Casenote of the Month

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The Black & Decker Disability Plan v. Nord,  

123 S. Ct. 1965; 155 L. Ed. 2d 1034, 2003 U.S. LEXIS 4061 (Supreme Court 5/27/03)

(Issue: Treating Physician Rule). 

As predicted, Nord ruled 9-0 that the treating physician rule was not mandated in ERISA-governed disability benefit plans.  Nonetheless, the opinion, which was written by Justice Ginsburg, is generally pro-plaintiff.  For example, the Court quoted Regula’s comment that plans may hire consultants who have an incentive to make a finding of "not disabled." *19.  The Court also explained that a treating physician may (quoting Regula) "have a greater opportunity to know and observe the patient as an individual." *19.  There is also language in the opinion that gives support to Judge Posner's comment in Hawkins v. First Union, 326 F.3d 914 (7^th Cir. 4/22/03)(May 2003) that plans can simply write out treating physician deference. However, the opinion concludes by noting, "Plan administrators, of course, may not arbitrarily refuse to credit a claimant's reliable evidence, including the opinions of a treating physician." *22.  The opinion also gives credit to the fact that "ERISA was enacted to promote the interests of employees and their beneficiaries in employee benefit plans, and to protect contractually defined benefits." *16. 

 What clearly drove the outcome of this case, though, was the fact that the Department of Labor did not promulgate a regulation on the treating physician rule and the Court was loathe to engage in rulemaking. However, that position ignores the fact that the Social Security treating physician rule was also court-created prior to its incorporation in a regulation.  From the language in the decision, had the Department issued a rule, it likely would have been upheld.

 Discussion:     Obviously, this case was a victory for the insurers since the Court made it clear that deference need not be accorded the treating physician opinion.  However, overall, this was a total waste of a Supreme Court opinion.  The Court had the opportunity to clarify the conflict of interest issue left open in Firestone, but the Court refused to deal with the issue at all despite its significance.  Nor is the ruling as clear-cut as might appear at first blush.  Indeed, the decision is, in many respects, highly pro-claimant.   Nord certainly agreed with the Ninth Circuit’s conclusion that a plan administrator’s determination is not insulated from an arbitrary and capricious finding merely because the plan has an opinion from its own consultant.   If the plan ignores the treating doctor’s opinion, it does so at its own peril. 

 After reading the Nord decision, we feel that Judge Posner’s opinion in Hawkins takes on greater significance.  As both the Seventh Circuit and the Supreme Court ruled, the treating doctor’s opinion may not necessary be entitled to deference just because of that person’s status as treating doctor.  However, the treating doctor may have greater expertise and knowledge, while the consulting doctor may be biased.  In fact, this ruling may open the door to wider discovery as to whether the consulting doctor has a bias since the Supreme Court has recognized that the issue is relevant.  Moreover, as in Hawkins, if the consulting doctor’s knowledge is based on a record review without an examination, the treating doctor’s opinion will likely control even without application of the treating physician rule.

 We also note that in the wake of the Supreme Court’s ruling, the Regula decision has also been vacated and remanded: Delta Family-Care Disability v. Regula, 2003 U.S. LEXIS 4279 (June 2, 2003).

This note appeared in the Disability E-News Alert! For subscription information, please go to www.disabilityenewsalert.com.