Skretvedt v. E.I. Dupont De Nemours & Co

• Decision Date: 13 December 2000
• Docket Number: MEDICAL-SURGICAL
• Citation: 268 F.3d 167
• Parties: (3rd Cir. 2001) ORRIN T. SKRETVEDT, APPELLANT v. E.I. DUPONT DE NEMOURS AND COMPANY, A DELAWARE CORPORATION; E.I. DUPONT DE NEMOURS AND COMPANY, PLAN ADMINISTRATOR;* PENSION AND RETIREMENT PLAN; HOSPITAL ANDPLAN; DENTAL ASSISTANCE PLAN; NONCONTRIBUTORY GROUP LIFE INSURANCE PLAN; CONTRIBUTORY GROUP LIFE INSURANCE PLAN; TOTAL AND PERMANENT DISABILITY INCOME PLAN; SAVINGS AND INVESTMENT PLAN; TAX REFORM ACT STOCK OWNERSHIP PLAN; SHORT TERM DISABILITY PLAN * (Amended per Clerk's Order dated
• Court: U.S. Court of Appeals — Third Circuit

Page 167

268 F.3d 167 (3rd Cir. 2001)

ORRIN T. SKRETVEDT, APPELLANT v. E.I. DUPONT DE NEMOURS AND COMPANY, A DELAWARE CORPORATION; E.I. DUPONT DE NEMOURS AND COMPANY, PLAN ADMINISTRATOR;* PENSION AND RETIREMENT PLAN; HOSPITAL AND MEDICAL-SURGICAL PLAN; DENTAL ASSISTANCE PLAN; NONCONTRIBUTORY GROUP LIFE INSURANCE PLAN; CONTRIBUTORY GROUP LIFE INSURANCE PLAN; TOTAL AND PERMANENT DISABILITY INCOME PLAN; SAVINGS AND INVESTMENT PLAN; TAX REFORM ACT STOCK OWNERSHIP PLAN; SHORT TERM DISABILITY PLAN

* (Amended per Clerk's Order dated 12/13/00)

No. 00-2918

U.S. Court of Appeals, Third Circuit

Argued: June 28, 2001

October 05, 2001

As amended December 21, 2001

On Appeal From the United States District Court For the District of Delaware (D.C. Civ. No. 98-CV-00061) U.S. Magistrate District Judge: Honorable Mary P. Thynge

[Copyrighted Material Omitted] John M. Stull, Esquire (argued) 1300 North Market Street, Suite 700 P.O. Box 1947 Wilmington, DE 19899, Counsel for Appellant.

Raymond M. Ripple, Esquire (argued) Donna L. Goodman, Esquire Legal D-7012 E.I. du Pont de Nemours and Company 1007 Market Street Wilmington, DE 19898, Counsel for Appellees.

Becker, Chief Judge, Nygaard and REAVLEY,^* Circuit Judges.

OPINION OF THE COURT

Becker, Chief Judge.

This is an appeal by Orrin T. Skretvedt, a former employee of defendant E.I. Du Pont de Nemours & Company ("DuPont"), from the order of the District Court granting summary judgment for DuPont on Skretvedt's suit alleging that DuPont had denied his claim for disability benefits under its pension and benefits plans in violation of the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. S 1001 et seq. For the reasons that follow, we will reverse.

The appeal first presents several questions about our scope of review, which we resolve in favor of applying the arbitrary and capricious standard prevalent in ERISA cases. We do not find the exceptions to that standard applicable here. Most significantly, we do not think the fact that DuPont's Associate Medical Director was involved in evaluating Skretvedt's claim both during the initial determination and on appeal creates a procedural impropriety that heightens the standard of review.

Despite the demanding arbitrary and capricious test, we conclude that the medical evidence of job-related stress that Skretvedt presented clearly demonstrates that he is eligible for disability benefits under Dupont's "Incapability Retirement" pension plan, one of the forms of disability benefits that he claims. Although we take the evidence in the light most favorable to DuPont, we are not convinced by DuPont's arguments that the medical evidence was inconclusive or equivocal with respect to the severity or permanence of Skretvedt's incapability to perform successfully the duties of his position. Indeed, Dupont can point to no truly conflicting medical evidence. Dupont's decision was "without reason," and it was "unsupported by substantial evidence." Pinto v. Reliance Standard Life Ins. Co., 214 F.3d 377, 393 (3d Cir. 2000) (quoting Abnathya v. Hoffman-La Roche, Inc., 2 F.3d 40, 45 (3d Cir. 1993) (internal quotation marks omitted)). It was therefore arbitrary and capricious, requiring us to reverse the grant of summary judgment and to direct that summary judgment be entered on the Incapability Retirement claim in favor of Skretvedt.

I. Facts and Procedural History

Skretvedt worked as an environmental engineer for DuPont from June 28, 1974, until February 7, 1995, when he was discharged. At that time, Skretvedt held the position of Senior Research Environmental Engineer at DuPont's Spruance Plant in Richmond, Virginia. Among other things, he was responsible for ensuring that the plant complied with federal environmental regulations. Skretvedt's job responsibilities and the pressures associated with them increased significantly in 1994 when certain regulations under the Clean Air Act went into effect and the department where he worked was simultaneously downsized.

In early 1994, Skretvedt began receiving treatments for work-related anxiety from his family physician, Harold Binhammer, M.D., who periodically prescribed to him the anti-anxiety drug Lorazepam. Skretvedt took a leave of absence from his job at the Spruance Plant beginning on November 11, 1994, and did not return to work at Dupont thereafter.¹ In November 1994, Dr. Binhammer diagnosed Skretvedt with depression, prescribed the antidepressant Paxil and referred him to a psychiatrist, Graenum R. Schiff, M.D. Dr. Schiff saw Skretvedt periodically beginning in November 1994. Schiff put Skretvedt on a regular daily dose of twenty milligrams of Paxil and referred him for therapy with Teresa A. Buczek, Ph.D., a clinical psychologist who specializes in work-related stress disorders.

On December 5, 1994, James E. Layton, M.D., the Medical Supervisor at the Spruance Plant, wrote to Drs. Binhammer, Schiff and Buczek, requesting that they complete medical report forms to help him prepare a written opinion on whether Skretvedt's condition qualified him for disability benefits under DuPont's pension plan. All three doctors responded to Dr. Layton's request, giving their diagnoses and medical opinions of the severity and likely duration of Skretvedt's condition. We describe these opinions in greater detail below.

DuPont fired Skretvedt on February 7, 1995, citing the incident in which he was accused of taking home a company fax machine without permission as the reason for the discharge. See supra note 1. Skretvedt filed a claim with the Equal Employment Opportunity Commission (EEOC), alleging that DuPont violated the Americans with Disabilties Act (ADA) by discriminating against him based on his anxiety disorder. The EEOC found no violation of the ADA based on the information that Skretvedt submitted, and issued him a right-to-sue letter. By September 1995, Skretvedt had contacted an attorney regarding his ADA and disability benefits claims. On September 29, Skretvedt, acting on the advice of counsel, signed a "Settlement Agreement and Release of All Claims" with DuPont. Under this agreement, Skretvedt released all of his employment-related claims against DuPont except for his application for disability benefits, which DuPont agreed to review in a "neutral" manner.

DuPont's pension plan provides two different long-term disability benefits: (1) the "Incapability Retirement" pension ("incapability benefits"); and (2) the "Total and Permanent Disability Income Plan" ("T & P benefits"). An employee is eligible for incapability benefits if he is "permanently incapable of performing the duties of his position with the degree of efficiency required by the Company, and he has at least 15 years of service." Under its separate T & P benefits plan, DuPont provides additional benefits to individuals who are "disabled by injuries or disease and presumably will be totally and permanently prevented from pursuing any gainful occupation." At all times relevant to this litigation, it was the practice of DuPont's three-member Board of Benefits and Pensions ("Board"), which was responsible for administering both disability benefits plans, to first determine whether an employee qualified for incapability benefits.² If so, the Board would determine whether the employee also qualified for T & P benefits.

Following the September 29, 1995 settlement agreement, the Board reviewed Skretvedt's claims for disability benefits. The Board considered the medical evidence that DuPont's Dr. Layton had collected from Skretvedt's treating physicians and psychologist as well as a medical opinion from Dr. Layton himself, and determined that Skretvedt was not eligible for either type of long-term disability benefits. On May 23, 1996, the Board denied Skretvedt's application for both incapability and T & P benefits and issued a one-page form letter denying his benefits claims. The letter stated that Skretvedt had failed to show that he was "permanently incapable of performing the duties of [his] job with the degree of efficiency required by the Company, at the time of [his] termination." It also advised him that in order to succeed on his appeal he would need to submit "additional objective evidence that will indicate a total impairment of function." The letter provided examples of such "objective evidence," including "tests such as MRI, x-ray reports and complete medical evaluations," but warned that "[o]pinions of healthcare providers are not sufficient without objective medical evidence to support such opinions."

Skretvedt contends that he and Dr. Binhammer sent three letters to the Board's designated contact for appeals, requesting clarification of the types of "objective medical evidence" needed to perfect his application on appeal in light of the fact that his claimed disability is psychological.³ After receiving no response for almost a year, Skretvedt formally submitted his appeal to the Board on May 16, 1997. He included with his application updated letters from the doctors who had examined him prior to his initial application, as well as letters and evaluation forms from other doctors. After hearing nothing from the Board for more than three more months, Skretvedt wrote to DuPont inquiring about the status of his appeal. He received no immediate response.

Having received no response from the Board, Skretvedt initiated the present lawsuit by filing a complaint on February 4, 1998, invoking 29 U.S.C. S 1132(a)(1)(B), which allows a beneficiary of an ERISA-governed benefits plan to sue for "benefits due to him under the terms of the plan." Skretvedt alleged that DuPont's pension and benefits review board had violated ERISA by arbitrarily and capriciously denying him disability benefits, by acting in bad faith, and by operating under a conflict of interest. The parties entered into a stipulation agreeing to stay the proceedings until October 1, 1998, pending a final decision by the Board on Skretvedt's appeal for...