Jette v. United of Omaha Life Ins. Co. ( 2021 )

United States Court of Appeals
For the First Circuit
No. 20-1713
KAREN JETTE,
Plaintiff, Appellant,
v.
UNITED OF OMAHA LIFE INSURANCE COMPANY,
Defendant, Appellee,
PRETI, FLAHERTY, BELIVEAU & PACHIOS LLP
LONG TERM DISABILITY PLAN,
Defendant.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Jennifer C. Boal, U.S. Magistrate Judge]
Before
Howard, Chief Judge,
Thompson, Circuit Judge,
and Arias-Marxuach, District Judge.*
Jonathan M. Feigenbaum, for appellant.
Brooks R. Magratten, with whom Pierce Atwood LLP was on brief,
for appellee.
* Of the District of Puerto Rico, sitting by designation.
November 10, 2021
-2-
THOMPSON, Circuit Judge. Plaintiff-appellant Karen
Jette ("Jette") participated in a long-term disability plan
("the Plan") sponsored by her employer, Preti, Flaherty, Beliveau
& Pachios LLP. Defendant-appellee United of Omaha Life Insurance
Company ("United") funds the Plan and serves as the claim
administrator. The Plan is subject to the Employee Retirement
Income Security Act ("ERISA"), 29 U.S.C. § 1001 et seq. After
United terminated Jette's disability benefits, Jette filed for an
internal appeal review. While the internal appeal was pending,
United hired a doctor to examine Jette. The doctor then sent
United a report of his findings. Despite Jette's request, United
did not give Jette a copy of the doctor's report or allow her to
respond to the report. United then upheld the termination of
benefits, relying in part on the doctor's report. Jette sought
relief in federal district court under ERISA's civil enforcement
provision, 29 U.S.C. § 1132(a)(1). She alleged that, by failing
to provide her with a copy of the doctor's report and an
opportunity to respond to it prior to the final determination on
appeal, United failed to provide her with the "full and fair
review" required by ERISA and its implementing regulation.
Additionally, she argued that United's decision to terminate her
benefits was not supported by substantial evidence in the
administrative record and thus should be overturned. After the
-3-
parties filed cross-motions for summary judgment, the district
court granted summary judgment for United, finding that United
committed no procedural violation and that substantial evidence in
the record supported United's termination of Jette's disability
benefits. This appeal ensued. Because we find that United did
not provide Jette a full and fair review of her claim, as required
under the ERISA regulation, and that Jette was prejudiced by
United's procedural violation, we vacate the entry of summary
judgment and remand the case to the district court with
instructions that it be remanded to United for a full and fair
review of Jette's claim.
I. Background
Jette worked as a legal assistant at Preti, Flaherty,
Beliveau & Pachios LLP. Her duties, which included filing, typing,
and handling case files, required her to sit "frequently to
constantly with occasional or intermittent standing/walking."
Jette had a history of back problems. In June 2012, an
MRI scan revealed congenital lumbar spinal stenosis and disc
degenerative changes at L4-L5 and L5-S1, which caused her a great
amount of leg and back pain. On November 30, 2012, after failing
to respond to conservative treatment, Jette underwent spinal
surgery. She spent several months recovering from the surgery and
returned to work in February 2013. Between March and June 2013,
-4-
Dr. Wojciech Bulczynski, Jette's orthopedic surgeon, diagnosed her
with mild radicular degenerative disease and lumbar degenerative
disc disease. Jette left work again in early July 2013, when she
re-injured her back. She received short-term disability benefits
from July 19 through October 3, 2013, due to lower back pain.
Jette then applied for long-term disability ("LTD") benefits under
the Plan, asserting that she was unable to sit or stand for more
than twenty minutes, or walk without extreme difficulty.
Dr. Bulczynski stated in Jette's application for LTD benefits that
she was limited due to lumbar degenerative disc disease to no
prolonged sitting, standing, lifting, bending, or squatting.
The Plan provides LTD benefits to participants who are
"prevented from performing at least one of the [m]aterial [d]uties
of [their] [r]egular [o]ccupation" by an injury or sickness. Under
the terms of the Plan, the ability to work on a full-time basis is
considered one of the material duties of a participant's
occupation.
Although United initially denied Jette LTD benefits, it
eventually approved such benefits in May 2014, after Jette appealed
the initial denial.1 In its review of Jette's claim on appeal,
United considered a report that Dr. Hyman Glick, an orthopedic
1United approved the benefits with a retroactive effective
date of October 3, 2013.
-5-
surgeon, prepared at United's request after reviewing Jette's
medical records. In his report dated April 21, 2014, Dr. Glick
recounted Jette's medical history, including her multiple visits
to her treating physicians, diagnoses, several MRI scans and x-
rays, physical therapy, cortisone injections, multiple
prescription medicines (including opioids), her 2012 surgery, and
a second spinal surgery that she underwent on November 8, 2013.
Dr. Glick concluded that there were no "inconsistencies in
diagnosis, treatment, and claimed restrictions and limitations,"
and that there was no "evidence of symptom magnification,
exaggeration or secondary gain." He noted, however, that he had
reviewed Jette's medical records up to December 17, 2013 and, at
only six weeks out from the November 8 surgery, Jette was not at
a "medical end result."
In early 2014,2 although Jette's condition had improved
somewhat after the second spinal surgery, she reported numbness in
her legs and complained of pain "across the lumbosacral junction"
despite taking opioids and a tranquilizing muscle-relaxing drug.
She was advised to continue physical therapy and exercise.
According to Dr. Bulczynski, she remained disabled from work.
2 Jette's ailments during this time frame were not
encompassed in United's review of Jette's claim on appeal.
-6-
In June 2014, Jette saw Dr. Marcus Yountz, a neurologist,
and reported intermittent leg weakness and pain, which Dr. Yountz
attributed to a likely chronic nerve injury and degenerative disc
disease in the lumbar region. Between July and December 2014,
Jette reported increasing back pain, numbness, and leg weakness to
Dr. Bulczynski. An MRI scan revealed degenerative changes at the
L3-L4 motion segment of her lumbar spine. Jette continued with
her prescription medicines and got an epidural steroid injection
and a sacro-iliac joint injection in December 2014. On January 8,
2015, she saw Dr. Bulczynski again and renewed her complaint of
back pain radiating to the hips and legs. On February 4, 2015,
Dr. Bulczynski completed a Physical Capacities Checklist for Jette
(a form provided by United) in which he noted her limited ability
to sit, stand, and walk, and concluded that she was unable to
work.3
On May 26, 2015, Jette saw Dr. Yountz again. He found
3 In its statement of the case, United suggests that this
checklist cannot be attributed to Dr. Bulczynski because a
physician's assistant signed it on his behalf. United provides no
support for this assertion. See Pitochelli v. Comm'r of Soc. Sec.,
No. 6:20-CV-135-DCI, 2021 WL 825089, at *4 (M.D. Fla. Mar. 4, 2021)
("The Court does not accept this argument without any authority
that stands for the proposition that an opinion does not belong to
a physician if an assistant permissibly endorses it with the
physician's name."). In any case, whether the form would be
admissible or not does not affect our conclusion that the district
court erred.
-7-
no significant signs of myelopathy4 and concluded that it was
"possible that [Jette] simply ha[d] [a] chronic injury from her
prior lumbar spondylosis."5 Dr. Yountz noted that Jette "[was]
stable but still ha[d] significant pain."
At United's request, on May 1, 2015, a nurse consultant
reviewed Jette's file (presumably in the course of ordinary
periodic reviews). She agreed with Dr. Bulczynski's February 4
findings regarding Jette's restrictions and limitations but
disagreed with his conclusion that she was unable to work.
United then hired a private investigation company to
conduct a background investigation and surveillance on Jette. As
part of its services, the company investigated Jette's online
activity and prepared a report dated May 29, 2015. According to
the report, Jette's Facebook profile indicated that she rides a
motorcycle, works at a law firm in Boston, owns a shop named
Andromeda's Alley, and is the Executive Director of Support Our
4 Myelopathy is "an injury to the spinal cord due to severe
compression." Johns Hopkins Medicine,
https://www.hopkinsmedicine.org/health/conditions-and-
diseases/myelopathy (last visited Nov. 7, 2021).
5 Lumbar spondylosis refers to "change[s] of the bones
(vertebrae) and discs of the spine. These changes are often called
degenerative disc disease and osteoarthritis." University of
Michigan Health, https://www.uofmhealth.org/health-
library/abr8401 (last visited Nov. 7, 2021).
-8-
Soldiers, Inc., a non-profit organization.6 Her store's website
indicated that the brick and mortar store closed in November 2014
due to Jette's declining health but that she continues to operate
an online store. It also said that Jette is licensed to perform
ministerial services.
The private investigation company conducted in-person
surveillance on July 11, 2015, and reported that Jette was observed
working at a motorcycle fundraiser at a local Veterans of Foreign
Wars Post from around 7:00 a.m. to 4:00 p.m. According to the
report, Jette registered motorcyclists for the event, alternating
between walking, standing, and sitting in a lawn chair throughout
the day. Jette usually used a cane and walked with a limp. The
investigator did not document Jette sitting for an extended period.
As per the Plan, United required Jette to apply for
Social Security Disability benefits. In June 2015, Jette was
awarded Social Security Disability benefits retroactively to
January 2014. She then notified United of the Social Security
determination.
Dr. Nancy Heimonen, a consulting physician for United,
conducted a medical review of Jette's file and penned a report on
November 12, 2015, in which she concluded that Jette was able to
6 The internet postings were not timestamped.
-9-
work. In her report, Dr. Heimonen outlined information gathered
from the online and in-person surveillance. According to
Dr. Heimonen, the surveillance report indicated that Jette could
alternate sitting, standing, and walking over a nine-hour period,
contradicting the limitations outlined by Dr. Bulczynski in
February. Further, Dr. Heimonen noted that the intensity of
Jette's medical care had diminished, as at the time there had been
only two medical appointments documented in 2015. Dr. Heimonen
reached the following conclusion:
Based on the currently available medical and file
information there is no evidence to support that the
insured would be unable to sustain full time primarily
seated work capacity with the above documented
[restrictions and limitations] (no lifting > 10#
occasionally and up to 10# frequently; no bending,
twisting, kneeling, crawling, climbing, squatting, or
stooping) as long as she was able to use naturally
occurring changes in occupational duties to make
postural and position changes for comfort purposes and
she works in an ergonomically appropriate environment.
The next day, Dr. Heimonen shared this conclusion with
Dr. Bulczynski in a letter. Dr. Heimonen also shared the
additional information United had gathered: Jette's participation
in the July 11th event and her online statements indicating that
she rides motorcycles, is licensed to perform ministerial
services, and runs a non-profit. Dr. Heimonen's letter asked
Dr. Bulczynski if he agreed with the following assessment:
Although [Jette]'s complaints are not in dispute, based
on the currently available medical and activity
-10-
information, it is my impression that she does not have
a physically based medical condition that would preclude
her ability to perform full time primarily seated work
with occasional standing and walking with restrictions
and limitations of no lifting >10# occasionally and up
to 10# frequently; no bending, twisting, kneeling,
crawling, climbing, squatting or stooping and as long as
she was able to use naturally occurring changes in
occupational duties to make postural and position
changes for comfort purposes in an ergonomically
appropriate environment.
Do you agree? Yes _____ No _____.
Dr. Bulczynski was asked to complete some follow-up questions if
he disagreed with the statement. Dr. Bulczynski marked "Yes" on
December 23, 2015, indicating he agreed with Dr. Heimonen's
statement without providing any additional information.
United terminated Jette's LTD benefits effective January
15, 2016. In its letter notifying the termination of benefits,
United provided an extensive list of documents on which it relied
in reaching this conclusion, including "[o]bservation of
activities" on July 11, 2015, medical review performed by
Dr. Heimonen, letter to Dr. Bulczynski dated November 13, 2015,
and Dr. Bulczynski's response dated December 23, 2015. The letter
stated that "[b]ased on her paucity of ongoing medical care, and
the activities documented by direct observation and internet
postings, it is unclear what precludes [Jette] from performing her
primarily seated occupational duties."7
7 United's letter clarified that, although United
-11-
Jette appealed the termination of benefits on July 15,
2016. With her appeal, Jette submitted additional information,
including updated medical records, affidavits from herself, a
friend, her mother, and stepfather,8 and a Patient's Personal
Activities Assessment.9 She pointed to the approval of her Social
acknowledged that Jette had been awarded Social Security
Disability benefits, "[t]he information relied upon [by United] to
reach [its] determination was not available to the Social Security
Administration at the time their decision was made."
8 In her affidavit, Jette stated that she "cannot perform
[her] occupation at all, as [she is] unable to sit in one position,
stand, stoop, bend, or walk for more than 20 minutes at a time and
spend[s] much of [her] day laying down with [her] knees raised as
this is the only position where [she] find[s] relief." She
explained that she cannot do most household activities on her own
and often relies on the assistance of her grandson, and that she
uses a cane, walker, wheelchair, or service dog "to walk and/or
stand." Further, Jette stated that she has not ridden a motorcycle
in more than five years. Finally, she clarified that her non-
profit work generally involves 1-2 hours of work per month and
that it took her a week of complete rest to recover from the annual
fundraiser of July 11, 2015.
The other affidavits were consistent with Jette's description
of her condition, bolstering her statements that she is unable to
sit upright for more than a few minutes and that she needs help
around the house. The affidavits also stated that Jette struggled
to recover from the fundraiser. Each person also contrasted
Jette's current condition to her active lifestyle and high energy
level prior to the onset of her back pain and surgeries.
9 The Patient's Personal Activities Assessment contained much
of the same information that she explained in the affidavit: that
she could not remain in the same position for more than twenty
minutes and had severe pain which inhibited her daily activities.
Jette's long-time primary care physician, Dr. Henry D'Angelo,
indicated the assessment accurately reflected her limitations.
-12-
Security Disability application as further support for her claim
for LTD benefits. Lastly, Jette requested that United promptly
disclose any new medical opinions generated during the appeal
process and provide her thirty days to respond prior to upholding
any adverse benefit determination so that she could have a "full
and fair review" of her claim.
United responded to Jette's appeal letter on July 21,
2016. In its response, United stated that it was "not required to
provide [Jette] with a copy of a medical or vocational consultant's
report prior to making an appeal decision on the claim." In
United's view, "ERISA regulations require[d] [it] to provide
re[lev]ant claim information prior to an appeal, and after [its]
decision on appeal is rendered, but not during the appeal process."
Accordingly, United "w[ould] not . . . provide a copy of a
consultant's report for [Jette's] review prior to [its] appeal
decision."
As part of the appeal, United required Jette to complete
an in-person independent medical examination with Dr. Donald
Thomson, a board-certified neurologist, which she did on September
21, 2016. He then produced a report for United on October 6, 2016,
based on his evaluation of Jette and his review of her medical
records. In his report, Dr. Thomson stated that Jette's history,
examination, medical records, and MRI scans "are consistent with
-13-
the diagnoses of lumbosacral spondylosis." He noted that Jette
complained of constant low back pain, which sometimes radiated
into her leg, and that the pain was worsened by prolonged periods
of sitting. Dr. Thomson further noted that Jette would stand and
walk for pain relief after five to ten minutes of sitting during
the examination, and that she "ha[d] difficulty taking off and
putting on her socks," but concluded that "[s]eated activities
with occasional standing and walking is permitted." He opined
that Jette "[was] able to drive an automobile, but should be
limited to short distances because prolonged sitting aggravates
her back pain."
When asked if he agreed with the restrictions and
limitations provided by the attending physicians, Dr. Thomson
noted that he agreed with the restrictions advised by Dr.
Bulczynski on December 23, 2015.10 Dr. Thomson found no signs of
"symptom magnification, lack of full effort, inconsistent
findings, or malingering." He concluded that Jette's "documented
activities outside of work" were "consistent with her reported
impairments" and that, overall, her reported symptoms, "claimed
restrictions and limitations" were consistent with his own
10 The restrictions advised by Dr. Bulczynski on December 23,
2015 are, in reality, the restrictions advised by Dr. Heimonen;
Dr. Bulczynski merely checked that he agreed with Dr. Heimonen's
restrictions.
-14-
findings. Dr. Thomson did not opine specifically on whether Jette
could handle the duties of her job on a full-time basis.
On October 18, 2016, United upheld its termination of
Jette's LTD benefits. In its letter notifying Jette of its
decision, United focused on Dr. Thomson's conclusion that Jette
"would be able to perform seated activities with occasional
standing and walking" and that she was able to drive an automobile,
although only for short distances. United noted that, "[d]riving
is a physically and cognitively demanding activity that requires
essentially full function of the spine and for an automatic
transmission, three extremities. An individual must have
preserved response times and grip strength and must be able to
tolerate sitting."
United also focused on Dr. Bulczynski's December 23,
2015 response "agree[ing] that Ms. Jette . . . did not have a . . .
condition that would preclude her from performing full-time . . .
primarily seated" work. It also noted that Jette was the Executive
Director of a non-profit organization, operated an online store,
and was licensed to perform ministerial services. According to
United, the medical documentation, activities, and Dr. Thomson's
examination findings supported its determination that Jette could
perform her regular occupation. After upholding the termination
of her LTD benefits, United provided Jette with a copy of Dr.
-15-
Thomson's report.
In August 2018, Jette filed this action in the United
States District Court for the District of Massachusetts seeking
reinstatement of her LTD benefits and recovery of attorney's fees
under ERISA. Both Jette and United cross-moved for summary
judgment. Jette argued that, by failing to provide her with a
copy of Dr. Thomson's report and an opportunity to respond to it
prior to the final determination on appeal, United incurred a
procedural violation and did not afford her a full and fair review
of her claim. She further argued that United's decision to
terminate her LTD benefits was not supported by substantial
evidence in the administrative record and thus should be
overturned. For its part, and consistent with its position during
the internal appeal process, United contended that it had afforded
Jette a full and fair review of her claim because, under the ERISA
regulation applicable to Jette's claim,11 it had no obligation to
11 The Department of Labor first issued a regulation governing
claims procedures for employee benefit plans under its ERISA
section 503 authority in May 1977. See Claims Procedure for
Employee Benefit Plans, 42 Fed. Reg. 27,426 (May 27, 1977)
(codified at 29 C.F.R. § 2560.503–1). The Department of Labor
issued a revised claims-procedure regulation in November 2000,
which applied to claims filed on or after January 1, 2002.
See Employee Retirement Income Security Act of 1974; Rules and
Regulations for Administration and Enforcement; Claims Procedure,
65 Fed. Reg. 70,246 (Nov. 21, 2000). Although the Department of
Labor revised again the claims-procedure regulation in December
2016, see Claims Procedure for Plans Providing Disability
Benefits, 81 Fed. Reg. 92,316 (Dec. 19, 2016), the parties agree
-16-
disclose Dr. Thomson's report prior to its final determination on
appeal. Additionally, United posited that its decision to uphold
the termination of Jette's LTD benefits was supported by
substantial evidence in the record. The district court agreed
with United, finding that United had committed no procedural
violation by failing to disclose Dr. Thomson's report prior to a
final determination on appeal. See Jette v. United of Omaha Life
Ins. Co., 467 F. Supp. 3d 3, 19-20 (D. Mass. 2020). It determined
that "an insurer does not have a duty under ERISA's 'full and fair'
review requirement to disclose IME [(independent medical
examination)] reports prior to making their decisions unless the
insurer relies on the unshared IME report to find a new reason to
deny coverage."12 Id. at 19. Here, in the court's view, United's
decision on appeal was consistent with its initial decision to
terminate LTD benefits: "that Jette's functional limitations did
that because Jette's claim was filed in 2013, it is governed by
the 2002 Regulation.
12 The district court noted that "[i]n December 2016, the
Department of Labor amended the relevant regulation[] to require
claim administrators to provide any new or additional evidence
considered prior to rendering a final determination," but
concluded that said requirement "was not in effect at the time
that United rendered its final decision on October 18, 2016
upholding the termination of LTD benefits." Jette, 467 F. Supp.
3d at 20 n.6.
-17-
not preclude sedentary work." Id. at 20. The district court
concluded that, because "United did not use Dr. Thomson's report
to find new reasons to deny Jette's claim," she had no right to
review the report before United made a final determination on
appeal. Id. Additionally, the court found that substantial
evidence in the record supported United's termination of Jette's
LTD benefits. Id. at 15-19.
II. Discussion
Jette contends that United's internal appeal procedure
failed to provide her with the "full and fair review" required by
ERISA and its implementing regulation. Specifically, she argues
that United violated 29 C.F.R. § 2560.503–1(h) by failing to allow
her to review and rebut Dr. Thomson's report prior to its final
decision on administrative appeal.
We review a district court's interpretation of federal
regulations de novo, applying general rules of statutory
construction and starting with the plain language of the
regulation. See United States v. Strong, 724 F.3d 51, 55 (1st
Cir. 2013) ("We review statutory and regulatory interpretations de
novo."); Morales v. Sociedad Española de Auxilio Mutuo y
Beneficencia, 524 F.3d 54, 57 (1st Cir. 2008) ("Determining a
regulation's meaning requires application of the same principles
that imbue exercises in statutory construction.").
-18-
Congress enacted ERISA "to promote the interests of
employees and their beneficiaries in employee benefit plans."
Merit Constr. All. v. City of Quincy, 759 F.3d 122, 127–28 (1st
Cir. 2014) (quoting Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 90
(1983)). To accomplish this goal, section 503 of ERISA establishes
minimum procedural requirements that govern how an ERISA plan
processes claims for health and disability benefits. 29 U.S.C.
§ 1133; see also Halo v. Yale Health Plan, Dir. of Benefits & Recs.
Yale Univ., 819 F.3d 42, 48-49 (2d Cir. 2016). It provides, in
relevant part, that "any [plan] participant whose claim for
benefits has been denied" must be afforded a "full and fair review"
of the decision denying the claim, "[i]n accordance with
regulations of the Secretary [of Labor]." 29 U.S.C. § 1133(2).
Consistent with Congress's delegation of authority in
section 503, the Department of Labor promulgated a claims-
procedure regulation for ERISA benefit plans. 29 C.F.R.
§ 2560.503-1. Subsection (h) of the regulation governs the
"[a]ppeal of adverse benefit determinations." Id. § 2560.503–
1(h). It requires the establishment and maintenance of "a
procedure by which a claimant shall have a reasonable opportunity
to appeal an adverse benefit determination . . . and under which
there will be a full and fair review of the claim and the adverse
benefit determination." Id. § 2560.503–1(h)(1). The regulation
-19-
further states that in order to satisfy this requirement of
providing a "full and fair review of a claim and adverse benefit
determination," the claimant must be provided, "upon request and
free of charge, reasonable access to, and copies of, all documents,
records, and other information relevant to the claimant's claim
for benefits." Id. § 2560.503-1(h)(2)(iii). "A document, record,
or other information shall be considered 'relevant' to a claimant's
claim" if it was "relied upon in making the benefit determination"
or was "submitted, considered, or generated in the course of making
the benefit determination." Id. § 2560.503–1(m)(8)(i)-(ii).
In addition, as part of the review process, a claimant
must also be provided an "opportunity to submit written comments,
documents, records, and other information relating to the claim
for benefits." Id. § 2560.503–1(h)(2)(ii). The review on appeal
must "take[] into account all comments, documents, records, and
other information submitted by the claimant relating to the claim,
without regard to whether such information was submitted or
considered in the initial benefit determination." Id. § 2560.503–
1(h)(2)(iv). These requirements apply to plans providing
disability benefits. Id. § 2560.503–1(h)(4).
The parties disagree over whether Jette was entitled to
review and rebut Dr. Thomson's report prior to United's final
decision on appeal. Jette contends that subsections (h)(2)(ii)
-20-
and (iii) of the regulation provide these rights. United, in
contrast, posits that subsection (h)(2)(iii)'s disclosure
requirement applies only to those documents relevant to the initial
adverse benefit determination. Under United's interpretation, the
documents generated during the review process, such as
Dr. Thomson's report, have to be disclosed only after a final
determination on review is reached. According to United, because
Jette had no right to review Dr. Thomson's report during the
pendency of the appeal, it follows that she did not have a right
to rebut it either. The district court offered yet another reading
of subsection (h)(2)(iii). In the district court's view, under
subsection (h)(2)(iii), a claimant must be provided with a copy of
a document generated during the appeal process prior to a final
determination on review only if "the insurer relies on the unshared
[document] to find a new reason to deny coverage." Jette, 467 F.
Supp. 3d at 19. We turn to the language of the regulation.
See In re Fin. Oversight & Mgmt. Bd. for P.R., 919 F.3d 121, 128
(1st Cir. 2019) ("[I]n resolving a dispute over the meaning of a
statute, we begin with the language of the statute itself. We
first determine whether the language at issue has a plain and
unambiguous meaning with regard to the particular dispute in the
case." (internal quotation marks and citations omitted)).
-21-
The plain language of subsection (h)(2)(iii) provides
for a full and fair review of the "claim and adverse benefit
determination," in which the claimant is provided all documents
"relevant" to his or her "claim for benefit." 29 C.F.R.
§ 2560.503-1(h)(2)(iii). Relying on out-of-circuit cases, United
submits that the "relevant" documents that subsection (h)(2)(iii)
refers to are limited to those used to make the initial benefit
determination.
We reject United's invitation to narrowly construe the
language of subsection (h)(2)(iii). The plain language of
subsection (h)(2)(iii) does not limit the documents to be produced
to those relevant to the initial benefit determination, but rather
unambiguously requires that "all documents . . . relevant to the
claimant's claim for benefits" be provided to the claimant.
29 C.F.R. § 2560.503-1(h)(2)(iii) (emphasis added). The initial
benefit determination is merely one event that occurs within a
claim for benefits. Indeed, the regulation provides that the
plan's "benefit determination on review" must occur within an
allotted timeframe unless "special circumstances . . . require an
extension of time for processing the claim," which demonstrates
that the administrative appeal is part of the claim process. Id.
§ 2560.503-1(i)(1)(i) (emphasis added). And United makes no
argument that the term "claim" refers to anything other than the
-22-
request for benefits under the Plan. Furthermore, we note that
the Department of Labor used the terms "claim for benefits,"
"adverse benefit determination," and "initial benefit
determination" throughout the regulation to refer to different
things. See, e.g., 29 C.F.R. §§ 2560.503-1(h)(1), (h)(2), and
(h)(4) (providing for a full and fair review not only of the
"adverse benefit determination" but also of the "claim,"
reflecting that the terms refer to different things); id.
§ 2560.503-1(h)(2)(iv) (stating that the review on appeal should
take into account "all comments, documents, records, and other
information submitted by the claimant relating to the claim"
regardless of "whether such information was submitted or
considered in the initial benefit determination" (emphasis
added)). This makes manifest that, despite knowing how to use the
terms "initial benefit determination" and "adverse benefit
determination" when it drafted the regulation, the Department of
Labor consciously chose to require that the documents to be
produced under subsection (h)(2)(iii) include all those relevant
to the "claim." We will thus respect that choice and construe the
regulation in light of its chosen "language . . . , the specific
context in which that language is used, and the broader context of
the statute as a whole." In re Fin. Oversight & Mgmt. Bd. for
P.R., 919 F.3d at 128 (quoting Robinson v. Shell Oil Co., 519 U.S.
-23-
337, 341 (1997)). Those definitions are clear: "relevant"
documents require a nexus to a "benefit determination," not an
"adverse" or "initial" benefit determination. We know that a
benefit determination, when used in an unqualified and general
sense, encompasses the determination on appeal because the
regulation separately provides that "the plan administrator shall
notify a claimant . . . of the plan's benefit determination on
review within a reasonable period of time . . . after receipt of
the claimant's request for review by the plan." 29 C.F.R.
§ 2560.503-1(i)(1)(i) (emphasis added); see also id. § 2560.503-
1(i)(3)(i) (same for disability claims). In an administrative
appeal, a plan is not simply reviewing the initial, adverse benefit
determination, but engaging in its own "benefit determination
. . . [that] is required to be made," id. § 2560.503-1(i)(4), or
"benefit determination [that] shall be rendered," id. §§ 2560.503-
1(i)(1)(ii), (i)(3)(ii), which may or may not be "adverse," id.
§ 2560.503-1(j).
Nor does subsection (h)(2)(iii)'s language support the
district court's interpretation that documents generated during
the internal appeal process must be provided to the claimant prior
to a final determination on review only if "the insurer relies on
the[m] . . . to find a new reason to deny coverage."13 Jette, 467
13 The district court relied on Killen v. Reliance Standard
-24-
F. Supp. 3d at 19. The regulation establishes no such condition.
To the contrary, under the regulation, a document is "relevant"
and thus must be disclosed to the claimant under subsection
(h)(2)(iii) not only if it "[w]as relied upon in making a benefit
determination," but also if it "[w]as submitted, considered, or
generated in the course of making the benefit determination,"
regardless of whether it "was relied upon in making the benefit
determination." 29 C.F.R. § 2560.503–1(m)(8)(i)-(ii).
"The purpose of [the 'full and fair review'] requirement
is to provide claimants with enough information to prepare
Life Ins. Co., 776 F.3d 303, 310-11 (5th Cir. 2015) and DiGregorio
v. Hartford Comprehensive Emp. Benefit Serv. Co., 423 F.3d 6, 16
(1st Cir. 2005), to support its theory. However, these cases are
either unpersuasive or inapposite. In Killen, in addressing the
claimant's contention that she had not received a full and fair
review of her claim because the plan administrator did not provide
her with a copy of the independent examiner's report obtained
during the internal appeal process, the Fifth Circuit did not
analyze the ERISA regulation. See 776 F.3d at 310-311. In fact,
the opinion does not even cite the regulation. Id. The only real
discussion of the regulation can be found in decisions by other
Circuits that Killen cites. See id. (collecting cases).
Furthermore, there is no indication in the opinion that the
claimant had requested a copy of such report during the internal
appeal process. See 29 C.F.R. § 2560.503-1(h)(2)(iii) (stating
that "all documents . . . relevant to the claimant's claim for
benefits" must be provided to the claimant "upon request").
DiGregorio is inapposite. DiGregorio did not interpret the 2002
Regulation at issue here; rather, it interpreted the 1977
Regulation. See 423 F.3d at 14 n.4. Furthermore, our review in
DiGregorio was limited to the issue of prejudice allegedly suffered
by the claimant due to the plan administrator's failure to disclose
the entire claim file during the internal review process. Id. at
13.
-25-
adequately for further administrative review or an appeal to the
federal courts." Juliano v. Health Maint. Org. of N.J., Inc., 221
F.3d 279, 287 (2d Cir. 2000) (alteration in original) (quoting
DuMond v. Centex Corp., 172 F.3d 618, 622 (8th Cir. 1999)).
United's proposed reading, however, would frustrate this purpose.
It would unreasonably prevent plan participants from responding to
evidence, not only at the administrative stage, but also on
judicial review, which is typically based on the administrative
record. See Orndorf v. Paul Revere Life Ins. Co., 404 F.3d 510,
519-20 (1st Cir. 2005) (explaining that when the decision to which
judicial review is addressed is the final ERISA administrative
decision, judicial review is usually limited to the administrative
record before the administrator). Furthermore, we have long
recognized that claimants must be allowed to engage in a meaningful
dialogue regarding the denial of benefits. See Glista v. Unum
Life Ins. Co. of Am., 378 F.3d 113, 129 (1st Cir. 2004) (noting
that the "administrators and beneficiaries [must] hav[e] a full
and meaningful dialogue regarding the denial of benefits").
Claimants, however, would be precluded from engaging in this
meaningful dialogue if the evidence is provided to them only after
the final decision is rendered, when it is too late for them to
respond.
According to the plain language of the regulation, upon
-26-
Jette's request for documents after the initial adverse
determination, United had to disclose to Jette Dr. Thomson's
report, which was relevant to her claim for LTD benefits regardless
of whether it would be used to support a new reason to deny
coverage. See 29 C.F.R. § 2560.503-1(h)(2)(iii). United then had
to give her the opportunity to respond to the report by submitting
written comments, documents, records, or other information
relating to her claim that she deemed appropriate. See id.
§ 2560.503-1(h)(2)(ii). Finally, United's review on appeal had to
take into account these new submissions. See id. § 2560.503-
1(h)(2)(iv). By failing to do so, United deprived Jette of a full
and fair review of her claim.
Our reading of the regulation is consistent with the
Ninth Circuit's decision in Salomaa v. Honda Long Term Disability
Plan, where the court held that the plan had denied a full and
fair review to the claimant when it procured two consultant medical
opinions but failed to disclose them to the claimant before denying
his internal appeal. 642 F.3d 666, 680 (9th Cir. 2011) (so
holding).14
14 We acknowledge that some other Circuits have reached a
different result, see Mayer v. Ringler Associates, Inc., 9 F.4th
78 (2d Cir. 2021); Midgett v. Wash. Group Int'l Long Term
Disability Plan, 561 F.3d 887 (8th Cir. 2009); Glazer v. Reliance
Standard Life Ins. Co., 524 F.3d 1241 (11th Cir. 2008); Metzger v.
UNUM Life Ins. Co. of Am., 476 F.3d 1161 (10th Cir. 2007), but we
do not find their reasonings persuasive. Mayer relies on the other
-27-
Jette argues that this reading is also consistent with
the Department of Labor's longstanding position that claimants
have a right to review and respond to new evidence or rationales
cases, 9 F.4th at 88, but does not address the contrary decision
by the Ninth Circuit in Salomaa, 642 F.3d at 680. Mayer also
reasons that there would have been no need to amend the 2002
regulation if that version already required disclosure. 9 F.4th
at 88 n.5. But, as we observe, the Department of Labor has
expressly stated that the amendment was not substantive but rather
was clarifying. Midgett relies on an overly narrow reading of
29 C.F.R. § 2560.503-1(h) as applying only to initial benefit
determinations, 561 F.3d at 894-95, which is inconsistent with the
plain text of the regulation for the reasons we have explained.
Glazer relies on the use of the past tense in § 2560.503-
1(m)(8)(i)-(ii) to restrict relevant documents to those that were
"relied upon" in prior benefit determinations, 524 F.3d at 1245,
but it overlooks the fact that claimants may request any document
that "[w]as submitted, considered, or generated in the course of
making the benefit determination," that is, while a benefit
determination is ongoing. 29 C.F.R. § 2560.503-1(m)(8)(ii).
Glazer also concludes that reading the regulation to require the
production of documents that were generated during an appeal before
a final decision is rendered would make superfluous the separate
requirement for the production of such documents after the appeal
is settled. 524 F.3d at 1245 (citing 29 C.F.R. § 2560.503-
1(i)(5)). This reasoning does not consider that claimants are
only entitled to relevant documents "upon request," 29 C.F.R.
§§ 2560.503-1(h)(2)(iii), (i)(5), (j)(3), so a claimant who did
not request such documents while an appeal was pending could
request them after an adverse decision, giving those provisions
separate purposes and force. Finally, Metzger relies principally
on policy considerations, as opposed to textual justifications,
for its reading of the regulation. 476 F.3d at 1166-67. In any
case, it limited its holding to the facts of the case, where the
expert reports that were generated during the administrative
appeal and that were not shared with the claimant "contain[ed] no
new factual information and den[ied] benefits on the same basis as
the initial decision." Id. at 1166. That was not the case here.
See generally Hughes v. Hartford Life & Accident Ins. Co., 368 F.
Supp. 3d 386 (D. Conn. 2019) (making substantially similar
arguments).
-28-
developed by the plan during the pendency of the internal appeal.
She posits that this has been the Secretary of Labor's
interpretation, as reflected both in the Preamble of the 2018
Regulation and in the amicus curiae brief that the Secretary of
Labor submitted in Midgett v. Wash. Group Int'l Long Term
Disability Plan, 561 F.3d 887 (8th Cir. 2009), and that such
interpretation is entitled to Auer deference. See Auer v. Robbins,
519 U.S. 452, 461-62 (1997).
The Preamble of the 2018 Regulation states that,
The Department continues to believe that a full and fair
review requires that claimants have a right to review
and respond to new evidence or rationales developed by
the plan during the pendency of the appeal and have the
opportunity to fully and fairly present his or her case
at the administrative appeal level, as opposed merely to
having a right to review such information on request
only after the claim has already been denied on appeal.
Claims Procedure for Plans Providing Disability Benefits, 81 Fed.
Reg. 92,316, 92,324, 2016 WL 7326455 (Dec. 19, 2016) (emphasis
added). It also states that 29 C.F.R. § 2560.503-1(h)(4) is
amended to clarify that, contrary to what some circuit courts have
held under the 2002 Regulation,15 the plan must
provide claimants, free of charge, with new or
additional evidence considered, relied upon, or
15The Preamble specifically cited the cases of Midgett, 561
F.3d 887, Glazer, 524 F.3d 1241, and Metzger, 476 F.3d 1161 -- all
of which United cited in support of its argument -- as examples of
cases in which the 2002 Regulation had been incorrectly
interpreted.
-29-
generated by the plan, insurer, or other person making
the benefit determination (or at the direction of the
plan, insurer or such other person) during the pendency
of the appeal in connection with the claim. . . . It was
and continues to be the view of the Department that
claimants are deprived of a full and fair review, as
required by section 503 of ERISA, when they are prevented
from responding, at the administrative stage level, to
all evidence and rationales.
Claims Procedure for Plans Providing Disability Benefits, 81 Fed.
Reg. at 92,324-5 & n.17.
Jette further argues that the Brief of the Secretary of
Labor, Hilda L. Solis, as Amicus Curiae in Support of Plaintiff-
Appellant's Petition for Rehearing, Midgett, 561 F.3d 887 (No. 08-
2523), 2009 WL 8186025, also reflects the Department of Labor's
position. In that brief, the Secretary of Labor argued that ERISA
"claimants are deprived of a full and fair review when claimants
are prevented from responding at the administrative level to
evidence developed by the plan" during the course of an
administrative appeal, and invoked Auer deference to the
Department's position. Id. at *5, 14.
United, however, argues that because the Preamble to the
2018 Regulation was published in December 2016, two months after
United had rendered its final adverse benefit determination, "[it]
cannot be expected to follow agency guidance published months after
it completed its review." That may well have been the case were
the Preamble the only departmental view that was published on the
-30-
matter. See Christopher v. SmithKline Beecham Corp., 567 U.S.
142, 159 (2012) (finding Auer deference "unwarranted" where its
application would "require regulated parties to divine the
agency's interpretations in advance"). But the Department of
Labor's interpretation of 29 C.F.R. § 2560.503-1(h) was not made
known for the first time in December 2016. The Department of Labor
had interpreted the scope of subsection (h) of the 2002 Regulation
since at least June 2009, when the Secretary of Labor submitted
her amicus curiae brief in Midgett, 561 F.3d 887. And, despite
United's protest that such interpretation should not be afforded
Auer deference because it was included in an amicus curiae brief,
as opposed to something more "widely disseminated to the industry,"
the Supreme Court has afforded Auer deference to agencies'
interpretations advanced for the first time in amicus curiae briefs
filed in the very same cases being decided. See, e.g., Auer, 519
U.S. at 461-62 (deferring to the Secretary of Labor's
interpretation of his own regulation, presented in an amicus brief
submitted by the agency, despite the petitioner's objection that
the agency's interpretation came in a legal brief); see also Chase
Bank USA v. McCoy, 562 U.S. 195, 209-10 (2011) (deferring to the
Federal Reserve Board's interpretation of its own regulation under
circumstances similar to those in Auer); United States v. Hoyts
Cinemas Corp., 380 F.3d 558, 567 (1st Cir. 2004) (affording "some
-31-
weight" to the Justice Department's interpretation of its
regulation "even though the Department's gloss is offered only in
a brief rather than in some more formal manner").
Because the language in the 2002 Regulation is
unambiguous, however, we do not resort to Auer deference. See
Kisor v. Wilkie, 139 S. Ct. 2400, 2415 (2019) (explaining that "a
court should not afford Auer deference unless the regulation is
genuinely ambiguous"). We clarify, however, that if the 2002
Regulation had been genuinely ambiguous, we would have applied
Auer deference to the Department of Labor's interpretation and
would have reached the same result.16
Having concluded that United violated 29 C.F.R.
§ 2560.503-1(h) by failing to provide a full and fair review of
Jette's claim, we next consider whether Jette was prejudiced by
United's procedural violation. See Lavery v. Restoration Hardware
Long Term Disability Benefits Plan, 937 F.3d 71, 82 (1st Cir. 2019)
(noting that we typically require a claimant to show prejudice
attributable to a procedural irregularity); Stephanie C. v. Blue
16 We note that United made no arguments as to why Auer
deference should not apply to the Department of Labor's
interpretation of the 2002 Regulation in the amicus brief, other
than because it was not widely disseminated to the industry. See
Kisor, 139 S. Ct. at 2415-18 (discussing when an agency's reading
of its rule should not receive Auer deference despite the rule's
genuine ambiguity).
-32-
Cross Blue Shield of Mass., 813 F.3d 420, 425 (1st Cir. 2016)
(same).
"Generally, where a district court has made a prejudice
determination, our case law has treated it as a 'factual conclusion
that we review only for clear error.'" Santana-Díaz v. Metro.
Life Ins. Co., 816 F.3d 172, 182 (1st Cir. 2016) (quoting
DiGregorio v. Hartford Comprehensive Emp. Benefit Serv. Co., 423
F.3d 6, 13, 15-16 (1st Cir. 2005)). However, "where the lower
court has made no factual finding as to prejudice, and where one
could be made on the basis of the administrative record before us,
we have, without remanding, made our own prejudice determination."
Id. Here, because the district court found no procedural
violation, it did not reach the question of whether Jette was
prejudiced because of the alleged procedural violation. A
prejudice determination, however, can be easily made at this stage
on the basis of the administrative record before us. See Bard v.
Boston Shipping Ass'n, 471 F.3d 229, 241 n.15 (1st Cir. 2006)
(holding, where the district court made no factual findings about
prejudice and incorrectly found no material noncompliance by the
plan's Board of Trustees, that there were "no relevant factual
determinations to defer to" and, in any event, "it was clear error
to hold that there was no 'material noncompliance by the Board'
[of Trustees]"). The administrative record reveals that, after
-33-
examining Jette and reviewing her medical records, Dr. Thomson
rendered a report in which, among other things, he agreed with the
restrictions advised by Dr. Heimonen and concluded that Jette
"[was] able to drive an automobile," although only for short
distances. Jette claims that the evidence does not support
Dr. Thomson's findings and conclusions, which she says were
inherently inconsistent. Yet, she did not have the opportunity to
review and respond to Dr. Thomson's report before United rendered
its final determination on appeal. The record further reflects
that United relied, at least in part, on Dr. Thomson's report to
uphold its decision to terminate her LTD benefits. Its letter
notifying Jette of its decision to uphold the termination of her
LTD benefits focused on Dr. Thomson's conclusions that Jette "would
be able to perform seated activities with occasional standing and
walking" and that she was able to drive an automobile, and
emphasized how "physically and cognitively demanding" driving is.
In fact, the letter made clear that the decision to uphold the
termination of benefits took into account "the medical
documentation, activities, and [Dr. Thomson's] examination
findings" (emphasis added). Accordingly, we find that Jette was
prejudiced by United's procedural violation.
Jette also challenges the substantive termination of her
LTD benefits, contending that there is no substantial evidence in
-34-
the administrative record to support that decision. Had Jette
been afforded the full and fair review to which she was entitled,
she would have been provided access to Dr. Thomson's report and,
as she represents to us, would have responded to his report.
Because Jette had no chance to review Dr. Thomson's report and
respond to it, the record is incomplete. Accordingly, we will not
review United's substantive decision at this time. Instead, we
will allow her claim to go back to the administrative stage, where
Jette will have the opportunity to "submit written comments,
documents, records, and other information relating to [her]
claim," 29 C.F.R. § 2560.503-1(h)(2)(ii), before United makes a
new determination based on the thus supplemented record, id.
§ 2560.503-1(h)(2)(iv). See Buffonge v. Prudential Ins. Co. of
Am., 426 F.3d 20, 31 (1st Cir. 2005) (noting that the "appropriate
response" when the "integrity" of a claim administrator's
"decision-making process" was compromised is to give the claimant
the "benefit of an untainted process").
III. Conclusion
In light of the above, we vacate the entry of summary
judgment and remand to the district court with instructions that
the case be remanded to United for a full and fair review of
Jette's claim. Costs are awarded to the appellant.
-35-