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United States District Court, N.D. California

January 20, 2004.


The opinion of the court was delivered by: JEREMY FOGEL, District Judge


The parties have filed cross-motions for summary judgment. At issue in this dispute is whether Defendants properly denied Plaintiff's claim to certain disability insurance benefits. The Court has considered the moving and opposing papers as well as the oral arguments presented at the hearing on January 12, 2004. For the reasons set forth below, Plaintiff's motion will be granted and Defendants' motion will be denied. Page 2


  Plaintiff Marcella Bona alleges that Defendants improperly denied her claim to long term disability benefits to which she was entitled under an ERISA*fn1 plan. Sullivan Decl., Ex. 1 (MetLife Policy No. 5537023-G ("the Policy")). Plaintiff was employed by Broadbase Software, Inc. as "Customer Community Program Manager," in which capacity she earned approximately $130,000 per year. Plaintiffs Motion, p. 1; Silver Decl., Ex. 2. This position required travel, the "physical ability to lift and transport packages that weigh a minimum of 35 pounds," the ability "to work long hours," and exposure "to marked changes in temperature or humidity." See Silver Decl., Exs. 3, 4, & 5; Sullivan Decl., Ex. 2.

  On September 28, 2001, Plaintiff became unable to perform her job duties due to alleged symptoms of multiple sclerosis ("MS"), see Silver Decl., Ex. 8, the existence and cause of which the parties dispute here. Neurologist Dr. Stasha Gominak diagnosed Plaintiff with chronic relapsing MS on December 12, 2001. Silver Decl., Exs. 7 & 21. Plaintiff previously had been diagnosed with MS when a brain magnetic resonance imaging ("MRI") examination, which was performed in August 2000, revealed that there were "multiple periventricular white matter changes consistent with demyelinating disease." Silver Decl., Ex. 30 (Jares letter, p.2). Defendants disputed that Plaintiff suffered from MS and denied her claim to two-thirds of her earnings, as provided for in the Policy. Silver Decl., Ex. 14. Defendants' stated reasons for the denial included the following:

The medical on file does not substantiate a diagnosis of multiple sclerosis. There are no test results or findings on exam (such as MRI of Neuraxis, Cerebrospinal Fluid Analysis, Intention Tremor, Nystagmus, Scanning Speech, Urinary Incontinence, Ataxia, Labile Affect) to support diagnosis of Multiple Sclerosis. Also you are not being treated with medications normally used to treat Multiple Sclerosis (such as copazone, betaseron or avonex). Generally patients that have Multiple Sclerosis are treated with one of these medication agents in an attempt to decrease progression of the disease.
. . .
  After consideration of the available information, we have concluded that your condition is not of the severity to have precluded the performance of your regular occupation as Marketing Director. Therefore, you do not meet the plans [sic] definition of disability cited above. Page 3

 Silver Decl., Ex. 14. Defendants also appear to have based their decision, at least in part, on the fact that Plaintiff became pregnant following the onset of her alleged disability, on the ground either that the pregnancy itself could have contributed to the symptoms that resulted in her disability or that Plaintiff's ability to maintain a pregnancy indicates that she does not suffer from MS.

  Dr. Gominak thereafter wrote the following response to Defendants:

As you know Ms. Bona has well documented Multiple Sclerosis. Her symptoms since onset have been severe, uncomfortable sensory symptoms and severe fatigue. Her diagnosis has been clearly confirmed on MRI of the brain performed in 8/2000.
. . .
She had severe fatigue as well as worsening of her sensory symptoms. She chose not to take steroids . . . as do many of my patients, as steroid therapy has never been shown to change the long term outcome of MS. Ms Bona has also, since she has been seeing me, been trying to get pregnant and has preferred to defer long term preventative medications for MS until after she has completed her pregnancy, which is a reasonable choice on her part.
. . .
Despite the fact that Ms. Bona does not use a cane or a wheelchair I have still made the determination that her disease precludes her from working, even part time. Your letter is phrased in such a way to suggest that if the criteria you have established regarding treatment and symptoms are not met then the patient doesn't have MS and is not disabled. Neither of those conclusions is true.
. . .
The fact that she has gotten pregnant while on disability means that I have to be truthful in answering that part of her fatigue may have to do with pregnancy, but surely her pregnancy did not cause her underlying, disabling condition, namely, MS. . . . I also feel that you have purposefully dealt with her in bad faith, using an inappropriate format for questioning, and incomplete records in order to deny a perfectly legitimate claim, which has not changed in symptoms or status since the first time she went out of work last August.
Silver Decl., Ex. 15. On June 17, 2002, Dr. Gominak found that Plaintiff was unable to perform work of any kind. Silver Decl., Ex. 16.

  After Defendants' denial, a second doctor, Dr. L. Neena Madireddi, evaluated Plaintiff and her medical records and concluded that Plaintiff "has well documented remitting/relapsing multiple sclerosis . . . confirmed . . . by clinical examination, history and brain MRI study. Multiple sclerosis is a very unpredictable disease and varies significantly from time to time." Sullivan Decl., Ex. 11 (Madireddi letter, p. 6). Dr. Madireddi also stated that it "is my medical Page 4 opinion that she is unable to perform even a sedentary work capacity at this time," Sullivan Decl., Ex. 11 (Madireddi letter, p. 6), and that Plaintiff "is definitely not a malinger [sic]," Sullivan Decl., Ex. 11 (Madireddi letter, p. 6).

  Dr. Madireddi's findings were presented to Defendants in support of Plaintiff's appeal of the denial of her claim. Defendants employed an outside firm, NMR, to review all of Plaintiff's medical records. On November 4, 2002, Dr. Joseph Jares, on behalf of NMR, concluded that the "history is compelling for multiple sclerosis but is not uniquely diagnostic of it. Also the MRI study is supportive of but not uniquely diagnosis of multiple sclerosis." Silver Decl., Ex. 30 (Jares letter, p. 3). Dr. Jares also stated:

It is difficult to determine if Ms. Bona has impairment due to objective findings as there has been no neurologic examination submitted since the initial examination of Dr. Gominak's in June 1999. In the three years of progress notes that are submitted, there is not one mention made of any abnormal or positive or negative physical findings on neurologic examination. The only positive abnormality is that of the MRI of the brain, but this in and of itself is a nonspecific abnormality and cannot be interpreted in the absence of clinical findings to support or refute a disability.
. . .
As there has been no current neurologic examination submitted, Ms. Bona retains the ability to work with the only restriction being that of avoidance of heat due to potential exacerbation of her MS symptoms. The information submitted does not provide any evidence as to an inability of Ms. Bona to work in at least a seated sedentary to light capacity. The restrictions and limitations placed by Dr. Gominak are unrealistic for everyday life. They are not supported by any positive or abnormal physical examination findings.
Silver Decl., Ex. 30 (Jares letter, p. 3). Dr. Jares concluded:
Ms. Bona retains the ability to work in at least a seated sedentary to light full-time capacity from 09/28/01 through the present. This is based upon the fact that there have been no abnormal neurological findings submitted. This is also based upon the fact that Ms. Bona has willingly decided to become pregnant, even being aware of the fact that pregnancy may place additional stress upon her body.
Silver Decl., Ex. 30 (Jares letter, p. 4). Dr. Jares opined further that Plaintiff, "[i]n an 8-hour workday . . . retains the ability to lift, carry or exert force up to: 20 pounds . . . maximum and frequently lift/carry up to 10 pounds." Silver Decl., Ex. 30 (Medical Consultant Review-Estimation of Physical Capacities). Dr. Jares did not find that Plaintiff could lift, carry, or exert force up to fifty pounds or frequently carry or lift up to twenty-five pounds. Defendants nonetheless denied Plaintiff's appeal based in part on Dr. Jares's conclusions. Page 5

  In their notice to Plaintiff denying her appeal, Defendants stated: "On an August 23, 2000 office note Dr. Gominak indicated that all of Ms. Bona's symptoms had resolved and a one-year follow up was recommended." In fact, Dr. Gominak had written: "all of her symptoms have resolved to numbness between D2 and D3 on the right." Silver Decl., Ex. 21. Dr. Gominak also wrote that "[Plaintiff's] MRI scan shows characteristic periventricular lesions" and concluded that she had "MS, chronic relapsing." Silver Decl., Ex. 21.

  In an unrelated proceeding, an administrative law judge for the Social Security Administration found that the "medical evidence establishes that claimant has the severe impairment of multiple sclerosis, acute, relapsing." Silver Decl., Ex. 33 (Decision, p. 4).


  A motion for summary judgment should be granted if 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))); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). The moving party bears the initial burden of informing the Court of the basis for the motion, and identifying portions of the pleadings, depositions, answers to interrogatories, admissions, or affidavits which demonstrate the absence of a triable issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). If the moving party meets its initial burden, the burden shifts to the non-moving party to present specific facts showing that there is a genuine issue of material fact for trial. FED. R. CIV. P. 56(e); Id. at 324. The evidence and all reasonable inferences therefrom must be viewed in the light most favorable to the non-moving party. T. W. Elec. Service, Inc. v. Pac. Elec. Contractors Ass'n, 809 F.2d 626, 630-31 (9th Cir. 1987). Summary judgment is not appropriate if the nonmoving party presents evidence from which a reasonable jury could resolve the material issue in his or her favor. Barlow v. Ground, 943 F.2d 1132, 1136 (9th Cir. 1991).


 A. Abuse of Discretion Is the Appropriate Standard of Judicial Review

  This Court reviews the denial of benefits de novo unless the benefit plan gives the Page 6 administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe the terms of the plan. See Firestone Tire and Rubber Co. v. Bruch, 489 U.S. 101, 109 (1989). The default is that the administrator has no discretion, and the administrator must show that the plan gives it discretionary authority in order to receive judicial deference to its decision. See Kearney v. Standard Insurance Co., 175 F.3d 1084, 1089 (9th Cir. 1999). Where such authority is given, a deferential standard of review is proper. See Firestone, 489 U.S. at 109. Where a plan grants discretionary authority, the Court applies the "arbitrary and capricious" standard of review. See id.

  The policy at issue contains the following language: "Metlife in its discretion has authority to interpret the terms, conditions, and provisions of the entire contract." Sullivan Decl., Ex. 1 (MetLife Certificate of Insurance, p. iii). Plaintiff concedes that the policy gives Defendants discretionary authority. Plaintiff's motion, p. 11. However, while the Court thus ordinarily would review Defendants' decision under the deferential standard of review, Plaintiff argues that Defendants ceded their entitlement to deference by (1) failing to meet deadlines for responding to Plaintiff's claim and Plaintiff's appeal of the denial of her claim and (2) resolving the claim and appeal under conditions tantamount to a conflict of interest.

  1. Procedural Deadlines

  In the Ninth Circuit, failure to adhere to regulatory deadlines may amount to a nondiscretionary denial of benefits, thus rendering review under the abuse of discretion standard meaningless. Jebian v. Hewlett Packard Co. Employee Benefits Organization Income Protection Plan, 349 F.3d 1098 (9th Cir. 2003). The district court should "not defer when a decision is, under the Plan, necessarily the mechanical result of a time expiration rather than an exercise of discretion." Id. at 1105. However, "deference may be due to a plan administrator that is engaged in a good faith attempt to comply with its deadlines when they lapse." Id. at 1103.

  Defendants have provided evidence that, during their review of Plaintiff's claim, they were in contact with Plaintiff and her doctors and were attempting to resolve her claim in good faith prior to the deadline. See Sullivan Decl., Ex. 16. Although Defendants offer no explanation as to why they did not respond to Plaintiff's appeal prior to the deadline, there is no Page 7 indication that Defendants did not make a good-faith determination of the merits of Plaintiffs appeal. Defendants did not merely deny Plaintiff's claim in reliance on a procedural deadline. Instead, they presented a reasoned opinion-after requesting further review of Plaintiff's records by new experts-explaining the basis of their decision.*fn2,*fn3 Defendants exercised discretion in their review of Plaintiff's claim and appeal, and this Court will accord deference to their determination.

  2. Conflict of Interest

  "The degree of judicial deference associated with [the abuse of discretion] standard of review may, however, be affected" when there is a "conflicting interest [that caused] a serious breach of the plan administrator's fiduciary duty to . . . the plan beneficiary." Lang v. Long-Term Disability Plan of Sponsor Applied Remote Technology, Inc., 125 F.3d 794, 797, 798 (9th Cir. 1997). The "affected beneficiary must 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 to the beneficiary." Id. at 798 (internal citation omitted). If that burden is satisfied the Court continues its review for abuse of discretion. Id. However, that review becomes "less deferential." Id.

  The Court will not alter the standard of review here. Plaintiff has not satisfied her burden of showing material, probative evidence of self-interest that caused Defendants to breach their fiduciary duty to her. The record does not support Plaintiff's argument that Defendants' reasons for denying her claim and her appeal are inconsistent, thereby satisfying her burden of showing a conflict of interest. See id. at 799. The record indicates that Defendants denied Plaintiff's claim and appeal because they were not persuaded as to the validity of her MS diagnosis, either with or without the MRI evidence. It is true that, initially, Defendants noted the lack of MRI evidence, Page 8 which they did not possess. However, they also denied Plaintiff's claim on the basis of the lack of other indications that MS was the root of her symptoms. See Silver Decl., Ex. 14. Later, they acknowledged the existence of the MRI, but found it inconclusive in light of other evidence pertaining to Plaintiffs medical condition. See Silver Decl., Ex. 32.

 B. Defendants Abused Their Discretion in Denying Plaintiff's Claim and Her Appeal

  1. Plaintiff's Employment Classification

  It is an abuse of discretion for Defendants to construe provisions of the Policy in a way that "conflicts with the plain meaning of the plan." Taft v. Equitable Life Assur. Soc., 9 F.3d 1469 (9th Cir. 1993). Defendants' interpretation of the plan must not be "unreasonable." Saffle v. Sierra Pacific Power Co. Bargaining Unit Long Term Disability Income Plan, 85 F.3d 455, 458 (9th Cir. 1996). The Policy defines disability in part as an inability "to earn more than 80% of your Predisability Earnings or Indexed Predisability Earnings at your Own Occupation for any employer in your Local Economy." Silver Decl., Ex. A (Policy, p. 9). "`Own Occupation' means the activity that you regularly perform and that serves as your source of income. It is not limited to the specific position you held with your Employer. It may be a similar activity that could be performed with your Employer or any other employer." Silver Decl., Ex. A (Policy, p. 8). The parties dispute the definition of Plaintiff's "own occupation." Defendants argue that (1) Plaintiff's employment position is best characterized as light or sedentary work and (2) that the Court should consider only the position she held as modified after she became disabled, and not her predisability position.

  The record shows that Plaintiff's job title was "Customer Community Program Manager." Silver Decl., Ex. 2. In this position, she was an "instrumental member of [her employers's] Corporate Marketing team" and was required to "work onsite at customer locations to build strategic relationships," "work long hours when necessary," have the "physical ability to lift and transport packages that weight [sic] a minimum of 35 pounds," travel, including internationally, fifty percent of the time, and "[b]e exposed to marked changes in temperature or humidity." Silver Decl., Exs. 3 & 4. A job requirement, among others, was "Manager 5 years/Director 10 years of marcom, corp comm or product marketing experience." Silver Decl., Ex. 3. Page 9

  Jeff Beeman, a vocational expert, reviewed Plaintiff's employment duties and determined that her "position could be defined as a hybrid or a mixture of sales, marketing, field work, technical support and customer service," and that her position is "medium exertional according to the Dept. of Labor standards." Silver Decl., Ex. 27 (Beeman letter, pp. 7 & 10). Mr. Beeman also concluded that her occupation description,

including the key worker traits outlined by the DOT of directing others, influencing people, making judgments, and dealing with people in user support, marketing customer service, an on-site analysis capacity, would seemingly be taken totally out of the realm of possibility as far as Ms. Bona's ability to perform her own occupation.
Silver Decl., Ex. 27 (Beeman letter, p. 9).

  Defendants attempt to classify Plaintiff's job as "Marketing Manager" according to the DICTIONARY OF OCCUPATIONAL TITLES VOL. I. ("DOT "). Sullivan Decl., Ex. 35. However, although the DOT is helpful in determining the duties of various occupations, in this case it is improper to rely on a classification that omits a major part of the claimant's actual duties. Defendants concede that the Policy "clearly allows MetLife to look at the activities that Plaintiff performed in her occupation." Defendant's Opposition, p. 12. Defendants' proposed classification does not include business travel, the same weight requirements or the management responsibilities, and it also would reduce Plaintiff's salary by seventy-five percent. Ignoring Plaintiff's actual employment activities and descriptions when determining whether Plaintiff was qualified for disability benefits was an abuse of discretion.

  Although Defendants state in their denial of Plaintiff's appeal that "[o]ur vocational counselor who is a Certified Rehabilitation Coordinator felt that Ms. Bona's occupation was in the light level capacity," Silver Decl., Ex. 32 (Appeal denial, p. 2), Plaintiff argues persuasively that her position qualifies as "medium exertional" according to the DOT, Sullivan Decl., Ex. 35. "Medium Work" includes "[e]xerting 20 to 50 pounds of force occasionally, and/or 10 to 25 pounds of force frequently, and/or greater than negligible up to 10 pounds of force constantly to move objects." DOT, p. 1013. "Light Work" includes "[e]xerting up to 20 pounds of force occasionally, and/or up to 10 pounds of force frequently, and/or a negligible amount of force constantly . . . to move objects." Id. "Sedentary Work" includes "[e]xerting up to 10 pounds of Page 10 force occasionally . . . and/or a negligible amount of force frequently . . . to lift, carry, push, pull, or otherwise move objects, including the human body." Id. Plaintiff's job description and the actual duties that she performed indicate that her position is more accurately characterized as medium, not light, work. Defendants provide no explanation for disregarding Plaintiff's predisability job duties. Instead, they rely on the conclusory opinion of Joe Atkonson, who "felt [Plaintiff's] occupation as a marketing manager/customer community program manager position would be in the light duty category." Sullivan Decl., Ex 13. As a matter of law, the duties that Plaintiff actually was expected to perform prior to the onset of her disability properly are characterized as medium, not light, work.

  Defendants argue, however, that the Court should only consider Plaintiff's post-disability accommodated employment position, noting that in that position Plaintiff had ceased traveling and reduced the number of days per week that she worked. Defendants also appear to argue that Plaintiff's pregnancy would have prevented her from performing her duties. Defendants thus attempt to reclassify Plaintiff's job to the level of performance of which Plaintiff was capable while suffering from symptoms of MS or pregnancy. This argument is inconsistent with applicable law. See Saffle, 85 F.3d at 459. Defendants point to no language in the Policy that permits Defendants to reclassify Plaintiff's position to reflect accommodations made as a direct result of her disability, and the Court can find none. Defendants merely argue that the Policy's "definition of `own occupation' is `not limited to the specific position you held with your Employer. It may be a similar activity that could be performed with your Employer or with any other employer.'" Defendant's Opposition, p. 12 (citing the Policy). There is no basis, other than an arbitrary and capricious one, for construing this language to permit Defendants to compare Plaintiff's present ability to the requirements of her employment position after it was modified. The Policy requires Defendants to determine whether Plaintiff is capable of performing her job or "a similar activity" in such a way as to earn more than 80% of predisability earnings. There is no reasonable basis for including a modified activity or an accommodation in the definition of "own occupation." Finally, if Defendants mean to argue that Plaintiff's travel duties may have been limited in the short term by her pregnancy, such temporary limitation does not provide a basis for Page 11 reducing Plaintiff's job classification to a lower category for the purposes of disability analysis.

  2. There Is No Genuine Issue of Material Fact as to Whether Defendants Abused Their Discretion in Finding that Plaintiff Did Not Suffer from a Disability that Rendered Her Incapable of Performing Work at the Level of Her Own Occupation

  According to the Policy, Plaintiff is disabled if it is determined that she "unable to earn more than 80% of [her] Prediability Earnings . . . at [her] Own Occupation," Silver Decl., Ex. A (Policy, p. 9), which the Court has determined is best classified as "medium work" as defined in the DOT. It is uncontroverted that Plaintiff's disability prevented her from conducting medium work. Even Defendants' medical record reviewer, Dr. Jares, upon whose report Defendants relied in denying Plaintiff's appeal, did not find that Plaintiff could lift, carry, or exert force up to fifty pounds or frequently carry or lift up to twenty-five pounds. Defendants do not dispute that Plaintiff cannot perform her traveling, marketing, and on-site sales duties as before.

  Additionally, Defendants' determination that Plaintiff does not suffer from MS was arbitrary and capricious. The determination appears to have been based upon conclusory statements that there was the possibility that Plaintiff's symptoms might have some etiology other than MS, a conclusion unsupported by the findings and conclusions of two doctors who examined and performed tests on Plaintiff. At most, Defendants' experts opined that there is no conclusive diagnosis of MS.*fn4 In contrast, there clearly is physical, objective evidence supporting a diagnosis of MS: Dr. Gominak performed an MRI and concluded that it was consistent with a diagnosis of MS. Dr. Gominak and Dr. Madireddi corroborated this physical evidence with clinical observations. In particular, Dr. Gominak noted that Plaintiff displayed other symptoms of MS, such as severe fatigue, lack of coordination, depression, apathy, poor attention, and hand tingling. He also found that Plaintiff was not capable of lifting or carrying more than ten pounds Page 12 or working. Silver Decl., Exs. 7 & 8. Dr. Madireddi formed similar conclusions. Sullivan Decl., Ex. 11. Finally, Defendants appear to have misread Dr. Gominak's statement that Plaintiff's symptoms had resolved to numbness between D2 and D3. In their denial letter, Defendants stated that Plaintiffs symptoms had resolved completely. Dr. Gominak noted that Plaintiff suffered from relapsing MS, so it is not surprising that her symptoms might decrease and increase in severity over time. Overlooking such observations could only have occurred under a review that was arbitrary and capricious. "Plan administrators . . . may not arbitrarily refuse to credit a claimant's reliable evidence, including the opinions of a treating physician." Black and Decker v. Nord, 123 S.Ct. 1965, 1972 (2003).

 C. Defendants' Objections to Evidence

  Defendants argue that the Court should not review evidence that was not in the record during the claim review and appeal period. Because the Court has not considered this evidence, it need not rule on the merits of Defendants' objections.


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