United States District Court, N.D. Alabama, Middle Division
For Greg Oliver, Plaintiff, Counter Defendant: Myron K Allenstein, Rose Marie Allenstein, LEAD ATTORNEYS, ALLENSTEIN & ALLENSTEIN LLC, Gadsden, AL.
For Aetna Life Insurance Company, Defendant: Colby S Morgan, David P Knox, Michael E Gabel, LEAD ATTORNEYS, FEDERAL EXPRESS CORPORATION, Memphis, TN.
For Federal Express Corporation Long Term Disability Plan, Defendant, Counter Claimant: David P Knox, LEAD ATTORNEY, Colby S Morgan, FEDERAL EXPRESS CORPORATION, Memphis, TN.
VIRGINIA EMERSON HOPKINS, United States District Judge.
I. INTRODUCTION AND PROCEDURAL HISTORY
Plaintiff Gregory Oliver (" Mr. Oliver" ), a former employee of Federal Express Corporation (" FedEx" ), initiated this employee benefits case in the Circuit Court of Etowah County, Alabama, on September 11, 2013. (Doc. 1-1 at 4). On October 22, 2013, Defendant Aetna Life Insurance Company (" Aetna" ) removed the lawsuit to
this court on the basis of federal question jurisdiction under the Employee Retirement Income Security Act (" ERISA" ) and the doctrine of complete preemption. (Doc. 1 at 2-3 ¶ ¶ 6, 7). On November 26, 2013, Mr. Oliver filed an amended complaint which added Federal Express Corporation Long Term Disability Plan (the " FedEx Plan" ) as a co-defendant to his lawsuit. (Doc. 10 at 1).
Currently pending before the court are the six following contested motions:
(1) Mr. Oliver's Motion for Summary Judgment on Appropriate Standard of Review (Doc. 20) (the " SOR Motion" ) filed on June 13, 2014;
(2) Mr. Oliver's Motion for Judgment for Total Disability (Doc. 28) (the " Disability Motion" ) filed on July 3, 2014;
(3) Defendants' Motion For Summary Judgment (Doc. 31) (the " Cross Disability Motion" ) filed on July 3, 2014;
(4) Mr. Oliver's Motion To Add Documents to the Claim File (Doc. 25) (the " Motion To Add" ) filed on July 3, 2014;
(5) Mr. Oliver's Motion To Strike (Doc. 40) (the " Strike Motion" ) filed on July 3, 2014; and
(6) Mr. Oliver's Motion To Compel Log of Omitted Documents from the Administrative Record (Doc. 49) (the " Compel Motion" ) filed on August 29, 2014.
The court has studied all these filings as well as the parties' respective supporting and opposing materials. (Docs. 23, 26-27, 29-30, 32-39, 41-44, 51). For the reasons explained below, (1) Mr. Oliver's SOR Motion is due to be denied; (2) Mr. Oliver's Disability Motion is due to be denied; (3) Defendants' Cross Disability Motion is due to be granted; (4) Mr. Oliver's Motion To Add is due to be denied and alternatively is due to be termed as moot; (5) Mr. Oliver's Strike Motion is due to be termed as moot; and (6) Mr. Oliver's Compel Motion is due to be denied.
II. FACTUAL BACKGROUND AND ADMINISTRATIVE HISTORY
Mr. Oliver formerly worked as courier for FedEx. Mr. Oliver experienced an on-the-job injury on August 15, 2009, and has the impairments of degenerative disc disease and osteoarthritis in the left knee. Mr. Oliver submitted a disability claim under the FedEx Plan, and received short-term disability benefits for the time period of August 24, 2009, through February 21, 2010. (Doc. 23-1 at 2). Subsequently, Mr. Oliver received long-term occupational disability benefits under the FedEx Plan for the two-year period of February 22, 2010, through February 21, 2012. Id. This provided Mr. Oliver with the maximum coverage for long-term occupational disability, as the FedEx Plan places a 24-month cap on receiving that type of benefit. (Doc. 23-7 at 50; Doc. 23-1 at 2).
Prior to the exhaustion of his long-term occupational disability payments, on August 25, 2011, Aetna sent Mr. Oliver a letter which explained the more demanding
definition of disability that applied to long-term benefits " beyond 24 months . . . ." (Doc. 23-2 at 4). More specifically, that standard requires a claimant to show a " complete inability . . . to engage in any compensable employment for twenty-five hours per week." (Doc. 23-1 at 2; Doc. 23-7 at 42).
Mr. Oliver sought to qualify for long-term total disability benefits to cover the time period from February 22, 2012, to the present. (Doc. 23-1 at 2). This claim was denied initially on January 12, 2012, and Mr. Oliver filed an appeal. Id. Subsequently, on March 13, 2012, Linda Bizzarro (" Ms. Bizzarro" ) sent a letter to Mr. Oliver on behalf of the Aetna Appeal Review Committee (" AARC" ) (Doc. 23-1 at 2-3), notifying him that the AARC had denied his appeal on March 12, 2012, " because there [wa]s a lack of significant objective findings to substantiate a claim under the Plan for Total Disability." (Doc. 23-1 at 3).
Before his long-term total disability claim was finally decided, Mr. Oliver received a favorable disability decision from the Social Security Administration (" SSA" ) on January 17, 2012 (Doc. 23-2 at 8-21), which concluded that Mr. Oliver became disabled (within the meaning of the Social Security Act) on August15, 2009, the same date as his job-related injury. Mr. Oliver contends that this SSA decision satisfies the total disability standard under the FedEx Plan and that " [t]he medical record reviewers were never provided [with a copy of it]." (Doc. 28 at 2).
The record reflects that Aetna received notice of Mr. Oliver's favorable SSA decision (indicating a retroactive benefit amount of $28,334.00) sent via facsimile on February 28, 2012, by a nonparty entity named Allsup. (Doc. 23-2 at 23-32). Further, the appeal denial letter expressly references the AARC's consideration of Mr. Oliver's favorable SSA award. However, the AARC ultimately discounted its evidentiary importance. Specifically, the AARC pointed out that " the criteria utilized by the Social Security Administration for . . . disability awards are different from the definition for Total Disability set forth in the Plan," and underscored its " duty to follow the terms of the Plan." (Doc. 23-1 at 3).
A. Summary Judgment
Summary judgment is proper only when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). All reasonable doubts about the facts and all justifiable inferences are resolved in favor of the nonmovant.
See Fitzpatrick v. City of Atlanta, 2 F.3d 1112, 1115 (11th Cir. 1993). A dispute is genuine " if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986).
" Once the moving party has properly supported its motion for summary judgment, the burden shifts to the nonmoving party to 'come forward with specific facts showing that there is a genuine issue for trial.'" International Stamp Art, Inc. v. U.S. Postal Service, 456 F.3d 1270, 1274 (11th Cir. 2006) (citing Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986)). Although there are cross motions for summary judgment, each side must still establish the lack of genuine issues of material fact and that it is entitled to judgment as a matter of law. See Chambers & Co. v. Equitable Life Assur. Soc. of the U.S., 224 F.2d 338, 345 (5th Cir. 1955) (" Both parties filed and argued motions for summary judgment, but this does not warrant the granting of either motion if the record reflects a genuine issue of fact." ). The court will consider each motion independently, and in accordance with the Rule 56 standard. See United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 994, 8 L.Ed.2d 176 (1962) ( " On summary judgment the inferences to be drawn from the underlying facts contained in such materials must be viewed in the light most favorable to the party opposing the motion." ). " The fact that both parties simultaneously are arguing that there is no genuine issue of fact, however, does not establish that a trial is unnecessary thereby empowering the court to enter judgment as it sees fit." Wright, Miller & Kane, Fed. Practice & Proc. § 2720, at 327-28 (3d ed. 1998).
Finally " [i]f the movant bears the burden of proof on an issue, because, as a defendant, it is asserting an affirmative defense, it must establish that there is no genuine issue of material fact as to any element of that defense." International Stamp, 456 F.3d at 1274 (citing Martin v. Alamo Community College Dist., 353 F.3d 409, 412 (5th Cir. 2003)).
B. Discovery Rulings
Regarding discovery rulings:
A district court has wide discretion in discovery matters and our review is " accordingly deferential." Harbert Int'l, Inc. v. James, 157 F.3d 1271, 1280 (11th Cir. 1998). A court abuses its discretion if it makes a " clear error of judgment" or applies an incorrect legal standard. Carpenter v. Mohawk Indus., Inc., 541 F.3d 1048, 1055 (11th Cir. 2008) (per curiam). Moreover, a district court's denial of additional discovery must result in substantial harm to a party's case in order to establish an abuse of discretion. See Leigh v. Warner Brothers, Inc., 212 F.3d 1210, 1219 (11th Cir. 2000).
Bradley v. King, 556 F.3d 1225, 1229 (11th Cir. 2009); accord Iraola & CIA, S.A. v. Kimberly-Clark Corp., 325 F.3d 1274, 1286 (11th Cir. 2003) (" Moreover, we will not overturn discovery rulings 'unless it is
shown that the District Court's ruling resulted in substantial harm to the appellant's case.'" (quoting Carmical v. Bell Helicopter Textron, Inc., 117 F.3d 490, 493 (11th Cir. 1997))).
C. Evidentiary Rulings
" All evidentiary decisions are reviewed under an abuse-of-discretion standard." See, e.g., General Elec. Co. v. Joiner, 522 U.S. 136, 141, 118 S.Ct. 512, 517, 139 L.Ed.2d 508 (1997). " An abuse of discretion can occur where the district court applies the wrong law, follows the wrong procedure, bases its decision on clearly erroneous facts, or commits a clear error in judgment." United States v. Estelan, 156 F.App'x 185, 196 (11th Cir. 2005) (citing United States v. Brown, 415 F.3d 1257, 1266 (11th Cir. 2005)).
Moreover, as the Eleventh Circuit has made clear, not every incorrect evidentiary ruling constitutes reversible error:
Auto-Owners' second argument is that it is entitled to a new trial on the basis of what it describes as a number of erroneous evidentiary rulings by the district court. Evidentiary rulings are also reviewed under an abuse of discretion standard. Finch v. City of Vernon, 877 F.2d 1497, 1504 (11th Cir. 1989). Moreover, even if Auto-Owners can show that certain errors were committed, the errors must have affected " substantial rights" in order to provide the basis for a new trial. See Fed.R.Evid. 103(a). " Error in the admission or exclusion of evidence is harmless if it does not affect the substantial rights of the parties." Perry, 734 F.2d at 1446. See also Allstate Insurance Co. v. James, 845 F.2d 315, 319 (11th Cir. 1988).
Haygood v. Auto-Owners Ins. Co., 995 F.2d 1512, 1515 (11th Cir. 1993). Therefore, even the existence of many evidentiary errors does not guarantee the party appealing a new trial. Instead, such erroneous rulings by a district court must " affect the substantial rights of the parties" for reversible error to occur.
A. Overriding Principles Governing ERISA Benefits
ERISA does not contain a standard of review for actions brought under § 1132(a)(1)(B) challenging benefit eligibility determinations. Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 108-09, 109 S.Ct. 948, 953, 103 L.Ed.2d 80 (1989) (" Although it is a 'comprehensive and reticulated statute,' ERISA does not set out the appropriate standard of review for actions . . . challenging benefit eligibility determinations." ). Moreover, the case law that has developed over time governing such standards has significantly evolved. A history of the transformation of these principles is useful to understanding the presently
applicable framework for evaluating § 1132(a)(1)(B) ERISA challenges.
In Firestone, the Supreme Court initially established three distinct standards for courts to employ when reviewing an ERISA plan administrator's benefits decision: " (1) de novo where the plan does not grant the administrator discretion; (2) arbitrary and capricious where the plan grants the administrator discretion; and (3) heightened arbitrary and capricious where the plan grants the administrator discretion and the administrator has a conflict of interest." Capone v. Aetna Life Ins. Co., 592 F.3d 1189, 1195 (11th Cir. 2010) (citing Buckley v. Metro. Life, 115 F.3d 936, 939 (11th Cir. 1997) (discussing Firestone, 489 U.S. at 115)). In Williams v. Bellsouth Telecomms., Inc., 373 F.3d 1132, 1137 (11th Cir. 2004), overruled on other grounds by Doyle v. Liberty Life Assur. Co. of Boston, 542 F.3d 1352 (11th Cir. 2008), the Eleventh Circuit fleshed out the Firestone test into a six-step framework designed to guide courts in evaluating a plan administrator's benefits decision in ERISA actions. When the Eleventh Circuit created the Williams test, the sixth step of the sequential framework required courts reviewing a plan administrator's decision to apply a heightened arbitrary and capricious standard if the plan administrator operated under a conflict of interest. See id. The Eleventh Circuit later modified this step in response to the Supreme Court's ruling in Metropolitan Life Insurance Co. v. Glenn, 554 U.S. 105, 115-17, 128 S.Ct. 2343, 171 L.Ed.2d 299 (2008), which concluded that a conflict of interest should be weighed merely as " one factor" in determining whether an administrator abused its discretion. See Doyle v. Liberty Life Assur. Co. of Boston, 542 F.3d 1352, 1359 (11th Cir. 2008) (" As we now show, Glenn implicitly overrules and conflicts with our precedent requiring courts to review under the heightened standard a conflicted administrator's benefits decision." ).
The Eleventh Circuit's latest iteration of the Firestone standard-of-review framework is found in Blankenship v. Metro. Life Ins. Co., 644 F.3d 1350 (11th Cir.), cert. denied, 132 S.Ct. 849, 181 L.Ed.2d 549 (2011):
(1) Apply the de novo standard to determine whether the claim administrator's benefits-denial decision is " wrong" ( i.e., the court disagrees with the administrator's decision); if it is not, then end the inquiry and affirm the decision.
(2) If the administrator's decision in fact is " de novo wrong," then determine whether he was vested with discretion in reviewing claims; if not, end judicial inquiry and reverse the decision.
(3) If the administrator's decision is " de novo wrong" and he was vested with discretion in reviewing claims, then determine whether " reasonable" grounds supported it (hence, review his decision under the more deferential arbitrary and capricious standard).
(4) If no reasonable grounds exist, then end the inquiry and reverse the administrator's decision; if reasonable grounds do exist, then determine if he operated under a conflict of interest.
(5) If there is no conflict, then end the inquiry and affirm the decision.
(6) If there is a conflict, the conflict should merely be a factor for the court to take into account when determining whether an administrator's decision was arbitrary and capricious.
Id. at 1355. All steps of the analysis are " potentially at issue" when a plan vests
discretion to the plan administrator to make benefits determinations. See id. at 1356 n.7. Conversely, then, where a plan does not confer discretion, the court simply applies the de novo review standard established by the Supreme Court in Firestone. See Firestone, 489 U.S. at 115 (" [W]e hold 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." ).
B. Mr. Oliver's SOR Motion is due to be denied.
In this case, the parties dispute the appropriate standard of review for this court to apply. In his SOR Motion, Mr. Oliver asserts that de novo review is called for, while Defendants maintain that discretionary or arbitrary and capricious review is required. Based upon the record in this case, the court sides with Defendants.
While Mr. Oliver bears the burden of proving his entitlement to ERISA benefits under the FedEx Plan, Horton v. Reliance Std. Life Ins. Co., 141 F.3d 1038, 1040 (11th Cir. 1998), Defendants " bear the burden of proving that the arbitrary and capricious standard of review applies." Anderson v. Unum Life Ins. Co. of Am., 414 F.Supp.2d 1079, 1095 (M.D. Ala. 2006) (citing Fay v. Oxford Health Plan, 287 F.3d 96, 104 (2d Cir. 2002)). After evaluating the substance of each plan document upon which Defendants rely, and as discussed more fully below, the court finds that Defendants have ...