United States District Court, W.D. Arkansas, Harrison Division
BRENDA K. MACKEY PLAINTIFF
LIBERTY LIFE ASSURANCE COMPANY OF BOSTON DEFENDANT
MEMORANDUM OPINION AND ORDER
TIMOTHY L. BROOKS JUDGE
This case comes before the Court following Liberty Life Assurance Company of Boston’s (“Liberty Life”) decision to terminate Brenda Mackey’s long-term disability benefits. The dispute arises under the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. §§ 1001 et. seq., which gives participants in an employee welfare benefit plan a cause of action “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). Ms. Mackey filed her Complaint (Doc. 1) on January 16, 2015, asking the Court to order Liberty Life to pay her the benefits to which she argues she is entitled. Liberty Life filed its Answer (Doc. 6) on February 20, 2015, generally denying the allegations against it. Ms. Mackey filed her “ERISA Brief” (Doc. 13) on May 13, 2015, and Liberty Life filed its “ERISA Brief” (Doc. 14) on June 12, 2015. The case now being ripe for decision, the Court REVERSES Liberty Life’s decision and REMANDS Ms. Mackey’s claim for further evaluation correcting the issues identified by the Court herein.
Brenda Mackey was employed as a registered nurse (“RN”) by Baxter Regional Medical Center (“BRMC”) for approximately 20 years. During the relevant portion of this time, she was enrolled in BRMC’s employee welfare benefit plan, which was underwritten and administered by Liberty Life. Following a bout with chronic knee pain, Ms. Mackey had a total knee arthroplasty on August 1, 2011. The medical experts who have treated Ms. Mackey or reviewed her files are all in material agreement that the surgery resulted in postoperative femoral nervepalsy with resulting quadriceps dysfunction. In layman’s terms, this means that Ms. Mackey suffered some nerve damage during her knee surgery, and that the nerve damage has caused her quadriceps muscle to become significantly weakened.
Ms. Mackey applied for long term disability (“LTD”) benefits pursuant to BRMC’s employee welfare benefit plan. Liberty Life approved her request, and began paying her LTD benefits on January 28, 2012. Per the benefit plan, a “Covered Person” is “Disabled” if she “is unable to perform the Material and Substantial Duties of [her] Own Occupation.” (Doc. 12-1, p. 6) (emphasis added). After 24 months, however, a “Covered Person” continues to be “Disabled” only if she “is unable to perform, with reasonable continuity, the Material and Substantial Duties of Any Occuption.” Id. (emphasis added). The benefit plan defines “Any Occupation” as “any occupation that the Covered Person is or becomes reasonably fitted by training, education, experience, age, physical and mental capacity.” Id. at 5. And, it defines “Material and Substantial Duties” as “responsibilities that are normally required to perform the Covered Person’s Own Occupation, or any other occupation, and cannot be reasonably eliminated or modified.” Id. at 8. Both parties agree that Ms. Mackey met the benefit plan’s definition of disabled during the initial 24-month period-the “Own Occupation” period. After this period ended on January 27, 2014, however, Liberty Life determined that she did not meet the “Any Occupation” definition of disabled, and terminated her benefits accordingly.
In so doing, Liberty Life relied primarily on medical information from: Ms. Mackey’s treating physician, Dr. Knox; BRMC’s Rehab Services Department; Twin Lakes Neurology; and Drs. Boswell, Pennington, and Johnson, all of whom were hired by Liberty Life to review Ms. Mackey’s medical records. Liberty Life also relied upon a report titled “Transferable Skills Analysis / Vocational Review, ” drafted by Ellen Levine, a Vocational Case Manager employed by Liberty Life. Based on these sources of information, Liberty Life sent Ms. Mackey a letter on December 16, 2013, informing her that they were terminating her LTD benefits effective January 27, 2014. Ms. Mackey requested a review of this decision. As part of the review, her complete file, including additional records received with her appeal, was reviewed by Liberty Life’s Managed Disability Services unit. The additional records included a vocational analysis performed by Tanya Owens, Ph.D., and submitted by Ms. Mackey. On July 17, 2014, Liberty Life sent a letter to Ms. Mackey’s attorney, Rick Spencer, informing him that it was affirming its decision to terminate Ms. Mackey’s benefits. Ms. Mackey timely appealed that decision to this Court.
II. LEGAL STANDARD
Generally, once a plaintiff has exhausted her administrative remedies, the Court’s function is to conduct a review of the record that was before the administrator of the plan when the claim was denied. Farfalla v. Mutual of Omaha Ins. Co., 324 F.3d 971, 974-75 (8th Cir. 2003); Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989). A denial of benefits claim under ERISA is reviewed for an abuse of discretion when “a plan gives the administrator discretionary power to construe uncertain terms or to make eligibility determinations.” King v. Hartford Life & Accident Ins. Co., 414 F.3d 994, 998-99 (8th Cir. 2005) (en banc) (citing Firestone, 489 U.S. at 111). The parties agree that the benefit plan in the instant case gives Liberty Life such discretion. Accordingly, the Court must defer to the determination made by the administrator or fiduciary unless such determination is arbitrary and capricious. Firestone, 489 U.S. at 115. “[R]eview for an ‘abuse of discretion’ or for being ‘arbitrary and capricious’ is a distinction without a difference” because the terms are generally interchangeable. Jackson v. Prudential Ins. Co. of Am., 530 F.3d 696, 701 n.6 (8th Cir. 2008), citing Schatz v. Mutual of Omaha Ins. Co., 220 F.3d 944, 946 n.4 (8th Cir. 2000).
This standard of review, “though deferential, is not tantamount to rubber-stamping the result.” Torres v. Unum Life Ins. Co. of Am., 405 F.3d 670, 680 (8th Cir. 2005). Indeed, the decision of a plan administrator may be overturned if it is not “reasonable, i.e., supported by substantial evidence.” Donaho v. FMC Corp., 74 F.3d 894, 899 (8th Cir. 1996), abrogated on other grounds by Black & Decker Disability Plan v. Nord, 538 U.S. 822 (2003). An administrator’s decision will be deemed reasonable if “a reasonable person could have reached a similar decision, given the evidence before him, not that a reasonable person would have reached that decision.” Id. (emphasis added). If a decision is supported by a reasonable explanation, it should not be disturbed, even though a different reasonable interpretation could have been made. Cash v. Wal-Mart Group Health Plan, 107 F.3d 637, 641 (8th Cir. 1997), citing Donaho, 74 F.3d at 899.
There are five factors the Court will consider to determine whether Liberty Life’s decision was reasonable:
(1) whether the administrator’s interpretation is consistent with the goals of the Plan;
(2) whether the interpretation renders any language in the Plan meaningless or internally inconsistent;
(3) whether the administrator’s interpretation conflicts with the substantive or procedural ...