United States Court of Appeals
For the First Circuit
No. 05-1416
THOMAS BUFFONGE,
Plaintiff, Appellant,
v.
THE PRUDENTIAL INSURANCE CO. OF AMERICA;
GETRONICS WANG CO., LLC,
Defendants, Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Nathaniel M. Gorton, U.S. District Judge]
Before
Lynch and Howard, Circuit Judges,
and Restani,* Judge.
Mitchell J. Notis, with whom Law Office of Mitchell J. Notis
was on brief, for appellant.
William T. Bogaert, with whom Wilson, Elser, Moskowitz,
Edelman & Dicker LLP was on brief, for appellees.
October 14, 2005
*
Chief Judge of the United States Court of International Trade,
sitting by designation.
LYNCH, Circuit Judge. We have not previously addressed
the issue raised in this ERISA appeal, which comes to us from the
district court's entry of summary judgment concluding that a claims
administrator's denial of long-term disability benefits was not
arbitrary and capricious. The plaintiff appeals and asserts that
his ERISA rights were violated because the administrator relied on
material mischaracterizations of the medical record.
The claims administrator, Prudential Insurance Company of
America, and co-appellee Getronics Wang Co., LLC, the employer,
stated that they based their denial of long-term disability
benefits to former Wang employee Thomas Buffonge on four pieces of
evidence. The denial rested heavily, but not exclusively, on the
opinion of Dr. Jonathan Rutchik, a consultant hired by Prudential
who did not examine Buffonge but who reviewed Buffonge's medical
history and concluded that there was a "consensus" that Buffonge
could perform sedentary duties, such as keyboard work. In fact,
the medical records showed that no such consensus existed, and, in
other ways, Dr. Rutchik's report materially mischaracterized
Buffonge's medical history. Prudential also rested its benefits
denial on the report of another physician, but that report
supported the grant, not the denial, of benefits. Further,
Buffonge's medical records, on which Prudential also purportedly
relied, demonstrated the two points made above.
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We conclude that the process used was materially tainted,
and the taint was sufficiently prejudicial, so as to render the
process arbitrary. We remand to the district court to remand to
the claims administrator for a new review of Buffonge's claim. We
emphasize that we do not reach the issue of whether Buffonge was
disabled.
I.
We recount the record which was before the claims
administrator. See Liston v. Unum Corp. Officer Severance Plan,
330 F.3d 19, 24 (1st Cir. 2003) ("Where . . . review is under the
arbitrariness standard, the ordinary question is whether the
administrator's action on the record before him was
unreasonable.").
A. Buffonge's Medical History
Buffonge began working for Wang1 in 1983. At that time,
he became a participant in Wang's employee benefits plan, which
included a long-term disability benefits program; Wang contracted
with Prudential to provide the program, and Prudential serves as
the program's claims administrator. The plan provides that an
employee is eligible for long-term disability benefits after he or
she has been "totally disabled" for 26 weeks. "Total disability"
exists when the following conditions are met:
1
At that time, the employer was Wang Laboratories Inc. Getronics
Wang Co., LLC has since acquired the business in relevant part.
For the sake of simplicity, we refer to the employer as "Wang."
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(1) Due to Sickness or accidental injury, both
of these are true:
(a) You are not able to perform, for
wage or profit, the material and
substantial duties of your
occupation.
(b) After the Initial Duration of a
period of Total Disability, you are
not able to perform for wage or
profit the material and substantial
duties of any job for which you are
reasonably fitted by your education,
training or experience. . . .
(2) You are not working at any job for wage or
profit.
(3) You are under the regular care of a
Doctor.
In 1993, Buffonge was a "field logistics coordinator" at
Wang. The job involved helping track and ship computer parts to
different offices across the country; it required some lifting as
well as computer and other desk work. In June 1993, Buffonge
injured his neck and back while moving computer parts at the
office. His discomfort worsened as the weeks passed, and, by July,
Buffonge was reporting severe pain in his chest, radiating into his
left arm and elbow. On July 28, 1993, examining physician Dr.
Wendell Pierce diagnosed "cervical disc disease with left
radiculitis" and wrote that Buffonge was "in a great degree of
discomfort."
Buffonge took leave from work on temporary disability
from August 1993 until April 1994. He then returned to work for
one week, but suffered pain while driving to and from the office,
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and so took leave again until early November 1994. Buffonge was
treated repeatedly during this period for continuing pain in his
neck, back, and chest. In August 1994, Dr. Stephen Lipson examined
Buffonge on referral from Dr. James Bayley, one of Buffonge's
regular physicians. Dr. Lipson diagnosed Buffonge as suffering
from at least one and possibly two herniated discs; he described
Buffonge's pain as "worse with sitting, standing, and lifting,
better with walking and better with bedrest."
Buffonge also saw Dr. David Duhme, a specialist in
internal medicine at Harvard University Health Services, who had
served as Buffonge's main treating physician since soon after his
initial injury. In a report dated July 20, 1994, Dr. Duhme stated
that he "ha[d] been seeing [Buffonge] frequently" and had referred
him for orthopedic evaluation. He stated that Buffonge was
"frustrated at his repeated failures to return to work without
aggravating the pain."
Buffonge's personnel records show that he had been placed
on modified duty perhaps as early as the summer of 1993:
thereafter, while he still had the mostly desk-bound duties of a
"field logistics coordinator," those duties were altered to avoid
regular lifting and other physical labor.2 Despite these
2
Several of Prudential's letters denying Buffonge benefits stated
that he had been placed on "light duty" after his initial injury;
one stated that he was "answering the telephones" at a desk job.
These accommodations are confirmed in an August 1993 report by Dr.
Duhme stating that Buffonge had told him he "now can do [his job]
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accommodations, Buffonge's November 1994 return to Wang lasted less
than one month. On December 5, 1994, Buffonge visited Dr. Duhme
for a follow-up examination. Dr. Duhme's report stated that
Buffonge "tried to return to work but now is out of work again due
to neck pain radiating to the [left] arm with numbness in the
[left] fingers . . . . [H]e would stand all day at work because the
pain was worse sitting." He diagnosed Buffonge as suffering from
both cervical and lumbar disc disease.
In January 1995, Buffonge attempted another return to
work, but his attendance during the months that followed was
sporadic at best: he was unable to work a full week, and even when
he was at work he reported an intermittent inability to concentrate
due to episodes of severe pain. In September 1995, Buffonge was
examined by Dr. John F. Duff at the request of Wang's lawyers; Duff
reported that Buffonge "has headaches . . . and he says that he has
trouble driving and by the end of the day, his low back gets sore
and he moves from different positions but apparently continues to
have the complaints." Buffonge also told Dr. Duff that he "has
chest pains when he sits too long and now gets low back pain." Dr.
Duff concluded that despite his pain, Buffonge should have been
without any lifting." Buffonge's job involved "occasional bending,
squatting, or reaching" and "very infrequent lifting of packages
that are less than 10 pounds," according to the 1997 letter in
which Prudential denied Buffonge's final administrative appeal.
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able to perform a full day's work so long as he shifted positions
during the work day and avoided heavy lifting.
By October 6, 1995, when he saw Dr. Duhme again, Buffonge
was reporting serious pain, especially late in the day and late in
the week. Dr. Duhme examined him that day; in the diagnosis
section of his report he again wrote "cervical disc disease" and
"lumbar disc disease," and this time added that the latter was
"becoming chronic pain." Dr. Duhme concluded that Buffonge needed
to take some time off of work. Later in October, Buffonge tried to
go to work once again, but he experienced such intense pain that he
"had to get down on his hands and knees" to control it. He visited
Duhme's office that afternoon; Duhme examined Buffonge and observed
in his report that "[w]hen he straightens up [from a bent-over
position] his whole right side of the back is bulging with muscle
spasm." He diagnosed "[e]xacerbation of lumbar intervertebral disc
disease with objective signs of pain and spasm."
On November 9, 1995, Buffonge again visited Dr. Duhme,
who reported that Buffonge "[u]sually . . . goes into work, tries
to work, and may have to stop and lie down. He does not think he
can carry on." Dr. Duhme assessed him as suffering from
"[i]ncreasing pain from cervical disc disease" and gave him a
letter authorizing "a medical leave of absence for a few weeks."
It is not clear precisely when Buffonge's leave began; however, the
record indicates that he missed work for five consecutive weeks in
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December 1995 and January 1996 while receiving treatment.
On January 18, 1996, a report by Dr. Frederick Mansfield
-- a spinal surgeon who examined Buffonge on referral from Dr.
Duhme -- noted that Buffonge had "developed worse pain in his head
and neck" two months earlier. Dr. Mansfield's report diagnosed
Buffonge with "[c]ervical and lumbar disc degeneration" and stated
that "[a]ny exercise or increased bending or twisting increases his
pain."
Buffonge returned to work yet again in late January 1996.
He had been attending physical therapy for some time as part of his
treatment, and on February 5, 1996, he was discharged from the
physical therapy program; the therapist wrote in his discharge
statement that he was "pain-free and [symptom]-free when last
seen." On February 15, however, Buffonge visited Dr. Duhme again
and reported that he had been suffering "severe pain." Dr. Duhme
assessed Buffonge as having "chronic neck pain due to cervical disc
disease" and reported that Buffonge was undergoing acupuncture and
would be in for follow-up evaluations. Six days later, on February
21, 1996, Buffonge left work because of the pain; it would prove to
be his last day on the job.
On June 5, 1996, Buffonge applied to Prudential for long-
term disability benefits. In the "Attending Physician" section of
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the application,3 Dr. Duhme reported his diagnosis that Buffonge
suffered from "chronic neck, shoulder and chest pain aggravated by
work," and that "Chronic Intervertebral Disc disease" resulted in
Buffonge's "long term disability." He reported that Buffonge had
tried many times to return to work and failed because "pain returns
whenever he returns to work for more than 2 wks." Asked whether
Buffonge could work part-time or in another type of job, Dr. Duhme
wrote, "don't know but probably not." Asked what work duties
Buffonge could perform, he wrote, "none."
Thereafter, Dr. Duhme saw Buffonge several times during
the spring and early summer. He reported each time that Buffonge
was in pain and was still disabled from working.
On June 27, 1996, another doctor examined Buffonge at
Prudential's request. Dr. William Kermond found that Buffonge
suffered from disc herniation and that physical examination
substantiated Buffonge's complaints of neck, arm, and chest pain.
Dr. Kermond also stated that Buffonge's injuries appeared causally
related to his 1993 accident at work. However, he concluded that
Buffonge could perform a desk job with phone and computer duties,
so long as he did not engage in heavy lifting or frequent overhead
work. As the record shows, Buffonge had been placed in exactly
3
This document is dated May 16, 1996, not June 5. However, from
the context it appears to be part of Buffonge's application for
long-term benefits, filled out by Dr. Duhme days in advance of the
application's submission.
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such a desk job as early as 1993, and his medical history
thereafter was described above.
B. The Denial of Benefits and Subsequent Appeals
Prudential examined Buffonge's medical records and denied
his claim for long-term disability benefits on September 20, 1996.
It noted that (1) the February 1996 physical therapy discharge
summary had deemed Buffonge pain-free, (2) Dr. Kermond had opined
that Buffonge could perform a desk job, and (3) Wang had made
physician-requested accommodations for Buffonge, including placing
him on light duty and permitting him to get up and walk around
every hour. It therefore concluded that there was "no objective
medical evidence in our file to support Total Disability."
Buffonge's employment was terminated on October 21,
1996.4 A month later, he administratively appealed Prudential's
benefits decision. Prudential upheld its denial in a letter dated
November 26, 1996. It stated that Buffonge did not qualify for
long-term disability because (1) according to Dr. Kermond, he could
perform a job involving desk work or light lifting as of June 1996,
4
The record is quite murky as to how and why this occurred. The
only available information (besides the fact of the termination) is
contained in an April 16, 1996 report by Dr. Duhme, which states:
"[Buffonge's] job at work has been eliminated. He is now out of
work on short term disability, but when he returns to work, he will
be given 30 days to find a new job in the company or be terminated
. . . ." We infer that after months passed and Buffonge did not
return to seek a new position, the company terminated his
employment. Whatever the details of the termination, however, they
do not affect our disposition of the case.
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and therefore (2) he had not been "totally disabled" for 26 weeks
after he left work in February 1996, as required under the plan's
definition of "total disability." Buffonge again appealed, and
Prudential affirmed its denial again, on the same grounds, in a
letter dated June 9, 1997.
On July 25, 1997, Buffonge filed his final administrative
appeal. This time he submitted additional reports and letters from
two physicians -- his primary physician, Dr. Duhme, and another
examining physician, Dr. Emilio Jacques -- in support of his claim.
Dr. Jacques, an orthopedist, examined Buffonge on April 9, June 11,
and July 9, 1997, and concluded each time that Buffonge was fully
disabled.5 His report of June 11, submitted with Buffonge's final
appeal, stated that Buffonge had told him "his pain is constant and
. . . he is only able to maintain activity for one to two hours."
Dr. Jacques concluded that Buffonge was "disabled and unable to
resume his occupation" and that the disability was causally related
to his 1993 work accident.
A follow-up examination by Dr. Jacques, conducted on
August 27, 1997, produced a report that Buffonge submitted as a
supplement to the appeal. In the August 27 report Dr. Jacques
detailed his findings on examination and then reiterated the
conclusion he had reached in all his earlier reports, stating:
5
Dr. Jacques used phrases ranging from "disabled" to "totally and
permanently disabled."
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"[I]n my opinion [Buffonge] is disabled from any gainful employment
at the present time." He also added:
In my opinion he is disabled from repetitive
bending, lifting, pushing, pulling and
carrying over fifteen to twenty pounds and he
is disabled from any repetitive squatting and
crawling positions.
The letter from Dr. Duhme, dated July 16, 1997, stated
the doctor's conclusion, based on numerous examinations of
Buffonge,6 that Buffonge was "completely disabled by chronic neck
pain due to cervical disc disease and low back pain due to lumbar
disc disease." He wrote that Buffonge was "unable to perform any
job that I can think of," that "[e]ither sustained activity or
sustained sitting will aggravate these pains," and that Buffonge
was "unable to devote his attentions to any work."
As part of its handling of Buffonge's appeal, Prudential
hired Dr. Jonathan Rutchik as a consultant. Rutchik spent a total
of three hours reviewing Buffonge's records and writing a report;
he did not examine Buffonge personally. In his report, dated
October 31, 1997, Dr. Rutchik wrote that "a consensus exists about
the fact that Mr. Boffonge [sic] can perform work tasks such as
sedentary duties and keyboard work." He therefore concluded that
6
It is unclear from the record whether Dr. Duhme examined
Buffonge on July 16 or, if not, how recently he had last examined
him. It is clear, however, that he was Buffonge's treating
physician and had examined him on numerous occasions from 1993
through 1996.
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Buffonge could have performed the largely desk-bound duties of his
job as a field logistics coordinator at Wang.
Dr. Rutchik reached this conclusion by parsing and in
part disregarding the findings of physicians who had examined
Buffonge. For example, he quoted Dr. Jacques' assessment that
Buffonge was "disabled from repetitive bending, lifting, pushing,
pulling and carrying over fifteen to twenty pounds" and followed it
with this comment: "Dr. Jacques was specific about the tasks that
Mr. Buffonge could not do and thus inferred that there were jobs he
could do." He thus ignored Dr. Jacques' statement in the same
report that Buffonge was "disabled from any gainful employment at
the present time." As to Dr. Duhme's conclusion, based on multiple
physical examinations and years of handling Buffonge's case, that
"[e]ither sustained activity or sustained sitting will aggravate
these pains," Dr. Rutchik wrote: "[t]his letter provided no
objective evidence that he has a condition where he could not do
sustained sitting or sustained activity." He did not address Dr.
Duhme's statements in the same letter that Buffonge was "unable to
perform any job that I can think of" and "unable to devote his
attentions to any work."
Prudential subsequently denied Buffonge's appeal in a
letter dated November 25, 1997. It stated:
[B]ased on a review of [Buffonge's] medical
file, the restrictions provided by Dr. Kermond
on June 26, 1996 and by Dr. Jacques on August
27, 1997 and the information provided by Dr.
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Rutchik, we do not find that Mr. Buffonge's
symptoms impaired him from performing the
duties of his occupation for the period
February 21, 1996 through August 20, 1996.
Therefore, we are upholding our decision to
deny Mr. Buffonge's claim . . . .
Prudential thus identified four bases for its denial: (1)
Buffonge's full medical file, (2) the Kermond report, (3) the
August 27 Jacques report, and (4) the Rutchik report.
II.
Buffonge filed suit on November 21, 2003 for review of
Prudential's denial pursuant to the Employee Retirement Income
Security Act (ERISA), 29 U.S.C. § 1001 et seq. Specifically,
Buffonge sought relief under Section 502, ERISA's civil enforcement
provision, which permits a participant in an ERISA-covered benefit
plan to sue "to recover benefits due" and "to enforce . . . rights"
under the plan. 29 U.S.C. § 1132(a)(1)(B).7 Buffonge argued that
Wang and Prudential violated the plan's terms and wrongfully denied
him long-term disability coverage; he sought a retroactive award of
benefits.8
The parties agreed that the Wang benefits plan confers
discretionary authority to the administrator to determine
7
Buffonge did not identify in his complaint which subsection of
Section 502 he was relying on. However, given his request for
retroactive benefits, subsection (a)(1)(B) is most directly
applicable.
8
At oral argument he requested a remand to the plan administrator
as an alternative remedy.
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eligibility for benefits. As the district court noted, that meant
Prudential's decision to deny Buffonge benefits was subject to
deference, to be reversed only if "arbitrary, capricious, or an
abuse of discretion." Gannon v. Metro. Life Ins. Co., 360 F.3d
211, 212-13 (1st Cir. 2004) (internal quotation marks omitted).
Under the "arbitrary and capricious" framework, as applied to ERISA
review, a decision will be upheld "if it is reasoned and supported
by substantial evidence." Id. at 213.
On October 20, 2004, Wang and Prudential moved for
summary judgment, arguing that their decision to deny benefits was
supported by substantial evidence and therefore was not arbitrary
or capricious. Buffonge filed an opposition and cross-motion for
summary judgment, arguing that Dr. Rutchik's report was skewed,
that Prudential relied on it in denying him benefits, and that as
a result Prudential did not give adequate weight to the conclusions
of his treating physicians. He did not argue that the conclusions
of his treating physicians deserved special status -- nor could he
have, given the Supreme Court's holding that "courts have no
warrant to require administrators automatically to accord special
weight to the opinions of a claimant's physician." Black & Decker
Disability Plan v. Nord, 538 U.S. 822, 834 (2003).
Applying the "arbitrary and capricious" standard, the
district court granted summary judgment for Wang and Prudential.
The court began by finding that, contrary to Buffonge's contention,
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Dr. Rutchik's report did not "ignore" or "intentionally
misinterpret" the conclusions of Dr. Duhme and Dr. Jacques. This
was so for two reasons. First, the court noted, Dr. Rutchik's
report contained multiple references to and repeated discussion of
the other doctors' reports. Second, the court in essence agreed
with Dr. Rutchik's parsing of the Jacques report.9 Since the
Rutchik report was valid, the court reasoned, Prudential had been
faced with a garden-variety conflicting-evidence situation, and the
case therefore fit within the rule that the existence of medical
evidence pointing in two directions does not render arbitrary or
capricious a plan administrator's decision to credit one viewpoint
or the other. See, e.g., Leahy v. Raytheon Co., 315 F.3d 11, 19
(1st Cir. 2002); Vlass v. Raytheon Employees Disability Trust, 244
F.3d 27, 32 (1st Cir. 2001); Gannon, 360 F.3d at 213. From this
grant of summary judgment Buffonge timely appealed.
9
It wrote: "The obvious implication of [Dr. Jacques' statement
listing activities Buffonge could not perform] is that plaintiff
could perform work so long as it did not involve those specific,
prohibited activities. Plaintiff attempts to diffuse Dr. Jacques'
statement by arguing that it was superceded by the Doctor's
eventual conclusion that Buffonge is 'disabled' but that
construction is unpersuasive because placing emphasis upon only the
latter statement would transform the former, more specific,
statement into meaningless surplusage."
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III.
Our review of the district court's grant of summary
judgment10 on the administrative record is de novo. Glista v. Unum
Life Ins. Co. of Am., 378 F.3d 113, 125 (1st Cir. 2004). We, like
the district court, must defer to the claims administrator's
benefits decision, disturbing it only if it was "arbitrary,
capricious, or an abuse of discretion." Gannon, 360 F.3d at 212-
13.11
Buffonge's argument focuses most heavily on the Rutchik
report. Buffonge argues that Dr. Rutchik distorted and
misrepresented the medical record, discounted conclusions by Dr.
Duhme and Dr. Jacques that Buffonge was fully disabled, and falsely
claimed a "consensus" that Buffonge could perform sedentary work.
10
"[I]n an ERISA case where review is based only on the
administrative record before the plan administrator and is an
ultimate conclusion as to disability to be drawn from the facts,
summary judgment is simply a vehicle for deciding the issue."
Orndorf v. Paul Revere Life Ins. Co., 404 F.3d 510, 517 (1st Cir.
2005). "This means the non-moving party is not entitled to the
usual inferences in its favor." Id.
11
This same standard has been described in other language. This
court has said, for example, that to pass "arbitrary and
capricious" review in the ERISA context a decision must be
"reasonable and supported by substantial evidence." Glista, 378
F.3d at 126. It also has said an administrator's decision is
arbitrary and capricious if "the insurer's eligibility
determination was unreasonable in light of the information
available to it," Pari-Fasano v. ITT Hartford Life & Accident Ins.
Co., 230 F.3d 415, 419 (1st Cir. 2000), and that "the arbitrary and
capricious standard is functionally equivalent to the abuse of
discretion standard," Wright v. R.R. Donnelley & Sons Co. Group
Benefits Plan, 402 F.3d 67, 74 n.3 (1st Cir. 2005).
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He argues that Prudential was intimately familiar with Buffonge's
medical records, and it therefore had to know that Dr. Rutchik was
misreading the Jacques and Duhme reports. He says Prudential's
heavy reliance on the Rutchik report, combined with its citation of
the Jacques report as support for its decision when the report
clearly cut the other way, renders the decision arbitrary and
capricious. We agree.
A. The Evidence
As previously noted, Prudential cited four pieces of
evidence in support of its final decision: (1) Buffonge's medical
file as a whole, (2) the Kermond report, (3) the August 27 Jacques
report, and (4) the Rutchik report. Of these four, at least two --
the Rutchik report and the Jacques report -- do not provide
reasoned support for Prudential's decision. We examine them in
turn.
1. The Rutchik report
Dr. Rutchik's report suffers from fundamental flaws. As
an initial matter, Dr. Rutchik's conclusion that "a consensus
exists" that Buffonge could perform a desk job is far from
accurate. Buffonge's medical record as of October 1997, the date
of Rutchik's report, contained at least three recent reports from
Dr. Jacques concluding just the opposite. Dr. Rutchik also had
before him the reports of Dr. Duhme, Buffonge's longtime treating
physician, who had repeatedly examined Buffonge and deemed him
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fully disabled, and who had stated that very summer that Buffonge
could not engage in "sustained sitting" or "devote his attentions
to any work." The Duhme reports alone preclude Dr. Rutchik's
finding of "a consensus" that Buffonge could perform desk work.
Similarly, his conclusion that there was no "objective" evidence to
support Dr. Duhme's conclusion is contradicted by Dr. Duhme's
personal observations on examination of Buffonge.
Dr. Rutchik's parsing of Dr. Jacques' August 27 report is
also, we think, not a fair reading. The Jacques report's explicit
statement that Buffonge was "disabled from any gainful employment"
(emphasis added) does not lend itself to the inference that "there
were jobs that [Buffonge] could do." This is especially true
considering that Dr. Jacques had filed at least three other reports
concluding that Buffonge was fully disabled.
The flaws in the Rutchik report are crucial to our
analysis for several reasons. The report's mischaracterizations
are material, and so it does not provide support for Prudential's
decision. Further, the fact that Prudential relied on the Rutchik
report at all brings into question the integrity of Prudential's
decision-making process in this case. Prudential had before it all
of Buffonge's records, and it had to be aware that the Rutchik
report misconstrued the conclusions of Buffonge's doctors.
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2. The August 27 Jacques report
Prudential also relied in part on "the restrictions
provided by . . . Dr. Jacques on August 27, 1997." But Dr.
Jacques' listing of physical activities Buffonge could not perform
did not create the inference that any activity not on the list was
one Buffonge could perform. Dr. Jacques began the crucial passage
by stating that Buffonge was "disabled from any gainful employment
at the present time." In light of that unequivocal statement, the
specifics that follow -- disabled from bending, lifting, etc. --
appear to us illustrative. It would make no sense for Dr. Jacques
to have stated that Buffonge was "disabled from any gainful
employment" and then in the very next sentence to have implied that
there was in fact gainful employment he could perform. Dr. Jacques
had also deemed Buffonge fully disabled in all of his other
reports; Prudential's reading of the exemplars as refuting Dr.
Jacques' consistent conclusion that Buffonge was fully disabled is
simply unreasonable. The August 27 report therefore does not
support Prudential's conclusion that Buffonge could perform
sedentary work.12
12
The district court agreed with Prudential's reading of the
Jacques report. However, we owe no deference to the district court
in this setting, see Glista, 378 F.3d at 125, and we simply
disagree with its analysis. In describing the Jacques report, the
district court wrote that Dr. Jacques first listed Buffonge's
specific disabilities and then wrote that he was "disabled." In
that context, it wrote, crediting only the latter statement "would
transform the former, more specific, statement into meaningless
surplusage." But in fact, Dr. Jacques wrote not simply that
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B. Analysis
In sum, we find that two of Prudential's four cited
pieces of evidence fail to provide reasoned support for its
conclusion; we also find that Prudential's willingness to rely on
a report it knew or should have known to be misleading, and its
mischaracterization of the conclusions of Dr. Jacques, raises
concerns about the fairness of its decision-making process. The
question is whether these flaws render the decision "arbitrary,
capricious, or an abuse of discretion." Gannon, 360 F.3d at 213.
We find that they do.
An administrator's decision must be "reasoned" to survive
"arbitrary and capricious" review, Gannon, 360 F.3d at 213, and we
cannot say that a decision relying on multiple pieces of faulty
evidence was "reasoned." See id. at 214-15 (finding that a claims
administrator "reasonably relied" on evidence only after confirming
that the evidence was "credible" and "reliable"). Further, in
giving content to "arbitrary and capricious" review in this
context, we find it useful to consider other ERISA provisions. Cf.
Global NAPs, Inc. v. Verizon New England, Inc., 396 F.3d 16, 24
(1st Cir. 2005) (noting that statutory subsections must be read in
light of structure and intent of the larger statute). Section 503
Jacques was "disabled," but "disabled from any gainful employment."
Further, he made this statement first and followed it with a list
of specifics, not the other way around. The passage is most
reasonably read as a categorical statement of total disability
followed by a list of examples.
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of ERISA, for example, states in relevant part that "every employee
benefit plan shall . . . afford a reasonable opportunity to any
participant whose claim for benefits has been denied for a full and
fair review by the appropriate named fiduciary of the decision
denying the claim." 29 U.S.C. § 1133 (emphasis added). While this
language refers to the benefit plan itself (and to procedural
safeguards), it also has some substantive content. One oft-quoted
decision has held that the "full and fair review" verbiage "must be
construed . . . to protect a plan participant from arbitrary or
unprincipled decision-making." Grossmuller v. Int'l Union, UAW,
Local 813, 715 F.2d 853, 857 (3d Cir. 1983). "Unprincipled
decision-making" of the sort forbidden by Section 503 is also
"arbitrary" (i.e. not "reasoned") within the meaning of our review
under Section 502. This does not mean that every perceived
unfairness rises to the level of arbitrariness.
We address Wang and Prudential's two main arguments to
the contrary. First, they argue, the decision was based on
substantial evidence, and must be upheld, because Prudential
considered not just the Rutchik report, but Buffonge's entire
medical record, some of which supports Prudential's decision. This
argument ignores the requirement that the decision must not be
arbitrary. Given the flaws present here, Prudential and Wang's
argument must boil down to a claim that an administrator's
arbitrary analysis should be ignored if the end result -- denial of
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benefits -- can nonetheless be saved by a single valid piece of
evidence that supports it. The argument would be stronger if the
evidence here compelled or virtually compelled a conclusion that
Buffonge was not disabled. That is not the case; Buffonge's claim
of disability is a serious one, and he has been prejudiced by the
process. We do not know what the administrator would have
determined if the process had been less flawed.
Second, Wang and Prudential reiterate the district
court's analysis, citing Vlass for the proposition that "[t]he
existence of contradictory evidence does not, in itself, make the
administrator's decision arbitrary." 244 F.3d at 30. The point is
true but not pertinent here.13
IV.
Having concluded that Prudential's decision fails
"arbitrary and capricious" review, we are left to consider the
remedy. There is no question that this court has the power to
remand to the claims administrator; it also has the power, in
appropriate cases, to award benefits to the disability claimant.14
13
As the Seventh Circuit said in a similar context, "[w]e
emphasize . . . that we neither determine whether [Buffonge] is
disabled, nor whether [Prudential's] decision was incorrect, rather
only that [Prudential] denied [Buffonge's] benefits in an arbitrary
and capricious manner." Quinn v. Blue Cross & Blue Shield Ass'n,
161 F.3d 472, 476 (7th Cir. 1998).
14
This is true despite the fact that 29 U.S.C. § 1132(a)(1)(B),
the subsection most directly relevant to Buffonge's claim, does not
explicitly authorize administrative remand as a remedy. Numerous
decisions by this court and others have ordered, or approved in
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See Cook v. Liberty Life Assurance Co., 320 F.3d 11, 24 (1st Cir.
2003) ("Once a court finds that an administrator has acted
arbitrarily and capriciously . . . the court can either remand the
case to the administrator for a renewed evaluation of the
claimant's case, or it can award a retroactive reinstatement of
benefits.").
The question, then, is which of these remedies is more
appropriate here. Some courts addressing similar fact patterns
have leaned toward categorical rules. See, e.g, Quinn v. Blue
Cross & Blue Shield Ass'n, 161 F.3d 472, 477 (7th Cir. 1998)
(holding that retroactive award is usually proper when claimant had
benefits and lost them because of arbitrary conduct and/or when no
evidence supported denial, while remand is appropriate where
decision-maker "fails to make adequate findings or fails to provide
an adequate reasoning"). This court, while acknowledging that
framework, see Cook, 320 F.3d at 24, has taken a more flexible
approach: it has held that "the variety of situations is so great"
in ERISA review that the court must have "considerable discretion"
to craft a remedy after finding a mistake in the denial of
benefits. Id.; see also Glista, 378 F.3d at 131-32 (concluding
that where the administrator attempts to rely on a new rationale on
theory, remand to the administrator where arbitrariness is found in
the course of 29 U.S.C. § 1132(a)(1)(B) review, see, e.g., Cook,
320 F.3d at 24; Quinn, 161 F.3d at 477, and we have seen none
holding that remand is impermissible.
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appeal, the court's response and the remedy should be resolved on
a case-by-case basis, in light of the facts and equities).
Here, the problem is not that Buffonge was denied
benefits to which he was clearly entitled; the evidence does not
compel such an outcome. The problem is with the integrity of
Prudential's decision-making process. The appropriate response is
to let Buffonge have the benefit of an untainted process.15 See
Quinn, 161 F.3d at 478 (finding that where administrator's decision
was faulty but it was not "clear-cut that it was unreasonable" to
deny benefits, remand was appropriate because a benefits award
"might provide [claimant] with an economic windfall should she be
determined not disabled upon a proper reconsideration"); cf.
Digregorio v. Hartford Comprehensive Employee Benefit Serv. Co.,
No. 04-2219, 2005 U.S. App. LEXIS 19380, at *25-26 (1st Cir. Sept.
8, 2005) (stating that in an ERISA Section 503 proceeding, remand
is appropriate where administrator's procedural failings prejudiced
claimant).
V.
Under the facts of this case, we reverse the grant of
summary judgment to Prudential and Wang. We remand to the district
15
We cannot say on this record that Prudential intentionally set
up a biased process. In any event ERISA is not a punitive statute.
See Hotz v. Blue Cross & Blue Shield of Mass., 292 F.3d 57, 61 (1st
Cir. 2002) (stating that ERISA does not permit punitive damages for
benefit claims (citing Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41,
53-54 (1987), abrogated in part on other grounds by Ky. Ass'n of
Health Plans, Inc. v. Miller, 538 U.S. 329 (2003))).
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court with instructions to enter judgment for Buffonge on his claim
that the denial of benefits was arbitrary and, as the appropriate
remedy, to remand the case to the plan administrator for
proceedings consistent with this opinion. In our view, that
includes the plan administrator taking new evidence should any
party wish to submit the same. Costs are awarded to Buffonge.
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Buffonge v. Prudential Insurance Co. of America
Court: Court of Appeals for the First Circuit
Date filed: 2005-10-14
Citations: 426 F.3d 20
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