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Gallegos v. The Prudential Insurance Company of America

United States District Court, N.D. California, San Jose Division

June 5, 2017



          BETH LAB SON FREEMAN, United States District Judge

         Prior to stopping work due to her disability, Plaintiff Lisa Gallegos (“Gallegos”) was a Drug Safety Operations Manager at Jazz Pharmaceuticals (“Jazz”) in Palo Alto, California. She sought short-term and long-term disability claims under the terms of Jazz Pharmaceuticals Disability Plan (“the Plan”), an employee benefits plan governed by ERISA.[1] As the administrator of the Plan, Defendant The Prudential Insurance Company of America (“Prudential”), initially granted the short-term and long-term claim but later terminated the long-term disability benefit as of April 13, 2015. AR 4642, 4947, 4958.

         The parties have filed cross motions for judgment pursuant to Federal Rule of Civil Procedure 52. Gallegos seeks a determination that she was disabled from both her regular occupation and any gainful occupation as those terms are defined under the Plan and Prudential seeks a contrary determination. The Court set a “Hearing on Dispositive Motions/Bench Trial” for May 5, 2017 and heard extensive oral argument of counsel on that date. For the reasons discussed below, the Court GRANTS IN PART Gallegos' Rule 52 motion, issues Findings of Fact and Conclusions of Law under Rule 52, and DENIES Prudential's motion.


         Federal Rule of Civil Procedure 52 provides that “[i]n an action tried on the facts without a jury . . . the court must find the facts specially and state its conclusions of law separately.” Fed.R.Civ.P. 52(a)(1). “In a Rule 52 motion, as opposed to a Rule 56 motion for summary judgment, the court does not determine whether there is an issue of material fact, but actually decides whether the plaintiff is [entitled to benefits] under the policy.” Prado v. Allied Domecq Spirits and Wine Group Disability Income Policy, 800 F.Supp.2d 1077, 1094 (N.D. Cal. 2011) (citing Kearney v. Standard Ins. Co., 175 F.3d 1084, 1095 (9th Cir. 1999)). In making that determination, the court must “evaluate the persuasiveness of conflicting testimony and decide which is more likely true” in order to make findings of fact that will be subject to review under a clearly erroneous standard if appealed. Kearney, 175 F.3d at 1095.

         On January 3, 2017, this Court ruled that the standard for judicial review is de novo. ECF 35. The Court thus determines based on the evidence in the administrative record whether Gallegos carries the burden of showing, by a preponderance of the evidence, that she was disabled under the terms of the Plan, without according deference to Prudential's denial of claim. Abatie v. Alta Health & Life Ins. Co., 458 F.3d 955, 963 (9th Cir. 2006); Oster v. Standard Ins. Co., 759 F.Supp.2d 1172, 1185 (N.D. Cal. 2011); Kearney, 175 F.3d at 1087-90. To prevail, Gallegos needs to prove it is “more likely than not” that she was disabled under the terms of the Jazz Pharmaceuticals Long-Term Disability Plan. Armani v. Nw. Mut. Life Ins. Co., 840 F.3d 1159, 1163 (9th Cir. 2016) (standard of proof in de novo ERISA disability claim is preponderance of the evidence); Sanchez v. Monumental Life Ins. Co., 102 F.3d 398, 404 (9th Cir. 1996) (defining “preponderance of the evidence” as “more likely than not”).


         A. Ms. Gallegos's Occupation

         Prior to becoming disabled, Gallegos was a Drug Safety Operations Manager at Jazz Pharmaceuticals in Palo Alto, California. AR 2913. As a Drug Safety Operations Manager, Ms. Gallegos was “responsible for ensuring the Drug Safety and Pharmacovigilance department operational functions are documented . . . and optimized.” Id. As set forth in her job description, performing key drug safety functions required “excellent verbal and written communication skills, ” and “[e]valuative, analytical, and interpretative skills enabling review and development of reports and other documents used in support of Drug Safety and Pharmacovigilance compliance.” Id. Prior to leaving Jazz, she had spent nearly a decade in the pharmaceutical compliance field. AR 4404.

         B. The Long-Term Disability Plan

         At all relevant times, Jazz provided its employees with long-term disability benefits under the Jazz Pharmaceuticals Long-Term Disability Plan. AR 4919. Prudential issued a group long-term disability insurance policy, under which Jazz was a participating employer and under which Gallegos was a covered employee. Id. Prudential receives and decides long-term disability claims submitted by Jazz employees. AR 4947, 4958.

         i. The Plan's definition of disability

         The policy of the Plan sets forth the following definitions of disability to determine eligibility for benefits. AR 4923.

         You are disabled when Prudential determines that:

• you are unable to perform the material and substantial duties of your regular occupation due to your sickness or injury; and
• you are under the regular care of a doctor; and
• you have a 20% or more loss in your monthly earnings due to that sickness or injury.

         After 24 months of payments, you are disabled when Prudential determines that due to the same sickness or injury:

• you are unable to perform the duties of any gainful occupation for which you are reasonably fitted by education, training or experience; and
• you are under the regular care of a doctor.

AR 4928.

         Material and substantial duties means duties that:

• are normally required for the performance of your regular occupation; and
• cannot be reasonably omitted or modified, except that if you are required to work on average in excess of 40 hours per week, Prudential will consider you able to perform that requirement if you are working or have the capacity to work 40 hours per week.
Regular occupation means the occupation you are routinely performing when your disability begins. Prudential will look at your occupation as it is normally performed instead of how the work tasks are performed for a specific employer or at specific location. AR 4928.
Gainful occupation means an occupation, including self-employment, that is or can be expected to provide you with an income within 12 months of your return to work, that exceeds:
• 80% of your indexed monthly earnings if you are working; or • 66 2/3% of your monthly earnings if you are not working.

AR 4929.

         The Plan further provides that disability benefits will cease under several conditions, including on the earliest of the date the claimant is no longer disabled under the terms of the Plan, or the date the claimant fails to submit proof of continuing disability satisfactory to Prudential. AR 4936-37.

         C. Gallegos's Medical Conditions and Disability

          Around October 2, 2012, Gallegos took leave from work due to headaches with altered vision and left-sided numbness. AR 204-5. These headaches occurred on a “daily basis” and Gallegos was feeling nauseated “constantly.” AR 42. Prudential reviewed her medical records and approved short-term disability benefits, concluding it was “reasonable that the claimant's daily headaches are of a severity that would preclude her from being able to function adequately and/or sustainably in a workplace environment.” AR 205. She returned to Jazz in January 2013 but took time off again starting June 21, 2013 for shoulder surgery due to a torn rotator cuff. AR 201, 215, 241-42, 261. Gallegos submitted a short-term disability claim and again, Prudential approved the claim. AR 344. Following recovery from surgery, Gallegos returned to work in September 2013. AR 337, 354. At the time, Gallegos informed Prudential that her doctor “doesn't think it is a good idea” to be released to work, but she returned anyway. AR 354, 361.

         About six months later, Gallegos began suffering from severe fatigue and headaches with eye pain and facial numbness. AR 380, 391. She also noticed increasing pain, weakness, headaches, sensitivity to light, and cognitive issues including reduced memory and concentration. AR 380, 391. Gallegos's primary care doctor, Dr. Jeff Tao, concluded that “she unfortunately is unable to function correctly from a work standpoint, ” and recommended that she go on disability for at least 12 weeks. AR 391-92. Based on her symptoms, her rheumatologist, Dr. Michael Neuwelt, diagnosed her with systemic lupus erythematosus (“Lupus”) pursuant to standard American College of Rheumatology criteria. AR 380, 4376. In addition to her Lupus diagnosis, Gallegos suffers from adrenal insufficiency, chronic sinusitis, antiphospholipid syndrome, relapsing polychondritis, Hashimoto's thyroiditis, and continues to suffer from her regular migraine headaches. AR 425, 457.

         i. Lupus ...

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