Diaz v. Metropolitan Life Insurance Company

Background

Raul Diaz brought this Employee Retirement Income Security Act (ERISA) benefits action against Metropolitan Life Insurance Company (MetLife). MetLife administered American Airlines’ self-insured long-term disability plan and had discretionary authority to interpret the plan and decide benefit eligibility.

Diaz was a former American Airlines flight attendant who stopped working after a March 2017 fall caused a right-foot calcaneal fracture. The opinion states that he underwent four surgeries and continued to report pain, swelling, difficulty wearing closed shoes, and an inability to stand or walk for more than brief periods.

The plan paid long-term disability benefits during the first 24 months when a participant could not perform the major duties of the participant’s own occupation. After 24 months, the participant had to be unable to perform the duties of any occupation for which the participant was reasonably qualified. The plan limited benefits for disabilities caused by certain neuromuscular, musculoskeletal, and soft-tissue disorders, but allowed extended benefits for certain excepted conditions, including lumbar radiculopathy supported by objective clinical evidence of nerve pathology.

MetLife initially approved Diaz’s benefits based on his foot fracture. After 24 months, MetLife terminated the benefits, stating that the medical information supported Diaz’s continued inability to perform his flight-attendant duties but that he did not meet the plan’s any-occupation definition because his disability was based on a limited condition. Diaz pursued two administrative appeals. He submitted medical records, imaging, and opinions from treating physicians identifying or discussing avascular necrosis in his right foot and lumbar radiculopathy.

MetLife’s reviewing physicians did not physically examine Diaz. Dr. Michael Chen concluded that Diaz could perform sedentary work and later stated that lumbar radiculopathy was not supported because there was no lumbar imaging confirming it. Dr. Arash Yaghoobian also concluded that Diaz could perform sedentary work and rejected lumbar radiculopathy. After MetLife asked for clarification about avascular necrosis, Dr. Yaghoobian stated that there was no imaging evidence supporting that diagnosis. MetLife denied Diaz’s second appeal based on the conclusion that he had exhausted benefits for a limited condition and had not shown disability from a non-limited or excepted condition.

Issues and legal standard

The parties filed cross-motions for summary judgment, which asks whether the record shows that a party is entitled to judgment without a trial. Because the plan gave MetLife discretion to interpret the plan and determine eligibility, the court reviewed MetLife’s decision for abuse of discretion. Under that deferential standard, the decision had to be supported by substantial evidence—meaning more than a minimal amount of evidence—and MetLife had to provide a reasonable explanation and could not ignore relevant evidence.

Plan coverage

The court accepted Diaz’s argument that avascular necrosis was a non-limited condition under the plan. The court reasoned that MetLife had not provided a meaningful contrary interpretation and had repeatedly treated avascular necrosis as a condition that was not limited by the plan during the administrative review. The court concluded that Diaz could qualify for extended benefits based on either lumbar radiculopathy or avascular necrosis if the diagnoses were supported by sufficient evidence.

The court did not find that MetLife abused its discretion regarding complex regional pain syndrome or the alleged musculopathy diagnosis. Diaz had not properly supported the complex regional pain syndrome argument with evidence showing that the condition caused his disability or qualified for extended benefits. He also did not respond to MetLife’s arguments that his physicians had not diagnosed musculopathy and that the plan required objective pathological evidence from a muscle biopsy or electromyography.

Ruling on lumbar radiculopathy

The court held that MetLife did not abuse its discretion in rejecting Diaz’s lumbar radiculopathy claim. MetLife relied on Dr. Yaghoobian’s analysis that the imaging did not show severe canal stenosis or nerve impingement and that the clinical findings did not support radiculopathy. Although that conclusion conflicted with opinions from Diaz’s treating physicians, the court found that Dr. Yaghoobian cited record evidence and explained the basis for the conclusion sufficiently under the applicable standard.

Ruling on avascular necrosis

The court held that MetLife abused its discretion in rejecting Diaz’s claim based on avascular necrosis. MetLife relied on Dr. Yaghoobian’s ambiguous and conclusory statement that there was no imaging supporting the diagnosis. The administrative record contained imaging and other medical evidence, including a March 2019 computed tomography scan, a June 2019 magnetic resonance imaging scan, a November 2019 computed tomography scan, a bone-density test, and x-rays. The court found that MetLife did not explain whether Dr. Yaghoobian had failed to review those materials or had reviewed them and found them inadequate.

The court also found that MetLife did not adequately explain why it rejected the opinions of Diaz’s treating physicians, who connected avascular necrosis with his continuing foot pain, difficulty walking, and failure of the fracture to heal after four surgeries. The court stated that MetLife could not satisfy its obligations by repeating a reviewing physician’s unexplained conclusion that a diagnosis lacked support.

The court noted additional concerns about MetLife’s review, including repeated requests for clarifications from its reviewing physicians and a months-long delay in sending Diaz the decision on his first administrative appeal. The court did not apply a less deferential review standard based on those irregularities because Diaz had not raised that argument and the irregularities did not appear sufficiently serious. The court nevertheless concluded that MetLife abused its discretion based on the inadequate explanation for rejecting the avascular necrosis evidence.

Disposition

Judge Michael J. Davis granted Plaintiff’s Motion for Summary Judgment and denied Defendant’s Motion for Summary Judgment. The order directed that judgment be entered accordingly. The opinion does not state whether MetLife must reinstate benefits, calculate a particular amount, or take another specific action beyond the judgment entered.