Denmark v. Liberty Life Assurance Company of Boston

United States Court of Appeals
For the First Circuit

No. 05-2877

DIANE DENMARK,

Plaintiff, Appellant,

v.

LIBERTY LIFE ASSURANCE COMPANY OF BOSTON, AND THE GENRAD, INC.
LONG TERM DISABILITY PLAN, THROUGH TERADYNE, INC., AS SUCCESSOR
FIDUCIARY,

Defendants, Appellees.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Douglas P. Woodlock, U.S. District Judge]

Before

Selya, Lipez, and Howard, Circuit Judges.

Jonathan M. Feigenbaum, with whom Phillips & Angley was on
brief, for appellant.
Andrew C. Pickett, with whom Ashley B. Abel, Richard W.
Paterniti, and Jackson Lewis LLP were on brief, for appellees.

March 28, 2007
 LIPEZ, Circuit Judge. This seemingly straightforward

appeal of a denial of disability benefits presents difficult issues

involving our standard of review in cases arising under the

Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. §§

1001-1461. In fact, the issues are so difficult that this case has

generated three opinions. Although I agree with the district court

that the insurer's denial of disability benefits was neither

arbitrary nor capricious, I believe that our circuit should

reexamine in an en banc proceeding the standard of review that

applies when an insurer both reviews and pays disability claims,

resulting in a structural conflict of interest. Judge Selya

concurs in the judgment affirming the decision of the district

court, but disagrees with my assessment of the standard of review.

Finally, although Judge Howard dissents, believing that the

disability benefits denial was arbitrary and capricious under our

current standard of review, he joins me in concluding that our

circuit should reexamine our standard of review in these structural

conflict cases.

I.

Appellant Diane Denmark ("Denmark") is a former

participant in a group long term disability insurance plan offered

through her employer, GenRad, Inc. (“GenRad”), and its successor in

interest, Teradyne, Inc. (“Teradyne”). Appellee Liberty Life

Assurance Company ("Liberty"), the plan insurer, denied Denmark’s

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claim for long term disability benefits on August 20, 2002. After

exhausting her administrative appeals, Denmark filed suit. On

cross-motions for summary judgment, the district court found that

the decision to deny benefits was neither arbitrary nor

capricious and entered summary judgment for defendants.

On appeal, Denmark argues that this court should

subject Liberty's benefits decision to de novo review on several

grounds: an improper delegation of discretionary authority, a

structural conflict of interest resulting from Liberty's dual

responsibility for making benefits determinations and paying

claims, and the fact that the entire benefits decision was

"infected with conflict." To further complicate matters, the

district court employed a heightened standard of review with

respect to one medical opinion as a sanction for Liberty’s

refusal to comply with a discovery order, and we must consider

how to deal with that aspect of the court's decision. Finally,

Denmark contends that Liberty's benefits decision cannot survive

even deferential arbitrary and capricious review.

A. Factual Background

The facts are undisputed (although the conclusions and

inferences to be drawn from them are not). This opinion will

recite them here in some detail to facilitate the analysis of the

issues raised by the parties. Denmark began working at GenRad on

April 2, 1973 as a Group Leader in Manufacturing Inspection. Her

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job involved inspecting GenRad products and overseeing other

inspection personnel.

She was diagnosed with fibromyalgia in 1996 by her

primary care physician, Dr. Gregory Malanoski. Fibromyalgia is a

chronic disorder characterized by muscle pain and fatigue that

can be alleviated, but not cured. Certain drug regimes and

physical therapy often help to improve a patient’s condition.

Despite her illness, Denmark continued working for

several years, including during several periods when her symptoms

worsened. On October 3, 2001, she stopped working for health

reasons. She has not returned to work.

At the time she left work, Denmark was covered under

GenRad’s Short Term Disability Benefits Plan ("STD plan") and its

Long Term Disability Benefits Plan ("LTD plan"). Liberty served

as the claims administrator for the STD plan, providing an

initial claims review and a decision for STD claims submitted by

GenRad employees. GenRad then reviewed appeals of STD benefit

denials and paid meritorious claims. For the LTD plan, Liberty

both made benefits determinations and paid for claims out of its

own assets. At some point in late 2001, Teradyne acquired

GenRad, but Denmark’s disability benefits under the two plans

remained the same.

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 1. Short Term Disability Claim1

GenRad’s STD plan defines “disabled” to mean that the

claimant is “unable to perform all of the material and

substantial duties of [her] occupation on an Active Employment

basis because of an Injury or Sickness.”

a. Initial Review by Nurse Kaye

Denmark filed for STD benefits shortly after she

stopped working on October 3, 2001. Her claim was reviewed by

Nurse Debra Kaye, a Liberty Disability Case Manager. Kaye

reviewed medical records provided by Dr. Malanoski, Denmark’s

primary care physician; Dr. Thomas Goodman, a rheumatologist to

whom Dr. Malanoski referred Denmark; and Dr. Terrence Hack, a

cardiologist. She also reviewed a description of Denmark's job

from GenRad.

Dr. Malanoski, who originally diagnosed Denmark with

fibromyalgia in 1996, examined her on October 4, 2001, the day

after she stopped working. His notes from that date state that

Denmark was “[d]oing poorly: much worse myalgia generally,”

“[h]eadache, hard to get out of [illegible], general point muscle

tenderness.” He also listed the nine drugs that Denmark was

taking and concluded: “No work until further [follow-up].” In an

Attending Physician Statement reporting on that visit, dated

1
Denmark's appeal concerns only the denial of her LTD claim.
This opinion recounts the history surrounding the STD claim because
Liberty considered this information in denying the LTD claim.

-5-
November 6, Dr. Malanoski considered Denmark’s physical

impairment “Class 5 – Severe limitation of functional capacity,

incapable of minimum activity.” In response to a question asking

for the “objective medical findings that support the above

restrictions and limitations,” he wrote: “diffuse muscle

tenderness,” “weakness,” and “fatigue.”

Dr. Malanoski referred Denmark to Dr. Goodman, a

rheumatologist who saw her on October 8. Dr. Goodman noted that

she experienced “palpitations, sharp ('stinging') pain” and

“fatigue/exhaustion/myalgia/insomnia,” and was “stiff, tired,

exhausted in AM. Needs afternoon nap.”

Dr. Terrence Hack, a cardiologist, prescribed many

medications to help manage Denmark’s angina and high blood

pressure. He also provided a report indicating that there were

no serious cardiac arrhythmias or other cardiac symptoms that

rendered Denmark unable to work.

GenRad's description of Denmark’s position listed the

physical demands: “Bending, squatting and body movement involved

inspecting external and internal components of various products.

Ability to utilize material handling equipment to move test

equipment and position product. Occasional lifting of 25

pounds.”

After reviewing this information, Nurse Kaye noted in

Liberty’s claim record on November 14, 2001 that “there is no

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indication as to what has changed to warrant

[restrictions/limitations] provided by [her primary care

provider] to justify [stopping work].” She acknowledged that

“Clmnt has [history] of fibromyalgia x5 years as diagnosed by her

[primary care provider], with episodes of flare in condition,”

but added that “there is no evidence that clmnt needed to cease

occupational functioning & in fact, was able to function in an

occupational setting full time, working long hours.”

b. Peer Review by Dr. Miller

Nurse Kaye requested a peer review from Dr. Clay

Miller, an independent physician specializing in physical

medicine and rehabilitation. She asked: “Does the accompanying

documentation provide objective findings that would indicate a

significant change in condition that was evident on or about the

date of disability?”

On December 5, Dr. Miller responded that the

documentation was insufficient because it did not “provide

objective findings that would indicate a significant change in

condition that was evident on or about the date of disability.”

He elaborated: “The documentation provided does not indicate a

significant change in the patient’s condition about the time of

disability 10/03/2001 because there are no objective physical

functional deficits documented and the patient had a normal

cardiac exercise test 11/09/2001.” He also limited the

-7-
significance of the reports of Dr. Malanoski and Dr. Goodman for

the purposes of a disability benefits determination, stating:

[t]he rheumatology exam was positive only for
the 18-fibromyalgia tender points. There are
no documented objective physical exam
findings that support a decrease or
significant change in this patient’s physical
condition. In fact, the patient had a normal
cardiac exercise test 11/09/2001. Therefore,
the medical records provided do not
substantiate that the patient’s condition
significantly changed about the time of
disability 10/03/2001.

c. Denial of Short Term Disability Benefits

The Liberty claim record includes entries on December

6, 2001 that summarize Dr. Miller’s peer review: “Dr[.] indicates

review of the medical information does not provide objective

findings that would indicate a significant change in clmt’s

condition on or about [date of disability].” The claim record

repeatedly notes the lack of objective findings.

In addition to his notes described above, Dr. Goodman,

the rheumatologist, submitted a follow-up letter dated December

11, 2001. He stated that Denmark's symptoms of fatigue,

exhaustion, myalgia and insomnia had become "quite marked over

the last year or so, such that she is unable to perform her usual

work as a quality control group leader." Noting that "[t]his

work requires her to be on her feet all day," he concluded that

"she remains totally disabled in terms of her line of work.”2

2
The claim record indicates that this letter was not
considered as part of the original STD benefits determination.

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 In a letter dated December 26, 2001, Liberty denied

Denmark’s claim for STD benefits. The letter cites the records

provided by Drs. Malanoski, Goodman, and Hack, as well as the

peer review of Dr. Miller. The letter explained that the lack of

documented objective physical exam findings supporting a

significant change in Denmark’s physical condition made it

impossible to define "restrictions and limitations" resulting

from her condition that would preclude her from performing her

job responsibilities at GenRad.3

d. Appeal of Short Term Disability Benefits
Decision

Denmark appealed her denial of STD benefits in January

2002. Liberty informed Denmark that her employer, now Teradyne,

reviewed all appeals itself. Liberty also sent letters to Drs.

Malanoski and Goodman inviting them to express disagreement with

Dr. Miller's peer review. Dr. Malanoski responded on January 14,

2002, stating:

Diane Denmark is a patient of mine who
suffers from substantial symptoms of
fibromyalgia. I strongly disagree with your
peer review decision not to provide
disability benefits. As you know,
fibromyalgia is a condition lacking
abnormalities in blood testing or specific

However, Liberty did consider the letter as part of its LTD
benefits determination.
3
The distinction between objective evidence of fibromyalgia
itself and objective evidence of the functional deficits resulting
from the disease is an important issue that will be discussed
infra.

-9-
 abnormalities in physical exam. [Denmark]
describes . . . extreme pain, fatigue, and
sleep disorder (among others). Dr. Goodman,
our Rheumatologist specialist, agrees with
her degree of disability.

Teradyne decided to have Denmark examined by an

independent medical examiner ("IME"). Dr. Peter Schur evaluated

Denmark and, in a letter to Dr. Goodman on April 12, concluded

that “at least for the time being, she is clearly disabled not

only from work, but from being able to take care of her

household.” He explained that Denmark “can no longer do

housework, cook, needs help shopping, although she is still able

to do her laundry"; that she is constantly fatigued and "has lots

of aches and pains all over her body”; that the range of motion

in her limbs is limited; and that she “clearly has a sleep

disorder.” As to the diagnosis of fibromyalgia, Dr. Schur noted

that Denmark’s “shoulder and pelvic girdle problems plus her

history of an elevated sedimentation rate would make one suspect

PMR [polymyalgia rheumatica], but I think most of this, in fact,

as suggested by others, is classical fibromyalgia.” He concluded

that modifying Denmark’s regime of exercise and medication may

help her “get her stamina back and be able to go back to work.”

Based on this independent evaluation by Dr. Schur,

Teradyne determined that it would pay for six months of STD

benefits for Denmark, retroactive to her date of disability.

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 2. Long Term Disability Benefits

Under the LTD benefits plan, one qualifies as disabled

if, for the first two years, “the Covered Person, as a result of

Injury o[r] Sickness, is unable to perform the Material and

Substantial Duties of his Own Occupation” and “thereafter, the

Covered Person is unable to perform, with reasonable continuity,

the Material and Substantial Duties of Any Occupation.”

a. Review by Nurse Kaye and Denial of Benefits

Denmark filed for LTD benefits in June 2002. Nurse

Kaye again reviewed Denmark’s medical file, focusing on the

information added since the conclusion of Liberty's initial

review of Denmark's claim on December 10, 2001. Since that time,

Denmark had submitted Dr. Goodman’s letter of December 12, 2001,

Dr. Malanoski’s letter of January 14, 2002 and Dr. Schur's IME

report as part of the STD appeals process conducted by Teradyne.

However, Denmark did not add any additional medical reports

regarding her physical limitations for her LTD benefits claim.

In addition, Kaye reviewed an activities questionnaire

that Denmark completed on July 23, 2002, in which Denmark stated

that she could sit for only thirty minutes at a time, stand for

ten minutes, walk for ten to fifteen minutes, sit in a car for

twenty minutes, and drive for five minutes. She also stated that

she spends fourteen hours a day in bed and needs help grocery

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shopping, carrying groceries, and washing and drying her hair.

Finally, she noted that she “can not concentrate for very long.

I go to do something then I find myself standing in the room

wondering what I was going to do.”

Kaye also reviewed the Department of Labor's general

description of Denmark's position, last updated in 1988. This

description listed the physical requirements of Denmark’s job as

“Light," stating that she would need to lift, carry or pull 20

pounds "occasionally," up to ten pounds "frequently," and smaller

weights "constantly." The job could include frequent walking and

standing.

After her review, Kaye again concluded that there had

been no “significant change” in Denmark’s condition around her

claimed date of disability. Denmark had had fibromyalgia for six

years and “managed to maintain occupational functioning during

that time, even during periods of exacerbation. This diagnosis

has been confirmed by multiple providers.” Kaye limited the

significance of the IME report by Dr. Schur, noting that “[s]ince

an IME provides an examination on a specific date in time, its

scope is limited in that inferences to the status of conditions 6

months previous cannot be accurately assessed.” Finally, Kaye

questioned the extent of Denmark’s disability, stating that she

“may be self-limiting her work or social activities, with no

objective medical basis to support [restrictions and

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limitations]” and that her “perception that she is unable to work

& is seeking permanent benefits” was a “barrier[] to recovery.”

On August 20, 2002, Liberty denied Denmark’s LTD

benefits claim, citing the reports of Drs. Malanoski, Goodman,

Hack, Miller, and Schur. The denial letter states: “Our

assessment of the new information provided by Dr. S[c]hur does

not find any information to alter our previous findings that

there was no significant change in Ms. Denmark’s condition on

October 3, 2001 which would preclude her from performing the

Material and Substantial duties of her occupation.”

b. Appeal of Long Term Disability Benefits
Decision

Denmark requested review of the denial of her LTD claim

in September 2002. She provided all of her medical records,

including a report from a psychological examination by Dr. Taylor

that was completed on July 24, 2002, but apparently was not

included in Nurse Kaye’s review. Dr. Taylor described Denmark's

illness as “well documented,” and concluded: “She presents in an

honest and straightforward manner and I suspect that she has some

significant physical limitations, as noted by Dr. Schur, M.D. I

do not believe that her depression, in and of itself, is of

sufficient severity to prevent her from gainful employment.”

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Again, however, Denmark did not add any additional medical

reports regarding her physical limitations.

Liberty arranged for surveillance of Denmark to monitor

her activity level on October 24 and November 2, 4, and 5, 2002.

On October 24, the investigator observed Denmark running errands

for about two and a half hours. The investigator photographed

her lifting groceries such as a gallon of water with one hand and

placing them in her car.4 The investigator also reported that

Denmark was “walking and moving in a fluid non-obstructed manner,

bending and lifting items such as a case of soda and gallon of

milk without difficulties.” On another day Denmark ran errands

for about an hour and a half, and on the last two days the

investigator did not observe any activity. Liberty's claim log

notes that the activity check “found her to be very active

running errands,” but that “the investigator had no video camera

on him . . . so we only have stills of her and not actual moving

footage. Will go [a]head and have peer review perform[ed.] I

was hoping to supply them with surveillance footage but as there

wasn’t much will not send.”

Liberty also obtained a Labor Market Survey regarding

Denmark’s job. The survey examined various sources and conducted

labor market research, finding that “[p]hysical demands were

described as sedentary to light with occasional lifting up to 20

4
The record indicates that a gallon of water weighs about
eight pounds.

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pounds” and that “[t]he opportunity to change positions from

sitting, standing and walking was provided throughout the

workday.”

Liberty submitted all the information it had

accumulated to the Network Medical Review – Elite Physicians

(“NMR”) for a final medical review.5 Dr. John Bomalaski did the

review and wrote a report on December 4, 2002. He stated that

the primary diagnosis “may be” fibromyalgia, but that “[t]he

physical examination and testing do not support the diagnosis of

Ms. Denmark’s treating physicians, at least within the records

provided. There is no documentation of laboratory testing ruling

out coexisting causes of myalgia.” Dr. Bomalaski stated that

“the diagnosis of fibromyalgia remains in question not only by

this reviewer but also by Dr. Schur, the consultant

rheumatologist who had examined Ms. Denmark at the request of her

treating rheumatologist, Dr. Goodman.”

Dr. Bomalaski also evaluated Denmark's functional

limitations. Relying on the surveillance evidence, he noted that

she can engage in activities such as sitting, standing, walking,

driving, reading, and lifting up to twenty pounds "occasionally,"

meaning "up to 1/3 of the time," and observed that she is "able

to lift a gallon of water (10 pounds) with one hand and place in

5
The Network Medical Review refers claims to physicians who
evaluate the functional abilities of a claimant based on medical
information provided.

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car from grocery cart." He concluded that Denmark was “capable

of working full time in a primarily sedentary position within the

limitations and restrictions noted on the Functional Capacities

Form.”

On December 10, 2002, Liberty informed Denmark’s

attorney that Liberty was upholding its decision to deny LTD

benefits. The denial letter states that the review found no

impairment that would prevent Denmark from performing her own

occupational job duties. Liberty’s case log states that “there

was limited evidence to support a need to cease working and she

was able in fact to work at her own occupation for long hours.

There was no indication of what changed in her condition.”

3. Social Security Determination

On January 31, 2004, an Administrative Law Judge

("ALJ") issued a decision that Denmark was entitled to Social

Security disability benefits retroactive to October 2, 2001, the

day before she stopped working. The ALJ concluded that Denmark

had been "disabled" within the meaning of the Social Security Act

since that date, because her "severe pain, limitations, and

restrictions . . . prevent [ ] her from performing her past

relevant work" and because she has suffered a "substantial loss

of ability necessary to perform a significant number of jobs"

identified as unskilled sedentary occupations. The ALJ noted

that Denmark’s testimony was credible and gave controlling weight

-16-
to additional reports that Drs. Goodman and Hack submitted for

the Social Security benefits determination.

Based on this favorable decision, Denmark again

requested that Liberty review the denial of LTD benefits and

submitted a new letter from Dr. Goodman. However, Liberty

replied on June 3, 2004 that the Social Security disability

benefits decision did not affect its prior denial determination.

B. Procedural History

On September 17, 2004, Denmark filed an action against

Liberty in Superior Court in Massachusetts seeking LTD benefits

allegedly due under ERISA, 29 U.S.C. §§ 1132(a)(1)(B), (2) and

(3), and for breach of contract.6 On October 27, Liberty removed

the case to federal district court in Massachusetts. Denmark did

not pursue her breach of contract claim in federal court.

After discovery was completed, both parties moved for

summary judgment. In a detailed opinion, the district court

granted summary judgment for Liberty. The court found that,

because the ERISA plan granted discretionary authority to

Liberty, the benefits decision should be reviewed under the

arbitrary and capricious standard. Although the court

acknowledged the potential financial conflict of interest

presented by Liberty’s dual responsibility for making benefits

6
The district court correctly noted that the appropriate civil
enforcement provision for Denmark’s benefits claim was 29 U.S.C. §
1132(a)(1)(B) only, not 29 U.S.C. §§ 1132(a)(2) and (3).

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determinations and paying claims, it found no evidence that this

financial arrangement had risen to the level of an actual

conflict that would warrant altering the standard of review.7

The court then thoroughly examined the evidence supporting

Liberty’s denial of LTD benefits to Denmark, ultimately

concluding that this denial, supported by substantial evidence,

was neither arbitrary nor capricious. In light of the record and

precedents, this decision is affirmed.

II.

A. Summary Judgment Standard in an ERISA Action

Summary judgment is appropriate when “the pleadings,

depositions, answers to interrogatories, and admissions on file,

together with the affidavits, if any, show that there is no

genuine issue as to any material fact and that the moving party

is entitled to judgment as a matter of law.” Fed. R. Civ. P.

56(c). In the ERISA context, however, we have held that “the

district court sits more as an appellate tribunal than as a trial

court"; instead of considering affidavits submitted to the court,

it "evaluates the reasonableness of an administrative

determination in light of the record compiled before the plan

fiduciary.” Leahy v. Raytheon Co., 315 F.3d 11, 18 (1st Cir.

7
The court did apply heightened review to Dr. Bomalaski’s
opinion as a sanction for Liberty’s refusal to comply with a
discovery order pertaining to its financial relationship with NMR,
Dr. Bomalaski’s employer. The court’s treatment of this evidence
will be discussed in detail below.

-18-
2002).8 Thus, because the court’s review is usually based only

on the administrative record, “summary judgment is simply a

vehicle for deciding the issue,” and consequently “the non-moving

party is not entitled to the usual inferences in its favor.”

Orndorf v. Paul Revere Life Ins. Co., 404 F.3d 510, 517 (1st Cir.

2005).

B. De Novo or Deferential Review

Appellate review of the district court’s grant of

summary judgment is de novo. See, e.g., Wright v. R.R. Donnelley

& Sons Co. Group Benefits Plan, 402 F.3d 67, 73-74 (1st Cir.

2005). However, the issue of what standard of review this court

applies to the administrative record can raise more difficult

questions. Denmark makes three arguments in support of de novo

review. First, she claims that de novo review is warranted

because Liberty was not granted discretionary authority under the

terms of the LTD plan. Second, she requests that we reconsider

our precedent and hold that, because Liberty both reviews and

pays claims, there is a structural conflict of interest requiring

de novo review. Finally, she argues that the entire review

process was “infected with conflict.” This opinion will address

each of these arguments in turn.

8
Leahy left open the possibility that under certain
circumstances a district court might take evidence in an ERISA
case. 315 F.3d at 18 n.6.

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 1. Grant of Discretionary Authority in an ERISA
Instrument

In Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101,

115 (1989) the Supreme Court held that “a denial of benefits

challenged under [29 U.S.C.] § 1132(a)(1)(B) is to be reviewed

under a de novo standard unless the benefit plan gives the

administrator or fiduciary discretionary authority to determine

eligibility for benefits or to construe the terms of the plan.”9

If the ERISA plan grants the plan administrator such

discretionary authority in the determination of eligibility for

benefits, the administrator’s decision must be upheld unless it

is arbitrary, capricious, or an abuse of discretion. Wright, 402

F.3d at 74.

The only document in the record describing the LTD plan

is the insurance policy. Section 7 of the policy provides that

"Liberty shall possess the authority, in its sole discretion, to

construe the terms of this policy and to determine benefit

eligibility hereunder. Liberty’s decisions regarding

construction of the terms of this policy and benefit eligibility

shall be conclusive and binding." In light of this language, the

9
The Court justified its holding by explaining that, in
interpreting ERISA, courts "are guided by principles of trust law."
Firestone, 489 U.S. at 111. Consequently, "[t]rust principles make
a deferential standard of review appropriate when a trustee
exercises discretionary powers." Id. (citing Restatement (Second)
of Trusts § 187 (1959)("Where discretion is conferred upon the
trustee with respect to the exercise of a power, its exercise is
not subject to control by the court except to prevent an abuse by
the trustee of his discretion.")).

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district court concluded that "the record unequivocally shows

that Liberty is a fiduciary within the meaning of ERISA because

it acted within the capacity of manager and administrator of

GenRad's LTD benefits plan," and consequently held that the

decision denying Denmark LTD benefits was subject to arbitrary

and capricious review.

On appeal, Denmark argues that Liberty "granted

discretion to itself without authority to do so." While

acknowledging that the language in Section 7 could provide a

sufficient grant of discretionary authority, she protests that in

this case authority was not properly delegated to Liberty in an

ERISA plan instrument. Denmark first contends that the LTD

policy in the record was not an ERISA plan instrument, but rather

an insurance policy that Liberty itself wrote. She then asserts

that GenRad never properly delegated discretionary authority to

Liberty.

The improper delegation argument involves the

interaction of several provisions of ERISA. As an employer who

established the LTD plan, GenRad — later Teradyne — is the plan's

sponsor. See 29 U.S.C. § 1002(16)(B). Because the LTD policy

does not designate an administrator, GenRad is also the

administrator. See id. § 1002(16)(A). In light of GenRad's

statutorily defined role as plan administrator, Denmark argues

that the LTD policy did not contain a sufficient delegation of

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fiduciary authority from GenRad to Liberty. ERISA states that

"[t]he instrument under which a plan is maintained may expressly

provide for procedures (A) for allocating fiduciary

responsibilities . . . among named fiduciaries, and (B) for named

fiduciaries to designate persons . . . to carry out fiduciary

responsibilities." Id. § 1105(c)(1). Denmark thus argues that

the LTD policy needed to designate Liberty to carry out fiduciary

responsibilities with an explicit statement such as “GenRad vests

Liberty with fiduciary responsibility including making benefit

decisions.”

Liberty counters that an insurance policy can serve as

an ERISA plan instrument. Moreover, it argues that the lack of

explicit delegation is irrelevant because, for all practical

purposes, it performed the role of a fiduciary of the policy.

Under 29 U.S.C. § 1102(a)(1), "[e]very employee benefit

plan shall be established and maintained pursuant to a written

instrument." Courts have held that an insurance policy may serve

as this written instrument. See, e.g., Krohn v. Huron Mem'l

Hosp., 173 F.3d 542, 551 (6th Cir. 1999)(“[T]he long-term

disability policy . . . is the written instrument pursuant to

which this employee benefit plan was established and maintained,

as required by ERISA.”); Cirelli v. Sec. Pac. Corp., 61 F.3d

1437, 1441 (9th Cir. 1995)(“[I]t is clear that an insurance

policy may constitute the 'written instrument' of an ERISA

-22-
plan.”); Gable v. Sweetheart Cup Co., 35 F.3d 851, 856 (4th Cir.

1994)(“An insurance policy may constitute the ‘written

instrument’ of an ERISA plan . . . .”).

However, a policy which serves as the written

instrument must

(1) provide a procedure for establishing and
carrying out a funding policy and method
consistent with the objectives of the plan
and the requirements of this subchapter,
(2) describe any procedure under the plan for
the allocation of responsibilities for the
operation and administration of the plan
(including any procedure described in section
1105(c) of this title),
(3) provide a procedure for amending such
plan, and for identifying the persons who
have authority to amend the plan, and
(4) specify the basis on which payments are
made to and from the plan.

29 U.S.C. § 1102(b). Our examination of the LTD policy satisfies

us that it complies with these requirements. Section 8 explains

that Liberty sets the premiums, specifies the conditions under

which the premiums can be changed and provides for payment of

premiums. Section 4 also provides a detailed description of

benefits. These provisions satisfy requirements (1) and (4). As

previously quoted, Section 7 explains that "Liberty shall possess

the authority, in its sole discretion, to construe the terms of

the policy and to determine benefit eligibility hereunder." This

provision satisfies requirement (2). Section 7 also states:

"This Policy may be changed in whole or in part. Only an officer

of Liberty can approve a change. The approval must be in writing

-23-
and endorsed on or attached to this policy." This provision

satisfies requirement (3). Thus, the LTD policy is the "written

instrument" required under 29 U.S.C. § 1102(a)(1).

Denmark's contention that GenRad did not explicitly

delegate fiduciary responsibility to Denmark also fails.

Although Liberty drafted the LTD policy, GenRad adopted the

provisions of the policy — including the grant of discretionary

authority to Liberty — by purchasing the LTD plan from Liberty.10

Moreover, the provisions of the LTD policy described supra

unquestionably assign Liberty fiduciary responsibility for

reviewing benefit claims. At least one court has held that

identical language warrants arbitrary and capricious review

"because Liberty is a fiduciary that the plan vests with

discretionary authority." Ellis v. Liberty Life Assurance Co.,

394 F.3d 262, 266 & n.3 (5th Cir. 2004). Thus, the policy

properly grants discretionary authority to Liberty and,

consequently, the LTD benefit decision warrants arbitrary and

capricious review under Firestone.11

10
Denmark cites Rodriguez-Abreu v. Chase Manhattan Bank, 986
F.2d 580 (1st Cir. 1993), to support her contention of improper
delegation, but that case is distinguishable. There, we applied de
novo review because the plan granted discretionary authority to a
named fiduciary, rather than to the plan administrator, but the
plan administrator made the final claim determination. Id. at 582-
84. Here, by contrast, the plan explicitly granted discretionary
authority to Liberty, and Liberty also made the final decision on
Denmark’s claim.
11
The district court took a different approach to this issue,
finding that the improper delegation argument "miss[es] the point"
because Liberty "acted as a de facto administrator and fiduciary"

-24-
 2. Effect of Structural Conflict of Interest

Firestone also held that "if a benefit plan gives

discretion to an administrator or fiduciary who is operating

under a conflict of interest, that conflict must be weighted as a

'facto[r] in determining whether there is an abuse of

discretion.'" 489 U.S. at 115 (quoting Restatement (Second) of

Trusts § 187, cmt. d (1959)). Since Firestone, however, "courts

have struggled to give effect to this delphic statement, and to

determine both what constitutes a conflict of interest and how a

conflict should affect the scrutiny of an administrator's

decision to deny benefits." Pinto v. Reliance Standard Life Ins.

Co., 214 F.3d 377, 383 (3d Cir. 2000).

In Doyle v. Paul Revere Life Insurance Co., 144 F.3d

181, 184 (1st Cir. 1998), we acknowledged that "a conflict of

interest exists" where, as here, "any award of benefits would

come out of [the insurer's] own pocket." However, we then

observed that an insurer’s financial self-interest is balanced by

an "important competing motive: having a benefit plan is to

please employees, not to result in the employer’s bad reputation.

Indeed, we venture that an employer would not want to keep an

overly tight-fisted insurer. The conflict is not as serious as

throughout the claim determination process and that, consequently,
it was a fiduciary within the meaning of ERISA. Because GenRad’s
adoption of the LTD policy granted discretionary authority to
Liberty, it is unnecessary to consider the merits of this de facto
analysis.

-25-
might appear at first blush." Id. (citation omitted). We

indicated that we would review cases of conflict with “more

bite,” meaning that we would “adher[e] to the arbitrary and

capricious principle, with special emphasis on reasonableness,

but with the burden on the claimant to show that the decision was

improperly motivated.” Id. In that regard, we concluded that

merely showing that the insurer both reviewed and paid claims was

not enough to warrant “more bite.” Id.

Subsequently, in Doe v. Travelers Insurance Co., 167

F.3d 53, 57 (1st Cir. 1999), we limited the significance that

might be imputed to the phrase “more bite,” explaining that

“[t]he essential requirement of reasonableness has substantial

bite itself where, as here, we are concerned with a specific

treatment decision based on medical criteria and not some broad

issue of public policy.” We reiterated that an insurer’s

“general interest in conserving its resources is [not] the kind

of conflict that warrants de novo review.” Id.12

Our subsequent cases have read Doyle and Doe to stand

for the proposition that "[t]he fact that . . . the plan

administrator[] will have to pay [the] claim out of its own

assets does not change [the arbitrary and capricious] standard of

12
As previously explained, GenRad was the statutory plan
administrator for the LTD plan, but it delegated the benefits
determinations to Liberty, making Liberty a fiduciary that is
responsible for paying claims out of its own assets. Thus, Liberty
faces the structural conflict of interest described in Doyle and
Doe.

-26-
review." Glista v. Unum Life Ins. Co. of Am., 378 F.3d 113, 125-

26 (1st Cir. 2004) (citing Pari-Fasano v. ITT Hartford Life &

Accident Ins. Co., 230 F.3d 415, 418-19 (1st Cir. 2000)). We

have continued to justify our adherence to arbitrary and

capricious review in the face of such “structural” conflicts on

the ground that “the market presents competing incentives to the

insurer that substantially minimize the apparent conflict.”

Pari-Fasano, 230 F.3d at 418. Recently, however, we acknowledged

that “other circuits have rejected the market forces rationale

and specifically recognized a conflict of interest when the

insurer of an ERISA plan also serves as plan administrator,

although there is no consistent approach in accordingly adjusting

the standard of review." Wright, 402 F.3d at 75 & n.5.

Prior to argument in this case, Denmark requested in a

petition for initial hearing en banc that we reconsider this

precedent. We denied the petition, and she now renews her

argument that, where an insurer both reviews and pays claims,

there is a “structural irreconcilable conflict of interest that

requires an initial de novo review of an adverse benefit

decision.” Liberty responds that the financial self-interest of

an insurer who both reviews and pays claims is counterbalanced by

the insurer’s desire to remain attractive to employers, and

emphasizes the desirability of a simple procedure for reviewing

denials of benefits.

-27-
 The circuits have adopted varying approaches to the

issue of whether the structural conflict that arises when an

insurer both reviews and pays claims justifies less deferential

review. In addition to this court, the Seventh and Second

Circuits have held that a structural conflict alone is

insufficient to alter the standard of review. Instead, these

circuits require an actual showing that the conflict of interest

affected the benefits decision before there will be any

alteration in the standard of review. See Rud v. Liberty Life

Assurance Co., 438 F.3d 772, 776-77 (7th Cir. 2006)(holding that

a structural conflict of interest, without more, does not affect

the standard of review); Sullivan v. LTV Aerospace & Def. Co., 82

F.3d 1251, 1255-56 (2d Cir. 1996)(holding that a claimant must

show that a conflict of interest affected the benefits decision,

but if such showing is made, de novo review applies).

However, seven other circuits have held that a

structural conflict warrants alteration to the standard of

review, although six of these circuits apply less deferential

review within the arbitrary and capricious framework. Of these

six circuits, all except one have adopted a “sliding scale”

approach to the standard of review, in which the court applies

less deferential review to the extent that a conflict of interest

exists. See, e.g., Fought v. Unum Life Ins. Co. of Am., 379 F.3d

997, 1004 (10th Cir. 2004)(per curiam)(explaining that “the court

-28-
must decrease the level of deference given to the conflicted

administrator’s decision in proportion to the seriousness of the

conflict”(internal citation and quotation omitted)); Pinto, 214

F.3d at 379 (expressly adopting a “sliding scale method,

intensifying the degree of scrutiny to match the degree of the

conflict”); Vega v. Nat’l Life Ins. Servs., Inc., 188 F.3d 287,

297 (5th Cir. 1999)(en banc)(explaining that “[t]he greater the

evidence of conflict on the part of the administrator, the less

deferential our abuse of discretion standard will be”); Woo v.

Deluxe Corp., 144 F.3d 1157, 1161-62 & n.2 (8th Cir.

1998)(explicitly adopting the sliding scale approach while noting

that “not every funding conflict of interest per se warrants

heightened review”); Doe v. Group Hosp. & Med. Servs., 3 F.3d 80,

87 (4th Cir. 1993)(applying less deference “to the degree

necessary to neutralize any untoward influence resulting from the

conflict”). The Ninth Circuit employs a “substantially similar”

approach, but with a “conscious rejection of the ‘sliding scale’

metaphor” on the ground that “[a] straightforward abuse of

discretion analysis allows a court to tailor its review to all

the circumstances before it.” Abatie v. Alta Health & Life Ins.

Co., 458 F.3d 955, 967-68 (9th Cir. 2006)(en banc).

The Eleventh Circuit uses a different framework. It

first determines, under de novo review, whether the decision was

wrong; if it was, and if an inherent conflict of interest exists,

-29-
“the burden shifts to the claims administrator to prove that its

interpretation of the plan is not tainted by self-interest.” HCA

Health Servs., Inc. v. Employers Health Ins. Co., 240 F.3d 982,

993-94 (11th Cir. 2001). The claims administrator may then meet

this burden “by showing that its wrong but reasonable

interpretation of the plan benefits the class of participants and

beneficiaries.” Id. at 994-95.

Finally, the D.C. Circuit has not yet established a

standard of review in cases involving a structural conflict of

interest. See Wagener v. SBC Pension Benefit Plan-Non Bargained

Program, 407 F.3d 395, 402 (D.C. Cir. 2005)(finding that the

result would be the same under either arbitrary and capricious or

de novo review).

This survey of the circuits reflects the difficulty of

the standard of review issue. It remains an issue of

considerable importance, as the number of amicus curiae briefs

filed in this case demonstrates.13 However, this court’s prior

decision in Doyle cannot be overruled by a panel of the court.

Thus, we are bound by our precedent, and must apply arbitrary and

capricious review in situations where the conflict of interest is

purely structural.

Nevertheless, I think our standard of review in cases

13
The Massachusetts Employment Lawyers Association, AARP, and
United Policyholders have filed briefs in support of Denmark. The
American Council of Life Insurers has filed a brief in support of
Liberty.

-30-
in which an insurer also makes benefits determinations is

increasingly difficult to defend. In light of the development of

the law since we first addressed the issue in Doyle, and because

our position is now a minority view, I think it is time to

reexamine the standard of review issue in an en banc proceeding.

Although Judge Howard dissents from the judgment agreed to by

Judge Selya and myself, he agrees with me, as indicated in his

dissent, that we should reexamine the standard of review issue.

In such a proceeding, I would be inclined to favor the “sliding

scale” approach explicitly adopted by the Third, Fourth, Fifth,

Eighth, and Tenth Circuits. Under this approach, "'the fiduciary

decision will be entitled to some deference, but this deference

will be lessened to the degree necessary to neutralize any

untoward influence resulting from the conflict.'" Pinto, 214 F.3d

at 391 (citation omitted).

3. Other Evidence of Conflict

This panel must also consider, however, whether other

evidence, in addition to this structural conflict, warrants

alteration of the standard of review. In her broadest argument,

Denmark asserts that “[t]he District Court should have reviewed

the entire Liberty analysis with no less than a heightened

standard of review, because the entire claims process . . . was

infected with conflict.” In support of this argument, she

contends that Liberty chose to rely on unreliable medical

-31-
opinions and improperly imposed a requirement that she produce

objective evidence of her inability to work, thereby

demonstrating its bias against her.

This argument is essentially another request that we

reject our precedents in Doyle and Doe. The evidence to which

Denmark refers is part of the record on which Liberty based its

benefits decision, and is thus properly evaluated under the

“essential requirement of reasonableness” that we apply to that

decision, Doe, 167 F.3d at 57, rather than as evidence of a

conflict of interest. As the district court acknowledged, Wright

entertained — and rejected — a plaintiff’s claim that there was a

conflict of interest based on certain factual circumstances

surrounding the claim. 402 F.3d at 76. Here, however, the

evidence in question falls within the scope of the reasonableness

analysis, and this opinion will consider it using that framework.

Before the district court, Denmark made one additional

attempt to demonstrate a conflict of interest. She filed a

motion for discovery of information relating to the financial

relationship between Liberty and NMR, arguing that such

information would help her establish that Liberty referred claims

to NMR for reasons of financial self-interest. The district

court granted the motion and ordered Liberty to produce

information about how much money it paid NMR, answer Denmark's

interrogatory as to how many files it referred to NMR, and

-32-
stipulate the number of cases in which NMR has accepted a claim.

Liberty produced information showing that between 2001 and 2003

it had paid $2,004,656 and referred 1,204 files to NMR, but

stated that it was unable to make the stipulation described by

the district court "due to the very substantial burden and

expense that would be involved in retrieving and manually

reviewing the over 1,200 claims files that were referred to NMR

physicians from 2001 to 2003."

In its order granting summary judgment to Liberty, the

district court interpreted “the First Circuit’s reluctant

concurrence with past precedent in Wright as a suggestion that

additional evidence of the ERISA plan administrator’s efforts to

maximize profits could be enough to turn apparent conflict into

real conflict.” Moreover, it stated that the discovery Denmark

requested was appropriate because "[a] claimant cannot meet the

burden of demonstrating a conflict of interest if she cannot

supplement the record with relevant evidence." To sanction

Liberty for its refusal to comply with this discovery order, the

district court determined that it would “draw the inference

suggested by the Plaintiff, namely that NMR has not found in

favor of a single claimant in connection with the 1,204 Liberty

files referred to NMR during the years 2001--2003.” The court

concluded that, if NMR never found in favor of claimants in its

evaluations, Liberty would have a “‘clear incentive’ to contract

-33-
with NMR to obtain peer reviews that support denial of disability

benefits, justifying a review with ‘more bite.’” However, the

court also determined that to “calibrate the sanction” it would

apply the heightened standard of review only to Liberty’s

reliance on Dr. Bomalaski’s opinion because no other evidence in

the record would have been affected by the conflict with NMR.

On appeal, Denmark does not advance the argument that,

under this court’s existing precedent, the evidence of Liberty’s

relationship with NMR would, in combination with the existing

structural conflict, justify some degree of heightened review not

only of Dr. Bomalaski’s opinion but also of the entire record.

Liberty, however, protests both the discovery that the district

court allowed and the sanction that the court imposed for its

refusal to comply. It urges that we disregard the discovery

admitted into the record and reject the heightened standard of

review that the district court applied to Dr. Bomalaski's

opinion.

In light of Denmark's silence on the link between the

particularized conflict evidence and an altered standard of

review for the entire record, we need not decide whether such

alteration of the overall standard of review would have been

appropriate under our precedents suggesting that proof of an

actual conflict (rather than a structural conflict) might justify

review with "more bite." However, the panel has divided on its

-34-
response to the sanction imposed by the district court for

Liberty's refusal to comply with the discovery order. Judge

Selya concludes that the sanction was a proper exercise of the

district court's authority. Judge Howard does not reach the

sanction issue because his view of the case does not depend on

whether a higher level of scrutiny is applied to the report of

Dr. Bomalaski. In my view, the district court erred in applying

heightened review to Dr. Bomalaski's opinion as a sanction for

failure to comply with the discovery it orders. This piecemeal

approach to the standard of review is not supported by any

precedents that I could find.

I think that the district court's implementation of its

piecemeal approach demonstrates the problem with such an

approach. It first applied heightened review to conclude that

Dr. Bomalaski's opinion was "not fully supported, although still

relevant." It then factored its skeptical assessment of Dr.

Bomalaski's opinion into the overall arbitrary and capricious

analysis, essentially running Dr. Bomalaski's opinion through two

levels of analysis. Although arguably manageable as a mode of

analysis here because this case involves only one expert’s

opinion, one can easily imagine cases in which this piecemeal

approach would be unmanageable if conflicts affected numerous,

discrete portions of the record. I cannot approve such an

-35-
unwieldy approach to the standard of review.14 Therefore, in

applying that arbitrary and capricious standard of review as

articulated in Doyle and Doe to the administrative record, I will

not apply heightened review to the report submitted by Dr.

Bomalaski.

Having found no reason to depart from the arbitrary and

capricious standard, I turn to the administrative record,

applying that standard as articulated in Doyle and Doe.

III.

Under arbitrary and capricious review, this court will

uphold an administrator’s decision to deny benefits to a

beneficiary if the decision was reasoned and supported by

substantial evidence. Wright, 402 F.3d at 74. Evidence is

substantial when it is reasonably sufficient to support a

conclusion, and contrary evidence does not make the decision

unreasonable. Id. While arbitrary and capricious review is not

the equivalent of a "'rubber stamp,'" Lopez v. Metro. Life Ins.

Co., 332 F.3d 1, 5 (1st Cir. 2003)(citation omitted), "'a court

is not to substitute its judgment for that of the

[decisionmaker],'" Terry v. Bayer Corp., 145 F.3d 28, 40 (1st

14
I think that the novelty of the district court's piecemeal
approach to the standard of review demonstrates an understandable
uncertainty in the district court, under our current law, about
what is permitted in the way of discovery to establish a conflict
of interest that goes beyond a structural conflict, and what should
be done when such a conflict exists. This uncertainty emphasizes
further the need for en banc consideration of the standard of
review issue in this type of ERISA case.

-36-
Cir. 1998)(citation omitted).

Thus, I will review the LTD benefits denial by

examining in turn Liberty’s review of the medical opinions, its

insistence on objective evidence, its reliance on the

surveillance evidence, and its refusal to consider the favorable

Social Security determination. After such review, I conclude

that Liberty’s denial of benefits was supported by substantial

evidence.

A. Review of Medical Evidence

In support of her claim that Liberty's decision was not

supported by substantial evidence, Denmark first argues, as a

general proposition, that Liberty improperly based its decision

on the opinions of medical personnel who did not examine her.

She then discusses the reports of these medical personnel on an

individual basis, arguing that these opinions were unreliable.

Liberty counters that the opinions were consistent with the

claims file and that, consequently, it could rely on them.

1. Nonexamining Medical Personnel

Denmark objects to Liberty’s reliance on the opinions

of Nurse Kaye and Dr. Miller over the opinions of three doctors

who conducted physical examinations: Dr. Malanoski, Dr. Goodman,

and Dr. Schur. She relies on Calvert v. Firstar Finance, Inc.,

409 F.3d 286, 295 (6th Cir. 2005), in which the court found that

while “reliance on a file review does not, standing alone,

-37-
require the conclusion that [the insurer] acted improperly, we

find that the failure to conduct a physical examination . . .

may, in some cases, raise questions about the thoroughness and

accuracy of the benefits determination.”

However, the Supreme Court held in Black & Decker

Disability Plan v. Nord, 538 U.S. 822, 834 (2003), that courts

“have no warrant to require plan administrators automatically to

accord special weight to the opinions of a claimant's physician;

nor may courts impose on such administrators a discrete burden of

explanation when such administrators credit reliable evidence

that conflicts with a treating physician's evaluation.”

Moreover, as Calvert acknowledges, the absence of a physical exam

is not determinative. 409 F.3d at 295. Finally, in Gannon v.

Metropolitan Life Insurance Co., 360 F.3d 211, 214 (1st Cir.

2004), this court noted that “we have treated a nonexamining

physician’s review of a claimant’s file as reliable medical

evidence on several occasions." Thus, I conclude that it was

permissible for Liberty to rely on the reports of nonexamining

physicians over those of examining physicians.15

15
The dissent argues, based on our decision in Cook v. Liberty
Life Assurance Co., 320 F.3d 11 (1st Cir. 2003), that Liberty's
rejection of the opinions of Drs. Malanoski, Goodman, and Schur is
particularly suspect because the treating physicians and the IME
were in agreement. Part of the basis for our decision in Cook was
the insurer's failure to seek an IME or subject the claimant's file
to review by another physician. Id. at 23. However, we did not
hold that, where an IME agrees with a treating physician, an
insurer cannot reach an opposite conclusion as to the claimant's
disability status. In fact, we stated that "[t]here may well be

-38-
 2. Nurse Kaye's Opinion

In addition to her objection to Nurse Kaye's

nonexamining role, Denmark argues that Liberty should not have

relied on the opinion of a nurse over the opinions of doctors.

Moreover, she contends that Kaye made an improper credibility

finding.

Denmark directs this panel to Gellerman v. Jefferson

Pilot Financial Insurance Co., 376 F. Supp. 2d 724, 735 (S.D.

Tex. 2005), in which one district court found that “the level of

deference due nurses should generally be less than that extended

to doctors whose professions concentrate in the relevant field.”

Although that district court admitted that little precedent

supports this exact proposition, "other courts, at least in the

context of determining medical necessity, have been wary of

giving nurses broad deference." Id. at 735-36 (citing C.N.S.,

Inc. v. Conn. Gen. Life Ins. Co., 9 F. Supp. 2d 194, 198

(E.D.N.Y. 1998); Pritt v. United Mine Workers of Am., 847 F.

Supp. 427 (S.D.W.Va. 1994)).

I conclude, contrary to Denmark’s claims, that it was

not improper for Liberty to rely on Nurse Kaye’s report

questioning the probative value of Dr. Schur's opinion. On April

cases where the opinion of the claimant's treating physician can be
rejected without reliance on any contradictory medical evidence
developed by the plan administrator." Id. Moreover, Dr. Schur's
IME report was submitted as part of the STD appeals process, and
Denmark submitted no additional medical reports during the
subsequent LTD benefits determination.

-39-
12, 2002, as part of the STD appeal, Dr. Schur evaluated Denmark

and found that “at least for the time being, she is clearly

disabled not only from work, but from being able to take care of

her household.” Denmark's application for LTD benefits on July

11 then began a new phase of the process, and Denmark failed to

submit any additional medical reports during this part of the

process. Evaluating Denmark’s LTD claim on August 8, Nurse Kaye

found that "inferences into the status of [the Plaintiff's]

conditions 6 months previous cannot be accurately assessed."

Although in fact only four months had elapsed, Dr. Schur's own

limitation on his opinion to "the time being" and Denmark's

failure to submit additional medical reports resulted in a lack

of evidence showing that, on an ongoing basis, Denmark was

"unable to perform the Material and Substantial Duties" of her

own occupation.16 Consequently, I find that Nurse Kaye’s

assessment was not unreasonable.

Denmark also contends that Liberty should not have

relied on Kaye’s opinion due to an apparent credibility

determination that Kaye made in her review of Denmark's file.

Denmark cites Smith v. Continental Casualty Co., 450 F.3d 253,

16
Following the denial of Denmark's LTD benefits appeal, Drs.
Goodman and Hack each submitted a detailed four-page "Fibromyalgia
Residual Functional Questionnaire" for Denmark's Social Security
benefits determination. The questionnaires addressed some of the
functional limitations caused by Denmark's condition. Such
information might have been helpful to Denmark if it had been
submitted during the LTD process.

-40-
263-64 (6th Cir. 2006), in which the court found that an

insurer’s reliance on a credibility determination by a

nonexamining physician, in conjunction with its refusal to seek

an independent medical examination, supported a finding that the

decision was arbitrary.

In the claim log, Kaye observed: "[Denmark] may be

self-limiting her work or social activities . . . . Barriers to

recovery are clmnt’s perception that she is unable to work & is

seeking permanent benefits." However, this apparent credibility

determination was only one of many statements by Kaye evaluating

Denmark's record. There is no indication that this statement

dictated the outcome of the benefits decision. Kaye also

thoroughly reviewed each piece of evidence in Denmark's file and

requested a peer review "to fully define" Denmark's condition and

to "determine if the [restrictions/limitations] are supported."

This review evinces a full evaluation of the evidence in the

record.

3. Dr. Miller’s Opinion

Denmark challenges Liberty's reliance on the opinion of

Dr. Miller on the grounds that he did not examine her, that he

required objective evidence of her condition, and that he did not

consider her entire medical record. For the reasons discussed

supra, Dr. Miller's evaluation is not unreliable simply because

he did not examine Denmark. And, as explained infra, the

-41-
emphasis on objective evidence of Denmark's inability to work

does not render Dr. Miller's opinion unreliable. Finally,

Denmark's only evidence that Dr. Miller did not examine her

entire medical file was his fax report accompanied by only three

pages of medical records. However, this fact alone does not

demonstrate that he did not also consider the remainder of her

file; in fact, his report refers to several documents in

Denmark's file that were not among those that accompanied the

fax.

4. Dr. Bomalaski's Opinion

Denmark contends that Dr. Bomalaski's opinion was

unreliable because he did not identify the records that he

reviewed and because his conclusion that she could work full time

in her own occupation did not follow from surveillance evidence

documenting her activities for a few hours at a time. Liberty

counters that Dr. Bomalaski's opinion was based on both the

surveillance evidence and the medical information in the file.

Dr. Bomalaski's opinion specifically refers to the

opinions of Drs. Malanoski, Goodman, Taylor and Schur, the

Functional Capacities Form, and the surveillance evidence,

indicating that he examined these records. He first found that

"[t]he clinical medical evidence does not clearly support severe

impairment because as noted the diagnosis of fibromyalgia remains

in question not only by this reviewer but also by Dr. Schur."

-42-
Given that Liberty does not contest the diagnosis of

fibromyalgia, this statement is largely irrelevant.

More importantly, Dr. Bomalaski relied on the

surveillance evidence to conclude that Denmark could engage in

activities such as sitting, standing, walking, driving, reading,

and lifting up to twenty pounds "occasionally," meaning "up to

1/3 of the time," and observed that she is "able to lift a gallon

of water (10 pounds) with one hand and place in car from grocery

cart." Dr. Bomalaski concluded that "Denmark is capable of

working full time in a primarily sedentary position within the

limitations and restrictions noted on the Functional Capacities

Form." His characterization of her occupation as "primarily

sedentary" is supported by the Labor Market Survey's description

of the physical demands as "sedentary to light." Moreover, while

his conclusion that she can perform the duties of her occupation

does not follow necessarily from the surveillance evidence, it is

not contradicted by objective evidence of Denmark's functional

limitations.

B. Requirement of Objective Evidence of Inability to Work

Denmark also contends that it was unreasonable for

Liberty to require her to produce objective evidence of her

inability to work. In evaluating the STD claim, Kaye sought a

peer review from Dr. Miller asking whether “the accompanying

documentation provide[s] objective findings that would indicate a

-43-
significant change in condition that was evident on or about the

date of the disability (10/3/2001)[.]” Dr. Miller responded that

“[t]here are no documented objective physical exam findings that

support a decrease or significant change in this patient’s

physical condition.” His conclusion is quoted and paraphrased

throughout Liberty’s claim log as well as in the letters denying

Denmark’s STD and LTD benefits claims.17

We have previously found it unreasonable for an insurer

to require objective evidence to support a diagnosis of a

condition that is not subject to verification through laboratory

testing. See Cook v. Liberty Life Assurance Co., 320 F.3d 11, 21

(1st Cir. 2003)(explaining that it was unreasonable for an

insurer to require a claimant to provide “clinical objective”

evidence that she was suffering from chronic fatigue syndrome).

The district court correctly found that fibromyalgia is also a

condition that is not subject to objective verification because,

as Dr. Malanoski explained, it is a “condition lacking
17
The dissent says that this opinion has failed to address the
issue of whether Liberty improperly required Denmark to show
evidence that her condition changed on or around her date of
disability, contending that neither case law nor the LTD policy
supports such a requirement. I have not ignored that issue, and
agree that "[a] disabled person should not be punished for heroic
efforts to work by being held to have forfeited his entitlement to
disability benefits should he stop working." Hawkins v. First
Union Long-Term Disability Plan, 326 F.3d 914, 918 (7th Cir. 2003).
In this case, however, it was Denmark and her physicians who
initially claimed that her condition worsened around the date of
disability. Under such circumstances it was not unreasonable for
Liberty to consider the lack of evidence to substantiate Denmark's
self-reported worsening condition.

-44-
abnormalities in blood testing or specific abnormalities in

physical exam.” In accordance with this precedent, Liberty did

not base its denial of LTD benefits on reservations about

Denmark’s diagnosis of fibromyalgia.

However, this court draws a distinction between

requiring objective evidence of the diagnosis, which is

impermissible for a condition such as fibromyalgia that does not

lend itself to objective verification, and requiring objective

evidence that the plaintiff is unable to work, which is allowed.

In Boardman v. Prudential Insurance Co. of America, 337 F.3d 9,

17 n.5 (1st Cir. 2003), we held that “[w]hile the diagnoses of

chronic fatigue syndrome and fibromyalgia may not lend themselves

to objective clinical findings, the physical limitations imposed

by the symptoms of such illnesses do lend themselves to objective

analysis.” We concluded:

None of the specialists that have treated Ms.
Boardman in the past two years have indicated
any limitations or restrictions, based on
objective findings, that would preclude Ms.
Boardman from performing any occupation for
which she is suited. Therefore, we have
determined that Ms. Boardman does not meet
the definition of disability as required by
the policy.

Id. at 16-17. Thus, it fell within the parameters defined in

Boardman for Liberty to require Denmark to provide objective

evidence of functional limitations or restrictions that would

prevent her from working.

-45-
 Denmark attempts to distinguish Boardman on the ground

that, unlike the plaintiff in that case, she submitted evidence

of impairment rather than mere conclusions from the treating

physician. Moreover, she argues that, unlike the IME in

Boardman, the IME in this case agreed with the conclusions of the

treating physician. Dr. Schur stated:

Her muscle tone is very poor throughout; she
has about 30 tender points all over,
including her hands, wrists, elbows, around
her shoulders, back and neck, upper back,
middle and low back, as well as lower
extremity. . . . [S]he has decreased
abduction in both shoulders, more on the
right than on the left, and decreased
rotation in both shoulders, some decreased
rotation in both hips. I cannot do straight
leg raising on either side because of back
discomfort.

Denmark argues that Dr. Schur’s findings provide the objective

evidence that was lacking in Boardman. However, while Denmark is

correct that Dr. Schur’s evaluation does provide some objective

support for her physical restrictions, it does not demonstrate

objectively her inability to work because the evaluation does not

sufficiently relate those restrictions either to the specific

physical requirements of her job or to her overall stamina.18

18
The dissent contends that significant limitations on
Denmark's stamina would preclude her from performing the duties of
any occupation. However, Dr. Schur provided no specific
information regarding such limitation. Although he recommended a
course of treatment "to try and cut down on pain and help her sleep
. . . so that she isn't so tired and, hopefully, can get some of
her stamina back," this general comment merely recognizes some
amount of fatigue without acknowledging that Denmark's stamina is

-46-
Consequently, Liberty’s emphasis on objective evidence was not

impermissible.

C. Reliance on Surveillance Evidence

Denmark also argues that Liberty relied unreasonably on

the surveillance evidence it obtained. She dismisses the

surveillance evidence against her as "worthless," emphasizing

that she was never out of her house for more than a few hours at

a time and that on two of the four days she did not leave her

house at all.

Liberty counters that the surveillance directly

contradicted Denmark's self-reported limitations in her

activities questionnaire. She was observed driving for up to

twenty minutes at a time, when her activities questionnaire had

reported that she could drive for only five minutes at a time.

She was also observed lifting and carrying groceries from the

store to her car and from her car to her house, when her

activities questionnaire had reported that she needed help with

these tasks.

I conclude that Liberty was entitled to consider the

surveillance evidence along with the other medical opinions and

evidence that it had at its disposal. Liberty itself

acknowledged the limitations of the evidence, explaining that the

investigator “didn’t have a video camera to document [Denmark’s]
impaired to such a degree that she cannot work.

-47-
activities only a photo camera which can’t detail how fluid her

movements were and how long she was doing the activities."

However, Denmark does not contest that she performed the

activities described by the surveillance investigator, and it was

not improper for Liberty to use the investigator's report and

photographs in making the LTD benefit determination.

D. Refusal to Consider Social Security Determination

Finally, Denmark argues that Liberty should have

reconsidered her claim in light of her favorable decision from

the Social Security Administration ("SSA"). As the district

court correctly noted, “[a]lthough the SSA’s determination of a

claimant’s entitlement to social security disability benefits is

not binding on disability insurers, it can be relevant to an

insurer’s determination whether that claimant is eligible for

disability benefits.” See Gannon, 360 F.3d at 215.

However, the district court also correctly concluded

that the timing in this case forecloses Denmark’s argument.

Liberty initially decided Denmark’s LTD claim on August 20, 2002.

It then denied Denmark’s appeal in a letter dated December 10,

2002, which stated that Denmark’s “administrative right of review

has been exhausted and no further review will be conducted by

Liberty.” On January 13, 2004, more than thirteen months later,

the SSA issued its decision for Denmark.

-48-
 On appeal, Denmark relies heavily on Calvert, 409 F.3d

286, in which the Sixth Circuit held that an insurer’s refusal to

consider a Social Security benefits decision contributed to a

finding that its decision was arbitrary and capricious. In

Calvert, however, the SSA’s decision was issued more than two

years before Liberty denied the claimant’s appeal. We have

observed that “in order to find that an insurer has abused its

discretion under the contract, we would have to conclude that the

insurer’s eligibility determination was unreasonable in light of

the information available to it” when it made its decision.

Pari-Fasano v. ITT Hartford Life & Accident Ins. Co., 230 F.3d

415, 419 (1st Cir. 2000); see also Orndorf, 404 F.3d at 519

(“[T]he final administrative decision acts as a temporal cut off

point. The claimant may not come to a court and ask it to

consider post-denial medical evidence in an effort to reopen the

administrative decision.”). Because the SSA decision was not

available to Liberty when it made its decision, Liberty cannot be

faulted for failing to factor the SSA decision into its final

decision.

IV.

Applying arbitrary and capricious review, I conclude

that Liberty's benefits determination was supported by

substantial evidence. Liberty reasonably relied on the opinions

of three nonexamining medical personnel: Nurse Kaye, Dr. Miller,

-49-
and Dr. Bomalaski. These reports, in conjunction with the lack

of objective evidence to support Denmark's inability to work, and

the surveillance evidence, provide substantial evidence to

support Liberty's decision to deny Denmark's claim for LTD

benefits. Finally, I cannot fault Liberty for refusing to

reconsider its decision to deny benefits in light of the

subsequent SSA decision.

Although Judge Selya does not join my analysis of the

administrative record, he agrees with my conclusion that

substantial evidence in that record supports Liberty's decision.

Thus, we affirm the district court’s determination that Liberty’s

decision to deny Denmark’s claim for long term disability

benefits was neither arbitrary nor capricious.

Affirmed.

- Concurring and Dissenting Opinions Follow -

-50-
 SELYA, Circuit Judge (concurring in the judgment). I

agree with Judge Lipez's meticulous analysis of the relevant

medical evidence and with the lead opinion's conclusion that the

judgment rendered by the district court — a judgment rendered

after an equally thoughtful study — should be affirmed. For the

reasons elucidated by Judge Lipez and by the court below, the

benefits determination made by Liberty, qua plan fiduciary, was

within the universe of plausible outcomes. Consequently, that

determination was neither arbitrary nor capricious. See, e.g.,

Leahy v. Raytheon Co., 315 F.3d 11, 21 (1st Cir. 2002)

(upholding plan fiduciary's benefits determination, which,

"though not inevitable, was solidly grounded").

Despite my admiration for the lead opinion's synthesis

of the medical evidence, I choose not to join it. I write

separately to identify the two areas of concern that prompt this

course of action.

First — and in the overall scheme of things less

important — I disagree with the lead opinion's treatment of the

sanction imposed by the district court. While I must confess

that the sanction — reading the report of Dr. John Bomalaski

with an increased level of scrutiny — is an unorthodox one, I do

not think that the sanction goes beyond the limits of the

district court's authority.

-51-
 It is black-letter law that district courts have wide

authority to fashion sanctions that are appropriate to the

circumstances. See, e.g., Santiago-Díaz v. Laboratorio Clínico

y De Referencia Del Este, 456 F.3d 272, 275 (1st Cir. 2006);

Rosario-Diaz v. Gonzalez, 140 F.3d 312, 315 (1st Cir. 1998).

The more unusual the circumstances of the misconduct, the more a

need for inventiveness may arise. See generally Tower Ventures,

Inc. v. City of Westfield, 296 F.3d 43, 46 (1st Cir. 2002)

(encouraging case-by-case review of choice of sanction because

“the circumstances attendant to noncompliance are apt to differ

widely”). Busy district courts must be able to control their

dockets and to manage burgeoning caseloads effectively. Thus,

when the choice of an appropriate sanction is at issue,

orthodoxy for its own sake ought not to be required.

The sanction imposed here, though curious, was custom-

tailored to fit a unique set of circumstances and to offset the

perceived effects of an idiosyncratic discovery violation.

Although I would not recommend this form of sanction for

everyday use, I am not prepared to say that it falls outside the

extensive armamentarium of sanctions available to a federal

district court. I would, therefore, unlike Judge Lipez, uphold

the sanction.

Having made this point, I eschew any further

elaboration. The situation is sui generis, and Judge Lipez's

-52-
refusal to enforce the sanction — while mistaken in my view — is

of no consequence in the long run. Either way — that is, with

or without effectuating the sanction — the district court's

affirmance of the benefits-denial determination merits our

approbation.

This brings me to a more important, more global area

of concern. I wish to disassociate myself from the lead

opinion's survey of the standard-of-review cases (which I find

more nuanced than that opinion indicates) and from its

conclusion that our own standard of review, most clearly set

forth in Doe v. Travelers Insurance Co., 167 F.3d 53, 56-57 (1st

Cir. 1999), requires reexamination en banc. The Doe standard,

in my view, is not only correct but also sufficiently flexible

to permit us to take into account singular factors and

circumstances that might heighten conflict-of-interest concerns

in a particular case. See, e.g., id. at 57 (terming the

requirement that the fiduciary's determination be "reasonable"

as "the basic touchstone" of our standard of review). Indeed,

we have recognized that, in developing this standard of review

in Doe and its lineal ancestor, Doyle v. Paul Revere Life

Insurance Co., 144 F.3d 181, 184 (1st Cir. 1998), "we took into

account the potential for conflict in considering whether the

insurer's decision had strayed outside the bounds of

reasonableness to become an abuse of discretion." Pari-Fasano

-53-
v. ITT Hartford Life & Accid. Ins. Co., 230 F.3d 415, 419 (1st

Cir. 2000). I have no desire to revisit this well-ploughed

terrain.

I need not wax longiloquent. It suffices to say that

the Doe standard has served us well. I continue to believe, as

I remarked in a different context, that "if it ain't broke,

don't fix it." United States v. Natanel, 938 F.2d 302, 310 (1st

Cir. 1991) (quoting Lawrence "Yogi" Berra). In my judgment, our

court would do well to heed that piece of folk wisdom here.

If more is needed — and I doubt that it is — en banc

proceedings tend to be notoriously wasteful of scarce judicial

resources. There seems to me to be little point in trading a

workable and battle-tested standard of review for yet another

plunge into the vortex of en banc consideration — a plunge that

threatens to splinter the court and to make the standard of

review less transparent. Even if one assumes, for argument's

sake, that our standard of review could profit from an attempted

clarification with respect to "structural conflict" cases, the

unevenness in the decisions of the various courts of appeals

strongly suggests that any such undertaking should be left to

the Supreme Court (when and if the Justices deem the time

propitious).

With these brief comments, I concur in the judgment of

the court.

-54-
 HOWARD, Circuit Judge, dissenting. For essentially

the reasons stated by Judge Lipez, I agree that we ought to re-

examine our approach to reviewing an administrator's denial of

benefits under a plan governed by the Employee Retirement Income

Security Act, 29 U.S.C. § 1001 et seq. ("ERISA"), when those

benefits stand to be paid out of the administrator's own assets.

I think, however, that, even under the standard of review now in

place, we should reverse the decision by Liberty Life Assurance

Company ("Liberty") to deny long-term disability benefits to

Diane Denmark. In my view, the denial "was 'unreasonable in

light of the information available' to Liberty at the time of

its decision." Cook v. Liberty Life Assurance Co., 320 F.3d 11,

18 (1st Cir. 2003) (quoting Pari-Fasano v. ITT Hartford Life &

Acc. Ins. Co., 230 F.3d 415, 419 (1st Cir. 2000)). As my view

does not depend on whether a higher level of scrutiny is applied

to the report of the outside physician who reviewed Denmark's

file for Liberty, Dr. John Bomalaski, see infra note 4, I do not

reach whether the district court permissibly applied a higher

level of scrutiny as a sanction for Liberty's refusal to provide

discovery on whether Dr. Bomalaski's employer routinely approved

Liberty's benefit decisions.

As Judge Lipez's lead opinion observes, Liberty does

not dispute that Denmark has fibromyalgia, but only that the

condition rendered her disabled under the terms of the plan when

-55-
she stopped working in October 2001. Around that time,

Denmark's treating physician rated her as having a "severe

limitation of functional capacity" and being "incapable of

physical activity," while her rheumatologist called her

"disabled by exhaustion and myalgia which makes it difficult for

her to stay at work for any appreciable amount of time." At her

employer's insistence, Denmark then obtained a third opinion, in

the form of an independent medical examination conducted by Dr.

Peter Schur ("the IME"). Schur found that Denmark was "clearly

disabled, not only from work, but from being able to take care

of her household." While he expressed hope that changes to

Denmark's drug regime and increased exercise "will improve

matters so that she can get her stamina back and get back to

work," he concluded that "until that is accomplished, which may

take months, she is clearly disabled."

In spite of this consensus among the doctors who had

examined Denmark, Liberty concluded that she was not, in fact,

disabled because "there was no significant change in [her]

condition" on the date she stopped working. This rationale,

however, bears no relationship to any requirement for long-term

disability benefits imposed by the plan itself. Instead, it

amounts to an argument that, because Denmark has suffered from

fibromyalgia since at least 1996 but continued working

nonetheless, she cannot rely on fibromyalgia as a reason for not

-56-
working in 2001 unless she can show that her condition has

worsened. The argument does not survive even minimal scrutiny.

As a number of other courts have recognized, there is

no "logical incompatibility between working full time and being

disabled from working full time. A desperate person might force

himself to work despite an illness that everyone agreed was

totally disabling. Yet even a desperate person might not be

able to maintain the necessary level of effort indefinitely."

Hawkins v. First Union Long-Term Disability Plan, 326 F.3d 914,

918 (7th Cir. 2003) (citations omitted); accord Seitz v. Metro.

Life Ins. Co., 433 F.3d 647, 651 (8th Cir. 2006); Lasser v.

Reliance Std. Life Ins. Co., 344 F.3d 381, 392 (3d Cir. 2003);

Maracek v. BellSouth Telecomms., Inc., 49 F.3d 702, 706 (11th

Cir. 1994). In addition to its appeal as a matter of human

experience, this reasoning also furthers an important policy

objective, namely that "[a] disabled person should not be

punished for heroic efforts to work by being held to have

forfeited his entitlement to disability benefits should he stop

working." Hawkins, 326 F.3d at 918.

Rather than engaging this line of authority here, the

lead opinion sidesteps the issue, concluding that, because

Denmark herself asserted that her condition had worsened at the

time she stopped working, Liberty was entitled to rely on her

failure to support that assertion in denying her claim. Under

-57-
the plan, however, Denmark's entitlement to long-term disability

payments does not depend on whether her fibromyalgia had

intensified around the time she stopped working. It depends on

whether she was then "unable to perform the Material and

Substantial Duties of [her] Own Occupation." Denmark's treating

physicians, as well the independent doctor hired by her

employer, all concluded that she was. Liberty could not have

reasonably reached the opposite conclusion based on Denmark's

failure to prove a fact that is inessential, and logically

unconnected, to her contractual right to long-term disability

benefits.

The lead opinion also downplays the importance of this

factor to Liberty's ultimate decision, focusing instead on the

asserted absence of objective evidence of Denmark's inability to

work. But the lack of a change in Denmark's condition at the

time she stopped working was the sole explanation the insurer

gave for denying both short-term and long-term disability

benefits.19 In any event, Denmark presented objective evidence

of her inability to work in the form of the IME, where Dr. Schur

observed "tender points all over," a decreased range of motion

19
Liberty's letter reaffirming its denial of long-term
disability benefits does cite the absence of "support of a severity
of impairment that would preclude Ms. Denmark from performing her
own occupational job duties," but, as the lead opinion observes, a
contemporaneous explanation in Liberty's case log again notes the
"limited evidence to support a need to cease working."

-58-
in the shoulders and hips, and "back discomfort" during an

extensive physical examination.

The lead opinion treats this as "some objective

evidence of [Denmark's] physical restrictions," but concludes

that "it does not demonstrate objectively her inability to work

because the evaluation does not specifically relate those

restrictions either to the physical requirements of the job or

to her overall stamina" (emphasis added). As this passage

recognizes, a condition that saps a claimant of her energy would

make her unable to perform the duties of nearly any occupation.

See, e.g., Rose v. Shalala, 34 F.3d 13, 19 (1st Cir. 1994). Dr.

Schur's report characterizes Denmark's fibromyalgia in precisely

that way: he endorses a course of treatment "to try and cut down

on pain and help her sleep . . . so that she isn't so tired and,

hopefully, can get some of her stamina back," but opines that,

"until that is accomplished, which may take months, she is

clearly disabled not only from work, but from being able to take

care of her household." The IME therefore expressly relates the

objective manifestations of Denmark's condition--the pain Dr.

Schur observed in various points throughout her body--to her

inability to work.20
20
The lead opinion devalues Dr. Schur's report based on its
view that it does not speak to the current level of Denmark's
fatigue or its effect on her ability to do her job. But, again,
the report states that Denmark's fatigue has left her unable to
work or to care for her household. I do not know how the report
could have described the level of fatigue any more clearly, or

-59-
 In light of this diagnosis, our decision in Boardman

v. Prudential Ins. Co. of Am., 337 F.3d 9 (1st Cir. 2003), does

not support the outcome reached by the majority. In Boardman,

we upheld the insurer's denial of long-term disability benefits

to the claimant based on two factors: "(1) the absence of

adequate evidence in [her] medical records indicating that [her]

condition imposed limitation on her ability to perform the

material and substantial duties of her own occupation . . . and

(2) the evidence to the contrary provided in the [IME] reports .

. . ." Id. at 17. Here, in stark contrast, the IME

unequivocally concludes, based on objective observations, that

Denmark is disabled, and that conclusion squares with the

opinions of her treating physicians.

Liberty's contrary finding, then, much more closely

resembles the decision we overturned in Cook. There, as here,

the physician who had examined the claimant opined that she was

disabled from fatigue,21 but Liberty relied on purported defects

in the opinion--identified by an in-house analyst who had not

examined the claimant--to conclude otherwise. 320 F.3d at 20-

23. In criticizing this approach, we suggested that an insurer

who doubts a treating doctor's diagnosis ordinarily should seek

a second opinion, either in the form of peer review or an IME.

pertinently.
21
The claimant in Cook suffered from asthma, chronic fatigue
syndrome, and fibromyalgia. 320 F.3d at 15.

-60-
Id. at 23. Here, of course, the IME confirmed the diagnoses of

Denmark's treating physicians. So Liberty reached the contrary

conclusion based on purported defects in the IME identified by

an in-house analyst who had not examined Denmark--using, in

essence, the same approach we took such a dim view of in Cook.22

Furthermore, Liberty's efforts to discount the IME do

not hold up, even under our deferential standard of review. In

seeking to diminish Dr. Schur's conclusion that Denmark is

disabled, Liberty's in-house nurse argued that "since an IME

provides an examination on a specific date in time, its scope is

limited on that inferences to the status of conditions 6 months

previous cannot be accurately assessed." Under this logic,

however, a medical examination--which, by its nature, always

occurs "on a specific date in time"--can never "accurately

assess" the patient's condition prior to having walked into the

examination room. Either that premise is demonstrably false, or

a patient is subjected to a pointless exercise every time she

undergoes an IME. Cf. Cook, 320 F.3d at 23. Liberty's reasons

for spurning Dr. Schur's opinion here, then, are no more
22
Liberty also subjected the IME to peer review by Dr.
Bomalaski, who concluded that "[t]he clinical medical evidence does
not clearly support severe impairment because as noted, the
diagnosis of fibromyalgia remains in question . . . ." As Judge
Lipez notes, this conclusion is irrelevant because Liberty has
never contested the diagnosis itself. The closest Dr. Bomalaski's
report comes to supporting Liberty's position that Denmark is not
disabled is its observation that "[l]imitations of ability to
function are difficult to assess . . . ." The report therefore
does little to bolster Liberty's decision.

-61-
supportable than its reasons for spurning the treating doctor's

opinion in Cook.23

I recognize, as we did in Cook, the possibility of

"cases where the opinion of the claimant's treating physician

can be rejected without reliance on any contradictory medical

evidence developed by the plan administrator." 320 F.3d at 23.

But rejecting the opinions of the claimant's treating

physicians, and the corroborating view of an independent medical

examiner, ought to require a considerably stronger justification

than the one relied on here.24 Accordingly, I would overturn

Liberty's denial of long-term disability benefits to Denmark,

even under our present standard of review.

23
The lead opinion finds Liberty's criticism of the IME "not
unreasonable given that Dr. Schur himself had limited his
evaluation to 'the time being.'" While Dr. Schur's report indeed
contains the phrase "at least for the time being," it is clearly
not intended to limit Dr. Schur's opinion retrospectively, but
prospectively: in both the paragraph immediately preceding the
phrase and the sentence immediately following it, Dr. Schur
suggests interventions for Denmark that "hopefully will improve
matters, so that she can get her stamina back and get back to
work." Accordingly, I do not see how the phrase "for the time
being" can reasonably be read to support Liberty's exceedingly
narrow view of Dr. Schur's opinion.
24
While Liberty also relied on its surveillance of Denmark to
support its decision, I agree with the district court that this
evidence does not speak to whether she can consistently work full
days as her job requires. Denmark was observed leaving her house
on only two of the four days she was being watched and, even then,
was out for only a few hours.

-62-