Salomaa v. Plan

• Decision Date: 26 May 2011
• Docket Number: No. 08–55426.,08–55426.
• Citation: 642 F.3d 666
• Parties: Samuel SALOMAA, Plaintiff–Appellant,v.HONDA LONG TERM DISABILITY PLAN, an Erisa Plan, Defendant–Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

642 F.3d 666

11 Cal. Daily Op. Serv. 6380

2011 Daily Journal D.A.R. 7630

Samuel SALOMAA, Plaintiff–Appellant,

v.HONDA LONG TERM DISABILITY PLAN, an Erisa Plan, Defendant–Appellee.

No. 08–55426.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted May 4, 2009.Filed March 7, 2011.Amended May 26, 2011.

Charles J. Fleishman, Northridge, CA, for the appellant.Melissa M. Cowan, Burke, Williams & Sorensen, LLP, Los Angeles, CA, for appellee.Appeal from the United States District Court for the Central District of California, Andrew J. Guilford, District Judge, Presiding. D.C. No. 2:06–cv–00754–AG–FMO.Before: CYNTHIA HOLCOMB HALL,¹ ANDREW J. KLEINFELD, and BARRY G. SILVERMAN, Circuit Judges.Opinion by Judge KLEINFELD; Dissent by Judge HALL.

ORDER

The opinion filed on March 7, 2011 is amended as follows:

At 3202 of the slip opinion, strike the following sentence:

This “ any reasonable basis” test is no longer good law.

Replace with:

This “ any reasonable basis” test is no longer good law when as in this case an administrator operates under a structural conflict of interest.

The amended opinion is filed concurrently with this Order. With this amendment, Judges Kleinfeld and Silverman voted to deny the petition for hearing. Judge Silverman voted to deny the petition for rehearing en banc, and Judge Kleinfeld has recommended the same.

The full court has been advised of the petition for rehearing and no judge of the court has requested a vote on the petition for rehearing en banc. Fed. R.App. P. 35.

The petition for rehearing and petition for rehearing en banc is DENIED. No further petitions for rehearing or petitions for rehearing en banc will be entertained.

OPINION

KLEINFELD, Circuit Judge:

We address the standard for overturning an ERISA plan decision, and why the challenger met it.

I. Facts.

Samuel Salomaa worked for American Honda Motor Company, Inc. for more than twenty years. His supervisor described him as “without a doubt the best employee to have worked for me” in her 15 years at Honda. He was never out sick, and never left work early or came in late. At age 47, Salomaa was a dedicated family man to his wife and daughter, and an exercise enthusiast who jogged two miles to and from work every day and enjoyed playing tennis with his wife.

But in October 2003, Salomaa fell ill with what he thought was a stomach flu that made him miss three days of work. He was never the same again. He returned to work, but was tired all of the time, and had difficulty concentrating. His supervisor noted that Salomaa “walked more slowly,” and co-workers asked her about Salomaa's well-being. Not only did Salomaa no longer jog to work, he did not even walk to work. After work he was completely exhausted, and spent weekends in bed recovering.

Salomaa went to Kaiser Permanente to find out what was wrong with him and get it cured. His complaint was grossly excessive fatigue, beginning when he had his “flu,” along with other symptoms, such as headache, insomnia, and excessive sensitivity to stimuli. His doctors went through a lengthy process of ruling out alternatives to chronic fatigue syndrome.

Over the following months, Salomaa's Kaiser Permanente physicians worked on a diagnosis. He had reported loss of libido, and a blood test showed low testosterone, but a subsequent blood test was normal, so low testosterone was ruled out as an explanation. An MRI showed no brain abnormalities. The thyroid reading on his blood tests were normal. Heart failure might explain severe fatigue, and an echocardiogram showed mild mitral regurgitation, but the examining cardiologist ruled out a heart problem as the cause of the fatigue.

A Kaiser Permanente psychiatrist formed what she called a “working diagnosis” of “atypical depression.” The depression was “atypical” in that Salomaa had no previous psychiatric history, could precisely identify the onset of his fatigue following his October 2003 flu, had no “precipitating stressors” that might have triggered the depression, and denied feeling depressed. The psychiatrist tried treating Salomaa with various anti-depressants and a counseling program. In July 2004, Salomaa took medical leave, based on his doctor's diagnosis of depression and anxiety. After several months, it was clear that the medication and counseling were not working, so the physician who had made the working diagnosis of depression rejected the diagnosis.

Salomaa's condition got worse instead of better. Some days, getting up and getting dressed left him too exhausted to drive the two miles to his job, so he stayed home. When he did go to work, he could not do his job as well as he had been before his illness. His supervisor reported that on bad days he seemed confused, and she often insisted that he go home to rest. When he came home from work, he went straight to bed, even eating dinner there. In spite of his fatigue, Salomaa also had insomnia.

A physician in the internal medicine department at Kaiser Permanente, Dr. Floyd Anderson, diagnosed chronic fatigue syndrome. He noted the ineffectiveness of various medications that had been tried for other conditions that might explain the symptoms. He wrote on March 4, 2005 that “since beginning our Kaiser Permanente Chronic Fatigue/Fibromyalgia Clinic in 1992, Mr. Salomaa is one of the more severe patients that I have seen in the clinic as far as his energy level. He is probably the most sensitive patient I've seen in regard to sensitivity to sound. His memory has also markedly decreased secondary to his illness. Mr. Salomaa is totally disabled and would not be able to work even 30 minutes per day on a daily basis.” The psychiatrist who had tentatively diagnosed depression wrote to the plan administrator concurring in Dr. Anderson's diagnosis, and stating that Salomaa had “never suffered from Major Depression though that was [her] working diagnosis for several months.”

Salomaa applied to Honda's ERISA plan administrator for long-term medical disability benefits.² The claim manager denied his claim on April 22, 2005. She wrote that Salomaa had no positive objective physical findings, the lack of objective physical findings apparently forming the basis for the denial. She noted that Salomaa's “thyroid, calcium, albumin, serum electrolytes, and CBC results were normal.” Contrary to her inference that Salomaa was healthy, the Kaiser Permanente physicians had used these normal results to rule out alternatives to chronic fatigue syndrome. She erred in some respects, suggesting a less than careful examination of Salomaa's medical record. For example, she wrote that he had “no fevers or weight loss,” but actually he had lost 14% of his body weight in six months according to the medical materials that had been submitted. She misunderstood the Kaiser Permanente evaluation that “you never had major depression” as meaning that “your depression has improved.” In the denial letter, she relied on review by “our medical department,” by which she meant that one physician had read Salomaa's medical file and written his opinion.

The denial had invited supplementation within thirty days, so Dr. Anderson provided more details. The disability claim manager had provided a form for Salomaa's physician to use to check off physical abilities, and Dr. Anderson checked “occasionally,” the lowest level allowed on the form, for sitting, standing, walking, grasping, and carrying objects. He wrote a letter as well, stating that Salomaa had severe fatigue, and was “only able to do paperwork for a few minutes and then is very fatigued.” Dr. Anderson explained in his letter that patients with chronic fatigue syndrome have good days and bad days, and that on a good day the patient might be able to perform the activities listed on the form for an hour or two, but then end up in bed for several days due to overexertion. In Salomaa's case, Dr. Anderson's letter opined that “Salomaa would not be able to work perhaps 30 minutes to one hour” and that, “[e]ven this, if he happened to overexert, would leave him exhausted.” “Since beginning our clinic here in 1992, Mr. Salomaa is one of the more severe cases I have seen” and that Salomaa “definitely could not work.” He pointed out to the disability claim manager that “laboratory tests are always normal and there is no test that is available at the present time for chronic fatigue syndrome.” The plan administrator's reviewing physician called Dr. Anderson on the phone, and Dr. Anderson reminded him that Salomaa had chronic fatigue syndrome, and that Salomaa's lack of positive laboratory findings was consistent with that diagnosis.

The disability claim manager sent out a final denial on May 20, 2005. She again recited the absence of positive laboratory results or physical findings, again made the error on weight loss and depression, and noted that Salomaa's daily activities exceeded Dr. Anderson's estimations. She pointed out that his daily journals had showed him driving a half-hour to an hour to Home Depot and an hour to pick up his children at school, both taking longer than the half-hour that his doctor said was the most he could work.

Dr. Anderson responded that since Salomaa's last two visits in May and June, he thought Salomaa's condition had markedly deteriorated, to where he could no longer work even five minutes per day. Responding to the disability claim manager's argument that Salomaa had “no physical findings to support chronic fatigue syndrome,” he wrote that in his experience, “most patients' symptoms and physical findings manifest when they initially develop the viral-type illness,” as Salomaa's had. He pointed out that usually there were no physical findings for chronic fatigue syndrome except that the patient looked fatigued, just as there were no physical symptoms for migraine headache except that the patient would appear to be in pain.

Rebutting the plan administrator's contention, Dr. Anderson wrote that on his long trip to Home...