Doroshow v. Hartford Life and Acc. Ins. Co.

• Decision Date: 30 July 2009
• Docket Number: No. 08-2836.,08-2836.
• Citation: 574 F.3d 230
• Parties: Jay DOROSHOW, Appellant, v. HARTFORD LIFE AND ACCIDENT INSURANCE COMPANY.
• Court: U.S. Court of Appeals — Third Circuit

574 F.3d 230

Jay DOROSHOW, Appellant, v. HARTFORD LIFE AND ACCIDENT INSURANCE COMPANY.

No. 08-2836.

United States Court of Appeals, Third Circuit.

Argued on February 3, 2009.

Opinion Filed: July 30, 2009.

Scott I. Fegley, Esquire (Argued), Yardley, PA, for Appellant.

Brian P. Downey, Esquire (Argued), Pepper Hamilton, LLP, Harrisburg, PA, Stacey I. Gregory, Esquire, Pepper Hamilton, LLP, Philadelphia, PA, for Appellee.

Before: RENDELL, JORDAN and ROTH, Circuit Judges.

OPINION

ROTH, Circuit Judge:

Jay Doroshow appeals the District Court order granting summary judgment in favor of Hartford Life and Accident Insurance Company. The District Court found that Hartford had not been arbitrary and capricious in its decision to deny long term disability benefits to Doroshow under an employee welfare benefit plan, governed by the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1001, et seq. For the following reasons, we will affirm that decision.

I. Background

Doroshow was an employee of the CVS Corporation and participated in its Long Term Disability Income Insurance Plan, a group benefit plan issued by Hartford. CVS "delegated sole discretionary authority to Hartford ... to determine [the participant's] eligibility for benefits and to interpret the terms and provisions of the plan and any policy issued in connection with it."

Doroshow's effective date of coverage was July 1, 2006. Under the plan, long term disability benefits are not payable for disabilities "caused by, contributed to, or resulting from ... a preexisting condition." A pre-existing condition is one "for which medical treatment or advice was rendered, prescribed or recommended within 12 months (3 months for exempt employees) prior to [the participant's] effective date of insurance." It is undisputed that Doroshow was subject to the three-month look-back period.

Doroshow was diagnosed definitively with Amyotropic Lateral Sclerosis (ALS) on March 15, 2007. On March 16, 2007, Doroshow applied for disability benefits under the Hartford plan. Hartford denied Doroshow's claim on August 30, 2007, writing:

Our review of all of the medical information in your claim file shows that you are claiming benefits because of symptoms related to motor neuron disease (MND), which includes amyotrophic lateral sclerosis (ALS). The medical records obtained from the office of Dr. Goldstein indicate that you were treated for this condition on 05/16/2006. ALS was discussed in this OV, likely due to the type of symptoms you were experiencing and the family history of this disease. Intermittent workup and follow up continued for your reported symptoms until definitive diagnosis was reached in March 2007. You were provided advice related to the possibility of an ALS diagnosis on 05/16/2006, and the symptoms were certainly a precursor to the eventual diagnosis of ALS. This treatment date falls within the 3 month period that ends before your effective date of LTD coverage. This information shows that your condition was Preexisting.

The office visit with Dr. Arnold Goldstein, M.D., Doroshow's primary care physician, to which Hartford referred in its denial letter, occurred on May 16, 2006, during the look-back period. Hartford's denial relied on Dr. Goldstein's office notes, in which he wrote, "Motor neuron disease. Lumbrosacral plexitis is the most recent diagnosis. Was not felt to be ALS." Hartford determined that during this office visit Dr. Goldstein had rendered advice pertaining to ALS, thus making Doroshow ineligible for long-term disability benefits under the pre-existing condition plan exclusion.

Even prior to the Dr. Goldstein visit during the look-back period, Doroshow's medical records indicate he had received advice and undergone testing related to ALS based on symptoms he was experiencing and a family history of the disease. On July 25, 2005, Dr. Mark J. Brown, M.D., a neurologist, conducted an electromyographic (EMG) test on Doroshow. In Dr. Brown's notes, he wrote: "1. Chronic active degeneration of right leg, arm, paraspinal and bulbar muscles with near-normal nerve conduction studies. These are features of a motor neuron disease. 2. If the left Babinksi sign is a consistent feature then he has the ALS form of motor neuron disease."

Following this test, Doroshow visited Leo McCluskey, M.D., an ALS specialist, on July 27, 2005. Dr. McCluskey wrote that "Doroshow demonstrates evidence of a lower motor neuron process affecting his right leg" and that "[h]e has no upper motor neuron signs." Accordingly, Dr. McCluskey felt that "[t]hese are features that do not support the diagnosis of amyotropic lateral sclerosis or a progressive motor neuron disorder." Doroshow was under Dr. McCluskey's treatment for motor neuron disease between April 1, 2000, and June 30, 2006. Dr. McCluskey was ultimately the doctor who diagnosed Doroshow with ALS on May 15, 2007.

After he unsuccessfully appealed Hartford's decision via its internal administrative procedures, Doroshow filed an action in the District Court pursuant to 29 U.S.C. § 1132(a)(1)(B). He claimed that Hartford's denial was arbitrary and capricious. Both parties subsequently filed motions for summary judgment. The District Court determined that Doroshow had not demonstrated that Hartford's decision was arbitrary and capricious and granted judgment for Hartford. Doroshow appealed.

II. Standard of Review

We have jurisdiction over this appeal under 28 U.S.C. § 1291 and exercise plenary review over the District Court's decision to grant summary judgment. Summary judgment is appropriate when the "pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c).

III. Discussion

Before addressing the merits of Doroshow's appeal, we must first determine what standard of review a trial court must apply in 29 U.S.C. § 1132(a)(1)(B) actions. In Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989), the Supreme Court held that "a denial of benefits challenged under § 1132(a)(1)(B) is to be reviewed under a de novo standard unless the benefit plan gives the administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe the terms of the plan." Id. at 115, 109 S.Ct. 948. When the administrator has discretionary authority to determine eligibility for benefits, as Hartford did in this case, the decision must be reviewed under an arbitrary and capricious standard. Under that standard, "if a benefit plan gives discretion to an administrator or a fiduciary who is operating under a conflict of interest, that conflict must be weighed as a `facto[r] in determining whether there is an abuse of discretion.'" Id.

Until recently, this Circuit had used a sliding scale approach to address conflicts of interest and their impact on the amount of discretion that should be afforded to the decisions of plan administrators. See Estate of Schwing v. The Lilly Health Plan, 562 F.3d 522, 525 (3rd Cir.2009). Under the sliding scale approach, "if the level of conflict is slight, most of the administrator's deference remains intact, and the court applies something similar to traditional arbitrary and capricious review; conversely, if the level of conflict is high, then most of its discretion is stripped away." Post v. Hartford Ins. Co., 501 F.3d 154, 161 (3d Cir.2007). In Pinto v. Reliance Std. Life Ins. Co., 214 F.3d 377 (3d Cir.2000), we said, "an insurance company [that] both funds and administers benefits ... is generally acting under a conflict that warrants a heightened form of the arbitrary and capricious standard of review." Id. at 378. Under the heightened version of this form of review, a court should be "deferential, but not absolutely deferential" to the administrator. Id. at 393. The District Court, following Pinto, used a heightened arbitrary and capricious standard to review Hartford's rejection of Doroshow's claim for benefits because Hartford both funded the plan and was solely responsible for determining eligibility under the plan.

In making its determination, the District Court did not have the benefit of Metropolitan Life Ins. Co. v. Glenn, ___ U.S. ___, 128 S.Ct. 2343, 171 L.Ed.2d 299 (2008), in which the Supreme Court rejected a conflict of interest review that requires a heightened arbitrary and capricious standard. In Glenn, a participant in a long-term disability insurance plan administered by Metropolitan Life Insurance Company (MetLife) challenged MetLife's determination that she was no longer eligible for benefits because she was not totally disabled. MetLife both funded the plan and had discretionary authority to determine the validity of an employee's benefits claim, creating the same type of conflict of interest that we found in Pinto and that we have in this case.

With Glenn, the Court aimed to elucidate its previous precedent in Firestone that a conflict should be weighed as a factor in determining whether there is an abuse of discretion. Glenn, 128 S.Ct. at 2350. In doing so, the Court emphasized that the existence of a conflict did not change the standard of review from abuse of discretion to a more searching review. Id. at 2351. The Court explained that any one factor could act as a tiebreaker when the other factors are closely balanced. The greater "the tiebreaking factor's inherent or case-specific importance[,]" the less closely the other factors must be balanced for that tiebreaking factor to be decisive. Glenn, 128 S.Ct. at 2351. The Court provided an example:

The conflict of interest at issue here, for example, should prove more important (perhaps of great importance) where circumstances suggest a higher likelihood that it affected the benefits decision, including, but not limited to, cases where an insurance company administrator has a history of...