San Francisco Bad Faith Insurance Law Blog

Courts Accept That “Objective Evidence” Is Not Required To Prove Disability Due To Fibromyalgia

Many insurance companies insist that a person suffering from fibromyalgia must provide “objective evidence” of disability in order to qualify for disability benefits.  A number of federal decisions, however, make very clear that a person seeking disability benefits for fibromyalgia need not establish “objective evidence” of disability.

In Hawkins v. First Union Corp. Long-Term Disability Plan, 326 F.3d 914 (7th Cir. 2003), the Court of Appeal  characterized as the “gravest problem” with the position of the ERISA insurer’s medical consultant that “subjective” symptoms accepted as true by the treating physician can never establish disability.  In reversing the District Court’s upholding of the denial, the Court of Appeals stated, “Pain often and in the case of fibromyalgia cannot be detected by laboratory tests. The disease itself can be diagnosed more or less objectively… but the amount of pain and fatigue that a particular case of it produces cannot be.”  Id. at 919.

In Jordan v. Northrop Grumman Corp. Welfare Benefit Plan, 370 F.3d 869, 877 (9th Cir. 2004), the 9th Circuit Court of Appeals stated as to fibromyalgia, “Objective physical signs, laboratory results, and x-ray results are generally negative, and “because the majority of patients appear tense and anxious and have no recognizable objective basis for symptoms, the syndrome is often considered psychogenic.”  Id. at 872-873.  In Eisner v. Prudential Ins. Co. of Am., 10 F. Supp. 3d 1104, 1117 (N.D. Cal. 2014), the Court stated, “… disability claims based on fibromyalgia and chronic fatigue syndrome may be premised on subjective evidence and the reports of treating physicians.”

Accordingly, when a disability insurer informs a person suffering from fibromyalgia that he or she must provide “objective evidence” of disability to prove the claim, there is abundant legal authority to the contrary.

-Posted on July 24, 2017, by Bennett M. Cohen

San Francisco Bad Faith Insurance Law Blog

An Insurance Company May Not Raise New Defenses In The Litigation That It Did Not State In Its Denial Letters

When an insurance company denies a claim, it will purport to state the reasons on which it bases its denial.  The insurance company’s reasons are all too often no more than a pretext for denying a claim it knows it should pay.  If the case proceeds to litigation, the insurance company will then assert any number of additional defenses that it never asserted at the time of its denial.

In an ERISA case, the law is clear that an insurance company cannot assert defenses during a litigation that it did not assert at the of its denial.  As the 9th Circuit Court of Appeals stated in Harlick v. Blue Shield of Cal., 686 F.3d 699, 719-20 (9th Cir. 2012), quoting another 9th Circuit case, an ERISA insurer must state all of the “specific reasons” for its denial during the administrative process to enable the claimant to meet those reasons directly during the administrative process or in court:

“A plan administrator may not fail to give a reason for a benefits denial during the administrative process and then raise that reason for the first time when the denial is challenged in federal court, unless the plan beneficiary has waived any objection to the reason being advanced for the first time during the judicial proceeding.”  Harlick v. Blue Shield of Cal., supra at 719.

In stressing that the insurer is barred from asserting in a litigation any reasons not stated in the denial, the Court stressed that allowing such defense would defeat the purpose of the ERISA appeals process.  As the 9th Circuit stated:

“Requiring that plan administrators provide a participant with specific reasons for denial “enable[s] the claimant to prepare adequately for any further administrative review, as well as appeal to the federal courts.” … ERISA and its implementing regulations are undermined “‘where plan administrators have available sufficient information to assert a basis for denial of benefits, but choose to hold that basis in reserve rather than communicate it to the beneficiary.'”  Harlick v. Blue Shield of Cal., supra at 720.

If your claim was denied, beware that the insurance company will try to present new reasons for its denial in a litigation that it never asserted originally.  Be ready to argue that it has forfeited its right to so.

-Posted by Bennett M. Cohen on July 6, 2017

San Francisco Bad Faith Insurance Law Blog

An Insurer’s Mere Mention Of Evidence Contrary To Its Denial Does Not Mean It Considered It

When an insurance company denies a claim, it will often summarize in its denial letter the evidence cited by the insured in support of the claim.  The insurance company will do so in order to attempt to create an appearance that it actually reviewed and considered in good faith the evidence contrary to its decision.  The insurance company, however, will almost never articulate a reason why the particular evidence cited by the insured is not true or not worthy of belief.

In Montour v. Hartford Life & Accident Ins. Co., 588 F.3d 623, 635 (9th Cir. 2009), in denying the insured’s claim, the disability insurance company, Hartford, mentioned that the Social Security administration had found that the insured was disabled but failed to explain why such a finding was incorrect.  In stating that Hartford’s mere mention of a contrary conclusion is not the same as actually considering it, the 9th Circuit stated:

“In its decision denying Montour’s appeal, Hartford acknowledged the SSA’s decision but did not articulate why the SSA might have reached a different conclusion. See MetLife I, 461 F.3d at 671 n.3 (noting that there is a distinction between mentioning a contrary determination and discussing it).  Montour v. Hartford Life & Accident Ins. Co., supra at 635.”

The insurance company mere repetition of the formulaic or conclusory opinion of its “go to” medical consultant to support its denial is not the same as explaining why the insured’s evidence is not persuasive.  If you received a denial letter from your insurance company, it is important to review it carefully to see whether the insurance company ever articulated a specific and credible reason why your evidence should not be believed.  As the 9th Circuit has made clear, the insurance company’s failure to state specific and credible reasons to reject your evidence may be an important ground for overturning the denial.

-Posted June 26, 2017, by Bennett M. Cohen

San Francisco Bad Faith Insurance Law Blog

An ERISA Insurer Or ERISA Plan Must Sufficiently Explain Its Denial

When an insurance company or ERISA plan denies your disability claim, it often leaves you with more questions than answers.  You will likely receive a letter littered with conclusions as to why you are not disabled without any reasoned explanation as to why you do not qualify.  The law is clear, however, that an ERISA insurer or ERISA plan cannot properly base its denial on a medical consultant’s conclusion where that conclusion is unsupported by a reasoned explanation. 

One example of the multiple times in which courts have stated that an ERISA insurer cannot deny a claim without a reasoned is the meticulously reasoned decision from the Northern District of California, James v. AT&T W. Disability Benefits Program, 41 F. Supp. 3d 849, 874-875 (N.D. Cal. 2014).

In James, Judge William Orrick found that the ERISA administrator’s denial was arbitrary and capricious for many reasons, including the failure of the Plan’s experts to provide reasons to support their opinions.  As Judge Orrick stated:

Dr. Lewis [the physician retained by the Claims Administrator] also said that a sedentary occupation would not “cause undue levels of pain” for James despite the fact that Dr. Balytsky [a treating doctor] concluded that James could not sit for more than 15 minutes at a time without experiencing pain. AR 745. But he does not explain how he reached any of these conclusions. Id. at 875.

The Court also stressed that the ERISA administrator’s denial was arbitrary and capricious because it failed to identify evidence that demonstrated that the claimant was able to work.  As the Court stated:

But the plan did not point to any affirmative evidence supporting its argument that James was actually able to work. Without “rely[ing] on other contradictory evidence,” the plan abused its discretion by failing to identify “reliable evidence that conflicts with [the] treating physican[s’] evaluation.” Farhat, 439 F. Supp. 2d at 973; Rowell, 2012 U.S. Dist. LEXIS 67201, 2012 WL 1672497, at *15.  James v. AT&T W. Disability Benefits Program, supra at 877  (Emphasis added.)

If your disability claim has been denied, it is important to carefully review the denial letter to see whether the ERISA administrator or insurance company has actually set forth a reasoned explanation based on evidence as to why you are not disabled.  The failure to provide a reasoned explanation may convince a federal judge to reverse the denial and order the payment of disability benefits.

-Posted June 20, 2017 by Bennett M. Cohen

San Francisco Bad Faith Insurance Law Blog

Recovering Attorneys Fees Where Your Public Interest Lawsuit Has Limited Success

Under California law, a private citizen can bring a lawsuit specifically intended to address the ills or injustices in society.  Recognizing that such lawsuits are highly risky and may be prohibitively expensive, in 1977, California passed a law often referred to as the Private Attorney General’s Act (“PAGA”).  Under PAGA, found at California Code of Civil Procedure Section 1021.5, a party is entitled to an award of reasonable attorney fees for bringing a lawsuit intended to improve the public interest if four criteria are met: (1) he is the “successful party”; (2) his lawsuit has enforced an important right affecting the public interest; (3) a significant benefit has been conferred on the general public or a large class of persons; and (4) the necessity and financial burden of private enforcement are such as to make an award of fees appropriate.

Under PAGA, a litigant may recover attorneys fees even if he achieves a significant public benefit even if he fails to achieve the ultimate goal of the litigation.  A plaintiff may be deemed a “prevailing” or “successful” party warranting an award of attorney’s fees if he succeeds on “any significant issue in litigation which achieves some of the benefit the parties sought in bringing suit.”  Maria P. v. Riles (1987) 43 Cal.3d 1281, 1292, Bowman v. City of Berkeley, 131 Cal. App. 4th 173, 178.

A major California case supporting an award of attorneys fees where the lawsuit results in a limited but significant success is the California Supreme case of Harbor v. Deukmejian (1987) 43 Cal.3d 1078.  In Harbor, the litigants brought the lawsuit to invalidate the California Governor’s veto of a welfare statute that would have increased aid to families with dependent children.  Although the litigants failed to win any increase in aid to families with dependent children, the California Supreme Court ruled that they were still entitled to attorneys fees because the litigation had significantly clarified the extent of the Governor’s veto power.  As the Clourt stated, “Our decision will result in enforcement of an important right affecting the public interest, conferring a “significant benefit” on the general public in clarifying the extent of the Governor’s veto power…”

If you have identified a particular societal ill that the legislature or the courts have not addressed, explore whether a litigation is feasible in light of the PAGA.

-Posted by Bennett M. Cohen, June 13, 2017

San Francisco Bad Faith Insurance Law Blog

Your Attempt To Return To Work Does Not Bar A Finding Of Disability

California case law is clear that an insured’s attempt to return work may not bar a finding of disability.  The California courts have long recognized that people who are struggling with pain and other symptoms will nevertheless attempt to work.  In recognizing that people may continue perform job duties that endanger their health, courts have stated that, in such instances, the test for disability is not what the insured actually did but what he could safely do.

One such case is Wright v. Prudential Insurance Company of America (1938) 27 Cal.App.2d 195, 214-217, in which the insured, an assistant engineer in the boiler room suffering from neurological difficulties, continued to work for more than two year after the onset of his symptoms.  Even though the insured continued to work “as best he could” during this two year period, the appellate court upheld the trial court’s judgment that, during that period, he was still totally disabled.  As the court stated:

“In the light of the medical and other evidence recited and in support of the trial court’s findings, we must, as we think, take it to be true that, as early as the fall of 1934, respondent’s ailment had reached a stage when, in the exercise of ordinary care for his own health, he ought to have ceased work, not temporarily only, but permanently and entirely. This he did not in fact do, but instead, continued, as best he could, to follow his occupation until February 16, 1936, and to receive compensation for such services as he in the meantime rendered.”  Id. at 214-215.

Even in ERISA cases, courts have recognized that an insured’s continuing to work does not preclude a finding of disability.  As the 7th Circuit stated in Hawkins v. First Union Corp. Long-Term Disability Plan, 326 F.3d 914, 918 (7th Cir. 2003), “A desperate person might force himself to work despite an illness that everyone agreed was totally disabling.”  Similarly, in Levinson v. Reliance Standard Ins. Co., 245 F.3d 1321, 1326 n.6 (11th Cir. 2001), the court stated that the insured’s status as a full-time employee does not constitute reliable evidence that he is able to perform his material job duties full time.  Other courts have stated that a return to work is not conclusive on whether the insured is disabled.  See Stark v. Weinberger, 497 F.2d 1092 (7th Cir. 1974 and Lasser v. Reliance Std. Life Ins. Co., 344 F.3d 381, 391-392 (3d Cir. 2003)

If your insurance company have denied your claim where you returned to work full time due to economic necessity or with persisting symptoms, you likely have a basis for challenging the denial.  If your evidence is properly presented to the insurer or to the court, even if the insurer still persists in affirming its denial, you have a strong chance of reversing the insurer’s denial and receiving benefits.

Posted October 27, 2016

San Francisco Bad Faith Insurance Law Blog

Even In An ERISA Case, The Disability Insurer Must Consider the Insured’s Actual Job Duties

Some disability insurance policies include a provision that the insurer will try to use to disregard the insured’s actual job duties in deciding whether the insured is disabled.  A number of these policies, especially those sold by Standard Insurance Company, contain language that states that, in deciding whether to pay the claim, the insurer can “look to” how the occupation is performed “in the national economy” or how the occupation is “generally” performed.  The insurance company will wield this language like a sword to disregard a particular job duty that the insured is required to perform but is unable to do.  Often the insurance company will not even inquire into the insured’s actual job duties but instead simply quote from this policy language permitting it to look to how the occupation is performed in the “national economy” or performed elsewhere.

In the 9th Circuit, it is clear that in evaluating a disability claim, an insurance company or ERISA Plan must “analyze, in a reasoned and deliberative fashion,” the actual job duties required of a claimant for his particular employer.  Salz v. Std. Ins. Co., 380 Fed. Appx. 723, 724 (9th Cir. 2010).  In Salz, in reversing the district court’s decision upholding Standard Insurance Company’s denial of disability benefits by, the 9th Circuit Court of Appeals stated at page 724:

“Second, even if use of the Department of Labor’s Dictionary of Occupational Titles (1991) (“DOT”) is appropriate, Standard’s exclusive reliance on the DOT failed to take into account Salz’s “Own Occupation.” While the policy states that Standard “is not limited to looking at the way you perform your job for your Employer” (emphasis added), a proper administrative review requires Standard to analyze, in a reasoned and deliberative fashion, what the claimant actually does before it determines what the “Material Duties” of a claimant’s occupation are.”

If your claim has been denied, read the denial letter carefully to see if the insurance company ever expressly acknowledged the specific job duties or functions of your job that you state you are limited in performing and whether it has expressly considered whether you can perform them.  If the insurance company never identifies those job duties or functions and never states considers whether your medical condition limits you in performing those job duties or functions, it is likely that the insurance company has violated the requirements of governing case law.  Under the Salz case, failure to consider your actual job duties should be a solid ground for reversing the insurance company’s denial.


San Francisco Bad Faith Insurance Law Blog

An ERISA Insurer Cannot Refuse To Credit The Claimant’s Medical Evidence Without A Sufficient Explanation

In the recent case of Backman v. Unum Life Ins. Co. of Am., 2016 U.S. Dist. LEXIS 74918 (N.D. Cal. June 8, 2016), in which the claimant sought disability benefits for a painful back injury, the US District Court for the Northern District reversed Unum’s denial and ordered the payment of benefits. Unum had denied benefits based on the opinions of its own hired medical consultants. However, Unum’s consultants dismissed the well reasoned opinions of the claimant’s long time treating physicians without explaining why their opinions were not correct.

In deciding the case, the District Court stressed that it improper for an ERISA insurer to accept the opinions of its handpicked experts over the treating physicians where those experts never explain in any reasoned way why the treating physician’s opinions are incorrect As the Backman Court stated at pages 48-49:

“The Ninth Circuit has cautioned that “complete disregard for a contrary conclusion without so much as an explanation raises questions about whether an adverse benefits determination was ‘the product of a principled and deliberative reasoning process.’ Salomaa, 642 F.3d at 679 n. 35; see also Montour v. Hartford Life & Acc. Ins. Co., 588 F.3d 623, 635 (9th Cir. 2009). Here, Unum maintained its opinion that Backman’s pain was out of proportion to the clinical and diagnostic findings in the record, despite contrary conclusions from her treating physicians, with little credible explanation for why it dismissed those conclusions…”

Other District Courts have strongly criticized the ERISA insurer for seizing upon the opinions of its hired consultants who say that the claimant is not disabled where those consultants dismiss without a reasoned explanation the opinions of the treating physicians. See, for example, James v. AT&T West Disability Benefits Program, 41 F. Supp. 3d 849, 879, (N.D. Cal. 2014).

If you were denied disability benefits insurer never explains in any reasoned, sensible way why the opinions of your treating physicians are not valid, it is likely that your insurer has violated the settled rules and standards in the federal courts that apply to your case.

San Francisco Bad Faith Insurance Law Blog

In Many ERISA Cases, The Disability Insurer Should Be Barred From Requiring “Objective Evidence” Of Disability

In ERISA claims, disability insurance companies often state in their denial letters that the insured does not qualify for benefits because he has not stated “objective evidence” of disability. However, case law in the 9th Circuit and elsewhere is clear that an ERISA insurer cannot properly insist on proof with “objective evidence” if the condition is one for which objective evidence is unlikely to exist.

“[C]onditioning an award on the existence of evidence that cannot exist is arbitrary and capricious.” Salomaa v. Honda Long Term Disability Plan, 642 F.3d 666, 678 (9th Cir. 2011). In the 11th Circuit, the Court of Appeals stated: “Many medical conditions depend for their diagnosis on patient reports of pain or other symptoms, and some cannot be objectively established” but “a disability insurer [cannot] condition coverage on proof by objective indicators . . . where the condition is recognized yet no such proof is possible.” Id. The United States Court of Appeals for the Eleventh Circuit has observed, “There is, quite simply, no laboratory [ ] test to diagnose chronic pain syndrome. . . . Chronic pain syndrome is a severely debilitating medical condition that may be fully diagnosed only through long-term clinical observation . . . .” Lee v. BellSouth Telecomms., Inc., 318 F. App’x 829, 837 (11th Cir. 2009).”

In Palmer v. University Medical Group, 994 F. Supp. 1221 (D. Or. 1998) in which the insurer denied benefits on the ground, in part, that the insured’s back injury symptoms were all “subjective” and not confirmed by X-Ray or MRI, the court reversed the ERISA insurer’s denial. In reversing the denial and ordering he payment of benefits, the court stressed that, absent solid proof that the “subjective” symptoms were not genuine, the denial was improper. As the Palmer Court stated:

“Throughout the claims review process, Standard’s overriding concern was “objective medical evidence” While that certainly is a relevant consideration, Standard erred in this instance by elevating it to an absolute pre-requisite. Not all medical conditions as readily susceptible to verification by x-rays or other laboratory tests. Some complaints — such are pain and fatigue — are difficult
to objectively measure, and there is considerable variation among individuals. See Bunell v. Sullivan, 947 F.2d 341, 345-47 (9th Cir. 1991) (en banc). There also is much that we do not know about the human body. Merely because we cannot see pain or fatigue on an x-ray, or measure it in a laboratory, does not mean that it is not real. CF, Bunell, 947 F.2d at 347 (“We cannot conclude that Congress intended to require objective medical evidence to fully corroborate the severity of pain while aware of the inability of medical science to provide such evidence.”)”

(Emphasis Added.) (Id. at 1233.)

If you received a denial of benefits based on the absence of “objective evidence,” chances are high that the insurer’s denial is arbitrary and capricious. In fact, a denial based on the purported lack of “objective evidence” is one that usually betrays a biased and unfair evaluation.

San Francisco Bad Faith Insurance Law Blog

How The Insurance Company Uses The “Vocational Expert” To Support A Denial

Insurance companies use a “vocational expert” to assist them in denying claims. Rather than assess whether the policyholder is able to perform his or her actual job as reflected in an accurate job description or a fair analysis of the actual functional requirements of the job, the “vocational expert” is enlisted to redefine the policyholder’s job. By redefining the job to be something it is not, the insurer can far more easily deny the claim and provide a disingenuous justification for its denial.

Among the techniques commonly used by the insurance company’s “vocational expert” in drafting memos or reports to assist insurance companies in denying  claims are as follows:

  1. Using the Dictionary of Occupational Titles, a publication of the federal government, last updated in 1999, to describe the occupation performed by the policyholder rather than the policyholder’s actual job description — which is likely to reveal a far more demanding job.
  2. Describing the demands of the policyholder’s occupation solely as “sedentary” and disregarding or minimizing the cognitive demands of the job — more particularly, for example, disregarding the need for the policyholder to sustain focus and concentrate for prolonged periods of time on complex and detailed subject matter, multi-task, speak at meetings of co-workers or speak and interact in public forums and perform other complex and demanding tasks that far exceed the mere ability to sit.
  3. Disregarding in their analysis that policyholder, in the real world, is required to perform his or her job duties “with reasonable continuity” and in the “usual and customary way” — as recognized in the California definition of “disability” or “total disability.”
  4. With regard to physicians applying for disability benefits, mischaracterizing the actual occupation duties of the particular physician — for example, mischaracterizing the nature of the surgical procedures he or she actually customarily performed, the physical and cognitive demands of such surgeries, and the functional requirements of conducting a particular office  practice.

In fairness to the “vocational expert” — who is usually an employee of the insurance company, these techniques designed to deprive the deserving policyholder of disability benefits originate in the insurance company. The “vocational expert” is just another cog in the insurance company’s denial mechanism.

Posted by Bennett Cohen on 4/11/16.