Hamma v. Intel Corp.
| Decision Date | 23 March 2009 |
| Docket Number | No. 2:07-cv-01795-GEB-CMK.,2:07-cv-01795-GEB-CMK. |
| Citation | 642 F.Supp.2d 1144 |
| Parties | Denise K. HAMMA, Plaintiff, v. INTEL CORPORATION; Intel Corporation Long Term; Disability Benefit Plan; Intel Disability Appeals Committee; and Matrix Absence Management, Inc., Defendants. |
| Court | U.S. District Court — Eastern District of California |
Frank Nicholas Darras, Shernoff Bidart Darras Echeverria LLP, Ontario, CA, Pamela I. Atkins, Atkins and Associates, Atlanta, GA, for Plaintiff.
Joseph E. Lambert, Joseph Lambert PC, Attorney at Law, Mesa, AZ, Nancy Joan Sheehan, Porter Scott, Sacramento, CA, for Defendants.
Defendants Intel Corporation, Intel Corporation Long Term Disability Plan, Intel Disability Appeals Committee (collectively "Intel"), and Matrix Absence Management ("Matrix") seek summary judgment on Plaintiff's claim under 29 U.S.C. § 1132(a)(1)(b) ("ERISA") for long term disability ("LTD") benefits. Plaintiff opposes the motion and requests in her Opposition brief that summary judgment be granted in her favor. Plaintiff's motion has not been duly noticed for hearing and is denied on that ground. The parties dispute whether Defendants abused their discretion in determining Plaintiff did not present "Objective Medical Findings" that her condition, Chiari I Malformation, was a "Disability" as defined by the LTD Plan (the "Plan"). Additionally, the parties dispute whether Plaintiff's claim should be evaluated under an abuse of discretion standard of review or a heightened standard of review since Intel funded the Plan.
Plaintiff worked at Intel from June 2000 until February 2004 as an Administrative Support Specialist. On March 12, 2004, Plaintiff applied for LTD benefits under the Plan, listing her disabling condition as "Chiari malformation and Syringomyelia." (Pl. Application for LTD Benefits.) Plaintiff had previously applied for and been granted short term disability benefits under a separate plan offered to Intel employees.
Beginning in 1994, Intel delegated the responsibility for administration of the Plan to an independent third party, Matrix. Matrix makes an initial determination whether to award or deny LTD benefits to Intel employees applying for LTD benefits. If Matrix denies an application for LTD benefits, an employee may appeal his or her claim to the Intel Disability Appeals Committee ("Appeals Committee"), which is comprised of Intel employees. However, even during the appeal, Matrix acts as an intermediary, assisting employees to organize their appeal files and to obtain additional physician review of their files. The Plan granted discretion to Matrix and the Appeals Committee to make factual determinations and to interpret the terms of the Plan.
Under the Plan terms, disability is defined as "an illness or injury substantiated by objective medical findings and which renders a participant incapable of performing work." (Intel Corporation Long Term Disability Plan, 2.05.) "Objective medical findings" are defined by the Plan "as a measurable abnormality which is evidenced by one or more standard medical diagnostic procedures;" objective medical findings do not include "`physicians' opinions or other third party opinions based solely on the acceptance of subjective complaints." (Id. at 2.14.) Under the Plan, even if a disability is generally recognized by the medical community and is substantiated by objective medical findings, "it will not be considered disabling if the Participant had such illness, injury or condition on the date of hire by the Company unless it can be shown by further objective medical findings that such illness, injury or condition materially deteriorated since the date of hire by the company." (Id. at 4.03(L).)
Following Matrix's receipt of Plaintiff's application, it requested and received Plaintiff's medical records from numerous physicians. (June 25, 2005 Letter from Matrix to Plaintiff.) Matrix then contacted Doctor Experts, a referral agency for independent review of medical files, in order to arrange for Plaintiff's medical records to be reviewed by an independent physician. Doctor Experts then hired Dr. Burres, and Dr. Burres reviewed Plaintiff's medical records. (Dr. Kenneth Burres, Independent Medical Examination, Ex. 21 at 7.) Thereafter, Dr. Burres concluded that "[Plaintiff] is capable of performing her sedentary job at Intel [], and [he found] no objective or substantive reason why restrictions or limitations should be placed [on Plaintiff]." (Id. at 8.)
Matrix relied upon Dr. Burres's review and notified Plaintiff that her application for LTD benefits had been denied. Matrix explained that "the current objective medical findings do not support a disability as defined by the Plan." (Letter from Matrix Absence Management, Inc., Exhibit 2.) Matrix further notified Plaintiff that her LTD benefits claim was being denied because her condition existed prior to her employment with Intel. (Id.)
On December 2, 2004, Plaintiff appealed Matrix's denial of her LTD benefits claim. Plaintiff submitted additional information to Matrix, the entity that prepared Plaintiff's appeal file, to substantiate her claim for LTD benefits. For purposes of the appeal, Matrix consulted CORE, an independent clearinghouse for medical peer reviews, and requested that a neurologist review Plaintiff's file. CORE hired Dr. Sands, a neurologist, who concluded:
The patients [ ] pain complaints involve both upper and lower extremities and back while no signs of neurologic damage are present ... Therefore, not only are there no objective physical findings, but the symptoms fit no pattern supportive of a precise diagnosis ... The objective medical findings are not of so severe a nature to prevent the patient from performing any occupation for which she is or becomes qualified for based on education, training, and experience.
(Dr. Jonathan Sands Report, Ex. 28 at 1-2.)
The Appeals Committee considered Plaintiff's appeal on August 18, 2005 and affirmed Matrix's denial of LTD benefits. On September 1, 2005, Plaintiff was notified of the Appeals Committee's decision. On August 31, 2007, Plaintiff filed a complaint against Defendants for wrongful denial of benefits.
The Plan confers discretionary authority upon Intel to determine eligibility for benefits; Intel has delegated this discretionary authority to Matrix. "Where an ERISA plan confers discretionary authority upon a plan administrator to determine eligibility for benefits, [district courts] generally review the administrator's decision to deny benefits for an abuse of discretion." Nolan v. Heald College, 551 F.3d 1148, 1153 (9th Cir.2009). See also Abatie v. Alta Health & Life Ins. Co., 458 F.3d 955, 965 (9th Cir.2006).
Plaintiff, however, argues that because the Plan is funded from Intel's general assets, a structural conflict of interest exists and a heightened standard of review should apply. When an employer "acts as both the plan administrator and the funding source for benefits [it] operates under what may be termed a structural conflict of interest." Id. at 965.
Where a plan administrator operates under a [structural] conflict of interest ... a court must weigh the conflict as a factor in determining whether there is an abuse of discretion. [C]onsideration of the conflict can affect judicial review, and a court is required to consider the conflict whenever it exists, and to temper the abuse of discretion standard with skepticism commensurate with the conflict.
Only a serious conflict of interest warrants a heightened standard of review. Jordan v. Northrop Grumman Corp. Welfare Benefit Plan, 370 F.3d 869, 875 (9th Cir.2004). Plaintiff "has the burden to come forward with `material, probative evidence, beyond the mere fact of the apparent conflict, tending to show that the fiduciary's self-interest caused a breach of the administrator's fiduciary obligations....'" Bendixen v. Standard Ins. Co., 185 F.3d 939, 943 (9th Cir.1999) (quoting Atwood v. Newmont Gold Co., 45 F.3d 1317, 1323 (9th Cir.1995)).
[Further, t]he level of skepticism with which a court views a conflicted administrator's decision may be low if a structural conflict of interest is unaccompanied, for example, by any evidence of malice, of self-dealing, or of a parsimonious claims-granting history. A court may weigh a conflict more heavily if, for example, the administrator provides inconsistent reasons for denial, fails adequately to investigate a claim or ask the plaintiff for necessary evidence, fails to credit a claimant's reliable evidence, or has repeatedly denied benefits to deserving participants by interpreting plan terms incorrectly or by making decisions against the weight of evidence in the record.
Defendants argue that "any structural conflict has been effectively eliminated by Intel's delegation of its administrative duties to Matrix." Wallace v. Intel Corp., 2006 WL 2709839 *6 (D.Ariz.2006). "[A] company's delegation of claims administration responsibilities, while not sufficient to negate a structural conflict outright, is a significant factor in assessing the impact of that conflict in an elevated abuse of discretion review." Id.
Plaintiff argues a higher standard of review should be applied because the Appeals Committee was comprised solely of Intel employees; and contends her co-workers may be biased in making benefit determinations for their co-workers. Defendants controvert Plaintiff's assertion that the Appeals Committee was biased through the declarations of Appeals Committee members who evaluated Plaintiff's claim.1 (Ex. 45-47.) George Aubrey, declares, "I and the other employees who served on the Appeals Committee were there to hear appeals of claims that had been denied by Matrix and essentially to make sure that Matrix did not deny a claim that should have been granted, consistent with the terms and...
To continue reading
Request your trial
-
Thompson v. Insurance and Benefits Trust/Committee Peace Officers Research Association of California
...benefits under the "any occupation" standard even when social security disability benefits had been awarded); Hamma v. Intel Corp., 642 F.Supp.2d 1144, 1152 (E.D.Cal.2009) (holding that "plan administrators are not constrained by an award of Social Security benefits . . . because `the test ......
-
Swafford v. Cigna Grp. Ins., CASE NO. 1:14-cv-00213-DAD-MJS
...by the Court regarding his eligibility for benefits. Such claims are routinely cognizable under ERISA. E.g., Hamma v. Intel Corp., 642 F. Supp. 2d 1144 (E.D. Cal. 2009); Finley v. Carpenters Pension Trust Fund for N. Cal., No. 2:13-cv-1132-GEB-EFB PS, 2016 WL 1060169 (E.D. Cal. Mar. 17, 201......