Abnathya v. Hoffmann-La Roche, Inc.

• Decision Date: 05 August 1993
• Docket Number: No. 92-5487,HOFFMANN-LA,92-5487
• Citation: 2 F.3d 40
• Parties: Aline ABNATHYA, Appellee, v.ROCHE, INC., a corporation or business organization; John Doe, said name being fictitious; James Smith, said name being fictitious; Henry Jones, said name being fictitious. Hoffmann-La Roche Inc., Appellant.
• Court: U.S. Court of Appeals — Third Circuit

Page 40

2 F.3d 40

Aline ABNATHYA, Appellee, v. HOFFMANN-LA ROCHE, INC., a corporation or business organization; John Doe, said name being fictitious; James Smith, said name being fictitious; Henry Jones, said name being fictitious Hoffmann-La Roche Inc., Appellant.

No. 92-5487.

United States Court of Appeals Third Circuit.

Argued April 28, 1993.

Decided Aug. 5, 1993.

Stephen Gold, (argued), Freeman & Bass, Newark, NJ, for appellee.

John A. Ridley, (argued), Anthony J. Cincotta, Crummy, Del Deo, Dolan Griffinger & Vecchione, Newark, NJ, for appellant.

Before: BECKER, HUTCHINSON, and WEIS, Circuit Judges.

OPINION OF THE COURT

BECKER, Circuit Judge.

Aline Abnathya, a former employee of defendant Hoffmann-La Roche Inc., brought this suit challenging Hoffmann's decision to discontinue her long-term disability benefits. Concluding that Hoffmann's decision was arbitrary and capricious, in violation of the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. Sec. 1001 et seq. (1988), the district court granted summary judgment in favor of Abnathya. Because Hoffmann's Long-Term Disability Benefits Plan ("the LTD Plan") gives Hoffmann, as plan administrator, the discretion to make eligibility determinations under the Plan, the district court correctly applied the deferential arbitrary and capricious standard of review required under Firestone Tire and Rubber Co. v. Bruch, 489 U.S. 101, 115, 109 S.Ct. 948, 956-57, 103 L.Ed.2d 80 (1989). However, we find no support in the record for the court's conclusion that Hoffmann's decision was arbitrary and capricious. Rather, the record clearly demonstrates the contrary.

Under the arbitrary and capricious standard, the court must defer to the administrator of an employee benefit plan unless the administrator's decision is clearly not supported by the evidence in the record or the administrator has failed to comply with the procedures required by the plan. Hoffmann's determination that Abnathya was no longer totally disabled within the meaning of the LTD Plan is clearly supported by the evidence in the record, and there is no evidence that Hoffmann failed to comply with any of the procedures required under the Plan. Hence we will reverse the grant of summary judgment in favor of Abnathya and will order that summary judgment be entered in favor of Hoffmann.

I.

Hoffmann maintains a self-funded employee benefits plan which includes the Long-Term Disability Benefits Plan. The LTD Plan is an employee welfare benefit plan governed by ERISA. See ERISA Sec. 3(1), 29 U.S.C. Sec. 1002(1) (1988). The Plan provides benefits beginning after 182 consecutive days of "total disability," which is defined by the Plan as occurring where

(a) for the [first two years during which benefits are received] the Member is completely unable to perform any and every duty of his regular occupation and is not engaged in any occupation or employment for wage or profit; and (b) for the period commencing twenty-four months after [benefits are first received] the Member is completely unable to perform any and every duty of any gainful occupation for which he is or becomes reasonably qualified by training, education or experience.

Hoffmann acts as the claims administrator for the LTD Plan. The Plan authorizes a committee, whose members are appointed by Hoffmann's Board of Directors, to make all determinations regarding a claimant's eligibility for and entitlement to LTD Plan benefits. ¹ Specifically, the Plan provides:

The Committee shall have ... the power to interpret and construe the Plan, to direct payment of benefits and to determine all questions relating to eligibility for membership, eligibility for disability income benefits, and computation of benefits, and all similarly related matters necessary or advisable to operate and administer the Plan. The Committee's determination of all questions arising under the Plan shall be binding upon all employees, Members and any others concerned.

The Plan further provides that participants receiving LTD benefits may be required to undergo semi-annual medical examinations by a physician appointed by the Committee and/or to submit evidence to the Committee of continued total disability; if the Committee determines that a participant is no longer totally disabled, Hoffmann will cease paying LTD benefits. ² The participant may appeal a decision to discontinue benefits by requesting in writing that the Committee review the decision. The second determination by the Committee becomes final.

Abnathya worked for Hoffmann as a data entry operator from October of 1967 until approximately September 20, 1985. She had contracted polio as a child, which permanently paralyzed her left leg, requiring that she wear a full brace and that she walk with a cane. Over the years at her job at Hoffmann, she developed severe pain in her neck, shoulders, arms, hands, and legs from having to sit for long periods of time. In February of 1986, claiming that she suffered from a totally disabling orthopedic condition, Abnathya applied for LTD Benefits.

As support for her claim, Abnathya submitted a report, dated February 6, 1986, from Dr. Andre Birotte, an orthopedic surgeon who was her attending physician. Dr. Birotte described Abnathya's symptoms as "severe pain in the left ankle and right knee and right hand." His diagnosis was "probable degenerative joints disease of the lumbosacral spine and hips; bilateral flaccid paralysis secondary to poliomyelitis." He concluded that Abnathya was "totally disabled for any gainful employment." Abnathya had also been examined in January of 1986 by Dr. Albin Leonhardt, an orthopedic surgeon selected by MetLife, see supra n. 1, who similarly concluded that she was "totally permanently disabled as a result of ... post-polio syndrome" and that she was "unable to engage in any type of gainful activity."

Based on these medical evaluations, the Committee determined that Abnathya was totally disabled and therefore eligible for LTD benefits, which she began receiving on March 24, 1986. In accordance with the LTD Plan, Hoffmann requested semi-annual statements from Abnathya's treating physician in September of 1986, March of 1987 and October of 1987. In each of his statements, Dr. Birotte repeated his original diagnosis and his opinion that Abnathya was totally disabled and unable to perform any gainful employment.

In March of 1988, as part of Hoffmann's two-year review of Abnathya's continued eligibility and pursuant to the LTD Plan, Hoffmann asked that Abnathya be re-examined by Dr. Leonhardt, who again diagnosed lower left extremity paralysis due to polio, but stated that Abnathya's orthopedic disability was "moderate" and "partial" and that she was "able to do work of a sedentary nature ... since there is no disability related to the upper extremities." In spite of this evaluation, the Committee continued Abnathya's LTD benefits for two more years, during which Abnathya continued to submit semi-annual statements from Dr. Birotte, reflecting his consistent opinion that she was totally disabled and unable to perform gainful employment.

In 1990, as part of the four-year review of Abnathya's continued total disability and pursuant to the Plan, Hoffmann required that Abnathya be examined again by an independent medical examiner. She was examined in January of 1990 by Dr. Arthur Canario, an orthopedic surgeon selected by MetLife, who described her disability in a brief, two-page letter-report, concluding, "In my opinion, the patient has a severe disability but is certainly capable of working.... [W]ith independent transportation[,] I see no reason why she would not be employable in the Hoffmann-La Roche company."

Because Dr. Canario's conclusions conflicted with the semi-annual reports of Abnathya's treating physician and because Abnathya expressed dissatisfaction with Dr. Canario's examination, Hoffmann requested a second examination by a different independent medical examiner. In March of 1990, Abnathya was examined by Dr. David Greifinger, an independent orthopedic surgeon selected by MetLife. Dr. Greifinger's written evaluation of Abnathya's medical condition was significantly more detailed than Dr. Canario's report, but came to the same conclusion that Abnathya was not totally disabled:

This 41-year old female has longstanding poliomyelitis. It has affected her left lower extremity. The patient does have significant disability. The patient is independent with her ambulation. I would suggest that she can work in a sedentary fashion. It would be important for her to remain active. I believe that some tasks can be carried out.

Based on the reports of Drs. Canario and Greifinger, the Committee determined that Abnathya was no longer totally disabled within the meaning of the LTD Plan and voted to terminate her LTD benefits effective July 31, 1990. Abnathya was notified of this decision by letter dated July 30, 1990.

Abnathya appealed the Committee's decision in a letter to Hoffmann dated August 5, 1990. As the basis for her appeal, Abnathya stated that the examination by Dr. Canario was extremely cursory and that the conclusions of both Canario and Greifinger were erroneous. On August 15, 1990, Abnathya's newly retained counsel wrote to Hoffmann setting forth the reasons for her appeal, specifically: (1) that it was improper for the Committee not to have relied on Dr. Birotte's opinion since he was the treating physician and since the Committee had relied on his opinion of Abnathya's condition for the previous four years; and (2) that the examinations of Drs. Canario and Greifinger were cursory and incomplete and therefore were not valid grounds for the discontinuation of benefits.

Responding to Abnathya's request for review of the Committee's decision to discontinue her benefits, Hoffmann informed her in late August that the Committee would meet to review its original determination on September 6, 1990. Hoffmann also informed Abnathya...