Hensley v. International Business MacHines Corp. , 123 F. App'x 534 ( 2004 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 04-1162
BRENDA HENSLEY, an individual,
Plaintiff- Appellee,
versus
INTERNATIONAL BUSINESS MACHINES CORPORATION, a
New York Corporation; METROPOLITAN LIFE
INSURANCE COMPANY, a Delaware Corporation,
Defendants - Appellants,
and
DOES 1 THROUGH 10, inclusive,
Defendant.
No. 04-1728
BRENDA HENSLEY, an individual,
Plaintiff - Appellee,
versus
INTERNATIONAL BUSINESS MACHINES CORPORATION, a
New York Corporation; METROPOLITAN LIFE
INSURANCE COMPANY, a Delaware Corporation,
Defendants - Appellants,
and
DOES 1 THROUGH 10, inclusive,
Defendant.
Appeals from the United States District Court for the Southern
District of West Virginia, at Huntington. Robert C. Chambers,
District Judge. (CA-03-233-3; CA-03-223-3)
Argued: September 29, 2004 Decided: December 13, 2004
Before WILKINSON and LUTTIG, Circuit Judges, and Henry E. HUDSON,
United States District Judge for the Eastern District of Virginia,
sitting by designation.
Reversed by unpublished opinion. Judge Luttig wrote the opinion,
in which Judge Wilkinson and Judge Hudson joined.
ARGUED: Beth Ann Oliak, METROPOLITAN LIFE INSURANCE COMPANY, New
York, New York, for Appellants. Mark F. Underwood, Huntington,
West Virginia, for Appellee. ON BRIEF: Scott A. Damron, DAMRON &
TAYLOR, Huntington, West Virginia; C. J. Schmidt, WOOD & LAMPING,
Cincinnati, Ohio, for Appellants.
Unpublished opinions are not binding precedent in this circuit.
See Local Rule 36(c).
2
LUTTIG, Circuit Judge:
Defendants-appellants International Business Machines Corp.
(“IBM”) and Metropolitan Life Insurance Co. (“MetLife”) appeal from
an order of the United States District Court for the Southern
District of West Virginia granting summary judgment to plaintiff-
appellee Brenda Hensley. The district court held that MetLife
abused its discretion in terminating Hensley’s long-term disability
benefits under an ERISA-governed employee benefits plan. Because
we conclude that MetLife did not abuse its discretion, we reverse
the judgment of the district court.
I
Appellee Hensley was employed by IBM in a sedentary capacity
as an “accounts specialist” prior to August 1999. During that
time, she participated in a group long-term disability plan (“the
Plan”) administered by MetLife on behalf of IBM. The Plan is an
employee welfare benefit plan within the meaning of the Employee
Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1001 et seq.
According to the terms of the Plan, a “totally disabled” employee
is entitled to long-term disability (“LTD”) benefits. J.A. 191.
“Totally disabled” is defined as follows:
[T]otally disabled means that during the first 12 months
after you complete the waiting period, you cannot perform
the important duties of your regular occupation with IBM
because of a sickness or injury. After expiration of
that 12 month period, totally disabled means that,
because of a sickness or injury, you cannot perform the
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important duties of your occupation or of any other
gainful occupation for which you are reasonably fit by
your education, training or experience.
J.A. 193. The Plan also provides that the Plan’s administrator
“shall have discretionary authority to interpret the terms of the
Plan and to determine eligibility for and entitlement to Plan
benefits in accordance with the terms of the Plan.” J.A. 213.
On August 9, 1999, Hensley applied for LTD benefits under the
Plan, submitting a statement of her attending physician diagnosing
her with osteoarthritis and rotator cuff syndrome. J.A. 726.
MetLife initially granted her application for LTD benefits on
November 9, 1999, but sought further information regarding her
disability in January and March of 2000. A second attending
physician submitted a letter to MetLife in April 2000 in response
to these requests. He listed Hensley’s diagnoses as morbid
obesity, osteoarthritis, rotator cuff tendinitis, wrist tendon
inflammation, carpal tunnel syndrome, and lower back pain, but he
did not include objective tests or x-ray reports to substantiate
these diagnoses. J.A. 463. An independent physician consultant
reviewed Hensley’s medical records on behalf of MetLife in August
2000 and concluded that the records showed no objective impairment
that would prevent Hensley from returning to work. J.A. 425. On
the consultant’s recommendation, a functional capacity exam (“FCE”)
was performed on Hensley in March 2001 to assess her physical
capabilities, but the physical therapist reported that Hensley did
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not put forth a consistent effort during the tests and that Hensley
exaggerated her pain complaints. J.A. 400-02. After the
independent consultant concluded in a second review that Hensley
had not produced medical evidence of incapacity for work, J.A. 390-
91, MetLife terminated her benefits in November 2001.
In support of two subsequent appeals to MetLife, Hensley
submitted another diagnosis letter from a third attending physician
and the report from a second FCE. J.A. 115, 167. But the third
doctor did not provide additional objective evidence to support
Hensley’s diagnoses, see J.A. 115-16, and the physical therapist
again concluded that Hensley exaggerated her symptoms and engaged
in self-limiting behavior, J.A. 168. MetLife denied Hensley’s
appeals.
Hensley sued IBM and MetLife for restoration of her benefits
under the Plan in the district court in March 2003. J.A. 6. On
cross-motions for summary judgment,1 the district court granted
summary judgment for Hensley, holding that MetLife abused its
discretion as administrator of the Plan in terminating Hensley’s
LTD benefits. J.A. 31. The district court also awarded Hensley
costs and fees. Order Granting Plaintiff’s Motion for Attorney’s
Fees, Costs and Prejudgment and Postjudgment Interest at 1. IBM
and MetLife appeal from both orders.
1
The parties did not dispute any material fact in the record.
J.A. 22.
5
II
We review the district court’s grant of summary judgment de
novo, applying the same standards employed by the district court.
Gallagher v. Reliance Std. Life Ins. Co., 305 F.3d 264, 268 (4th
Cir. 2002). Where, as here, an ERISA plan gives the administrator
discretionary authority to interpret the terms of the plan, the
district court reviews the administrator’s decisions for abuse of
discretion. Booth v. Wal-Mart Stores, Inc., 201 F.3d 335, 341 (4th
Cir. 2000). Under the abuse of discretion standard, the court may
not overturn the administrator’s denial of benefits if the denial
“is the result of a deliberate, principled reasoning process and if
it is supported by substantial evidence.” Elliott v. Sara Lee
Corp., 190 F.3d 601, 605 (4th Cir. 1999) (quoting Brogan v.
Holland, 105 F.3d 158, 161 (4th Cir. 1997)). Substantial evidence
is more than a scintilla, but less than a preponderance. Newport
News Shipbuilding and Dry Dock Co. v. Cherry, 326 F.3d 449, 452
(4th Cir. 2003).
Because MetLife both administers and funds the plan, however,
we adjust the standard of review by decreasing our deference to
MetLife in proportion to the degree of MetLife’s conflict of
interest. In such circumstances, we must determine whether the
denial of benefits would constitute an abuse of discretion by a
disinterested fiduciary. See, e.g., Bailey v. Blue Cross & Blue
Shield of Virginia, 67 F.3d 53, 56 (4th Cir. 1995) (“[W]e will
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review the merits of the [funding fiduciary’s] interpretation to
determine whether it is consistent with an exercise of discretion
by a fiduciary acting free of the interests that conflict with
those of the beneficiaries.”). Even on this adjusted scale of
deference, we conclude that MetLife did not abuse its discretion
because its decision to terminate Hensley’s benefits was the result
of a deliberate, principled reasoning process and supported by
substantial evidence.
A
It is apparent from the record that MetLife’s decision to
terminate benefits was the result of a “deliberate, principled
reasoning process.” The decision followed MetLife’s multiple
requests for information from Hensley’s physicians, repeated
reviews of her medical records by the independent consultant, and
two appeals of the initial termination during which Hensley was
permitted to provide supplemental medical evidence.
MetLife’s decision to terminate Hensley’s benefits might
appear inconsistent with its prior determination in November 1999
that she was “totally disabled” under a functionally identical
standard.2 But the fact that MetLife initially awarded benefits to
2
The Plan’s “regular occupation” definition of total
disability applied to the April 1999 decision, while the “any
occupation” definition applied to the November 2001 termination.
But because this dispute focuses on Hensley’s ability to perform
any sort of sedentary labor at all, there is no practical
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Hensley does not mean that its subsequent termination of those
benefits was the result of unprincipled reasoning. The termination
of benefits was based on further investigation and review,3 during
which Hensley’s physicians failed to provide objective support for
their diagnoses and Hensley failed to put forth credible efforts in
two functional capacity exams. And, as the district court
correctly noted, the Fourth Circuit has held that no vested right
to benefits accrues under an employee welfare benefits plan, see
Gable v. Sweetheart Cup Co., 35 F.3d 851, 855 (4th Cir. 1994), so
that “the decision to grant benefits initially cannot create an
obligation by which a plan fiduciary is estopped from later
terminating benefits.” J.A. 26.
B
We also conclude that MetLife’s decision was supported by
substantial evidence. As MetLife’s consultant twice concluded, the
record is largely devoid of objective medical evidence of total
difference between the two standards for the purposes of this
appeal.
3
This factor, among others, distinguishes the case upon which
Hensley principally relies, Norris v. Citibank Disability Plan, 308
F.3d 880 (8th Cir. 2002). The Norris court emphasized that the
plan administrator’s denial of benefits came “a few months later,
and on the basis of no new medical evidence,” after a prior
determination that the claimant was totally disabled. Id. at 885(emphasis added).
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disability, such as x-rays, test results or MRI reports.4 J.A.
391, 425. Instead of objective evidence, Hensley relies
principally on the diagnosis letters of her three treating
physicians, Dr. Wazulak, Dr. Harvey, and Dr. Martin. But none of
these doctors provided objective evidence of disability to support
his conclusions. Dr. Wazulak’s report of August 1999 listed
nothing under “objective findings,” but listed only subjective pain
symptoms to support his diagnoses. J.A. 726. Likewise, Dr.
Harvey’s letter of April 2000 reported several pain-related
diagnoses for Hensley, but admitted that Dr. Harvey did not have
actual x-ray reports or reports from specialists substantiating
these diagnoses. J.A. 463. And Dr. Martin’s letter of December
2001 merely recited the same diagnoses as Dr. Harvey’s, without
providing additional objective medical evidence. J.A. 115-16.
In the absence of objective evidence of Hensley’s disability,
it was reasonable for MetLife to conclude that the diagnoses of her
treating physicians rested primarily or exclusively upon Hensley’s
subjective pain complaints. But the results from her subsequent
FCEs substantially undercut the credibility of those pain
complaints. Both physical therapists concluded that Hensley
4
One exception is that a spine MRI performed on Hensley in
April 2000 confirmed that she had degenerative disc disease. That
MRI, however, found no disc herniation. J.A. 453. A doctor
examining Hensley and the MRI report at that time described her as
“a middle-aged female in no acute distress” and noted that she had
refused to undergo nerve conduction studies that might confirm the
diagnosis of her carpal tunnel syndrome. J.A. 455.
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engaged in self-limiting behavior and symptom magnification during
the FCEs. J.A. 167, 402. The report from the second FCE, which
was performed upon the referral of her treating physician,
emphasized Hensley’s self-limitation:
The results of this FCE do not represent a valid measure
of Brenda’s maximum functional capacities as she
significantly limited her performance due to pain and, at
the same time, demonstrated maximum signs of magnified
illness behavior. . . . Her requests to terminate testing
due to pain were made in conjunction with the lack of
objective pain behavior and a pleasant, even jovial
demeanor while rating her pain at a ‘9 out of 10.’
J.A. 168. Despite his inability to assess her full physical
capacities, the therapist nevertheless concluded that Hensley was
capable of “SEDENTARY” work under Department of Labor Standards.
J.A. 167. Given that the Plan placed upon Hensley the burden of
producing evidence of total disability, J.A. 193, and given her
non-cooperation in both FCEs, it was reasonable for MetLife to
conclude that Hensley was capable of sedentary occupation.
The district court reasoned that it was unreasonable for
MetLife to credit the opinion of an independent consultant who had
never treated Hensley, over the contrary conclusions of her
treating physicians. J.A. 27 (“To rely solely on the opinion of an
independent consultant physician who examined only medical records
-- as opposed to examining the claimant -- in the face of the
unanimity of the physicians who had examined the claimant . . . is
arbitrary and capricious.”). But the Supreme Court has explicitly
held that ERISA plan administrators are not required to accord any
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special deference to the opinions of treating physicians over those
of non-treating consultants. Black & Decker Disability Plan v.
Nord, 538 U.S. 822, 834 (2003) (“[C]ourts have no warrant to
require administrators automatically to accord special weight to
the opinions of a claimant’s physician . . . .”). As noted above,
MetLife had reason to believe that the treating physicians’
diagnoses rested on subjective pain complaints whose credibility
was undermined by the FCE tests, which were designed to assess
actual functional capacities and to detect pain magnification. See
J.A. 401 (evaluating Hensley’s pain behavior during testing). In
light of this evidence, it was reasonable for MetLife to discount
the conclusions of Hensley’s treating physicians.
The district court also emphasized that subjective pain
complaints can often constitute a medically sound basis for
diagnosis. J.A. 28 (“Merely because we cannot see pain or fatigue
on an x-ray, or measure it in a laboratory, does not mean that it
is not real.” (quoting Palmer v. Univ. Med. Group, 994 F. Supp.
1221, 1233 (D. Or. 1998))). But the Fourth Circuit has held that
denials of benefits are permissible where the claimant provides
only subjective pain complaints and not objective evidence. See,
e.g., Lown v. Continental Casualty Co., 238 F.3d 543, 546 (4th Cir.
2001) (upholding, on de novo review, the denial of benefits against
the opinions of three treating physicians where the insurer
“determined that [the claimant’s] documentation was inadequate to
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prove a total disability because of the lack of test results or
other objective evidence to support the disability”); Ellis v.
Metropolitan Life Ins. Co., 126 F.3d 228, 231 (4th Cir. 1997)
(approving MetLife’s reliance on a board of non-treating
consultants over the opinions of treating doctors who credited the
claimant’s pain complaints but could not pinpoint their
“etiology”). This preference for objective verification is all the
more reasonable in light of the evidence of symptom magnification
present in this case.
In sum, MetLife’s decision to terminate Hensley’s LTD benefits
was the result of a deliberate, principled reasoning process. And
the record clearly contains substantial evidence to support
MetLife’s conclusion. MetLife’s decision thus did not constitute
an abuse of discretion, even under the adjusted standard of review.
III
MetLife and IBM also appeal from the district court’s award of
pre- and postjudgment interest, costs, and attorney’s fees. We
review the district court’s award for abuse of discretion.
Metropolitan Life Ins. Co. v. Petitt, 164 F.3d 857, 865 (4th Cir.
1998). In awarding attorney’s fees, the district court applied the
five factors of Quesinberry v. Life Ins. Co. of North Am., 987 F.2d
121017, 1029 (4th Cir. 1993) (en banc).5 Here the district court
relied primarily on (1) the degree of opposing parties’ culpability
or bad faith, and (5) the relative merits of the parties’
positions. Order Granting Plaintiff’s Motion for Attorney’s Fees,
Costs and Prejudgment and Postjudgment Interest at 4. In light of
our conclusion that MetLife did not abuse its discretion, neither
of these factors favors Hensley. Therefore the district court’s
order granting fees, costs, and interest is also reversed.
CONCLUSION
The judgment of the district court is reversed and the case is
remanded with instructions to enter judgment for appellants.
REVERSED
5
The five factors are: (1) degree of the opposing parties’
culpability or bad faith, (2) the ability of opposing parties to
pay fees, (3) whether the fee award would deter others similarly
situated, (4) whether the parties requesting fees sought to benefit
other claimants or to resolve a significant ERISA-related legal
question, and (5) the relative merits of the parties’ positions.
Quesinberry, 987 F.2d at 1029.
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