UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 10-2124
STATIA SCOTT,
Plaintiff - Appellee,
v.
EATON CORPORATION LONG TERM DISABILITY PLAN,
Defendant - Appellant.
Appeal from the United States District Court for the District of
South Carolina, at Anderson. Henry M. Herlong, Jr., Senior
District Judge. (8:09-cv-02572-HMH)
Argued: October 27, 2011 Decided: November 21, 2011
Before MOTZ, KING, and DUNCAN, Circuit Judges.
Reversed by unpublished per curiam opinion.
ARGUED: Anna K. Raske, BENESCH, FRIEDLANDER, COPLAN & ARONOFF,
LLP, Cleveland, Ohio, for Appellant. Robert Edward Hoskins,
FOSTER LAW FIRM, LLP, Greenville, South Carolina, for Appellee.
ON BRIEF: Jeffrey D. Zimon, BENESCH, FRIEDLANDER, COPLAN &
ARONOFF, LLP, Cleveland, Ohio, for Appellant.
Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:
This case arises from the revocation by appellant Eaton
Corporation Long Term Disability Plan (“Eaton”) of long-term
disability (“LTD”) benefits provided to appellee Statia Scott.
The district court reversed Eaton’s decision and awarded LTD
benefits to Scott. Because we find that Eaton’s decision was
not an abuse of discretion, we reverse.
I.
A.
Eaton is the administrator of a LTD benefit plan for the
employees of Eaton Corporation, a manufacturer of, inter alia,
electrical components. Benefits are funded by premiums paid by
the employees and by contributions from Eaton Corporation’s
general assets. This LTD plan is a “welfare plan” governed by
the Employee Retirement Income Security Act (“ERISA”). ERISA §
3(1). Eaton is the plan administrator and has discretion to
interpret and apply its provisions. Eaton has delegated claims
administration to Sedgwick Claims Management Service, Inc.
(“Sedgwick”).
To be eligible for benefits under the plan, a beneficiary
must have a covered disability and must be under the continuous
care of a physician who verifies the beneficiary’s disability to
the satisfaction of the claims administrator. As relevant to
2
this appeal, a covered disability is an injury that renders the
beneficiary “totally and continuously unable to engage in any
occupation or perform any work . . . for which [she is], or may
become, reasonably well fit by reason of education, training, or
experience.” J.A. 67. After an initial determination of
eligibility, the claims administrator performs periodic
evaluations to revalidate eligibility. The burden is on the
beneficiary to show at the initial determination stage and at
subsequent revalidations that she is disabled. LTD benefits end
on “[t]he first day for which [the beneficiary is] unable to
provide satisfactory evidence of a covered disability.” J.A.
71. The disability must be shown at all times by “objective
findings,” i.e., “those that can be observed by [a] physician
through objective means, not from [the beneficiary’s]
description of the symptoms.” J.A. 73. In addition, for those
claiming to be disabled due to mental illness, they must be
under the continuous care of a psychologist or psychiatrist.
B.
Because our review is very fact-dependent, we lay out the
history of Scott’s disability and treatment in some detail.
Eaton Corporation employed Scott for approximately 17 months.
In 1998, Scott stopped working because of chronic pain in her
right wrist and arm. The chronic pain appears to be the result
of a childhood injury that healed improperly and that was
3
aggravated by an injury at work. Eaton initially granted Scott
benefits in 1998 based on this right arm pain.
In August 2003, Scott had surgery to address her right arm
pain. Two months after surgery, her orthopedist, Dr. Timms,
noted “no wrist misalignment,” and although Scott complained of
crepitus 1 in her wrist, Dr. Timms saw “no real signs of anything
going wrong” and opined, “overall things look good.” J.A. 437.
Three months after surgery, Dr. Timms noted that Scott’s wrist
had “loosened up nicely;” that she was not experiencing “a lot
of pain or swelling;” and that her range of motion was “quite
improved.” J.A. 442. Five months after surgery, however, Scott
complained that the pain in her wrist had returned and that she
was experiencing “decreased sensation and shooting pains.” J.A.
443. Dr. Timms could not pinpoint the cause of the symptoms,
noting that, “she is just having generalized pain. Again, there
is no swelling. Incisions are clean. Motion appears to be
full.” J.A. 444.
Scott’s LTD benefits were terminated in 2004 based upon
“insufficient documentation of a functional impairment that
would preclude [Scott] from the job duties of any occupation.”
J.A. 119. Scott appealed this termination and Eaton reinstated
1
Crepitus is “a palpable or audible grinding.” The Merck
Manual of Diagnosis and Therapy 285 (Robert S. Porter et al.
eds., 19th ed. 2011).
4
her benefits after an independent medical evaluation. This
independent medical evaluation noted that Scott’s symptoms were
possibly caused by Reflex Sympathetic Dystrophy (“RSD”) 2
secondary to her 2003 surgery.
In 2005, Scott applied for Social Security disability
benefits. The Social Security Administration denied Scott
benefits because it concluded that she was not disabled. 3 Also
in 2005, Scott presented to Dr. Riley--her primary physician--
with swelling in her feet and ankles. Later, a blood test
showed elevated levels of Rheumatoid Factor (“RF”). 4 Based upon
these symptoms and Scott’s family history of Rheumatoid
Arthritis (“RA”), Dr. Riley suggested that Scott see a
rheumatologist. Scott declined. Nevertheless, Dr. Riley
eventually diagnosed Scott with RA.
In 2006, as part of a periodic revalidation of her
eligibility for benefits, Eaton required Scott to undergo an
2
RSD, also known as “complex regional pain syndrome,” is a
neurological condition that “typically follows an injury,” and
is characterized by various degrees of burning pain, excessive
sweating, swelling, and sensitivity to touch. The Merck Manual
of Diagnosis and Therapy, supra, at 1633-34.
3
This was Scott’s second such denial. Scott was previously
denied Social Security disability benefits because she had not
yet paid enough into the system to become eligible.
4
RFs are antibodies that are present in about 70 percent of
patients with RA. The Merck Manual of Diagnosis and Therapy,
supra, at 333.
5
independent medical evaluation by a rheumatologist. The
rheumatologist, Dr. Stephenson, stated, Scott’s “[p]revious
diagnosis of RSD and as well as RA are not supported by my
examination. . . . I don’t think the RA is currently a clinical
factor.” J.A. 510. Dr. Stephenson also believed Scott was
being overmedicated. He concluded that Scott’s chronic pain was
most likely caused by her depression and anxiety. 5 Nonetheless,
Dr. Stephenson believed Scott was totally disabled based on her
pain and mental illness.
Revalidation of Scott’s disability began again in 2007. As
part of this revalidation, Sedgwick asked Scott’s treating
physicians to complete questionnaires and submit medical notes
from recent examinations.
In his medical notes from May 1, 2007, Dr. Riley indicated
that Scott’s RA symptoms were worsening. Dr. Riley indicated
that Scott told him that she has not seen a rheumatologist. It
is unclear if Dr. Riley was aware of Dr. Stephenson’s
examination of Scott in 2006 and his conclusion that Scott was
5
Dr. Stephenson did not discuss Scott’s mental illness in-
depth. The first indication in the record that Scott suffers
from mental illness is a 2004 letter from Dr. Riley noting that
Scott suffers from anxiety and is taking Valium. It appears Dr.
Riley first prescribed Scott an antidepressant, Lexapro, in
January of 2007.
6
not suffering from RA. Dr. Riley also noted that Scott was on
pain medication, “which she tries to take sparingly.” J.A. 532. 6
In a questionnaire from Sedgwick completed by Dr. Riley on
September 22, 2007, Dr. Riley concluded that Scott was totally
disabled due to her anxiety and depression and pain in her right
arm. Dr. Riley made no mention of Scott’s previous diagnoses of
RSD and RA. Dr. Riley also indicated for the first time that
the medication Scott was taking made it difficult for her to
concentrate.
In medical notes from October 4, 2007, Dr. Riley concluded
that Scott “is permanently disabled secondary to” RA and RSD.
J.A. 547. Dr. Riley also indicated that Scott had been seeing
Dr. Sida, a neurologist, for treatment.
The record shows that Dr. Sida examined Scott multiple
times. In notes from Dr. Sida, dated October 3, 2007, he
observed that Scott was “alert and oriented” and had “normal
language and attention.” J.A. 545. Dr. Sida also noted that
Scott could perform serial seven calculations 7 and that her
memory was normal. X-rays ordered by Dr. Sida indicated that
Scott was suffering from “degenerative facet joint arthritis of
6
At the time of the most recent review of her eligibility,
Scott was taking Mobic and Percocet.
7
A test for mental function, where a patient is asked to
count down from 100 by sevens.
7
mild degree . . . and mild osteoarthritis.” J.A. 248. In notes
from his November 7, 2007, examination of Scott, Dr. Sida
stated, he could not “find a neuropathic cause for her
persistent pain.” J.A. 255. Dr. Sida also noted that Scott
“has been told she has rheumatoid arthritis but no one is
treating for this.” Id.
Between December 13, 2007, and March 25, 2008, it appears
from the record that Dr. Riley examined Scott three times. Dr.
Riley’s medical notes indicate that on December 13, 2007, Scott
came “[i]n for follow up on rheumatoid arthritis.” J.A. 259.
Dr. Riley ordered a blood test, which showed Scott had an
elevated RF level.
Scott was examined by Dr. Riley again on March 7, 2008. On
an examination sheet under “Assessment:,” Dr. Riley wrote,
“RSD.” J.A. 266. Under “Plan:,” Dr. Riley wrote, “Still unable
to work.” Id. No mention is made of RA. In a Sedgwick
questionnaire completed by Dr. Riley on March 17, 2008, he noted
for the first time that side effects from Scott’s pain
medication “interfere[] with her ability to work,” J.A. 264, but
he did not describe what this interference was or provide
objective findings to substantiate such interference.
After her next exam--on March 25, 2008--on an examination
sheet under “Assessment:,” Dr. Riley wrote, “Rheumatoid
arthritis.” J.A. 268. On the sheet, Dr. Riley also checked the
8
box next to “edema” and noted that Scott’s hands and feet were
“puffy.”
Sedgwick also asked Dr. Riley to fill out a physical
capacity evaluation (“PCE”) for Scott. On the PCE, Dr. Riley
indicated that Scott was capable of sitting, standing, walking,
speaking, and viewing a computer screen for 8 hours a day.
Despite this, on the same PCE, Riley concluded that Scott could
do zero hours of sedentary work per day. To address this
apparent inconsistency, a Sedgwick representative contacted Dr.
Riley by phone. The Sedgwick representative reported that Dr.
Riley said that Scott was capable of sedentary work.
To summarize, Scott had, at various times, been diagnosed
with four potentially disabling conditions, with conflicting
evidence as to each. Two doctors had diagnosed Scott with RSD--
a neurological condition--but Dr. Stephenson rejected this
diagnosis and Scott’s treating neurologist, Dr. Sida, could find
no neurological cause for her pain. Dr. Riley had diagnosed
Scott with RA; however, Dr. Stephenson, a rheumatologist,
rejected this diagnosis, and Scott had never seen a
rheumatologist for treatment. Two doctors also diagnosed Scott
as suffering from mental illness; Scott, however, has never been
under the continuous care of a psychologist or psychiatrist, as
required by the plan. Dr. Riley also concluded that the side
effects from Scott’s pain medication would interfere with her
9
ability to work, but no objective findings exist in the record
to substantiate such interference. Also, Dr. Riley previously
noted that Scott tried to take her medication “sparingly,” and
Dr. Sida concluded that Scott had normal cognitive functioning.
Finally, as to the cumulative effect of Scott’s ailments on her
ability to work, Dr. Riley came to conflicting conclusions on
the PCE and, when asked to clarify, stated that Scott could
perform sedentary work.
C.
Sedgwick submitted the above information along with Scott’s
medical records to a specialist in internal medicine and
rheumatology, Dr. Lumpkins. Dr. Lumpkins, in a July 23, 2008,
report, concluded that Scott could perform sedentary work.
First, Dr. Lumpkins noted that Scott’s primary physician, Dr.
Riley, had concluded that Scott could perform sedentary work.
Regarding Scott’s RSD, Dr. Lumpkins concluded that Scott could
perform work so long as it did not entail “repetitive fine motor
manipulation.” J.A. 575. As to concerns regarding potential
side effects of Scott’s pain medication, Lumpkin concluded that
one medication Scott was taking, Mobic, “would not be expected
to influence [Scott’s] functional ability in a sedentary . . .
work environment.” J.A. 578. As to another medication,
Percocet, Lumpkin concluded that its side effects would limit
Scott from “working at unprotected heights, driving a company
10
vehicle, [and] working with heavy machinery or safety sensitive
materials.” Id. As to Dr. Riley’s diagnosis of RA, Dr.
Lumpkins noted that while there was some objective evidence that
Scott has some sort of arthritis, it was insufficient to
conclude that Scott had RA. Based on Dr. Lumpkins’s report, on
October 7, 2008, Sedgwick notified Scott that her LTD benefits
would cease starting November 1, 2008.
Scott sought review of this decision pursuant to plan
procedure on October 25, 2008. On November 7, 2008, Scott
provided Sedgwick with a letter from Dr. Riley, dated October
11, 2008, in which he again asserted that Scott was totally
disabled and could perform no work. In the letter, Dr. Riley
referred to “the side effects of the chronic medication that
[Scott] takes,” J.A. 552, but did not indicate what those side
effects were. The letter contained no objective findings and
did not attempt to explain his previous inconsistent conclusions
on the PCE or his later statement that Scott could perform
sedentary work. Dr. Riley also submitted additional information
to Sedgwick in December 2008 and early 2009. This information
showed that Dr. Riley had not seen Scott in person from March of
2008 until after Eaton revoked her benefits in October of that
year. The information also indicated that in March of 2009, Dr.
Riley ordered a bone scan for Scott to check for RA. The bone
scan revealed no obvious signs of RA.
11
On review, Sedgwick engaged three physicians (a physical
medicine specialist, a psychiatry and neurology specialist, and
an internal medicine and rheumatology specialist) to re-evaluate
Scott’s medical records and speak with Dr. Riley. All three
physicians concluded that Scott was able to work. Based on
these reports, Sedgwick reaffirmed its original decision.
Scott appealed this decision to Eaton, pursuant to plan
procedure. Upon her appeal, Eaton provided her records to three
anonymous physicians (a specialist in neurology, a specialist in
psychiatry, and a specialist in physical medicine). These
physicians all concluded that Scott could work. Eaton denied
Scott’s appeal on September 28, 2009. J.A. 86. In its denial
letter, Eaton noted that the only physician since 2007 to
conclude Scott was disabled was Dr. Riley. Eaton discounted Dr.
Riley’s conclusions based on the various inconsistencies among
his diagnoses and his lack of objective findings. Eaton
concluded that the weakness of Dr. Riley’s conclusions, the
dearth of supporting objective evidence, and the unanimous
contrary view of the seven reviewing physicians, noted above,
was enough to support the original revocation of Scott’s LTD
benefits.
D.
On October 9, 2009, Scott sued Eaton, seeking reinstatement
of her benefits. On February 11, 2010, the district court
12
stayed the action to permit Eaton to review an affidavit by Dr.
Riley. 8 Eaton agreed to reconsider its revocation in light of
this affidavit. After review of the affidavit, the same
anonymous reviewing physicians who previously concluded Scott
could work again came to the same conclusion. Based on this,
Eaton sustained the revocation. As to Dr. Riley’s assertion
that Scott’s medication will prevent her from working, Eaton
noted:
[A]lthough Dr. Riley expresses concern with respect to
Ms. Scott’s ability to perform sedentary work, given
the medications she uses, his office notes and records
do not evidence the cognitive changes that he told the
independent physician reviewer may impact her
functional capacity.
J.A. 97.
The parties then moved for judgment pursuant to the
district court’s “Specialized Case Management Order for ERISA
benefits cases.” J.A. 1249. The district court found Eaton had
abused its discretion in two ways. First, the district court
concluded that Eaton acted unreasonably when, on review of its
initial determination, it failed to give adequate weight to Dr.
Riley’s letter of October, 17, 2008: “Instead of meaningfully
8
The affidavit was undated and not notarized, but appears
to be from sometime in 2009. Scott’s subjective complaints were
listed and Riley averred that Scott’s “subjective complaints and
limitations are consistent with her objectively diagnosed
medical conditions,” J.A. 598, but the affidavit listed no
objective findings. Scott’s medical conditions were noted as
RSD and RA.
13
discussing the impact that Dr. Riley’s subsequent letter had on
the conclusion that Scott could perform sedentary work, Eaton
turned to hired peer reviewers in an attempt to reconcile its
initial determination that Scott no longer had a covered
disability.” J.A. 1257-58. Second, the district court
concluded that Eaton violated terms of the plan when it “failed
to adequately address the impact of Scott’s medication regime on
her ability to work.” J.A. 1259. The district court stated:
“Eaton’s reviewers collectively failed to evaluate and consider
the disabling side effects of Scott’s narcotic medication. By
failing to consider the side effects of Scott’s pain medication,
the Plan Administrator and its reviewers have disregarded the
terms of the Plan.” J.A. 1261-62. The district court
accordingly reversed Eaton’s revocation and awarded Scott LTD
benefits. Eaton appealed.
II.
On appeal, Eaton argues that the district court erred when
it reversed Eaton’s decision to end Scott’s LTD benefits,
because Eaton’s decision-making process was sound and its
ultimate decision was supported by substantial evidence. We
agree.
Because the LTD plan granted Eaton discretionary authority
to determine eligibility for benefits, “the exercise of assigned
14
discretion is reviewed for abuse of discretion.” Evans v. Eaton
Corp. LTD Plan, 514 F.3d 315, 321 (4th Cir. 2008). “[T]he
district court functions in this context as a deferential
reviewing court with respect to the [administrator’s] decision,
and we review the district court’s decision de novo, employing
the same standards applied by the district court in reviewing
the [administrator’s] decision.” Id. (internal quotations
omitted). In Evans, we provided a helpful and in-depth
discussion of the abuse of discretion standard in ERISA cases,
beginning with the following principle: “At its immovable core,
the abuse of discretion standard requires a reviewing court to
show enough deference to a primary decision-maker’s judgment
that the court does not reverse merely because it would have
come to a different result in the first instance.” Id. at 322.
It is also important to keep in mind that “the abuse of
discretion standard . . . like other such standards, bites
mainly in close cases,” and in a close case, a court “should .
. . acknowledge[] the essential equipoise and stay[] its hand.”
Id. at 325.
Particularly as to ERISA, we advised, a court should “not
disturb an ERISA administrator’s discretionary decision if it is
reasonable,” and “an administrator’s decision is reasonable if
it is the result of a deliberate, principled reasoning process
and if it is supported by substantial evidence.” Id. at 322
15
(internal quotations omitted). In Donovan v. Eaton Corp. LTD
Plan, 462 F.3d 321, 329 (4th Cir. 2006), this court held an
administrator’s reasoning process to be unprincipled when the
administrator ignored pro-beneficiary evidence. As we have
noted, “what rightly offended the Donovan court was not [the
administrator’s] selectivity (which is part of a plan
administrator's job), but its ‘wholesale disregard’ of evidence
in the claimant’s favor.” Evans, 514 F.3d at 326 (quoting
Donovan, 462 F.3d at 329).
Applying these principles to the facts of this case, we
conclude that Eaton’s decision was reasonable. First, the
district court was incorrect that Eaton disregarded Dr. Riley’s
October 2008 letter. The record is clear that Eaton
thoughtfully considered the views of Dr. Riley. Eaton and its
reviewers discussed Dr. Riley’s views, but gave them little
weight because of their inconsistency and the fact that many of
them were not based on objective evidence. Furthermore, Dr.
Riley’s conclusions--those of a well-meaning family doctor--were
contradicted by several specialists, who gave no indication of
unreliability. It was not unreasonable to discount Dr. Riley’s
conclusions in these circumstances. See Black & Decker
Disability Plan v. Nord, 538 U.S. 822, 834 (2003) (“[C]ourts
[may not] impose on plan administrators a discrete burden of
explanation when they credit reliable evidence that conflicts
16
with a treating physician’s evaluation.”); see also id. at 832
(noting that a treating physician’s conclusion may be questioned
because “a treating physician, in a close case, may favor a
finding of ‘disabled’ ”).
Second, the district court was incorrect that Eaton ignored
potential side effects of Scott’s medication in concluding that
she was able to work. Dr. Lumpkins, in reviewing Scott’s record
for Sedgwick, noted that Scott can do sedentary work but that
side effects of Percocet would keep Scott from “working at
unprotected heights, driving a company vehicle, [and] working
with heavy machinery or safety sensitive materials.” J.A. 573.
Then, in the final cancellation letter, Eaton stated, “We also
note that although Dr. Riley expresses concern with respect to
Ms. Scott's ability to perform sedentary work given the
medications she uses, his office notes and records do not
evidence the cognitive changes that he told the independent
physician reviewer may impact her functional capacity.” J.A.
92. This is sufficient consideration, especially considering
the lack of objective evidence supporting the existence of such
side effects. See Evans, 514 F.3d at 326 (noting approvingly
that “[t]he benefits cancellation letter . . . gave due regard
to the evidence in [the beneficiary’s] favor”).
Finally, the district court erred in reversing Eaton’s
decision, which was based upon--at best--conflicting evidence.
17
In favor of a finding of disability were only Scott’s subjective
complaints, the inconsistent conclusions of Scott’s primary
physician, and some objective evidence of RA. Against a finding
of disability were not only the unanimous assessments by peer
reviewers, but also the following facts: (1) Dr. Riley’s
diagnosis of RA has never been substantiated by a rheumatologist
and a bone scan revealed no obvious signs of RA; (2) Dr. Riley’s
diagnosis of RSD, a neurological condition, was refuted by
Scott’s treating neurologist, Dr. Sida, who found no
neurological cause of her pain; and (3) there is no objective
evidence Scott suffers side effects from her medication and
Scott had been observed by Dr. Sida as alert and oriented. 9
Based on this evidence, Eaton’s decision to end Scott’s benefits
was not unreasonable. See Elliot v. Sara Lee Corp., 190 F.3d
601, 606 (4th Cir. 1999) (noting that an administrator does not
abuse its discretion by denying benefits if the record contains
“conflicting medical reports”).
9
Scott has not argued that her mental illness entitled her
to LTD benefits.
18
III.
For the foregoing reasons, the holding of the district
court is
REVERSED.
19