Case Name: Warner v. Unum Life Insurance Company
Court: United States District Court for the Northern District of Illinois
Type of Claim: Long Term Disability
Insurance Company: Unum Life Insurance Company
Claimant’s Employer: Tyson Foods, Inc.
Benefits Paid? No.
Issues: (A) “Did Unum Arbitrarily Reject Warner’s Evidence of Disability?”; and (B) “Did a Conflict of Interest Influence Unum’s Denial of Benefits?”
Holding: (A) Yes; and (B) Yes.
Summary: In Warner v. Unum Life Insurance Company, the Plaintiff Debra Warner brought an ERISA benefits action to compel Defendant Unum to pay her long-term disability and life insurance benefits that she contended she was owed under her former employer’s group plan. The parties filed cross-motions for summary judgment. The District Court granted Warner’s motion and denied Unum’s motion.
First, the Court held that Unum must be deemed to have been arbitrary and capricious because it disregarded clear precedent at its peril as a result of its failure to explain its rejection of a favorable FCE and because of its insistence on objective documentation of a disability:
As already noted, there is no basis on which to conclude (and Unum does not attempt to establish) that Warner was not actually affected by fibromyalgia, back pain, and chronic fatigue syndrome. The only question is whether these conditions rendered her unable to perform the duties of her regular occupation. As the Seventh Circuit has observed, there are no objective tests that document conditions such as fibromyalgia and chronic fatigue syndrome; they are diagnosed based upon the patient’s subjective description of the symptoms. Williams v. Aetna Life Ins. Co., 509 F.3d 317, 322 (7th Cir. 2007); Hawkins v. First Union Corp. Long–Term Disability Plan, 326 F.3d 914, 916 (7th Cir. 2003). But these conditions cannot be disregarded simply because they do not lend themselves to objective testing. Holmstrom, 615 F.3d at 769 (“[W]e have rejected as arbitrary an administrator’s requirement that a claimant prove her condition with objective data where no definitive objective test exists for the condition or its severity.”); Hawkins, 326 F.3d at 919.
That is why, in this case, the functional capacity examination is important evidence: although it cannot measure the amount of fatigue or pain an individual experiences, it can assess how much an individual’s degree of pain or fatigue limits her functional capabilities, which is something than can be objectively measured. Williams v. Aetna Life Ins. Co., 509 F.3d 317, 322-23 (7th Cir. 2007) (faulting claimant with chronic fatigue syndrome for failing to submit “an actual FCE or any measurement of specific limitations” so as to support the claimed level of functional impairment); Majeski v. Metro Life Ins. Co., 590 F.3d 478, 485 (7th Cir. 2009) (explaining that a plan may not deny benefits solely on the basis that the symptoms of the claimed disability are subjective, but it may deny benefits where the claimant fails to properly document pain-induced functional limitations). The Seventh Circuit “finds utility in functional capacity evaluations when the testing factors reports of pain into the functional assessment.” Marantz v. Permanente Medical Group, Inc. Long Term Disability Plan, 687 F.3d 320, 332 (7th Cir. 2012). In this case, the FCE does factor in Warner’s reports of pain (and Unum does not argue otherwise). Therefore, the administrator was required to explain why it rejected the FCE. See Holmstrom, 615 F.3d at 771 (7th Cir. 2010). And its explanation, even under the arbitrary and capricious standard, cannot “lack substance” or reflect “arbitrary action.” Id.
The day-long Work Well functional capacity exam that Warner underwent on December 1, 2011, was a lengthy and comprehensive battery of physical tests. See Admin. Rec. Vol. II, Dkt. # 103-4, at 1552-1577. Ultimately the FCE concluded that Warner’s regular occupation was more strenuous than she could perform, recommending that she could return to work with “job modifications” or “alternative placement.” Id. at 1553. The FCE report shows limitations on crouching, kneeling, lifting and carrying, and prolonged sitting and standing, and noted that “objective signs coincided with the client’s reports of discomfort.” Id. Particularly noteworthy is the fact that the therapist who administered the FCE expressly addressed the legitimacy of Warner’s effort in performing the various tests required, and concluded that she was not exaggerating or malingering, finding that the functional limitations noted in report were consistent with the diagnoses of low back pain, osteoarthritis, and fibromyalgia and that the objective evidence observed during the tests was consistent with Warner’s self-reported perceptions of pain.
Despite the clear importance of an FCE when a claimant suffers from fibromyalgia, chronic fatigue, or related conditions, Unum, in its denial letter, provided only a terse explanation that is plainly inadequate in the context of Warner’s claimed disability. Unum addressed none of the specifics of the FCE report, stating only that it had “noted and evaluated” the FCE findings, but went on to state “there are no exams, laboratory testing, specialty evaluation, medication changes or imaging to support the level of impairment Ms. Warner describes.” Of course there are not—the very reason an FCE was necessary was to objectively document the limitations caused by conditions that cannot themselves be substantiated with imaging and laboratory testing. See Holmstrom, 615 F.3d at 769-70. In light of the FCE, Unum’s bald statement, unsupported by any medical authority, that “[t]he level of severity Ms. Warner describes is in excess of fibromyalgia symptoms and no restrictions or limitations are supported,” was arbitrary and capricious. The FCE substantiates a level of impairment sufficient to satisfy the policy definition of “disabled” (Unum does not argue to the contrary) and, at the very least, Unum was obligated to explain why the FCE did not establish an inability to perform the job that its occupational consultant had deemed a “light” work position.
In its summary judgment briefing, Unum argues that the FCE documents only impairments caused by the injury to Warner’s back in November 2011 during physical therapy. Mem., Dkt. # 130 at 6. But nothing in the FCE itself supports this conclusion; although at the time of the exam, Warner’s chief complaint was “back pain,” there is nothing to support Unum’s current argument that all of Warner’s symptoms “related to the lower back injury” rather than her long-documented chronic back pain and fibromyalgia. This is an unconvincing post-hoc rationalization for rejecting the FCE rather than the “substantive” explanation for rejecting it in the first instance that is required by Seventh Circuit precedent; certainly Unum’s reviewing physician did not reject the FCE on that basis. To the contrary, she simply ignored it. Dr. Rodela, on whose opinion Unum relied in the administrative appeal, barely mentioned the FCE, simply noting a couple of the lifting and mobility restrictions set forth in the report without comment— which explains why Unum’s letter denying Warner’s appeal includes no substantive discussion of the report.
In any case, Unum’s focus on diagnosis—i.e., its insistence that FCE evaluated only limitations caused by the November back injury—largely misses the point. The relevance of the FCE is not to show that the limitations reported on the FCE could be isolated to any particular cause; the test measures capabilities, not pathologies. Indeed, it is doubtful that the physical therapist who administered the testing was qualified to opine on the medical cause of the limitations. The purpose of the FCE was not to determine whether Warner’s limitations were the product of osteoarthritis [footnote 4 omitted] in combination with fibromyalgia but rather to assess and document the degree of impairment—whatever its cause(s).
Whether or not osteoarthritis was contributing to Warner’s pain,5 the FCE documents functional limitations consistent with the policy definition of disabled, Unum’s own vocational consultant, Marian Pearman described the requirements of Warner’s regular occupation as a “Nurse Supervisor Occupational Health Nursing,” concluding that this “light” work in the national economy occasionally requires lifting, carrying, pushing, and pulling 20 pounds and frequently 10 pounds, as well as “walking and or standing frequently even though weight is negligible”; the job also “can include pushing and or pulling of arm and or leg controls.” There is no evidence that Unum compared this description of the physical demands of Warner’s job with her capabilities and limitations as recorded in the FCE.
In denying Warner’s appeal, Unum did not question the FCE methodology, the qualifications of the physical therapist who administering the testing, or any aspect of the examination. Nor did Unum assert, much less establish a basis to infer, that Warner was malingering or otherwise attempting to manipulate the results of the FCE—which would be a tall order in light of Bryan’s express observations to the contrary. Rather, Unum’s rationale for dismissing the FCE, as evident from Dr. Rodela’s assessment, was that the FCE recorded functional limitations caused by impairments that could not be seen or measured with objective medical tests. Thus, despite the presence of an FCE at least arguably showing disability under the regular-occupation standard, Unum’s grounds for denial come down to the absence of objective medical testing to support her subjective symptoms – even though the resulting limitations were documented. Hawkins, Holmstrom, and other Seventh Circuit precedent all forbid the denial of benefits based on this sole ground if indeed there are no applicable objective medical tests to perform.
The Court is not, as Unum suggests of Warner, “anointing FCEs as the determinative litmus test for disability” or advocating that an FCE is “the decisive test that outweighs all other evidence.” Mem., Dkt. # 130 at 5. But the Seventh Circuit has explained that “procedural reasonableness is the cornerstone of the arbitrary-and-capricious inquiry,” Majeski, 590 F.3d at 484, and the precedent requiring a proper FCE to be taken into account, and to be addressed with a substantive explanation of its purported shortcomings, is clear: “[A] plan administrator’s procedures are not reasonable if its determination ignores, without explanation, substantial evidence that the claimant has submitted that addresses what the plan itself has defined as the ultimate issue-here, whether [the claimant’s] functional limitations were objectively documented.” Id. As noted, the arbitrary and capricious standard does not allow the Court to rubber-stamp the administrator’s rejection of a disability claim; the Seventh Circuit has not hesitated to enforce the administrator’s obligation to provide reasoned decisions. E.g., Holmstrom, 615 F.3d at 772; Leger v. Tribune Co. Long Term Disability Ben. Plan, 557 F.3d 823, 835 (7th Cir. 2009); Love v. National City Corp. Welfare Benefits Plan, 574 F.3d 392, 397-98 (7th Cir. 2009). Unum disregarded clear precedent at its peril, and as a result, its failure to explain the rejection of the FCE, and its insistence on objective documentation, must be deemed to have been arbitrary and capricious.
As for the conflict of interest issue, the Court held:
[Note: this claim was not handled by the Ortiz Law Firm. It is merely summarized here for a better understanding of how Federal Courts are handling long term disability insurance claims.]
Although the Court does not believe that the inherent structural conflict of interest reaches “the vanishing level” of importance under Glenn—as far as the record shows Unum has not taken active steps to mitigate it—neither has Warner shown that increased weight should be given to the conflict due to a history of bias or the bonus compensation issue. The Court nevertheless concludes that Warner’s motion must be granted because Unum abused its discretion in denying her claim without substantively explaining its rejection of her FCE and relying exclusively on the absence of objective tests confirming her subjective symptoms.
Here is a copy of the decision in PDF: Warner v. Unum