Case Name: Godmar v. Hewlett-Packard Company; Hewlett-Packard Company Disability Plan; Sedgwick Claims Management Services, Inc.
Date of Decision: December 9, 2015
Court: United States Court of Appeals for the Sixth Circuit, on appeal from the United States District Court for the Eastern District of Michigan.
Type of Claim: Short Term Disability.
Plan Provider: HP provides disability benefits through the Hewlett-Packard Disability Plan (the Plan), which is administered by Sedgwick Claims Management Services, Inc. (Sedgwick). That is, HP delegated to Sedgwick its “discretionary authority” to determine whether an employee is totally disabled.
Claimant’s Employer: Hewlett-Packard Company.
Claimant’s Occupation / Job Position: Godmar worked as a customer-project manager at HP.
Disabilities: On September 20, 2009, Godmar sustained traumatic injuries to his left leg in a water-skiing accident, including dislocation of his tibia and fibula, a tibia plateau fracture, a torn meniscus, a torn medial collateral ligament, a ruptured plantar fascia, a damaged Achilles tendon, a damaged thigh muscle, damaged ligaments in his ankle, and damaged peroneal, femoral, and sciatic nerves. Over the next three years, Godmar underwent nine surgeries to repair the damage, culminating in a knee-replacement arthroplasty in October 2011. Because of his numerous surgeries, Godmar was prescribed pain medication for more than two years.
Definition of Disability: In the first twenty-six weeks following the onset of an injury or sickness, an employee is eligible for short-term disability benefits if “totally disabled.” An employee qualifies as totally disabled if “unable to perform the material and essential functions” of the employee’s “usual occupation,” defined as “the customary work assigned” to the employee on the employee’s “customary schedule.”
Benefits Paid? Disability benefits were paid for approximately one month and then were terminated. The termination letter concluded that “[t]he medical documentation . . . [did] not contain objective findings to support [Godmar’s] inability to perform [his] usual and customary job duties.” The letter acknowledged that “a medical condition may exist” but stated that “there must be objective medical information to support disability benefits” under the Plan.
Procedural history: In a six-page appeal letter, Godmar addressed the findings Sedgwick cited in its decision and elaborated on the circumstances of his treatment in June and July. He explained that he was on morphine twenty-four hours per day, could no longer drive, and slept more than twenty hours per day several times per week. He also described his plan to seek professional help to address his opiate addiction.
Key Physician Opinions: During the pendency of the appeal, the claimant’s treating physician, Dr. Schwarz, sent Sedgwick a letter reiterating his support for Godmar’s disability claim and explaining that Godmar could not perform the core functions of his HP position because of his chronic pain and medication. In fact, three of Godmar’s treating physicians informed Sedgwick that Godmar could not perform his job at HP. Dr. Schwarz, his family physician, repeatedly documented pain in Godmar’s left leg and certified to Sedgwick that Godmar was totally disabled in June, July, and December 2012. Dr. Rigueras, a physiatrist, concluded that Godmar had lumbar radiculopathy, neuropathy, and knee pain, and noted in late June 2012 that Godmar could not “run, jump, [or] sit for long times.” In May 2013, Dr. Rigueras told Dr. Tran, one of the consulting physicians, that Godmar would be disabled until 2014. Dr. Rosenberg, a pain-management specialist, reported in September 2012 that Godmar had “burning, electric shock-like, sharp, stabbing, dull, and shooting” pain that was increased by “sitting, standing, physical activity, work activity, and lying down.” He diagnosed Godmar with complex regional pain syndrome and described Godmar’s symptoms as “persistent, severe, [and] disabling.” In November 2012, Dr. Rosenberg sent Sedgwick a certification that Godmar was disabled by “consistent pain in left knee and foot with muscle spasms, numbness, tingling and weakness,” as well as “increased pain with physical activity (sitting, standing).” These findings were corroborated by other treating physicians.
Sedgwick sent Godmar’s records to three physicians to conduct outside reviews. Dr. Richard Kaplan reviewed Godmar’s records from a physical medicine perspective and found that although Godmar “appear[ed] to have [a] residual clinical finding in his left lower extremity from both an orthopedic and a neurological perspective,” this limitation “would not impact [Godmar’s] usual work activities” according to his job description. Dr. Kaplan concluded that Godmar was not totally disabled. Dr. Marcus Goldman reviewed Godmar’s file from a psychiatry perspective and found that Godmar was disabled from August 15 to August 28—the period when Godmar “was actively treating in a rehabilitation facility for his history of opiod [sic] addiction and was incapable of function or working due to his confinement.” Outside this period, Dr. Goldman concluded, there were “no relevant data to support disability.” Relying on these reports, Sedgwick issued a decision on September 28 approving benefits from August 15 to August 28 and otherwise denying benefits beginning on July 2.
Sedgwick issued its final decision on June 4, 2013, concluding there was insufficient objective evidence to support Godmar’s claim of total disability after June 2012, except for the period he was at Brighton Recovery Center in August 2012. Godmar did not return to work until February 2014. Godmar brought an ERISA action to recover disability benefits, and the district court granted judgment on the administrative record to HP, the Plan, and Sedgwick. Godmar then appealed to the Sixth Circuit.
Issues: (1) Godmar first challenges Sedgwick’s decision to deny his claim after approving one month of benefits. Sedgwick’s decision was arbitrary and capricious, he argues, because it reversed the initial disability determination without evidence that his condition had improved. (2) Godmar also challenges Sedgwick’s decision-making process, particularly its reliance on a file review conducted by consulting physicians. Sedgwick’s decision was arbitrary and capricious, he argues, because Sedgwick selectively reviewed the record and improperly dismissed his limitations as subjective. (3) Whether Sedgwick’s rejection of the treating physicians’ clinical impressions mainly because they relied on Godmar’s descriptions of his pain was appropriate.
Holdings: (1)The Court disagreed: “Godmar applied for short-term disability benefits and received preliminary approval for only the first month of his claim. Sedgwick did not terminate the approved month of benefits or reverse its limited eligibility determination; rather, Sedgwick declined to approve continued benefits. … Sedgwick’s denial of benefits would be arbitrary and capricious only if it lacked a rational basis at the time of the denial, regardless of its earlier approval.” (2) The Court agreed: “We have explained that plan administrators may not engage in a “selective review of the administrative record,” by ignoring evidence of disability or giving undue weight to evidence favoring denial. When an administrator “focuse[s] on slivers of information that could be read to support a denial of coverage and ignore[s]—without explanation—a wealth of evidence that directly contradict[s] its basis for denying coverage,” the administrator’s “decision-making process is not deliberate or principled.”” (citations omitted).
The Court stated, “Dr. Goldman, Sedgwick’s psychiatric reviewer, concluded that there was no objective evidence that Godmar’s addiction issues prevented him from working until he was confined in the recovery center. But Dr. Goldman did not address the effects of Godmar’s pain medications—nor did Drs. Tran or Kaplan. Sedgwick’s final denial similarly failed to even mention the issue. Neither Sedgwick nor its consultants explained how Godmar could perform a job that required him to drive between HP and GM on a daily basis while he was prescribed a regimen of morphine that prevented him from driving. Sedgwick’s failure to address this issue counsels in favor of finding that its decision was arbitrary and capricious.” (3) Sedgwick’s rejection of the treating physicians’ clinical impressions without conducting an independent medical examination and instead relying only on a file review was error: “We have explained that there is “nothing inherently objectionable about a file review by a qualified physician in the context of a benefits determination.” … However, Sedgwick had the right to examine Godmar under the Plan, and the decision not to exercise that right “raise[s] questions about the thoroughness and accuracy of the benefits determination.”” The Court further stated, “File reviews are particularly troubling when the administrator’s consulting physicians—who have never met the claimant—discount the claimant’s limitations as subjective or exaggerated. … Thus, we have observed that “reliance on a file review may be inadequate” when “the conclusions from that review include critical credibility determinations regarding a claimant’s medical history and symptomology.”” The Court states, “And in Shaw, we observed that the administrator “should not have made a credibility determination about [the claimant’s] continuous reports of pain” without an examination, even under an objective-evidence standard. … “Because chronic pain is not easily subject to objective verification, the Plan’s decision to conduct only a file review supports a finding that the decision-making was arbitrary and capricious.” … Like the administrators in Smith and Shaw, Sedgwick decided that Godmar’s pain was subjective without examining him, and that failure weighs in favor of a determination that the denial of his claim was arbitrary and capricious.”
Summary: The Court vacated the district court’s judgment and remanded to the district court: “ On this record, we conclude that the decision to deny Godmar’s claim for short-term disability benefits beginning in July was arbitrary and capricious. First, Sedgwick’s determination that Godmar could perform his job at HP from July 2, 2012, until he entered recovery on August 15, 2012, is an unsupported interpretation of the record. Godmar’s severe pain and prescription medications prevented him from driving, a requirement of his job, and Sedgwick improperly determined that Godmar’s pain symptoms were not objective evidence of disability without a medical examination. Further, Sedgwick also failed to adequately explain why it rejected evidence of Godmar’s disability from August 29, 2012, when the records of his treating physicians were completely aligned in assessing his injuries, his pain, and his limitations, through November 5, 2012, the earliest date that Godmar’s records suggested he might not be objectively disabled. Dr. Rosenberg’s April 2013 conversation with Dr. Kaplan may have called Godmar’s disability into question beginning on some date to be determined through a “deliberate, principled reasoning process,” … but the record does not reflect such a process or determination.”