It was on March 14, 2007 that Life Insurance Corporation of America (LINA) terminated Zainab Austin’s long-term disability benefits even though no evidence existed that Austin’s medical condition had improved. When asked for evidence proving her complete disability from working, Austin had provided LINA with opinions of three physicians.

According to LINA, these opinions were not sufficient to prove that Austin’s heart condition and fibromyalgia were severe enough to prevent her from working in a sedentary job. Austin appealed this decision twice, both times sharing even more medical evidence that showed that not only was she as disabled as she was when LINA had initially approved her disability benefits, but that her medical condition was in some ways degenerating. The evidence included opinions from her cardiologist, internist and pain management specialist who were of the view that Austin had not at all improved, and was not fit to work even in a sedentary job. After LINA refused her appeal twice, Austin had only two options left – either accept the decision as fait accompli or take the insurance company to court.

Disability Attorney Finds Claimant has Strong Case Against LINA.

Austin chose to take the company to court. She hired a disability attorney, who advised her that she had a strong case to reinstate her disability benefits. There were several factors that made the disability attorney suggest this. For one, LINA had never explained why its decision that Austin was not disabled differed from the decision of the Social Security Administration (SSA) that Austin’s congenital heart condition and her fibromyalgia left her unable to work. SSA used almost the same definition of disability as LINA.

Another reason was that even though the disability insurance company had the option of ordering an independent medical exam, it had never ordered one. Instead LINA had only ordered a file review of Austin’s medical records.

LINA had asked Austin to provide objective evidence that her pain and medical condition left her incapable of work, without ever spelling out what type of objective evidence it sought. Without telling Austin what was missing from her medical record, LINA insisted that something was. This facet of LINA’s decision had the possibility of falling afoul of the arbitrary and capricious standard of review.

LINA first found Austin totally disabled and paid out her disability benefits regularly. Later, despite no evidence that Austin’s medical condition had improved, LINA terminated her benefits. This suggested LINA had abused its discretion as plan administrator.

How Would Court Handle Disability Termination Lawsuit?

It seemed that LINA had failed to take the opinions of Austin’s primary cardiologist and the cardiologist employed by Social Security into consideration while coming to its decision. The Court first ordered LINA to consider their opinions before going ahead with the case. LINA reported back that it had already done so, and affirmed its finding that Austin’s medical records did not support her claim that her congenital heart condition and fibromyalgia left her incapable of even sedentary work.

Now that the case was finally before the Court, it had to decide which standard of review was to be applied. Since the policy in question conferred discretionary authority on LINA, the Court determined that the arbitrary and capricious standard of review applied here.

As mandated by the Supreme Court ruling in Glenn, the Court then considered whether a conflict of interest existed for LINA. Since LINA acted both as the insurer and the claims administrator, the Court found that LINA was an inherently conflicted administrator.

Based on Abatie, the Court decided that LINA’s conflict of interest would be relevant to the its decision if it could be proven that LINA had failed to investigate Austin's "claim adequately, failed to credit Austin's reliable evidence, or made its decision against the weight of evidence in the record."

Having decided how the case would be considered, the Court then turned to the administrative record of the case.

Court Finds LINA Failed to Consider Social Security Disability Benefits Award.

In its denial letters to Austin, LINA had never mentioned that Social Security Administration had found Austin disabled and awarded her Social Security disability benefits. While ERISA does not expect the plan administrators to come to the same decision as SSA, complete disregard to the SSA’s decision raises questions about the reasoning with which the plan administrator reached its conclusion. In Montour, the Court found that failure to explain why the disability insurance company disagreed with SSA decision "may indicate a failure to consider relevant evidence."The definition of "disability" used by Social Security and LINA were very much alike.

SSA had initially turned down Austin’s application for Social Security, a decision which LINA had used in its decision to terminate her insurance benefits. But when later SSA reversed its decision, LINA did not explain why this did not support Austin’s claim that she was still disabled. LINA’s decision to ignore the Social Security decision without explanation seemed to arise at least partly from a conflict of interest.

LINA Argues That Desire To Work Part-Time Demonstrates Ability to Work.

In January 2006, Austin had expressed her desire to work part-time to LINA’s claims representative. LINA argued that this showed Austin was capable of working part-time, and hence was not totally disabled. Considering the fact that she never actually went back to work, the Court found that Austin’s statement was just a desire and did not prove that she was actually capable of work.

Court Considered LINA's Demands for Objective Evidence.

Contending that it was entitled to its requirement of objective evidence, LINA claimed that Austin had never provided the insurance plan with objective evidence that proved she was disabled. When reviewing the administrative record, it became apparent the company had relied heavily on two forms filled in by Austin’s primary cardiologist. The Court found that both of these forms were confusing. On both LINA's Medical Request Form and Physical Ability Assessment Form, Austin’s cardiologist’s responses were far from unambiguous.

In the Medical Request form filled in by the cardiologist, it was not at all clear what the opinion of the cardiologist actually was about Austin's ability of to return to work part-time or full-time. The form only indicated the accommodations that would be required for Austin to return to work.

The Physical Ability Assessment form was ambiguous as well. It asked the cardiologist to indicate Austin’s ability to do various tasks, but did not ask if she would be in pain when she did them. Since she could hardly be expected to work when under pain, the form did not tell anything about her ability to work at all.

Similarly, the physical ability assessment prepared by Austin's treating pain specialist was not clear about her ability to work. Later, when the specialist had provided LINA with more and complete information about her inability to work, LINA chose to ignore it.

Stating that Austin’s internist did not provide "objective physical or cognitive clinical findings," LINA ignored his findings.

In Booton v. Lockheed Med. Benefit Plan, the court found that failing "to properly identify information needed from the claimant or refusing to consider evidence presented is evidence of a conflict and an abuse of discretion." LINA had not specified what kind of "objective evidence" it sought from Austin’s internist to support his finding that she was unable to return to work.

In Cotton v. Bowen, the Court found that "requiring full objective confirmation of pain complaints before believing them 'would overlook the fact that pain is a highly idiosyncratic phenomenon, varying according to the pain threshold and stamina of the individual victim,' and it would trivialize the importance that we have consistently ascribed to pain testimony, rendering it, in the final analysis, almost superfluous."

In Jordan v. Northrop Grumman Corp. Welfare Benefit Plan, the Court found that there aren't any laboratory tests that measure the presence or severity of fibromyalgia, the disease Austin suffered from.

Noting that LINA did not ask any of its doctors to conduct an independent in-person medical examination, the Court found that this suggested that LINA abused its discretion as plan administrator, despite the fact that the plan did not require the insurance plan to do so.

Disability Attorney Argues That Client's Condition Was Unchanged.

Having approved Austin’s disability benefits based on her cardiac condition, it was curious that LINA would terminate benefits without any evidence that Austin’s condition had improved. In Saffon, the Court found that "one would expect the [tests] to show an improvement, not a lack of degeneration," before a disability plan would terminate benefits. LINA could not explain how the failure of her cardiac condition to become worse supported the insurance company’s decision to terminate benefits.

Court Finds That LINA Terminated Benefits Under Any Occupation Terms.

Having terminated Austin’s benefits before she came under the "any occupation" term of the long-term benefit plan, LINA now argued that Court should only award her benefits that extended to the end of the "own occupation" terms of the plan. The company contended that it made its determination to terminate Austin’s benefits under the "own occupation" terms of the plan.

The Court ruled against this argument. The Court found that all through process reaching the decision to termination Austin's benefits and the appeals, LINA had used the "any occupation" standard to evaluate Austin’s continuing qualification for benefits. The administrative record supported this fact.

In Grosz-Salomon v. Paul Revere Life Ins. Co., the Court found that "retroactive reinstatement of benefits is appropriate in ERISA cases where ... but for the insurer's arbitrary and capricious conduct [the insured] would have continued to receive the benefits or where there was no evidence in the record to support a termination of benefits."

Having found that LINA was using the stricter "any occupation" standard when it decided to terminate Austin’s benefits, the Court was not willing to remand the decision regarding Austin's qualifications for disability benefits under this stricter standard, not after reviewing LINA's failure to give credit to the reliable evidence she had provided.

The Court Rules Against LINA for Wrongful Termination of Disability Benefits.

Ruling against LINA, the Court ordered it to immediately reinstate Austin's long-term disability benefits. LINA was also required to pay pre-judgment interest on the retroactive benefits. Since Austin had been paying premiums for a life insurance policy purchased from LINA, which she need not have paid had LINA not terminated her disability benefits, the Court also ordered LINA to refund Austin those premiums.

ERISA allows a claimant to seek an award of their attorney’s fees in cases where a successful and clear victory has been gained by the claimant.

In this case, the Court indicated in its decision that it would entertain an application from Austin's ERISA attorney for a reward of attorney’s fees.