Beckstrand v. Electronic Arts Group Long Term Disability Plan, 2008 U.S.Dist.LEXIS 83195 (E.D.Cal. September 16, 2008)(Issues: Social Security, Reviewing Doctors, Conflict of Interest).  This case presents a wide array of findings instructive on numerous issues that frequently arise issues in disability benefit disputes.  The plaintiff initially became disabled in 1998 due to AIDS and its resultant debilitating symptoms.  After the initial 24 months of benefit payments under an “own occupation” definition of disability, Beckstrand’s entitlement to continuing disability benefits was his inability to perform the duties of “any occupation.”  Although Beckstrand’s entitlement to benefits under the more strenuous standard was initially challenged, a review by a physician hired by the plan established his ongoing entitlement to benefits.  However, in 2004, the claim was again challenged and the benefit payments were terminated.  An internal appeal to the insurer was unsuccessful and litigation ensued. 

Despite applying a deferential standard, the court explained, an "abuse of discretion analysis allows a court to tailor its review to all the circumstances before it." Abatie v. Alta Health & Life Ins. Co., 458 F.3d 955, 968 (9th Cir. 2006). *16.  The court also cited Metropolitan Life Ins. Co. v. Glenn, 128 S.Ct. 2343, 2346, 171 L. Ed. 2d 299 (2008), and noted it was required to take into consideration the plan insurer’s conflict of interest.  Among the factors cited by the Supreme Court as issues to be considered was the insurer’s emphasis on certain reports that favor a denial of benefits and de-emphasis on reports that suggest a contrary conclusion.  The court found the insurer had ignored findings made in its earlier review and also disregarded the treating doctor’s findings.   

The court also pointed out the plain is required to engage in a “meaningful dialogue” with the beneficiary and to notify the claimant of additional evidence necessary in order to perfect the claim.  Although the plan had internally come to the belief that there were psychiatric issues affecting Beckstrand’s symptoms, there was no effort made to suggest to him that he should provide evidence of a mental health diagnosis and treatment.   

The court further noted that tacking on a new reason for the denial in a final decision precludes the plan participant from responding to that rationale and insulates that rationale from review, a factor that must be considered in assessing an abuse of discretion.  Thus, because the plan first raised mental health issues in its final denial, the court deemed such conduct evidence of an abuse of discretion. 

Next, the court remarked, “An ERISA administrator can abuse its discretion if it relies on clearly erroneous findings of fact.” *23 (citing Boyd v. Bert Bell/Pete Rozelle NFL Players Ret. Plan, 410 F.3d 1173, 1178 (9th Cir. 2005); Taft v. Equitable Life Assur. Soc., 9 F.3d 1469, 1473 (9th Cir.1993)).  The court then explained, "[a] finding is clearly erroneous when although there is evidence to support it, the reviewing body on the entire evidence is left with the definite and firm conviction that a mistake has been committed." *23-*24 (quoting Concrete Pipe and Products of California, Inc. v. Construction Laborers Pension Trust for Southern California, 508 U.S. 602, 622, 113 S. Ct. 2264, 124 L. Ed. 2d 539 (1993)).  

Other factors considered included the plan’s encouragement of a social security application, an offsetting of social security benefits, but a refusal, at the time of benefit denial, to consider the Social Security determination.  Even though the plan argued that it agreed with the Social Security finding at the time it was rendered, the court found the fact pattern in Glenn on that issue resembles what occurred in this case. 

The court also pointed out that a file review alone does not lead to the conclusion that the plan administrator acted improperly.  However, the failure to conduct an independent medical examination, particularly when critical credibility determinations are at stake, raises questions about the thoroughness and accuracy of the claim determination.