Collier v. Lincoln Life Assurance Co. of Bos.

• Decision Date: 21 November 2022
• Docket Number: 21-55465
• Parties: Vicki COLLIER, Plaintiff-Appellant, v. LINCOLN LIFE ASSURANCE COMPANY OF BOSTON, Defendant-Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

53 F.4th 1180

Vicki COLLIER, Plaintiff-Appellant,

v.LINCOLN LIFE ASSURANCE COMPANY OF BOSTON, Defendant-Appellee.

No. 21-55465

United States Court of Appeals, Ninth Circuit.

Argued and Submitted July 28, 2022 Pasadena, California

FILED NOVEMBER 21, 2022

Glenn R. Kantor (argued), Zoya Yarnykh, and Sally Mermelstein, Kantor & Kantor LLP, Northridge, California; for Plaintiff-Appellant.

Kristina N. Holstrom (argued), Ogletree Deakins Nash Smoak & Stewart PC, Phoenix, Arizona; Byrne J. Decker, Ogletree Deakins Nash Smoak & Stewart PC, Portland, Maine; for Defendant-Appellee.

Before: Richard A. Paez and Paul J. Watford, Circuit Judges, and Richard D. Bennett,^* District Judge.

PAEZ, Circuit Judge:

Vicki Collier ("Collier") appeals the district court's judgment in favor of Lincoln Life Assurance Company of Boston ("Lincoln") in an action arising under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq. Collier filed a claim for long-term disability ("LTD") benefits through her employer-sponsored disability insurance policy ("the Plan"), which was administered by Lincoln. Lincoln denied Collier's claim for LTD benefits. Collier then pursued an internal appeal, but Lincoln again denied her claim. On de novo review, the district court affirmed Lincoln's denial of Collier's claim. In so doing, the district court adopted new rationales that the plan administrator did not rely on during the administrative process.

We reverse and remand. When a district court reviews de novo a plan administrator's denial of benefits, it examines the administrative record without deference to the administrator's conclusions to determine whether the administrator erred in denying benefits. See Abatie v. Alta Health & Life Ins. Co. , 458 F.3d 955, 963 (9th Cir. 2006) (en banc); Kearney v. Standard Ins. Co. , 175 F.3d 1084, 1088–89 (9th Cir. 1999) (en banc). The district court's task is to determine whether the plan administrator's decision is supported by the record, not to engage in a new determination of whether the claimant is disabled. Accordingly, the district court must examine only the rationales the plan administrator relied on in denying benefits and cannot adopt new rationales that the claimant had no opportunity to respond to during the administrative process.

The district court erred because it relied on new rationales to affirm the denial of benefits—rationales that Lincoln did not assert during the administrative process. See Harlick v. Blue Shield of California , 686 F.3d 699, 719–20 (9th Cir. 2012). Specifically, the district court found for the first time that Collier was not credible, and that she had failed to supply objective medical evidence to support her claim. As Lincoln did not present these rationales during the administrative process, Collier was afforded no opportunity to respond to them, and was denied her statutory right to "full and fair review" of the denial of her claim. See 29 U.S.C. § 1133(2). Accordingly, we reverse and remand for the district court to reconsider Collier's claim de novo, with no deference to the administrator's decision, and to determine whether the record evidence supports the reasons on which Lincoln relied to deny benefits.

I.

From 2013 to 2018, Collier worked at the Automobile Club of Southern California ("AAA") as an insurance sales agent. During that time, Collier experienced persistent pain in her neck, shoulders, upper extremities, and lower back, which limited her ability to type and sit for long periods of time. Collier was eventually diagnosed with a variety of physical impairments that restricted her mobility in her back, shoulders, elbows, and wrists. Collier underwent surgery on her right shoulder and later returned to work, but her pain continued. She received a variety of treatments to mitigate the pain, including cortisone, epidural, and Botox

injections, oral pain medication, acupuncture, and physical therapy.

In April 2018, she applied for worker's compensation. A worker's compensation representative recommended that AAA institute certain ergonomic accommodations for Collier to allow her to work with less pain. Despite these accommodations,¹ Collier reported that her pain persisted. In May 2018, Collier stopped working at AAA, citing her reported pain.

As an employee of AAA, Collier purchased LTD insurance through the Plan, which qualified her as a Plan participant. Collier was entitled to LTD benefits if she could show that she was disabled under the terms of the Plan. The Plan provided that Collier would be considered "disabled" if:

during the [26 week] Elimination Period and the next 12 months of Disability [Collier], as a result of Injury or Sickness, [was] unable to perform with reasonable continuity the Substantial and Material Acts necessary to pursue [her] Own Occupation in the usual and customary way; and thereafter, [Collier was] unable to perform, with reasonable continuity, the Substantial and Material Acts of any occupation, meaning that as a result of sickness or injury [Collier was] not able to engage with reasonable continuity in any occupation in which [she] could reasonably be expected to perform satisfactorily in light of [her] age, education, training, experience, station in life, and physical and mental capacity.²

In February of 2019, Collier filed a claim for LTD benefits with Lincoln. Lincoln obtained Collier's medical records, sent her records to an outside reviewer, Dr. Akhil Chhatre ("Dr. Chhatre"), and arranged for a vocational analysis of Collier's occupation. Dr. Chhatre reviewed Collier's medical records but did not examine Collier. His report concluded that Collier could work full-time without restrictions. Dr. Chhatre noted that "[t]he claimant has stable exam findings with no new diagnostic testing or exam changes to suggest an acute neurologic or (musculoskeletal) MSK derangement." Dr. Chhatre further noted that the "severity and scope" of Collier's reported pain was "not in line with the chronic and stable conditions that are supported by the medical evidence." A vocational analyst retained by Lincoln reviewed Collier's claim and determined that Collier's occupation as a "Sales Agent, Insurance" could be performed at either sedentary or light work levels. At either level, Collier's occupation required "frequent" fingering tasks, such as typing.

In May 2019, Lincoln denied Collier's claim for LTD benefits. Lincoln concluded that "[b]ased on the medical documentation received in relation to the requirements of [Collier's] occupation, [Collier did] not meet the definition of disability" under the Plan. In its denial letter, Lincoln quoted from and principally relied on Dr. Chhatre's report. The denial letter, however, said nothing about Collier's credibility or the lack of objective medical evidence as grounds for denying benefits.

Collier timely appealed the denial of benefits. In support of her internal appeal, Collier submitted additional medical records, a functional capacity evaluation ("FCE"),³ declarations from Collier, her family, and a close friend, and her primary care physicians' responses to Dr. Chhatre's report. As part of its review, Lincoln scheduled an independent medical examination for Collier with Dr. Katrina Vlachos ("Dr. Vlachos"). In January 2020, Dr. Vlachos reviewed Collier's medical records and examined her in-person. While Dr. Vlachos observed that Collier had "a number of areas of tenderness," she noted that her symptoms "appear[ed] to be out of proportion to what would be expected based on [her] MRI findings." Dr. Vlachos concluded that Collier could work full time with restrictions, but that she could only perform fingering tasks, like typing, on an occasional basis. Dr. Vlachos also stated that Collier "may benefit from voice activated software should she require any computer work."

In April 2020, Lincoln denied Collier's appeal. Lincoln concluded that after having

conducted a thorough and independent review of Collier's entire claim ... the information does not contain physical exam findings, diagnostic test results or other forms of medical documentation supporting her impairments and symptoms remained of such severity, frequency and duration that they resulted in restrictions or limitations rendering her unable to perform the duties of her occupation throughout and beyond the Policy's elimination period.

Lincoln further stated that the rationale for its original decision had not changed, noting that its "position remain[ed]" that Collier did not provide sufficient proof of her disability. As to accommodations, Lincoln simply stated that "ergonomic equipment [was] readily available" without specifying what equipment was available or how it would be implemented to accommodate Collier's restrictions.

Subsequently, Collier filed this action under ERISA § 502(a)(1)(B), 29 U.S.C. § 1132(a)(1)(B), for judicial review of Lincoln's denial of her claim for LTD benefits. The district court ordered a bench trial. See Kearney , 175 F.3d at 1094–95. In its trial briefs, Lincoln argued for the first time that Collier was not credible. Lincoln further argued that because Collier's doctors relied in large part on her subjective reports of pain, their conclusions were not supported and thus did not constitute objective evidence of her disability. Finally, Lincoln asserted that even if Collier were disabled under the Plan's terms, her typing restriction could be accommodated with ergonomic equipment, such as voice-activated software.

At trial, no witnesses testified and the administrative record was the only documentary evidence admitted. After trial, the district court issued findings of fact and conclusions of law affirming Lincoln's denial of LTD benefits. See Fed. R. Civ. P. 52(a)(1). Reviewing Lincoln's decision de novo, the court concluded that Collier failed to demonstrate that she was disabled under the Plan. Adopting the reasoning from Lincoln's trial brief, the district court determined that...