United States Court of Appeals
For the First Circuit
No. 06-2042
KENNETH M. KANSKY,
Plaintiff, Appellant,
v.
COCA-COLA BOTTLING COMPANY OF NEW ENGLAND;
COCA-COLA ENTERPRISES INC.; COCA-COLA ENTERPRISES LONG-TERM
DISABILITY PLAN, a/k/a CORE LTD BENEFITS; AETNA LIFE INSURANCE
COMPANY,
Defendants, Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Douglas P. Woodlock, U.S. District Judge]
Before
Torruella, Lipez, and Howard,
Circuit Judges.
Bernard A. Kansky, with whom Kansky & Associates was on brief,
for appellant.
Stephen D. Rosenberg, with whom Eric L. Brodie and The
McCormack Firm, LLC, were on brief, for appellees.
June 29, 2007
LIPEZ, Circuit Judge. Kenneth Kansky appeals the
district court's entry of summary judgment against him in his
lawsuit, filed under the Employee Retirement Income Security Act of
1974 ("ERISA"), 29 U.S.C. §§ 1001-1461, challenging a plan
administrator's decision to deny him long-term disability benefits.
We affirm.1
I.
We recount here the undisputed facts briefly, and
subsequently provide further detail as needed. Kansky was
diagnosed with schizoaffective disorder in 1994, and was treated
for that condition continuously by the same physician, Dr.
Vuckovic, beginning in February 2000, extending through the entire
relevant period of his disability. He worked for Coca-Cola
Enterprises from April 21, 2003 to July 7, 2003, but did not
thereafter return to work, claiming that he was totally disabled.
1
In conjunction with this appeal, Kansky filed a motion to
substitute the pseudonym "John Doe" in court records, pleadings,
and decisions. However, he failed to respond to our January 3,
2007 Show Cause order with an explanation or reason for his filing
of a public appendix that encompasses almost the entire lower court
record. The district court opinion has already been made publicly
available (apparently without objection), and all filings with this
court have used the appellant's real name. Therefore, at this late
stage in the litigation, changing appellant's name on all court
records is not feasible. It is simply too late to impose
confidentiality on the materials involved in this case. Hence the
motion to substitute the pseudonym "John Doe" is denied.
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On January 8, 2004, Kansky filed for benefits under Coca-Cola's
long term disability ("LTD") plan, which is administered by Aetna.2
Kansky's initial application for benefits and the
supporting medical records indicated that his disability was caused
by his schizoaffective disorder. After Aetna denied his claim
under the pre-existing condition exclusion clause, Kansky
unsuccessfully appealed. He appealed again in August 2004 and
argued, apparently for the first time, that his disability was
caused by chronic fatigue syndrome ("CFS"). In support of this
claim, Kansky submitted a letter from Dr. David Bell, which
2
To be eligible for LTD benefits under this plan, an employee
must show that (a) a physician has diagnosed him or her as "totally
disabled" due to a physical or mental condition, and (b) provide
proof that (1) this disability occurred while he or she was insured
and (2) the disability has continued for at least 26 weeks.
Benefits are not available if the disability began "during the
first 12 months of your most recent period of coverage under this
Plan and [was] caused, or contributed to, by a 'pre-existing
condition.'" A condition is pre-existing "if, during the 3 months
before the date [the employee] became covered under this Plan, [the
employee] received diagnosis, treatment or services, or [] took
drugs prescribed or recommended by a physician, for that
condition."
Kansky argues that the pre-existing condition exclusion clause
ought not apply to him because he previously worked for Coca-Cola
for nineteen months between 1995 and 1996; he claims that our
decision in Rucker v. Lee Holding Co., 471 F.3d 6 (1st Cir. 2006),
allows him to combine those nineteen months of employment with the
three months worked in 2003. If such an aggregation were
permitted, Kansky would have worked for Coca-Cola for longer than
twelve months and the pre-existing condition exclusion clause would
not apply. However, the terms of this LTD plan expressly preclude
this sort of aggregation and our decision in Rucker, dealing with
FMLA benefits, does nothing to alter or contradict the clear terms
of this plan. Thus, Kansky's prior employment is irrelevant and
the pre-existing condition exclusion clause applies to him.
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indicated that Kansky's then-current symptoms (in July 2004) were
the result of CFS. Dr. Bell did not opine that CFS was the cause
of Kansky's disability in July 2003. Aetna submitted the entire
file, including this new letter, to a physician and a psychiatrist,
and, based on their assessments, denied the claim a third time.3
Kansky responded with a second letter from Dr. Bell, reiterating
the CFS diagnosis. In early 2005, Aetna issued a final denial of
the claim.
Kansky filed this suit, seeking review of Aetna's denial
of benefits, as well as sanctions against defendants for an alleged
failure to produce requested documents. The district court's
opinion, Kansky v. Coca-Cola Bottling Co., et al., 2006 WL 1167781
(D. Mass. May 1, 2006), reviews the facts of this case and
evaluates Kansky's challenge to Aetna's decision with admirable
care. The court concluded that Aetna's decision "was reasoned and
supported by substantial evidence." This appeal ensued.
II.
3
Aetna explained its decision, after providing lengthy
quotations from the reports issued by its reviewing physicians, as
follows:
Since the records we have reviewed support that Mr.
Kansky received treatment and took drugs for
schizoaffective disorder during the pre-existing
condition exclusionary period, April 1, 2003 through June
30, 2003, and that his other conditions have not been
established to result in a level of impairment that he
would have been precluded from performing the material
duties of his own occupation as of January 6, 2004, the
denial of his LTD benefits due to the pre-existing
condition is upheld.
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A. Standard of Review
Our review of the district court's entry of summary
judgment is de novo. Cook v. Liberty Life Assur. Co., 320 F.3d 11,
18 (1st Cir. 2003). The district court, following clear First
Circuit precedent, reviewed Aetna's benefits determinations under
an arbitrary and capricious standard. See Glista v. Unum Life Ins.
Co., 378 F.3d 113, 125-26 (1st Cir. 2004); Doe v. Travelers Ins.
Co., 167 F.3d 53, 57 (1st Cir. 1999); Doyle v. Paul Revere Life
Ins. Co., 144 F.3d 181, 184 (1st Cir. 1998). However, Kansky
argued before the district court that the standard of review
applicable to Aetna's benefits determination should be de novo
because the insurance company both determines the benefits owed and
pays any benefits after the first $35,000 (which the employer
pays). Kansky cited precedents from other circuits, which apply a
less deferential standard where such a "structural" conflict of
interest exists. See McLeod v. Hartford Life & Acc. Ins. Co., 372
F.3d 618, 623 (3d Cir. 2004). The district court rejected this
argument and, consistent with our current law, applied the
arbitrary and capricious standard.
Since the district court issued its decision in this
case, the appropriate standard of review for ERISA cases involving
structural conflicts of interest has come into question in this
circuit. Specifically, in Denmark v. Liberty Life Assurance Co.,
481 F.3d 16, 19 (1st Cir. 2007), two members of this court
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expressed their dissatisfaction with our present standard of review
in such cases, and urged this court to reconsider the standard of
review issue in an en banc proceeding. We also noted in Denmark
that the other circuit courts have taken a wide range of approaches
to the standard of review question. Id. at 30-31. There is
presently pending a petition for rehearing en banc in Denmark.
That petition raises the standard of review issue in terms
comparable to those used by Kansky in his appeal here. If we
thought any change in the applicable standard of review (and we are
not intimating in any way that there will necessarily be such a
change) might affect the outcome of this appeal, we would defer a
decision on this appeal until the en banc petition in Denmark was
resolved. However, even under the de novo standard of review
advocated by Kansky, Aetna's benefits determination was amply
supported by the evidence.4
4
No circuits apply a pure de novo review standard in
structural conflict cases. Of the circuits that apply a less
deferential standard in such cases, five of them apply a "sliding
scale" standard: the level of deference given to the insurance
company's decision is correlated to the severity of the conflict.
See, e.g., Fought v. Unum Life Ins. Co. of Am., 379 F.3d 997, 1004
(10th Cir. 2004); Pinto v. Reliance Standard Life Ins. Co., 214
F.3d 377, 379 (3d Cir. 2000); Vega v. Nat’l Life Ins. Servs., Inc.,
188 F.3d 287, 297 (5th Cir. 1999)(en banc); Woo v. Deluxe Corp.,
144 F.3d 1157, 1161-62 & n.2 (8th Cir. 1998); Doe v. Group Hosp. &
Med. Servs., 3 F.3d 80, 87 (4th Cir. 1993). This sliding scale
approach preserves the arbitrary and capricious framework, but
applies greater scrutiny where the conflict of interest is greater.
One circuit applies a "substantially similar" abuse of discretion
standard. See Abatie v. Alta Health & Life Ins. Co., 458 F.3d 955,
967-68 (9th Cir. 2006)(en banc). Only the Eleventh Circuit applies
a standard similar to the de novo standard; it first evaluates
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B. Evidence Supporting the Denial of Benefits
Under Aetna's LTD plan, an employee is ineligible for
benefits if his disability began during the first twelve months of
employment and was "caused, or contributed to, by a 'pre-existing
condition." See supra note 1. The plan defined "pre-existing
conditions" as those for which the employee received "diagnosis,
treatment or services or took drugs prescribed or recommended by a
physician" during the three months prior to the beginning of
coverage under the plan. Id. Aetna denied Kansky's claim for LTD
benefits because it determined that his schizoaffective disorder
caused or contributed to his disability in July 2003, and hence his
schizoaffective disorder was a "pre-existing condition" under the
terms of the plan. That decision was consistent with the
overwhelming weight of the evidence in the administrative record.
First, when Kansky initially applied for LTD benefits in
February 2004, his treating physician, Dr. Vuckovic, attributed his
disability to his schizoaffective disorder. Dr. Vuckovic had been
continuously treating Kansky for that condition for four years and
stated in his Attending Physician's Statement (which Kansky
submitted to Aetna in support of his LTD benefits application) that
the disability that began in July 2003 and continued to the present
whether the insurance company's decision was incorrect, and if it
was, the burden shifts to the claims administrator to demonstrate
that the decision was not affected by a conflict of interest. See
HCA Health Servs., Inc. v. Employers Health Ins. Co., 240 F.3d 982,
993-94 (11th Cir. 2001).
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was attributable to that condition. This record, offered by Kansky
and created contemporaneously with his application for benefits,
provides strong evidence that Kansky himself, as well as his
treating physician, attributed his disability to his
schizoaffective disorder.
Second, Kansky was hospitalized for a period of ten days
between the onset of his disability and his application for LTD
benefits. The discharge summary from this treatment stated that
his primary diagnosis was atypical schizophrenia. The hospital did
not diagnose Kansky with CFS.
Third, Aetna sent Kansky's medical records to two board
certified physicians for their review and evaluation. Each of them
concluded that his primary diagnosis, schizoaffective disorder, was
the primary cause of his disability. Each credited Dr. Vuckovic's
opinion, based on his long-term treatment and evaluation of Kansky,
and found that the records supported Dr. Vuckovic's impression of
Kansky's medical problems rather than Dr. Bell's.
Kansky argues, however, that his disability was caused
exclusively by his CFS - an independent diagnosis, unrelated to his
history of schizophrenia, and therefore not classifiable as a pre-
existing condition. In support of his claim, he points to the two
letters from Dr. Bell. The first letter, from July 2004, stated
that Kansky's then-existing symptoms were "very suggestive of
chronic fatigue syndrome," and that CFS "is a more accurate
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clinical diagnosis than his atypical schizophrenia." The letter
also acknowledged, however, that Kansky "would not fulfill the
Centers for Disease Control criteria for chronic fatigue syndrome
as he has a history of atypical schizophrenia." Dr. Bell
recommended no alterations to Kansky's medications or treatment,
and suggested only that he make an effort to "establish a very
regular sleep time and a regular time for arising."
The second letter, dated January 2005, was much shorter
and simply reiterated the findings stated in the July 2004 letter.
It stated that Kansky's "current disability is not due to the
schizoaffective disorder; it is due to chronic fatigue syndrome."
Neither letter purported to provide a diagnosis for Kansky's
disability as of July 2003; both stated only that, at the time Dr.
Bell saw him, Kansky's symptoms could be explained by CFS.
Therefore, even if we were to credit Dr. Bell's letters
and assume that his diagnosis was accurate, he simply did not opine
that Kansky suffered from CFS at the time his disability began.
Furthermore, Dr. Bell never offered an opinion, one way or the
other, as to whether Kansky's well-documented schizoaffective
disorder contributed to his disability. By contrast, every
treating physician who saw Kansky stated that his medical problems
were the result of his schizoaffective disorder, or complications
arising from that disorder. The independent medical professionals
who examined Kansky's records and provided their opinions to Aetna
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agreed with this diagnosis. On this record, there is simply no
doubt that Kansky's schizoaffective disorder, for which he had
received treatment during the three months prior to commencement of
the LTD plan, either caused or contributed to his disability. We
find no error in Aetna's denial of benefits on this basis.
III.
Kansky has raised a number of additional points in his
appeal. We address them briefly.
A. Denial of Motion to Alter or Amend Judgment
In the district court, Kansky filed a motion to alter or
amend the judgment, on numerous grounds, pursuant to Federal Rule
of Civil Procedure 59(e). We review the lower court's denial of
the motion for abuse of discretion. See Palmer v. Champion
Mortgage, 465 F.3d 24, 30 (1st Cir. 2006). Rule 59(e) motions are
granted only where the movant shows a manifest error of law or
newly discovered evidence. Marie v. Allied Home Mortgage Co., 402
F.3d 1, 7 n.2 (1st Cir. 2005) (stating that Rule 59(e) motions are
generally unlikely to succeed because the movant must "clearly
establish a manifest error of law" or provide newly discovered
evidence (quoting Pomerleau v. W. Springfield Pub. Sch., 362 F.3d
143, 146 n.2 (1st Cir. 2004)).
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First, Kansky claimed that the district court erred
because it "relied" on the opinions offered by Aetna's reviewing
physicians, who he claimed were unqualified to provide medical
opinions on his condition. The district court found that Aetna's
reviewing doctors were "certainly qualified to provide their
medical opinions on whether Kansky's pre-existing schizo-affective
disorder caused or contributed to his disability." On appeal,
Kansky only points out that neither of these doctors' CVs mentions
any research specifically focused on CFS. The district court did
not abuse its discretion in ruling that the absence of CFS research
did not render Aetna's reviewing doctors unqualified to give an
opinion on the causes or contributors to Kansky's disability.
Second, Kansky argued that the court erred in "conducting
its own medical research." This claim is unfounded. The district
court provided a reasonable explanation for its use of a single
medical article, which was not part of the Administrative Record,
for background information. In denying Kansky's Rule 59(e) motion,
the court explained that it had consulted the article because it
"played a significant role" in an earlier district court decision,
which Kansky had urged the court to consider. The court also noted
that the article appeared to be "the basis for the comments of Drs.
Bell, Burton, and DeFoy5 [in this case] to the effect that Kansky
5
Drs. Burton and DeFoy were Aetna's reviewing physicians, who
examined Kansky's medical records and opined that his disability
was caused, at least in part, by his schizoaffective disorder.
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cannot be diagnosed [with CFS] according to the current research
criteria put out by the Centers for Disease Control." Kansky, 2006
WL 1167781, at *9. There was no abuse of discretion in the court's
use of this article in such a limited way.
Finally, Kansky also claimed, in his Rule 59(e) motion,
that the court erred in reaching an "independent" medical
diagnosis, which he described as "schizoaffective disorder
'contributing to' his CFS." In reality, the district court found
that Kansky's schizoaffective disorder contributed to his
disability, and made no finding as to whether the schizoaffective
disorder caused or contributed to the CFS or whether CFS
contributed to the disability. The court did not abuse its
discretion with its insistence that it did not make any independent
medical diagnosis.
B. Request for Sanctions
Kansky claims that the district court erred in denying
his request for sanctions against the defendants for an alleged
"failure" to produce certain documents. The documents in dispute
were produced, although apparently later than Kansky would have
liked. He has admitted that he suffered no prejudice from this
delay. The district court did not abuse its discretion in denying
sanctions. See, e.g., Sullivan v. Raytheon Co., 262 F.3d 41, 52
(1st Cir. 2001).
IV.
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We do not minimize the hardships caused by Kansky's
medical condition. We recognize the physical, emotional, and
financial burdens imposed by that condition. But the entitlement
to long-term disability benefits is controlled by contract language
and legal standards that we must apply as the law requires. Having
done so, we must affirm the thorough and carefully reasoned
decision of the district court.
So ordered.
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