:: Seventh Circuit Finds Conflict Factor Insignificant In Judicial Review
Moreover, we have already considered and rejected the argument that Glenn requires a “heightened arbitrary and capricious standard.” See Leger v. Tribune Co. Long Term Disability Benefit Plan, 557 F.3d 823, 831 (7th Cir. 2009). As we explained then, we read Glenn as an extension of the principle established in Firestone, 489 U.S. at 115, that an administrator’s conflict of interest must be weighed as a factor along with all other relevant factors. Leger, 557 F.3d at 831. While we must take its conflict of interest into account, Standard remains entitled to the deference normally afforded under the arbitrary and capricious standard. See Glenn, 128 S. Ct. at 2350. . . .
Nor were [the file reviewer's] opinions so weak or ill-reasoned that this is one of those borderline cases described by the Supreme Court, where Standard’s conflict of interest becomes the tiebreaking factor. See id.; Jenkins, 564 F.3d at 861-62. Rather, Standard’s denial of Black’s claim was rationally supported by evidence in the record, and its conflict of interest–just one additional factor that we consider–does not require reversal.
Black v. Long Term Disability Ins. 07-3550 (7th Cir.) (9/18/2009)
The SeventhCircuit post-Glenn opinions are a mosaic with no discernable theme.
Rather than examination all factors in “combination”, several courts have emphasized the “tie breaker” reference in Glenn, and only view a conflict of interest as significant in close cases. Fischer v. Liberty Life Assur. Co., 2009 U.S. App. LEXIS 17226 (7th Cir.) (August 4, 2009) is an example of that approach. Jenkins v. Price Waterhouse Long Term Disability Plan, 564 F.3d 856 (7th Cir. Ill. 2009) is another.
Since that decision the Seventh struck out in a new direction by breaking with the multi-factored approach altogether in Marrs v. Motorola, 2009 U.S. App. LEXIS 18129 (7th Cir. Ill. Aug. 14, 2009). Now the Seventh Circuit has handed down another opinion which applies a “tiebreaker” approach and which may be interpreted as distancing its approach from that of the Sixth and Ninth Circuits ( the latter having been recently summarized in :: File Review Of Medical Evidence After MetLife v. Glenn – A New Preference For Treating Physician Opinions?)
Sharing Of Non-Medical Information
The Court distinguished DeLisle v. Sun Life Assurance Co. of Canada, 558 F.3d 440, 445 (6th Cir. 2009) in which the Sixth Circuit held that
providing consulting physicians with nonmedical information that portrays the claimant in a negative light increases the risk of bias and suggests procedural unreasonableness.
Here, the Seventh Circuit contrasts that situation, stating that:
Unlike the information reviewed in DeLisle, the consulting physicians here received a detailed history of Black’s employment, which was especially relevant in light of her claim that her condition was negatively affected by the stress of her job. This information provided relevant context for the medical evidence as well as the various recommendations provided by Black’s treating physicians. And based on this information and the apparent inconsistencies in the treating physicians’ reports, Standard was permitted to credit the consulting physicians’ opinions that Black was not disabled.
The Seventh Circuit viewed this case as one where the conclusions was “rationally supported by the record.”
Treating Physician Opinions
The Sixth and Ninth Circuits have viewed consideration of treating physician opinions as an important factor bearing on the quantity and quality of evidence.
The Seventh Circuit opinion marginalizes the distinction between file or “consulting” physicians and treating physicians by stating:
Black also argues that we should discount all of the consulting physicians’ reports for their lack of firsthand clinical knowledge in accordance with Federal Rules of Evidence 602 and 802. The Federal Rules of Evidence, however, do not apply to an ERISA administrator’s benefits determination, and we review the entire administrative record, including hearsay evidence relied upon by the administrator. See Speciale v. Blue Cross & Blue Shield Ass’n, 538 F.3d 615, 622 n.4 (7th Cir. 2008).
And hinting at a need for a threshold showing of bias, the Court states:
Black contends that Standard has a pattern of arbitrarily crediting its consulting physicians and that those doctors’ findings have drawn criticism from the courts. But there is nothing in this record to suggest that the consulting physicians failed to consider all of the evidence or were biased against Black’s claim.
Administrative Law & The Scope of Review
Black argued that Glenn “required a change in the application of the scope of court review,” noting that the Court cited Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402 (1971), and Universal Camera Corp. v. NLRB, 340 U.S. 474 (1951), as support for this proposition.
The Court charactized those cases “merely as examples in which it refrained from creating ’special burden-of-proof rules’ and simply instructed reviewing courts to take a particular factor into account as part of the overall fact-specific review.
Social Security Administration Determination
Nor did the Court find a different outcome in a Social Security determination significant.
Here, Standard reviewed Black’s Social Security determination and discounted that finding of disability because the SSA did not review the same information that Standard obtained from its consulting physicians or her relevant employment history. Standard has not taken conflicting positions with respect to Black’s Social Security application, nor is there any evidence that its conflict of interest played a role in Black’s case.
Rational Support – Conflict “Just One Additional Factor”
The Court’s cabining of conflict as “just one additional factor” clearly shows a minimalist interpretation of Glenn. The following excerpt reveals the rather short shrift given the conflict factor:
Standard’s denial of Black’s claim was rationally supported by evidence in the record, and its conflict of interest–just one additional factor that we consider–does not require reversal. Although others reviewing Black’s medical condition in the first instance may reasonably conclude that she is disabled, as both the SSA and Paul Revere Life Insurance Company did, our standard of review in this matter is deferential, and we cannot say that Standard’s determination was unreasonable.
Note: In Young v. Wal Mart, No. 07-31130 (5thCir. 9/22/2008), the Fifth Circuit addressed Citizens to Preserve Overton Park, Inc. v. Volpe, and Universal Camera Corp. v. NLRB in the context of judicial review as discussed in :: Administrative Law Analogies After MetLife v. Glenn
In Black, the Seventh Circuit also notes the Glenn use of these two seminal administrative law cases. The Court rejects the notion that these authorities signal any change in approach to judicial review:
Black contends that in so holding, the Court “required a change in the application of the scope of court review,” and notes that the Court cited Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402 (1971), and Universal Camera Corp. v. NLRB, 340 U.S. 474 (1951), as support for this proposition. But the Court cited those cases merely as examples in which it refrained from creating “special burden-of-proof rules” and simply instructed reviewing courts to take a particular factor into account as part of the overall fact-specific review. See Glenn, 128 S. Ct. at 2352.
Moreover, we have already considered and rejected the argument that Glenn requires a “heightened arbitrary and capricious standard.” See Leger v. Tribune Co. Long Term Disability Benefit Plan, 557 F.3d 823, 831 (7th Cir. 2009). As we explained then, we read Glenn as an extension of the principle established in Firestone, 489 U.S. at 115, that an administrator’s conflict of interest must be weighed as a factor along with all other relevant factors. Leger, 557 F.3d at 831. While we must take its conflict of interest into account, Standard remains entitled to the deference normally afforded under the arbitrary and capricious standard. See Glenn, 128 S. Ct. at 2350.
I do not agree with the Court’s assessment of Glenn on this point. As I wrote in The Debate over Deference in the ERISA Setting — Judicial Review of Decisions by Conflicted Fiduciaries, 54 S.D.L.Rev. 1 (2009):
In Citizens to Preserve Overton Park, Inc. v. Volpe, cited by Justice Breyer in Glenn, the Court reversed the Sixth Circuit Court of Appeals, which had affirmed summary judgment for the Secretary of Transportation on a claim that the Secretary violated certain federal statutes in approving construction of an interstate highway through a public park. The Glenn Court‘s citation of this case in its assessment of judicial review has several possible implications.
The standard of review in Overton Park was essentially applied in the ERISA context, as the Court applied 5 U.S.C. § 706(2)(A) under which the Court evaluates whether the factual findings were “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law[.]” Another similarity in the proceedings under review in Overton Park and the typical proceedings in ERISA benefit determinations may be found in the development of the administrative record.
The Seventh Circuit erred in concluding that the citation of these cases by the Glenn majority was simply an example of the Supreme Court’s rejection of special burden of proof rules.
In historical context, the point of Universal Camera was that federal courts should uphold agency factual findings if supported by “substantial evidence on the record considered as a whole.” “Substantial evidence” (a controversal standard when the APA was adopted) was the standard before Universal Camera – so the significance of the decision lies in the emphasis of the review of the record as a whole.
In fact, in Universal Camera, the Court (through Justice Frankfurter) sought to address the Congressional “mood” that the courts had been to0 lenient prior to the APA in seeking only substantiating evidence without a critical eye toward other, potentially conflicting, evidence. The recent Sixth and Ninth Circuit opinions get rthis point – which was perhaps too subtly made in Glenn and missed entirely by the Seventh in its post-Glenn jurisprudence.
