March 29 (Westlaw Journals) - A plan administrator abused its discretion in denying long-term-disability benefits to a worker suffering from severe chronic fatigue syndrome, the 9th U.S. Circuit Court of Appeals has ruled.
The administrator's denial of benefits to a claimant deemed disabled by every doctor who personally examined him was "illogical, implausible and without support," the 2-1 panel majority said.
According to the majority opinion written by Judge Andrew J. Kleinfeld, Samuel Salomaa was an outstanding, energetic 20-year American Honda Motor Co. employee who was never out sick until he became ill in October 2003.
Although he returned to work three days later, he was “never the same again,” the opinion says. The slightest amount of exertion, even getting dressed, left him exhausted. When he did manage to go to work, his job performance was impaired.
Diagnostic testing failed to reveal a cause of Salomaa’s symptoms.
Eventually, Salomaa’s doctor diagnosed him with chronic fatigue syndrome. Noting that Salomaa was “one of the more severe patients that I have seen,” the doctor described him as totally disabled and unable to work even 30 minutes a day, the opinion said.
Other doctors examined him and arrived at the same diagnosis, with one doctor calling Salomaa “one of the most disabled individuals I have seen in over 15 years of practice.”
Salomaa applied for long-term-disability benefits under Honda’s group plan, which was insured and administered by Cigna Group Insurance.
The administrator denied benefits, emphasizing the lack of objective physical findings.
After administrative appeals were unsuccessful, Salomaa sued the plan in the U.S. District Court for the Central District of California, challenging the denial of benefits.
The court upheld the benefits denial, and Salomaa appealed to the 9th Circuit.
The appellate panel said the test to be applied in determining whether a plan administrator abused its discretion is whether the decision was “illogical,” “implausible” or “without support in inferences that may be drawn from the facts in the record.”
In this case, the panel majority concluded all three labels applied to Cigna’s decision and, consequently, the administrator abused its discretion.
The majority gave five reasons for its conclusion:
• Every doctor who personally examined Salomaa concluded, “often in dramatic language,” that he was disabled.
• The plan administrator demanded objective tests to establish the existence of a condition for which there are no objective tests.
• The administrator failed to consider Salomaa’s Social Security disability award.
• The reasons for the denial “shifted as they were refuted” and were “largely unsupported by the medical file,” and only the denial stayed constant.
• The administrator failed to engage in the required meaningful dialogue with Salomaa.
The 9th Circuit panel majority therefore reversed the District Court’s decision and directed an award of long-term-disability benefits to Salomaa.
The opinion included a dissent written by Judge Cynthia Holcomb Hall before her death Feb. 26.
Judge Hall questioned the majority’s implicit suggestion “that doctors who personally examine claimants are somehow more reliable than doctors who do not personally examine claimants.”
“I do not think the plan’s lack of personally examining physicians indicates that it abused its discretion in denying Salomaa’s claim,” she wrote.
The plaintiff attorney was Charles J. Fleishman of Northridge, Calif. Defense counsel was Melissa M. Cowan of Burke, Williams & Sorensen in Los Angeles.
Salomaa v. Honda Long Term Disability Plan, No. 08-55426, 2011 WL 768070 (9th Cir. Mar. 7, 2011).