Pistilli v. First Unum Life Insurance Company

Background

Lia Pistilli sought long-term disability benefits from First Unum Life Insurance Company under an employee-benefit plan governed by the Employee Retirement Income Security Act of 1974 (ERISA). Pistilli had worked as a corporate finance attorney at Davis Polk & Wardwell LLP beginning in May 2022. On July 8, 2022, her vehicle was rear-ended while stopped at a traffic light. She later reported headaches, nausea, neck pain, fatigue, concentration problems, and other symptoms that she said prevented her from performing the duties of a corporate finance attorney.

Pistilli received 26 weeks of short-term disability benefits. Under the long-term disability policy, disability meant that an injury or sickness prevented her from performing each material duty of her regular occupation. The policy gave First Unum discretionary authority to decide eligibility and interpret the policy.

First Unum denied long-term disability benefits in June 2023 and denied Pistilli’s appeal on February 26, 2024. First Unum’s reviewers concluded that the medical record did not support the restrictions and limitations Pistilli reported. They relied in part on the minor nature of the accident, normal or unchanged diagnostic findings, inconsistencies in neuropsychological testing, and evidence that Pistilli had experienced severe headaches before the accident. Pistilli submitted additional medical opinions stating that she had cognitive deficits and could not work, and she also testified about her symptoms at trial.

Issues and standard of review

The parties stipulated to an agreed administrative record and both moved for judgment under Federal Rule of Civil Procedure 52. Pistilli argued that First Unum’s appeal review violated federal claims-procedure regulations because First Unum allegedly used unqualified or insufficiently independent medical reviewers and improperly extended the time for deciding her appeal.

The court first considered the applicable standard of review. Because the policy gave First Unum discretionary authority, the court would ordinarily review the denial under the deferential arbitrary-and-capricious standard. Under that standard, a denial is upheld if it has a reasonable basis, is supported by substantial evidence, and is not legally erroneous. Pistilli argued that First Unum’s regulatory violations required the court to review the claim independently, or de novo, meaning without deference to First Unum.

Court’s analysis

The court rejected Pistilli’s challenge to the qualifications of First Unum’s reviewers. Although a nurse initially reviewed the file, First Unum later referred the matter to Dr. Howard Grattan, whose qualifications were uncontested. The court concluded that First Unum consulted health care professionals with appropriate training and experience.

The court also rejected Pistilli’s argument that the reviewers were not independent merely because First Unum paid them. The court held that compensation by the insurer, without additional evidence of improper conduct or cherry-picking, did not establish a violation of the claims-procedure regulations.

The court further held that First Unum’s 45-day extension was proper. First Unum notified Pistilli during the initial review period that it needed additional time to complete medical reviews, consider new information, allow Pistilli to respond to a preliminary decision, and seek previously requested behavioral-health records. First Unum ultimately decided the appeal within the permitted 90-day period. The court found that the appeal presented new facts and issues beyond First Unum’s control and that First Unum acted in good faith.

Applying the arbitrary-and-capricious standard, the court held that First Unum’s denial was not unreasonable, unsupported by substantial evidence, or legally erroneous. The court emphasized the lack of objective support for Pistilli’s claim that the accident prevented her from working, the unchanged brain imaging, the limited response from her treating physicians to First Unum’s inquiries, and the explanations provided by First Unum’s medical and psychological reviewers. The court also stated that it would reach the same result even under de novo review because Pistilli had not proved her claim by a preponderance of the evidence.

Disposition

The court found that First Unum did not act arbitrarily or capriciously in denying Pistilli’s claim. Judge Alvin K. Hellerstein granted First Unum’s motion for judgment and denied Pistilli’s motion. The Clerk was directed to tax costs, enter judgment for First Unum, and close the case.