In a recent case, despite the application of an arbitrary and capricious standard of review, the 6th U.S. Circuit Court of Appeals concluded that when MetLife terminated Wanda Glenn's benefits, its actions were not ''the result of a deliberative process or that it was based on substantial evidence.'' Glenn v. MetLife, 2006 U.S.App.LEXIS 22432 (Sept 1).

Glenn, a long-time Sears, Roebuck employee who supervised about 20 to 30 sales associates, became disabled in 2000 due to severe dilated cardiomyopathy.

After two years of ''own occupation'' disability coverage, the definition of disability under the MetLife policy at issue required her to establish her inability to perform the duties of any gainful work for which she was qualified based on her ''training, education, experience and past earning.''

Glenn qualified for the initial two years of disability and concurrently was approved to receive Social Security disability based on representation provided by a MetLife vendor.

Consequently, MetLife reduced its payment by the amount of the Social Security benefits based on coordination of benefits provisions in the policy; and the insurer recouped over $13,000 in benefits that were overpaid on account of the Social Security award.

Although Glenn's condition stabilized somewhat after she left work, her cardiologist continued to report that she became fatigued and short of breath, particularly when under stress. Nonetheless, on a MetLife form, the cardiologist reported in March 2002 that Glenn could perform a sedentary physical exertion level occupation. However, just a few days later, the cardiologist reported to Glenn's internist that symptoms had increased and he reported in a letter dated July 22, 2002:

''[Glenn] has dilated cardiomyopathy as well as a history of ventricular tachycardia requiring an implantable defibrillator device. The patient has been on multiple medications for her dilated cardiomyopathy. The patient continues to have significant difficulty with exertional shortness of breath on any kind of moderate exertion. She also continues to have significant difficulty in returning to even any kind of sedentary job because any kind of psychologic stress at work causes significant problems with her cardiovascular condition and she decompensates fast. This has happened on multiple occasions in the past. The patient has tried to return to work in the past with exacerbation of her symptoms as well as exacerbation of her condition.

''At the present time, I do not believe Wanda should be forced to return to any kind of even sedentary work particularly because it is the psychologic stress of work that really exacerbates her cardiovascular condition and symptomology. The patient basically should be considered completely disabled from her dilated cardiomyopathy as well as history of ventricular tachycardia.''

Disregarding that opinion, MetLife terminated Glenn's payments as of September 2002 based on the absence of clinical documentation of an exacerbation of her condition and that the limitations were ''due to subjective complaints of work-related stress.'' Glenn appealed; and her cardiologist reiterated his opinion that she was disabled ''mainly from her cardiomyopathy and associated symptoms from her [left ventricular] dysfunction.'' MetLife then referred the file for review; and the reviewing doctor reported that while Glenn's ejection fraction had improved, she was unable to do any ''exertional physical activity.'' However, the reviewing doctor then suggested that Glenn could try working at a sedentary job on a trial basis. MetLife relied on that equivocal report to uphold the denial, and litigation ensued.

Although the district court found in MetLife's favor under a deferential standard of review, the court of appeal reversed, finding numerous errors in the lower court's determination, including the failure by the district court to consider what, if any, effect, MetLife's conflict of interest had on its determination. The appellate court also faulted the lower court for not giving adequate consideration to the Social Security determination, particularly in view of MetLife hiring a representative to assist Glenn in obtaining benefits, and MetLife's recoupment of benefits based on the Social Security award. On that issue, the court commented:

''The courts have recognized that a disability determination by the Social Security Administration is relevant in an action to determine the arbitrariness of a decision to terminate benefits under an ERISA plan. In Ladd v. ITT Corp., 148 F.3d 753, 755-56 (7th Cir. 1998), for example, the 7th Circuit overturned a plan administrator's denial of disability benefits after finding that the insurance company had encouraged and assisted the plaintiff in applying for Social Security benefits, which were granted after an administrative law judge found that the plaintiff was totally disabled. Writing for the court, Judge Richard A. Posner noted that the concept of judicial estoppel was not technically applicable but, nevertheless, he concluded that the inconsistency in litigation positions had to be factored into a review of the plan administrator's determination for arbitrariness:

''The grant of social security disability benefits … brings the case within the penumbra of the doctrine of judicial estoppel — that if a party wins a suit on one ground, it can't turn around and in further litigation with the same opponent repudiate the ground in order to win a further victory. The doctrine is technically not applicable here, because MetLife and ITT, the defendants in this suit, were not parties to the proceeding before the Social Security Administration. Yet they ''prevailed'' there in a practical sense because the grant of social security benefits to Ladd reduced the amount of her claim against the employee welfare plan. If we reflect on the purpose of the doctrine, which is to reduce fraud in the legal process by forcing a modicum of consistency on a repeating litigant, we see that its spirit is applicable here. To lighten the cost to the employee welfare plan of Ladd's disability, the defendants encouraged and supported her effort to demonstrate total disability to the Social Security Administration, going so far as to provide her with legal representation. To further lighten that cost, it then turned around and denied that Ladd was totally disabled, even though her condition had meanwhile deteriorated. In effect, having won once the defendants repudiated the basis of their first victory in order to win a second victory. This sequence casts additional doubt on the adequacy of their evaluation of Ladd's claim, even if it does not provide an independent basis for rejecting that evaluation.''

That rationale was adopted earlier by the 6th Circuit in Darland v. Fortis Benefits Insurance Co., 317 F.3d 516 (6th Cir. 2003). Although the lower court had rejected the Social Security finding based on the absence from that record of the form in which Glenn's cardiologist had written she was capable of working in a sedentary occupation, the Court of Appeals explained that he later clarified his opinion to indicate he had never considered his patient capable of working on a full-time basis. Thus, ''[h]aving benefitted financially from the government's determination that Glenn was totally disabled, MetLife obviously should have given appropriate weight to that determination.'' The court added that while MetLife's failure to consider the Social Security finding ''does not render the decision arbitrary per se, but it is obviously a significant factor to be considered upon review.'' The court also expressed its perplexity with how MetLife reviewed the evidence. The court deemed it inconsistent for MetLife to ignore the cardiologist's overall medical records and report yet give full credit to a form he completed in which he indicated that Glenn could work at a sedentary job. The court also considered MetLife's failure to conduct an examination a factor in finding the determination arbitrary, particularly since it appeared the reviewing doctor was not provided with all of the treating doctor's reports. The court then zeroed in on what appeared to be a recantation of a previously expressed opinion that Glenn was capable of working:

''In the absence of an explanation from MetLife, the district court provided its own, noting that because [the doctor] 'expressly acknowledged that he had stated that plaintiff was fit for sedentary work.… MetLife did not abuse its discretion by viewing [the doctor]'s recantation with skepticism.'

''In support of this conclusion, the district court invoked United States v. Willis, 257 F.3d 636, 645-46 (6th Cir. 2001), for the proposition that affidavits recanting trial testimony are viewed with 'extreme suspicion.' The court's reliance on Willis is misplaced, however, because that case addresses the full recantation of a witness's testimony in a criminal trial, a situation which is hardly equivalent to the doctor's follow-up letters, which were consistent with his earlier assessments of Glenn's ability to work and which are more aptly described as clarifications, rather than recantations. Indeed, the concept of recantation has little application outside the unique context of the criminal case, and any presumption regarding the credibility of inconsistent testimony should be limited to that context.'' Instead, the court expressed its belief that ''the only fair inference from the record'' would be that the check-off form was mistaken given its inconsistency with the full context of the records. The court added, ''As for the district court's attempt to reconcile the conflicts in the record, we point out that the court's role is to review the basis for the decision that was actually made by the plan administrator, not to provide an adequate basis where none was offered.'' Nor did the court accept the insurer's argument that stress was a subjective factor. Citing Evans v. UnumProvident Corp., 434 F.3d 866 (6th Cir. 2006), evidence that stress could exacerbate a condition was deemed relevant to the disability determination; and the court added:

''As in Evans, the plan in this case does not say that prophylactic determinations are not relevant to the decision, nor does it say that self-reported or ''subjective'' factors should be accorded less significance than other indicators. And, although it is not clear that stress is the most important factor in all cases of cardiomyopathy, as it apparently is with epilepsy, it is unreasonable for MetLife to have dismissed stress as an improperly documented, subjective, and irrelevant factor in its disability determination.''

Thus, while acknowledging that MetLife did not have to give controlling deference to the treating doctor's opinions, in this case the treating physician was a specialist and had a long-term treatment relationship, thereby giving added weight to his opinions.

Finally, the court examined the suggestion by MetLife's consultant that Glenn could attempt to work and concluded, based on McDonald v. Western-Southern Life Insur.Co., 347 F.3d 161 (6th Cir. 2003), that a hypothetical possibility of a return to work cannot justify a benefit termination. Hence, the court ordered benefits reinstated, finding:

''For the reasons set out above, we conclude that MetLife's decision to deny long-term benefits in this case was not the product of a principled and deliberative reasoning process. MetLife acted under a conflict of interest and also in unacknowledged conflict with the determination of disability by the Social Security Administration. In denying benefits, it offered no explanation for crediting a brief form filled out by [the doctor] while overlooking his detailed reports. This inappropriately selective consideration of Glenn's medical record was compounded by the fact that the occupational skills analyst and the independent medical consultant were apparently not provided with full information from [the doctor] on which to base their conclusions. Moreover, there was no adequate basis for the plan administrator's decision not to factor in one of the major considerations in Glenn's pathology, that of the role that stress played in aggravating her condition and, in the language of the MetLife policy, in preventing her return to 'gainful work or service for which [she is] reasonably qualified taking into consideration [her] training, education, experience, and past earning.' Taken together, these factors reflect a decision by MetLife that can only be described as arbitrary and capricious.''

The 6th Circuit has been at the forefront of a trend in ERISA litigation (Calvert v. Firstar Finance Inc., 409 F.3d 286 (2005); Kalish v. Liberty Mutual/Liberty Life Assur.Co. of Boston, 419 F.3d 501(2005); and Evans v. UnumProvident Corp., 434 F.3d 866 (2006)) to seriously question benefit decisions made without examinations of the claimant in view of the conflict of interest under which insurers operate. Rather than taking a minimalist view of ERISA litigation, the 6th Circuit has put teeth in the Supreme Court's admonition:

''Whatever the standards for reviewing benefit denials may be, they cannot conflict with anything in the text of the statute, which we have read to require a uniform judicial regime of categories of relief and standards of primary conduct, not a uniformly lenient regime of reviewing benefit determinations.'' Rush Prudential HMO, Inc. v. Moran, 536 U.S. 355, 385 (2002).

Here, a more penetrating review exposed several defects in MetLife's claim process and resulted in a decision that was based on the merits of the dispute rather than a blind determination that arbitrary and capricious means the claimant loses.