I’ve been away from case summaries for a bit. Going to turn that around with a recent decision in Foss v. Standard Insurance Company, Case No. 20-cv-2449, decided by the United States District Court for the District of Minnesota on August 19, 2022. Unfortunately, the Court ruled in favor of the insurance company.
Plaintiff Caroline Foss is a 37-year-old, who worked as the Assistant Director of Annual and Leadership Giving at Boston College. Defendant Standard Insurance Company (Standard) is the insurance company that issued Boston College’s long-term disability (LTD) insurance policy (the Policy) and adjudicates LTD benefits claims made by employees under the Policy.
It is always key to start with the definition of disability under the specific policy. An employee in Foss’s employment class who has a disability or is disabled is defined by the Policy as:
(1) . . . being unable due to sickness, bodily injury, or pregnancy to perform with reasonable continuity the Material Duties of your Normal Occupation; or
(2) working, but due to sickness, bodily injury, or pregnancy being unable to earn 80% or more of your Increasing Monthly Wage Base.
Under this policy, “Normal Occupation” is defined as “any employment, business, trade, or profession that involves Material Duties of the same general character as the type of occupation you are regularly performing for your Employer when Disability begins.”
Under the terms of the Policy, when determining a claimant’s “Normal Occupation,” Standard may evaluate the way an employee “perform[ed] [her] job for [her] Employer” as well as “the way this type of occupation is generally performed.”
The Policy defines “Material Duties” as “the essential tasks, functions and operations, and the skills, abilities, knowledge, training and experience, generally required by employers from those engaged in a particular occupation that cannot be reasonably modified or omitted.”
The Policy expressly provides that Standard has discretionary authority to determine whether employees insured by the Policy are entitled to benefits thereunder.
Foss applied to Standard for LTD benefits. Foss stated that the illnesses that contributed to her inability to work at her occupation were depression and anxiety. Foss explained in her LTD application that she believed her illnesses were caused by stress and burnout, and she listed the following symptoms: “muscel [sic] aches, digestive upset, memory loss, fatigue, insomnia, emotional dysregulation.”
In support of her application, Foss submitted an attending physician statement completed by a Nurse Practitioner.
Standard reviewed Foss’s medical records, including a progress note; a psychological evaluation; a behavioral health diagnostic evaluation; chiropractic treatment records; and other medical records.
Standard initially commissioned three medical professionals to review Foss’s medical records: Bo Irish, RN, BSN, MS, CPDM; Gary Nudell, M.D., Board Certified in Internal Medicine; and David Yuppa, M.D., Board Certified in Psychiatry. None of these medical professionals met with Foss.
Nurse Irish, who appears to have only focused on Foss’s physical ailments, concluded that “available medical records do not reflect the extent of physical complaints.” Nurse Irish then referred the file for an additional behavioral health review.
Dr. Nudell concluded that Foss’s medical records did not support an internal medicine diagnosis that would result in functional impairment because the impairing diagnoses appeared to be related to “behavioral/mental health,” which would have to be evaluated by a different reviewer who specialized in mental health.
Dr. Yuppa hypothesized that Foss’s diagnosis of “major depression/generalized anxiety disorder” was incorrect and that Foss would be more properly diagnosed as having an “adjustment disorder with mixed anxiety and depressed mood.” Dr. Yuppa determined that Foss’s “emotional distress is due to her workplace issues/reports of burnout.” Dr. Yuppa wrote that Foss “declined pharmacologic intervention (other than self- administered cannabis)” and that “[t]he evidence does not support psychiatric impairment/restrictions/ limitations from 6/3/2019 forward.” Dr. Yuppa asserted that, to find a qualifying impairment, the medical “records would include consistent/ongoing documentation of evidence of symptomatology such as suicidal/harmful ideation with intent/plan, poor impulse control, paranoia, psychosis, delusional thinking, disorganized thought processing, aggressive/hostile ideation/behavior, or conversely, catatonic-like or excessively withdrawn behavior (thus indicating impairment in social functioning).” Dr. Yuppa also stated that Foss’s decision to “decline pharmacological treatment for anxiety/depression . . . is not consistent with the presence of an incapacitating mood/anxiety disorder.” Dr. Yuppa suggested that Foss’s reports of not being able to carry out activities of daily living and needing her husband to dress her were undermined by Foss’s medical providers’ observations that Foss did not look disheveled or unkempt.
In light of the above reports, Standard sent a letter to Foss denying her LTD claim.
Standard concluded that the “evidence demonstrates that [Foss’s] primary impediments to [her] continued employment were directly related to [her] specific circumstances at [her] specific place of employment.” Standard explained that the Policy insures employees who are unable to perform the material duties of their normal occupation, not their specific job. Standard stated that if “there are personal difficulties that you had at a specific worksite that would prevent you from returning[,] it does not equate to you being unable to perform the occupation as a whole, given the benefit of a neutral work environment away from the particular stresses you encountered at your worksite.”
Standard concluded that there was insufficient documentation from June 3, 2019, to support the conclusion that Foss is psychologically unable to perform her normal occupation.
Foss appealed to Standard and the appeal was denied.
On December 3, 2020, Foss commenced a lawsuit, alleging that Standard’s denial of her claim for LTD benefits violates the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. §§ 1001 et seq. Foss and Standard cross-moved for summary judgment.
Neither party disputed that the Policy vested Standard with the discretion to determine eligibility and to construe the terms of the Policy. Courts “review a denial of benefits under the deferential arbitrary and capricious standard applicable to those cases in which the ERISA plan gives the administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe the terms of the plan.” The Court, therefore, reviewed Standard’s decision under the arbitrary-and- capricious standard.
Under the arbitrary-and-capricious standard of review, a court must uphold a plan administrator’s decision so long as the administrator provides a “reasonable explanation for its decision, supported by substantial evidence.” Ratliff v. Jefferson Pilot Fin. Ins. Co., 489 F.3d 343, 348 (8th Cir. 2007). Substantial evidence is “more than a scintilla but less than a preponderance.” Leonard v. Sw. Bell Corp. Disability Income Plan, 341 F.3d 696, 701 (8th Cir. 2003) (internal quotation marks omitted). The focus of a court’s analysis is whether a “reasonable person could have reached a similar decision . . . not that a reasonable person would have reached that decision.” Phillips-Foster v. UNUM Life Ins. Co. of Am., 302 F.3d 785, 794 (8th Cir. 2002) (internal quotation marks and emphasis omitted). “This highly deferential standard reflects the fact that courts are hesitant to interfere with the administration of [an ERISA] plan.” Khoury v. Grp. Health Plan, 615 F.3d 946, 952 (8th Cir. 2010) (internal quotation marks omitted). A plan administrator, however, “abuses its discretion when it ignores relevant evidence.” Willcox v. Liberty Life Assurance Co. of Bos., 552 F.3d 693, 701 (8th Cir. 2009).
The Court stated, “As Standard explained in its denial letters, the test for receiving disability benefits is not whether Foss cannot perform her specific job with her specific employer—it is whether she could not perform that category of job with any employer. That is, Standard must determine whether Foss has a disability that would preclude her from performing this category of job anywhere.”
The Court found that the record clearly establishes that Foss experienced significant mental health struggles, that Foss’s employment at Boston College exacerbated her condition, and that Foss’s condition improved, at least marginally, when Foss began treating her ADHD. However, the Court stated:
These facts notwithstanding, because this Court’s review of Standard’s denial must be “highly deferential,” Khoury, 615 F.3d at 952 (internal quotation marks omitted), and the Court must decide whether a “reasonable person could have reached a similar decision,”
Phillips-Foster, 302 F.3d at 794, the Court finds that a reasonable person could have reached a decision similar to the one which Standard reached. A reasonable person could have concluded that, although Foss’s mental health diagnoses are significant and legitimate, her diagnoses and resulting symptoms are not disabling such that she could not perform this type of job for any employer.
For this reasons, the Court concluded that Standard’s denial of benefits was not arbitrary and capricious, denied Foss’s motion for summary judgment and granted Standard’s motion for summary judgment.
A full copy of the decision is here: Foss v. Standard.
These ERISA disability cases are tough.