does not support a condition of total disability.” 3  Mote then filed suit against both the Plan and Aetna, claiming that they improperly terminated her long-term disability benefits.   The district court dismissed Aetna as an improper party, denied Mote’s cross-motion for summary judgment, and granted the Plan’s cross-motion for summary judgment.   Mote appeals.


We review a district court’s decision on summary judgment de novo. Davis v. Unum Life Ins. Co. of Am., 444 F.3d 569, 574 (7th Cir.2006) (citations omitted).  “Summary judgment is proper when the ‘pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.’ ” Tegtmeier v. Midwest Operating Eng’rs Pension Trust Fund, 390 F.3d 1040, 1045 (7th Cir.2004) (quoting Fed.R.Civ.P. 56(c)).  “With cross-motions, our review of the record requires that we construe all inferences in favor of the party against whom the motion under consideration is made.”  Id. (quotations and citations omitted).

On appeal, Mote first argues that the Plan’s decision to stop paying her benefits after finding that she did not meet the stricter five-year definition of “total disability” was arbitrary and capricious.   In Firestone Tire & Rubber v. Bruch, 489 U.S. 101, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989), the Supreme Court held that “ ‘a denial of benefits challenged under § 1132(a)(1)(B) is to be reviewed under a de novo standard unless the benefit plan gives the administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe the terms of the plan.’ ” Diaz v. Prudential Ins. Co. of Am., 424 F.3d 635, 636-37 (7th Cir.2005) (quoting Firestone, 489 U.S. at 115, 109 S.Ct. 948).  “When, as here, the terms of an employee benefit plan afford the plan administrator broad discretion to interpret the plan and determine benefit eligibility, judicial review of the administrator’s decision to deny benefits is limited to the arbitrary-and-capricious standard.”  Davis, 444 F.3d at 575 (citing Sisto v. Ameritech Sickness & Accident Disability Benefit Plan, 429 F.3d 698, 700 (7th Cir.2005)).

Under the arbitrary and capricious standard, “we will overturn a plan administrator’s decision ‘only ․ if it is downright unreasonable.’ ” Herman v. Cent. States, Se. & Sw. Areas Pension Fund, 423 F.3d 684, 692 (7th Cir.2005) (quoting Carr v. Gates Health Care Plan, 195 F.3d 292, 294 (7th Cir.1999) (internal quotation omitted)).  “That is, this court will not substitute the conclusion it would have reached for the decision of the administrator, as long as the administrator makes an informed judgment and articulates an explanation for it that is satisfactory in light of the relevant facts.”  Id. (internal quotations and citations omitted).   We previously have noted that “ ‘[r]eview under the deferential arbitrary and capricious standard is not a rubber stamp,’ so that, ‘[e]ven under the deferential review we will not uphold a termination where there is an absence of reasoning in the record to support it.’ ” Id. at 693 (quotingHackett v. Xerox Corp. Long-Term Disab. Income, 315 F.3d 771, 774-75 (7th Cir.2003)).  “A satisfactory explanation is one that gives ‘the specific reasons for the denial,’ but it need not explain ‘the reasoning behind the reasons, ․ [that is,] the interpretive process that generated the reason for the denial.’ ” Id. (quoting Gallo v. Amoco Corp., 102 F.3d 918, 922 (7th Cir.1996) (internal quotation omitted)).   Further, we have found that “[t]he administrator of a pension fund does not act arbitrarily and capriciously when he changes a previous decision because the facts known to the plan have changed;  ‘[p]ut simply, a reversal based on new information is not a nonuniform interpretation.’ ” Id. (quoting Militello v. Cent. States, Se. & Sw. Areas Pension Fund, 360 F.3d 681, 690 (7th Cir.2004)).

In this case, Mote first argues that the Plan’s decision was arbitrary and capricious because there was no evidence in the record that her condition improved.   Mote contends that a finding of improvement is necessary because the Plan actually terminated her benefits under the “own occupation” definition of “totally disabled,” rather than the five-year, “any occupation” definition. Thus, she reasons that if the Plan found that she could not perform her position as a human resource generalist in 1998, and there is no evidence that her chronic back pain or fibromyalgia had improved, then the Plan had no basis for terminating her benefits.   As discussed above, the totality of the evidence indicates that the Plan terminated Mote’s benefits based on the five-year, “any occupation” definition.   See supra, at n. 1. Because that definition differs significantly from the more lenient “own occupation” definition, we find that even if Mote’s condition did not improve over the five-year period she was receiving disability benefits, that is not determinative of whether she was “totally disabled” under the five-year definition.   Accordingly, we evaluate whether the Plan arbitrarily and capriciously evaluated the evidence before it in making its determination that Mote was capable of performing some occupation, rather than merely her previous occupation.

Mote next asserts that the Plan did not properly weigh her treating physicians’ opinions in reaching its termination decision.   Mote’s argument is unavailing, however, because “ERISA does not require plan administrators to accord special deference to the opinions of treating physicians.”  Kobs v. United Wis. Ins. Co., 400 F.3d 1036, 1039 (7th Cir.2005) (citations omitted).   Further, courts may not “impose on plan administrators a discrete burden of explanation when they credit reliable evidence that conflicts with a treating physician’s evaluation.”  Davis, 444 F.3d at 578 (quoting Black & Decker Disability Plan v. Nord, 538 U.S. 822, 834, 123 S.Ct. 1965, 155 L.Ed.2d 1034 (2003)).   We also have recognized that “[m]ost of the time, physicians accept at face value what patients tell them about their symptoms;  but insurers ․ must consider the possibility that applicants are exaggerating in an effort to win benefits (or are sincere hypochondriacs not at serious medical risk).”  Leipzig v. AIG Life Ins. Co., 362 F.3d 406, 409 (7th Cir.2004).   Accordingly, the Plan did not act improperly when it looked to, and credited, evidence that conflicted with Mote’s treating physicians’ opinions as part of its deliberative process in evaluating her claim.

Mote further argues that the Plan’s reviewing doctors’ opinions regarding her condition were unreliable and rendered the Plan’s decision arbitrary and capricious.   Specifically, Mote takes issue with the fact that none of the Plan’s physicians consulted a rheumatologist with specialized expertise in fibromyalgia, nor did the Plan contact her treating physicians to discuss her fibromyalgia. As a threshold matter, an ERISA plan is not required to hire specialists for every claimed malady in cases in which the plan hired an independent expert to conduct a physical examination of the claimant.   In this case, the Plan hired an independent expert, orthopedic surgeon Richard Tuttle, M.D., to examine Mote. The record indicates Dr. Tuttle conducted an “18 tender points” examination of Mote to assess her fibromyalgia, which was the same test that Mote’s own physician, Dr. Gruft, conducted.   While Mote seeks to impose a requirement on the Plan to consult with her treating physicians, the record reveals that Dr. Gruft is a pain management specialist and not a rheumatologist, and that Lee Lichtenberg, M.D., who is a rheumatologist, only examined Mote once.   Moreover, nothing in the record indicates that Mote’s primary care physician, Dr. West, has any particular expertise in fibromyalgia.   In addition to hiring Dr. Tuttle to examine Mote, the Plan also relied upon the opinions of William Hall, whose specialty is unknown, and Paul Radford, an occupational medicine specialist.   While neither of these consultants is a rheumatologist, the fact remains that Mote sought long-term disability benefits on grounds other than fibromyalgia, including chronic back pain, migraine headaches, and irritable bowel syndrome, all of which Drs. Tuttle, Hall and Radford are just as qualified to opine about as Mote’s treating physicians.   Accordingly, we do not find that the Plan’s reliance on the opinions of Drs. Tuttle, Hall and Radford, in conjunction with the treating records of Mote’s own physicians, as well as other outside evidence gathered during its deliberative process, rendered its decision either arbitrary or capricious.4

Next, Mote argues that Dr. Hall’s and Dr. Radford’s opinions are suspect simply because the Plan hired them.   Mote’s assertion that the Plan’s employees or its consultants had an incentive to deny her claim is without support in the record.   As we recognized in Leipzig v. AIG Life Insurance Co., “most insurers are well diversified, so that the decision in any one case has no perceptible effect on the bottom line,” and thus “[t]here is correspondingly slight reason to suspect that they will bend the rules,” absent suspect circumstances such as “an insurer or plan administrator pay[ing] its staff more for denying claims than for granting them.”  362 F.3d at 409 (citing Perlman v. Swiss Bank Corp., 195 F.3d 975, 980-81 (7th Cir.1999)).   As we have stated previously, ERISA “plan administrators have a duty to all beneficiaries and participants to investigate claims and make sure to avoid paying benefits to claimants who are not entitled to receive them.”  Davis, 444 F.3d at 575 (citations omitted).   Accordingly, the Plan would have been remiss if it did not investigate Mote’s long-term disability claim, and its use of independent experts and medical consultants not only was justified, but consistent with its duty to investigate.

Mote also asserts that the Plan’s reliance on the results of her November 11, 2002, functional capacity examination (“FCE”) was unreasonable.   In his report, the FCE evaluator concluded that Mote “is currently capable of working at the sedentary physical demand level within the material handling and positional tolerances set forth in the report, of an eight hour day.”   Despite that conclusion, Mote asserts that the FCE evaluator’s opinion was not supported by the evaluation findings regarding her severe pain, and that the Plan “cherry-picked” selected portions of the FCE report to justify its termination of her long-term disability benefits.   Her argument fails, however, because the Plan never stated that the FCE was the deciding factor in its decision.   Rather, the Plan advised Mote that it considered that FCE in tandem with Dr. Tuttle’s September 15, 2003, independent medial examination.   The Plan’s December 8, 2003, letter also advised Mote that both examinations revealed that she possessed greater physical capability than that stated in her subjective medical history, and that both examinations supported a conclusion that she could work at a sedentary position for a eight-hour work day.   Accordingly, we find that the Plan’s consideration of Mote’s November 11, 2002, FCE as one component of its deliberative process did not make its decision to terminate Mote’s long-term disability benefits either arbitrary or capricious.

Mote then contends that Dr. Hall’s opinion is suspect because he changed his conclusion after viewing the videotape snippets of her daily activities and that the Plan’s consideration of the videotapes during its deliberative process was improper.   These argument also are without merit.   In Shyman v. Unum Life Insurance Co., 427 F.3d 452 (7th Cir.2005), we considered an ERISA plan’s denial of benefits decision, which partially was based on evidence gathered by a private detective that contradicted claimant’s disability claims.  Id. at 456.   We did not object to the plan’s surveillance of the claimant, and we held that the plan’s denial decision was neither arbitrary nor capricious.  Id.;  see also Dougherty v. Indiana Bell Telephone Co., 440 F.3d 910, 917 (7th Cir.2006) (upholding ERISA plan’s decision to terminate disability benefits after surveillance videotape showed the claimant engaging in normal, everyday activities, such as driving his car and hauling shopping bags).   Mote attempts to distinguish these cases by arguing that the videotapes in this case do not contain evidence contradictory to her treating physicians’ diagnoses, and thus the Plan could not reasonably have relied upon them in its deliberative process.   The evidence in the record, however, rebuts Mote’s argument.   For example, Dr. Gruft opined that Mote “cannot operate a motor vehicle,” but the videotape shows Mote doing just that.   The videotapes also contradict Dr. Gruft’s claim on his December 11, 2003, Functional Capacity Worksheet that Mote could “never climb, crawl, kneel, move repeatedly or stoop,” but the surveillance videotape shows her kneeling, moving repeatedly, and stooping.   In short, the videotapes show Mote engaging in many of the activities that she claimed to be unable to accomplish in her application for long-term disability benefits and, consequently, the Plan properly considered them.   Further, Dr. Hall was justified in altering his opinion regarding Mote’s ability to work after viewing the videotapes, because Mote’s activities on the videotapes were exactly the type of additional, contrary evidence upon which he conditioned his original opinion when he stated that, “absent medical or personal information regarding [Mote] to the contrary, her subjective musculoskeletal symptoms are of such severity as to be totally limiting.”   Finally, the record reflects that the Plan relied upon the videotapes merely as one piece of the puzzle in its deliberative process and, while they may have altered the outcome, they were not the sole basis for the Plan’s denial of Mote’s claim.   Accordingly, we find that the Plan’s use of the videotape evidence of Mote’s physical capacity did not render its decision either arbitrary or capricious.5

Mote further argues that the Plan was estopped from asserting that she was not totally disabled because the Social Security Administration (“SSA”) later found Mote to be disabled under its standards.   Mote, however, ignores the fact that the Plan’s five-year definition of “totally disabled,” and the standard used in other ERISA plans, is not the same as the standard used for evaluating disability under the Social Security Act, 42 U.S.C. § 423(d)(1)(A).   See Nord, 538 U.S. at 833, 123 S.Ct. 1965 (“In determining entitlement to Social Security benefits, the adjudicator measures the claimant’s condition against a uniform set of federal criteria.  ‘[T]he validity of a claim to benefits under an ERISA plan,’ on the other hand, ‘is likely to turn,’ in large part, ‘on the interpretation of terms in the plan at issue.’ ” (quoting Firestone, 489 U.S. at 115, 109 S.Ct. 948)).   We previously have stated that a court may consider SSA determinations as relevant, and an SSA decision could be binding if an ERISA plan specifically includes SSA disability as a condition of plan disability.  Reich v. Ladish Co., 306 F.3d 519, 524-25 (7th Cir.2002).   The Plan, however, did not include any provisions regarding SSA decisions in its policy.   Further, even if the SSA’s decision could have had some bearing on the Plan’s decision, the Plan was unable to consider it because the SSA did not award benefits to Mote until May 24, 2005, eight months after the Plan issued its decision.   See Tegtmeier, 390 F.3d at 1046 (“While Social Security decisions, if available, are instructive, these determinations are not dispositive ․” (emphasis added)).   Accordingly, the Plan was not estopped from independently interpreting the terms of its policy merely because the SSA found Mote to be disabled pursuant to its standards months after the Plan issued its final decision to terminate Mote’s long-term disability benefits.

Finally, Mote contends that the district court erred by dismissing her claims against Aetna upon its finding that Aetna was not a proper party to the action.   She asserts that she should be able to sue both her employer’s ERISA plan (i.e., the Plan) and the Plan’s administrator, Aetna.   Generally, in a suit for ERISA benefits, the plaintiff is “limited to a suit against the Plan.” Blickenstaff v. R.R. Donnelley & Sons Co. Short Term Disability Plan, 378 F.3d 669, 674 (7th Cir.2004).   While we have allowed plaintiffs in ERISA cases to sue an ERISA plan administrator in some limited instances, the operative facts of those cases differ from those in this case.   For instance, in Riordan v. Commonwealth Edison Co., 128 F.3d 549, 551 (7th Cir.1997), we permitted a plaintiff to sue the plan administrator to recover ERISA benefits because the employer failed to raise the issue in the district court and the plan documents referred to the employer and the plan interchangeably.   Neither of those pivotal facts is present here.   Similarly, in Mein v. Carus Corp., 241 F.3d 581 (7th Cir.2001), we allowed a plaintiff to sue his employer to recover ERISA benefits because the employer and the plan were closely intertwined.  Id. at 584-85.   We are not faced with that situation in this case, since Aetna was not Mote’s employer and the Plan’s policy distinguishes between the Plan, the employer, and Aetna.   We thus find that the district court did not err in dismissing Aetna from the suit because it was not a proper party to the action.


The district court properly entered summary judgment for the Plan and denied Mote’s motion for summary judgment because the Plan’s decision to terminate Mote’s long-term disability benefits was neither arbitrary nor capricious, and because the Plan was not estopped from terminating Mote’s benefits based upon the Social Security Administration’s subsequent finding that Mote was disabled under its regulations.   The district court also properly dismissed Mote’s claims against Aetna because Aetna was not a proper party to the action.   Accordingly, the district court’s judgment is Affirmed.

In fact-specific cases like this one, the court of appeals is usually de facto the last stop on the road for the litigants.   It is thus critical that we get the facts right, even if we agree on the governing legal standards.   Here, although I agree with the majority’s assessment of the claims against Aetna, the administrator of the plan at issue, I must part ways with its evaluation of Brenda Mote’s claims against the long-term disability plan (“the Plan”).   According to Mote’s treating physicians and other specialists, since at least 1998 she has suffered from fibromyalgia, migraines, a sleep disorder, depression, and pain throughout her body.   From 1998 to 2003, she received benefits from the long-term disability plan sponsored by her former employer, Arthur Andersen.   In 2003, Mote’s disability benefits were terminated because the length of Mote’s disability triggered a shift in the applicable standard for disability, from the earlier one in which she needed to show that she could not perform her own job, to the more stringent one in which she needed to show that she could not perform any work at all.   Mote appealed the decision, but the Plan affirmed itself.   Mote then filed this suit in federal court, alleging that the Plan’s decision to terminate her benefits was arbitrary and capricious.

Although arbitrary and capricious review ties our hands considerably, it is “not a rubber stamp.”  Hackett v. Xerox Corp. Long-Term Disability Income Plan, 315 F.3d 771, 774 (7th Cir.2003).   We have held that a benefits plan governed by ERISA “must weigh the evidence for and against [a benefits determination], and within reasonable limits, the reasons for rejecting evidence must be articulated.”  Halpin v. W.W. Grainger, Inc., 962 F.2d 685, 695 (7th Cir.1992) (internal quotation marks omitted).   Further, “ERISA requires that specific reasons for denial be communicated to the claimant and that the claimant be afforded an opportunity for ‘full and fair review’ by the administrator.”  Id. at 688.

I see two significant problems in the Plan’s consideration of Mote’s appeal, either one of which would require reversal even under arbitrary and capricious review.   First, in denying Mote’s appeal on September 28, 2004, the Plan made the following statement:  “Reported pain also cannot be relied upon as [a] sufficient indicator of functional impairment since perception of pain may be affected by individual tolerance, motivation or psychological factors.”   Perhaps if this plan had language in it to that effect, that conclusion might be acceptable.   But most plans do not, and this one is no exception.   To the contrary, section VII, which includes the governing definitions for the Plan, says only that “total disability/totally disabled” means

that solely because of an illness, pregnancy or accidental bodily injury, an insured employee is unable:  (1) [d]uring the first 5 years of disability to perform the material duties of the employee’s own occupation;  and (2) [f]rom then on, to work at any occupation for which such employee is, or may reasonably become, fitted by education, training or experience.   The availability of employment will not be considered in the assessment of the employee’s disability.

Plan, sec.   VII, ¶ 29.   In other words, the Plan takes a functional approach to disability.   It does not forbid an employee from showing functional incapacity through self-reported symptoms.   The ability to “interpret” cannot mean the ability to add entirely new language to plans.   In my view, Mote’s case is indistinguishable from another ERISA case involving fibromyalgia, in which we held that subjective reports of pain can suffice to show one’s complete disability.  Hawkins v. First Union Corp. Long-Term Disability Plan, 326 F.3d 914, 918 (7th Cir.2003).   The Plan therefore made an error of law, or behaved arbitrarily and capriciously, in its analysis.   Although it was entitled to credit evidence other than Mote’s own reports of pain, it cannot begin with the premise that reported pain can never be enough.1

The Supreme Court’s decision in Black & Decker Disability Plan v. Nord warns that “Plan administrators, of course, may not arbitrarily refuse to credit a claimant’s reliable evidence, including the opinions of a treating physician,” even though the administrators have no obligation “to accord special weight to the opinions of a claimant’s physician.”  538 U.S. 822, 834, 123 S.Ct. 1965, 155 L.Ed.2d 1034 (2003).   In this case, even if there were some language in the Plan on which the administrators could hang their conclusion that subjective evidence is never enough to support an award of benefits, the Plan still failed to articulate its “reasons for rejecting evidence,” which is necessary “if there is to be meaningful appellate review.”  Halpin, 962 F.2d at 695.   It may be that even under the correct standards, a weighing of all the evidence would lead once again to a rejection of her claim.   Nonetheless, Mote is entitled to have the decision, whatever it is, reached through the use of a fair process.   The record makes clear that this did not happen.

Second, although surveillance evidence can be used to undermine the credibility of a doctor’s medical opinions where the diagnosis is based substantially on patient reports, whether it was used properly here depends on how it was used and for what purpose.   The record indicates that the Plan’s medical reviewer, Dr. Hall, did not receive all of the surveillance information about Mote, which was gathered over days and days of observation.   Instead, as the majority concedes, he received only a compilation of two hours of pre-selected footage.   After reviewing this material and looking at no other new evidence, Dr. Hall withdrew his earlier conclusion that Mote was totally disabled from working in any occupation.   The fact that the tapes themselves are not in the record does not somehow make Dr. Hall’s conclusion reliable.   No one disputes that he never saw the vast majority of the evidence that was collected.   One might just as well view a two-hour snippet of Mote sitting on a sofa, and conclude that this was all she ever did.   Dr. Hall’s opinion was based on inherently unreliable evidence and thus should not have been entitled to any weight.

Properly used, surveillance evidence can provide a basis for choosing between contradictory medical evidence by rendering some of that evidence less credible.   This court has noted that “[w]e can imagine an argument that even if the activity disclosed ․ does not indicate a capacity to engage in full-time work, the fact that it is discrepant with the level of activity described by [the treating physician], presumably on the basis of representations made to him by [the plaintiff], fatally undermines [the plaintiff’s] credibility.”   Hawkins, 326 F.3d at 918.   Here, the Plan contends that the surveillance evidence was used to discredit the treating physicians’ statements and not as an independent basis for terminating Mote’s benefits, but the record belies this assertion.

Mote may well have concluded that there was no need to supplement the record before this court by furnishing all of the surveillance tapes, because even the evidence that Dr. Hall viewed was generally consistent with the records from Mote’s treating physicians.   One problem with the way in which the Plan used the surveillance evidence is the fact that it made assumptions that find no support in the record.   Thus, for example, in its 2004 denial of Mote’s appeal, it described the activities viewed in surveillance as Mote’s “daily living activities,” even though the record contains no evidence that these activities were daily or even regular.   As I have already noted, the record contains only the pre-edited, two-hour videotape that, in essence, constitutes a highlight reel of Mote’s most active moments during several days of surveillance.   There would have been no need to plant cameras inside Mote’s home in order to collect evidence that fairly reflected her ordinary activities;  a fair look at the days’ worth of footage actually obtained would have sufficed.

Most troubling to me is that when the activities observed by surveillance are put in context, their utility in assessing Mote’s level of disability appears flimsy at best.   Mote’s medical records state that Mote “overdoes it.   Others aware of her overdoing it and depend on it.   Patient aware of need for changes.”   We have recognized in the past that some disabled people manage to keep going only through superhuman efforts;  in those circumstances their activities do not negate the fact that they are disabled.   See Perlman v. Swiss Bank Corp. Comprehensive Disability Protection Plan, 195 F.3d 975, 983 (7th Cir.1999).   In 1999, Dr. Gruft noted that Mote had a goal of setting boundaries with her mother (who is also disabled) and setting limits with others generally.   The only days where Mote was observed undertaking any significant activity were the days she drove her mother to and from her mother’s doctor’s appointments (once in July 2001 and once two years later in January 2003).   Her activities that day included eating at a restaurant with her mother, where she sat for one hour, and standing up for two minutes after approximately 30 minutes of sitting.   The other day of surveillance came on a day where Mote was required by the Plan to undergo a functional capacity evaluation.   She drove 45 minutes each way to that appointment.   Although these contextual details are in the surveillance notes, there is no indication that Dr. Hall had access to the written notes or that they were incorporated into the video that he watched.   Notably, Mote cancelled the second day of her evaluation because she was in pain.   Although one of Mote’s treating physicians noted in her medical records that Mote could not operate a motor vehicle, this observation accompanied a new prescription for a sedative.   It is entirely possible that the doctor meant to warn against operation of a motor vehicle while taking the drug, rather than to describe Mote’s ability to drive.   The tape showing Mote picking up her mail and newspapers at the end of her driveway included observations that she limped to the end of the driveway, that the limp significantly worsened on the walk back to the house, and that Mote struggled twice with the newspaper, and so I am unable to see how this helps the Plan’s arguments at all.

Other courts have concluded that segments of surveillance showing light physical activities by a plaintiff do not amount to a showing that she is able to manage full-time employment.   See Osbun v. Auburn Foundry, Inc., 293 F.Supp.2d 863, 870 (N.D.Ind.2003) (“[Surveillance] evidence that [the plaintiff] can perform light physical tasks for 1.5 hours over two days falls far short of demonstrating that he is capable of sustaining a job.  [The defendant] produced no evidence showing how long [the plaintiff] can perform such tasks, whether he can perform them on a daily basis, or how much pain he must endure in the process.”);  Crespo v. Unum Life Ins. Co. of Am., 294 F.Supp.2d 980, 996 (N.D.Ill.2003) (finding, in a claim of disability due to fibromyalgia, that the defendant’s “comparison between [the plaintiff’s] daily activities and the requirements of a full-time job is misplaced,” as “[t]here is no evidence anywhere in the record that [the plaintiff] undertakes these activities [including taking walks and performing household chores] with the regularity and structure of a full time job”);  see also id. (noting that claimants need not “become inert in order to avoid having their disability benefits denied”).

Viewed in any light, the surveillance evidence in Mote’s case is nothing like what this court faced in Shyman v. Unum Life Ins. Co., 427 F.3d 452, 456 (7th Cir.2005), which involved an allegedly bedridden man coaching basketball and baseball teams.   Mote’s evidence demonstrates that she was not capable of functioning in any capacity within the workforce.   Surely there is room to conclude that a person is totally disabled from working without requiring that she be bedridden and immobile during every second of the day.   The Plan’s apparent assumption that only something this extreme would disable her from working is, or could be viewed by a finder of fact to be, arbitrary and capricious.

Before concluding, I note with some concern that the actual plan underlying this claim is shrouded in mystery.   Bizarrely, at oral argument, defense counsel acknowledged that although he represents both Aetna and the Plan, his only direction in this case came from Aetna.   Aetna, however, was dismissed from the case at the district court level, and all three judges on this panel agree that this was correct.   It is odd, at best, that Aetna therefore seems to be handling the litigation on appeal and that the Plan is nowhere to be found.   The evidence of the Plan was also handled carelessly.   Mote attached a copy of the long-term disability insurance contract between Arthur Andersen and Aetna to her complaint, entitled “Long-Term Disability Policy,” rather than another document, entitled “Arthur Andersen LLP Group Long Term Disability Insurance Plan,” which appears later in the record.   Both Mote and the defendants refer to the first document as the plan at issue in this case.   In the insurance contract, obligations are imposed on “Aetna” and the “policyholder” throughout, with Arthur Andersen (Mote’s former employer) identified as the policyholder.   In the latter document, which seems to be the actual plan at issue, obligations are imposed upon the “Administrator,” “Fiduciary,” and “Appeals Fiduciary,” as one would expect.   Arthur Andersen, which is defunct at this point, is named as the Plan Administrator, while both Fiduciary roles are filled by Aetna.

Given these two documents, it is unclear how an employee would know which plan document she should rely upon, who was in charge of the Arthur Andersen long-term disability plan, or if the Plan was its own entity separate from Aetna.   The employee would need to consult both plans, which notably have similar but not identical definitions of disability.   Mote has not pressed this issue in support of any of her arguments, and so we do not need to consider its implications on the case at hand.   It does help to explain, however, some of the problems in this case.

Because, in my view, Mote has raised genuine issues of fact on the question whether Aetna’s determination (or, more accurately, the Plan’s) that she could not show inability to perform any job in the economy was arbitrary and capricious, I would reverse the district court’s grant of summary judgment in favor of the Plan and remand for further proceedings.   I therefore respectfully dissent.


1.   Fibromyalgia is “pain and stiffness in the muscles and joints that is either diffuse or has multiple trigger points.”   Dorland’s Illustrated Medical Dictionary 673 (29th ed.2000).

2.   The Plan’s letter of December 8, 2003, indicates that it based its decision to terminate Mote’s benefits on the Plan’s stricter, five-year definition of “totally disabled.”   Specifically, that letter states:  “Our review of the information in our file indicates you have the functional capacity to perform the material duties of any occupation and you no longer meet the plan requirements for total disability.”   The Plan’s letter of September 28, 2004, indicates that the Plan is “upholding [its] termination on December 8, 2003,” and it cites both the initial and five-year definitions of “totally disabled.”   However, the Plan’s second letter then states that Mote’s long-term benefits “ceased on December 8, 2003, after it was assessed you are capable of performing your own sedentary occupation.”   The Plan argues that the reference to Mote’s own occupation in the second letter was a scrivener’s error, and that Mote was apprised adequately of and able to respond to the stricter five-year definition set forth in the first termination letter.   We agree that the Plan’s letter of December 8, 2003, adequately notified Mote that the Plan’s termination of her benefits-which occurred exactly five years after it originally approved her claim-was based on the five-year definition, and provided Mote with an opportunity to submit additional evidence challenging the Plan’s decision under that definition of “totally disabled.”   The fact that the Plan erroneously cited the wrong definition of “total disability” in its final denial letter was inconsequential because that letter merely informed Mote that the Plan had affirmed its decision to deny her claim following its review of its earlier decision, which the parties do not dispute was based on the five-year definition.   Accordingly, the Plan’s scrivener’s error in the second letter does not warrant remand to the plan administrator.   See Schleibaum v. Kmart Corp., 153 F.3d 496, 503 (7th Cir.1998).

3.   The dissent asserts that the Plan’s letter to Mote of September 28, 2004, adds entirely new language to the Plan. The “entire new language” that it quotes is a sentence lifted from a three-page letter explaining, after an “independent, full and fair review,” why the Plan is upholding its decision to terminate Mote’s claim for long-term disability benefits.   The language that the dissent quotes is not an addition of entirely new language to the Plan, and when taken out of context, it misconstrues the text of the Plan’s letter.   Also, the dissent does not mention that the sentence that it quotes is surrounded by a full analysis detailing the Plan’s rationale for its prior decision and the medical evidence Mote presented for reconsideration.   Following the quoted statement, the Plan’s letter goes on to express its rationale for denying the request for reconsideration.   When read in context, it is clear that the quoted statement does not indicate that the Plan began its analysis with the premise that reported pain can never be enough.

4.   On appeal, Mote also raises for the first time the following arguments:  (1) that Dr. Radford was not qualified to render an opinion because he is an occupational medicine specialist;  (2) that Dr. Tuttle did not have the entire record to review before his independent medial examination;  and (3) that Drs. Tuttle, Radford, and Hall were opining outside their respective scopes of expertise when they determined that Mote could work at a sedentary occupation.   Because Mote failed to raise those arguments in the district court, she has waived her opportunity to raise them at this stage.  Taubenfeld v. AON Corp., 415 F.3d 597, 599 (7th Cir.2005) (citing Heller v. Equitable Life Assurance Soc’y, 833 F.2d 1253, 1261-62 (7th Cir.1987) (“On numerous occasions we have held that if a party fails to press an argument before the district court, he waives the right to present that argument on appeal․ As we have made clear, it is axiomatic that arguments not raised below are waived on appeal.” (citations and quotation marks omitted))).

5.   The dissent takes issue with the Plan’s use of portions of the surveillance videotapes, and attempts to draw conclusions regarding Mote’s activities depicted on the videotapes.   As the parties indicated during oral argument, neither the snippets of the videotapes viewed by Dr. Hall, nor the raw footage, are in the record.   We are thus unable to review either set of videotapes to determine whether the parties’ representations regarding the substance of those videotapes are accurate.   What is in the record, however, are Dr. Hall’s statements regarding their content after he reviewed them, as well as the records from the investigators who conducted the surveillance.   Based on those memorialized accounts in the record, there is ample evidence that the activities in which Mote engaged conflicted with her representations regarding her functional abilities.   Even if this is a close call, there is insufficient contrary evidence to conclude that the evidence presented on the videotapes rendered the Plan’s decision arbitrary and capricious.Moreover, if Mote believed that the portions of the surveillance videotapes relied upon by the Plan were not representative of her functional abilities, or if she believed the videotapes had been edited to omit evidence that supported her claim, she was free to submit that evidence to the court.   Mote elected not to submit any portion of the surveillance videotapes, and thus it is not a proper function of this court to speculate on what the videotapes may or may not have shown.

1.   My colleagues believe that the Plan’s letter of September 28, 2004, taken as a whole, does not rest on the premise that reported pain can never be enough, but I see nothing in the letter that qualifies the statement quoted above.   Page 1 of the letter summarizes the Plan’s conclusion that Mote is not entitled to relief and sets forth the definition of disability from the Plan. From the bottom of page 1 through the middle of page 2, the letter reviews Mote’s medical history.   It then states that[a]vailable medical records do not include references to clinical, laboratory or radio-graphic findings of progressive or worsening organic illness, or to severe or intractable medication side effects.   They also do not furnish descriptors of severity of your musculoskeletal symptoms or other subjective symptoms.   Although your subjective musculoskeletal symptoms are credible, they are not accounted for by identifiable neurological or musculoskeletal pathology.In my view, the only way to read this letter is that Mote’s reported pain is insufficient to justify relief.The only other items to which the letter refers are the surveillance evidence, which for the reasons I outline later is insufficient to support the Plan’s conclusions, and an Independent Medical Examination (“IME”) conducted by a Dr. Tuttle on September 15, 2003.   Dr. Tuttle was commissioned by the defense to examine Mote, but his examination could only have been as good as the data he had.   As Mote pointed out in her brief, both his background and the file he consulted were deficient.   Dr. Tuttle was given only a partial record to review and “lacked the appropriate medical specialization to evaluate a fibromyalgia claim.”   Based on his one-time examination of Mote, his review of an incomplete record of her medical history, and his viewing of the selective excerpts from the surveillance tapes, Dr. Tuttle stated that he could not “see any reason why [Mote] cannot return to a sedentary type of position at a full 8 hours a day.”   IME at 4. I fail to see how Dr. Tuttle’s opinion, given these significant limitations, could constitute a valid basis for disregarding the informed and fully documented conclusions of Mote’s treating physicians.   Yet the Plan justified its decision to deny benefits based solely on this IME and the surveillance evidence.

MANION, Circuit Judge.

Strong ERISA LTD Opinion From The Ninth Circuit Court of Appeals

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United States Court of Appeals,Ninth Circuit.

Graciela SAFFON, Plaintiff-Appellant, v. WELLS FARGO & COMPANY LONG TERM DISABILITY PLAN, an Erisa Plan, Defendant-Appellee.

No. 05-56824.

    Decided: January 09, 2008

We consider whether an ERISA plan administrator properly terminated benefits because of its beneficiary’s failure to produce evidence of her disability.


Graciela Saffon has long suffered from degeneration of her cervical spine, a condition confirmed by repeated MRI scans and X-rays.   After a car crash aggravated her condition in December 2001, Saffon quit her desk job at Wells Fargo Bank and applied for disability benefits from defendant, the Wells Fargo & Co. Long Term Disability Plan. The Metropolitan Life Insurance Company (MetLife), which served both as the Plan’s insurer and as its claims administrator, promptly began to pay her short-term disability benefits.   Saffon eventually applied for long-term disability benefits, which MetLife granted.   After paying long-term benefits for a year, MetLife informed Saffon that she “no longer m[et] the definition of disability” and terminated her long-term benefits.   Saffon then unsuccessfully availed herself of MetLife’s administrative appeals process.

Saffon sued the Plan under 29 U.S.C. § 1132(a), seeking payment of withheld benefits, attorney’s fees and a declaration that she is disabled.   After a bench trial on the administrative record, the district court concluded that the Plan hadn’t abused its discretion and denied Saffon any relief.

Standard of Review

1. We review benefits denials de novo “unless the benefit plan gives the administrator or fiduciary discretionary authority to determine eligibility for benefits;” if the plan does grant such discretionary authority, we review the administrator’s decision for abuse of discretion.  Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989).

Here, the Plan’s Summary Plan Description states:

In carrying out their respective responsibilities under the Plan, the Plan administrator and other Plan fiduciaries shall have 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.

Saffon argues that we must review MetLife’s decision de novo because it is unclear whether the Summary Plan Description’s discretionary clause refers to MetLife.  Kearney v. Standard Ins. Co., 175 F.3d 1084, 1090 (9th Cir.1999) (en banc) (we defer only if the grant of discretionary authority is “unambiguous[ ]”).  Saffon sees an ambiguity in the fact that the Summary Plan Description doesn’t refer to MetLife by name;  instead, it grants discretionary authority to “the Plan administrator [Wells Fargo] and other Plan fiduciaries.”   But it’s perfectly clear that MetLife is included in this grant of discretionary authority because it is one of the “other Plan fiduciaries” mentioned there.

A “fiduciary” is an entity with “any discretionary authority” in the “administration of” an ERISA plan.  29 U.S.C. § 1002(21)(A).   See Aetna Health Inc. v. Davila, 542 U.S. 200, 220, 124 S.Ct. 2488, 159 L.Ed.2d 312 (2004) (“When administering employee benefit plans, HMOs must make discretionary decisions regarding eligibility for plan benefits, and, in this regard, must be treated as plan fiduciaries.”).   MetLife’s Certificate of Insurance provides that “MetLife in its discretion has authority to interpret the terms, conditions, and provisions of the entire contract.”   The Summary Plan Description explains that the Plan “is ․ administered by [MetLife].”   “To qualify for LTD benefits,” beneficiaries must “[r]eceive approval for LTD benefits by MetLife.”   Those “benefits will begin” one month after “MetLife determines you are disabled,” and will end on “[t]he date MetLife determines that you are no longer disabled.”

These provisions leave no doubt that MetLife is an entity with discretionary authority to administer the Plan. MetLife is therefore one of the “other Plan fiduciaries” to which the Summary Plan Description grants “discretionary authority to ․ determine eligibility for ․ Plan benefits.”   While the path to this conclusion is somewhat tortuous, it is also perfectly clear.   See Wilson Arlington Co. v. Prudential Ins. Co. of Am., 912 F.2d 366, 371 (9th Cir.1990) (complexity is not the same thing as ambiguity).   The Plan unambiguously confers discretionary authority on MetLife to administer benefits claims.

2. Saffon also argues that we must disregard the discretionary authority granted to MetLife because the California Insurance Commissioner has revoked the Certificate of Insurance in Saffon’s policy, and “any related Summary Plan Descriptions.” 1  At least 6 other states have done the same;  the National Association of Insurance Commissioners encourages the remaining 43 to follow suit.   See Henry Quillen, State Prohibition of Discretionary Clauses in ERISA-Covered Benefit Plans, J. Pension Planning & Compliance, Summer 2006, at 67.

This nationwide vote of no confidence seems to have been precipitated by the cupidity of one particular insurer, UnumProvident Corp., which boosted its profits by repeatedly denying benefits claims it knew to be valid.   UnumProvident’s internal memos revealed that the company’s senior officers relied on ERISA’s deferential standard of review to avoid detection and liability.   See John H. Langbein, Trust Law As Regulatory Law:  The UNUM/Provident Scandal and Judicial Review of Benefit Denials Under ERISA, 101 Nw. U.L.Rev. 1315, 1317-21 (2007) (describing UnumProvident’s behavior).   It is an open question whether the states’ efforts are preempted by ERISA, 29 U.S.C. § 1144(a), or (as is more likely) they are saved from preemption because they “regulate[ ] insurance,” id. § 1144(b)(2)(A).   See Quillen, supra, at 77-79 (arguing against preemption).   The parties haven’t briefed the preemption question in depth, and we do not consider it.

Even if federal law permitted states to nullify an ERISA plan’s grant of discretionary authority, California law doesn’t authorize the Commissioner to do so retroactively.  Cal. Ins. Code § 10291.5(f).  Assuming that the Commissioner may prohibit insurance companies from using this discretionary clause in future insurance contracts, he cannot rewrite existing contracts so as to change the rights and duties thereunder.   Cf. Peterson v. Am. Life & Health Ins. Co., 48 F.3d 404, 410 (9th Cir.1995) (“[A]n otherwise valid [insurance] policy is a binding contract and governs the obligations of the parties until the Commissioner revokes his approval.”).

3. That the Plan grants MetLife discretionary authority is only the first step in determining the standard by which we review its denial of benefits.   While we nominally review for abuse of discretion, the degree of deference we accord to a claims administrator’s decision can vary significantly.   In Bruch, the Supreme Court instructed us to “weigh[ ]” a fiduciary’s “conflict of interest” as “a ‘facto[r] in determining whether there is an abuse of discretion.’ ”   489 U.S. at 115, 109 S.Ct. 948 (quoting Restatement (Second) of Trusts § 187 cmt. d (1959)).   MetLife labors under such a conflict of interest:  It both decides who gets benefits and pays for them, so it has a direct financial incentive to deny claims.   See Langbein, supra, at 1321 (“The danger pervades the ERISA-plan world that a self-interested plan decisionmaker will take advantage of its license under Bruch to line its own pockets by denying meritorious claims.”).

The district court didn’t take MetLife’s conflict of interest into account, apparently because Saffon didn’t produce “material, probative evidence” of the conflict.  Atwood v. Newmont Gold Co., 45 F.3d 1317, 1323 (9th Cir.1995).  Atwood was the law in our circuit at the time the district court reached its decision but it has since been overruled.  Abatie v. Alta Health & Life Ins. Co., 458 F.3d 955, 966-67 (9th Cir.2006) (en banc).   In Abatie, we explained that a reviewing court must always consider the “inherent conflict that exists when a plan administrator both administers the plan and funds it.”  Id. at 967.   We “weigh” such a conflict more or less “heavily” depending on what other evidence is available.  Id. at 968.

We “view[ ]” the conflict with a “low” “level of skepticism” if there’s no evidence “of malice, of self-dealing, or of a parsimonious claims-granting history.”  Id. But we may “weigh” the conflict “more heavily” if there’s evidence that the administrator has given “inconsistent reasons for denial,” has failed “adequately to investigate a claim or ask the plaintiff for necessary evidence,” or has “repeatedly denied benefits to deserving participants by interpreting plan terms incorrectly.”  Id.

In explaining what it means to “weigh” a conflict of interest, Abatie “conscious[ly]” rejected the “sliding scale” approach adopted by other circuits:

[W]eighing a conflict of interest as a factor in abuse of discretion review requires a case-by-case balance ․ A district court, when faced with all the facts and circumstances, must decide in each case how much or how little to credit the plan administrator’s reason for denying insurance coverage.   An egregious conflict may weigh more heavily (that is, may cause the court to find an abuse of discretion more readily) than a minor, technical conflict might.

Id. at 967, 968.   Abatie went on to offer additional guidance:

[C]ourts are familiar with the process of weighing a conflict of interest.   For example, in a bench trial the court must decide how much weight to give to a witness’ testimony in the face of some evidence of bias.   What the district court is doing in an ERISA benefits denial case is making something akin to a credibility determination about the insurance company’s or plan administrator’s reason for denying coverage under a particular plan and a particular set of medical and other records.   We believe that district courts are well equipped to consider the particulars of a conflict of interest, along with all the other facts and circumstances, to determine whether an abuse of discretion has occurred.

Id. at 969.

As we read Abatie, when reviewing a discretionary denial of benefits by a plan administrator who is subject to a conflict of interest, we must determine the extent to which the conflict influenced the administrator’s decision and discount to that extent the deference we accord the administrator’s decision.   In so doing, we seek to overcome the “serious ․ danger of conflicted plan decisionmaking” illustrated by the UnumProvident scandal.   Langbein, supra, at 1335.

Because the district court did not have the benefit of Abatie’s teachings, it applied the wrong legal standard in reviewing MetLife’s determination that Saffon is not disabled.   We therefore accord the district court’s ruling no deference and examine the record afresh through Abatie’s lens.


1. After MetLife granted Saffon long-term disability benefits, it commissioned Dr. John D. Thomas to review her medical records.   Dr. Thomas found that Saffon hadn’t provided evidence to corroborate her claim that the pain prevented her from working:  “[Saffon’s] file,” he wrote, “lacks detailed, objective, functional findings or testing which would completely preclude [an effort by Saffon to return to work].”   MetLife forwarded Dr. Thomas’s report to Dr. David Kudrow, Saffon’s neurologist.   Dr. Kudrow responded to Dr. Thomas’s report in a detailed letter that discussed Saffon’s reported symptoms, his unsuccessful attempts to alleviate them and the evidence of Saffon’s condition:  “Objective evidence of cervical pathology is noted in previous cervical spine MRI which shows multilevel degenerative disease.”   Saffon herself also wrote explaining that her condition “has not changed, it has been the same for over a year now, my headaches and neck pain are moderately severe 24 hours a day.”

MetLife added Saffon’s and Dr. Kudrow’s letters to Saffon’s file and sent it back to Dr. Thomas for a second review, whereupon Dr. Thomas again concluded that Saffon’s file “lacks clear, sequential, detailed, objective clinical information which would completely preclude Ms. Saffon from an attempt at return to work.”   MetLife faxed this pronouncement to Dr. Kudrow and gave him a deadline:  “If you disagree with the findings of [Dr. Thomas’s second] review, please respond by fax [within ten days] with supporting documentation.   If we do not hear from you, we will presume you are in agreement with the findings of the review.”   MetLife did not send Saffon a copy of this query.   Dr. Kudrow did not reply before the expiration of MetLife’s ten-day deadline, nor, of course, did Saffon.

MetLife then terminated Saffon’s benefits, explaining its decision as follows:

The medical information provided no longer provides evidence of disability that would prevent you from performing your job or occupation.   You no longer meet the definition of disability therefore your claim has been withdrawn․

The letter advised Saffon that she could appeal the decision by providing

medical evidence from the doctor(s) treating you for a condition that indicates you are under the appropriate care and treatment and objective medical information to support your inability to perform the duties of your occupation.

Saffon appealed and, in an apparent effort to provide “objective medical information,” she included her most recent MRI, which showed that her cervical spine was “not significantly changed” since the MRI taken right after the car crash.   She also included another letter from Dr. Kudrow, her treating neurologist, who confirmed that Saffon had tried a variety of pain treatments “without sustainable benefit” and that she was still “unable to tolerate sustained sitting.”

MetLife referred Saffon’s appeal to Dr. Robert A. Menotti, who, like Dr. Thomas, neither examined nor interviewed her.   After reading MetLife’s file, Dr. Menotti concluded that “[t]here simply is not enough objective medical findings and office notes that have continued to flow into this file, that convince this reviewer that the claimant’s self-reported headache and chronic pain syndrome has been enough to preclude her from” working.

MetLife thereupon denied Saffon’s appeal:

Medical information furnished reflects diagnoses including chronic headaches, chronic pain syndrome, cervical spondylosis, cervical strain and sprain.   The determination of disability is not based on the presence of diagnoses, but is based on functional ability supported by clinical evidence that would substantiate symptoms consistent with those reported by the patient and medical providers.   In this determination of disability, we must take into consideration current restrictions and limitations that are supported by clinical evidence that substantiates an inability to perform the duties of your job for your own or any employer in accordance with the Wells Fargo Disability Plan.

․ It is not clear what Dr. Kudrow used as a basis for [his diagnosis of your] reported limitations as we’ve not been furnished with a Functional Capacity Evaluation that would objectively measure and document your current level of functional ability.

․ The MRI of April 28, 2003 documents degenerative changes [in your cervical spine], but indicates this is unchanged from the prior January 12, 2002 MRI. No progression in degeneration is documented.   Prescribed medications of bextra and celexa do not appear to represent an excessive amount of medication that would result in decreased concentration levels.   The frequency of pain clinic visits were noted to not be excessive to the degree that would render you unable to perform sedentary functions consistent with your own occupation.

2. Ten years ago, in Booton v. Lockheed Medical Benefit Plan, 110 F.3d 1461, 1463 (9th Cir.1997), we interpreted the ERISA regulations as calling for a “meaningful dialogue” between claims administrator and beneficiary.   In resolving Saffon’s claim for benefits, MetLife was required to give her “[a] description of any additional material or information” that was “necessary” for her to “perfect the claim,” and to do so “in a manner calculated to be understood by the claimant.”  29 C.F.R. § 2560.503-1(g).

MetLife cannot be faulted for taking our instructions in Booton too seriously.   Its communications with Saffon and her doctors are hardly a model of clarity;  they certainly do not explain “in a manner calculated to be understood by the claimant” what Saffon must do to perfect her claim.   For example, Dr. Thomas’s statement that Saffon’s file “lacks clear, sequential, detailed, objective clinical information which would completely preclude Ms. Saffon from an attempt at return to work” is little more than a long series of unconnected adjectives.   How an absence of information could preclude Saffon from returning to work, what function the word “sequential” plays in this litany, or why Dr. Kudrow’s report and attached MRI did not amount to “objective clinical information” or was not “clear” is left to the imagination.

MetLife’s termination letter to Saffon is equally uninformative.   It notes merely that “[t]he medical information provided no longer provides evidence of disability that would prevent you from performing your job or occupation,” but does not explain why that is the case, and certainly does not engage Dr. Kudrow’s contrary assertion.   The termination letter does suggest Saffon can appeal by providing “objective medical information to support [her] inability to perform the duties of [her] occupation,” but does not explain why the information Saffon has already provided is insufficient for that purpose.

Both Saffon and Dr. Kudrow then provided additional information about Saffon’s course of treatment, including evidence that Saffon’s pain was not relieved by a variety of pain treatments.   This proved unsatisfactory to Dr. Menotti (who reviewed Saffon’s administrative appeal);  he remained unconvinced “that the claimant’s self-reported headache and chronic pain syndrome has been enough to preclude her from” working.   Dr. Menotti does not explain why he is unconvinced, nor what Saffon or Dr. Kudrow would need to do to convince him.   MetLife nevertheless relied on Dr. Menotti’s evaluation to deny Saffon’s appeal in the three paragraphs quoted above at page 1213.   The first of these paragraphs is no more intelligible than MetLife’s original denial letter, perhaps less so.   It’s even unclear whether this paragraph purports to give reasons for the denial or merely explains the standard of review that MetLife is applying.   In any event, we can make out nothing in it of use to the claimant.

The second paragraph does communicate some useful information.   In responding to Dr. Kudrow’s various reports, MetLife notes that “[i]t is not clear what Dr. Kudrow used as a basis for [his diagnosis] ․ as we’ve not been furnished with a Functional Capacity Evaluation that would objectively measure and document your current level of functional ability.”   This appears to be not only MetLife’s first (and only) response to Dr. Kudrow’s evaluation, but also the first reference in the record to the absence of a Functional Capacity Evaluation-at least, the parties have pointed us to no other reference, and we’ve not located one on our own.   Since this was MetLife’s final denial of Saffon’s claim, this information came too late to do Saffon any good.

The third paragraph contains the following self-contradictory passage:

The MRI of April 28, 2003 documents degenerative changes [in your cervical spine], but indicates this is unchanged from the prior January 12, 2002 MRI. No progression in degeneration is documented.

We do not understand how the April 28, 2003, MRI can document “degenerative changes” but remain “unchanged” from the January 12, 2002, MRI. In any event, assuming that the MRIs document no “progression in degeneration,” MetLife does not explain why further degeneration is necessary to sustain a finding that Saffon is disabled.   After all, MetLife had been paying Saffon long-term disability benefits for a year, which suggests that she was already disabled.   In order to find her no longer disabled, one would expect the MRIs to show an improvement, not a lack of degeneration.

Insofar as MetLife believed that a Functional Capacity Evaluation, or some other means of objectively testing Saffon’s ability to perform her job, was necessary for it to evaluate Saffon’s claim, it was required to say so at a time when Saffon had a fair chance to present evidence on this point.   We addressed this issue directly in Abatie:

An administrator must provide a plan participant with adequate notice of the reasons for denial, 29 U.S.C. § 1133(1), and must provide a “full and fair review” of the participant’s claim, id. § 1133(2);  see also 29 C.F.R. § 2560.503-1(g)(1), (h)(2). When an administrator tacks on a new reason for denying benefits in a final decision, thereby precluding the plan participant from responding to that rationale for denial at the administrative level, the administrator violates ERISA’s procedures.  Section 1133 requires an administrator to provide review of the specific ground for an adverse benefits decision.   By requiring that an administrator notify a claimant of the reasons for the administrator’s decisions, the statute suggests that the specific reasons provided must be reviewed at the administrative level.   Moreover, a review of the reasons provided by the administrator allows for a full and fair review of the denial decision, also required under ERISA.   Accordingly, an administrator that adds, in its final decision, a new reason for denial, a maneuver that has the effect of insulating the rationale from review, contravenes the purpose of ERISA.   This procedural violation must be weighed by the district court in deciding whether [the administrator] abused its discretion.

458 F.3d at 974 (internal quotation marks, alterations and citations omitted).

In Abatie, the beneficiary presented evidence in the district court bearing on the new issue, but the court refused to consider it. Id. We held that this was error, which must mean that a claimant in such circumstances is entitled to present evidence and to have the district court consider it.   In addition, the fact that the claims administrator presented a new reason at the last minute bears on whether denial of the claim was the result of an impartial evaluation or was colored by MetLife’s conflict of interest.   After all, coming up with a new reason for rejecting the claim at the last minute suggests that the claim administrator may be casting about for an excuse to reject the claim rather than conducting an objective evaluation.   See Langbein, supra, at 1321 (noting that UnumProvident claim administrators played on the deferential standard of review to deliberately deny meritorious claims).   This is a matter to be resolved by the district court in the first instance, and we therefore vacate the district court’s ruling and remand for this purpose.

In order to avoid unnecessary disputes on remand, we offer additional guidance for the parties and the district court:  First, the district court must give Saffon an opportunity to present evidence on the one issue that was newly raised by MetLife in its denial letter-the results of a Functional Capacity Evaluation or other objective evidence of whether she is totally disabled under the terms of the Plan. Saffon need not present the results of such an evaluation, though she should be allowed to do so if she wishes.   However, Saffon may, instead, offer evidence (from Dr. Kudrow or some other qualified expert) that such evidence is not available or not particularly useful in diagnosing her ability to return to her job.   In this regard we note our case law in Social Security disability cases, e.g., Cotton v. Bowen, 799 F.2d 1403, 1407 (9th Cir.1986) (per curiam), where we have noted that individual reactions to pain are subjective and not easily determined by reference to objective measurements.   See also Bunnell v. Sullivan, 947 F.2d 341, 348 (9th Cir.1991) (en banc) (affirming Cotton );  Fair v. Bowen, 885 F.2d 597, 601 (9th Cir.1989) (“[P]ain is a completely subjective phenomenon” and “cannot be objectively verified or measured.”).2  If MetLife is turning down Saffon’s application for benefits based on Saffon’s failure to produce evidence that simply is not available, that too may bear on the degree of deference the district court shall accord MetLife’s decision and on its ultimate determination as to whether Saffon is disabled.

Second, in determining the degree of deference to which MetLife is entitled, the district court must consider MetLife’s course of dealing with Saffon and her doctors.   We have already pointed out some of the ways in which MetLife did not meet its duty-outlined 10 years ago in Booton-to have a meaningful dialogue with its beneficiary in deciding whether to grant or deny benefits.   MetLife seems to have disregarded this responsibility in various ways-the opacity of its communications with Saffon, the fact that it communicated directly with her doctors without advising her of the communication 3 and the fact that it took various of her doctors’ statements out of context or otherwise distorted them in an apparent effort to support a denial of benefits.4  See Langbein, supra, at 1319 (noting allegations of a physician claims reviewer for UnumProvident “that he was instructed ‘to use language to support the denial of disability insurance’;  that he was not allowed ‘to request further information or suggest additional medical tests’;  and that he was ‘not supposed to help a claimant perfect a claim’ ” (alterations omitted)).

Finally, after determining the degree of deference (if any) it should accord MetLife’s decision, the district court must determine whether Saffon is permanently disabled, taking into account not only the evidence presented in the record, but such additional evidence as Saffon may present (as discussed above) and any contrary evidence MetLife may present.   If the parties wind up presenting significant new evidence in the district court, it may be impossible for the court to grant any deference to the decision of the claims administrator, as that decision will perforce have been made without taking into account the new evidence.   As a practical matter, therefore, it may be unnecessary for the district court to determine the degree of deference to give MetLife’s decision, as the admission of significant new evidence will require a de novo reconsideration of the decision in any event.



1.   Order from John Garamendi, Cal. Ins. Comm’r, to All Disability Insurers Doing Business in California 2 (Feb. 27, 2004).   MetLife chose not to request a hearing on this decision;  the Commissioner’s withdrawal therefore became effective 91 days after his Order was published.  Cal. Ins. Code § 10291.5(f).  As a result, MetLife may no longer “issue[ ] or deliver[ ]” an insurance policy like Saffon’s in California.   Id. § 10290.

2.   While the rules and presumptions of our Social Security case law do not apply to ERISA benefits determinations, see Black & Decker Disability Plan v. Nord, 538 U.S. 822, 123 S.Ct. 1965, 155 L.Ed.2d 1034 (2003), our Social Security precedents are relevant for the factual observation that disabling pain cannot always be measured objectively-which is as true for ERISA beneficiaries as it is for Social Security claimants.

3.   For example, the letter to Dr. Kudrow, giving him 10 days to respond if he disagreed with Dr. Thomas’s second review, appears not to have been sent to Saffon.   Dr. Kudrow missed the 10-day deadline and, because Saffon was not notified, she was not in a position to urge him to timely respond or ask MetLife to extend the deadline.   MetLife also seems to have communicated directly with Dr. Soderlund, Saffon’s primary care physician, who had very little to do with Saffon’s treatment for her back injury.   A doctor is not a lawyer;  though he may provide information that is relevant to a claimant’s disability, his actions (or inaction) cannot bind the client.   If a claims administrator communicates with a doctor who has treated a beneficiary, it must disclose that fact to the patient at a meaningful time.

4.   MetLife, for example, relies on Dr. Kudrow’s suggestion that Saffon try returning to work, but omits this important qualifier:  “if she feels that she is able.”   Letter from Dr. David Kudrow re:  Graciela Saffon (Jan. 29, 2003).   There is a world of difference between saying that a patient can return to work and saying she should return to work if she feels she is able to do so:  Omitting the distinction could be a sign of either inattention to important details or bad faith.   In either event, it suggests less deference should be given to the decision of the claims administrator.   See Langbein, supra, at 1333-34 (citing Brown v. Blue Cross & Blue Shield of Ala., Inc., 898 F.2d 1556, 1566 (11th Cir.1990)) (courts should “insist[ ] on de novo review despite contrary plan terms in cases involving conflicted decisionmaking”).

KOZINSKI, Chief Judge:

ERISA Long-Term Disability Procedures Have Changed.

Eight Updates for Your Disability Claims Procedures

Lois Gleason, CEBSMarch 29, 2018Disability, DOL, Employee Benefits, Regulatorydisability claims procedures

Time to get your Employee Retirement Income Security Act (ERISA) plans in shape . . . there are no more delays for required new disability claims procedures!

After postponing the original effective date of January 1, 2018, the U.S. Department of Labor (DOL) announced that new disability claims procedure regulations for ERISA-covered plans will definitely take effect April 1, 2018. Many in the benefits industry were expecting more delays or amendments or withdrawal of the new rules, but that didn’t happen.

Eight Updates for Your Disability Claims Procedures

The new rules apply to all ERISA benefit plans that base any benefit decisions on their determination of whether or not a person is disabled. This includes disability benefit plans as well as some health and retirement plans. Why health or retirement plans? Some of their plan provisions could be based on a disability determination. For example, a retirement plan that allows unreduced early distributions after determining a person is disabled is basing a benefit decision on a disability determination.

[Related: Overview of Disability Plans E-Learning Course]

Effective April 1, 2018, disability claims procedures must include the following:

The people responsible for determining whether a claimant is disabled must be impartial and independent.
Denial notices must explain completely why the benefit claim was denied.
Plans must give claimants adequate time and notice to respond to denials.
Plans must give claimants timely access to their entire claim file upon request.
Claimants must be allowed to present evidence and testimony in support of their claim during the review process.
Certain rescissions of disability benefits are treated like denials for the claims procedures process.
Plans must write notices in a culturally and linguistically appropriate manner.
Claimants may seek court review of denials if the plan does not follow the proper claims process.

DOL made similar changes to health benefit claims procedures several years ago. With the new disability claims regulations, DOL intends to similarly protect participants’ rights to fair and full disability claims reviews.

[Related: Ancillary Benefit Plans, September 24-25, 2018, Washington, D.C.]

What should benefit plans do now?

Review ERISA plan document provisions.
Review disability claims administrative procedures.
Amend plans if necessary.
Make sure your benefits administrators comply with the new requirements.
If you’re not sure whether your plans comply, it would be a good idea to consult an employee benefits attorney.

Disability claims requirements are tightening April 1, 2018. Now is the time to update your plan documents and procedures.



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.


The New ERISA Regs. Are Coming Soon

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 toll free (844) LTD-CODY. We are based in Nashville, Tennessee; however, we represent clients in many states (TN, KY, GA, AL, MS, AR, NC, SC, FL, MI, OH, MO, LA, VA, WV, 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





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News Release
U.S. Department of Labor Announces Decision on April 1, 2018, Applicability of Final Rule Amending Claims Procedure for Disability Benefit Plans

WASHINGTON, DC – The U.S. Department of Labor announced today its decision for April 1, 2018, as the applicability date for employee benefit plans to comply with a final rule under the Employee Retirement Income Security Act (ERISA) that will give America’s workers new procedural protections when dealing with plan fiduciaries and insurance providers who deny their claims for disability benefits.

The new rule ensures, for example, that disability claimants receive a clear explanation of why their claim was denied as well as their rights to appeal a denial of a benefit claim, and to review and respond to new information developed by the plan during the course of an appeal. The rule also requires that a claims adjudicator could not be hired, promoted, terminated, or compensated based on the likelihood of denying claims.

The Department announced a 90-day delay of the applicability date of the final rule – from Jan. 1, 2018, through April 1, 2018 – to give stakeholders the opportunity to submit data and information on the costs and benefits of the final rule. The Department received approximately 200 comment letters from the insurance industry, employer groups, consumer advocates, and lawyers representing disability benefit claimants, all of which are posted on the Department’s website. Only a few comments responded substantively to the Department’s request for quantitative data to support assertions that the final rule would drive up disability benefit plan costs by more than the Department had predicted, cause an increase in litigation, and consequently reduce workers’ access to disability insurance protections.

The information provided in the comments did not establish that the final rule imposes unnecessary regulatory burdens or significantly impairs workers’ access to disability insurance benefits.
EBSA News Release:
Contact Name:
Eric Holland
Phone Number:
(202) 693-4676
Release Number:

Revisiting A Key First Circuit Decision

United States Court of Appeals,First Circuit.

Diahann L. GROSS, Plaintiff, Appellant, v. SUN LIFE ASSURANCE COMPANY OF CANADA, Defendant, Appellee.
No. 12–1175.
Decided: August 16, 2013
Before THOMPSON, SELYA, and LIPEZ, Circuit Judges.Michael D. Grabhorn, with whom Jonathan M. Feigenbaum and Grabhorn Law Office, PLLC were on brief, for appellant. Joshua Bachrach, with whom Wilson, Elser, Moskowitz, Edelman & Dicker LLP was on brief, for appellee.

This case requires us to determine, inter alia, whether the “safe harbor” exception to the Employee Retirement Income Security Act of 1974 (“ERISA”) applies to the long term disability insurance policy that covers appellant Diahann Gross. The district court found that it did not. The court therefore held that Gross’s state law claims were preempted. Furthermore, it concluded that her insurer was entitled to the highly deferential “arbitrary and capricious” review prescribed for certain ERISA benefits decisions. Using that standard, the court upheld the insurer’s denial of benefits to Gross.

On appeal, Gross asserts that the district court triply erred. She first argues that the safe harbor exception applies, removing her benefits claim from the ERISA scheme. She further maintains that, even accepting that ERISA governs, the court reviewed the insurer’s decision under the wrong standard and—even under that standard—reached the wrong result.

Each of appellant’s contentions raises a substantial question. Although we agree with the district court that the safe harbor exception is inapplicable, we hold that the benefits denial was subject to de novo review. Joining several other circuits, we conclude that language requiring proof of disability “satisfactory to us” is inadequate to confer the discretionary authority that would trigger deferential review. We also conclude that the administrative record is inadequate to allow a full and fair assessment of Gross’s entitlement to disability benefits. Hence, we vacate the judgment and remand the case to the district court so that it may return the matter to Sun Life for further development of the record as described below.


In reciting the facts germane to resolution of this ERISA appeal, we draw on the record that was before the claims administrator. Buffonge v. Prudential Ins. Co. of Am., 426 F.3d 20, 22 (1st Cir.2005).

A. Background

Appellant Gross, an optician and office manager for Pinnacle Eye Care LLC in Lexington, Kentucky, was placed on disability leave in early August 2006, when she was 34 years old. She complained of severe pain, weakness and numbness in her legs and arms, and recurring headaches that had been worsening since early 2004. Gross’s treating physician concluded that she had reflex sympathetic dystrophy (“RSD”),1 fibromyalgia, migraines, and chronic fatigue. In a report signed in September 2006, the doctor wrote that Gross “cannot work.”

Gross is covered under a long term disability (“LTD”) policy that Pinnacle obtained from Medical Group Insurance Services, Inc. (“MGIS”), a company that sells employee benefit coverage provided by the United Health Services Employer’s Trust (“the Trust”). Pinnacle had obtained group policies from the Trust, through MGIS, since 2003,2 with the policies originally written by The Hartford Life & Accident Insurance Company (“Hartford”) and, beginning in 2006, by appellee Sun Life Assurance Company of Canada. Pinnacle paid 100 percent of its employees’ premiums for life and accidental dismemberment and death (“AD & D”) insurance, but the employees themselves paid for LTD coverage. Despite the payment differences, the policies were administered under the same group number, MGIS Group. No. 20178808, and all of the coverage was billed to Pinnacle in a single monthly statement.3

Shortly after leaving her job, Gross filed a claim with MGIS seeking long term disability benefits. The administrative record includes voluminous medical evidence, some submitted by Gross to support her application for benefits and some solicited by Sun Life to aid in its evaluation. Sun Life also hired an investigator to perform a background check and video surveillance on Gross. In April 2007, Sun Life notified Gross that it had denied her request for benefits because of “insufficient objective evidence to substantiate” a disability that precluded her from performing her duties at Pinnacle. In so concluding, the insurer relied, inter alia, on its video surveillance and the opinions of consulting physicians who reviewed Gross’s medical history but did not physically examine her. Gross filed an administrative appeal, which Sun Life rejected in January 2008 with the explanation that it had found “no basis on which to conclude that Ms. Gross would be unable to perform the Material and Substantial Duties of her Own Occupation .” Sun Life emphasized the discrepancy between Gross’s activities while under surveillance and her appearance and behavior during medical visits.

B. Procedural History

Gross initially filed a lawsuit against Sun Life in Kentucky state court challenging the insurer’s denial of benefits on state law grounds, but later dismissed that action without prejudice. In September 2009, she filed suit in Norfolk County Superior Court in Massachusetts, again alleging only state law causes of action.4 Sun Life removed the new action to federal district court and filed a motion to dismiss based on ERISA preemption. After the court ruled in Sun Life’s favor, Gross amended her complaint to add claims under 29 U.S.C. § 1132, which, among other things, provides a cause of action for an ERISA plan participant “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).

In February 2011, Gross filed a motion asking that the district court apply de novo review in its evaluation of her ERISA claims, based on the Supreme Court’s decision in Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989). See id. at 115 (stating that the default standard for ERISA claims is de novo). The court denied the motion, and cross motions for summary judgment followed. On January 6, 2012, the district court granted summary judgment for Sun Life and denied Gross’s parallel motion. The court held that Sun Life’s decision to deny benefits was not arbitrary and capricious, and thus complied with ERISA’s requirements. In so ruling, the court noted that plan administrators “ ‘are not obligated to accord special deference to the opinions of treating physicians,’ “ Gross v. Sun Life Assurance Co. of Canada, No. 09–11678–RWZ, 2012 WL 29061, at *4 (D.Mass. Jan.6, 2012) (quoting Black & Decker Disability Plan v. Nord, 538 U.S. 822, 825, 123 S.Ct. 1965, 155 L.Ed.2d 1034 (2003)), and that “even ‘sporadic surveillance capturing limited activity’ may be used to uphold termination of benefits, particularly where videos show plaintiff engaging in activities that specifically contradict her claims as to ‘how she spent her time and what [actions] she could tolerate,’ “ id. at *5 (quoting Maher v. Mass. Gen. Hosp. Long Term Disability Plan, 665 F.3d 289, 295 (1st Cir.2011)).

On appeal, Gross asserts that the district court incorrectly found that: (1) her long term disability policy was part of an ERISA plan; (2) the plan gave Sun Life discretionary authority to make claims decisions, thus allowing only arbitrary and capricious review of the insurer’s rejection of benefits; and (3) Sun Life permissibly exercised its discretion in denying benefits to her. We begin as we must with Gross’s contention that her claims do not fall under ERISA.


A finding that ERISA governs a benefits plan typically will impact a plaintiff’s appeal of her insurer’s denial of benefits in ways that will make that challenge more difficult. See Johnson v. Watts Regulator Co., 63 F.3d 1129, 1131–32 (1st Cir.1995). The application of ERISA triggers preemption of state-law principles, see 29 U.S.C. § 1144(a), which “may cause potential state-law remedies to vanish, or may change the standard of review, or may affect the admissibility of evidence, or may determine whether a jury trial is available.” Watts Regulator, 63 F.3d at 1131–32 (citations omitted); see also Aetna Health Inc. v. Davila, 542 U.S. 200, 215, 124 S.Ct. 2488, 159 L.Ed.2d 312 (2004) (“The limited remedies available under ERISA are an inherent part of the ‘careful balancing’ between ensuring fair and prompt enforcement of rights under a plan and the encouragement of the creation of such plans.” (quoting Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 55, 107 S.Ct. 1549, 95 L.Ed.2d 39 (1987)). Gross’s vigorous opposition to applying ERISA to her claim is therefore unsurprising.

With exceptions not pertinent here, ERISA applies to “any employee benefit plan if it is established or maintained ․ by any employer engaged in commerce or in any industry or activity affecting commerce.” 29 U.S.C. § 1003(a)(1).5 We have observed that “the existence of a plan turns on the nature and extent of an employer’s benefit obligations,” Belanger v. Wyman–Gordon Co., 71 F.3d 451, 454 (1st Cir.1995), and, accordingly, the two common ways to show that a benefits decision falls outside ERISA both involve inquiry into the employer’s relationship with the benefits under scrutiny. First, the regulatory “safe harbor” provision excludes “group or group-type insurance programs” from ERISA’s oversight if they satisfy four criteria:

(1) the employer makes no contributions on behalf of its employees;

(2) participation in the program is voluntary;

(3) the employer’s sole functions are to collect premiums and remit them to the insurer, and, without endorsing the program, to allow the insurer to publicize the program to its employees; and

(4) the employer receives no consideration for its efforts, other than reasonable compensation for administrative services necessary to collect premiums.

See 29 C.F.R. § 2510.3–1(j); see also Watts Regulator, 63 F.3d at 1133.

A benefits program that fails the safe harbor test will not necessarily be deemed an ERISA plan, however. Watts Regulator, 63 F.3d at 1133. Exemption also may result from application of “the conventional tests” for determining whether ERISA governs. Id. An ERISA welfare benefit plan has “five essential constituents”:

(1) a plan, fund or program (2) established or maintained (3) by an employer or by an employee organization, or by both (4) for the purpose of providing medical, surgical, hospital care, sickness, accident, disability, death, unemployment or vacation benefits, apprenticeship or other training programs, day care centers, scholarship funds, prepaid legal services or severance benefits (5) to participants or their beneficiaries.

Wickman v. Nw. Nat’l Ins. Co., 908 F.2d 1077, 1082 (1st Cir.1990) (quoting Donovan v. Dillingham, 688 F.2d 1367, 1370 (11th Cir.1982) (en banc)). We have observed that “[t]he crucial factor in determining if a ‘plan’ has been established is whether the purchase of the insurance policy constituted an expressed intention by the employer to provide benefits on a regular and long term basis .” Id. at 1083. The inquiry is performed from the perspective of a reasonable person: “[A] ‘plan, fund or program’ under ERISA is established if from the surrounding circumstances a reasonable person can ascertain the intended benefits, a class of beneficiaries, the source of financing, and procedures for receiving benefits.” Id. at 1082 (quoting Donovan, 688 F.2d at 1373).

Thus, even if the Sun Life policy does not fall within the regulatory safe harbor, we must separately determine if it was a “plan” or “program” that was “established or maintained” by Pinnacle. Although we often start with the safe harbor inquiry, we begin here by examining whether Pinnacle’s benefits arrangement is properly classified as an ERISA plan because that sequence better fits our analysis.

A. Standard of Review

Although the district court’s refusal to remand this case to state court was a ruling on subject-matter jurisdiction engendering de novo review, see Samaan v. St. Joseph Hosp., 670 F.3d 21, 27 (1st Cir.2012); BIW Deceived v. Local S6, Indus. Union of Marine & Shipbuilding Workers of Am., 132 F.3d 824, 830 (1st Cir.1997), the underlying jurisdictional issue—whether ERISA governs the Pinnacle plan—is a mixed question of fact and law triggering scrutiny “along a degree-of-deference continuum,” Watts Regulator, 63 F.3d at 1132. Where, as here, factual questions about the plan dominate the inquiry, the clear-error standard will be our primary tool. See id. We keep in mind, however, that “the removing party bears the burden of persuasion vis-à-vis the existence of federal jurisdiction.” BIW Deceived, 132 F.3d at 831.

B. Existence of an ERISA Plan

The record demonstrates beyond debate that the “crucial factor” we identified in Wickman is satisfied here, i.e., that Pinnacle undertook to provide benefits for its employees “on a regular and long term basis.” 908 F.2d at 1083; see also, e.g., Anderson v. UNUM Provident Corp., 369 F.3d 1257, 1263 (11th Cir.2004) (“[T]he ‘established or maintained’ requirement is designed to ensure that the plan is part of an employment relationship ․ “ (alteration in original) (internal quotation marks omitted)). Pinnacle has participated in the United Health Services Employer’s Trust since at least October 2003, when the company and MGIS representatives signed a one-page “Group Benefit Summary” issued by the Trust that described the life, accidental death, and LTD coverages available to Pinnacle’s employees and their beneficiaries.6 So far as the record shows, each of those benefits has been offered to employees or provided at no cost on an ongoing basis since that time.

Gross does not address ERISA’s applicability to Pinnacle’s insurance benefits generally, but focuses instead on the LTD policy. Emphasizing that the LTD policy is the only one the employees must pay for themselves,7 she seeks to divorce that policy from any benefit “program” and have us separately evaluate whether ERISA applies to it. The district court, however, viewed the LTD policy as one part of a “comprehensive employee benefit plan.” Gross v. Sun Life Assurance Co. of Can., No. 09–11678–RWZ, 2010 WL 817409, at *2 (D.Mass. March 4, 2010). We detect no clear error in that conclusion. As detailed below, the record provides ample support for the court’s finding that Pinnacle’s package of insurance benefits constituted a unitary ERISA program.8

Significantly, the Trust identifies all of the Pinnacle employee policies by a single group number. In addition, as noted above, the Group Benefit Summary issued by the Trust referred to all of those policies. Paul Wedge, the “owner-member” of Pinnacle who signed the Summary on behalf of the employer, is noted on the document as the administrative contact, without distinction among policies. Similarly, invoices sent to Pinnacle by MGIS in 2006 list the life, AD & D, LTD, and short-term disability policies with the amounts due for each. The record also contains an “Employer’s Participation Agreement,” signed by Wedge in 2006, requesting membership in the Trust “and coverage under the Group Policies issued to the Trustees of the Trust now in effect or later modified or replaced,” again without distinction among the different types of insurance offered by the Trust.

The Trust polices have thus consistently been treated as a unit, despite their different contribution requirements. Moreover, the information provided to employees was in keeping with that approach. The record contains single-page summary fliers for the life insurance and LTD coverages that are similar in appearance, both containing the Sun Life logo in the upper right corner and both offering “Highlights” of the particular policy “for Employees of Pinnacle Eye Care, LLC.” The disability flier contains instructions on how to enroll, directs employees to return the form to their employer, and tells them that they “must elect or refuse insurance coverage within 31 days of your date of eligibility”—creating an explicit link between that form of insurance and Pinnacle notwithstanding the employer’s lack of financial involvement. The link is reinforced by the requirement that an enrolling employee acknowledge the following understanding: “I am requesting LTD coverage under a Group Insurance policy offered by my employer. This coverage will end when my employment terminates.” Yet another indicator of Pinnacle’s role is the fine print at the bottom of the flier describing the LTD coverage as a “benefit[ ] available from your employer” and advising employees that Pinnacle will provide a copy of Sun Life’s LTD booklet with complete details “[w]hen you become eligible for benefits under the plan.”

In these circumstances, we see no justification for isolating the long-term disability policy from Pinnacle’s insurance package for purposes of our ERISA inquiry. A “plan” under ERISA may embrace one or more policies, see Donovan, 688 F.2d at 1373 (noting that a benefits plan or program may consist of “a group policy or multiple policies”), quoted in Wickman, 908 F.2d at 1083, and it strikes us as both impractical and illogical to segment insurance benefits that are treated as a single group and managed together, potentially placing some under ERISA and some outside the statute’s scope. In so concluding, we join several other courts that have declined to “unbundle [ ]” a set of policies or benefits offered by an employer to its employees when evaluating whether ERISA governs. Postma v. Paul Revere Life Ins. Co., 223 F.3d 533, 538 (7th Cir.2000); see also Gaylor v. John Hancock Mut. Life Ins. Co., 112 F.3d 460, 463 (10th Cir.1997) (rejecting plaintiff’s attempt to “sever her optional disability coverage from the rest of the benefits she received through her employer’s plan”);9 Peterson v. Am. Life & Health Ins. Co., 48 F.3d 404, 407 (9th Cir.1995) (concluding that policy that did not on its own comply with ERISA requirements nonetheless fell under the statute because it “was just one component of [the] employee benefit program and ․ the program, taken as a whole, constitutes an ERISA plan”);10 Pando v. Prudential Ins. Co. of Am., 511 F.Supp.2d 732, 736 (W.D.Tex.2007) (“[W]here the employer contributes to some, but not all, benefits which arise from the employment relationship, a court will separately evaluate whether a particular policy is an ERISA plan only when it is clearly separate from the benefits plan to which the employer does contribute.”); cf. Smith v. Jefferson Pilot Life Ins. Co., 14 F.3d 562, 567 (11th Cir.1994) (rejecting plaintiff’s attempt “to sever the dependent coverage feature from the benefits package provided ․ through the Plan”).11

Having concluded that the LTD policy must be treated as part of Pinnacle’s longstanding insurance benefits program, we also conclude that a reasonable person could readily ascertain the program’s specific elements—the benefits, the class of beneficiaries, the source of funding, and procedures for obtaining benefits. See Wickman, 908 F.2d at 1082. The one-page Highlights fliers for the LTD and the combined life and AD & D insurance policies generally describe the benefits, costs, and enrollment procedure, and they direct employees to Sun Life’s detailed booklets for “complete plan details.” The life insurance flier notes that eligible employees will need to designate beneficiaries using one of two identified forms, and the LTD flier states that the benefits are “[a]vailable to all full time employees working 30 or more hours per week.”

Also in the record is an individualized LTD “Benefit Highlights” form prepared for Gross that lists pertinent details of the Sun Life policy, among them the waiting period for eligibility (“1st of the month following full-time employment”); the benefit percentage of earnings (sixty percent); the maximum monthly benefit ($9,000); and the elimination period (180 days). Sun Life’s forty-seven page LTD booklet contains instructions on filing a claim and explains the appeals process, including “your right to bring a civil action under ERISA, § 502(a) following an adverse determination on review.” See Wickman, 908 F.2d at 1083 (noting that handbook detailing ERISA rights, distributed to employees, “is strong evidence that the employer has adopted an ERISA regulated plan”); cf. Thompson v. Am. Home Assurance Co., 95 F.3d 429, 437 (6th Cir.1996) (noting, among facts undermining finding of employer endorsement, that “[t]he policy documentation ․ nowhere mentions that the policy is subject to ERISA” nor describes employee’s ERISA rights).

In combination, the documents in the record associated with Pinnacle’s employee benefits program establish all five of the constituent elements of an ERISA plan listed in Wickman: (1) a plan, (2) established and maintained (3) by an employer (4) to provide multiple types of insurance benefits (5) to employees and, in some cases, their beneficiaries.12 The materials further show that a reasonable Pinnacle employee would understand the nature of the plan, including the scope of coverage, the costs for the plan’s different components, and the claims procedures. Inescapably, Pinnacle’s arrangement with MGIS and the Trust represented a “calculated commitment to qualified employees for similar benefits regularly in the future.” Wickman, 908 F.2d at 1083. We therefore conclude that Pinnacle offered LTD benefits to its employees under a “plan” or “program” that is subject to ERISA.

C. The Safe Harbor Exception

Gross’s argument that the safe harbor exception applies depends on her assumption that the LTD policy may be examined independently from the rest of Pinnacle’s insurance benefits plan. Based on that assumption, she asserts that three of the four safe harbor requirements are clearly met: Pinnacle does not contribute to her LTD policy, her participation was voluntary, and Pinnacle did not receive any consideration in connection with the sale of the LTD policy to its employees. See Watts Regulator, 63 F.3d at 1133. She states that only the fourth requirement—that the employer’s sole functions are administrative and do not reflect endorsement of the policy—is “reasonably in dispute.”

Our rejection of Gross’s assumption that Pinnacle provided multiple, independent plans is fatal to her safe harbor argument. The exception does not apply unless all four requirements are met, id., and Pinnacle’s full funding of the life and AD & D insurance is thus sufficient to disqualify the Pinnacle plan. In addition, with respect to the “endorsement” criterion, the Pinnacle plan falls short as well. Our discussion above shows the close relationship between the LTD plan and the other Pinnacle insurance benefits, which were treated alike except for who paid the premiums. In an affidavit, Pinnacle’s Wedge stated that the employer “did not negotiate the terms of the voluntary long term disability insurance policy from Sun Life.” Although the employer did not specify the policy’s terms, MGIS’s benefits manager reported that Pinnacle did provide guidelines for eligibility, submitting “a list of eligible employees as well as class definitions, classes for each employee, plan waiting periods, and plan designs.”

Thus, eligibility for this LTD policy was not only tied to employment at Pinnacle, but Pinnacle also determined which employees had access to that benefit. Consequently, both in outward appearance and internally, Pinnacle played more than a bystander’s role concerning the LTD policy. See Watts Regulator, 63 F.3d at 1134 (linking endorsement to the employer’s “engagement in activities that would lead a worker reasonably to conclude that a particular group insurance program is part of a benefit arrangement backed by the company”); Thompson, 95 F.3d at 436 (holding that a finding of endorsement may be appropriate “where the employer plays an active role in ․ determining which employees will be eligible for coverage”); ERISA Op. Letter No. 94–26A, 1994 WL 369282, at *3 (July 11, 1994) (stating that endorsement occurs “if the [employer] engages in activities that would lead [an employee] reasonably to conclude that the program is part of a benefit arrangement established or maintained by the [employer]”).

In short, because Pinnacle’s insurance benefits program is an ERISA plan, and the safe harbor exception is inapplicable, we must determine the proper ERISA standard of review.


A. Background

The question of what standard of review is applicable to a benefits decision governed by ERISA is an issue of law that we review de novo. Maher, 665 F.3d at 291. The default standard for reviewing benefits decisions also is de novo, and plenary review is displaced only if the benefit plan gives discretionary authority to the administrator or fiduciary to determine eligibility for benefits. See Firestone, 489 U.S. at 115; Maher, 665 F.3d at 291. If the plan affords such discretion, the court applies “a deferential ‘arbitrary and capricious’ or ‘abuse of discretion’ standard.” Maher, 665 F.3d at 291 (quoting Cusson v. Liberty Life Assurance Co. of Bos., 592 F.3d 215, 224 (1st Cir.2010)).13

The district court summarily denied Gross’s motion seeking application of de novo review. Sun Life urges us to affirm that ruling, arguing that the LTD policy contains sufficiently clear language granting discretionary authority to the insurer and that Pinnacle accepted that language, and the resulting deferential review of benefits decisions, when it signed the Employer’s Participation Agreement with the Trust.14 Sun Life points specifically to two statements in the policy: “Proof [of claim] must be satisfactory to Sun Life” and “Benefits are payable when Sun Life receives satisfactory Proof of Claim.” Sun Life relies on our decision in Brigham v. Sun Life of Canada, 317 F.3d 72 (1st Cir.2003), where we accepted the view that language in a different Sun Life policy comparable to the pertinent language here constituted “an indicator of subjective, discretionary authority on the part of the administrator.” Id. at 81.

Although Sun Life is correct that the language at issue in Brigham is similar to the language now before us,15 two factors important to our decision in Brigham are absent here. First, plaintiff Brigham advocated for de novo review for the first time on appeal, having assumed throughout the district court proceedings that the arbitrary and capricious standard applied. We saw no injustice in rejecting Brigham’s belated argument based on our well established raise or waive rule, and without “undertak[ing] a thorough exploration of the issue,” in light of the “widespread acceptance” by courts at that time that the phrase “satisfactory to us” triggers discretionary review. Id. at 82.

Since our decision in Brigham, however, the precedential landscape—the second important factor—has changed. In Brigham, decided more than a decade ago, we noted the split in the circuits on whether policy provisions containing a “satisfaction” requirement were sufficient to confer discretionary authority triggering deferential review. Id. at 81–82. We reported that some circuits considered the use of “to us” after “satisfactory” to be “an indicator of subjective, discretionary authority on the part of the administrator, distinguishing such phrasing from policies that simply require ‘satisfactory proof’ of disability, without specifying who must be satisfied.” Id. at 81 (citing, inter alia, Nance v. Sun Life Assurance Co. of Can., 294 F.3d 1263, 1267–68 (10th Cir.2002); Ferrari v. Teachers Ins. & Annuity Ass’n, 278 F.3d 801, 806 (8th Cir.2002)). Only the Sixth Circuit, in an 8–6 en banc decision, had held that discretionary review is triggered by a requirement of “ ‘satisfactory proof’ without specification of who must be satisfied.” Id. at 81–82 (citing Perez v. Aetna Life Ins. Co., 150 F.3d 550, 556–58 (6th Cir.1998) (en banc)). The Second Circuit, in dicta, stood alone in suggesting that the “satisfactory to us” language might not convey discretion. Id. at 82 (citing Kinstler v. First Reliance Standard Life Ins. Co., 181 F.3d 243, 252 (2d Cir.1999)).

Although the division of opinion remains, three circuits have in the interim adopted the Second Circuit’s suggestion that the “to us” amplification on “satisfactory” is inadequate in itself to confer discretion. See Viera v. Life Ins. Co. of N.A., 642 F.3d 407, 414–417 (3d Cir.2011) (describing cases); Feibusch v. Integrated Device Tech., Inc. Emp. Benefit Plan, 463 F.3d 880, 884 (9th Cir.2006); Diaz v. Prudential Ins. Co. of Am., 424 F.3d 635, 639–40 (7th Cir.2005). In reaching that conclusion, the Seventh Circuit panel departed from its own prior precedent and thus submitted its proposed decision to all active judges before it was published. No judge requested en banc review. See Diaz, 424 F.3d at 640. On the other hand, at least one circuit has reaffirmed its earlier view that a plan requiring submission of “ ‘satisfactory proof of Total Disability to [the plan administrator]’ “ granted discretion to the administrator. See Tippitt v. Reliance Standard Life Ins., 457 F.3d 1227, 1233–34 (11th Cir.2006) (quoting Levinson v. Reliance Standard Life Ins., 245 F.3d 1321, 1324–25 (11th Cir.2001)).

The procedural backdrop of Brigham and the intervening circuit court decisions mean that the standard of review issue in this case cannot be resolved, as Sun Life cursorily asserts, on the ground that it is governed by Brigham. That decision explicitly relied on the plaintiff’s procedural default, which we declined to sidestep because of the then-current state of the law: “[W]ith the possible exception of the Second Circuit in dicta, no federal appeals court has viewed the type of language at issue in this case as inadequate to confer discretion on the plan administrator.” 317 F.3d at 82. Here, where we do not have procedural default and we do have out-of-circuit precedent rejecting the adequacy of “satisfactory to us,” our acceptance of the language in Brigham is not binding. Rather, the time is now appropriate for the “thorough exploration of the issue” that we put off in Brigham, 317 F.3d at 82.

B. The Pursuit of Clarity

We have long recognized that the threshold question in determining the standard of review is whether the provisions of the benefit plan at issue “reflect a clear grant of discretionary authority to determine eligibility for benefits.” Leahy v. Raytheon Co., 315 F.3d 11, 15 (1st Cir.2002) (emphasis added). In Leahy, for example, we observed that the “discretionary grant hardly could be clearer” where the plan documents gave the insurer “ ‘the exclusive right, in [its] sole discretion, to interpret the Plan and decide all matters arising thereunder,’ “ and further provided that the insurer’s decision “in the exercise of that authority ‘shall be conclusive and binding on all persons unless it can be shown that the ․ determination was arbitrary and capricious.’ “ Id. (alteration and omission in original); see also, e.g., Twomey v. Delta Airlines Pilots Pension Plan, 328 F.3d 27, 31 (1st Cir.2003) (giving administrative committee “ ‘such duties and powers as may be necessary to discharge its responsibilities under the Plan, including ․ decid [ing] all questions of eligibility of any Employee ․ to receive benefits,’ “ with such decisions, assuming good faith, “ ‘to be final and conclusive’ “ (first omission and alteration in original)).

The wording at issue here is obviously a far cry from the explicit provisions in Leahy and Twomey. There are no required “magic words,” however, to confer discretion, and “language that falls short of th[e] ideal” can suffice. Brigham, 317 F.3d at 81. Here, the two pertinent sentences appear in a section of the LTD insurance booklet in which a series of questions about claims procedures are asked and answered. The first three questions address how a claim is submitted. The next question asks “What is considered Proof of Claim?” The response includes one of the sentences under scrutiny:

Proof of Claim must consist of at least the following information:

-a description of the disability;

-the date the disability occurred; and

-the cause of the disability.

Proof of claim may include, but is not limited to, police accident reports, autopsy reports, laboratory results, toxicology results, hospital records, x-rays, narrative reports, or other diagnostic testing materials as required.

Proof of Claim for disability must include evidence demonstrating the disability including, but not limited to, hospital records, Physician records, Psychiatric records, x-rays, narrative reports, or other diagnostic testing materials as appropriate for the disabling condition.

Sun Life may require as part of the Proof, authorizations to obtain medical and non-medial information.

Proof of your continued disability and regular and continuous care by a Physician must be given to Sun Life within 30 days of the request for proof.

Proof must be satisfactory to Sun Life.

App. at 250 (emphasis added). The next question in sequence asks when benefits will be received, with this response: “Benefits are payable when Sun Life receives satisfactory Proof of Claim.” Id. (emphasis added).

We note initially that the second reference to satisfactory proof lacks the “to us” modifying phrase and is thus used in a way that, as we noted in Brigham, most courts consider inadequate to signify discretionary authority. See 317 F.3d at 81; see also Viera, 642 F.3d at 414. We agree, and we therefore focus on the “satisfactory to us” (here, “satisfactory to Sun Life”) formulation.

The courts deeming even the “to us” wording insufficiently explicit have offered several justifications for their conclusions. The Second Circuit observed that specifying the need to satisfy the administrator adds nothing to the obvious point that “[n]o plan provides benefits when the administrator thinks that benefits should not be paid.” Kintsler, 181 F.3d at 252. That assessment was echoed in Diaz: “All plans require an administrator first to determine whether a participant is entitled to benefits before paying them; the alternative would be to hand money out every time someone knocked on the door, which is obviously out of the question.” 424 F.3d at 637. According to these courts, there must be language that “unambiguously indicate[s] that the plan administrator has authority, power, or discretion to determine eligibility or to construe the terms of the Plan.” Feibusch, 463 F.3d at 884 (internal quotation marks omitted); see also Viera, 642 F.3d at 417 (stating that in order for a plan to be insulated from de novo review, it must reveal that the administrator “ ‘has the power to interpret the rules, to implement the rules, and even to change them entirely’ “ (quoting Diaz, 424 F.3d at 639)); Diaz, 424 F.3d at 639–40 (“[T]he critical question is whether the plan gives the employee adequate notice that the plan administrator is to make a judgment within the confines of pre-set standards, or if it has the latitude to shape the application, interpretation, and content of the rules in each case.”).

Both the Ninth and Seventh Circuits emphasized that the “satisfactory to us” construct fails to alert plan participants to the administrator’s discretion because it is ambiguous as to what must be satisfactory to Sun Life. When faced with language and context virtually identical to that before us—also in a Sun Life policy—the Ninth Circuit easily dismissed the wording as inadequate:

[T]he Sun Life policy language simply does not clearly indicate that Sun Life has discretion to grant or deny benefits. Indeed, the language makes no reference whatsoever to granting or denying benefits, and is included under the policy heading “What is considered proof of claim?” We construe ERISA policy ambiguities in favor of the insured.

Feibusch, 463 F.3d at 884. The Seventh Circuit likewise found the “satisfactory to us” phrase ambiguous, observing that,

[f]airly read, it suggests only that the plan participant must submit reliable proof of two things: continuing disability and treatment by a doctor. In short, under [the policy], the only discretion reserved is the inevitable prerogative to determine what forms of proof must be submitted with a claim—something that an administrator in even the most tightly restricted plan would have to do.

Diaz, 424 F.3d at 639; see also Viera, 642 F.3d at 417 (observing that “the only discretion reserved by this single phrase, nested within a section wholly regarding the procedural requirements for submission of a claim, is ‘the inevitable prerogative to determine what forms of proof must be submitted with a claim’ “ (quoting Diaz, supra )).16

All four courts rejecting the adequacy of “satisfactory to us” recommended the use of language that either explicitly “stat[es] that the award of benefits is within the discretion of the plan administrator or ․ is plainly the functional equivalent of such wording,” and three of the courts proposed specific language. Kinstler, 181 F.3d at 252; see also Viera, 642 F.3d at 417 (“ ‘Benefits under this plan will be paid only if the plan administrator decides in [its] discretion that the applicant is entitled to them.’ “ (quoting Herzberger v. Standard Ins. Co., 205 F.3d 327, 331 (7th Cir.2000)); Feibusch, 463 F.3d at 883 (“The plan administrator has discretionary authority to grant or deny benefits under this plan.” (internal quotation marks omitted)); Diaz, 424 F.3d at 637 (stating that “the surest way” for a plan to insulate its benefits denial from de novo review is to “includ[e] language that either mimics or is functionally equivalent” to the Herzberger language).

C. Our Conclusion

Our acknowledgment in Brigham of “an increasing recognition of the need for the clearest signals of administrative discretion” foreshadowed the insistence on “greater precision” that has surfaced in the later cases. 317 F.3d at 82. Although we refrained there from entering the discussion in light of the appellant’s procedural default, we did “wholly endorse” the Herzberger model language that the Third and Seventh Circuits have since expressly recommended. Id. at 81. Having now fully considered the issue, we agree with those courts holding that the “satisfactory to us” wording, without more, will ordinarily fail to meet the “requisite if minimum clarity” necessary to shift from de novo to deferential review. Herzberger, 205 F.3d at 331. We are persuaded primarily by the ambiguity of the phrase, which reasonably may be understood to state Sun Life’s right to insist on certain forms of proof rather than conferring discretionary authority over benefits claims. Indeed, in the present context, the language more naturally supports the former reading, as the phrase appears following a listing of the required information and appropriate types of evidence to prove a claim.17 We reiterate that no precise words are required. Yet, to secure discretionary review, a plan administrator must offer more than subtle inferences drawn from such unrevealing language. To conclude otherwise would negate our requirement of a clear grant of discretion. See Brigham, 317 F.3d at 80 (“We have ‘steadfastly applied Firestone to mandate de novo review of benefits determinations unless “a benefits plan ․ clearly grant[s] discretionary authority to the administrator.” ‘ “ (alterations in original) (quoting Terry v. Bayer Corp., 145 F.3d 28, 37 (1st Cir.1998)); Feibusch, 463 F.3d at 883 (“ ‘Neither the parties nor the courts should have to divine whether discretion is conferred. It either is, in so many words, or it isn’t.” (quoting Sandy v. Reliance Standard Life Ins. Co., 222 F.3d 1202, 1207 (9th Cir.2000)).

Two additional factors contribute to our decision. First, it is not difficult to craft clear language. The model text offered by other courts—including the wording endorsed in Brigham—demonstrates that “clear language can be readily drafted and included in policies.” Kinstler, 181 F.3d at 252; see also Feibusch, 463 F.3d at 883–84 (“[I]t is easy enough to confer discretion unambiguously if plan sponsors, administrators, or fiduciaries want benefits decisions to be reviewed for abuse of discretion.” (internal quotation marks omitted) (alteration in original)). Second, the drafters of ERISA plans have had ample time to take heed of the developing precedent rejecting the adequacy of the “satisfactory to us” language.

Indeed, Sun Life had every opportunity to avoid an adverse ruling on this issue. Our decision in Brigham, which indicated discomfort with the clarity of the “satisfactory to us” wording, made reliance on that language a risky strategy for securing discretionary review of benefits decisions. Sun Life’s relationship with the Trust began in 2006—three years after Brigham and a year after Diaz. Sun Life was also the insurer in Brigham. We see no reason why it could not have inserted more explicit language in either its policy or the summary policy booklet that it provided to Gross and the other employees covered by the Trust’s group policies.

In sum, the “satisfactory to us” language as used in the Sun Life policy insuring Gross does not state with sufficient clarity “that the plan administrator is to make a judgment largely insulated from judicial review by reason of being discretionary.” Herzberger, 205 F.3d at 332. Hence, Sun Life’s rejection of Gross’s claim for benefits is subject to de novo review.


A. Standards of Review

As with any summary judgment appeal, we review a district court’s decision on the merits of an ERISA benefits case de novo. See Kansky v. Coca–Cola Bottling Co. of New Eng., 492 F.3d 54, 57 (1st Cir.2007). Given that we play the same role as the district court in evaluating Sun Life’s denial of benefits, we have chosen not to remand to that court for application of the correct, de novo, standard for reviewing Sun Life’s decision.

Both in the district court and on appeal, however, the summary judgment analysis in ERISA benefits cases differs from the ordinary summary judgment inquiry “in one important aspect.” Orndorf v. Paul Revere Life Ins. Co., 404 F.3d 510, 517 (1st Cir.2005). In these cases, “where review is based only on the administrative record before the plan administrator and is an ultimate conclusion as to disability to be drawn from the facts, summary judgment is simply a vehicle for deciding the issue.” Id. The non-moving party in an ERISA benefits case is thus not entitled to the usual inferences in its favor. Id.; see also Cusson, 592 F.3d at 223–24.

Where, as here, a challenged denial of benefits is subject to de novo review under ERISA because there has been no grant of discretionary authority, “our task on appeal ‘is to independently weigh the facts and opinions in the administrative record to determine whether the claimant has met [her] burden of showing that [she] is disabled within the meaning of the policy.’ “ Scibelli v. Prudential Ins. Co. of Am., 666 F.3d 32, 40 (1st Cir.2012) (quoting Richards v. Hewlett–Packard Corp., 592 F.3d 232, 239 (1st Cir.2010)). In so doing, we give no deference to the administrator’s opinions or conclusions. Id.

We begin by summarizing both the evidence in the administrative record and Sun Life’s decisions rejecting Gross’s claim for benefits.

B. Gross’s Medical Evidence

1. Dr. Rita Egan

The physician who recommended that Gross stop working, Dr. Rita Egan, a rheumatologist, began treating Gross in February 2006. The doctor ordered a triple-phase bone scan to look for evidence of RSD, but the results were negative. Dr. Egan nonetheless concluded that Gross probably had the disease in her right arm, as well as other conditions that were contributing to her difficulties. For the first of three insurance-related assessments that Dr. Egan subsequently completed, the doctor prepared an Attending Physician’s Statement dated September 23, 2006, classifying Gross’s impairment level from her combination of medical problems as a “[s]evere limitation of functional capacity; incapable of minimum (sedentary[ ] ) activity.” On the line asking for “objective findings,” Dr. Egan wrote that Gross experienced “[p]ain to touch all over but [right] arm is untouchable.” The doctor did not note any mental impairment, although she had prescribed an anti-depressant to Gross in April 2006 and stated at that time that, if the drug did not work, Gross would “need[ ] to see a psychiatrist to help us with her medication.”18

In the second such statement, completed in October 2006, Dr. Egan stated that Gross’s pain had worsened over time, despite treatment, and that Gross could not sit in one place or drive for more than ninety minutes, use her right hand, or firmly grasp with her left hand. She reiterated her findings that Gross suffered from RSD, fibromyalgia, widespread pain, and fatigue. Two months later, in the third report (“Attending Physician’s Supplemental Statement”), Dr. Egan confirmed Gross’s limitations,19 adding that she could not lift more than ten pounds. The doctor described Gross’s diseases as “chronic” and stated that her condition was expected to last for her lifetime.

2. Other Medical Evaluations

In addition to her ongoing treatment with Dr. Egan, Gross consulted with several other medical practitioners. In October 2005, before she began seeing Dr. Egan, Gross was evaluated by Dr. Tarvez Tucker for complaints of headaches, neck pain, and scoliosis. Diagnostic tests showed no abnormalities, but Dr. Tucker noted her pain and weakness symptoms:

[Gross] has intractable transformed migraine, chronic daily headache, which has not been responsive to a variety of preventatives․ She also has ․ a lot of radicular upper extremity and cervical pain associated with tingling and numbness of the right arm and hand, which is worse at the end of the day. She has on examination a drift of the outstretched right upper extremity without pronation, weakness of the intrinsic hand muscles, and diminished perception of primary sensory modalities in the right arm and face.

In December, Dr. Tucker noted that her headaches had improved, but Gross reported worsening joint and muscle pain.

Dr. Egan twice referred Gross to pain management specialists. In April and May 2006, she saw Dr. William Witt, who diagnosed her with fibromyaligia, CRPS, and “probable post traumatic stress disorder” related to a history of sexual abuse.20 In May, Dr. Witt observed that “[h]er right hand continues to be reddened, somewhat swollen, and she is holding in a claw position.” He deferred medical intervention until after a scheduled evaluation and treatment by a psychologist,21 but there is no indication in the record that such an evaluation took place.22 The following year, in March 2007, Gross saw Dr. Fred Coates, who joined the chorus of doctors who diagnosed her with fibromyalgia and either RSD or CRPS. Dr. Coates observed that she was “showing signs of severe pain while seated,” and further noted that her right arm hung “limply at her side.” He described her right hand as “red, slightly swollen, cool to the touch and sweating.” He also recommended psychiatric or psychological counseling and treatment.

Meanwhile, in January 2007, Gross underwent a functional capacity evaluation (“FCE”) to determine her physical capabilities. The physical therapist who performed the evaluation offered a “[p]rimary” diagnosis of CRPS or RSD, and a “[s]econdary” diagnosis of fibromyalgia. He reported swelling of her right hand, as well as a “shiny” appearance, perspiration, and “increased temperature to touch vs. the left.” The report identifies a number of “key limitations” in Gross’s physical abilities, including lack of functional use of her right arm, poor standing balance, inability to perform sustained overhead activity, need for assistance or a handrail to negotiate stairs, and inability to crouch, kneel, squat or crawl. The document also lists numerous medications that Gross reported using on a daily basis: Wellbutrin, Duragesic patches, Klonipin, Tizanadine, Lortab, Ambien CR, Valtrex, Estrostep FE, Senokot, Tylenol Rapid Release, Excedrin Tension Headache, and Phaxyme. The FCE concludes that Gross

does not present at a functional level that could maintain sustained work activity. Her overall level of physical activity is well below the sedentary level category based upon the frequent position change requirement, lack of bilateral activity ability, and short length of time able to perform activity. Unless there is a significant change in her current level of activity, it is not known what form of employment this client would be able to obtain.

C. Surveillance Evidence

Sun Life supplemented the medical evidence by arranging for nine days of video surveillance of Gross during November 2006 and in January and February 2007. The investigator’s written reports reveal little activity by Gross during most of the surveillance days, with three exceptions. First, on November 9, 2006, shortly after dropping off a teenager believed to be her stepdaughter at school, Gross was observed driving for about an hour and a half to her mother’s home, with a brief stop at a rest area along the way. Second, during the evening of January 11, 2007, Gross drove a short distance with her stepdaughter to a Kmart, where she was observed bending down toward lower-level shelves, extending her arms above her head to retrieve items, and kneeling to examine other items. Third, on February 21, after receiving a phone call that her mother had been admitted to the hospital with chest pain, Gross drove to a gas station, pumped gas using her right hand, and then drove for two hours to the hospital, with a brief stop halfway through the trip. About two hours later, she left the hospital and drove home.23

The surveillance reports showed inconsistencies in Gross’s stamina and physical abilities. On multiple occasions, she was seen limping, but also was twice described as “jogging” a few steps. On November 7, for example, Gross left home with her husband at 7:17 AM to vote at a local elementary school, returned home at 7:34 AM, and then departed again with her stepdaughter at 8:21 AM for an apparent appointment at a nearby office building. When they returned home at 9:27 AM, Gross appeared to be limping. The investigator remained on the scene, but observed no further activity before his departure at about 4 PM. Two days later, the investigator reported that Gross “jogged down the sidewalk” to her car before driving her stepdaughter to school.

D. The Independent Medical Examination (“IME”)

On February 22, 2007, the last day of video surveillance and the day after Gross had driven to the hospital to see her mother, an IME was conducted at Sun Life’s request by a neurologist, Dr. Rukmaiah Bhupalam.24 The investigator observed Gross walk with a limp as she left home that morning for the appointment and, when she emerged from the doctor’s office more than four hours later, she was seated in a wheelchair pushed by her husband. Once they reached home, Gross’s husband opened the car door for her, though she stood up without assistance. The couple embraced before walking arm-in-arm up the driveway toward the house. About halfway to the front door, Gross’s husband held on to her right arm as she walked, with a slight limp, the remaining distance.

In his initial report of the IME, dated March 19, Dr. Bhupalam stated that Gross’s husband had “to assist her to move from [a] chair to the bed as she appeared to be in significant pain and she could not use her right hand.” Gross told Dr. Bhupalam that “she is usually able to walk 6 hours after she changes her Duragesic patch [pain medication delivered through the skin], and she can function better for approximately 10 to 12 hours after that and again she goes downhill.” The doctor stated that Gross’s “main difficulty is ambulating because of pain and also use of her right hand.” He diagnosed Gross with, inter alia, chronic fibromyalgia and “probably complex regional pain syndrome,” but speculated that “emotional factors ․ could be contributing to her pain symptomatology,” and recommended that she be seen by a behavioral specialist or mental health professional. In conclusion, Dr. Bhupalam stated that Gross is “unable to return to [her] prior occupation and is totally disabled even for sedentary work even on a part time basis.”

Immediately after receiving Dr. Bhupalam’s report, Sun Life sent him copies of the video surveillance. After viewing the recordings, the physician changed his assessment:

[I]t does appear that she can function very well without any difficulty and appears neurologically normal even the day before my examination. On the day of examination she was limping even in the videotape however, this appears to be a functional component. Based on the observation in the video tape, especially on the day before, and also to previous videotapes in January and November, I do feel that she can function quite well and probably will be able to return to her previous occupation as a manager in a multi physician opthalmology and optometric office. However, a re-evaluation might be beneficial. It does appear that she can use both upper and lower extremities quite well and her gait also appears to be normal, and she does not appear to be in any pain or discomfort in the video recorded on February 21, 2007 just a day before my evaluation in the office. Even on the videos that were done in November and January, it appears that she can function quite well, based on my review of the video.

Following Dr. Bhupalam’s examination, Sun Life obtained a paper review of Gross’s medical records from another medical consultant, Dr. William Hall, who likewise noted that the surveillance videos undermined Gross’s subjective reports of pain and functional limitations.

E. Sun Life’s Benefits Decisions

In a seven-page letter dated April 23, 2007, Sun Life notified Gross that it had denied her benefits claim because of “insufficient objective evidence to substantiate” a disability that precluded her from performing her duties at Pinnacle. The letter cited to the surveillance evidence, which in Sun Life’s view demonstrated “a capacity for activity that far exceeds” the limits described in Gross’s claim forms. The insurer specifically referred to Dr. Bhupalam’s reports, and it quoted from Dr. Hall’s file review. Dr. Hall’s evaluation highlighted the absence of “[c]onsistent and abnormal objective physical and neurological findings,” other than the doctors’ reports of swelling, temperature variation, perspiration, and discoloration of her right arm. He further noted that, while Gross’s medical records “provisionally support diagnosis of RSD right arm and hand,” the surveillance video “compellingly weighs against” that diagnosis and corresponding activity restrictions.

Gross filed an appeal of Sun Life’s decision, which she supported with results of a fourth functional capacity evaluation by Dr. Egan.25 In that November 2007 report, the doctor again diagnosed CRPS in the right arm, fibromyalgia, severe migraines, and chronic fatigue, as well as depression. She observed that Gross’s right arm was colder and discolored, “as is seen in complex regional pain syndrome,” and that Gross “can hardly raise her arm.” She further reported that Gross spends most of her day in bed or on a recliner and that “[a]ctivity leads to worsening pain.” Predicting that Gross was “unlikely to improve,” the doctor summarized her conclusions as follows:

She has had symptoms for many years. No medication or other modality has made her able to function well enough to have a life at home much less at work. With these diagnoses, she is unlikely to get to the point she will be able to work.

Dr. Egan stated that Gross was limited to sitting and standing for no more than one hour per day, and that she could neither push nor lift any weight. The physician also noted that Gross’s work capacity was further limited by the effects of four prescription medications, which left her tired or with trouble thinking, or both.

Sun Life rejected the appeal on January 23, 2008. Its letter of explanation relied heavily on a report from a third-party medical consultant, who had performed a paper review of Gross’s medical file earlier that month. The physician, Dr. Alan Neuren, noted “the marked dichotomy between [Gross’s] reported appearance, behavior, and findings when seen by healthcare providers ․ compared with her appearance under surveillance,” and asserted that “[t]he only reasonable conclusion” to be drawn “is that she has deliberately embellished her symptoms to her providers for secondary gain.” Invoking the multiple medical reports that had questioned the medical support for, and thus the veracity of, Gross’s complaints, Sun Life stated that “[t]he severe restrictions and limitations, as noted by Dr. Egan on ․ September 23, 2006, are clearly not credible when viewed in light of Ms. Gross’ demonstrated functional capacity on the surveillance video.” The insurer thus found “no basis on which to conclude that Ms. Gross would be unable to perform the Material and Substantial Duties of her Own Occupation.”

F. Discussion

Gross argues primarily that Sun Life gave unjustified weight to the surveillance videotapes. She asserts that the insurer wrongly depicted the activity seen during the surveillance as inconsistent with the physical limitations determined by the physicians and physical therapist who examined her, and she emphasizes that the episodes highlighted by Sun Life constituted a small percentage of the time she was observed. With respect to the long-distance driving in particular, she objects to Sun Life’s failure to take into account—and inform its medical consultants about—her mother’s poor health and medical emergency. Sun Life, meanwhile, insists that the surveillance videotapes provide substantial evidence in support of its denial of Gross’s claim, and it highlights the absence of objective evidence in support of her proffered diagnoses and limitations.

In considering these arguments, we initially put to one side the video surveillance, considering its impact only after examining the medical evidence.

1. Medical Analysis

We have no difficulty concluding that the medical evidence in the record, if credited, is adequate to prove Gross’s entitlement to disability benefits. Her long history of migraines, extreme fatigue, and widespread muscular pain is well documented, and the progressive weakness and numbness affecting her right arm and hand are also supported by numerous medical reports. Without exception, the doctors who examined her viewed her symptoms to be consistent with RSD, CRPS, fibromyalgia, or more than one of those illnesses. Although many of Gross’s physical complaints may not be readily susceptible to objective confirmation, findings of chronic pain may not automatically be dismissed by a benefits administrator for lack of confirmable symptoms. See, e.g., Maher, 665 F.3d at 304 (Lipez, J., dissenting) (“Our court has emphasized before that in dealing with hard-to-diagnose, pain-related conditions, it is not reasonable to expect or require objective evidence supporting the beneficiary’s claimed diagnosis.”); Cusson, 592 F.3d at 227 (recognizing that “fibromyalgia is a disease that is diagnosed primarily based on a patient’s self-reported pain symptoms”); Denmark v. Liberty Life Assurance Co. of Bos., 481 F.3d 16, 37 (1st Cir.2007), vacated on other grounds, 566 F.3d 1 (1st Cir.2009) (“We have previously found it unreasonable for an insurer to require objective evidence to support a diagnosis of a condition that is not subject to verification through laboratory testing.”).

Importantly, however, the record here includes objective evidence, as well as the recognition by Sun Life’s own medical consultant, Dr. Hall, that Gross’s “musculoskeletal symptoms, as presented by her, are credible to treating and consulting physicians .” Indeed, Dr. Hall wrote that the medical records he had reviewed “support her reported subjective symptoms, and provisionally support diagnosis of RSD right arm and hand.” For example, each of the medical professionals who examined Gross found her right arm to be visibly abnormal in one or more ways, including: reddened, blue or purplish, swollen, “profuse sweating,” shiny, cool to the touch, or with “increased temperature to touch vs. the left.” Multiple doctors viewed these distortions as symptomatic of RSD or CRPS.26 In addition, the physical therapist who performed her FCE, Chris Kaczmarek, noted that the “[g]eneral muscle tone of the right upper extremity and bilateral lower extremities was ․ hypotonic.”27

Moreover, not only did the examining doctors uniformly perceive her complaints of pain and limited capacity to be credible, but Kaczmarek also reported that, when undertaking tasks for the FCE, Gross was cooperative and “willing to work to maximum abilities in all test items.” He further observed that Gross’s “perceived abilities ․ are consistent with client’s functional abilities objectively identified during the FCE.” His assessment that she “gave maximal effort on all test items” was based on his observations of “predictable patterns of movement including increased accessory muscle recruitment, counterbalancing and use of momentum, and physiological responses such as increased heart rate.” These objective indicators of effort diminish the possibility that Gross was deliberately “failing” the capacity test and lend weight to Kaczmarek’s report that Gross was “physically unable to perform” a range of tasks. Medical notes from various doctors show that her weight dropped by about thirty pounds between October 2005 and March 2007.

Gross’s good faith in describing her limitations is also reinforced by letters from her co-workers and employers—not mentioned in either of Sun Life’s denial letters—describing her persistence in continuing to work despite obvious pain and compromised physical capacity. Indeed, contrary to Sun Life’s assertion in its initial denial letter that Gross chose to stop working,28 Pinnacle’s Paul Wedge told the insurer that “[w]e stopped her from working when we received her doctor orders that she was not fit to work.” In a “To Whom It May Concern Letter” written in February 2007, the general manager of the optometry practice where Gross worked described the “steady decline in the use of her arms and legs for nearly nine months.”29 Simply put, this does not seem to be the history of a person seeking to exaggerate her illnesses to avoid working and obtain disability pay. Cf. Gannon v. Metro. Life Ins. Co., 360 F.3d 211, 213 (1st Cir.2004) (observing that claimant’s performance during FCE was inconsistent and she “did not put forth her maximum effort during the tests”).

Of course, the medical evidence is not entirely favorable to Gross. All of her diagnostic tests, including a bone scan that is sometimes used to diagnose RSD, were negative, and Dr. Bhupalam noted that “there is no definitive evidence” for that syndrome. Dr. Hall noted that neither Gross’s “symptoms nor varying right arm or hand findings explained by appropriate MRI, CT, radioisotope or electrophysiologic findings or by hematologic, metabolic, endocrinologic or renal testing.” Dr. Coates pointed, inter alia, to Gross’s report that her Fentanyl pain-relief patch inexplicably wore off “in what would normally be the middle of the dosing.” The doctors who performed physical examinations speculated that the severity of her symptoms might be attributable in part to psychological factors and recommended that she obtain counseling or behavioral treatment. See, e.g., App. at 416 (Dr. Egan, in September 2006, stating that she believes “a lot of the problem is depression” and that Gross “needs to see a psychiatrist”); id. at 394 (Dr. Coates in March 2007); id. at 448 (Dr. Witt); id. at 459 (Dr. Bhupalam). She did not do so.

Nonetheless, even with negative tests and some puzzlement over the extent of her reported pain, doctors continued to diagnose her with RSD and fibromyalgia. The negative bone scan—emphasized by Sun Life—is not decisive. A CRPS fact sheet prepared by the National Institute of Neurological Disorders and Stroke (“NINDS”), a 2007 version of which is contained in the record, reported that “CRPS is diagnosed primarily through observation of the signs and symptoms” and stated that “there is no specific diagnostic test for CRPS.” R. 03359. The NINDS fact sheet further explained:

[T]he most important role for testing is to help rule out other conditions. Some clinicians apply a stimulus (such as touch, pinprick, heat, or cold) to the area to see if it causes pain. Doctors may also use triple-phase bone scans to identify changes in the bone and in blood circulation.

Id.30 The repeated referrals to counseling also reflect common practice in treating CRPS.31

In sum, the sustained and progressive nature of Gross’s complaints, their facial credibility to the medical practitioners who personally examined her, and the objective symptoms consistent with RSD—given the absence of any method for reaching a conclusive diagnosis—support a finding of total disability. Cf. Maher, 665 F.3d at 293 n. 4 (observing that the claimant arguably would be unable “to fool so many doctors over so many years if there were little or no serious pain”). The narrative changes, however, with the addition of the surveillance evidence.

2. Surveillance Videotapes

The immediate about-face of Dr. Bhupalam, an independent medical consultant whose April 2007 report was the final medical evaluation before the initial rejection of Gross’s claim, reveals the impact of the surveillance evidence on Sun Life’s decision to deny benefits. Although Dr. Bhupalam’s examination of Gross and her medical history had led him to conclude that Gross “is totally disabled even for sedentary work even on a part time basis,” the videotapes led him to the opposite conclusion: “I do feel that she can function quite well and probably will be able to return to her previous occupation as a manager in a multi physician ophthalmology and optometric office.”

Dr. Neuren, whose paper review of Gross’s file was the final medical assessment before Sun Life’s second rejection of her claim, similarly placed substantial weight on the videotapes. He noted “the marked dichotomy between her reported appearance, behavior, and findings when seen by healthcare providers (her own treating physicians, along with Dr. Bhupalam and therapist Kaczmarek) compared with her appearance under surveillance.” Addressing the one objectively manifested symptom noted by all examiners, Dr. Neuren stated that “[t]he reported sweating, redness, etc. can be self induced and may have been in this instance.” Dr. Neuren opined that the inconsistencies between Gross’s “observed activities while under surveillance and her appearance in the physicians’ offices are ․ indicative of symptom embellishment,” and he concluded that “[i]t is obvious that there has been no loss of function.”

We have long recognized that even limited surveillance is a useful way to check the credibility of individuals who claim disability based on symptoms that are difficult to evaluate through objective tests. See, e.g., Cusson, 592 F.3d at 229 (“We have permitted ERISA plan administrators to use this type of sporadic evidence in the past.”); Denmark, 481 F.3d at 38 (recognizing that insurer could properly use an investigator’s report and photographs in making the benefits determination); Tsoulas v. Liberty Life Assurance Co., 454 F.3d 69, 80 (1st Cir.2006) (approving insurer’s reliance on both surveillance evidence and medical advice). Where the activities captured on video directly contradict a claimant’s asserted limitations, and there is no definitive evidence of a disabling condition, the surveillance alone could provide adequate support for a denial of benefits. See, e.g., Cusson, 592 F.3d at 229–30 (noting that the insurer “reached its decision not because it failed to consider the evidence in [claimant’s] favor, but because it determined that the surveillance results undermined the credibility of important portions of that evidence”); Tsoulas, 454 F.3d at 74–75 (affirming denial of benefits where claimant stated, inter alia, that she could not walk or stand without assistance and spent fourteen to eighteen hours in bed each day and surveillance showed her walking without assistance and “traveling to a hotel, a parking garage, a restaurant, a comedy club, a night club, and back to the hotel on a single day”).

Sun Life maintains that this is such a case. On this record, under a de novo standard of review, we cannot agree. In our view, the most significant incompatibilities between Gross’s reports and her observed functional capacity arise in three episodes recorded by the investigator: the two lengthy drives to see her mother, and the evening shopping excursion to Kmart in which Gross was seen in a short span of time reaching over her head, bending, and kneeling, with “no signs of guarded motion.” Without these more ambitious activities, the remainder of the observations cited by Sun Life—Gross’s jogging a few steps on two occasions, driving short distances for errands or appointments, and walking without limping or other signs of pain—could be dismissed as day-to-day variations in physical ability related, inter alia, to fluctuations in her level of fatigue and the timing of pain medications. Indeed, even the ninety-minute drive to her mother’s home on the morning of November 9, 2006 was within the limitations specified by Dr. Egan, who reported that Gross could not sit or drive for more than that amount of time. Notably, Gross stopped at a rest area one hour into the trip, and it is not known when she drove home. The investigator left while Gross was still at her mother’s home, and no surveillance took place the next day.

The trip to Kmart on January 11, which spanned an hour door-to-door in the early evening, is more at odds with Gross’s reported limitations. Though accompanied by her stepdaughter, Gross was seen reaching for an item above her head, bending down to the lower level of the shelves, and kneeling to examine other items. Once at home, Gross carried two plastic bags as well as her purse from the car to the house. All of these movements occurred with no reported hesitancy or instability. According to physical therapist Kaczmarek, however, Gross reported a week later that “she tolerates short bouts of activity for less than a few minutes,” and that she has “difficulty walking with frequent falls.” Based on his testing, Kaczmarek concluded that Gross had “[p]oor standing balance,” “[u]nstable gait pattern requiring assistance of device or hand held assistance,” and “[i]nability to get into and out of positions such as crouching, kneeling, squatting, crawling.”

The 120–mile round-trip drive on February 21 from her home to the medical center in Ashland, Kentucky, is particularly troubling. Before setting off on the trip, Gross pumped gas, “us[ing] her right hand to hold the gas nozzle in her gas tank.” She then drove for an hour before stopping at a rest area, where she was observed “walk[ing] quickly and show[ing] no signs of guarded motion.” When she exited the restroom, she was seen walking quickly to her vehicle and taking two jogging steps before entering the car. She drove for another hour to the medical center, arriving at about 1:30 PM, and two hours later made the return trip home—possibly without a rest stop along the way. Gross’s activity on this day was singled out by Dr. Bhupalam in his revised assessment of her ability to work. Her manipulation of the gas pump is especially noteworthy given her reports of pain and numbness and “little functional usage” of her right hand.

Dr. Bhupalam also noted, however, that “a re-evaluation might be beneficial”—an observation we understand to suggest that the video surveillance, while damaging to Gross, did not necessarily undermine her claim. Indeed, the record does not show that either Dr. Bhupalam or Dr. Neuren knew that Gross’s travel to the medical center in Ashland was in response to a phone call reporting that her mother had experienced a medical emergency, possibly a heart attack. Dr. Neuren, in fact, commented in his report that “[i]t is unclear who the claimant was seeing [at the medical building in Ashland] or why she would need to travel so far to be seen.” We consider knowledge of the reason for Gross’s unusual travel that day essential for any reliable appraisal of her medical condition. Individuals often rise to the occasion in the event of an emergency. Hence, on the current record, we are unable to judge whether Gross’s condition and physical limitations, as she reports them, are necessarily inconsistent with her activities that day. In context, the extra driving, the hurried movements, the pumping of gas may have been at the far edge of what she could manage with the aid of medication in the face of a family crisis.32 In addition, the pain and functional limitations observed by Dr. Bhupalam during his examination of Gross the next day might possibly have been the price she paid for those actions, supporting her claim that she could not handle such activities on a daily basis. It is also noteworthy that on February 23, two days after the trip and the day after the doctor’s visit, the investigator observed no activity by Gross.

Sun Life’s handling of the inconsistencies between the medical reports and the video surveillance—specifically its apparent failure to provide important context to Dr. Bhupalam and its internal reviewers—raises a legitimate question about whether Sun Life has made a bona fide effort to determine Gross’s capabilities. On de novo review, we have no choice but to remand. As the record now stands, we are unable to resolve the debate between the parties on the significance of the surveillance evidence. Although the medical evidence in Gross’s favor is impressive, it is not monolithic and the surveillance results diminish its force. The capabilities documented on video, particularly on January 11 and February 21, require us to look more skeptically at Gross’s self-reported complaints of constant pain, fatigue, and limited function. Yet, we are unwilling to disregard the evidence in her favor without any contextualized assessment of the most significant departures from her professed limitations. See Marantz v. Permanente Med. Grp., Inc. Long Term Disability Plan, 687 F.3d 320, 329 (7th Cir.2012) (“[T]he weight given to surveillance evidence of this type depends both on the amount and nature of the activity observed.”); Maher, 665 F.3d at 295 (same).

We recognize that Gross bears the burden to prove disability. Moreover, as Sun Life pointed out in rejecting her appeal, she did not submit a statement from her own doctor refuting Sun Life’s assertion in its original denial letter that the surveillance “show[ed] a capacity for activity that far exceeds” the limitations she claims. This omission highlights what we regard as the open question: the effect that the surveillance evidence, when viewed in context, may have on other evidence indicating disability.33

Hence, as in Maher, we cannot “say with assurance that [Sun Life] denied [Gross] benefits to which she was entitled,” but we also have doubts about Sun Life’s justification for its decision. 665 F.3d at 295. We will remand this case so that the parties can further address both the significance of the video evidence in assessing Gross’s limitations and the veracity of her self-reported and observed symptoms, particularly concerning the condition of her right arm. Cf., e.g., Buffonge, 426 F.3d at 22 (ordering remand to the claims administrator for a new review); Quinn v. Blue Cross & Blue Shield Ass’n, 161 F.3d 472, 477 (7th Cir.1998).


To recap, we hold that Pinnacle’s disability policy was a component of a benefits plan governed by ERISA and that the applicable standard of review for benefits claims under the plan is de novo. Applying that standard to the evidence currently in the record, we cannot determine whether Sun Life justifiably rejected Gross’s disability claim on the basis of the surveillance video and the likelihood of symptom embellishment, particularly relating to her right arm.

We therefore vacate the judgment appealed from and remand the case to the district court, with directions that it remand the matter to Sun Life for proceedings consistent with this opinion. The insurer, as plan administrator, will have the opportunity to address the concerns that we have identified, i.e., the significance of the video evidence in assessing Gross’s limitations and the veracity of her self-reported and observed symptoms. Gross, in turn, must be given the opportunity to respond. Before the district court enters its remand order, it should hear from the parties on whether to allow the record to be supplemented beyond those specific inquiries. We leave to the district court’s discretion whether to retain jurisdiction while the supplemental administrative process goes forward. We take no view as to the outcome of the further proceedings to be held on remand.

So ordered. Each party to bear its own costs.


1. RSD is apparently considered equivalent to complex regional pain syndrome, or “CRPS,” and we thus refer to the two conditions interchangeably.

2. The Trust provides group life, accidental death, and disability insurance.

3. The monthly statements indicate that Pinnacle arranged for short term, as well as long term, disability coverage. We are unable to determine from the record who pays for the short term coverage.

4. Gross evidently chose to file her original lawsuit in Kentucky because she lives there. After Sun Life removed that action to federal court, Gross dismissed it and filed a new complaint in the Massachusetts county where Sun Life maintains its principal United States place of business.

5. ERISA also applies to plans established or maintained by employee organizations or “organizations representing employees engaged in commerce or in any industry or activity affecting commerce.” 29 U.S.C. § 1003(a)(2).

6. The Trust also provided short-term disability coverage for Pinnacle. The “Remarks” section of the Group Benefit Summary directs the reader to “[s]ee [the] attached addendum for Short Term Disability benefits.” The addendum is not in the record.

7. As noted earlier, the record does not reveal whether Pinnacle funded its employees’ short-term disability coverage, although the district court stated that, while Gross paid her own LTD premium, Pinnacle funded “all the others.” Gross v. Sun Life Assurance Co. of Can., No. 09–11678–RWZ, 2010 WL 817409, at *1 (D.Mass. March 4, 2010).

8. Gross points to a statement by Paul Wedge of Pinnacle that the company did not intend to create an ERISA welfare benefits plan. The question, however, is not the employer’s intent vis-à-vis ERISA, but whether the employer “intended to establish or maintain a plan to provide benefits to its employees as part of the employment relationship.” Anderson, 369 F.3d at 1264; see also, e.g., Watts Regulator, 63 F.3d at 1136 n. 5 (discussing the Safe Harbor elements and noting that “this case turns on the employer’s activities, not its intentions”).

9. Gross asserts that Postma and Gaylor are distinguishable because the companies in each instance paid the premiums for all of the policies. She is correct that, in Postma, the employer took over paying the LTD premium from the employees. See 223 F.3d at 537–38. The circumstances in Gaylor are less clear. The opinion states in one place that the employer contributed part of the LTD premium “for certain employees,” 112 F.3d at 462, but elsewhere indicates that the plaintiff paid the full cost of her coverage, see id. at 463. Regardless of these distinctions, the pertinent point is that “the disability policy was part of a broader benefits package maintained by [the employer] for its employees.” Postma, 223 F.3d at 538.

10. In Peterson, the policy at issue would not on its own have qualified as an ERISA plan because coverage was provided only to a partner in a business partnership and not to any employees. See 48 F.3d at 407 (citing 29 C.F.R. § 2510.3–3(b)). We offer no view on the Peterson court’s conclusion that a policy ineligible for ERISA coverage may nevertheless be governed by the statute if it is part of an ERISA-covered employee benefit program. In a somewhat similar context—where the benefit at issue (reimbursement for educational expenses) is not among those protected by ERISA—the Eleventh Circuit held that the benefit’s inclusion in a plan providing ERISA-covered employee benefits did not bring the non-ERISA benefit within the statute’s scope. See Kemp v. IBM Corp., 109 F.3d 708, 713 (11th Cir.1997).

11. As the Eleventh Circuit noted in Smith, 14 F.3d at 567 n. 3, the Supreme Court, in a different context, has recognized the importance of treating benefits plans holistically. See Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 107–108, 103 S.Ct. 2890, 77 L.Ed.2d 490 (1983) (“The administrative impracticality of permitting mutually exclusive pockets of federal and state jurisdiction within a plan is apparent.”); see also Smith, 14 F.3d at 567 n. 3 (stating that, based on Shaw, “we may infer that, generally, ERISA plans may not be severed so that portions of them may be excluded from regulation under ERISA”).

12. An ERISA plan may be created without formal documentation. See Donovan, 688 F.2d at 1372 (noting that “[t]here is no requirement of a formal, written plan in either ERISA’s coverage section ․ or its definitions section”); see also N.E. Mut. Life Ins. Co. v. Baig, 166 F.3d 1, 5 n. 6 (1st Cir.1999) (citing Donovan ).

13. The parties’ arguments on this issue rely on the language contained in a booklet that is described therein as “intended to provide a summarized explanation of the current Group Policy Benefits.” The booklet warns that “the Group Policy is the document which forms Sun Life’s contract to provide benefits.” Because the parties do not assert otherwise, we presume that the language in the booklet and the language in the policy are the same for our purposes.

14. The Agreement states, inter alia, that “upon acceptance for participation under the policies, Participant will be bound by the terms of this Request form and Policies.”

15. To the extent it differs, the Brigham language is more expansive. The Sun Life policy there stated that the insurer “ ‘may require proof in connection with the terms or benefits of [the] Policy’ “ and further declared: “ ‘If proof is required, we must be provided with such evidence satisfactory to us as we may reasonably require under the circumstances.’ “ Brigham, 317 F.3d at 81 (alteration in original) (emphasis removed).

16. The policy at issue in Viera covered accidental death and dismemberment. The pertinent language appeared in a section labeled “Proof of Loss” and stated: “ ‘Written or authorized electronic proof of loss satisfactory to Us must be given to Us at Our office, within 90 days of the loss for which claim is made.’ “ 642 F.3d at 411. The court explained the ambiguity in the language as follows: “In other words, it is not clear whether ‘satisfactory to Us’ means ‘electronic proof of loss [in a form] satisfactory to Us’ or ‘electronic proof of loss [substantively and subjectively] satisfactory to Us.’ “ Id. at 417.

17. Although the language as used here is unquestionably ambiguous, we do not foreclose the possibility that the same phrase may be clear if used in a context where the only plausible meaning would link it to the administrator’s discretion to make eligibility determinations.

18. In notes dated September 20, 2006, Dr. Egan reported:1. Chronic migraines—a little improved with present regimen of medications.2. Widespread pain and right arm reflex sympathetic dystrophy—she is doing a little better with the medications we have her on, but I think a lot of the problem is depression. It certainly is contributing to her pain. She also is not sleeping well. At this point, I am going to look into another neurosurgeon or anesthesiologist who may be able to put an implantable stimulator or consider cranial stimulation therapy, which I have been reading about with fibromyalgia, and also the patient needs to see a psychiatrist to help with a lot of issues.

19. This report varied slightly from the previous one, stating that Gross could not stand or walk for more than an hour, drive for more than ninety minutes, or sit in one place for more than two hours.

20. Among his written findings were the following:She has multiple health-related problems, various aches and pains throughout her body․․ She has definite swelling of the right hand as compared with the left. There is obviously differential sweating as well․ [Her gait] is slow and purposeful․ She has multiple tender points in all of the classic sites for fibromyalgia.

21. Dr. Witt noted that he was “very hesitant to engage in any interventional treatment or any further medical treatment ․ until we have had a chance to work with her from a behavioral standpoint which may serve several purposes ․ as this is clearly a sympathetically maintained pain.”

22. As reported in another doctor’s notes, Gross apparently explained to Dr. Egan that she could not afford to see the psychiatrist to whom she originally was referred and was to investigate other options. Dr. Egan stated in August 2006 that her scheduled appointments with a psychologist “did not work out ․ because they cancelled.” Gross was, however, treated with anti-depressants.

23. Sun Life states in its brief that Gross made the return trip without stopping. Although that may be a fair inference from the record, Gross correctly notes that the investigator did not explicitly say that she did not stop. Despite stating that he “followed [Gross] approximately the same distance back towards her residence,” he evidently lost sight of her at some point because, when he arrived at her residence, her car was already parked and she had entered her home.

24. This independent evaluation was recommended by Dr. James Sarni, a Sun Life medical consultant who had reviewed the information in Gross’s chart. Dr. Sarni noted thatthe documentation does not strongly support a diagnosis of reflex sympathetic dystrophy or complex regional pain syndrome․Therefore, it would be helpful if this patient were to be evaluated by a neurologist who would have experience in treating migraine headaches. Any neurologist should be able to comment intelligently upon the right upper extremity and whether or not they believe it is consistent with complex regional pain syndrome or RSD and what steps could be taken to both diagnose and treat it.

25. Gross submitted a forty-seven page letter to Sun Life in December 2007, which, inter alia, reviewed evidence that she previously had submitted and described the results of Dr. Egan’s most recent assessment.

26. The Mayo Clinic’s list of indicators of CRPS, which is defined as “an uncommon form of chronic pain that usually affects an arm or leg,” includes many of these qualities, including swelling of the affected area, changes in skin temperature, discoloration, and a shiny skin appearance. See Complex Regional Pain Syndrome, MayoClinic.com, www.mayoclin ic.com/health/complex-regional-pain-syndrome/DS00265 (last visited Aug. 7, 2013).

27. “Hypotonic,” in the physiological sense, is defined as “[h]aving less than the normal tone.” Random House Dictionary of the English Language (2d ed.1987) 945.

28. The pertinent paragraph in the denial letter was as follows:Therefore, it does not appear that you would be eligible for Total Disability benefits, Partial Disability benefits or benefits under the rider attached to your policy based on our thorough review of all of the medical, occupational and other information in the claim file. Rather, any loss of income appears to be as a result of a choice to stop working for your Employer and not as a result of any change in restrictions and limitations that would prevent you from performing a light occupation.

29. Gross’s boss, Mike Feeney, elaborated in his letter as follows:Countless times I spoke with Diahann about the need to take time off, to take care of herself before the job responsibilities. Stubborn is not a strong enough term each time she told me to mind my own business. She wasn’t going to give in until she absolutely had to. She never lacked in doing a great job in the office. It wasn’t until early May of 2006 when I witnessed her fall in the office, that I felt I could do something to try and help. That day after falling, she couldn’t use her legs and get up. Dr. Baier (staff Optometrist) and myself assisted her up into a chair, and I refused to take no for an answer. The two of us drove her home, helping her into her home. I did not allow her back into the office until she obtained a doctor’s note releasing her for work. She gave me that on May 10, 2006 and returned.Another letter, from Dr. Baier, noted that, in August 2006, “Ms. Gross finally succumbed to the advice of her physicians, family, friends and co-workers and terminated her employment.”

30. The current version of the fact sheet appears at http:// www.ninds.nih. gov/di sorders/reflex_sympathetic_dystrophy/detail_reflex_ sympathetic_ dystrophy.htm# 241003282 (“NINDS Fact Sheet”) (last visited Aug. 7, 2013).

31. The current NINDS fact sheet lists psychotherapy as one form of treatment for relieving the symptoms of CRPS. It states:CRPS and other painful and disabling conditions often are associated with profound psychological symptoms for affected individuals and their families. People with CRPS may develop depression, anxiety, or post-traumatic stress disorder, all of which heighten the perception of pain and make rehabilitation efforts more difficult. Treating these secondary conditions is important for helping people cope and recover from CRPS.NINDS Fact Sheet, supra.

32. Gross reported to two different doctors in March 2007 that she retained at least some use of her right arm. She told Dr. Coates that she could lift her arm slightly after changing her pain medication patch, and she told Dr. Bhupalam that she felt the “right upper extremity” is “almost useless almost 95% of the time .”

33. Relatedly, we note that Dr. Neuren’s assertion that the physical abnormalities affecting Gross’s right arm could have been self-induced is unexplained and thus provides dubious support for his conclusion that Gross likely exaggerated her symptoms. This gap, too, can be explored in future proceedings.

LIPEZ, Circuit Judge.