Summary
In Quast, the Social Security finding of plaintiff's disability was issued after the plan administrator had denied the plaintiff's administrative appeal under ERISA.
Summary of this case from Archer v. Honda of America Mfg., Inc.Opinion
Case No. 02:01-CV-1135
July 15, 2003
ORDER
This matter is before the Court on Defendant Square D Company's ("Square D") Motion for Summary Judgment, or, in the alternative, Motion for Judgment Affirming Denial of Benefits (doc. #21); Plaintiff's Motion to Remand to Defendant for Further Proceedings (doc. # 32); Defendant's Memorandum In Opposition to Plaintiff's Motion to Remand (doc. # 33); and, Plaintiff's Memorandum in Support of His Motion to Remand to Plan Administrator for Further Proceedings (doc. # 34). For the following reasons Square D's motion (doc. # 21) is DISMISSED WITHOUT PREJUDICE and Plaintiff David G. Quast's ("Quast") motion (doc. # 32) to remand is GRANTED. This matter is remanded to the Square D Company Employee Benefits Administration Committee ("EBAC") as Plan Administrator of the Square D Company Disability Plan.
This is a claim for long term disability benefits under an employee benefit plan, governed by the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq. Plaintiff Quast claims that the EBAC arbitrarily and capriciously revoked and denied his request for long term disability (LTD) benefits under the Plan. Quast received LTD benefits from July 28, 1999 until July 30, 2000.
Both parties agree that the Court should review the plan administrator's decision to deny benefits under the "arbitrary and capricious" standard of review. The Court agrees with Plaintiff Quast, however, that the Social Security Administration ("SSA") notice of decision, issued September 25, 2001, should be included in the Administrative Record. The Court will not conduct its review of the EBAC decision until the committee is afforded the opportunity to review this information. The SSA decision, though not determinative of Plaintiff Quast's claim for LTD ERISA benefits, is relevant to both the EBAC's determination of Quast's disability status and the Court's "arbitrary and capricious" review of the EBAC decision. See Darland v. Fortis Benefits Ins. Co., 317 F.3d 516 (6th Cir. 2002); see also Wallis v. ITT Educational Services, Inc., 254 F. Supp.2d 926 (S.D. Ohio 2003).
The EBAC is a fiduciary. As a fiduciary charged under ERISA the EBAC has the obligation to administer its benefits solely in the interest of its participants and for the exclusive purpose of providing benefits to these individuals. The Court finds that, given the responsibility and deference attributed to the EBAC's fiduciary status, the EBAC should be privy to all information that tends to show whether or not Plaintiff Quast is disabled. Such information includes the evidence evaluated, and the decision rendered, by the SSA Administrative Law Judge.
The administrative law judge's determination is persuasive evidence of the presence or absence of a disability and therefore should be part of the ERISA fiduciary's decision:
[a]lthough a disability determination by the Social Security Administration (SSA) is not binding on an ERISA plan administrator, such a determination should be considered as a factor in deciding whether an administrator's decision denying disability benefits was arbitrary and capricious. Employee Retirement Income Security Act of 1974, §§ 2 et seq., 29 U.S.C.A. §§ 1001 et seq.Calvert v. Firstar Finance, Inc., 2003 WL 21356453 (W.D. Ky. June 10, 2003).
Because notice of the SSA decision (issued September 25, 2001) was not available to the EBAC at the time Plaintiff's LTD benefits appeal was reviewed and denied (July 18, 2001), the EBAC was unable to consider this important factor when making its determination. The Court finds that, "[a] reasonable decision maker, one not operating under a predisposition or inclination to terminate benefits, would welcome the opportunity to review all relevant data and personal examinations before taking the serious step of terminating disability benefits." Reipsa v. Metropolitan Life Ins. Co., 2002 U.S. Dist. LEXIS (E.D. Ill.). A remand gives the EBAC precisely such an opportunity to review, more completely, the relevant data in Plaintiff Quast's claim before the Court undertakes its review of the EBAC decision.
The Court is cognizant of the recent Supreme Court decision in Black Decker Disability Plan v. Nord (Case No. 02-469), 538 U.S. (May 27, 2003). There, the Supreme Court held that ERISA plan administrators are not obligated to accord special deference to the opinions of treating physicians Id. This differs from the rule in cases arising under the Social Security Act, where special weight must be accorded to the opinions of a claimant's treating physician(s) when determining a claimant's entitlement to Social Security benefits. Specifically Nord establishes that "courts have no warrant to require administrators automatically to accord special weight to the opinions of a claimant's physician; nor may the courts impose on plan administrators a discrete burden of explanation when they credit reliable evidence that conflicts with a treating physician's evaluation." Id. at 7. The holding in Nord thus determines that the EBAC did not have to credit the opinions of Plaintiff Quast's treating physicians over other evidence related to Quast's medical condition.
Defendant Square D argues that the holding in Nord absolves any need for the EBAC to review the SSA notice of decision. Square D sets forth the proposition that by recognizing material differences between the ERISA disability benefits system and the disability system under the Social Security Act, the Supreme Court has established that decisions by the Social Security Administration have no value to a claim, such as Plaintiff Quast's, for disability benefits under ERISA. The holding in Nord is not this broad. Nord merely proclaims that the "treating physician rule" mandatory in social security cases is not mandatory in cases arising under ERISA.
The instant case does not implicate the holding in Nord. Plaintiff Quast has not argued that the EBAC should have given controlling weight to the opinion of his treating physician(s). Nor does Quast argue that the EBAC should be required to explain why the committee ultimately chose to credit other relevant evidence over such opinions. See Nord, supra at 22. Plaintiff Quast only requests the opportunity to provide the EBAC with the SSA notice of decision. He does not submit that the EBAC is mandated to follow this decision, or to give his treating physician(s) opinions the same deference that the administrative law judge afforded to them.
Moreover, the holding in Nord does not disturb Sixth Circuit precedent establishing that a decision rendered by the SSA is a factor to be considered by a Court determining whether an ERISA plan administrator's decision was arbitrary or capricious. See Darland v. Fortis Benefits Ins. Co., 317 F.3d 516, 527 (6th Cir. 2003). Depending on the circumstances of a given case, the Sixth Circuit has recognized that a plan administrator's decision to deny LTD benefits may be arbitrary and capricious if the plan participant had been ruled disabled by the SSA, but that the SSA's determination is not dispositive. Willis v. ITT Educational Services, Inc., 254 F. Supp.2d 926, 944 (S.D. Ohio 2003). In Willis, the court determined that a plan administrator may ultimately disregard the S S A's decision at its discretion, but it should at least consider said decision in making its own decision. Id. Thus, the Court will afford the EBAC the opportunity to review the SSA decision.
Defendant Square D also argues that the SSA decision is irrelevant because it is not a part of the Administrative Record before the Court. Square D submits that when evaluating an ERISA Plan Administrator's decision under the arbitrary and capricious standard of review, a court should only consider the evidence that was before the Plan Administrator when it made its decision. See Wilkins v. Baptist Health Care System Inc., 150 F.3d 609 (6th Cir. 1998). The Court is bound by this rule, however, the Court must also take care to ensure that it has the information needed to adequately determine whether a plan administrator's decision was arbitrary and capricious. The fiduciary relationship between employee and ERISA plan administrator, as well as the facts of this particular case, demand as much.
First, the SSA decision which found Plaintiff Quast disabled was rendered after the ERISA appeal process had run its course. Therefore, the EBAC denied Plaintiff's benefits without any opportunity to review the decision. The decision of another administrative body, finding Quast disabled and the information upon which this determination rests, is evidence that Plaintiff Quast is disabled. Because the EBAC is charged with determining whether Quast is disabled evidence which tends to prove his disability should be considered.
A recent decision from a district court in the Sixth Circuit illustrates this proposition and the implications of Nord. In Calvert, supra, the court was faced with applying Nord to the facts of an ERISA appeal in which the claimant argued that a plan administrator's denial of disability benefits was "arbitrary and capricious" because the claimant was found disabled, and granted benefits, by the SSA. After applying Nord, the court determined that while the SSA "treating physician rule" was not binding on the ERISA plan administrator, "[n]evertheless, the Court acknowledges that the Social Security Administration's decision should be considered as a factor in determining whether a plan administrator's decision denying benefits was arbitrary and capricious." Id., *6. The court then went on to review the SSA decision, as well as the evidence relied upon by the ERISA benefits administrator, to determine that the plan administrator's denial of ERISA benefits was not arbitrary and capricious.
The Court further notes that in Calvert, the district court deciding whether the denial of ERISA benefits was arbitrary and capricious was doing so based on a record that contained the claimant's SSA decision awarding her benefits. The claimant argued that the denial was arbitrary and capricious because the ERISA administrator did not follow the SSA decision, which credited her treating physician's opinion. There, the court was able to properly review the SSA findings and determine that the decision of the SSA was based solely on the "treating physician rule." Thus, because Nord holds that an ERISA plan administrator is not bound by the "treating physician rule," the court went on to find that the plan administrator's denial of ERISA benefits, based on other relevant information, was not arbitrary and capricious. See Calvert, supra at 6. Here, the Court cannot consider the SSA determination and its basis, it is precluded from conducting such an analysis.
Remanding this matter to the EBAC will enable the SSA decision to become part of the Administrative Record, thereby properly enabling the Court to consider both the SSA decision and the EBAC's treatment of such decision. When faced with the task of determining whether the EBAC's denial of Quast's benefits was arbitrary and capricious, the Court needs this information in order to conduct a complete and meaningful review.
Additionally, remanding this matter to the EBAC is appropriate based on the equitable considerations of Plaintiffs case. Plaintiff Quast emphasizes the fact that Square D's employee benefit plan had a "plan-designed symbiosis with the social security framework" and that such symbiosis requires the EBAC to at least consider SSA findings. Plaintiff's argument is based on the Plan's "social security offset provision" that reduces the amount of any monthly benefit otherwise due to a claimant under the Plan by the monthly benefit amount the claimant receives from the Social Security Administration. Additionally, a claimant applying for benefits pursuant to Square D's Plan is required to apply for social security benefits at the same time, ensuring the setoff provision will be triggered. Along the same line, Square D's Plan requires that the recipient of any retroactive SSA award reimburse the Plan for benefits that have been "overpaid."
These provisions, Plaintiff argues, create an interdependence between the ERISA plan and benefit administration under the Social Security Act. Plaintiff avers that the interdependence between the plans renders it unjust to allow an ERISA plan administrator to depend on the SSA determination of disability in order to reduce its monthly payment obligation, but then deny that an SSA determination of disability has any relevance to their determination of disability under ERISA. The Sixth Circuit has taken a similar stance; Darland, supra, states:
it is totally inconsistent for [the ERISA plan administrator] to request that Darland apply for Social Security benefits, yet avail itself of that Social Security regarding disability to contend, at the same time, that he is not disabled. Though not directly applicable in this case, the principals of judicial estoppel certainly weigh against [the ERISA plan administrator] taking such inconsistent opinions.
Darland, supra at 529, citing Ladd v. ITT Corp., 148 F.3d 753 (7th Cir. 1998).
The above equity considerations alone instruct the Court that, at the very least, the EBAC must have the opportunity to review the SSA decision and the evidence relied on by the SSA in finding Plaintiff Quast disabled. Further, in order for the Court to determine whether the EBAC's decision was "arbitrary and capricious" in a meaningful and fair manner, the Court must ensure that the EBAC, a fiduciary, was privy to all information "enabling the Committee to protect . . . the interests of the participants in their employee benefit plans and their beneficiaries." The Court adheres to the following reasoning; "[i]f the court believed that the plan administrator needed additional evidence unavailable at the time of his decision, the proper course was to `remand to the trustee for a new determination.'" Brack v. Kelly Springfield Tire Co., 1990 WL 173715, *3 (D. Md. Nov. 7, 1990).
Accordingly, this Court will continue the wise practice of remanding actions to the plan administrator when it finds that the administrator should review additional evidence unavailable to him at the time of his decision. Plaintiff Quast's Motion to Remand to Defendant for Further Proceedings (doc. # 32) is hereby GRANTED. Because the matter is remanded to the Square D Benefits Administration Committee, Defendants Motion for Summary Judgment, or, in the alternative, Motion for Judgment Affirming Denial of Benefits (doc. # 21) is DENIED WITHOUT PREJUDICE. This case is stayed until the fiduciary has made a final determination upon remand.