Gaither v. Aetna Life Ins. Co., 03-7029.

• Citation: 388 F.3d 759
• Decision Date: 04 November 2004
• Docket Number: No. 03-7029.,03-7029.
• Parties: Donald B. GAITHER, Plaintiff-Appellant, v. AETNA LIFE INSURANCE COMPANY and Pharmacia Corporation, Defendants-Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (10th Circuit)

388 F.3d 759

Donald B. GAITHER, Plaintiff-Appellant, v. AETNA LIFE INSURANCE COMPANY and Pharmacia Corporation, Defendants-Appellees.

No. 03-7029.

United States Court of Appeals, Tenth Circuit.

November 4, 2004.

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Gentner F. Drummond (Will K. Wright, Jr., with him on the briefs), The Drummond Law Firm, Tulsa, OK, for Plaintiff-Appellant.

Tamsin J. Newman (Joseph J. Costello with her on the brief), Morgan, Lewis & Bockius LLP, Philadelphia, PA, for Defendant-Appellee Pharmacia Corporation.

Mark D. Spencer (Amy D. White with him on the brief), McAfee & Taft, P.C., Oklahoma City, OK, for Defendant-Appellee Aetna Life Insurance Company.

Before MURPHY, HOLLOWAY, and McCONNELL, Circuit Judges.

McCONNELL, Circuit Judge.

In the summer of 1999, Donald B. Gaither was suspended from employment because his employer determined that his medical condition—his use of narcotic painkillers—made him unable to perform his job. At the same time, his employer's ERISA plan administrator denied him disability benefits because his medical condition did not make him unable to perform his job. The plan administrator defends on the essential ground that it did not know, and was under no obligation to find out, why Mr. Gaither lost his job.

Until September 1999, Mr. Gaither worked for Monsanto Corporation ("Monsanto") as a Utilities Team Leader in an Okmulgee, Oklahoma plant.¹ In late 1996, he was diagnosed with multiple myeloma, a cancer of the blood that affects the bone marrow. His long and ultimately unsuccessful battle against the disease required extended absences from his job, during which time Monsanto provided disability benefits to him pursuant to an employee benefits plan governed by ERISA. Mr. Gaither also took powerful prescription drugs to manage his pain, but he eventually attempted to wean himself from them in order to return to Monsanto, which insisted that the drugs impaired his judgment and made him unfit for his position.

After Mr. Gaither had been back at work for several months, Monsanto discovered evidence that Mr. Gaither was once again taking prescription painkillers. As a result, Monsanto personnel found Mr. Gaither temporarily unfit for his job and placed him on leave beginning on July 22, 1999, and continuing until he was terminated for unauthorized personal use of a company credit card on September 2nd of that year. Meanwhile, Aetna Life Insurance Company ("Aetna"), the company that administered Monsanto's disability plan, denied him benefits on the ground that there was "inadequate documentation of functional disability preventing the performance of the essential duties of Mr. Gaither's occupation ... during the period from July 1999 through September." It apparently reached this conclusion without any awareness of Monsanto's contrary findings or inquiry into the reasons for Mr. Gaither's suspension.

The district court affirmed Aetna's decision, applying the "arbitrary and capricious" standard of review. On appeal Mr. Gaither argues that under the circumstances of his case, Aetna's failure to inquire about the reason Monsanto put him on leave rendered its decision arbitrary and capricious. He also argues that Monsanto had an obligation to inform Aetna of the grounds for his leave of absence. We agree with Mr. Gaither and therefore reverse the judgment of the district court.

BACKGROUND

Mr. Gaither's problems began in October 1996 when he hurt his back playing golf. When that pain, along with pain from a previous rib injury, did not subside, Mr. Gaither saw a doctor. After several tests, he was diagnosed with multiple myeloma. In victims of that disease, the affected plasma cells (known as myeloma cells) multiply and gather in the bone marrow. Typically, they accumulate in the cavities of multiple bones, where they eventually cause numerous small lesions, often resulting in fractures, and weakness in the bone structure. As in Mr. Gaither's case, a common early symptom of the disease is pain in the ribs or lower back caused by such lesions and fractures.

As a Monsanto employee, Mr. Gaither was eligible for disability benefits under the Monsanto Disability Income Plan ("the Plan"), Appellees' Supp.App. 48-72, an ERISA plan partially administered by Aetna. Under the Plan, for the first two years of disability, a claimant is eligible for benefits if he is "not able, solely because of disease or injury, to perform the material duties of his own occupation." Group Coverage Plan Booklet 3, App. Vol. II. 561 (emphasis added). After two years, the requirements tighten, and the claimant becomes eligible only if, as a result of the disease or injury, he becomes disabled from "any reasonable occupation." Id.

After talking with Mr. Gaither and his supervisor at work, and after confirming his condition with his doctors, Aetna certified Mr. Gaither's disability through mid-July of the following year while he underwent chemotherapy. He was also in and out of the hospital trying to wean himself from prescription pain medications during that time. Under Mr. Gaither's disability plan, during the first six months of that leave, his benefits were 100% of his normal salary; after that point he entered a Long-Term Disability status and received only 65% of his salary.

Feeling mounting pressure to provide for his family of four children, Mr. Gaither returned to work in July 1997. Despite his earnest desire to return to work, Mr. Gaither's recovery was far from complete. At the end of September, Monsanto informed Aetna that in Mr. Gaither's first two months back on the job, he had missed more than a month of work and occasionally had trouble completing his twelve-hour shifts when he did show up. When questioned, Mr. Gaither stated that he had missed those days because of pain. Aetna refused to certify Mr. Gaither's disability for that period, although the case file notes explaining why appear to be missing from our copy of the record.

The next development in Mr. Gaither's case came in April 1998, when Susan Shean, Health Services Supervisor at Monsanto, contacted Aetna because Mr. Gaither had apparently stopped working again two months earlier. She stated that this was a difficult case and that she would handle it directly. Ms. Shean tracked down Mr. Gaither's new oncologist, Dr. Brunk, and forwarded his medical records to Aetna. Those records showed that his multiple myeloma condition was improving. Dr. Brunk's office also indicated that the "biggest problem was back pain and gross fatigue," and reported that Mr. Gaither's dosage of Oxycontin was being increased as of April 23. That same day, Mr. Gaither had a three-way phone conversation with Ms. Shean and Aetna's case worker. He expressed a desire to return to work immediately (rather than returning to 65% disability pay) and claimed that although he had just had his Oxycontin prescription increased, he was not taking the drug. Ms. Shean, on the other hand, noted that he had not managed to fulfill his job duties consistently, and questioned whether it was appropriate for him to resume working. The upshot of the conversation was that Ms. Shean would send Dr. Brunk a description of Mr. Gaither's job specifications and ask for his evaluation of Mr. Gaither's ability to return to work with or without restrictions. On May 6, 1998, Ms. Shean wrote the following in her request to Dr. Brunk:

The Team Leader's guidance, judgments, and decision making abilities are crucial to the safety of the operation and the personnel on his shift. Our concerns about his ability to function safely are heightened by the knowledge that he may be using the analgesic Oxycontin at work, in either sustained release or immediate release formulations.

Letter from E. Susan Shean to Fred Brunk, M.D. (May 6, 1998), App. Vol. II 402.

By May 11, Ms. Shean had determined which days Mr. Gaither missed, and based on her report, Aetna retroactively certified Mr. Gaither's disability for eight days in September 1997, six days in January 1998, and from February 10, 1998 until May 15. Ms. Shean stated, however, that Mr. Gaither would not be allowed to return to work until she had received more information from his treating physicians and he had obtained clearance from Monsanto's medical department. Mr. Gaither's physicians were somewhat slow to respond, and even when Dr. Brunk indicated that he thought Mr. Gaither could return to work, Ms. Shean remained worried that he had not recognized the dangers involved in letting Mr. Gaither perform his duties while on pain medications. On several occasions, Aetna extended Mr. Gaither's disability certification based solely on Monsanto's continuing concerns about safety and refusal to let Mr. Gaither return to his job.

Finally, on June 16, 1998, Aetna successfully reached Dr. Sorenson, Mr. Gaither's pain specialist, who was unsure about Mr. Gaither's situation in particular but noted that his patients could usually perform at their jobs without any problems. Because of this uncertainty, a reviewing Aetna physician ordered an independent medical evaluation from a doctor in occupational medicine. On July 9, 1998, that evaluation was performed by Dr. William Gillock. He concluded that until Mr. Gaither stopped taking narcotic pain medications, he should refrain from using or supervising hazardous machinery, using company vehicles, and working on unguarded elevations.

After consulting with Mr. Gaither's supervisor, Ms. Shean reported to Aetna that Monsanto could not accommodate Dr. Gillock's restrictions. As a result, Aetna's case worker transferred Mr. Gaither's case to a rehabilitation specialist who could help Mr. Gaither retrain for other occupations.

Threatened with the loss of his position and the need to seek new employment, Mr. Gaither spoke with Ms. Shean, assuring her that he was "pain free and in a program to withdraw" from his pain medications. She therefore requested that Aetna continue to certify Mr. Gaither's disability...