I’m pleased to report that this week’s notable decision is a firm victory in the matter of Fleming v. Unum Life Insurance Company, No. 17-01576-CJC, 2018 WL 6133859 (C.D. Cal. Nov. 20, 2018). Fleming was a former litigation attorney who was forced to stop working in 2005 from increasing pain symptoms related to spine injuries from a serious car accident several years earlier. Unum found her entitled to long-term disability benefits and paid her claim for over a decade, even at one point offering to buy-out her claim for 65% of the present value.
After experiencing payment fatigue, Unum terminated her benefits and justified the denial based on surveillance video and three paper reviews of her claim. The video surveillance showed Fleming on one day descending a flight of stairs with a trash bag (that she threw in a dumpster) in one hand and a small cooler in the other hand. She then got into her car with her mother and drove in Los Angeles for several hours in order to attend a doctor’s appointment.
Fleming appealed the denial to Unum and submitted updated medical records, a supportive treating doctor opinion letter, a Functional Capacity Evaluation, and a Cardiopulmonary Exercise Test report. She also submitted a personal statement explaining that the trash bag was light as it was filled with empty water bottles and the cooler weighed about one pound. She also explained that she was experiencing pain while driving and that she no longer drives at all at the behest of one of her doctors. After it received her appeal, Unum obtained another paper review, which unsurprisingly supported Unum’s claim termination.
On de novo review, the Court found in favor of Fleming. It noted her “voluminous file of medical records cataloging her chronic pain and physical restrictions.” Despite this, Unum and its physicians chose to put more emphasis on 15 minutes of surveillance footage, where she can be seen for only brief periods from a distance. The Court assigned “little to no weight to this surveillance footage.” The Court noted that it was not clear whether or not the reviewing physicians actually watched the surveillance footage or only read the surveillance report, which painted an incomplete picture. In addition, none of the activities seen on surveillance show that Fleming recovered or relate to her actual restrictions and limitations. To the contrary, it showed her walking gingerly down and up a flight of stairs and spending the majority of her time at home. “Unum’s assertion that Plaintiff has somehow lost credibility because she drove herself to a doctor’s appointment finds little traction with the Court.” The court found that the 15 minutes of footage from one day should not be credited over ten years of medical records.
Without the surveillance, Unum’s decision was based “entirely on cherry-picked statements” from her physicians and the paper-only reviews. The court found that each of the reviewer’s conclusions were largely dependent on the purported inconsistencies revealed by the surveillance. The paper review on appeal was done by a doctor board certified in family, occupational, and aerospace medicine, which is not “training and experience” in the fields of medicine involved in the medical judgment at issue here. In sum,
The Administrative Record contains thousands of pages documenting that pain. Over a period of almost eleven years, Fleming underwent two back surgeries, nearly weekly medical appointments, and dozens of cervical facet rhizotomies and other painful injections. Her self-reports of pain and the pain witnessed by Unum’s own interviewers have been corroborated by medical imaging and the opinions of her treating physicians. One day of surveillance footage and Unum’s physicians’ paper-only review of Fleming’s claim does not overcome the overwhelming evidence that Fleming was limited from performing the ‘material and substantial duties of [her] regular occupation.’
Id. at *10. For these reasons, the court found that Fleming met her burden of establishing her entitlement to benefits. Fleming is represented by Kantor & Kantor attorneys: Andrew Kantor, Susan Meter, and Glenn Kantor.
Below is a summary of this past week’s notable ERISA decisions by subject matter and jurisdiction.
Simonoff v. Saghafi, No. 1:17 CV 2574, 2018 WL 6018875 (N.D. Ohio Nov. 16, 2018) (Judge Donald C. Nugent). The court previously granted “Simonoff’s Motion for Mandatory Injunctive Relief, finding Plaintiff had clearly demonstrated that Mrs. Saghafi was entitled to benefits pursuant to valid QDROs issued by the Domestic Relations Court and that compliance with the QDROs was unduly delayed by the Saghafi Defendants.” The court denied attorneys’ fees, however, because the court did not find the requisite culpability or bad faith on the part of the Saghafi Defendants necessary to justify an award of attorneys’ fees.
Marx v. Baker County Medical Services, Inc., No. 3:16-CV-462-J-32MCR, 2018 WL 6078342 (M.D. Fla. Nov. 21, 2018) (Judge Timothy J. Corrigan). Though Defendants prevailed on summary judgment, the court found that Plaintiff did not litigate in bad faith and cannot satisfy a fee award. The deterrence factor is neutral and the benefit to all ERISA participants’ factor is inapplicable. After weighing the factors, the court denied Defendants’ motion for attorneys’ fees. The court taxed costs against Plaintiff but reduced costs by 50% based on Plaintiff’s financial circumstances.
Breach of Fiduciary Duty
Oriska Insurance Company v. Avalon Gardens Rehabilitation & Health Care Center, LLC, et al., No. 618CV1030DNHDEP, 2018 WL 6074693 (N.D.N.Y. Nov. 21, 2018) (Magistrate Judge David E. Peebles). In this suit by a domestic insurance company against a group of interrelated skilled nursing facilities for allegedly failing to make payments to workers’ compensation trusts in violation of RICO and ERISA, the court found that Attorney James Kernan should be removed as counsel of record for Oriska and no longer take any role in this litigation. The court determined that Attorney Kernan’s appearance in this action constitutes the “business of insurance,” for which the written consent of the NYSDFS is required pursuant to U.S.C. § 1033(e)(2) based on his prior federal conviction.
The City of Pontiac Retired Employees Association v. Schimmel, No. 12-12830, 2018 WL 6046165 (E.D. Mich. Nov. 19, 2018) (Judge Avern Cohn). In this class action lawsuit challenging the elimination of health care benefits for certain Pontiac retirees, the court granted final approval of the class action settlement. The Settlement Agreement, in part, provides that the City of Pontiac will pay an initial amount of $4,250,000, and annual amounts of up to $1,500,000, to form a trust that will constitute a Voluntary Employees’ Benefits Association under IRC § 501(c)(9) to provide retiree health benefits for class members and Plaintiffs into the future.
Disability Benefit Claims
Fleming v. Unum Life Insurance Company, No. 17-01576-CJC, 2018 WL 6133859 (C.D. Cal. Nov. 20, 2018) (Judge Cormac J. Carney). See Notable Decision summary above.
Hocheiser v. Liberty Mutual Insurance Company et al., No. 3:17-CV-6096 FLW-DEA, 2018 WL 6026818 (D.N.J. Nov. 16, 2018) (Magistrate Judge Douglas E. Arpert). In this dispute over long-term disability benefits subject to the arbitrary-and-capricious standard of review, the court denied Plaintiff’s motion to compel Liberty Life to respond to interrogatories and requests for production concerning personnel and documents Liberty relied on in terminating benefits. “In this case, Plaintiff’s allegations that a court could construe as claims of procedural irregularities do not rise to the level that warrant discovery beyond the administrative record. In the end, Plaintiff’s main contention is that Liberty either ignored or failed to give proper weight to the opinions of Plaintiff’s medical providers. Plaintiff’s allegations, without more, do not raise a reasonable suspicion of misconduct by Defendants.”
IN RE: EpiPen (Epinephrine Injection, USP) Mktg., Sales Practices & Antitrust Litig. (This Document Applies to All Cases), No. 17-MD-2785-DDC-TJJ, 2018 WL 6025607 (D. Kan. Nov. 16, 2018) (Judge Teresa J. James). The court denied non-party OptumRx’s motion seeking an order quashing Class Plaintiffs’ Rule 45(d)(3) deposition subpoena or, in the alternative, a protective order narrowing the proposed topics and extending the time for compliance, and an award of costs and expenses. In addition, the court denied Optum’s request to order Class Plaintiffs to produce in advance copies of documents it intends to use at the 30(b)(6) deposition. The court also denied Optum’s request to preclude attorneys representing plaintiffs in both this action and the Minnesota ERISA action from attending the deposition.
Exhaustion of Administrative Remedies
Traughber v. Sun Life Financial (U.S.) Services Company, Inc., No. 1:18-CV-00036-GNS, 2018 WL 6050875 (W.D. Ky. Nov. 19, 2018) (Judge Greg N. Stivers). Plaintiff alleged violations of two Kentucky laws – Kentucky Unfair Claims Settlement Practices Act and Kentucky Consumer Protection Act – in connection with Sun Life’s denial of accidental death benefits. The court found these state law claims preempted by ERISA. “While KUCSPA and KCPA might create rights and obligations by which insurers conducting business in Kentucky otherwise must abide, the claims afforded by these statutes are not independent from ERISA when a plaintiff’s claims arise from a violation of the rights and duties provided by an ERISA-governed policy.”
RMP Enterprises, LLC v. Connecticut General Life Insurance Company, No. 9:18-CV-80171, 2018 WL 6110998 (S.D. Fla. Nov. 21, 2018) (Judge Robin L. Rosenberg). The court dismissed Plaintiffs’ First Amended Complaint for failure to cure the deficiencies the court outlined in dismissing the Complaint. Specifically, the court found that Ambrosia Singer Island and Ambrosia South lack standing to assert any claims because they have not alleged any injury beyond allegations that Cigna requested medical records from them. Plaintiffs also failed to exhaust their administrative remedies because the FAC does not allege which claims were appealed, when they were appealed, and how they were appealed. And, even if they had adequately pled exhaustion, Plaintiffs fail to state a claim under ERISA 502(a)(1)(B) because they fail to identify the claims at issue and the amount they seek or sufficient facts demonstrating benefits are due. Plaintiffs also do not plausibly allege that Cigna is the proper defendant. ERISA Section 503 does not provide for a private right of action. Further, the ERISA 502(a)(3) claim fails because Plaintiffs’ allegations do not amount to a violation of the claims procedure regulations. Plaintiffs do not state a claim for penalties since they did not have the right to receive plan documents. The court dismissed the FAC with prejudice.
Statute of Limitations
Acosta v. Chimes District of Columbia, Inc., et al., No. RDB-15-3315, 2018 WL 6104736 (D. Md. Nov. 21, 2018) (Judge Richard D. Bennett). The court determined that the Form 5500s filed by Defendants contained the essential facts sufficient to support the Secretary’s claims that Defendants paid excessive fees for services. The court held “that the Secretary had actual knowledge of sufficient facts relied upon in the claims that were pleaded to trigger the three-year limitations period. The claims arising more than three years prior to the operative dates that the Defendants entered into the Tolling Agreements are time-barred.”