The opinion of the court was delivered by: Chesler, U.S.D.J.
This matter comes before the Court on two motions for summary judgment, pursuant to FED. R. CIV. P. 56: 1) the motion by Defendant the Prudential Insurance Company of America ("Prudential"); and 2) the motion by Plaintiff John M. Simon, Esq. ("Plaintiff"). For the reasons stated below, Plaintiff's motion will be granted, and Defendant's motion will be denied.
In brief, this case arises from a dispute over disability insurance benefits. The following facts are undisputed. Plaintiff was employed as an environmental litigation trial attorney and was covered under a group long-term disability insurance policy issued by Prudential. Under the terms of the policy, one of the requirements for "total disability" is: "You are unable to perform, for wage or profit, the material and substantial duties of your occupation." (Coppola Dec. Ex. 1 at D 002187.)
In 1998, Plaintiff was injured in a motor vehicle accident. Plaintiff had a period of disability at that time, returning to work on March 22, 1999. Plaintiff then worked until August 27, 2008. Plaintiff submitted a claim for long-term disability benefits on or about September 30, 2008. Prudential approved Plaintiff's claim pending further review, and paid disability benefits for the period from November 26, 2008 through December 31, 2009. After completing a review of Plaintiff's claim, Prudential terminated his disability benefits. Following an appeals process, Plaintiff instituted this suit, filing a Complaint with eight counts. An Amended Complaint asserts four counts. On October 28, 2010, this Court entered a consent Order dismissing the second, third, and fourth counts in the Amended Complaint. Only the first count in the Amended Complaint remains, for arbitrary and capricious denial of benefits under ERISA, which is the subject of the two instant motions for summary judgment.
The parties thus ask the Court to review Prudential's decision to terminate Plaintiff's disability benefits. The parties agree on the legal standard to be applied to this Court's review of Defendant's denial of benefits. As the Third Circuit recently held:
We review a challenge by a participant to a termination of benefits under ERISA § 502(a)(1)(B) under an arbitrary and capricious standard where, as here, the plan grants the administrator discretionary authority to determine eligibility for benefits. An administrator's decision is arbitrary and capricious if it is without reason, unsupported by substantial evidence or erroneous as a matter of law.
Miller v. Am. Airlines, Inc., 632 F.3d 837, 844-845 (3d Cir. 2011) (citations omitted). The parties do not dispute that the plan granted the administrator discretionary authority to determine eligibility for benefits.
In considering whether the administrator abused its discretion, this Court considers a variety of factors:
[B]enefits determinations arise in many different contexts and circumstances, and, therefore, the factors to be considered will be varied and case-specific. In Glenn, factors included procedural concerns about the administrator's decision making process and structural concerns about the conflict of interest inherent in the way the ERISA-governed plan was funded; in another case, the facts may present an entirely different set of considerations. After Glenn, however, it is clear that courts should take account of several different considerations of which a conflict of interest is one, and reach a result by weighing all of those considerations.
Estate of Schwing v. Lilly Health Plan, 562 F.3d 522, 526 (3d Cir. 2009) (citations omitted).
This Court's first step in the analysis requires an inquiry into whether a structural conflict of interest exists. See, e.g., Miller, 632 F.3d at 847. Plaintiff argues that Prudential is both the administrator and the decision maker for the plan in this case and that, pursuant to Smathers v. Multi-Tool, Inc., 298 F.3d 191, 197 (3d Cir. 2002), this constitutes a conflict of interest. In response, Prudential, while not conceding the existence of a conflict of interest, does not dispute it, but merely argues that such a conflict is but one factor for the Court to weigh in its analysis. (Def.'s Opp. Br. 16-17.) There appears to be no real dispute that, to the extent that a structural conflict of interest exists, this factor should be weighed in favor of Plaintiff.
The Court next conducts an analysis of the procedural factors, inquiring into the procedure followed by the administrator in making its decision to terminate Plaintiff's benefits. The factual record in this case contains a wealth of detail. The key document is the August 4, 2010 letter (the "Appeal Letter") from Prudential which gives the decision on Plaintiff's appeal of the termination of benefits. (D002782C-D002782L). The letter states this decision: "After completing a through review of Mr. Simon's medical records and claim file, we have determined that the available information does not support a level of impairment that would preclude him from performing the material and substantial duties of his own occupation." (D002782L).
The Appeal Letter does not reduce the basis for the decision to a simple summary. The letter does, however, set forth four pieces of evidence, which must be presumed to have provided the basis for the decision: 1) the external independent review by the pain medicine specialist; 2) the external independent review by the psychiatric specialist; 3) the surveillance report; and 4) the occupational duties analysis. Only the first two pieces of evidence contain analysis of the medical evidence of disability.
The Appeal Letter does not discuss the reports from the two external independent reviews but, instead, quotes them at length. Indeed, the majority of the Appeal Letter is two long quotations from each reviewer. Again, it is presumed that ...