Donald Artz v. Hartford Life & Accident Insurance Company

In the

United States Court of Appeals

For the Seventh Circuit

____________________

No. 23-2269

DONALD ARTZ,

Plaintiff-Appellant,

v.

HARTFORD LIFE & ACCIDENT INSURANCE COMPANY,

Defendant-Appellee.

____________________

Appeal from the United States District Court for the

Eastern District of Wisconsin.

No. 2:21-cv-00391-BHL — Brett H. Ludwig, Judge.

____________________

ARGUED FEBRUARY 23, 2024 — DECIDED MAY 6, 2024

____________________

Before SCUDDER, JACKSON-AKIWUMI, and PRYOR, Circuit

Judges.

SCUDDER, Circuit Judge. Donald Artz worked as an electric

distribution controller at WEC Energy Group until his multi-

ple sclerosis caused him to retire. He sought long-term disa-

bility benefits from WEC under a plan administered by Hart-

ford Life and Accident Insurance Company. Concluding that

Artz was not “disabled” within the meaning of the plan, Hart-

ford denied his claim. Artz then filed suit under the Employee

2 No. 23-2269

Retirement Income Security Act, alleging that the disability

determination was arbitrary and capricious because Hartford

misconstrued the terms of the plan and failed to provide a

reasonable explanation for its decision.

While Hartford’s denial letters were not models of thor-

oughness, we conclude that the plan administrator communi-

cated rational reasons for its decision based upon a fair read-

ing of the plan and Artz’s medical records—and provided

sufficient process besides. Because ERISA requires no more,

we affirm.

I

A

Donald Artz began working at WEC Energy Group, an

electric utility company in Milwaukee, Wisconsin, in 1998.

For most of his career he worked as a Senior Electric Distribu-

tion Controller, a position WEC described as an “[a]dminis-

trative or clerical occupation in which the employee is primar-

ily involved with sedentary work,” under conditions “gener-

ally associated with working in an office environment.” The

position required Artz to work rotating 12-hour shifts—one

week on the day shift, one week on the night shift. Artz

learned that he had multiple sclerosis in 2003 but managed to

continue in his role at WEC for sixteen more years. He finally

stopped working in November 2019 due to worsening fa-

tigue—a well-known symptom of MS.

In early 2020 Artz asked WEC to accommodate a reduc-

tion in shift length from twelve to eight hours due to his fa-

tigue, but the company denied the request. Artz received

short-term disability benefits under WEC’s plan beginning in

January 2020 (approved by the administrator, Hartford, and

No. 23-2269 3

paid out by WEC), and the Social Security Administration

eventually awarded disability benefits in April 2020. When

Artz applied for long-term benefits under WEC’s disability

plan, however, Hartford denied the request in January 2021.

Under the terms of WEC’s long-term disability benefits

plan—governed by the Employee Retirement Income Secu-

rity Act of 1974—Hartford as the plan administrator has “full

discretion and authority to determine eligibility for benefits

and to construe and interpret all terms and provisions.” The

plan defines “Disability or Disabled” as being “prevented

from performing one or more of the Essential Duties” of

“Your Occupation.” The plan in turn defines “Essential Duty”

as

1) [] substantial, not incidental; 2) [] fundamen-

tal or inherent to the occupation; and 3) cannot

be reasonably omitted or changed. Your ability

to work the number of hours in Your regularly

scheduled workweek is an Essential Duty.

From there the plan states that “Your Occupation” is de-

fined “as it is recognized in the general workplace. Your Oc-

cupation does not mean the specific job You are performing

for a specific employer or at a specific location.”

Hartford reviewed Artz’s medical history but found con-

flicting information about his ongoing ability to work in his

field. His treating neurologist, Dr. Bhupendra Khatri, opined

in October 2019 (and several times thereafter) that Artz could

work 8 hours per day, 40 hours per week despite having MS,

whereas occupational therapist Jodi Kitzrow capped Artz’s

work capacity at 4 hours per day, 20 hours per week. A third

professional, Dr. Al Baltrusaitis, an occupational medicine

4 No. 23-2269

physician, was even less optimistic and determined that Artz

was altogether “not capable of gainful employment.” Dr. Bal-

trusaitis based his view on the disability standards in the So-

cial Security Administration’s Handbook for Physicians. But

he later amended his opinion to state that Artz could handle

working 4 hours per day, 20 hours per week.

To resolve these inconsistent opinions, Hartford retained

a third-party contractor to provide an independent medical

assessment. Neurologist Sherry Leitch reviewed Artz’s medi-

cal records and spoke with Dr. Baltrusaitis before concluding

that Artz could work 8 hours per day, 40 hours per week. Dr.

Leitch’s notes indicate that Dr. Baltrusaitis had informed her

that Artz struggled with dexterity and endurance after 8

hours. Her notes also reflected her own opinion that “the ev-

idence does not substantiate severe cognitive abnormalities.”

While Artz’s cognitive function would be affected by fatigue,

Dr. Leitch believed he could work up to 8 hours per day. Dr.

Leitch later clarified that Artz’s workday should be confined

to the hours of 6:30 a.m. and 4:30 p.m. She also recommended

physical limitations that would allow Artz to avoid walking

and standing for extended periods of time. Dr. Khatri, Artz’s

treating neurologist, later opined that he agreed with Dr.

Leitch’s conclusions.

Hartford’s claim review process also entailed a case man-

ager performing an “occupational analysis” to determine the

“essential duties” of Artz’s occupation in the general work-

place as defined by the terms of WEC’s long-term disability

plan. The case manager consulted the U.S. Department of La-

bor’s Dictionary of Occupational Titles, the Occupational In-

formation Network, and the Occupational Access System da-

tabase, and determined that Artz’s position at WEC equated

No. 23-2269 5

to a “power-distribution engineer” in the general work-

place—a “sedentary” job that might require “exert[ing] up to

10 pounds of force occasionally.” The essential duties of the

position, the case manager continued, included “planning

construction” and “coordinating operation of facilities for

transmitting power.” The position did not require squatting,

stooping, or walking on irregular surfaces, activities problem-

atic for Artz due to his MS. The case manager’s occupational

analysis reached no conclusion on shift length, but a second

Hartford representative later added a note to the claim file ac-

knowledging that “12 hour day[s]” are “not essential to

[Artz’s occupation].”

Hartford’s initial denial letter in June 2020 reiterated Dr.

Leitch’s conclusion that “from a cognitive perspective, there

was no objective evidence to substantiate severe cognitive ab-

normalities.” The broader medical record, Hartford ex-

plained, indicated that Artz could work 40 hours per week

(over a standard 5-day work week). The letter then explained

that although “your specific employer may require working

shifts longer than 8 hours, that is not a requirement in the na-

tional economy, and not an Essential Duty of your Occupa-

tion.” In the end, then, Hartford concluded that Artz was not

“disabled” within the meaning of WEC’s long-term disability

plan.

Artz filed an administrative appeal in November 2020.

Hartford responded by providing Artz with a copy of his

claim file and informing him twice that he could submit addi-

tional information (to include his Social Security disability

records) in support of his appeal. But Artz declined to submit

anything further to Hartford.

6 No. 23-2269

During the administrative appeal, Hartford requested an-

other round of independent assessments—again from a third-

party reviewer—to take a fresh look at Artz’s medical history.

Neuropsychologist Michael Sugarman reviewed Artz’s med-

ical record and concluded that Artz, despite suffering from

MS, could work standard 8-hour days. Dr. Sugarman ex-

plained that he saw “no objective documentation of reduc-

tions in [Artz’s] ‘ability to focus’” and declined to comment

on the need for “fatigue”-based restrictions. Neurologist Ste-

phen Selkirk also reviewed Artz’s records and likewise

opined that the “available evidence” did not support fatigue-

or focus-based restrictions beyond the 8-hour workday. Dr.

Selkirk saw no evidence to support cognitive dysfunction or

attention deficits and concluded that “[t]he severity and fre-

quency of [Artz’s] reported symptoms are not corroborated

by clinical data in the medical record.”

Before making a final decision on Artz’s claim, Hartford

sent Dr. Selkirk’s and Dr. Sugarman’s reports to treating neu-

rologist Dr. Khatri for his review and included a form for

written comments. Dr. Khatri responded, “I do not agree with

your decision,” but provided no explanation for his view.

Hartford denied Artz’s administrative appeal and upheld

the denial of benefits in January 2021, explaining that “the to-

tality of the evidence does not corroborate a severity in the

symptoms such that functional impairment is established.”

Hartford acknowledged that it had considered Artz’s receipt

of Social Security disability benefits but explained that the

terms of WEC’s long-term disability plan differed from the

federal Social Security disability standard in critical ways.

No. 23-2269 7

B

Artz sued both Hartford and WEC in state court, alleging

that the denial of long-term benefits amounted to a breach of

contract under Wisconsin law. Hartford removed the case to

federal court, viewing the claim as completely preempted by

§ 1132(a)(1)(B) of the Employee Retirement Income Security

Act. The doctrine of complete preemption, the Supreme Court

has explained, creates an exception to the well-pleaded com-

plaint rule that a court look only to the complaint to deter-

mine whether there is federal question jurisdiction under 28

U.S.C. § 1331. See Aetna Health Inc. v. Davila, 542 U.S. 200, 207

(2004). “When a federal statute wholly displaces the state-law

cause of action through complete pre-emption, the state claim

can be removed” under 28 U.S.C. § 1441(a) because the claim

“is in reality based on federal law.” Id. at 207–08 (cleaned up).

Following removal to federal court, Artz filed an amended

complaint against Hartford alone. Invoking § 1132(a)(1)(B) of

ERISA, which provides a civil action “to recover benefits due

to [the employee] under the terms of his plan,” Artz alleged

that he was entitled to recover long-term disability benefits

under the terms of WEC’s plan. The amended complaint

dropped the state law claim.

The district court upheld the denial of benefits at sum-

mary judgment, concluding that Artz had placed too much

emphasis on the duties of his specific position at WEC rather

than the “essential duties” of his job in the general workplace

as required by the company’s plan. Going further, the district

court underscored the independent medical reviews commis-

sioned by Hartford and, after canvassing the opinions of the

third-party physicians, saw the medical evidence as support-

ing only one conclusion—that Artz’s MS did not prevent him

8 No. 23-2269

from working a standard 40-hour week as a power-distribu-

tion engineer. The decision to hire independent examiners,

the district court continued, alleviated any “conflict of inter-

est” based on Hartford’s dual role in approving and paying

out the long-term disability benefits, especially where Hart-

ford provided Artz with “a review process, copies of the med-

ical opinions, [and] opportunities to respond.”

Finally, the district court rejected Artz’s contention that

the approval of other forms of disability benefits (in particu-

lar, Social Security benefits and short-term benefits under

WEC’s plan) required Hartford to approve long-term bene-

fits, observing that Artz had declined to provide copies of his

Social Security records and had not clearly identified the

terms of WEC’s short-term benefits plan.

Artz now appeals.

II

ERISA requires an employee benefit plan (or here its

claims administrator) to “set[] forth the specific reasons” for

the denial of disability benefits. 29 U.S.C. § 1133(1). The Act

also states that claimants must receive a “reasonable oppor-

tunity” for “a full and fair review by the appropriate named

fiduciary of the decision denying the claim.” 29 U.S.C.

§ 1133(2). To that end, ERISA’s implementing regulations re-

quire that the plan administrator describe in the initial denial

letter “any additional material or information necessary for

the claimant to perfect the claim and an explanation of why

such material or information is necessary.” 29 C.F.R.

§ 2560.503-1(g)(1)(iii). That way, “when a claimant appeals a

denial to the plan administrator, he will be able to address the

determinative issues and have a fair chance to present his

No. 23-2269 9

case.” Halpin v. W.W. Grainger, Inc., 962 F.2d 685, 689 (7th Cir.

1992).

The parties agree that WEC’s long-term disability benefits

plan grants Hartford as the plan administrator discretionary

authority to determine benefits. “When the administrator has

such discretionary authority, as the vast majority now do, the

court applies a more deferential standard [of review], seeking

to determine only whether the administrator’s decision was

arbitrary and capricious.” Holmstrom v. Metropolitan Life Ins.

Co., 615 F.3d 758, 766 (7th Cir. 2010) (internal quotation marks

omitted). The controlling questions under this standard of re-

view incorporate the terms of § 1133: whether Hartford com-

municated “specific reasons” for the denial of benefits and

whether Artz received an opportunity for “a full and fair re-

view” of the decision. See Majeski v. Metropolitan Life Ins. Co.,

590 F.3d 478, 484 (7th Cir. 2009). We also review more gener-

ally whether Hartford’s decision finds rational support in the

record. Our cases are clear that we will not overturn the denial

of benefits “absent special circumstances such as fraud or bad

faith.” Dragus v. Reliance Standard Life Ins. Co., 882 F.3d 667,

672 (7th Cir. 2018) (internal quotation marks omitted).

One final note about the standard of review. With Hart-

ford as the plan administrator shouldering responsibility for

both evaluating and paying Artz’s claim, we must remain

mindful of the possibility that this conflict of interest “affected

the benefits decision.” Metropolitan Life Ins. Co. v. Glenn, 554

U.S. 105, 116–17 (2008). The substantive standard of review is

still the same—the arbitrary-and-capricious standard—but

“the conflict of interest is ‘weighed as a factor in determining

whether there is an abuse of discretion.’” Jenkins v. Price Wa-

terhouse Long Term Disability Plan, 564 F.3d 856, 861 (7th Cir.

10 No. 23-2269

2009) (internal citation omitted); see also Glenn, 554 U.S. at 117

(suggesting that the conflict-of-interest factor may “act as a

tiebreaker when the other factors are closely balanced”).

A

Because the terms of WEC’s long-term disability plan de-

termine eligibility for benefits, we begin there. And we do so

underscoring that everyone recognizes that Artz has MS and

has exhibited extraordinary strength struggling with its

symptoms for years.

The question before us mirrors the one before the district

court: whether Artz brought forth enough evidence at sum-

mary judgment to permit a finding that he meets the WEC

plan’s definition of “disabled” for purposes of receiving long-

term disability benefits. Recall from the plan itself that Artz

qualifies as “disabled” only if he cannot perform one or more

“essential duties” of his occupation as it is “recognized in the

general workplace.”

The core disagreement between the parties relates to the

“essential duties” of a power-distribution engineer. Hartford

emphasizes that WEC’s plan enumerates as one essential duty

“[y]our ability to work the number of hours in Your regularly

scheduled workweek.” We agree with the district court’s

takeaway from the medical evidence and, more specifically,

the opinions of the independent reviewers Hartford enlisted

to assess Artz’s ongoing ability to work as a power-distribu-

tion engineer. The medical record shows that Artz can still

work a traditional week of 40 hours broken down into five

eight-hour shifts. Artz’s primary pushback is to contend that

Hartford should have recognized that WEC called on its

power-distribution engineers not to work ordinary eight-

No. 23-2269 11

hour days, but instead to work three 12-hour shifts each week.

Artz sees the longer shifts—the 12-hour shifts—as defining an

essential duty of his job at WEC and one that his MS no longer

allows him to perform.

The fatal flaw in Artz’s position is that an employer’s spe-

cific requirements—here WEC’s requirements for its power-

distribution engineers—differ from the way the company’s

long-term disability benefits plan defines the “essential du-

ties” of that position. In no uncertain terms, the plan states

that essential duties are “substantial,” “fundamental or inher-

ent to the occupation,” and “cannot be reasonably omitted or

changed,” and Artz has provided nothing aside from evi-

dence of his own job requirements at WEC to show that 12-

hour shifts (or nighttime shifts or overtime work) are inherent

to the power-distribution engineer occupation.

Artz failed to provide any such evidence despite Hart-

ford’s clear statement in the initial denial letter that “working

shifts longer than 8 hours” is “not an Essential Duty of your

Occupation.” We agree with Artz that Hartford’s denial letter

could have been more plain and precise—it could have ex-

plained, for example, that the Dictionary of Occupational Ti-

tles and other occupational sources say nothing at all about

shift length for a power-distribution engineer. Still, Hartford

said enough to survive arbitrary-and-capricious review. The

initial denial letter allowed Artz to “formulate [a] further

challenge” to Hartford’s conclusion that shift length was not

an essential duty, which is all that ERISA requires. See Gallo

v. Amoco Corp., 102 F.3d 918, 923 (7th Cir. 1996) (explaining

the purpose behind ERISA’s requirement that the plan ad-

ministrator state specific reasons for the denial of benefits);

see also Halpin, 962 F.2d at 690 (framing as the relevant

12 No. 23-2269

question whether the beneficiary received “a statement of rea-

sons that, under the circumstances of the case, permitted a

sufficiently clear understanding of the administrator’s posi-

tion to permit effective review”).

The facts here do not align in Artz’s favor—at least not

enough for the question to go to a jury. He knew at least as

early as his receipt of the initial denial letter that WEC did not

consider 12-hour shift length an essential duty of his occupa-

tion. Yet he provided no evidence during the appellate pro-

cess outside of his WEC job description to support his claim

that shift length is in fact an essential duty.

B

Perhaps anticipating that conclusion, Artz pivots and ar-

gues that that even if his occupation as defined by the terms

of WEC’s plan requires only 8-hour shifts, his MS leaves him

unable to dedicate the requisite attention and focus to his job

as a power-distribution engineer for that amount of time. But

here, too, we conclude that Artz’s position falls short because

Hartford, in denying long-term disability benefits, communi-

cated rational reasons for its decision based on the available

medical evidence. As Hartford explained in its denial letters,

the medical record on balance shows that Artz can work a

standard 8-hour shift as a power-distribution engineer with-

out accompanying fatigue-based limitations.

While two of the medical professionals who conducted in-

person physical exams (Dr. Baltrusaitis and Jodi Kitzrow)

capped Artz’s work capacity at 4 hours per day, Dr. Khatri

also conducted an in-person physical exam and concluded

that Artz could work 8-hour workdays between the hours of

6:30 a.m. and 4:30 p.m. And Hartford did not base its denial

No. 23-2269 13

solely on Dr. Khatri’s opinion. Indeed, Hartford recognized

that Dr. Khatri’s 8-hour recommendation conflicted with the

4-hour recommendation and decided to investigate further.

To that end, Harford sought an independent medical assess-

ment to get to the bottom of Artz’s functional work capacity.

Hartford’s ultimate reliance on Dr. Leitch’s independent

assessment was reasonable. After reviewing Artz’s medical

records, and after speaking with Dr. Baltrusaitis (the occupa-

tional medicine physician), she concluded that Artz could still

work a standard 40-hour week (with 8 hours per day) despite

his fatigue- and focus-based MS symptoms. Dr. Leitch added

that Artz should avoid standing and walking for extended pe-

riods of time, but those restrictions are not inconsistent with

sedentary work. In these circumstances, Hartford reasonably

relied on the treating neurologist and independent assessor’s

consensus view to deny Artz’s claim for long-term disability

benefits at the initial decision-making stage. See Davis v.

Unum Life Ins. Co. of America, 444 F.3d 569, 578 (7th Cir. 2006)

(characterizing decisions about conflicting medical evidence

as “question[s] of judgment that should be left to [the admin-

istrator] under the arbitrary-and-capricious standard”).

When Artz pursued an administrative appeal, Hartford

again sought independent assessments. Two neurologists

agreed with Drs. Khatri and Leitch that Artz could work 8

hours per day, 5 days per week. And, for their part, independ-

ent assessors Drs. Sugarman and Selkirk explained that Artz

had not come forward with any objective evidence to substan-

tiate the need for additional fatigue- or focus-based re-

strictions or other functional limitations. See Williams v. Aetna

Life Ins. Co., 509 F.3d 317, 322 (7th Cir. 2007) (describing the

distinction between “the amount of fatigue or pain an

14 No. 23-2269

individual experiences … [which] is entirely subjective,” and

“how much an individual’s degree of pain or fatigue limits

his functional capabilities, which can be objectively meas-

ured”).

Artz did not pursue follow-up testing even after receiving

these independent assessments—and despite receiving notice

in the initial denial letter that there was a lack of objective ev-

idence surrounding his cognitive function. He nonetheless in-

sists that this was not an evidentiary failure on his part, but

instead that Hartford as the plan administrator should have

ordered more objective tests. This strikes us as in tension with

the plain import of ERISA’s implementing regulations,

though. See 29 C.F.R. § 2560.503-1(g)(iii) (stating that the

claimant—not the administrator—“perfect[s] the claim”); see

also Halpin, 962 F.2d at 691 (suggesting that once the ERISA

plan informs the claimant that more information is needed,

the claimant—not the administrator—must provide it).

We have stated our conclusion with caution because our

decision in Hennen v. Metropolitan Life Insurance Company inti-

mated that the administrator would have done well to order

additional testing. But we offered that observation in very dif-

ferent circumstances. See 904 F.3d 532, 540–41 (7th Cir. 2018).

In Hennen, no fewer than five doctors examined the claimant

in person and found clinical evidence of an often-disabling

condition called radiculopathy. Id. at 540. But a sixth doctor

disagreed (without even being asked to opine on the diagno-

sis), suggesting that more tests were needed to find objective

evidence of the condition. See id. at 538. Instead of ordering

more tests or otherwise grappling with the fact that five doc-

tors had reached a different conclusion, the plan administra-

tor simply adopted the sixth doctor’s conclusion and denied

No. 23-2269 15

benefits. Id. at 541. We explained in that specific situation,

where “all [five of] the examining doctors disagreed with [the

administrator’s reviewing doctor] on the key issue,” that the

administrator acted arbitrarily in deciding to privilege its own

doctor’s findings—especially where that doctor made the

“key final recommendation” to arrange for follow-up testing.

Id. at 540–41.

The record here, by contrast, contained rational support

for Hartford’s decision to deny long-term benefits under

WEC’s plan even without additional testing. See Davis, 444

F.3d at 576–77 (“The judicial task here is not to determine if

the administrator's decision is correct, but only if it is reason-

able.”). Treating neurologist Dr. Khatri concluded on multiple

occasions that Artz could work 8 hours per day, 5 days per

week despite his physical and cognitive MS symptoms. See id.

at 577 (suggesting that it is reasonable for a plan administrator

“to rely on its doctors’ assessments of the file and to save the

plan the financial burden of conducting repetitive tests and

examinations,” especially where the administrator’s doctors

were not “completely at odds with the claimant’s doctors and

the medical evidence”). Dr. Khatri may have later changed his

opinion about Artz’s overall employability—but he did so

without providing any explanation or evidentiary support.

See id. at 578 (discounting a physician’s change of opinion be-

cause it was made without “new data in the record”).

C

We owe a few words in response to Artz’s emphasis on

how his receipt of Social Security disability benefits and short-

term disability benefits under WEC’s plan further shows the

infirmity in Hartford’s conclusion. To Artz’s mind, those

more favorable determinations prove once and for all that

16 No. 23-2269

Hartford’s conflict of interest affected the long-term benefits

decision. We cannot agree.

Remember that Artz declined to provide his Social Secu-

rity records to Hartford even though he was invited to do so.

See Black v. Long Term Disability Ins., 582 F.3d 738, 748 (7th Cir.

2009) (observing that the insurer reasonably rejected the

SSA’s disability finding because “the SSA did not review the

same information that [the administrator] obtained from its

consulting physicians”). Even had Artz provided these rec-

ords, the validity of his claim would turn, “in large part, on

the interpretation of terms in the plan at issue.” Black & Decker

Disability Plan v. Nord, 538 U.S. 822, 833 (2003) (internal quo-

tation marks omitted).

Nor did Hartford’s approval of short-term disability ben-

efits necessarily resolve the question of long-term benefits un-

der the WEC plan. See Holmstrom, 615 F.3d at 767 (explaining

that a plan administrator “is entitled to seek and consider new

information and, in appropriate cases, to change its mind”).

Prohibiting plan administrators from collecting new infor-

mation during the long-term benefits review process (or re-

quiring them to collect more information in the short term)

would effectively require a merger of short- and long-term

benefits determinations.

***

In no way is the human side of our conclusion lost on us.

Multiple sclerosis is a serious disease, and we have much

sympathy for Artz’s position. But this case is before us on ar-

bitrary-and-capricious review, and as Hartford explained in

its final denial letter, “the presence of a diagnosis or symptom

alone does not represent functional impairment resulting in

No. 23-2269 17

Disability as defined by the Policy.” The evidence must show,

in addition to the existence of symptoms, that the “severity and

persistency” of those symptoms results in “functional impair-

ment”—especially for a “highly heterogeneous condition”

like MS. That is where Artz’s claim falls short. Several physi-

cians concluded that he did not present enough objective evi-

dence to show “severity and frequency” of symptoms “such

that functional impairment [was] established.” This eviden-

tiary record leaves us no choice but to AFFIRM.