United States District Court, N.D. California
[Copyrighted Material Omitted]
[Copyrighted Material Omitted]
[Copyrighted Material Omitted]
Re: Dkt. Nos. 35, 42, 45.
For Diana James, Plaintiff: David Joseph Linden, LEAD ATTORNEY, Attorney at Law, Napa, CA; Laurence Fred Padway, LEAD ATTORNEY, Law Offices of Laurence F. Padway, Alameda, CA.
For AT& T West Disability Benefits Program, Defendant: Susan Tayeko Kumagai, LEAD ATTORNEY, Rebecca Kim Kimura, Lafayette & Kumagai LLP, San Francisco, CA.
For AT& T Umbrella Benefit Plan No. 1, Defendant: Rebecca Kim Kimura, Lafayette & Kumagai LLP, San Francisco, CA.
ORDER ON CROSS MOTIONS FOR SUMMARY JUDGMENT
WILLIAM H. ORRICK, United States District Judge.
Plaintiff Diana James and defendant AT& T Umbrella Benefit Plan No. 1 (" the plan" ) have made cross motions for summary judgment about whether the plan's denial of long-term disability (" LTD" ) benefits for James was wrongful. The question I must answer is whether the plan abused its discretion in denying James LTD benefits despite the fact that she suffered from chronic pain and depression. Because I conclude that the plan wrongly disregarded evidence in James's favor and did not meaningfully identify what evidence she could provide to support her claims, James's motion for summary judgment is GRANTED and the plan's motion for summary judgment is DENIED.
James was a Service Representative with Pacific Bell Telephone Company from 1997 until she stopped working as a result of the health issues discussed in this Order in 2010. Her job was to assist customers with orders, billing, and collection-related issues. Administrative Record (" AR" ) 410. She was covered under the AT& T West Disability Benefits Program  (the " disability plan" ). Def. Opp'n Adkins Decl. (Dkt.
No. 44-2) ¶ 3. The disability plan is a component program of the AT& T Umbrella Benefit Plan No. 1. AR 833.
I. THE DISABILITY PLAN
Under the disability plan, short-term disability (" STD" ) benefits of full or partial wage replacement are available to employees for up to 52 weeks. AR 812-14. Eligibility for STD benefits requires that an employee have a " sickness, injury or other medical, psychiatric or psychological condition that prevents [her] from engaging in [her] normal occupation or employment with the Participating Company." AR 812. After receiving 52 weeks of STD benefits, employees may become eligible for LTD benefits. AR 818. Under the disability plan, eligibility for LTD benefits requires that an employee have a " sickness, injury or other medical, psychiatric or psychological condition that prevents [her] from engaging in any occupation or employment for which [she is] qualified or may reasonably become qualified, based on training[,] education or experience." AR 818.
The terms of the disability plan provide that " [t]he Plan Administrator (or, in matters delegated to third parties, the third party that has been so delegated) will have sole discretion to interpret [the disability plan], including . . . determination of coverage and eligibility for benefits, and determination of all relevant factual matters." AR 834. The disability plan also states that " [t]he Claims Administrator has been delegated authority by the Plan Administrator to determine whether a particular Eligible Employee who has filed a claim for benefits is entitled to benefits" and that " [t]he Appeals Administrator has been delegated authority by the Plan Administrator to determine whether a claim was properly decided by the Claims Administrator." AR 834.
Sedgwick Claims Management Services, Inc. (" Sedgwick" ) is the third party that has been delegated responsibility for both the entire claims and appeals processes under the disability plan. AR 801, 833, 836; Def. Opp'n Adkins Decl. ¶ 4; Def. Opp'n Hagestad Decl. (Dkt. No. 44-1) ¶ ¶ 1-2. The group at Sedgwick that handles disability benefits claims is called the AT& T Integrated Disability Service Center (" IDSC" ). Def. Opp'n Hagestad Decl. ¶ 3. Appeals of denied disability claims are decided by Sedgwick's Quality Review Unit (" QRU" ). Def. Opp'n Hagestad Decl. ¶ 4. The QRU makes its determination based upon the information that was before the IDSC in making the initial denial decision, the issues and comments submitted by the participant employee, and any other evidence that the QRU may independently discover. Def. Opp'n Hagestad Decl. ¶ 4. The QRU may seek assistance from independent medical advisors to analyze medical information in submitted in support of claims. Def. Opp'n Hagestad Decl. ¶ 4; AR 827.
Only the Claims Administrator has discretion to determine whether an employee has a disability qualifying her for STD or LTD benefits. AR 813, 819. In determining eligibility, Sedgwick relies upon objective medical findings from the employee's providers concerning the severity of the patient's condition and its impact on the employee's ability to work. See AR 57, 238, 492; Def. Opp'n Hagestad Decl. ¶ 8. " A medical opinion that is not supported by objective and measurable medical findings is usually insufficient to support a claim for disability benefits . . . . General, vague, or unsupported descriptions of disability alone are not useful in making determinations about an employee's ability to work." Def. Opp'n Hagestad Decl. ¶ 8.
Sedgwick does not have a role in the Plan's funding and is not a source of funds
used to pay disability benefits. Def. Opp'n Adkins Decl. ¶ 6; Def. Opp'n Hagestad Decl. ¶ 5. Sedgwick receives a flat fee for its services regardless of whether it approves or denies claims. Def. Opp'n Adkins Decl. ¶ 6; Def. Opp'n Hagestad Decl. ¶ 5.
II. JAMES'S STD BENEFITS
James has been seeing Dr. Natalia Balytsky, a pain management specialist, since 2007 for chronic low back pain and facet syndrome. AR 77. Since that time, James has received numerous steroidal injections for her pain, the severity of which has varied over time. On a scale of one to 10, James has reported feeling pain ranging from two to 9.5. AR 76. On March 3, 2009, Dr. Balytsky opined that James's pain was chronic based on her observations of James over two years. AR 77.
On June 2, 2009, James took leave from work due to depression, arthritis, and sciatica. AR 1, 59. On June 10, 2009, Dr. Balytsky diagnosed James with " Facet Syndrome/low back pain/arthritis." AR 75. James's symptoms included " [l]ow back pain caused by prolonged sitting . . . arthritis in elbows, shoulders and fingers." AR 75. James was also " unable to sit and type due to her condition." AR 75. Dr. Balytsky expected James's condition to improve within three months with treatment and prescribed treatment involving radio frequency ablation if a medial branch block was successful--both depended on authorization from her insurance company. AR 75. She suggested that James " avoid prolong[ed] sitting, bending, lifting & typing" for three months. AR 75.
On June 15, 2009, in support of James's claim for STD benefits, Sedgwick received office visit notes and a Mental Health Provider Statement from her psychiatrist, Dr. Robert Swanson. AR 9-10. James told Dr. Swanson that " she doesn't have the energy and ability to concentrate that is necessary for work, lead[ing] to increased anxiety at work." AR 10. Dr. Swanson observed symptoms of depression, anxiety, and persistent pain in the neck, hands, and back. AR 64. He noted James's inability to concentrate, but stated that she did not require assistance to go about daily life. AR 65. Instead of providing her with a return-to-work plan and date, Dr. Swanson " recommend[ed] retirement" because her " pain isn't going to get better." AR 65; see also AR 66.
On July 1, 2009, Sedgwick received June 18, 2009, office notes from Dr. Balytsky. The notes stated that James has " major depression." While she did not have suicidal or homicidal thoughts or psychotic symptoms, the medical evidence " provides significant observable evidence of severe cognitive or functional impairment precluding appropriate communication with peers and customers, higher level reasoning, multitasking or obtaining and retaining info. due to comorbid diagnosis of depression and low back pain." AR 17-18.
On June 23, 2009, a supervisor at Sedgwick noted that medical documentation showed that James had a medical condition and symptoms that would preclude prolonged sitting, talking, typing, and client interaction, and that she has a " secondary mental health component" that was being exacerbated by her current medical condition. While the supervisor said that giving
James some time off was within reason, James would have to be evaluated to see whether conservative treatment and a full-time return-to-work plan was feasible. AR 14.
On July 8, 2009, Dr. Swanson noted James as being " very anxious" even with medication and was observed as having major depression, anxiety, and chronic back pain. AR 19-20. James's " back pain persists" and she " needs surgical intervention," but it was not approved yet. AR 19. Her medication was increased that day. He concluded that " there is no way she can [return to work] anytime soon." AR 20. Dr. Swanson recommended that, " at best," James take one month off from work so that he could reevaluate her at that time. AR 20.
On July 14, 2009, Dr. Balytsky noted, " It is my professional opinion[ ] that [James] is unable to sit and type due to her condition. Her pain is worsened by prolonged sitting which is required of her job." AR 98.
James's claim for STD benefits was approved starting on June 9, 2009, and was extended several times through November 1, 2009, after which she returned to work on a part-time basis. AR 39-40, 42, 44-45, 142, 155. She received trigger point injections on several occasions during this period. AR 17, 88, 118. On August 5, 2009, she received the medial branch block procedure. AR 105. After the procedure, Dr. Balytsky stated, " the patient is having a lot of severe back pain, significant sitting intolerance, and I do not see the patient being able to go back to work full time." AR 117.
On September 29, 2009, Dr. Balytsky wrote to Sedgwick stating that while James was not able to return to work yet, after she undergoes another injection upon receiving approval from her health insurance to do so, she is estimated to be able to return to work by November 1, 2009. AR 128. On October 7, 2009, James was approved for the procedure and was scheduled to receive it on October 19, 2009. AR 137. Thereafter, James's STD benefits were extended to November 1, 2009. AR 140-42.
On October 28, 2009, Sedgwick received a report on a follow-up visit held on October 26, 2009, with Dr. Balytsky. AR 143. Dr. Balytsky wrote that James's condition improved, so she was being released to work part-time for two weeks. AR 143. Sedgwick approved James's request for a modified work schedule from November 2, 2009, to November 15, 2009, and her department provided the accommodation. AR 39-40, 42, 148, 155. The accommodation was later extended to November 22, 2009, based on James's request. AR 44-45. On November 23, 2009, James returned to work fulltime. AR 45-46.
On January 5, 2010, James went on leave again and was approved for STD benefits. AR 160, 230. Because she had been on leave within the 13 weeks prior, her STD benefits continued from what remained of her 52-week STD benefits allotment after her last disability claim. AR 160.
On January 12, 2010, Sedgwick received a statement from Dr. Swanson identifying symptoms of major depression, chronic back pain, and knee and neck pain in James. AR 242. He reported that James could not function in a high-stress job when she is severely depressed and recommended that she not return to work and go on permanent disability. AR 242-43. She occasionally cried, and the treatment Dr. Swanson was recommending for her was " just for maintenance" but was not " expect[ed] to improve the patient's physical or cognitive functioning." AR 242. Sedgwick also received a January 8, 2010,
statement from Dr. Balytsky, who indicated that James received trigger point injections on January 7, 2010, and would improve in three to four weeks, although James " is not able to tolerat[e] prolonge[d] sitting or standing." AR 245. The plan approved STD benefits for James from January 12, 2010, to January 31, 2010. AR 249.
On January 26, 2010, Sedgwick received a statement from Dr. Leo Becnel, who diagnosed James with cataracts and recommended surgery. AR 262-63. Based on this documentation, James was approved for STD benefits through February 14, 2010. AR 269-70, 275-76. Two days later, Dr. Swanson stated in a doctor's certificate that James was " not to work again." AR 690.
On January 29, 2010, Sedgwick received a " Physical Capacities Evaluation: Sedentary" form from Dr. Balytsky. AR 176, 277-78. Dr. Balytsky reported that James would not be able to stand or sit for more than 10-15 minutes, nor would she be able to lift or bend; the doctor said that although James could maneuver a mouse and view a computer screen for up to four hours a day, she would not be able to work for more than an hour a day. AR 277. In particular, James would need a break every 15 minutes for 10 minutes. AR 277. Dr. Balytsky stated that James's restrictions were " permanent" and Dr. Balytsky could not provide a return-to-work plan for James; she also noted that a sit/stand work station would not help James. AR 278.
On February 9, 2010, Sedgwick received a statement from Dr. Geoffrey Tompkins, an orthopedic surgeon. AR 176, 284. He stated that James demonstrated a normal gait unsupported; both her knees showed full equal range of motion; both her hips showed " normal exam" ; she had tenderness in both knees, but neither demonstrated an effusion or crepitation; both knees had a normal ligamentous exam; " McMurray's test" did not cause any significant pain; and a " neurocirculatory exam" resulted in a normal diagnosis. AR 287. However, he noted that James was " on significant narcotic medication for chronic back pain." AR 287. Dr. Tompkins also reviewed x-rays from September 4, 2009, and concluded that they showed mild-to-moderate lateral joint spacing narrowing bilaterally, slightly greater on the left. AR 287. He gave James injections in both knees and reported that she would improve in three to six months. AR 284, 287.
On February 16, 2010, Sedgwick received a note from Dr. Balytsky stating, " At this time I feel it is in Mrs. James['s] best interest to remain off of work until February 24, 2010." AR 301. On March 3, 2010, Dr. Balytsky reported back to Sedgwick about her February 24th meeting with James, stating, " It is my professional opinion that Mrs. James needs to apply for permanent disability. I do not believe that she will be able to return to work under her medical conditions." AR 321.
On March 15, 2010, Sedgwick received notes from a March 3, 2010, appointment with Dr. Swanson indicating that James's back pain limited her activities, that she had depression, and that " she can't possibly do her demanding work in her present condition (physically) and it is unlikely to improve." AR 194, 338-39.
On March 18, 2010, a Sedgwick employee reviewed James's claim file and concluded based on the medical information received that James was unable to see a computer screen to perform talking and typing tasks. AR 195-96. The employee noted that the documents indicated that her sight could improve if her cataracts were removed. AR 196. Sedgwick then
approved STD benefits for James through April 18, 2010. AR 197.
On April 13, 2010, Sedgwick received an April 7, 2010, Preoperative Evaluation completed by Dr. Catherine Davis, a primary care physician. AR 346. Dr. Davis reported that James's " Hip xrays were unremarkable. No obvious arthritis." AR 346. On April 16, 2010, Dr. Davis forwarded to Sedgwick a hip x-ray report by Dr. David Schmidt, in which he reported " [n]o acute fracture or focal osseous abnormality" in James and her " [h]ip joints and sacroiliac joints appear unremarkable." AR 353. He concluded that it was an " [u]nremarkable examination." AR 353.
On April 16, 2010, Sedgwick received a report from Dr. Jason Bacharach stating that James had cataract surgery for her left eye on April 14, 2010, and surgery for her right eye was scheduled for June 9, 2010. AR 356.
On May 24, 2010, Dr. Balytsky completed another " Physical Capacities Evaluation: Sedentary" form, stating that James could not stand or walk for more than 15 minutes and that she could not tolerate prolonged sitting. AR 558-59. Dr. Balytsky also stated that James could speak and view a computer screen for up to three to four hours and maneuver a mouse for up to one to two hours during the course of an eight-hour workday, but that she could not work for more than an hour overall. AR 558. These restrictions, Dr. Balytsky said, were permanent. AR 559.
On May 26, 2010, Dr. Balytsky informed Sedgwick that James was appealing her insurance company's denial of a facet rhizotomy procedure. AR 205, 379, 400. Sedgwick extended James's STD benefits through July 25, 2010. AR 397. On July 1, 2010, James's insurance company reconsidered its denial and authorized the facet rhizotomy procedure. AR 400. On July 27, 2010, Sedgwick extended Plaintiff's STD benefits to August 17, 2010, on which date James would reach the maximum 52-week period of time for STD benefits available to her under the disability plan. AR 404-06.
III. JAMES'S LTD BENEFITS
On April 21, 2010, Sedgwick sent James a letter as part of a package advising her that her STD benefits would expire on August 17, 2010, and stating that she may be eligible for LTD benefits. AR 479. The package contained, among other things, a document entitled " For Objective Data," which explained the need to submit " objective data" to properly evaluate her claim, including " physical findings, laboratory results, imaging studies or other objective data . . . as it impacts functional impairment." AR 492-93. This data had to be " objective, not subjective." AR 492. The document does not appear to identify any objective data for showing pain or depression.
On May 7, 2010, an LTD case manager called James to explain the LTD claims process, including what forms to fill out, when to return them, and the benefits James could receive; she also explained that the definition of disability for LTD benefits was different than the definition for STD benefits, namely, the former required an inability to work in any occupation. AR 417-19. During the conversation, James said that she needed trigger point and facet injections, that " she is better in the sense [she does not] have to stress about the inability to be at work," and that work had become too stressful and hard--" real hard." AR 420. James also said that she could dress herself, bathe, do certain household chores, walk the dog, watch the news, read, drive (unless she is too medicated or in too much pain), and cook. AR 420-21.
On June 2, 2010, Sedgwick received James's application for LTD benefits. AR 572. She said that she first became disabled on January 5, 2010. AR 572. She also sent a " Training, Education and Experience Statement," which indicated that she had a college degree in Romance Languages, took computer classes in the late 1980's, used the internet, could use the company software at work, and could somewhat use Microsoft Word and Excel. AR 568-69.
On June 18, 2010, Dr. Balytsky noted that James's " severe low back pain," which renders her " not able to sit or stand for more than 15-20 min.," was a permanent condition. AR 689.
On June 22, 2010, James sent Sedgwick a copy of a Supplementary Certification that was sent to the California Employment Development Department and completed by Dr. Balytsky on June 16, 2010, indicating that James had " severe low back pain" and that her " condition is permanent." AR 578-79. On June 30, 2010, James sent Sedgwick a physician's office visit note dated June 28, 2010, indicating that her pain scale was 9 out of 10, that she was awaiting " RFA authorization," and that she needed trigger point injections " today." AR 580. On July 1, 2010, Sedgwick received office notes from Dr. Tompkins indicating that James received injections in both knees on June 30, 2010. AR 581.
On July 12, 2010, a case manager called and left messages for Drs. Balytsky, Swanson, Bacharach, Tompkins, and Davis, requesting their availability for a doctor-to-doctor call. AR 428. The next day, only Dr. Swanson called back, and he stated that he was unavailable that week and that he would need to see James first before making before speaking making such a call. AR 429.
On July 13, 2010, James's LTD claim was referred to two Physician Advisors (" PA" ) to provide opinions on whether James's medical information supported the likelihood that she would be able to return to work within six to 12 months after her STD benefits expired, and whether there was " medical evidence of a current severe medical condition" that would ...