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Michaleen Kosiba, et al v. Merck & Company

March 7, 2011


The opinion of the court was delivered by: Cooper, District Judge



Plaintiff Celeslie Epps-Malloy ("Epps-Malloy") commenced this action on July 30, 1998, seeking relief under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. §§ 1001-1461, against Merck & Company ("Merck"), UNUM Life Insurance Company of America ("UNUM"), and the Merck & Company, Inc. Long Term Disability Plan for Union Employees ("Plan") (collectively "Defendants"). On remand from the Third Circuit Court of Appeals, this matter is before the Court on motions for summary judgment regarding the termination of Epps-Malloy's long-term disability ("LTD") benefits. The Court is called upon to determine whether this termination was arbitrary and capricious, and thus unlawful pursuant to 29 U.S.C. § 1132(a)(1)(B). The Court determines the motions without oral argument. Fed.R.Civ.P. 78(b). For the reasons given in this Memorandum Opinion, the Court will deny Defendants' motion for summary judgment and grant Epps-Malloy's motion for summary judgment.


Epps-Malloy was a cook and food service attendant at Merck. (Dkt. entry no. 25, 5-1-00 Aff. of Epps-Malloy ("Epps-Malloy Aff.") at ¶ 2.) Her general cafeteria duties included customer service, food preparation, stocking supplies, and certain cleaning responsibilities. (Id.) In May 1991, while she was putting trays in a server bin, several trays fell on her. (Id. at ¶ 3.) Because of pain and swelling, she was unable to return to work. (Id.) At the time of the incident, Epps-Malloy was a participant in the Plan, which provides benefits to participating members who become disabled and are unable to perform the material aspects of their occupation. (Dkt. entry no. 24, 4-24-00 Aff. of Gloria Dukes ("Dukes Aff.") at ¶¶ 2, 6.) To be eligible for benefits, a participant must: (1) complete the "Total Disability Eligibility Period;" and (2) satisfy the definition of "Total Disability." (Dkt. entry no. 60, Def. Tr. Br., Ex. 1, Plan.)*fn1 According to Defendants, a participant has the burden to prove that he or she satisfies this definition of total disability. (Dukes Aff. at ¶ 8; Def. Tr. Br. at 17.)*fn2

Under the Plan's administrative structure, Merck acts as the "Plan Administrator" (Plan) and UNUM acts as the current "Claims Administrator." (id.; Dukes Aff. at ¶ 2).*fn3 The Plan further provided that Plan benefits can be offset against other benefits, including Social Security disability ("SSD") payments. (Plan.)

In April 1992, Epps-Malloy applied for benefits under the Plan. (Def. Tr. Br. at 6.) Between April 1992 and September 1992, four medical professionals compiled separate reports regarding her condition. (Epps-Malloy Aff. at ¶¶ 7-11.)

In a report dated April 15, 1992, Dr. Horia A. Schwartz ("Dr. Schwartz"), a physician apparently specializing in physical medicine and rehabilitation, gave the following diagnosis and opinion following an examination:

Diagnosis: Permanent residuals of extensive musculoskeletal disorder with evidence of severe fibromiralgia [sic], myofascitis, or in essence myopathy. It is obvious that her condition has been probably precipitated by the stressful physical activity as well as by her specific underlying disorder, sarcoidosis.

Commentary: Until a few years ago, it was considered that sarcoidosis was a disease of unknown ethology [sic] which is progressive in nature and would render a person totally disabled as time passes by. In the last few years, several articles have been written about connecting the sarcoidosis with stressful physical activities, but that was more on a "tentative" basis rather than specific proof. The bottom line is that anybody with an underlying diagnosis of sarcoidosis, whether or not they know about it or not, will have the entire spectrum of disability and symptomatology in a gradual and worsening fashion. It appears that in this particular instance that she developed the symptoms simultaneously with her being diagnosed as having sarcoidosis and it is entirely within the realm of medical probability that the type of work performed by her aggravated or precipitated the sarcoidosis. However, the sarcoidosis is not due to her trauma, although her "disorder" is definitely due to sarcoidosis.

In conclusion, we have a relatively young woman who suffers with severe musculoskeletal disorder, essentially pathological joint disease, bowel syndrome, etc., all connected with sarcoidosis as well as aggravated by the physical work activities, which renders her at present totally disabled, from the orthopedic standpoint.

It is highly unlikely that she will improve and that she will be able to do any kind of stressful physical activity in the future. Unless, of course, a new method of treatment is developed, either medical or otherwise, it is expected that she will progressively deteriorate. To what rate, nobody knows - it is strictly individual. In essence, Ms. Epps is no longer capable of working at her occupation or at any occupation that requires prolonged immobilization, such as even a sedentary position and definitely not in any occupation that requires physical activities.*fn4

(Dkt. entry no. 60, Administrative Record ("A.R.") at 360, 362, 4-15-92 Letter from Dr. Schwartz ("Dr. Schwartz Report").)*fn5

Dr. Paul J. Kiell, a neurologist who examined Epps-Malloy on April 28, 1992, concluded that she suffered from chronic pain syndrome and neuropsychiatric disability. (A.R. at 374-76, 4-28-92 Letter from Dr. Kiell.) An independent medical examiner, Dr. Frederick D. Gangemi, examined Epps-Malloy on June 30, 1992 and found that she suffered from fibromyalgia and noted the possibility that this "myofasial [sic] pain syndrome" was related to stressful work activities.*fn6 (A.R. at 384-85, 7-17-92 Letter from Dr. Gangemi.) The report stated that, although physical therapy treatments would provide only short-term, temporary relief, an exercise program would reduce her pain and stiffness and give her an enhanced sense of well being. (Id. at 384-85.) Rik Couwenberg, P.T. ("Couwenberg"), performed an Independent Functional Capacity Assessment ("FCA") on Epps-Malloy on September 4, 1992 to determine "the extent of the claimant's restrictions and limitations," as requested by her insurer. (A.R. at 327, 8-24-92 Engagement Letter from Joy Moyer; A.R. at 306, 9-4-02 Letter from Rik Couwenberg ("Couwenberg Report").) Couwenberg recommended that Epps-Malloy not return to work and stated that the prognosis for her attaining a "light physical demand classification" was poor if she in fact suffered from fibromyositis and given the past lack of success with physical therapy treatments. (Id. at 303.)*fn7

In October 1992, Epps-Malloy was approved for LTD benefits. (A.R. at 406, 10-9-92 Letter from Jean J. Copp.) She was informed that, under the Plan, she would receive benefits for twenty-four months if she remained totally disabled from returning to her previous job. (Id.) After that two-year period, benefits would be extended upon a determination that she was disabled from any occupation she was reasonably qualified for "by education, training or experience." (Id.)

As the two-year limit approached, information was requested from Epps-Malloy's then-treating physician, Dr. Randolph Stein ("Dr. Stein") in March 1993. (Epps-Malloy Aff. at ¶¶ 15-16.)

Dr. Stein diagnosed her with fibromyalgia as well as chronic pain syndrome. (A.R. at 285, 3-23-93 Attending Physician's Statement ("Dr. Stein Report") at 1.) He reported that Epps-Malloy's symptoms included pain in her arm, shoulder, neck, back, hip, and buttock area and concluded that she had reached maximum medical improvement. (Id. at 285-86.)

Based on a review of the Administrative Record and a questionnaire completed by Epps-Malloy, Epps-Malloy was approved for "any-occupation" LTD benefits in October 1993. (A.R. at 235, 10-5-93 Letter from Corey Bulluck; Dukes Aff. at ¶ 17; A.R. at 289-92, 6-30-93 Questionnaire.) The notification letter explained that periodic requests for medical information or other documentation would be made in the future to ensure continued eligibility for benefits. (A.R. at 235.)

Before this approval of "any-occupation" benefits, EppsMalloy applied for SSD benefits on March 30, 1992. (Epps-Malloy Aff. at ¶ 13.) The Social Security Administration ("SSA") denied the application on December 14, 1992. (A.R. at 281, 12-14-92 SSA Denial.) On March 18, 1994, Epps-Malloy had a hearing before an administrative law judge ("ALJ"), who issued a decision on September 13, 1994. (Id. at ¶¶ 13, 19; A.R. at 132, 9-13-94 SSA Decision.) Epps-Malloy recalls forwarding a copy of this decision to UNUM or the Plan in September of 1994 as well as sending a facsimile to UNUM representative Daren Winckler in November of 1995. (Epps-Malloy Aff. at ¶ 21; A.R. at 130, Facsimile Transmission Cover Sheet.)

The ALJ granted SSD benefits, finding that, because EppsMalloy could not perform a significant number of jobs in the national economy, she satisfied the definition of disability under the Social Security Act from May 14, 1991 until the date of the SSA Decision. (A.R. at 133-36, 9-13-94 SSA Decision.) The ALJ made a number of additional findings:

3. The medical evidence establishes that the claimant has severe chronic pain syndrome, sarcoidosis; by history, but that she does not have an impairment or combination of impairments listed in, or medically equal to one listed in Appendix 1, Subpart B, Regulations No. 4.

4. The intensity and persistence of the claimant's subjective complaints and alleged functional limitations are supported by the evidence.

5. The claimant has the residual functional capacity to perform the physical exertion requirements of work except for inability to lift over five pounds, inability to stand, walk, or sit for sustained periods or perform these activities for over three to four hours in terms of an eight hours [sic] workday, inability to operate foot controls or do any climbing or balancing, and severely limited capacity to kneel, stoop, crawl, or crouch (20 CFR 404.1545).

6. The claimant is unable to perform any of her past relevant works.

7. The claimant's residual functional capacity for the full range of sedentary work is reduced by limitations shown in item 5. (Id. at 135; see also id. at 132-33 (discussing and evaluating evidence presented by Epps-Malloy).)

UNUM requested Dr. Stein to provide further medical information in October 1994. (A.R. at 217, 10-20-94 Letter from Jodi Silberman.) Again, Dr. Stein diagnosed Epps-Malloy with fibromyalgia and chronic pain syndrome. (A.R. 204, 10-26-94 Supplementary Medical Report ("Dr. Stein Supp. Report").) Dr. Stein noted that Epps-Malloy was unable to "perform physical labor for any length of time," and concluded that he did not expect her condition to improve sufficiently in the future. (Id. at 204-05.) UNUM appears to have found Dr. Stein's report sufficient to continue Epps-Malloy's LTD benefits.*fn8

UNUM began another review of Epps-Malloy's disability status in May 1996. (A.R. 195, 5-22-96 Letter from Susan Spradlin.) UNUM sought current information from Epps-Malloy regarding her education and employment history and her treating physicians. (Dukes Aff. at ¶ 18.) Epps-Malloy completed the education and employment history form. (A.R. 199, Educ. & Emp't History Form.) UNUM requested information from the two doctors Epps-Malloy referred to as her treating physicians, a Dr. Pannullo and Dr. David L. Williams ("Dr. Williams"). (Dukes Aff. at ¶ 19.)

Dr. Pannullo informed UNUM that Epps-Malloy had sarcoidosis of the lung but that, as Epps-Malloy's gynecologist, she was not treating her for this condition. (A.R. 144, 6-12-96 Dr. Pannullo Report.) In a second UNUM questionnaire, Dr. Pannullo diagnosed Epps-Malloy with "Postmenopausal Replacement." (Id. at 145, 9- 10-96 Dr. Pannullo Report.) Dr. Pannullo reiterated that she was not treating Epps-Malloy for any illness and under return to work prognosis she wrote "good." (Id.)

Dr. Williams's notes, dated January 16, 1996, stated: . . . . [Epps-Malloy] has had a total hysterectomy in July of 1995 for a class 3 pap and will need gynecological follow up with a female gynecologist here when she is back in three months. Also, in 1989 she had a diagnosis of sarcoidosis made by broncoscopy [sic] and we have records of an FEV1 of 2000. She also has fibromyositis and has pain her left hip, back, and knee. She also has had some severe rectal bleeding in the past but has been worked up and called diverticular disease. She is on Premarin 1.25 mg daily. When she has taken steroids in the past, she has had dramatic changes in her mood and became quite cushingoid. (Id. at 189, 1-16-96 Dr. Williams Notes.) According to Dr. Williams's June 14, 1996 notes:

Celeslie is in today. We did a complete physical on her today. Her BP is 135/85. HEENT, HEART, LUNGS: within normal limits. OROPHARYNX: benign. NECK: supple. THYROID: not enlarged. CHEST: equal expansion bilaterally. No dullness to percussion. No lag nor rales. HEART: no murmurs, heaves or thrills. BREASTS: no masses. ABDOMEN: liver, kidneys, spleen nonpalpable. PELVIC: performed from a normal appearing vagina. She has had a hysterectomy. RECTAL: no masses. HEMOCCULT: negative stool. EXTREMITIES: no cyanosis, clubbing or edema. Bilateral mammography was ordered. I have identified no new health problems today. We are going to refill all of her medicines. I have put her on Elavil 25 mg at night for fibromyalgia. She is going to bring in her medical records so we can make copies of them. Sarcoidosis is her diagnosis as well as fibromyalgia. Return visit in six months. (Id., 6-14-96 Dr. Williams Notes.)

In a subsequent UNUM questionnaire, Dr. Williams concluded that Epps-Malloy was "disabled to light activity because of shortness of breath" and the prognosis for her to return to gainful full time or part time employment was "never." (Id. at 128, 10-28-96 Dr. Williams Report.) He further stated he had not recently conducted a pulmonary function test on her.*fn9 (Id.) Follow-up visits were scheduled for every six months. (Id.)

In a letter dated December 31, 1996, UNUM terminated EppsMalloy's any-occupation LTD benefits.*fn10 (A.R. at 120, 12-31-96 Letter from Dukes ("Init. Term. Letter").) The letter explained that, based on the medical documentation received, including information from Drs. Pannullo and Williams, "there is no evidence to support that you are medically incapable to perform the duties of your occupation." (Id.) It further stated that Epps-Malloy could seek a review of this determination by the Plan Administrator, but it noted that this request for review must include objective medical evidence. (Id.)

With a letter dated January 8, 1997, Epps-Malloy appealed this decision, informing UNUM that she was now under the care of Dr. Fred D. McQueen, Jr. ("Dr. McQueen"). (A.R. at 114, 1-8-97 Letter from Epps-Malloy.) She also submitted a completed medical questionnaire sent to her by UNUM in November 1996. (Id. at 115-16, 11-25-96 Questionnaire.) Following a letter from UNUM dated January 10, 1997 (id. at 112, 1-10-97 Letter from Dukes), she sent another letter, dated January 15, 1997, listing her current medications. (Id. at 109, 1-15-97 Letter from Epps-Malloy.) At UNUM's request, Dr. McQueen forwarded his notes ...

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