McIntyre v. Reliance Standard Life Insurance Company

Background

Melissa A. McIntyre brought this action under the Employee Retirement Income Security Act (ERISA) after Reliance Standard Life Insurance Company terminated her long-term disability benefits. McIntyre had worked as a nurse and had Charcot-Marie-Tooth syndrome, a progressive neurological condition affecting sensation, muscle strength, balance, and mobility.

The plan provided two types of disability benefits. During the first 24 months, a claimant qualified under the “Regular Occupation” definition by showing an inability to perform the duties of the claimant’s regular occupation. After 24 months, the plan applied the “Any Occupation” definition, which required an inability to perform the material duties of any occupation. The plan gave Reliance discretionary authority to interpret the plan and decide eligibility for benefits.

Reliance initially approved McIntyre’s benefits. In 2013, it began evaluating whether she qualified for benefits under the Any Occupation standard. Reliance investigated her medical condition, daily activities, and work capacity, including through surveillance. The surveillance showed McIntyre participating in dog breeding and showing, traveling for those activities, shopping, and doing light yard work for short periods. It also showed that she walked with a limp and generally returned home in the early afternoon.

McIntyre’s medical records documented chronic pain, severe fatigue, frequent naps, weakness, muscle wasting, balance problems, and other limitations. Her treating neurologist and nurse practitioner repeatedly stated that she could not maintain full-time work. Several Reliance nurses also concluded that she lacked consistent work function, although one Reliance nurse concluded that light sedentary work appeared possible.

Reliance terminated McIntyre’s benefits effective December 1, 2015, concluding that she could perform sedentary and light work. McIntyre appealed and submitted additional medical evidence, including her treating neurologist’s opinion that she could not engage in gainful employment, even sedentary work. Reliance later required an independent medical examination. After delays in scheduling and processing the appeal, Dr. Khalafalla Bushara examined McIntyre and concluded that she could perform sedentary jobs full time. Reliance upheld the termination, relying substantially on that examination and a vocational analysis based on Dr. Bushara’s restrictions.

Earlier Proceedings and Remand

In the earlier round of this case, the court granted McIntyre’s motion for summary judgment after applying a de novo standard of review. Reliance appealed. The Eighth Circuit vacated that judgment and remanded with instructions to review Reliance’s decision under an abuse-of-discretion standard because the plan gave Reliance discretionary authority.

An abuse-of-discretion review asks whether the administrator’s decision was unreasonable or unsupported by evidence of substantial quantity and quality. The reviewing court considers the administrative record that was before the plan administrator when the claim was denied. The court must also weigh case-specific factors, including any conflict of interest. Reliance both decided eligibility and paid benefits, creating such a conflict.

Analysis

The court considered four factors: the timeliness of Reliance’s appeal decision, the quality and quantity of the evidence, Reliance’s treatment of the Social Security Administration’s disability finding, and Reliance’s conflict of interest.

Timeliness. McIntyre submitted her appeal on May 31, 2016. Reliance was generally required to decide the appeal within 45 days, subject to a properly noticed additional 45-day extension for special circumstances. Reliance did not notify McIntyre that it intended to extend the deadline until 142 days after the appeal was submitted, and it issued its decision 204 days after the appeal. The court found that this delay was an egregious procedural irregularity. The court also found that the delay enabled Reliance to obtain Dr. Bushara’s examination, which was the main evidence supporting the final denial and had been largely absent from the original record.

Evidence. The court found that the medical evidence over several years consistently showed that McIntyre could not maintain full-time employment because of pain, fatigue, mobility limits, and the progressive nature of her condition. The court concluded that her hobbies and brief periods of yard work did not establish an ability to perform full-time sedentary work.

The court recognized that Reliance was not required to give special deference to treating physicians. But it could not arbitrarily disregard reliable evidence. Dr. Bushara’s opinion that McIntyre could work full time was an outlier among the medical evidence. Reliance’s vocational specialist relied only on Dr. Bushara’s restrictions and did not address the contrary limitations identified by McIntyre’s treatment team or most of the other evidence in the record.

The court concluded that Dr. Bushara’s report, when weighed against the rest of the record, was not substantial evidence supporting the denial. It therefore found that Reliance abused its discretion by relying almost exclusively on that conflicting opinion.

Social Security determination. The Social Security Administration had found McIntyre disabled. The court held that Reliance was not bound by that determination, and Reliance’s rejection of it did not independently show an abuse of discretion. The court found that this factor did not weigh heavily for either side, although the determination could add weight to the conflict-of-interest analysis in some circumstances.

Conflict of interest. Because Reliance both administered the plan and paid claims, it had a conflict of interest. The court gave that conflict greater weight in light of the serious procedural irregularities and Reliance’s reliance on insubstantial evidence. The conflict supported the conclusion that Reliance’s denial was an abuse of discretion.

Disposition

The court concluded that Reliance’s denial was unreasonable, was not supported by substantial evidence, and was affected by its procedural delays and significant conflict of interest. The court therefore granted McIntyre’s Motion for Summary Judgment and denied Reliance’s Motion for Summary Judgment. The court ordered that judgment be entered accordingly.