Opposition Brief — Kobs v. United Wisconsin Insurance
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Mary Sulliven, Ph.D., L.P: Dr. Sullivan is an Assis-
tant Professor of Neurology at the University of Min-
nesota Medical School. Dr. Sullivan performed a
neuropsychological evaluation of Petitioner on August
22, 2002 based on a referral from Petitioner's primary
care physician, Dr. Melby. Dr. Sullivan concluded that
“[t}here was in fact no real evidence that he had sus-
tained a closed head injury, e.g., an injury that would
have produced cognitive effects” and that the testing
results “were not consistent with the presence of
memory problems secondary to a closed head injury.”
(R App 63a-64a)’ Dr. Sullivan also noted “numerous
implausible aspects of [Petitioner’s) performance
which raise questions about the effort he exerted
throughout this evaluation.” Specifically, Dr. Sullivan
observed: |
First of all, [Petitioner's] IQ, as measured here,
was found to be 80, that is, just barely within the
low average range. This is simply not believable.
There is no possible way that a head injury of the
severity described by [Petitioner] could have low-
ered his IQ to this leve!. Furthermore, there were
findings within the IQ testing that were also
highly unlikely. [Petitioner] obtained a score on
Vocabulary, which measures knowledge of vo-
cabulary, that was in the low average range. This
seems unusually low for a man who finished two
years at Boston College and who used to make
speeches and sell cars ... Furthermore, knowl-
edge of vocabulary is pretty invulnerable to the ef-
fects of a mild head injury ... Third, [Petitioner]
got just one item right on the Picture
~ the first item. He then failed the next four items.
* Petitioner's appendix includes only excerpts from Dr. Sullivan's
report. The full report is included in Respondent's appendix at 39a-65a.
This is a highly unusual performance, even for
people who are mentally retarded. [Petitioner],
even given how poorly he performed, is clearly
not mentally ;
(R App 59a-60a)
Philip Sarff, Ph.D.: Dr. Sarff is a psychologist. Re-
spondent retained him to examine and test Petitioner
and to review Petitioner’s medical records. The ex-
amination was performed on March 28, 2003. Dr.
Sarff’s findings echo those of Dr. Sullivan. He noted
“a pattern of cognitive performance on current and
past testing that shows inconsistency, and these in-
consistencies were well documented in the neuropsy-
chological assessment done on 8/22/02.” (P App 84a)
Among other things, Dr. Sarff noted that the results
of memory testing showed low average performance
on most scores and that “(gliven this finding, along
with convincing evidence from the measures of sym-
tom |sic] exaggeration, it seems safe to conclude that
the client is not suffering from dementia.” (P App 85a)
[Petitioner’s) pattern of deficits is not consistent
with degenerative dementia, or demertia due to
brain injury. Unfortunately, there is strong evi-
dence that he consciously or unconsciously exag-
gerated symptoms for this evaluation. While one
cannot automatically conclude that he showed
the same pattern with the previous two neuro-
psychological evaluations, there is sufficient evi-
dence to at least question the findings. Also, it is
notable that for the current evaluation, the client
was obviously aware that his motivation might
be suspect because one of the first things he said
was to reassure the examiner that he was not go-
ing to ‘lie.’
9
(P App 85a-86a) The registered nurse retained by Respon-
dent to review the entire contents of Petitioner’s file
concluded that “(b]ased on the objective medical documen-
tation provided for review, the objective data does not even
come close to the massive subjective complaints of the
claimant.” (P App 91a) Respondent upheld the denial of
long-term disability benefits.
Proceedings Below. On November 26, 2003, Peti-
tioner filed this action in state court, pleading a claim for
state law breach of contract. (R App 1la-3a) Plaintiff also
served a “Demand to Produce” on Respondent, seeking -
information in Respondent’s claim file and a copy of the
relevant disability policy. Respondent removed the matter
to federal court and filed a motion to dismiss, arguing that
Petitioner’s state law claim was preempted by ERISA, 29
U.S.C. §1144(a). Petitioner responded by requesting leave
to amend his complaint to plead a claim for benefits under
ERISA, although Petitioner contended that his state law
claim was not preempted by ERISA.’ (R App 4a) Plain-
tiff’s amended complaint included ERISA and state law
claims. (R App 6a-11a)
* Petitioner argued that ERISA preemption only applies when a
benefit plan is “self-funded” and that it does not apply to insured
ERISA plans. Petitioner’s argument ignored the statutory definition of
an “employee welfare benefit plan” which broadly includes plans that
are funded “through the purchase of insurance or otherwise.” 29 U.S.C.
§1002(1). He also ignored decisions of this Court that apply ERISA’s
preemption provision to state law breach of contract and other claims
that arise out of insured ERISA plans. See, e.g., Pilot Life Ins. Co. v.
Dedeaux, 481 U.S. 41 (1987); Metropolitan Life Ins. Co. v. Taylor, 481
U.S. 58 (1987).
10
Shortly after removal, the parties filed their Rule 26(f)
Joint Scheduling Report. (R App 12a-15a) It was Peti-
tioner’s position that he would conduct the deposition of at
least one person involved in the denial of Petitioner's
disability benefit claim. Respondent stated that it would
object to any depositions.‘ Both parties stated that they
- contemplated filing motions for summary judgment. (R
App 12a, 13a-14a)
On January 27, 2004, the district court issued its
Preliminary Pre-Trial Conference Order, setting a deadline
for motions for summary judgment of May 1, 2004 and a
discovery deadline of June 10, 2004. (R App 16a-17a) On
February 2, 2004, the district court issued its Memoran-
dum and Order dismissing Petitioner's state law cause of
action as preempted by ERISA and allowing Petitioner to
proceed with his ERISA benefit claim. (R App 18a-24a) On
February 19, 2004, Respondent responded to Petitioner's
“Demand for Production” by agreeing to produce the policy
_ and the administrative record/claim file.
On April 5, 2004, Respondent filed its motion for
summary judgment. Respondent contended that, based on
the evidence in the administrative record, its decision to
deny Petitioner’s benefit claim was not arbitrary and
capricious or an abuse of discretion.’ Petitioner sought an
* In the Seventh Circuit, as in other circuits, where an abuse of
discretion standard is applicable, a court's review of a decision to deny
ERISA plan benefits is limited to the evidence that was before the
decision maker at the time of the determination. See, e.g., Perlman v.
Swiss Bank Corp. Long Term Comprehensive Dis. Protection Plan, 195
F.3d 975, 981-82 (7th Cir. 1999). Because admissible evidence is so
limited, Respondent took the position that discovery is likewise limited.
* The deferential review standard in the Seventh Circuit is termed
an “arbitrary and capricious” standard rather than an “abuse of
discretion” standard. The Seventh Circuit has ruled that the two
(Continued on following page)
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extension to respond, stating that he intended to take a
deposition of one of Respondent's representatives. Respon-
dent moved for a protective order, arguing that any evi-
dence obtained in the deposition was beyond the scope of
admissible evidence in an ERISA benefit proceeding and
that Petitioner had not timely noticed the deposition. (R
App 25a-26a; 27a-34a) Petitioner responded, contending
that he needed the deposition to determine if Respondent
was acting in a “dual capacity” in processing Petitioner’s
benefit claim and that without the deposition, “the Plaintiff
is unable tc determine whether [Respondent] acts as the
insurer, interpreter, and the administrator of [Petitioner’s}
insurance policy... .” Petitioner argued that it was “impos-
sible for Plaintiff to respond” to the motion for summary
judgment without the deposition. (R App 36a, 37a)
On May 5, 2004, the district court granted Respon-
dent’s motion for protective order, ruling that “a deposition
is not required to determine the administration [sic]
record in this matter.” (P App 19a) On May 12, 2004,
Petitioner responded to the motion for summary judgment.
He argued that Responde™t acted in a dual role as admin-
istrator and insurer and that this should result in either a
de novo review standard or a “sliding scale.” Other than
the alleged “dual role,” Petitioner presented no evidence or
arguments to support an alleged conflict of interest, nor
did he present any arguments or evidence that an alleged
conflict had any impact on the benefit denial.
standards are equivalent. See, eg, Fritcher v. Health Care Service
Corp., 301 F.3d 811, 816 n.4 (7th Cir. 2002) (“We note in passing that a
previous decision from a panel of this court once noted a distinction
between the ‘arbitrary and capricious’ standard of review and the ‘abuse
of discretion’ standard of review ... As we have subsequently pointed
out, however, this eppears to be a distinction without a difference.”).
12
On May 28, 2004, the district court granted summary
judgment in favor of Respondent. The court concluded that
Respondent’s decision was “amply supported by extensive
medical records;” that the medical evidence “was in near
unanimous support of the conclusion that plaintiff was not
disabled as a result of any orthopedic conditions;” and that
“the overwhelming weight of the medical evidence ...
suggested that plaintiff’s complaints were exaggerated
and that he did not have significant cognitive impair-
ment,” including “the conclusions of Dr. Sullivan who was
independent and not hired by defendant.” (P App 16a)
The Seventh Circuit affirmed. The court noted that
Petitioner’s claim was supported by his family doctor and
by a psychologist who saw Petitioner on a referral from
Petitioner’s family doctor. However, “(ojn the other side of
the scale were the opinions of two orthopedic surgeons,
two psychologists, a psychiatrist/neurologist, and e¢ regis-
tered nurse.” (P App 4a) The court quoted from several of
the medical reports, including the conclusion that “there is
strong evidence that [Petitioner] consciously or uncon-
sciously exaggerated symptoms for this evaluation.” (P
App 5a) The court emphasized the findings of Dr. Sullivan,
who was not on Respondent’s payroll and who saw Peti-
tioner on a referral from Petitioner’s own doctor, and who
“was also the first of three medical experts who questioned
whether [Petitioner] was sandbagging during the tests.” (P
App 7a) Ultimately, the court of appeals stated as follows
regarding Respondent’s decision:
(Respondent) gathered and reviewed the pertinent
medical information, hired a number of physicians to
evaluate [Petitioner] and review his medical files, and
made an informed judgment about [Petitioner’s] long-
term disability application that coincided with the
13
bulk of the medical evidence. When [Petitioner] ap-
pealed the initial determination, [Respondent] ac-
cepted additional medical information submitted by
[Petitioner], had another psychologist evaluate [Peti-
tioner], and hired a nurse to review [Petitioner’s] en-
tire file. Given this exhaustive process, [Respondent’s]
reasonable conclusior s, and the absence of evidence of
bad faith or conflict of interest, there is no basis to
disturb [Respondent’s] benefits determination.
(P App 9a)
7
REASONS FOR DENYING THE WRIT
The Petition raises two questions: (1) when and under
what circumstances does an ERISA claim administrator
that is also an insurer have a conflict of interest when
deciding benefit claims?; and (2) what impact does such a
conflict have on a court’s application of the abuse of
discretion standard” Resolving one question without also
resolving the other would provide the lower courts with
little guidance. Unfortunately, the facts in this case make
it a poor vehicle for resolving either one of these questions.
* During the last term, this Court denied at least three petitions
for writs of certiorari raising questions related to the conflict of interest
of ERISA claim administrators — petitions that were filed by parties
representing varied interests, including plan participants, self-funded
plan sponsors, and plan insurers. See Unum Life Insurance Company of
America v. Fought, No. 04-1000 (petition filed by benefit plan insurer in
case decided by the Tenth Circuit); Merck & Co. v. Epps-Malloy, No. 04-
995 (petition filed by self-funded plan sponsor and the plan’s claim
administrator in case decided by the Third Circuit); Peach v. Ultramar
Diamond Shamrock, No. 04-919 (petition filed by claimant/plan
participant in case decided by the Sixth Circuit).
14
I. THIS IS NOT AN APPROPRIATE CASE FOR
RESOLVING WHEN AND UNDER WHAT CIR-
CUMSTANCES AN INSURER HAS A CONFLICT
OF INTEREST GENERALLY BECAUSE THERE
IS SUBSTANTIAL EVIDENCE OF RESPON-
DENTS IMPARTIALITY IN DENYING PETI-
TIONER’S CLAIM AND BECAUSE PETITIONER
HAS WAIVED ANY OPPORTUNITY TO DEMON-
STRATE BIAS BEYOND THE MERE FACT
THAT RESPONDENT IS AN INSURER.
A. Because the Seventh Circuit Rejects “One
Size Fits All” Assumptions about Alleged
Insurer Bias, the Conflict of Interest Analy-
sis in Each Case is Highly Fact-Sensitive.
Petitioner's criticism that the Seventh Circuit relies
on “unsubstantiated economic assumptions” is not only
ironic, but also misses the entire point of the Seventh
Circuit’s position on the conflict of interest issue. Peti-
tioner’s argument is ironic because the very basis of
Petitioner's own argument is the unsubstantiated eco-
nomic assumption that all insurers are always biased and
that they always act in exactly the same biased way when
determining benefit claims, regardless of the actual
evidence in a particular case. The argument also misses
the point of the Seventh Circuit’s position, which is that
the court refuses to engage in economic assumptions, one
way or the other, and instead presumes neutrality unless
the claimant demonstrates that the decision maker was
biased and that this bias had an impact on the benefit
denial.
The Seventh Circuit has repeatedly recognized that
when deciding benefit claims. On the one hand, insurers
15
are in business to make a profit and it is not impossible
that there may be a temptation in some cases to deny
borderline claims. See, e.g., Leipzig v. AIG Life Ins. Co.,
362 F.3d 406, 408 (7th Cir. 2004). On the other hand, the
Seventh Circuit also recognizes that, in order to compete
in the marketplace, there is pressure to pay claims be-
cause insurers recognize that overly “tight-fisted” claims
decisions may discourage employers from buying their
policies. Mers v. Marriott Int'l Group Accidental Death &
Dismemberment Pian, 144 F.3d 1014, 1021 (7th Cir. 1998)
(“Companies ... who choose which group insurance
policies they will use to fund their plans ... have the
sophistication and bargaining power necessary to take
their business elsewhere if an insurer ... consistently
denies valid claims.”). Likewise, because insurers are
generally well diversified, must maintain reserves, and
are well funded, the impact of granting or denying benefits
in a given case, “is miniscule compared to [the insurer’s)
bottom iine.” Jd. at 1021; Leipzig, 362 F.3d at 409. Fur-
thermore, there are various forms of insurance arrange-
ments that affect who is ultimately | abie for a benefit
such that blanket assumptions about insurance arrange-
ments generally may not be valid in a given case. Leipzig,
362 F.3d at 408 (some insurance arrangements contain
adjustments in benefit rates and/or premium costs that
“compensate employees for the risk of self-interested
behavior”); Perlman v. Swiss Bank, 195 F.3d at 981
(discussing retrospectively rated insurance arrangements
whereby benefit costs are reimbursed by the employer).
The Seventh Circuit has also noted that a denial that
turns on unique factual evidence, like the present case, is
likely to have less overall impact on an insurer than a
denial that turns on broader issues of policy interpreta-
tion that can potentially affect other claims. Cozzie v.
16
Metropolitan Life Ins. Co., 140 F.3d 1104, 1108 (7th Cir.
1998) (““ndeed, it has not been demonstrated that MetLife
has a direct stake, in terms of its own financial health, in
the outcome of this issue of interpretation.”). Finally, the
Seventh Circuit has questioned whether one can make a
valid assumption in every case that an insurer’s corporate
profit motive actually impacts the individual employees
who decide claims. Perlman, 195 F.3d at 981 (“[I]t is
unsound for the judiciary automatically to impute the plan
administrator’s position to the person who decides on its
behalf.”).
Although the Seventh Circuit refuses to engage in
general assumptions about insurer bias, the Seventh
Circuit does consider the possibility that a given insurer
may let partiality influence its decision in a specific claim.
The court will consider “specific evidence of actual bias
that there is a significant conflict.” Mers, 144 F.3d at 1020.
This includes evidence that “an insurer or plan adminis-
trator pays its staff more for denying claims than for
granting them.” Leipzig, 362 F.3d at 408-09. In other
words, in each individual benefit dispute, if tiiere is
evidence that a decision was impacted by bias, the Sev-
enth Circuit will consider that evidence and will adjust the
amount of deference accordingly. If there is no such evi-
dence, the Seventh Circuit will not engage in unsubstanti-
ated ‘assumptions about what may or may not have
motivated the decision. Each ERISA benefit case in the
Seventh Circuit stands on its own facts.
17
B. This Case is a Poor Vehicle for Deciding
Whether or Not Insurers Generally Have an
“Inherent” Conflict Because the District
Court and the Seventh Circuit Emphasized
that the Specific Facts of this Case Demon-
strated that Respondent Acted Impartially.
Ignoring the specific facts in the present case, Peti-
tioner contends that all insurers should always be clothed
with the assumption that they act under perpetual “inher-
ent” conflicts of interest. The problem with this argument
is that, in this case, the record evidence contains multiple
indications of Respondent's impartiality. First, even
though substantial procedural defects in a claim decision
can be evidence of potential bias,’ there is no evidence of
any substantial procedural defects in the processing of
Petitioner’s claim. To the contrary, the review process
involved volumes of medical records, reviews and exami-
nations by multiple experts in varied specialties, and the
process was, by all accounts, extensive. Second, rather
than merely relying on its own employees, Respondent
retained several independent medical experts to review
Petitioner’s records and to examine and evaluate Peti-
tioner. Many courts hold that reliance on independent
experts is evidence that a decision is impartial.’ Finally,
" See, e.g., Woo v. Deluxe Corp., 144 F.3d 1157, 1160-61 (8th Cir.
1998) (Less deference may be accorded where a procedural irregularity
“caused a serious breach of the plan administrator's fiduciary duty” and
“has some connection to the substantive decision reached.”)
* See, ¢.7., Fought v. Unum Life Ins. Co. of America, 379 F.3d 997,
1015 (10th Cir. 2004), cert. denied, No. 04-1000 (May 2, 2005) (“Where
... @ conflict of interest may impede the plan administrator's impartial-
ity, the administrator best promotes the purposes of ERISA by obtain-
ing an independent evaluation.”), Hightshue v. AIG Life Ins. Co., 135
F.3d 1144, 1148 (7th Cir. 1998) (“Seeking independent expert advice is
(Continued on following page)
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Respondent relied on opinions from doctors to whom
Petitioner was referred by his own primary care physician.
Certainly, Petitioner cannot allege bias on the part of
experts who examined Petitioner at the direction cf his
own doctor.
The record also directly refutes Petitioner's contention
that the district court and the Seventh Circuit completely
ignored any potential for a conflict of interest. To the
contrary, both courts were careful to note evidence of
impartiality. =e apne A esacrneesg the district
court specifically noted with respect to each medical
professional, the means by which each expert was retained
and by which party. (P App 12a-l4a) Concluding that
“overwhelming” evidence supported the decision that
Petitioner's cognitive complaints were exaggerated and not
disabling, the district court also noted that this conclusion
was “particularly” supported by Dr. Sullivan “who was
independent and not hired by defendant.” (P App 16a)
Obvi wsly, the district court kept its “eyes peeled” for
potential bias.
made several comments indicating that it carefully consid-
ered the potential for bias. Responding to Petitioner’s argu-
ment that the court should defer to his primary care doctor,
the court noted that the primary care doctor’s opinions were
contradicted by the opinions of specialists and that Petitioner
made ro effort to address the opinions that undermined his
primary care doctor. (P App 6a) The court also specifically
noted that Petitioner's primary care physician referred
evidence of a thorough investigation.”); Ellis v. Metropolitan Life Ins.
Co., 126 F.3d 228, 234 (4th Cir. 1997) (reliance on independent medical
experts “greatly mitigates” any conflict of interest).
19 u
Petitioner to two of the psychologists who performed tests,
and that one of them, Dr. Sullivan, was “the first of three
medical experts who questioned whether [Petitioner] was
sandbagging during the test.” (P App 7a) Finally, the Seventh
Circuit made the point that Respondent rendered its decision
only after gathering and reviewing pertinent medical infor-
mation, that Respondent hired a number of physicians and
other professionals to examine Petitioner and to review his
records, that Respondent employed an “exhaustive process”
in evaluating Petitioner’s claim, and that Respondent's
decision was rendered free of any evidence of bad faith or
conflict of interest. All of this shows that the courts did not
ignore the potential for bias, but instead carefully noted the
substantial evidence that the decision was rendered free of
any partiality. Whatever this Court might ultimately deter-
mine as to whether or not insurers in general have an
“inherent” conflict of interest, the facts in this case demon-
strate that any such “inherent” conflict was more than
neutralized and that any decision regarding when a conflict
of interest exists generally will likely have no impact on the
judicial review standard applied in this case.
C. Even Ignoring the Substantial Record Evi-
dence of Respondent’s Impartiality, if this
Court Decides that Something More than a
Mere “Inherent” Conflict is Needed before
there is any Impact on the Abuse of Discre-
tion Standard, Petitioner has Waived any
Opportunity to Obtain any Evidence of Ac-
tual Bias Because He Failed to Appeal the
District Court’s Discovery Order.
In the district court, Petitioner contended that he
needed the deposition of one of Respondent’s employees to
20
determine if Respondent was acting in a “dual capacity.”
He also argued that without the deposition, “the Plaintiff
is unable to determine whether [Respondent] acts as the
insurer, interpreter, and the administrator of [Petitioner’s]
insurance policy... .” (P App 36a, 37a) In fact, Petitioner
argued that it was “impossible for Plaintiff to respond” to
the motion for summary judgment without the deposition.
(P App 37a) The district court denied Petitioner’s request
and granted Respondent’s motion for protective order.
Contrary to his representations to the district court, it was
not “impossible” for Petitioner to argue that Respondent
had an inherent conflict, because that is exactly what
Petitioner did argue to the district court, the court of
appeals, and in his Petition before this Court.
As Petitioner recognizes, an “inherent” conflict, is not
enough in the Seventh Circuit, and Petitioner was re-
quired to show that an actual conflict impacted the denial.
In some circuits, although a court’s review of the substan-
tive evidence in an ERISA claim is limited to the record
developed before the claim administrator, a claimant may
submit evidence outside of the administrative record
regarding certain tangential issues, such as a potential
conflict of interest.’ Petitioner argues that the Seventh
Circuit does not permit discovery into the conflict of
interest issue. Assuming this is true, Petitioner’s appeal to
the Seventh Circu’* « ld have offered a perfect opportu-
nity for Petitione: +. challenge that rule. Nevertheless,
* See, ¢.g., Wilkins v. Baptist Healthcare System, 150 F.3d 609, 618 (6th
Cir. 1998) (an exception to the principle of not receiving new evidence at the
district court level is when consideration of the evidence is necessary to
resolve alleged bias on the part of the claim administrator).
21
Petitioner did not appeal the discovery ruling and that
issue is now waived.”
The problem that Petitioner’s waiver presents in terms
of whether to grant the Petition is that it substantially
narrows the range of holdings thai are likely to impact this
case. If this Court rules that an ERISA claimant is required
to prove something more than an “inherent” conflict in order
to modify the abuse of discretion standard, such a decision
will make no difference in this case because Petitioner has
not preserved his opportunity to meet this standard.
Apparently realizing that the record in this case is
bereft of any evidence of bias (in fact, the record contains
substantial evidence that Respondent was not biased),
Petitioner attempts to submit materials from other cases,
even though none of the materials relate to Respondent. At
most, the deposition in Armstrong v. Aetna Life Ins. Co., 128
F.3d 1263 (8th Cir. 1997) shows that the insurer in that
case had a potential conflict because the insurer allegedly
compensated its claim personnel for denying claims. The
Seventh Circuit has indicated that it would consider such
evidence if submitted in connectioz: with a particular claim
decision. Leipzig, 362 F.3d at 409 (“Unless an insurer or
plan administrator pays its staff more for denying claims
than for granting them, the people who actually implement
these systems are impartial.”). However, there is no such
” Failure to raise an issue on appeal constitutes waiver of any
claim of error with respect to the lower courts’ decisions on that issue.
See, e.g., HA-LO Indus. v. CenterPoint Props. Trust, 342 F.3d 794, 801
(7th Cir. 2003); Kuuthar SDN BHD v. Sternberg, 149 F.3d 659, 668 (7th
Cir. 1998). “Where issues are neither raised before nor considered by
the Court of Appeals, the Supreme Court will not ordinarily consider
them.” Pa. Dept of Corr. v. Yeskey, 524 U.S. 206, 213 (1998); see also
Adickes v. S.H. Kress & Co., 398 U.S. 144, 147, n.2 (1970).
22
evidence in this case and Petitioner has waived any oppor-
tunity to develop such evidence by failing to appeal the
protective order. The memo submitted with the plaintiff's
trial brief in Schneider v. Provident Life & Acc. Ins. Co. (P
App 117a) is, at most, ambiguous as to whether or not it
proves any conflict. But again, the memo concerns a differ-
ent insurer and does not relate to Respondent or to this
claim. At most, it shows that an insurer in that case might
have had a conflict in connection with that claim. Again, the
Seventh Circuit would consider such specific evidence if it
were related to Petitioner’s claim. Ironically, Schneider was
not even an ERISA case and it is not clear whether the
memo was even admitted into evidence. At any rate, that
case was tried to a jury under California state law and the
jury rendered a verdict in favor of the insurer." If the memo
was admitted into evidence, it obviously did not impress the
jury in that case.”
" Schneider v. Provident Life & Acc. Ins. Co., Cause No. 97-C-4646
(N.D. Cal.), Dkt. No. 223 (bench trial! ruling that “[t)his was not an
ERISA plan” and setting the matter for a jury trial); Dkt. No. 244
(judgment that plaintiff's state law claims are not preempted by ERISA),
Dkt. No. 245 (judgment en‘zred in accordance with jury verdict in favor
of Provident Life & Acciden’. Insurance Company and against plaintiff ).
” Plaintiff's submission of pleadings from a foreclosure and a replevin
action have nothing to do with any conflict of interest on the part of the
Respondent, the sole question raised in the Petition. A social security
administration decision also does not pertain to any question raised in the
Petition. At most, it shows that an administrative law judge found
Petitioner to be disabled under the rules that apply in social security
proceedings based in part on evidence that was not presented to Respon-
dent and not having the benefit of other evidence that was in Respondent's
file. There is nothing in the benefit plan or in ERISA that makes the social
security decision binding or even influential in Respondent's decision,
particularly when the decision was not submit. to Respondent. This
Court's decision in Black & Decker Disability Plan v. Nord, 538 U.S. 822
(2003) implies as much. /d. at 829-34 (discussing the differences between
(Continued on following page)
23
In summary, applying the fact-sensitive analysis
required in the Seventh Circuit, both the district court and
the Seventh Circuit carefully considered any possible bias
and both courts concluded that there was substantial
evidence demonstrating that Respondent was impartial.
Furthermore, by failing to appeal the district court’s
discovery order, Petitioner waived any opportunity to
demonstrate a conflict of interest beyond Respondent’s
alleged “irherent” conflict based on its dual role as claim
administrator and insurer. These facts substantially limit
the possibility that a review by this Court will have any
impact on application of the abuse of discretion standard
in this case or that it will change the result in this matter.
Il. THIS IS NOT AN APPROPRIATE CASE FOR
RESOLVING HOW A CONFLICT OF INTEREST
MIGHT AFFECT THE ABUSE OF DISCRETION
STANDARD BECAUSE THE SUBSTANTIVE
EVIDENCE WEIGHED HEAVILY IN RESPON-
DENT’S FAVOR, MAKING IT HIGHLY UN:
LIKELY THAT LESSENED DEFERENCE WOULD
CHANGE THE RESULT IN THIS CASE.
A. Given this Court’s Decision in Firestone,
the [Impact of a Conflict of Interest on the
Abuse of Discretion Standard Ranges From
an Unaltered Abuse of Discretion Standard
to Lessened Deference, Short of De Novo
Review.
In the district court and the Seventh Circuit, Peti-
tioner took the position that any conflict of interest should
the laws regulating social security and the laws regulating private
disability plans and holding that social security's treating physician rule
does not apply to private disability plans governed by ERISA).
24
result in the application of either a de novo review stan-
dard or a “sliding scale.” The former approach applies no
deference whereas the latter approach applies different
degrees of deference, depending on the magnitude of the
conflict. This Court already rejected the former approach
in Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101
(1989), when it declined to consider a claim administra-
tor’s impartiality as the criterion for determining whether
to apply a deferential review standard.
In Firestone, the Third Circuit held that whether a
claim administrator had a conflict of interest was the
determining factor in whether to apply a deferential
review standard in ERISA benefit disputes. This Court
declined to follow the Third Circuit’s reasoning and held
that the aprication of deferential review must depend on
the intent of the contracting parties, regardless of how a
benefit plan is funded and regardless of whether the
fiduciary is conflicted. 489 U.S. at 115. Thus, where “the
benefit plan gives the administrator or fiduciary discre-
tionary authority to determine eligibility for benefits or to
construe the terms of the plan,” courts must apply an
abuse of discretion standard of review to fiduciaries’
benefit determinations. Jd. This Court acknowledged thai
in some cases, discretionary authority might be granted to
conflicted claim administrators. In such cases, deferential
review would still apply and the conflict would be
“weighed as a ‘facto[r] in determining whether there is an
abuse of discretion.’” Jd. (citation omitted).
In summary, this Court has already determined that,
regardless of any conflict on the part of the claim adminis-
trator, courts will enforce discretionary authority in plan
documents, and will only take the conflict into account as
a factor when applying the abuse of discretion standard.
25
As a practical matter, then, the potential impact that a
conflict of interest may have on the abuse of discretion
standard may range from no impact (i.e. full deference) to
lessened deference, short of de novo review.
B. Even if this Court Holds that Less Deference
Applies when an Insurer Decides ERISA
Claims, it is Highly Unlikely that the Result
would Change in this Case Because the Great
Weight of the Record Evidence Would Still
Support the Denial.
Assuming arguendo that this Court would decide that
an “inherent” conflict arises from an insurer’s “dual role”
and that this type of conflict requires a court to grant less
deference-under the abuse of discretion standard, the
lessened deference would have no impact on the final
outcome in this case because of the strength of the medical
evidence supporting Respondent’s denial. The district
court concluded generally that the denial was not only
“reasonable” (i.e. not an abuse of discretion or arbitrary
and capricious), but that it was “amply supported by
extensive medical records.” (P App 16a) With respect to
Petitioner’s orthopedic claim, the district court concluded
that the “medical evidence was in near unanimous support
of the conclusion that plaintiff was not disabled.” Simi-
larly, with respect to Petitioner’s memory loss claim, the
district court concluded that “the overwhelming weight of
the medical evidence — and particularly the conclusions of
Dr. Sullivan who was independent and not hired by
defendant — suggested that [Petitioner’s] complaints were
exaggerated and that he did not have significant cogni-
tive impairment.” (P App 16a) On appeal, after noting
that at least three experts concluded that Petitioner was
26
“sandbagging,” the Seventh Circuit held that Respondent’s
decision “coincided with the bulk of the medical evidence.”
(P App 9a) The Seventh Circuit also noted that, while
Petitioner’s claim was supported by his family doctor and
a psychologist who saw Petitioner on a referral from the
family doctor, “loJn the other side of the scale were the
opinions of two orthopedic surgeons, two psychologists, a
psychiatrist/neurologist, and a _ ~istered nurse.” (P App
4a) Granted, both courts applied a deferential standard of
review in light of Petitioner’s failure to produce any
evidence of a conflict or bad faith on the part of Respon-
dent, but even a cursory reading of the decisions reveals
that neither the district court nor the Seventh Circuit saw
the benefit denial as a close call. Even if the courts had
applied less deference, the evidence would still be “near
unanimous” on the orthopedic claim and “overwhelming”
on the cognitive claim, and Respondent’s denial would
likely be affirmed.
The same result would apply if this Court were to
decide that a review standard close to de novo should
result from the “inherent” conflict. In light of the weight of
the record evidence, it is still highly likely that the denial
would be upheld. In this respect, Petitioner’s argument
that sumimary judgment would-not be appropriate because
there were some disagreements among the reviewing
doctors is not only wrong, but probably irrelevant.
Petitioner’s argument is wrong for at least two rea-
sons. First, to the extent that a court applies even minimal
deference, the ultimate question of fact is not wh-ther the
denial was correct, but whether it was an abuse of discre-
tion. A court can certainly make this determination on
summary judgment, even when the record evidence
contains disagreements among reviewing doctors and
27
particularly where the medical evidence in the record is so ~
strong in favor of the denial, as in this case.
Second, Petitioner’s argument is also wrong because
of the manner in which ERISA benefit disputes are deter-
mined. If the district court did not grant summary judg-
ment, it would sit as the fact finder in a bench trial.” The
substantive evidence at trial would be exactly the same as
at summary judgment, i.e., the written administrative
record. In fact, Petitioner did not even suggest that the
district court should consider other medical evidence not
already included in what was an extensive medical record.
In this type of proceeding, summary judgment is nothing
more than “a vehicle for deciding” whether the denial was
correct:
The review utilized both by this court and the
district court in this ERISA case differs in one impor-
tant aspect from the review in an ordinary summary
judgment case... [I]n an ERISA case where review is
based only on the administrative record before the
plan administrator and is an ultimate conclusion as
to disability to be drawn from the facts, summary
judgment is simply a vehicle for deciding the issue...
This means the non-moving party is not entitled to
the usual inferences in its favor. When there is no
dispute over plan interpretation, the use of summary
judgment in this way is proper regardiess of whether
our review of the ERISA decision maker’s decision is
de novo or deferential.
* In the Seventh Circuit, as in every other circuit that has decided
the issue, ERISA benefit disputes are tried to the court and not to a
jury. See, e.g., Mathews v. Sears Pension Plan, 144 F.3d 461, 466 (7th
Cir. 1998).
28
Trial is not warranted because the record shows one
doctor’s diagnosis disagrees with another’s, and the
fact that judicial review is de novo does not itself enti-
tle a claimant to a trial or to put on new evidence.
Orndorff v. Paul Revere Life Ins. Co., 404 F.3d 510, 517-18
(1st Cir.), cert. denied, No. 05-189 (October 11, 2005). In
other words, Petitioner’s assumption that disagreements
among the medical experts would result in a denial of
summary judgment if the court applied something close to
a de novo review standard, is incorrect in an ERISA record
review proceeding.
~ Petitioner’s argument that summary judgment would
not be appropriate under a less deferential standard is
also irrelevant. Even if the district court denied summary
judgment and conducted a bench trial on the record,
applying minimal deference, the Petitioner would still
bear the burden to prove by a preponderance of the evi-
dence that Respondent abused its discretion. There is
virtually no chance that Petitioner could ever meet this
burden given the district court’s conclusions that there
was “near unanimous” support for the determination that
he was not orthopedically disabled, and “overwhelming”
evidence supporting the determination that Petitioner was
exaggerating his complaints and was not cognitively
disabled.
In summary, this case is not a proper vehicle for
certiorari because, no matter what the Court decides
regarding the impact of a conflict of interest on the abuse
of discretion review standard, the record evidence is such
that it is highly likely that Respondent's decision will still
be upheld.
2
29
CONCLUSION
For the foregoing reasons, Respondent respectfully
requests that the petition for writ of certiorari be denied.
Respectfully submitted,
MARY C. NASH MARK E. SCHMIDTKE*
UNITED WISCONSIN SCHMIDTKE HOEPPNER
INSURANCE COMPANY CONSULTANTS LLP
401 W. Michigan Street 103 East Lincolnway
Milwaukee, WI 53203 P.O. Box 2357
(414) 226-6510 Valparaiso, IN 46384
(219) 464-4951
*Counsel of Record
Counsel for Respondent
October 28, 2005
R. App. la
STATE OF WIS“ONSIN CIRCUIT COURT POLK COUNTY
Elvis Kobs Other Contracts — 30303
65 County Road M
Star Prairie, WI 54026
Plaintiff, COMPLAINT
v. (Filed Nov. 28, 2003)
United Wisconsin Insurance Company
P.O. Box 2013
Milwaukee, WI 53201-2013
Defendant.
NOW COMES Plaintiff by and through his under-
signed attorneys, Novitzke, Gust, Sempf & Whitley, by
Jason W Whitley, and for his complaint against defendant
above named, states:
1. That the plaintiff, Elvis Kobs, is an adult resident of
the State of Wisconsin and has as his residence 65
County Road M, Star Prairie, WI 54026.
2. That the defendant, United Wisconsin Group is an
insurance company licensed to do business in the
State of Wisconsin and is in the business of providing
group benefit insurance to individuals and employers.
3. That on January 4, 2002 and all other times relevant
to the causes of action set forth below, the plaintiff,
Elvis Kobs, was covered by a policy of insurance is-
sued by United Wisconsin Group.
4. That pursuant to the terms of that policy, Elvis Kobs
is provided with disability benefits.
5. That pursuant to the terms of the benefit plan pro-
vided by United Wisconsin Group, the plaintiff was
11.
12.
13.
R. App. 2a
provided short-term disability benefits from January
4, 2002 through July 4, 2002.
That after expiration of the short-term disability
benefits, the plaintiff requested long-term disability
benefits pursuant to the terms of the defendant’s
plan.
That despite meeting the qualifications and criteria
for payment of long-term disability benefits, the de-
fendants have denied said benefits to the plaintiff.
That the plaintiff has duly and properly complied
with all administrative remedies provided by the plan
in seeking review of the plans denial of long-term dis-
ability benefits.
That by and pursuant to the disability plan issued by
the defendant, the plaintiff is entitled to receive long-
term disability benefits.
That the defendant has denied long-term disability
benefits to the plaintiff.
That such denial is a violation of the terms of the
policy and constitutes breach of contract.
That since July 4, 2002, the plaintiff, due to injury
and/or illness has been unable to perform the mate-
rial duties of his regular occupation for a period of 180
days since the onset of total disability and through
the 24 month period following the elimination period
and the plaintiff has been unable to perform any of
the material duties of any gainful occupation for
which he may reasonably fitted by education, training
or experience, due to injury and/or illness.
That as a result of said breach, the plaintiff has been
damaged in an amount of money equal to his lost
benefits, interest, attorney's fees, and other costs as-
sociated with this action.
R. App. 3a
Wherefore, plaintiff demands judgment against the
defendant for a specific performance of the contract terms
or in the alternative, damages including consequential
damages plus costs, attorney’s fees, pre-judgment interest
and such other relief as the court deems just and equita-
ble.
DATED: 11-26-03 NOVITZKE GUST, SEMPF &
WHITLEY
/s/ Jason W. Whitley
Jason W. Whitley (ID # 1027052)
Attorneys for Plaintiff
314 Keller Ave No Ste 399
Amery WI 54001
(745) 268-6130
A TWELVE-PERSON JURY IS DEMANDED
R. App. 4a
UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF WISCONSIN
Elvis Kobs
65 County Road M
Star Prairie, W1 54026 Case No: 04C0005S
Plaintiff,
Vv.
United Wisconsin Insurance Company
P.O. Box 2913
Milwaukee, WI 53201-2013
Defendant.
leet ctlimtitiadiienstiemtionsl eee eee
eid eee eae
Plaintiff, Elvis Kobs, by and through his attorneys,
Novitzke, Gust, Sempf & Whitley, by Jason W. Whitley,
hereby move to amend the plaintiff’s complaint.
The basis for the motion is set forth below and in the
attached memorandum of law:
1. The plaintiff filed an action in State Court based
upon the breach of an employee provided disabil-
ity policy.
2. The policy was not employer funded.
3. The defendant removed the state action to Federal
Court pursuant to ERISA but the defendant is not
an ERISA plan or an employer.
4. The defendant’s removal may be proper if the
‘subject insurance policy is covered by ERISA; the
R. App. 5a
removal is not proper if the insurance company
defendant is not governed by ERISA.
5. The proper procedure following removal under
such circumstances is to recharacterize the state
action as falling with ERISA and file an amended
complaint pursuant to 29 U.S.C. §1132.
6. The proposed amended complaint is submitted
with this motion along with a memorandum of law
supporting the motion to amend.
Dated this 15 day of January, 2004.
/s/ Jason W. Whitley
Jason W. Whitley (ID #1027052)
NOVITZKE, GUST, SEMPF &
WHITLEY
Attorneys for Plaintiffs
314 Keller Avenue N. Ste. 399
Amery, WI 54001 (715) 268-6130
R. App. 6a
UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF WISCONSIN
Elvis Kobs
65 County Road M
Star Prairie, WI 54026 Case No: 04C 0005S
Plaintiff, AMENDED COMPLAINT
Vv.
United Wisconsin Insurance Company
P.O. Box 2013
Milwaukee, WI 53201-2013
Defendant.
Plaintiff, Elvis Kobs, by and through his attorneys,
Novitzke, Gust, Sempf & Whitley, by Jason W. Whitley, as
and for an amended complaint against the above named
defendant, allege as follows:
I, FIRST CAUSE OF ACTION: ERISA CLAIMS
1. The plaintiff, Elvis Kobs, is an adult resident of the
State of Wisconsin and has as his residence 65 County
Road M, Star Prairie, WI 54026.
2. That the defendant, United Wisconsin Group is an
insurance company licensed to do business in the
State of Wisconsin and is in the business of providing
group benefit insurance to individuals and employers.
3. That upon information and belief, this court may
have original jurisdiction over this action pursuant to
28 U.S.C. $1331 as this action may arise out of the
Employee Retirement Income Security Act of 1974, 29
U.S.C. §101, et. seq.
10.
11.
12.
R. App. 7a
That upon information and belief, the United State
District Court for the Western District of Wisconsin is
the proper venue for this action as all parties and all
transactions between the parties arise and occur
within said district.
That on January 4, 2002 and all other times relevant
to the causes of action set forth below, the plaintiff,
Elvis Kobs, was covered by a policy of insurance is-
sued by United Wisconsi . Group.
That pursuant to the terms of that policy, Elvis Kobs
was provided with disability benefits.
That pursuant to the terms of the benefit plan pro-
vided by United Wisconsin Group, the plaintiff was
provided short-term disability benefits from January
4, 2002 through July 4, 2002.
That after expiration of the short-term disability
benefits, the plaintiff requested long-term disability
benefits pursuant to the terms of the defendant's
plan.
That despite meeting the qualifications and criteria
for payment of long-term disability benefits, the de-
fendant has denied said benefits to the plaintiff.
That the plaintiff has duly and properly complied
with all administrative remedies provided by the plan
in seeking review of the plans denial of long-term dis-
ability benefits.
That by and pursuant to the disability plan issued by
the defendant, the plaintiff is entitled to receive long-
term disability benefits.
That the defendant has denied long-term disability
benefits to the plaintiff.
13.
14.
15.
16.
17.
R. App. 8a
That such denial is a violation of the terms of the
policy and entitles the plaintiff to all rights and
remedies provided by the Employee Retirement In-
come Security Act of 1974.
That since July 4, 2002, the plaintiff, due to injury
and/or illness has been unable to perform the mate-
rial duties of his regular occupation for a period of 180
days since the onset of total disability and through
the 24 month period following the elimination period
and the plaintiff has been unable to perform any of
the material duties of any gainful occupation for
which he may reasonably fitted by education, training
or experience, due to injury and/or illness.
That plaintiff brings this action pursuant to 29 U.S.C.
§1132 and demands enforcement of the provisions of
the insurance plan, actual attorney fees, interest,
costs, and any equitable relief necessary to protect the
plaintiff’s rights under the plan and under ERISA.
That pursuant to Lutheran Medical Center v. Contrac-
tors, Laborers, Teamsters, and Engineers Health and
Welfare Plan, and Rivera v. Benefit Trust Life Insur-
ance Company, plaintiff seeks prejudgment interest
on the total of the delayed benefits.
That pursuant to 29 U.S.C. §1132 and Merideth v.
Navistar International Transportation Corporation,
the plaintiff demands payment of actual attorney's
fees and costs incurred in the prosecution of this ac-
tion.
WHEREFORE, plaintiff demands enforcement of the
plan, payment of past benefits due, payment of future
benefits due, actual attorney fees and costs, payment of
interest on past due benefits and judgment against the
defendant for all amounts past due with interest, costs
R. App. 9a
and attorney fees, and equitable relief as necessary to
ensure defendant's compliance with the policy and ERISA.
II. Second Cause of Action - State Law Claims
18. That the defendant, United Wisconsin Group is an
insurance company licensed to do business in the
State of Wisconsin and is in the business of providing
group benefit insurance to individuals and employers.
19. That, upon information and belief, the defendant may
not be an ERISA plan subject to federal preemption of
state law claims.
20. That on January 4, 2002 and all other times relevant
to the causes of action set forth below, the plaintiff,
Elvis Kobs, was covered by a policy of insurance is-
sued by United Wisconsin Group.
21. That pursuant to the terms of that policy, Elvis Kobs
is provided with disability benefits.
22. That pursuant to the terms of the benefit plan pro-
vided by United Wisconsin Group, the plaintiff was
provided short-term disability benefits from January
4, 2002 through July 4, 2002.
23. That after expiration of the short-term disability
benefits, the plaintiff requested long-term disability
benefits pursuant to the terms of the defendant's
plan.
24. That despite meeting the qualifications and criteria
for payment of long-term disability benefits, the de-
fendants have denied said benefits to the plaintiff.
25. That the plaintiff has duly and properly complied
with all administrative remedies provided by the plan
in seeking review of the plans denial of long-term dis-
ability benefits.
26.
29.
30.
R. App. 10a
That by and pursuant to the disability plan issued by
the defendant, the plaintiff is entitled to receive long-
term disability benefits.
. That the defendant has denied long-term disability
benefits to the plaintiff.
That such denial is a violation of the terms of the
policy and constitutes breach of contract.
That since July 4, 2002, the plaintiff, due to injury
and/or illness has been unable to perform the mate-
rial duties of his regular occupation for a period of 180
days since the onset of total disability and through
the 24 month period following the elimination period
and the plaintiff has been unable to perform any of
the material duties of any gainful occupation for
which he may reasonably fitted by education, training
or experience, due to injury and/or illness.
That as a result of said breach, the plaintiff has been
damaged in an amount of money equal to his lost
benefits, interest, attorney's fees, and other-costs as-
sociated with this action.
Wherefore, plaintiff demands judgment against the
defendant for a specific performance of the contract terms
or in the alternative damages including consequential
damages plus costs, attorney's fees, pre-judgment interest
and such other relief as the court deems just and equita-
ble.
R. App. lla
DATED: 1-15-04 NOVITZKE GUST, SEMPF &
WHITLEY
/s/ Jason W. Whitley
Jason W. Whitley (ID # 1027052)
Attorneys for Plaintiff
314 Keller Ave No Ste 399
Amery WI 54001
(715) 268-6130
A TWELVE-PERSON JURY IS DEMANDED
R. App. 124
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WISCONSIN
Elvis Kobs
65 County Road M
Star Prairie, WI 54026
Plaintiff, CASE NO: 04-C-0005-S
District Judge John C. Shabaz
United Wisconsin Insurance Company
P.O. Box 2013
Milwaukee, WI 53201-2013
Defendant.
RULE 26(F) JOINT REPORT
Pursuant to the Court’s Order and Federal Rule of
Procedure 26(f), the parties hereby submit this joint report
to facilitate the scheduling and disposition of the above-
captioned case:
1. Potenti ediation or Settlement of Ca
During the 26(f) conference, the parties discussed the
possibility of mediation in an effort to settle the case. The
parties acknowledged the extent of the medical records at
issue herein and the need for review of same. The parties
also contemplate briefing summary judgment.
Consequently, should this case not be resolved as a
result of summary judgment, the parties have mutually
agreed to arrange a mediation. The Court’s analysis of the
summary judgment motion is likely to affect the parties’
evaluation of the merits of this case and their respective
R. App. 13a
settlement positions. If the parties choose to pursue
mediation, they will use a mutually-agreed upon private
mediator and share the costs of mediation equally.
2. Initial Disclosures/Mandatory Discovery
The parties do not anticipate any changes to the
timing, form or requirement for disclosures under Federal
Rule of Civil Procedure 26(a).
The Plaintiff has requested a copy of the Defendant's
administrative file and a list of persons materially in-
volved in the Defendant’s decision to deny long-term
disability benefits. The parties have agreed that time need
not be spent exchanging copies of medical records as it is
likely they are in possession of identical documents. The
Defendant has requested a list of the Plaintiff's relevant
physicians. The Plaintiff claims he has insufficient infor-
mation to specifically calculate a damage demand but will
phrase his damage estimate in terms of how many months
for which be is claiming to be disabled. The Defendant
acknowledged that it has reinsurance relative to the claim
at issue, and the Plaintiff has requested a copy of the
applicable reinsurance agreement.
These disclosures will be made within the time set
forth in Federal Rule of Civil Procedure 26(a)(1).
3. Subjects of Discovery/Completion of Discovery
Although the parties do not believe that this case
requires extensive discovery, the Plaintiff has acknowledged
that he wants to conduct the deposition of at least one
person material in the Defendant's decision to deny long-
term disability benefits to the Plaintiff. The Defendant has
R. App. 14a
indicated that it will object to such deposition(s) because,
under an arbitrary and capricious standard of review,
discovery that seeks to examine the thought processes of
the decision-makers is precluded [see Perlman v. Swiss
Bank Corp. Comprehensive Disability Protection Plan, 195
F.3d 975 (7th Cir. 1999)|. The parties contemplate complet-
ing discovery within ninety (90) days of this report. The
parties do not request any change in the discovery limita-
tions imposed by the Federal Rules of Civil Procedure or
Local Rules.
4. Any Other Orders
The parties do not request any additional orders from
the Court at this time.
Dated this 27th day of January, 2004.
NOVITZKE GUST, SEMPF &
WHITLEY
Attorneys for the Plaintiff
/s/ Jason W. Whiley
Jason W. Whitley
Wis. Bar. No.: 1027052
314 Keller Avenue N. Ste. 399
~ Amery WI 54001
(715) 268-6130
R. App. 15a
UNITED WISCONSIN
INSURANCE-COMPANY
/s/ Carol L. Dorner
Carol L. Dorner,
Attorney for Defendant
Wis. Bar No.: 1032239 x
401 West Michigan, woci0
Milwaukee, WI 53203
(414) 226-60
R. App. 16a
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF WISCONSIN
ELVIS KOBS,
Plaintiff, PRELIMINARY
PRE-TRIAL
V. CONFERENCE
UNITED WISCONSIN ORDER
INSURANCE COMPANY, 04-C-005-8
Defendant.
Preliminary pre-trial conference was held by tele-
phone in the above entitled matter on January 27, 2004,
the plaintiff having appeared by Novitzke, Gust, Sempf &
Whitley by Jason W. Whitley; defendant by United Wis-
consin Group by Carol L. Dorner. Honorable John C.
Shabaz, District Judge, presided.
ORDER
IT IS ORDERED that all dispositive motions to be
filed during the pendency of this matter, to include mo-
tions for summary judgment, shall be accompanied by
memoranda of law; opposing party being given 20 calendar
days to respond; and the moving party 10 calendar days to
reply.
IT IS FURTHER ORDERED that all motions for
summary judgment and other dispositive motions shall be
served and filed not later than May 1, 2004; motions for
summary judgment in accordance with local rule, a copy of
which is enclosed.
R. App. 17a
IT IS FURTHER OKDERED that nondispositive
motions, to include procedural motions, may be heard
upon five days notice on any Wednesday morning by
telephone at 8:00 A.M. or earlier, moving party to initiate
the telephone conference to 608-264-5504.
IT IS FURTHER ORDERED that discovery shall be
completed and all depositions taken not later than June
10, 2004.
IT IS FURTHER ORDERED that the following
discovery materials will not be filed with the Court unless
they concern a motion or other matter under consideration
by the Court: interrogatories; responses to interrogatories;
requests for documents; responses to requests for docu-
ments; requests for admission; and responses to requests
for admission.
IT IS FURTHER ORDERED that final pre-trial
conference is scheduled for June 14, 2004, at 1:00 PM.,
pursuant to the provisions of Order Prior to Final Pre-trial
Conference, a copy of which is also enclosed.
IT IS FURTHER ORDERED that trial to the Court is
scheduled to commence June 25, 2004, at 8:30 A.M.
IT IS FURTHER ORDERED that plaintiff's motion to
amend complaint is GRANTED.
Entered this 27th day of January, 2004
BY THE COURT:
/s/ John C. Shabaz
JOHN C. SHABAZ
District Judge
R. App. 18a
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF WISCONSIN
ELVIS KOBS,
Plaintiff,
MEMORANDUM
Vv. AND ORDER
UNITED WISCONSIN 04-C-005-S
INSURANCE COMPANY,
De*“2ndant.
Plaintiff Elvis Kobs commenced this action in Polk
County Circuit Court against defendant United Wisconsin
Insurance Company alleging breach of contract and
seeking benefits allegedly due under a long-term disability
policy held by plaintiff’s former employer and insured by
defendant. Defendant removed pursuant to 28 U.S.C.
§ 1441(a) arguing that plaintiff’s breach of contract claim
is preempted by the Employee Retirement Income Secu-
rity Act (ERISA), 29 U.S.C. § 1132(e)(1). Defendant then
moved to dismiss plaintiff’s breach of contract cause of
action as preempted by ERISA. Plaintiff was granted leave
to amend the complaint to state an ERISA claim. The
matter is presently before the Court on defendant’s motion
to dismiss plaintiff’s second cause of action for breach of
contract as preempted by ERISA. The following facts are
taken from plaintiff’s amended complaint and the policy,
which was referred to in the complaint and provided to the
R. App. 19a
Court in the form of an attachment to defendant’s motion
to dismiss.’
BACKGROUND
Plaintiff was a participant in a long-term disability
group insurance policy issued by defendant to plaintiff’s
former employer Bernard’s Northtown, Inc. Plaintiff
received short-term disability benefits from January 4,
2002 through July 4, 2002. After plaintiff’s short-term
benefits expired, plaintiff requested long-term benefits.
Plaintiff’s request was denied. Plaintiff exhausted his
administrative remedies and brought suit for breach of
contract alleging a violation of the terms of the policy.
MEMORANDUM
Defendant moves to dismiss plaintiff’s second cause of
action for breach of contract arguing that it is preempted
by ERISA. Plaintiff states in his brief in opposition to
defendant’s motion that “defendant may not have a suffi-
cient basis to assert that this case is governed by ERISA
because the defendant is not an employer and is not an
ERISA plan. The defendant is an insurance company.”
Citing Perto v. D.W.G. Corp., 148 Wis. 2d 725, 727, 436
N.W.2d 875, 876 (Ct. App. 1989), plaintiff argues:
The general rule is that ERISA does preempt
state claims regarding employer sponsored bene-
fits plans. However, the general rule only applies
' Documents that a defendant attaches to a motion to dismiss are
properly considered if they are referred to in the plaintiff's complaint
and are central to his claim. Venture Assocs. Corp. v. Zenith Data
Systems Corp., 987 F.2d 429, 431 (7th Cir. 1993).
R. App. 20a
to circumstances where the ‘plan’ is self-funded
and is not insured. If the plan is insured, then
state regulation is ‘saved’ from preemption. ER-
ISA only preempts state law claims if the plan
under consideration is an uninsured plan, that
is, funded through employer/employee contribu-
tions rather than through purchased private in-
surance.
Plaintiff’s argument is unpersuasive.
Plaintiff alleges a state law cause of action for breach
of contract against an insurance company seeking to
recover benefits allegedly due under a welfare benefit plan
established by plaintiff’s former employer through the
purchase of insurance from defendant. Such a cause of
action is preempted by ERISA. Pilot Life Ins. Co. v.
Dedeaux, 481 U.S. 41 (1986). Accordingly, defendant’s
motion to dismiss plaintiff's breach of contract cause of
action must be granted.
Plaintiff’s argument confuses the relationship be-
tween ERISA’s three main preemption-related provisions:
the “preemption clause,” the “saving clause,” and the
“deemer clause.” The “preemption clause” provides that if
a state law relates to an employee benefit plan, then the
state law is preempted unless it is “saved” from preemp-
tion by the saving clause. 29 U.S.C. § 1441(a). The “saving
clause” excepts (or “saves”) from the preemption clause
any law that regulates insurance. Jd. § 1144(b)(2)(A).
Finally, the “deemer cl. use” clarifies that state laws which
purport to regulate insurance (and would therefore other-
wise fall under the saving clause) may not deem an em-
ployee benefit plan to be an insurance company. /d.
§ 1144(b)(2\B).
R. App. 2la
The first preemption-related clause is the “preemption
clause.” The preemption clause applies to any “state law”
that “relate[s] to” an “employee benefit plan.” Jd. § 1441(a).
ERISA defines the term “state law” broadly to include “ail
laws, decisions, rules, regulations, or other State action
having the effect of law.” Id. § 1144(c)(1). Accordingly, the
U.S. Supreme Court has interpreted the term “state law”
to include common law causes of action for breach of
contract. See Pilot Life, 481 U.S. at 47-48 & n.1. The
phrase “relate to” in the preemption clause has a “broad
common-sense meaning.” Jd. at 47. A state law “relate/[s)
to” an employee benefit plan “in the normal sense of the
phrase, if it has a connection with or reference to such a
plan.” Metro. Life Ins. Co. v. Massachusetts, 471 U.S. 724,
739 (1984) (quoting Shaw v. Delta Air Lines, Inc., 463 U.S.
85, 97 (1983)). Plaintiff’s state law cause of action has a
connection with the long-term disability group insurance
policy because his claim seeks benefits allegedly due under
the policy. See Pilot Life, 481 U.S. at 47-48. Accordingly,
plaintiff’s breach of contract cause of action invokés a
“state law” that “relates to” the group insurance policy.
The inquiry then becomes whether the policy is part of an
“employee benefit plan.”
An “employee welfare benefit plan” is one type of
“employee benefit plan.” 29 U.S.C. § 1002(3). An “employee
welfare benefit plan” is defined in relevant part as follows:
any plan, fund, or program ... established or
maintained by an employer .. . for the purpose of
providing for its participants or their beneficiar-
ies, through the purchase of insurance or other-
wise, (A) medical, surgical, or hospital care or
benefits, or benefits in the event of sickness, ac-
cident, disability, death or unemployment, or va-
cation benefits, apprenticeship or other training
R. App. 22a
programs, or day care centers, scholarship funds,
or prepaid legal services.
29 U.S.C. § 1002(1).
Defendant’s policy is part of an “employee welfare
benefit plan.” Plaintiff was a participant in a group health
insurance policy issued by defendant to plaintiff’s former
employer Bernard’s Northtown, Inc. to provide benefits
including long-term disability benefits to participants.
“(Bly its express terms, ERISA encompasses welfare plans
provided through the purchase of insurance.” Fugarino v.
Hartford Life & Accident Ins. Co., 969 F.2d 178, 183 (6th
Cir. 1992) (construing 29 U.S.C. § 1002(1)). It is “common
practice” for employers to establish plans that provide
disability benefits to their employees through the pur-
chase of a group health insurance policy from a commer-
cial insurance company. /d. (citing Metro. Life, 471 U.S. at
727). Accordingly, plaintiff’s breach of contract cause of
action falls under the preemption clause.
The second preemption-related clause is the “saving
clause.” The saving clause excepts from the preemption
clause any law that “regulates insurance.” 29 U.S.C.
§ 1144(b)(2)(A). For a law to “regulate[] insurance” it must
be specifically directed towards the insurance industry.
Pilot Life, 481 U.S. at 50. For example, in Rimes v. State
Farm Mutual Automobile Insurance Co., the Wisconsin
Supreme Court held that under Wisconsin subrogation law
an insurer cannot share in the recovery from a tortfeasor if
the total amount recovered by the insured from the in-
surer and the wrongdoer does not cover the insured’s
entire loss. 106 Wis. 2d 263, 316 N.W.2d 348 (1982), cited
in Perto, 148 Wis. 2d at 727, 436 N.W.2d at 876; see also
R. App. 23a
Paulson v. Allstate Ins. Co., 2003 WI 99, 263 Wis. 2d 520,
665 N.W.2d 744. This equitable principle is specifically
directed at the insurance industry. Accordingly, it is saved
from preemption as a law that regulates insurance.
To the contrary, a cause of action for breach of contract
is not specifically directed towards the insurance industry.
Pilot Life, 481 U.S. at 50. Accordingly, the saving clause
does not apply to plaintiff’s breach of contract cause of
action. Plaintiff’s breach of contract cause of action is
preempted by ERISA.
The third preemption-related clause is the “deemer
clause.” The deemer clause clarifies that state laws which
purport to regulate insurance companies may not deem an
employee benefit plan to be an insurance company. 29
U.S.C. § 1144(b)(2XB). In other words, employers who
provide disability benefits through plans that are funded
through employer/employee contributions rather than
through purchased private insurance (“self-funded plans”)
are exempt from state laws that regulate insurance. Smith
v. Blue Cross & Blue Shield, 959 F.2d 655, 657 (7th Cir.
1992). In Perto, the Court found that the plan could not be
“deemed” to be an insurance company because the plan
was a self-funded plan. 148 Wis. 2d at 728, 436 N.W.2d at
876. Consequently, the plan was exempt from the subroga-
tion limitation announced in Rimes. Id.
The deemer clause has no application to plaintiff’s
breach of contract cause of action. First, plaintiff’s breach
of contract cause of action does not purport to regulate
insurance. Second, defendant is an insurance company;
the deemer clause prevents entities that are not insurance
companies from being deemed to be insurance companies
for state regulatory purposes.
R. App. 24a
ORDER
IT IS ORDERED that defendant’s motion to dismiss
plaintiff’s state law cause of action is GRANTED.
IT IS FURTHER ORDERED that plaintiff’s second
cause of action is dismissed without prejudice.
Entered this 2nd day of February, 2004.
BY THE COURT:
/s/ John C. Shabaz
JOHN C. SHABAZ
District Judge
R. App. 25a
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WISCONSIN
Elvis Kobs
65 County Road M
Star Prairie, WI 54026
Plaintiff, Case No: 04-C-0005-S
v. Assigned Judge:
John C. Shabaz
United Wisconsin
Insurance Company
P.O. Box 2013
Milwaukee, WI 53201-2013
Defendant.
NOTICE OF MOTION AND MOTION
FOR PROTECTIVE ORDER
(Filed Apr. 26, 2004)
TO: Theresa Owens Jason Whitley
Clerk of District Court Attorney for Plaintiff
U.S. Courthouse Novitzke, Gust, Sempf
120 North Henry St., & Whitley
Rm 320 314 Keller Ave No., Ste 399
Madison, WI 53703 Amery, WI 54001
PLEASE TAKE NOTICE that Defendant, United
Wisconsin Insurance Company (“UWIC”), by and through
its attorney, Caro] L. Dorner, hereby moves this Court for
a Protective Order preventing the Plaintiff from conduct-
ing depositions in this matter, because such discovery is
beyond that which is permissible under an arbitrary and
capricious standard of review under the Employee Retire-
ment Income Security Act of 1974 as amended, 29 U.S.C.
§ 1001 et seq. (“ERISA”). Further, even if the Court should
find that the Plaintiff can obtain discovery beyond the
R. App. 26a
administrative record in this case, the Court should still
find that the Plaintiff did not provide reasonable notice to
UWIC of his request to depose a UWIC employee before
May 4, 2004.
This motion is supported by UWIC’s Brief in Support
of its Motion for a Protective Order and Affidavit of Carol
L. Dorner submitted herewith and all pleadings on file.
WHEREFORE, Defendant UWIC respectfully re-
quests that the Court enter a Protective Order precluding
Plaintiff from conducting discovery depositions in this
case.
Dated this 23rd day of April, 2004.
UNITED WISCONSIN
INSURANCE COMPANY
By: /s/ Carol L. Dorner
Carol L. Dorner
State Bar. No.: 1032239
\
P.O. ADDRES
401 West Michigan Street, WOC10
Milwaukee, WI 53203-2804
Phone: (414) 226-6930
Facsimile: (414) 226-6229
R. App. 27a
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WISCONSIN
Elvis Kobs
65 County Road M
Star Prairie, WI 54026
Plaintiff, Case No: 04-C-0005-S
v. Assigned Judge:
John C. Shabaz
United Wisconsin :
Insurance Company
P.O. Box 2013
Milwaukee, WI 53201-2013
Defendant.
BRIEF IN SUPPORT OF DEFENDANT’S
MOTION FOR PROTECTIVE ORDER
(Filed Apr. 26, 2004)
INTRODUCTION
The Plaintiff originally commenced this action in Polk
County Circuit Court in November 2003. Defendant
United Wisconsin Insurance Company (“UWIC”) removed
the case to this Court on the basis of preemption of the
Plaintiff’s state law causes of action by the Employee
Retirement Income Security Act of 1974 (“ERISA”).
UWIC filed a motion for summary judgment on or
about April 1, 2004. The Plaintiff requested and was
granted an Enlargement of Time in which to file a re-
sponse brief, in part, because the Plaintiff’s counsel, Mr.
Whitley, seeks to depose a UWIC employee. UWIC objects
to such deposition because under an arbitrary and capri-
cious standard of review of a benefit determination under
R. App. 28a
an ERISA plan, the scope of discovery is limited to the
administrative record. Pursuant to F.R.C.P. 26(cX1) UWIC
moves for a protective order preventing the Plaintiff from
conducting depositions and limiting discovery in this
matter to the administrative record. Further, even if the
Court finds that the Plaintiff can obtain discovery beyond
the administrative record in this matter, it should still
deny the Plaintiff’s request for a deposition to be sched-
uled prior to May 4, 2004, because UWIC has not received
reasonable notice.
FACTS
The background facts in this case have been previ-
ously set forth in the parties’ briefs on file with the Court.
Further, it has been established in the Court’s Memoran-
dum and Order of February 2, 2004, that the group dis-
ability insurance policy at issue in this matter qualifies as
an “employee welfare benefit plan” as that term is defined
in ERISA.
During the parties’ 26(f) conference on January 20,
2004, the Plaintiff’s counsel, Mr. Whitley, indicated that
he would request the deposition of a UWIC employee
subsequent to his receiving UWIC’s administrative file.
Dorner Aff. 7 4. At that time, UWIC’s counsel advised Mr.
Whitley that UWIC would object to depositions because
discovery in this case is limited to the administrative file
under ERISA’s arbitrary and capricious standard. Dorner
Aff. | 4. This was documented in the parties’ Joint 26(f)
Report dated January 27, 2004, and on file with m the Court.
Dorner Aff. { 4.
UWIC provided the Plaintiff with its initia) disclo-
sures on February 2, 2004. Dorner Aff. 4 6. On february
R. App. 29a
19, 2004, UWIC provided the Plaintiff with its answer to
the Plaintiff’s Demand to Produce and documents from
UWIC’s administrative file, with the exception of medical
records which Mr. Whitley had not requested. Dorner Aff.
7. Based on these disclosures, the Plaintiff would have
been aware that Constance DuBose was a UWIC employee
involved in the review of the Plaintiff’s claims. Dorner Aff.
1% 6, 7.
It was not until April 22, 2004, that Mr. Whitley's
office contacted UWIC via telephone to request that the
deposition of Constance DuBose be scheduled prior to May
4, 2004. Dorner Aff. 7 8. No written notice of deposition
has yet been received by UWIC. Dorner Aff. { 8.
Additional facts will be set forth in the Argument
section as necessary.
ARGUMENT
I. UNDER THE ARBITRARY AND CAPRICIOUS
STANDARD OF REVIEW THE PLAINTIFF IS
NOT ENTITLED TO DISCOVERY BEYOND
THE ADMINISTRATIVE RECORD; THERE-
FORE, THE DEPOSITION SOUGHT BY THE
PLAINTIFF IS NOT A VALID GROUND OF
INQUIRY IN THIS MATTER.
A. An Arbitrary And Capricious Standard Of
eview Applies To This ’s Review Of
UWIC’s Benefit Denial.
The standard for judicial review of benefit determina-
tions under ERISA plans depends primarily upon the
language of the employee welfare benefit plan at issue. The
Supreme Court, the Seventh Circuit and this Court have all
held that if the plan’s language confers discretionary
R. App. 30a
authority upon the plan administrator or fiduciary to
determine eligibility for benefits or to construe the terms
of the plan, then the courts will apply the deferential
arbitrary and capricious standard of review. Firestone Tire
& Rubber Co. v. Bruch, 489 U.S. 101, 109 S.Ct. 948, 103
L. Ed. 2d 80 (1989); Wilczynski v. Kemper Nat'l Ins. Co..,
178 F.3d 934, 935 (7th Cir. 1999); Chojnacki v. Georgia-
Pacific Corp., 108 F.3d 810, 814 (W.D. Wis. 1997). Where
the plan’s language fails to confer discretionary authority,
the courts will apply a de novo standard. Id.
“No magic words are required to confer discretion on
an administrator.” Chajnacki, 108 F.3d at 815; Herzberger
v. Standard Ins. Co., 205 F.3d 327, 331 (7th Cir. 2000).
However, the Seventh Circuit has drafted the following
“safe harbor” language, the use of which shall trigger the
arbitrary and capricious standard of review:
Benefits under this plan will be paid only if the
plan administrator decides in his discretion that
the applicant is entitled to them.
Herzberger, 205 F.3d at 331,
In the case at bar, the employee welfare benefit plan
(the “Plan”) that was maintained by the Plaintiff’s former
employer, Bernard's Northtown, Inc. (“Bernard’s North-
town”), and insured by UWIC and under which the Plain-
tiff seeks benefits contains the following provision:
BENEFIT DETERMINATION
Benefits under this policy will be paid only if
United Wisconsin Insurance Company decides in
its discretion that the Insured is entitled to them.
UWIC’s Brief in Support of its Motion to Dismiss, Ex. A, p.
6 (emphasis added). This Plan language clearly parrots
R. App. 3la
that of the Seventh Circuit’s “safe harbor” and expressly
confers discretionary authority concerning benefit deter-
minations to UWIC. Thus, the arbitrary and capricious
standard of review applies to this Court’s review of
UWIC’s denial of benefits.
B. Under The Arbitrary And Capricious
Standard Of Review, Discovery Is Limited
To The Administrative Record.
Under the highly deferential arbitrary and capricious
standard of review, consideration of evidence by the court
is limited only to that which was submitted to the plan’s
administrator at the time the claims decision was ren-
dered. Perlman v. Swiss Bank Corp. Comprehensive
Disability Protection Plan, 195 F.3d 975 (7th Cir. 1999)
(finding that the district court erred in allowing discovery
beyond the administrative record); Winters v. UNUM Life
Ins. Co. of Am., 232 F.Supp.2d 918, 927 (W.D. Wis. 2002).
“Deferential review of an administrative decision means
review on the administrative record.” Perlman, 195 F.3d at
981-982. Inquiry into the thought processes of the admin-
istrator’s staff, the training of those who considered the
plaintiff’s claims “and in general who said what to whom
within [the administrator]” goes beyond that which is
allowed under a deferential review. Jd. The Seventh
Circuit has not allowed parties to take discovery into the
mental processes of the administrator’s personnel in cases
where an arbitrary and capricious standard governed. /d.
at 982. Moreover, if a party desires to add to the adminis-
trative record evidence that the plan administrator has
not reviewed in relation to the benefit determination, the
appropriate remedy is for the court to remand the case to
the administrator for another determination. Wardle v.
R. App. 32a
Central States Southeast & Southwest Areas Pension
Fund, 627 F.2d 820, 824 (7th Cir. 1980), cert. denied, 101
S.Ct. 922 (1981).
On February 2, 2004, UWIC provided the Plaintiff
with its initial disclosures pursuant to F.R.C.P. 26(a)(1).
Dorner Aff. { 6. On February 19, 2004, UWIC provided the
Plaintiff with a copy of the administrative record pertinent
to the Plaintiff’s claims, other than medical records for
which the Mr. Whitley has made no request. Dorner Aff.
q7 3, 7. UWIC has also answered the Plaintiff’s related
Demand to Produce based on the administrative record.
Dorner Aff. 4 7. As a result of these disclosures, the Plain-
tiff would have been aware of the involvement of UWIC’s
employee Constance DuBose in the review of the Plain-
tiff’s claims. Dorner Aff. ¥ 7.
On April 22, 2004, Mr. Whitley's office contacted
UWIC telephonically to schedule the deposition Constance
DuBose prior to May 4, 2004. Dorner Aff. 4 8. However,
the mental processes of Ms. DuBose or any other UWIC
employee involved in the review of the Plaintiff’s claims
are not legitimate grounds of inquiry under the applicable
arbitrary and capricious standard of review. Clearly,
discovery through a deposition would examine the thought
processes of the deponent and would expand the scope of
discovery well beyond the administrative record.
Therefore, an Order prohibiting the Plaintiff from
conducting such deposition is warranted. Further, if the
Plaintiff wishes to add to the administrative record, this
Court should remand this case to UWIC for another
review and determination concerning the Plaintiff’s
claims.
R. App. 33a
Il. EVEN IF THE COURT WOULD DETERMINE
THAT A DEPOSITION IS WARRANTED, UWIC
HAS NOT HAD REASONABLE NOTICE SUCH
THAT IT SHOULD BE UNDULY BURDENED
TO SCHEDULE SUCH DEPOSITION PRIOR
TO MAY 4, 2004.
Even if the Court should determine that the Plaintiff
can obtain discovery beyond the administrative record in
this case, UWIC is still entitled to reasonable notice of |
depositions pursuant to F.R.C.P. 30(b)(1). The Plaintiff has
failed to provide reasonable notice of his verbal request to
depose Constance DuBose before May 4, 2004.
In this case, UWIC put both the Plaintiff and the
Court on notice of its position that it would object to
depositions in this matter as early as January 20, 2004,
during the parties’ 26(f) conference and in the parties’
Joint Rule 26(f) Report dated January 27, 2004. Dorner
Aff. J 4. This was also documented in UWIC’s Preliminary
Pretrial Conference Report dated January 21, 2004.
Dorner Aff. { 5.
Mr. Whitley was provided with UWIC’s initial disclo-
sures on or about February 2, 2004, which included the
name of Constance )uBose. Dorner Aff. 9 6. Further, Mr.
Whitley would have been aware of Ms. DuBose’s review of
the Plaintiff’s claims as found within the administrative file
documents produced by UWIC on February 19, 2004.
Dorner Aff. 47. The fact that Mr. Whitley's office did not
request the deposition of Ms. DuBose until April 22, 2004,
and then further requested that such deposition be sched-
uled prior to May 4, 2004, is not reasonable notice to UWIC.
The Plaintiff has been aware for three months that
UWIC would object to depositions in this matter. The
R. App. 34a
Plaintiff has further been aware for two months of Ms.
DuBose’s involvement in the review of the Plaintiff's claims
at issue. Therefore, it is unreasonable for a deposition
request be made upon UWIC and its employee with less
than two weeks’ notice. Further, because I am in-house
counsel and currently handling the workload of another
attorney who is on a medical leave, it would be unreasona-
bly burdensome to my schedule to arrange for a deposition
within the next six working days. Dorner Aff. { 2.
CONCLUSION
For all of the reasons set forth above, the Court should
grant Defendant's Motion and enter a Protective Order
prohibiting the Plaintiff from conducting depositions and
limiting discovery in this case to the administrative record.
Even if the Court should find that discovery can be obtained
by the Plaintiff beyond the administrative record, the Court
should still find that the Plaintiff's request to depose
Constance DuBose prior to May 4, 2004, is unduly burden-
some to UWIC and is not based upon reasonable notice.
Dated this 23rd day of April, 2004.
UNITED WISCONSIN
INSURANCE COMPANY
By: /s/ Carol L. Dorner
Carol L. Dorner
State Bar. No.: 1032239
P.O. ADDRESS
401 West Michigan Street, C-10
Milwaukee, WI 53203
Phone: (414) 226-6930
Facsimile: (414) 226-6229
R. App. 35a
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WISCONSIN
ELVIS KOBS, Civil 04-C-0005-S
Plaintiff, ,
Vv.
UNITED WISCONSIN
INSURANCE COMPANY
Defendant.
MEMORANDUM OF LAW IN SUPPORT OF
PLAINTIFFS SECOND MOTION TO CONTINUE
DEFENDANT’S SUMMARY JUDGMENT MOTION
FOR ENLARGEMENT OF TIME TO REPLY
TO DEFENDANT'S SUMMARY JUDGMENT
MOTION and TO COMPEL DEPOSITION
DISCOVERY and in OPPOSITION TO
DEFENDANTS MOTION FOR PROTECTION
The Defendant, Elvis Kobs, through his attorneys,
Novitzke, Gust, Sempf & Whitley, by Jason W. Whitley,
have moved the court for the following relief:
1. Continuance of the Defendant’s Summary
Judgment Motion Hearing and Enlargement
of time in which to respond to Defendant's
Motion for Summary Judgment and for an
order to compel the Defendant to produce
witnesses for depositions.
The plaintiff files this memorandum of law in support
of his requests.
R. App. 36a
The Defendant has filed a Motion for Summary
Judgment requesting certain relief including total dis-
missal of Plaintiff’s claims.
Pursuant to FRCP 56(f) a Court may issue an order
for a continuance to permit the party opposing summary
judgment to obtain depositions or allow further discovery
in order that the opposing party may effectively oppose the
moving the party.
In the represent matter, the Plaintiff cannot effec-
tively oppose the Defendant’s Motion for Summary Judg-
ment until the Plaintiff has answers to certain essential
facts regarding the character and nature of the Defen-
dant’s insurance policy, as well as the underlying facts
regarding the Defendant’s handling of the Plaintiff’s
application for disability insurance benefits. These facts
are essential in determining whether the Defendant is
entitled to protections afforded by the Employee Retire-
ment Income Security Act (ERISA) of 1975.
The Plaintiff needs to learn what information was
available to the Defendant at the time Plaintiff made his
request for insurance disability benefits and also the
manner in which the Defendant handled and processed
that claim subject to the terms and provisions of its own
policy. In addition, the Plaintiff needs to know whether the
Defendant, in denying the Plaintiff’s claims for insurance
benefits, acted in a dual capacity as both insurer of the
Plaintiff and the Administrator of the plan or the policy
covering such a plan. This information is necessary to
determine the proper standard of review because the
defendant is claiming that its coverage decisions are
subject to the strict arbitrary and capricious standard
which properly only applies to pian administrators. Here,
_R. App. 37a
the defendant does not appear to be an not an administra-
tor but rather a mere insurance company.
Pursuant to Firestone Tire and Rubber Co. v Bruke,
489 U.S. 101, 115 (1989), if an insurance company acts in a
dual capacity which places that insurer in a perpetual
conflict as to both the insurer and interpreter of the plan,
then the proper standard of review is de novo. Jd. In the
present matter is appears from the administrative record
that and defendant's position on summary judgment that
the defendant has acted in a dual capacity thus requiring
a de novo standard of review. However, additional discov-
ery by way of deposition needs to be conducted.
At the present time, the Plaintiff is unable to deter-
mine whether United Wisconsin acts as the insurer,
interpreter, and the administrator of Mr. Kob’s insurance
policy and therefore, it is unable to determine the correct
standard of review.
This is an important matter because the Defendant's
Summary Judgment Motion requests a determination that
the standard of review is arbitrary and capricious. It is
impossible for Piaintiff to respond to the Defendant's
Motion in that regard unless the Plaintiff can determine
the various procedures followed by United Wisconsin
Company in reviewing and refusing Mr. Kobs’s insurance
claim.
The proper standard of review is of great importance
in ascertaining whether an insurer wrongfully denied
benefits under a benefits policy. Plaintiff must be able to
conduct necessary discovery before he can effectively
proceed on those issues.
R. App. 38a
Therefore, because the Plaintiff cannot properly
defend against Defendant’s Motion for Summary Judg-
ment without obtaining certain necessary discovery
material.
Dated this 5th day of May, 2004.
/s/ Jason W. Whitley
Jason W. Whitley, #1027052
NOVITZKE, GUST, SEMPF
& WHITLEY
Attorneys for Plaintiff
314 Keller Avenue North,
Suite 399
Amery, Wisconsin 54001
715-268-6130
R. App. 39a
UNIVERSITY OF MINNESOTA
Twin Cities Campus Mayo Mail Code 295
420 Delaware Street, Southeast
Minneapolis, MN 55455
Office: 612-625-9900
Fax: 612-625-7950 -
www.neurology.umn.edu
Department of Neurology
Medical School
SUMMARY OF
NEUROPSYCHOLOGICAL EVALUATION
Patient’s Newme: KOBS, Elvis Kevin
Medical Record #: 0050132702
Date of Evaluation: August 22, 2002
Referring Physician: Neal Melby, M.D.
New Richmond Clinic
New Richmond, WI
I. REASON FOR REFERRAL
Mr. Kobs, a 51-year-old, right-handed man, was evaluated
for documentation of his cognitive baseline in the setting
of his complaints about his memory. Mr. Kobs suffered
what sounded like a mild closed head injury in 1999,
followed by a fall from a roof onto his left side which
spared his head this past January. Mr. Kobs, according to
office notes from Dr. Melby, began complaining about
memory loss after the fall from the roof. He subsequently
was referred to a neurologist, John Floberg, M.D., for
follow-up of his complaints. According to Dr. Melby’s, not
Dr. Floberg’s notes, Dr. Floberg did an MRI scan of his
head and found some sort of abnormality in the right
R. App. 40a
frontal lobe that he reportedly thought was incidental,
e.g., not related to Mr. Kobs’s complaints about his mem-
ory. According to the same set of notes, Dr. Floberg
thought that Mr. Kobs’s memory complaints were due at
least in part to depression, although according to the
notes, Mr. Kobs disagreed with Dr. Floberg, since he
thought his memory problems were worseriing. Mrs. Kobs
reported to this examiner that her husband’s short-term
memory loss has become progressively worse since 1999
when he hit his head at work. Mr. Kobs reported that he is
in the process of applying for long-term disability after
being fired from his job in May of this year. He has hired
an attorney to aid him in establishing disability status.
Il. RELEVANT HISTORY
History of Presenting Complaint; Mr. Kobs was accompa-
nied to the evaluation by his wife Donna, who often
interjected details about Mr. Kobs’s history. Mr. Kobs
reported that in 1999 he hit his head on the corner of a
steel filing cabinet at work. He reportedly opened a door
inward into a room to talk to someone in the room, leaned
in forcefully with his head after closing the door and re-
opening it because the person was still speaking to him,
then struck the left front of his head on a corner of the
cabinet. He reportedly held onto the doorknob because he
went right to his knees. He immediately experienced
dizziness and headaches, went to the bathroom and threw
up, but was not knocked unconscious. He reported that the
skin on his fore head broke where he had hit it on the
cabinet, it bled, and the area eventually turned black and
blue. He did not seek any medical attention the day he hit
his head, reportedly because he had to work. After working
the entire day the next day, he went to the hospital because
R. App. 4la
his head was hurting so badly and he was sick to his
stomach. He reportedly did not remember what was done
to work up his complaints. He could not recall having been
given pain medication. However, he started going to a
chiropractor for the headaches; the treatment brought only
temporary relief.
Regarding the memory loss he reportedly experienced
after he hit his head, he reported that at work his general
manager kept giving him sly (Mr. Kobs used the word
“slide”) comments that he, the manager, could match Mr.
Kobs’s brain any day. Mr. Kobs reported that he did not
understand where his general manager was “coming
from,” since he has reportedly had twenty-six years of
experience as a business manager, and “never, ever made
any mistakes in [my] life as far as [my] work.” Mr. Kobs
reported that subsequent to the incident, he started
having to take a lot of notes at work. He reportedly used to
deal with twenty or more banking institutions and could
remember their fax and phone numbers, but started
having to look the numbers up in his computer. He report-
edly recently went to town and could not remember his
home phone number, so he went to his daughter’s to ask
her. He commented, “I want to know why this is happen-
ing.” Mrs. Kobs reported that her husband’s short-term
memory is getting worse and worse, but his long-term
memory is fine. When Mr. Kobs was asked about his
ability to pay attention, he denied any problems, but Mrs.
Kobs reported that he “almost just doesn’t get it.” Mrs.
Kobs also reported that she has to write out the checks
because “he forgets.” Mr. Kobs, however, reported that he
has cashed in his 401K and brought his first and second
mortgages up to date.
R. App. 42a
In January of this . ear, Mr. Kobs was taking Curistmas
decorations down from the roof of his granddaughter’s
house while standing on one side of the peak when he lost
his balance and fell. Mrs. Kobs reported that he fell
backward off of a ladder, but Mr. Kobs implied that he was
standing on the peak of the roof when he lost his balance
and fell. In any case, he reportedly fell thirty-five feet onto
concrete and landed on his left side. He reportedly chipped
his rotator cuff on the left, injured his left knee, injured
his left wrist and fractured his left hand. He denied that
he hit his head. Reportedly, he was hospitalized for a long
time after the fall, and he was kept stationary because of
the fear of blood clots forming in his leg. He had no sur-
gery after the fall, but according to the notes from Dr.
Melby, he complained about the knee’s not being able to
support his weight. He was also complaining of neck and
low back pain. According to notes from the orthopedic
surgeon, Thomas V. Reiser, M.D., of Midwest Spine &
Orthopaedics, MRI scan of his lumbar spine done in April,
2002 revealed degenerative disc disease at L3 through L5
without herniation, mild stenosis at L3-L4 and L4-L5, and
a small central herniation of “questionable significance” at
L5-S1. MRI scan of the cervical spine in March, 2002,
revealed mild degenerative disc disease at C3-C4 and
herniation at C5-C6, according to notes from Dr. Reiser.
Dr. Reiser commented that he thought the pain he was
experiencing was due to an aggravation of pre-existing
disc disease.
According to Dr. Melby’s notes, Mr. Kobs sustained a torn
horn of the meniscus medial compartment in a fall, which
fall is unclear since he had fallen at work and he fell from
the roof. This tear was subsequent to arthroscopy and
R. App. 43a
meniscectomy done in the fall of 2001 because of pre-
existing complaints about his knee. After the surgery, he
continued to complain that his knee felt unstable. He was
referred back to Dr. Engelking, the surgeon, told to con-
tinue with his knee brace, and given Paxil and analgesics.
Notes from Dr. Engelking were not available, but appar-
ently after all of this, he fell from the roof. Subsequent to
the fall, Mr. Kobs experienced chronic edema in that leg
and examination for deep vein thrombosis was undertaken
by Dr. Melby, with negative results.
Of interest were the notes from Dr. Reiser dated December
28, 1999. Mr. Kobs was reporting “symptoms of neck pain,
headaches, upper back pain and bilateral shoulder/arm
paint to the elbow, with numbness and tingling in his
hands.” Mr. Kobs reported to Dr. Reiser that three to four
months prior to the date of the visit, he was sitting at his
desk and bent over to get into a lower drawer when he
immediately felt low back pain. He received films of his
lumbar spine and was prescribed pain medication. Mr.
Kobs also reported to Dr. Reiser that in September of
1999, he “ran into a steel cabinet at work and sustained a
bruise to the head. He sought treatment at Holy Family
Hospital ER, for neck pain, nausea, and headaches.” He
was prescribed pain medication. He then continued treat-
ment with Dr. Melby for neck pain, upper back pain, and
radiating low back pain. His right leg reportedly was
giving out. After obtaining from Mr. Kobs localization of
the pain, description of the pain, pain rating, aggravating
factors, alleviating factors, and factors affecting his sleep,
Dr. Reiser obtained the history from the patient that a
year ago, he slipped on the ice at work. He immediately
felt neck pain and low back pain, sought treatment with
R. App. 44a
Dr. Meiby for three to four months, then reportedly ex-
perienced a complete recovery. He also reportedly told Dr.
Reiser that after the head injury at work in September of
1999, he continued treatment with Dr. Melby for his neck
pain, upper back pain, and his low back pain. After more
history-taking and a very thorough examination, Dr.
Reiser concluded that Mr. Kobs had “multiple level degen-
erative disc disease with mechanical lower back pain
regarding the lumbar spine.” He also “suspectied) degen-
erative disc disease of the cervical spine and chronic
mechanical pain.” Dr. Reiser recommended physical
therapy.
Psychosocial History: Mr. Kobs reported that he was
married before and had three children from his first
marriage. Donna, his wife, was also married before with
three children from that marriage. Then he and Donna
had their own child — for a total of seven children. Mr.
Kobs reported that he married his first wife at age sixteen
because she was pregnant. They were married in Canada,
reportedly the only place where they could get married.
Just immediately before or after deciding to leave his first
wife, she became pregrant with their third child. He
reportedly met Donna and then they had a child -
Shantel, age twenty-five. His third son by his first wife
was born after Mr. Kobs left. This son is also twenty-five
years old. His other two children from his first wife are
reportedly thirty-two and twenty-eight. However, if he was
married at age sixteen and his wife pregnant at the time,
then Mr. Kobs would only be forty-nine.
When asked how he spends his time currently, Mr. Kobs
reported that he does his exercises three times per day,
uses the whirlpool twice a day, watches the news, walks
his circular driveway for exercise, and cruises his pontoon
R. App. 45a
boat around the lake. He also reported that finances are
becoming a source of stress for him right now. He was on
short-term disability, then was fired from his job on May
2ist of this year. Dr. Melby has deemed him unemploy-
able, both by Mr. Kobs’s report and in a note by Dr. Melby.
However, long-term disability has been denied him until
the insurance company receives the results of this evalua-
tion. He has reportedly not gotten a check for seven or
eight months. Mrs. Kobs reportedly had breast cancer and
both breasts were removed, is an insulin-dependent
diabetic, has been diagnosed with lupus, and is on disabil-
ity because of the breast cancer. They reported that their
children are helping out by doing housework, buying
groceries and offering some financial support. Mr. Kobs
also reported that his father died of cancer approximately
nine years ago, and his mother is still alive and in good
health at age 69. She reportedly works at Turtle Lake
Casino in the Housekeeping Department.
Developmental, Educational, and Occupational Histories:
Mr. Kobs reported that he was born in New Richmond, WI
and that his birth was normal. His mother reportedly had
him when she was seventeen. At the age of five, he report-
edly contracted polio. He was reportedly paralyzed in his
legs and on the left side, but could still use his right arm.
He was in the hospital for a year at Sister Kenny. Report-
edly, doctors told him he would never walk again. His feet
are reportedly deformed, according to Mrs. Kobs, but he
denied that he has any leg wasting. He also reportedly not
only learned to walk again, but took third place in a
regional track meet when he was in the third grade.
He denied any developmental delays and added that he was
advanced in talking, crawling and walking. He reported
R. App. 46a
that he started school at the usual time, apparently
despite having had polio at age five. He reported that he
went to high school in Glenwood, Illinois, and graduated
from high school in LaSalle, IL. He then finished two
years of college at Boston College. When asked why he
quit, he reported that he got into “the car and people
business.” He reported that he really enjoyed the challenge
of financing people who could not otherwise get financing.
He reportedly tried to enlist in the Air Force at the age of
seventeen or eighteen, but was turned down because of the
history of polio.
Mr. Kobs reported that he had worked for eight years at
the company which fired him in May. This company — a car
dealership — reportedly did not have a leasing and finance
department until Mr. Kobs started one and built it up.
Prior to this he spent thirteen years at another dealership
on the East coast in Massachusetts. He also worked for
Anderson Windows in Bayport, MN before the job in
Massachusetts. He reported that before he went on short-
term disability he was earning an average of eighty
thousand dollars or more per year. He reported that long-
term disability was supposed to provide payments of about
$4,000 per month.
Past Medical History: Mr. Kobs, as noted above, has had
surgery on his left knee to repair a torn meniscus that was
not related to the fall from the roof. He has also reportedly
had gallbladder surgery. He reportedly suffered a heart
attack thirteen years ago that damaged the lower left
ventricle of his heart. He recently underwent left heart
catheterization, angiography, and left ventriculogram
because of complaints of chest pain, shortness of breath
and radiation to his jaw and right arm in June of this year.
He denied any history of stroke or closed head injury in
addition to bump on his head from the filing cabinet. As
R. App. 47a
noted above, there is a history of polio at the age of five. Mr.
Kobs had not brought the list of his medications, but
between him and Mrs. Kobs, they recalled that he was
taking Effexor, Celebrex, Prevacid, Lipitor, Plavix (Mr. Kobs
recalled the name of this medication), and Tylenol. Accord-
ing to the report on the heart work-up in June of this year,
he was also prescribed nitroglycerin. Mr. Kobs then re-
ported that he is taking Clonazepam for his “crawly legs.”
Mr. Kobs denied that he drinks, but reported that he
smokes about a pack a day, sometimes more, sometimes
less, and that he used to smoke four packs a day. Donna,
his wife, also reported that they like to have a Bloody
Mary together once in a while. Mr. Kobs reported that the
Effexor works very well and he is not depressed. From Dr.
Melby’s notes it was gleaned that he has a somewhat long-
standing history of complaints about depression. However,
Mr. Kobs denied that he was depressed before his wife was
diagnosed with cancer. After the diagnosis, he reportedly
saw both a psychologist and a psychiatrist and was put on
Effexor recently. He commented that she, Donna, is his life
and that he thought he was going to lose her many times.
At the end of the interview, Mr. Kobs reported that he
knows he is not himself because he was very outgoing. He
reportedly could give speeches in front of people and know
what he was talking about. He became tearful when he
said that now he would not make sense. He commented
that he is very intelligent but he frustrates his wife
because he does not remember. More will be said about
affect and personality functioning in the next section.
Ill, EVALUATION
Intellectual Performance: Mr. Kobs was administered the
Wechsler Adult Intelligence Scale-third Edition (WAIS-III)
R. App. 48a
in order to obtain a measure of overall level of intellectual
functioning. On the WAIS-III he performed within the low
average range overall. His WAIS-III Full Scale IQ was 80
(low average), his Verbal IQ was 88 (low average), and his
pro-rated Performance IQ (based on four rather than five
subtests) was 76 (borderline). IQ index scores such as
these have a mean of 100 and a standard deviation of 15.
Scores ranging from 80-89 are in the low average range,
from 90-109 are in the average range, and from 110-119
are in the high average range. Verbal subtests tap per-
formance on a range of verbal knowledge and verbal
reasoning tasks and on attention, working memory, and
mental arithmetic tasks. Performance subtests tap per-
formance on a range of timed and untimed visual reason-
ing and visual-motor tasks. Age-adjusted scaled scores are
given below, they have a mean of 10 and a standard
deviation of 3, with scores of 8 through 12 defining the
limits of average.
Wechsler Adult Intelligence Scale-third Edition
(WAIS-IID
Age- Age-
Adjusted Adjusted
Scaled Scaled
Verbal Score Performance Score
Vocabulary 7 Picture Completion —
not administered
Similarities 7 Digit Symbol-Coding 5
Arithmetic 7 Block Design 7
Digit Span 8 Matrix Reasoning 9
Information 8 Picture Arrangement 4
Comprehension ll
(Letter-Number
Sequencing) (8)
R. App. 49a
A discussion of these results is integrated into the discus-
sion of performance in each of the cognitive domains
below. The number in parentheses refers to a score not
averaged into the IQ index score.
Attention/Concentration: Mr. Kobs was fully oriented,
except for incorrectly recalling the day of the week. He
correctly recalled the names of the current U.S. Presideut,
the President who preceded Bush, and the Governor of
Minnesota. He could not recall the name of the current
Vice President. He attended to all questions and instruc-
tions. The level of effort exerted was not thought consis-
tent with what might be expected, given his high level of
education (two years of college at an excellent private
school in Boston) and all of his reported occupational
attainments. In short, Mr. Kobs was not thought to be
motivated to perform to the best of his ability, as for
example, on IQ testing. This questionable level of effort
and involvement in the testing were thought part of larger
motivational and personality issues. More will be said
about this in the section on Behavior and Personality
Functioning, and in the summary of this report. His
performance on a task requiring the repetition of series of
single digits both forward and backward was in the low
average range for age (WAIS-III Digit Span). He correctly
repeated one series of six digits forward and two series of
four digits backward. On a task requiring the mental
solution of orally presented arithmetic word problems
under timed conditions, his performance was below aver-
age for age (WAIS-III Arithmetic). Performance on a more
complex sequencing task requiring him to repeat series of
alternating numbers and letters in separate ordered
sequences of first numbers followed by letters was within
the low average range for age (WAIS-III Letter-Number
R. App. 50a
Sequencing). Finally, his performance on a spatial working
memory task requiring him to learn the associations
between four plain white cards in a row and a two-
dimensional spatial array of four disks, e.g., which card
went with which disk, through trial and error and exam-
iner feedback, was mildly to moderately impaired with
respect to the number of errors made, and moderately
impaired with respect to the number of trials needed reach
the criterion of twelve consecutive correct associations
(Petrides Conditional Associative Learning). In fact, Mr.
Kobs did net reach that criterion.
Speech/Language: Mr. Kobs spoke grammatically and
logically, articulated clearly, and understood all questions
and instructions. He occasionally made word substitution
errors, such as substituting “slide” for sly. He also occa-
sionally phrased a sentence awkwardly, such as when he
said he “financed people” in his business, meaning that he
got financing for people unable to get financing to pur-
chase a car. Ideas followed sequentially. Formal knowledge
of word meanings was below average for age (WAIS-III
Vocabulary). Performance on a verbal reasoning task
requiring the generation of higher level verbal abstrac-
tions was also below average for age (WAIS-III Similari-
ties). His fund of general knowledge of history, science,
religion, geography, and literature was within the low
average range for age. (WAIS-III Information). Perform-
ance on a common-sense verbal reasoning task requiring
social judgement and proverb interpretation, was solidly
average for age (WAIS-III Comprehension). Letter fluency,
the generation of words to selected letters of the alphabet
under timed conditions, was below average to mildly
impaired, for age and gender. Confrontational naming was
solidly average for age (Boston Naming Test).
R. App. 5la
Visual-Spatial/Visual-Perceptual Performance: Perform-
ance on a visual-spatial reasoning task requiring the
construction of two-dimensional block designs from a
model was below average for age (Block Design). Perform-
ance on a visual information processing and abstract
reasoning task requiring him to complete a visual array or
finish a sequence using a rule derived from the pattern
was also within the average range for age (Matrix Reason-
ing). Performance on a pictorial sequencing task requiring
ordering a series of pictures creating a brief story into a
logical, temporally correct sequence was mildly to moder-
ately impaired for age (Picture Arrangement). Mr. Kobs
got one item correct on this task. His copy of a complex
geometric design was in the range of severely impaired for
age (Rey Complex Figure — copy), because Mr. Kobs made
a series of minor errors which cost him a number of points.
These errors were largely omission errors, including not
drawing the fifth of five lines, and omitting small details
such as the single line above the small rectangle and the
horizontal line within the large triangle which is a con-
tinuation of the horizontal midline. He also incorrectly
placed the diamond on a line extending out from the tip of
the large triangle on the right side of the figure. The small
square in the lower left quadrant was drawn wider than
the small rectangle inside the central figure.
Visual Memory: His immediate recall and delayed re-
trieval performances, that is, drawing the complex figure
copied earlier from memory after three minutes and thirty
minutes, were solidly within the average range with
respect to immediate recall, and mildly below average with
respect to delayed retrieval, for age (Rey Complex Figure —
recall). Delayed recognition requiring the identification
and discrimination of parts of the original design from
R. App. 52a
parts of other designs was mildly impaired for age.
The pattern of retrieval vs.recognition (e.g., immediate
retrieval, below average delayed retrieval and mildly
impaired recognition) was consistent with a “storage”
pattern. His performance on an incidental learning task
requiring him to draw the symbols of the WAIS-III Digit
Symbol task from memory after transcribing them was
within the low average range with respect recall of the
symbol-number pairings, and below average to mildly
impaired with respect to free recall of the symbols (WAIS-
III Digit. Symbol — Incidental Learning: Pairing and Free
Recall).
Verbal Memory: Performance on a word-list learning and
retrieval task requiring recall of words from four catego-
ries on each of five learning trials ranged from solidly
average to mildly impaired for age and gender (California
Verbal Learning Test). Learning over trials ranged from
below average on the first trial to mildly impaired on the
last trial. His learning curve essentially leveled off after
the second trial. The sum total of words recalled was
mildly below average. Uncued and cued retrieval after
both the presentation of a second list of words (a distrac-
tion task) and after a longer delay interval was mildly
impaired (two standard deviations below the mean) for age
and gender. Delayed recognition of words from the original
list was moderately to severely impaired (four standard
deviations below the mean for age and gender), while his
ability to discriminate list words from other words was
mildly impaired. Immediate recall and delayed retrieval of
narrative information, e.g., brief paragraphs, were within
the average range for age (Wechsler Memory Scale-third
edition [WMS-III] Logical Memory I & II). The percentage
R. App. 53a
of information retained over the delay interval was solidly
average for age.
Psychomotor Performance: Speed of performance on 4
visual scanning and numerical sequencing task was mildly
below average for age and gender, with two errors sponta-
neously corrected (Trail Making Part A). On another visual
search task requiring numerical and alphabetical sequenc-
ing in alternating order, speed of performance was moder-
ately impaired for age and gender, with one error and no
confusion (Trail Making Part B). On still another visual
search and symbol substitution task requiring the tran-
scription of symbols under timed conditions, speed of
performance was below average to mildly impaired (WAIS-
III Digit Symbol).
Motor Performance: Finger-tapping speeds were solidly
average with the preferred hand and above average with
the non-preferred hand. Upper-extremity, fine, visual-motor
speed and control (e.g., grooved peg manipulation) were
mildly impaired with the preferred hand and moderately
impaired with the non-preferred hand, for age and gender.
Mr. Kobs followed directions perfectly on this task.
Executive Functioning: Performance on a nonverbal
reasoning and concept formation task requiring the
successive generation and utilization of problem-solving
principles (color, form, or number) as well as sustaining
the use of the principle or changing it in response to
examiner feedback ranged from mildly to moderately
impaired to below average, for age and level of education
(Wisconsin Card Sorting Test). Mr. Kobs demonstrated a
tendency to sort cards to some principle other than the
most obvious and appropriate ones. Thus, the non-
perseverative error rate, or the rate at which he made
R. App. 54a
errors not pertaining to previously correct principles was
in the range of mildly impaired. Otherwise, the numbers
and percentages of perseverative errors and perseverative
responses were mildly below average. Conceptual level
responding, or the number of three or more consecutive
correct responses divided by the total number of re-
sponses, was also mildly below average. He used each of
the three principles ten consecutive times, e.g., the num-
ber of categories completed was three, and in the range of
mildly impaired. Of some interest was that Mr. Kobs lost
set five times, e.g., failed to continue to use the correct
problem-solving principle despite having just used it a
minimum of five times. This is a highly unusual pattern of
performance suggesting extreme distractibility (he did not
seem distracted), confusion, or resistance to the task. He
also did not appear to benefit from experience with the
task, but it is unclear whether his performance truly
reflected his ability to understand the task.
Affect, Mood, Behavior and Personality Functioning: Mr.
Kobs’s affect during the evaluation was not fully congruent
with his presentation. In other words, when talking about
how he used to be able to stand up in front of people and
make sense when he gave speeches, he became tearful,
presumably over the fact that he now thinks he would not
be able to make any sense in the same situation. However,
throughout the evaluation he gave a series of poor ~
sometimes very poor — performances, yet did not seem at
all distressed by these. During a break from the testing he
was urged to do his best, in response to his question about
how he was doing. He reported that he thought he was
doing well, when he clearly was not. At the same time, he
expressed distress that he can no longer do what he used
to be able to do. If he were clearly upset about these
R. App. 55a
hypothesized changes, then it is unclear why he was not
bothered more by his own poor performance during this
evaluation, and completely unclear why he thought he was
doing well when he was not, yet reporting that he is a very
intelligent person who used to be much better at remem-
bering and giving speeches.
Second, during the Conditional Associative Learning Task,
this examiner inadvertently told him a correct response
was wrong. He appeared to catch this error immediately,
saying, “How can it be wrong,” when he appeared other-
wise to be having trouble doing the task. There was thus a
lack of congruence between his presentation of himself as
not being able to master the task, and his catching the
examiner's mistake.
In order to clarify discrepancies between his actual per-
formance and his expected level of performance based on
achievements in education and occupation, Mr. Kobs was
administered the Minnesota Multiphasic Personality
Inventory — revised (MMPI-2). Mr. Kobs was not particu-
larly willing to admit to ordinary human flaws. However,
he was highly consistent in his responding. In fact, scores
on TRIN (true-response inconsistency) and VRIN (variable-
response inconsistency) were at the lowest level possible
and thus were clearly not suggestive of nay-saying, non-
acquiescence, or random responding. Thus, the elevation
on the L scale likely reflected moderate “faking good,” and
the profile may thus not accurately represent the degree of
psychological disturbance present.
Mr. Kobs is reporting poor physical health and denying
good physical health. In fact, he is preoccupied with his
physical functioning. Mr. Kobs responded in a way which
suggests that he converts stress and difficulties into
R. App. 56a
physical complaints, or reacts to stressful events by
developing physical complaints, such as headaches, chest
pains, weakness or tachycardia. In tact, Mr. Kobs may be
exhibiting classic conversion symptoms. Many people with
this particular MMPI-2 profile develop somatic symptoms
centered around headaches or abdominal pain. In fact, Mr.
Kobs is reporting multiple physical complaints, such as
headaches, dizziness and problems with balance. Symp-
toms appear very suddenly and may abate quickly as well.
Although physical complaints may be the primary prob-
lems reported, he may also feel dysphoric and worried,
lacking in energy and having difficulty concentrating and
paying attention. He may feel that life is empty. He may
appear apathetic. He is conventional and takes a cautious
approach to life. At the same time, he is uninsightful about
his own motives and feelings, resists psychological expla-
nations or interpretations of his problems, and denies or
represses feelings and psychological problems. He may
respond well to direct advice or suggestion, if defenses
(e.g., physical symptoms) are not challenged or threatened.
Mr. Kobs may also seek and expect attention and a lot of
affection from others, and then use indirect or manipulat-
ive means to get them. He may be indirect interpersonally
and not likely to express anger and resentment openly. He
may be passive-dependent in relationships. He is sociable
and wants to be liked. He may be somewhat superficial in
interpersonal relationships. He appears to have a good
marital relationship, and, while he was still working,
probably had good work adjustment. However, because he
produced a “faking good” profile to a moderate degree,
there may be problems with adjustment and functioning
which he did not report.
R. App. 57a
Overall, Mr. Kobs is not a good candidate for insight-
oriented psychotherapy. However, supportive counseling,
especially given the potential seriousness of his wife’s
condition, is recommended.
Iv. COMMENT
Mr. Kobs, a 51-year-old, right-handed man, was evaluated
for documentation of his cognitive baseline status in the
setting of concerns about his memory. Mr. Kobs reported to
his primary care physician that he was having progressive
difficulty with his memory after he fell 35 feet, reportedly,
from a roof while taking down Christmas decorations. He
reported to this examiner that he landed on his left side,
did not hit his head, fractured his left hand/thumb, and
injured his left wrist, leg and shoulder. However, during
this evaluation, he reported to this examiner that the
source of his memory problems was a bruise to his head in
1999 when he leaned into a room and struck the left part
of his forehead on the corner of a steel filing cabinet.
Neuropsychologically, Mr. Kobs’s performance needs to be
put into the context of the seriousness of the head injury
suffered in 1999, since that is the event from which he and
his wife both are dating the changes and deterioration in
his memory. First of all, in that incident, he did not lose
consciousness. In fact, he did not seek medical attention
until the end of the next day, after a full day’s work. It is
unclear how he was able to function that day if he had a
head injury the day before serious enough to have deterio-
rating effects on his memory three years later. According
to the notes from his primary care physician, he did not
complain to this doctor about his memory. Rather, his
R. App. 58a
complaints centered around pain — pain in his neck, lower
back and head, in the form of headaches.
Second, Mr. Kobs was referred to a neurologist, John
Floberg, M.D., for investigation of his complaints about his
memory after the fall from the roof this year. Dr. Floberg
thought that Mr. Kobs’s memory complaints were secon-
dary to depression, not to the effects of the fall. Reportedly,
an MRI scan of his head, ordered by Dr. Floberg, revealed
some sort of abnormality in the right frontal lobe, but
what sort of abnormality was completely unclear from Dr.
Melby’s records, and Dr. Floberg’s dictated note was not
available for review. However, Dr. Floberg reportedly told
Mr. Kobs that the abnormality on the scan was incidental,
that is, unrelated to his memory complaints. Dr. Melby
noted that Mr. Kobs took exception to Dr. Floberg’s inter-
pretation of his memory problems as the result of depres-
sion, since Mr. Kobs was insisting that his memory was
deteriorating.
Third, the larger issue of Mr. Kobs’s continuing presenta-
tion to physicians with complaints about pain needs to be
noted here. Even before the fall from the roof in fact a
couple of years before, Mr. Kobs was reporting pain in his
leg. He had a knee operation, which evidently did not
resolve his concerns about his knee, since after the surgery
he complained that his knee was nunstable and likely to
give out. He also had chronic low back pain complaints. It
is true that Mr. Kobs has degenerative disc disease in his
lower back, according to the notes from Dr. Reiser, his
orthopedic surgeon. However, even with pain medication
and after physical therapy, it appeared that his complaints
about pain continued. After further diagnostic work-up in
response to his complaints, it was still unclear to Dr.
R. App. 59a
Reiser, according to his notes, that Mr. Kobs needed
surgery even after the fall from the roof.
All of this background information suggested that Mr.
Kobs might have presented himself in such a way as to
confirm his own view of himself as memory-impaired and
brain-injured. However, there are numerous implausible
aspects of his performance which raise questions about the
effort he exerted throughout this evaluation. First of all,
Mr. Kobs’s IQ, as measured here, was found to be 80, that
is, just barely within the low average range. This is simply
not believable. There is no possible way that a head injury
of the severity described by Mr. Kobs could have lowered
his IQ to this level. Furthermore, there were findings
within the IQ testing that were also highly unlikely. Mr.
Kobs obtained a score om Vocabulary, which measures
knowledge of vocabulary, that was in the low average
range. This seems an unusually low score for a man who
finished two years of college at Boston College and who
used to make speeches and sell cars, a man who reportedly
was making an average of $80,000 a year or more and who
probably relied on his verbal skills to help him make that
kind of money. Furthermore, knowledge of vocabulary is
pretty invulnerable to the effects of a mild head injury.
That is, one of the least likely effects of a head injury is to
lower one’s score on Vocabulary. Second, on Block Design,
he gave a highly variable performance. He failed a rather
simple four-block design because he rotated it out of the
proper orientation then rotated it back into the proper
orientation after the time limit had expired, yet he quickly
completed two nine-block designs that many patients find
difficult. This sort of variability in performance, e.g.,
failing easy items and passing harder ones, is often seen in
patients who are depressed or who are not doing their best
R. App. 60a
on all items. Third, Mr. Kobs got just one item right on
Picture Arrangement - the first item. He then failed the
next four items. This is a highly unusual performance,
even for people who are mentally retarded. Mr. Kobs, even
given how poorly he performed, is clearly not mentally
retarded. Furthermore, it is again completely unbelievable
that a person who suffered such a mild superficial injury
would experience such devastating effects on his ability to
arrange four picture cards in a temporally correct se-
quence in order to tell a simple story. Fourth, Mrs. Kobs
reported that at times, Mr. Kobs is paying such poor
attention that he seems not to be “getting it” at all. How-
ever, on measures of attention from the IQ test, like Digit
Span and Letter-Number Sequencing, he performed
within the low average range. Thus, his performance was
not typical of someone who is “not getting it.” In addition,
on the Comprehension subtest from the IQ test, a test of
common-sense reasoning and social judgement, Mr. Kobs
gave his best performance, a performance solidly within
the average range. People who really and truly are not
“getting it” would be highly likely to do poorly on this
particular test.
With regard to memory functioning, the findings are very
interesting. Even though memory functioning was his
primary cognitive complaint, there were aspects of mem-
ory functioning that were within the average range. His
immediate recall and delayed retrieval of brief paragraphs
was within the average range for age; the percentage of
information retained over the delay interval was solidly
average for age. On a very difficult immediate recall task,
that is, recalling the Rey figure three minutes after copy-
ing it without having first been told that he would be
asked to draw it from memory, Mr. Kobs’s performance
R. App. 6la
was solidly average for age. Delayed retrieval, that is,
drawing the same figure from memory thirty minutes
after copying it was only mildly below average. It would
ordinarily be expected that someone who has genuine
memory problems would simply be unable to do this task
at all, given how difficult it is. On the simpler task of
recognizing parts of the figvre that werr copied, his
performance was worse than on #ither immediate recall or
délayed retrieval, e.g., it was mildly impaired. However, on
the recognition task, Mr. Kobs made two Recognition
Failure errors, that is, he failed to recognize two parts of
the design that he drew on delayed recall. One of those
Recognition Failure errors was for a part that he drew
almost correctly on immediate recall and only marginally
correctly on delayed retrieval because he drew it sloppily.
Even so, Recognition Failure errors are highly uncommon
in people who have actually sustained brain damage as
the result of a head injury. Thus, the interpretation given
when there are two of these types of errors done by people
who are not brain-damaged is that they are not doing their
best on the task. The only task on which he consistently
demonstrated mild impairment in all aspects of retrieval
was on the California Verbal Learning Test. However, his
delayed recognition performance was very unusual on this
task. Most people do better on delayed recognition that on
delayed retrieval, especially people who have significant
memory impairment. In Mr. Kobs’s case, his performance
on the delayed recognition task was two standard devia-
tions below his delayed retrieval performance, a highly
unlikely and unusual discrepancy.
Finally, on the Wisconsin Card Sorting task, a nonverbal
reasoning and concept formation task requiring mental
flexibility and the ability to profit from feedback, Mr. Kobs
R. App. 62a
gave another highly unusual! performance with respect to
the number of set losses. Set losses are the number of
times a person stops using the correct problem-solving
principle after five correct usages and reverts to a previ-
ously correct principle or an unrelated principle. Mr. Kobs
lost set five times. This degree of set loss can reflect
confusion, or distractibility and problems focusing on the
task, or, as is thought in Mr. Kobs’s case, resistance to the
task. Mr. Kous seemed to be trying not to make too many
correct responses. After he had used each principle three
times, he began oscillating back and forth between the two
principles that were not in effect, as well as using an
unrelated or irrelevant or “non”-principle, e.g., making a
random response.
In terms of strengths, he demonstrated good visual mem-
ory for the Rey complex figure, solidly average common-
sense reasoning and social judgement, and average recall
of brief paragraphs.
With respect to personality functioning, as discussed
above, Mr. Kobs appears to be having a conversion reaction,
eg. he may be converting psychological problems into
physical symptoms, without any awareness of his behavior.
Thus, the results of the MMPI-2 suggested that these
efforts to make himself look cognitively impaired were not
done deliberately, e.g., with the intent to deceive Mr.
Kobs’s view of himself as physically unwell and cognitively
ally in the direction of impairment, when in fact these
results, when interpreted in light of all the available
information, suggest the opposite — that he is not memory
disordered or cognitively impaired. In other words, Mr.
Kobs seems to have convinced himself that he has memory
impairment, with, it would seem, Mrs. Kobs’s unwitting
R. App. 63a
reinforcement. It was clear that she perceives him as
having deteriorating short-term memory, but did not
provide a lot of history to substantiate her view.
However, there is undeniable psychological disturbance
here. Mr. Kobs was probably under-reporting psychological
distress and maladjustment, given his distaste for admit-
ting to normal human weaknesses and character flaws (an
elevation to a T score of 70 on the Lie Scale). Thus, it is
not clear to what lengths Mr. Kobs would go to reinforce
his view of himself as physically unwell and cognitively
aol
As noted above in the section on Personality Functioning,
Mr. Kobs is not insightful about or aware of these behav-
iors, and he is not likely to benefit from psychotherapy
which would offer sophisticated interpretations. However,
Mr. Kobs has obviously dealt with a lot of difficult situa-
tions attendant upon his wife’s diagnosis with breast
cancer. She reported having a variety of other serious
medical problems. He has some injuries as well as some
chronic back problems which are likely to result in the
experience of intermittent physical pain. Thus, he is
vulnerable to depression and he endorsed some depressive
symptomatology, most of it having to do with mental
dullness. It is recommended that Mr. Kobs receive some
supportive counseling and have the opportunity to discuss
sources of stress in his life with a psychologist or social
worker trained in helping people who are caregivers. It
would appear that Mr. Kobs has in fact on a number of
occasions assumed the role of caregiver of his wife. He
appears to need additional support.
In summary, the results were not consistent with the
presence of memory problems secondary to a closed head
R. App. 64a
injury. There was in fact no real evidence that he had
sustained a closed head injury, e.g., an injury that would
have produced cognitive effects. Mr. Kobs’s performance
was thought to be influenced by his conviction that he is ill
and his denial of physical and cognitive well-being. Al-
though an absence of progressive memory loss should be
good news, it probably will not be greeted with much
enthusiasm. There was evidence of a tendency to convert
stress reactions to physical symptoms, and to be unaware
of underlying psychological conflicts or concerns. Mr. Kobs
was thought to be experiencing more psychological dis-
tress than he was willing to acknowledge. It was recom-
mended that he receive supportive counseling. A referral
to William Robiner, Ph.D., ABPP, L.P. or Diane Bearman,
Ph.D., L.P, health psychologists in the Department of
Medicine here at Fairview-University Medical Center, is
suggested. This referral would be made by Dr. Melby. Dr
Robiner may be reached at (612) 624-1492, and Dr. Bear-
man at (612) 624-0933.
With regard to the issue of a return to work, Mr. Kobs
passed along a variety of disability forms to be completed.
It is this examiner’s opinion that he is not cognitively
disabled or memory impaired. However, he appears to
have some psychological disturbance at this point which
would render it difficult for him to be a fully engaged
worker, e.g., he sees himself as too sick to work and he is
sincerely convinced of this view. Further, this view has
been reinforced by his family. He has physical injuries and
chronic low back pain. It is therefore also recommended
that he be referred to Miles Belgrade, M.D., at Fairview-
Riverside, for help in dealing with what appears to be a
chronic pain syndrome. Dr. Belgrade may be reached at
R. App. 65a
(612) 273-5400. Again, Dr. Melby would make this referral
if he deemed it appropriate.
The opportunity to address questions regarding Mr. Kobs’s
cognitive status is appreciated. Thank you for the very
interesting referral. If there are questions about this
evaluation, please do not hesitate to call (612) 625-7423.
/s/ Mary Sullivan, Ph.D., L.P
Mary Sullivan, Ph.D., L.P.
Assistant Professor of Neurology
FILED
No. 05-394 OCT 28 2905
sn OE OEE Se, |
IN THE
Supreme Court of the Hnited States
ELVIS KOBs,
Petitioner,
v.
UNITED WISCONSIN INSURANCE COMPANY,
Respondent.
On Petition For A Writ Of Certiorari
To The United States Court Of Appeals
For The Seventh Circuit
BRIEF FOR LEGAL SERVICES FOR THE ELDERLY
AS AMICUS CURIAE SUPPORTING PETITIONER
GARY STONE
Counsel of Record
JONATHAN A. WEISS
LEGAL SERVICES FOR THE ELDERLY
130 West 42nd Street, 17th Floor
New York, New York 10036-7803
(646) 442-3316
October 28,2005 ~—
II.
TABLE OF CONTENTS
Applying An Administrative Law
“Arbitrary And Capricious” Standard To
Decisions By Conflicted ERISA
Administrators Denies Claimants Their
“Day .o Court” And Prevents Claimants
From Receiving The “Full and Fair”
Treatment That Congress Intended Them
To Receive When It Enacted ERISA...............
A. Equating ERISA Administrators
With Unbiased Federal Agencies
Denies Claimants An Unbiased
Adjudication On The Merits Of Their
Ee es ea ee
B. The Statutory Provisions Of ERISA
Offer No Basis For According
Conflicted ERISA Administrators
Deference Under An “Arbitrary And
Capricious” Standard Of Review ............
Failure To Resolve The Problem Raised
By Petitioner Risks Further Erosion Of
Public Confidence in ERISA-Governed
Benefit Plans To Provide Promised
RR A el
POPP PERU R UEC RPE S REESE SERRE TT
SESE HEE EEEEEEEREEEERREOHEEEE RH RRHREERE HR eeee
' TABLE OF AUTHORITIES
Page(s)
Cases:
Administrative Committee of the Time Warner,
Inc. v. Biscardi, 2001 WL 286749
8 EE SCE Se 13
Andrews-Clarke v. Travelers Ins. Co.,
984 F. Supp. 49 (D. Mass. 1997)...............c0000000 16
Armstrong v. Liberty Mutual Life Assur. Co.,
273 F. Supp.2d 395 (S.D.N.Y. 2003) ......0.....0.000 13
Badawy v. First Reliance Standard Life Ins.
Co.,
2005 WL 2396908 (S.D.N.Y. 2005) ...........cccecc00 13
Bergquist v. Aetna U.S. Healthcare,
289 F. Supp.2d 400 (S.D.N.Y. 2003)...........000.00+ 13
Boesel v. The Chase Manhattan Bank,
62 F. Supp.2d 1015 (W.D.N_Y. 1999).................. 13
Brown v. Blue Cross & Blue Shield of Ala.,
kN EE eee. ae eee 8
Bunting v. McCall,
280 A.D.2d 774, 719 N,Y.S.2d 907 (N.Y.
pK IRL Re REO ese: 2
Caidor v. Chase Manhattan Bank,
29 Fed. Appx. 704 (2d Cir. 2002) ............cccccccees 13
Chan v. Hartford Life Ins. Co.,
2004 WL 2002988 (S.D.N.Y. 2004) .........-ccceeeeees 13
Page(s)
Citizens to Preserve Overton Park, Inc. v.
Volpe,
1 ARE he aE Oat te Bates 10
Cook v. New York Times Co. Long-Term
Disability Plan, 2004 WL 203111
Es Ha SUD cschcnttaclidteiceasniidadiduecctepsenntsiionhesdie 13
Corvi v. Eastman Kodak Co. Long Term
Disability Plan, 2001 WL 484008
a ED cnitancinidiitenincnmnndhdicninsuaibuipiedters wae
DeFelice v. American Int'l Life Assurance Co.,
Re io ee ae te ey Be eriternrirseptincanesesmenbetions 16
DeVere v. Northrop Grumman Corp.,
1999 WL 182670 (E.D.N.Y. 1999)................:c0000- 13
Doe v. Cigna,
304 F. Supp.2d 477 (W.D.N.Y. 2003)...........200000 13
Duchow v. New York State Teamsters Conf.
Pension & Ret. Fund, 691 F.2d 74 (2d
Fes eee icinbiciieteehitiiasntarhtnia htt ccaitailinictncainiatinctagaii 11
Elsroth v. Consolidated Edison,
10 F. Supp.2d 427 (S.D.N.Y. 1998) .............0004 13
Fallick v. Nationwide Mut. Ins. Co., ,
162 F.3d 410 (6th Cir. 1998) ..2.0.........ccccceececeeeeees 6
Federal Maritime Comm'n v. South Carolina
State Ports Auth., 535 U.S. 743 (2002)............. 7,8
Firestone Tire & Rubber Co. v. Bruch,
SED UWB. 161 (1BGG) .nnccccvccsccsccccrecsecscooss
iv
Page(s)
Flynn v. Hach,
138 F. Supp.2d 334 (E.D.N.Y. 2001)...............0.. 13
Great-West Life & Annuity Ins. Co. v.
Knudson,
SORE Cae Sn PUTED cxvnictessnaiaeuedsenvornscabniicatcntidiincts 11
Henar v. First Unum Life Ins. Co.,
2002 WL 31098495 (S.D.N.Y. 2002) ............ccc00e 13
Joint Anti-Fascist Refugee Committee v.
McGrath, '
Se Eee BAP CID cen sdncnsnsepccbernssdemnctcigaprvatorseinieel 17
Kendrick v. Sullivan,
784 F. Supp. 94 (S.D.N.Y. 1992) ........cccseccecerseeees 1
Kirk v. Readers Digest Assoc.,
57 Fed. Appx. 20 (2d Cir. 2003) .0........cccceccereesees 13
Maniatty v. Unumprovident Corp.,
218 F. Supp.2d 500 (S.D.N.Y. 2002) .......... cee 13
Mers v. Marriot Int'l Group Accid. Death &
Dismemberment Plan, 144 F.3d 1014
ee i iatinntsititticigeatiRaicssbiiids iptuinbasbiienpesesis 15
Mertens v. Hewitt Associates,
Se AE SE OID shcltccrsinenieclsdiestcabubartenseubeadades 10
Miller v. United Welfare Fund,
73 ¥.36 1086 (2d Cir. 1906) ..cccccocccesseccceseessoceccoooses 5
Montesano v. Xerox,
117 F. Supp.2d 147 (D. Conn. 2000)...............00. 13
Page(s)
Motor Vehicle Mfrs. Ass'n. of the U.S., Inc. v.
State Farm Mut. Auto. Ins. Co., 463
ACR SE RENEE aN re 5
Nerys v. Building Service 32B-J Health Fund,
2004 WL 2210256 (S.D.N.Y. Pe
NRE RE AR Re a Dae ar re Aa NE ANS 3,13
Ortiz v. Regan,
769 F. Supp. 570 (S.D.N.Y 1991) ...........:ccccccceeeeees 2
Owen v. Wade Lupe Construction Co.,
325 F. Supp.2d 146 (N.D.N.Y. 2004) ..............0+ 13
Pagan v. NYNEX Pension Plan,
52 F.3d 438 (2d Cir. 1995)..............cc00+ 2, 3, 12, 16
Parry v. SBC Communications, Inc.,
375 F. Supp.2d 31 (D. Conn. 2005)..................++. 13
Perlman v. Swiss Bank Corp. Comprehensive
Disability Protection Plan, 195 F.3d 975
EE ea Meee oe 6
Pinto v. Reliance Standard Life Ins. Co.,
214 F.3d 377 (Sd Cir. 2000)......occccssccerseseseccessesseres 8
Rettig v. PBGC,
744 F.2d 133 (D.C. Cir. 1984) ..............cccceceeeceeees ll
Risenhoover v. Bayer Corp.,
83 F. Supp.2d 408 (S°D.N.Y. 2000).................... 13
Roberton v. Citizens Utilities Co.,
122 F. Supp.2d 279 (D. Conn. 2000)................... 13
Rosenthal v. First Unum Life Ins. Co.,
2002 WL 975627 (S.D.N.Y. 2002) .............ccccceeeee 13
— Page(s)
Schwartz v. Oxford Health Plans,
175 F. Supp.2d 581 (S.D.N.Y. 2001)............. 13, 14
Semmler v. Metropolitan Life Ins. Co.,
172 F.R.D. 86 (S.D.N.Y. 1997) ..........:cccccceeceeeseees 13
Shutts v. First Unum Life Ins. Co.,
310 F. Supp.2d 489 (N.D.N.Y. 2004) ..........0c0cc00 13
Smith v. First UNUM Life Ins. Co.,
2005 WL 2475724 (2d Cir. 2005) ............ccceeeeee. 13
Snyder v. First Unum Life Ins. Co.,
2004 WL 1784334 (W.D.N.Y. 2004)................... 13
Sullivan v. LTV Aerospace and Defense Co,
82 F.23 1251 (2d Cir. 1996) ..0..........cccceeceeeeeeeeenees 1l
Thompson v. General Elec. Co.,
2002 WL 482862 (S.D.N.Y. 2002) ............cccceeees 13
Van Boxel v. Journal Co. Employees’ Pension
Trust,
836 F.2d 1048 (7th Cir. 1987) .............cccceeecereereees 6
Varshavsky v. Perales,
202 A.D.2d 155, 608 N.Y.S.2d 184 (N_-Y.
ea Tas TN eiticisccennithiiininnnniciinieaniapitaatinventnians 1
Wagner v. First Unum Life Ins. Co.,
2003 WL 21960997 (S.D.N.Y. 2003) .................+. 13
Waksman v. IBM Separation Allowance Plan,
138 Fed. Appx. 370 (2d Cir. 2005) ..........cccccceeee 13
Weaver v. New York City Employees’
Retirement System, 717 F. Supp. 1039
ees I ecehiteccicetinentoninhsiiciinininalcincinaiiccningitsti 2
Page(s)
Weissman v. First Unum Life Ins. Co.,
44F Supp.2d 512 (S.D.N.Y. 1999) ........:ccccceeeeees 13
Zervos v. Verizon New York, Inc.,
2001 WL 1262941 (S.D.N.Y. 2001),
rev'd on other grounds, 277 F.3d 635
GD Ci Ce ciricitecepcsndondeeninsictiioitianaliiithindeitiiniadsethanie 13
Statutes, Regulations, and Rules:
SD UGG. 8 BATT cercccrcrercsensiomicntimanineuntinle
BD TR © BEG vecectccinkctstlitntoaiisitcsstapbitapiisitediciiletinileita 3,12
BOLO OIE i a ee 10
es FG» .” \ eee ies | 10
B AG © TR Pciicncindintinchtcchinintitiiasbidisigtinditsinsibeatiteishiite 10
BD CF Bee SHORTED BEE) ctetnittencsviticsiactecilinthovivintgicdpinatiai 4
Sen, 0h: Wn ee
‘Sup. 6 RR ey rns FIM RTRs 1
Other Authorities: :
2 Subcommittee on Labor of the Senate
Committee on Public Labor and Public
Welfare, 94th Cong. 2d Sess.,
Legislative History of the Employee
Retirement Security Act of 1974
SEIN, FE TN decticicteinietiniipiiccniincaaisaibiintitbdaiatinadie 10
5 The Writings and Speeches of Daniel Webster
ABA Model Code of Judicial Conduct, Canon 2
ABA Model Code of Judicial Conduct, Canon
SE a a a
Did Insurer Cheat Disabled Clients? , 60
Minutes, CBS News, Nov. 17, 2002.......
George G. Bogert & George T. Bogert,
Handbook of the Law of Trusts (5th ed.
John Larson & Lea Thompson, Benefit of the
Doubt; Several People Accuse Insurance
Company UnumProvidence (sic) of
Searching for Reasons to Deny Claims,
Dateline NBC, Oct. 12, 2002..................
Majority Staff of the House Comm. on Ways
and Means, 108th Cong. 2d sess., 2004
Green Book, Background Material on
Data on the Programs Within the
Jurisdiction of the Committee on Ways
and Means Table 13-2 (Comm. Print
Mark D. DeBofsky, The Paradox of the Misuse
of Administrative Law in ERISA
Benefit Claims, 37 John Marshall L.
I a
Peter A. Meyers, Comment, Discretionary
Language, Conflicts of Interest, and
Standard of Review for ERISA
Disability Plans, 28 Seattle L. Rev. 925
Gea cernccecintvcwscsestnesvienveenseseezesceyuscuesepaces
soquvevevente 14
Page(s)
Peter G. Gosselin, State Fines Insurer, Orders
Reforms in Disability Cases, Los
Angeles Times, Oct. 3, 2005 .........cccccccceccerseeeeeeees 14
Peter G. Gosselin. The New Deal; The Safety
Net She Believed In Was Pulled Away
When She Fell, Los Angeles Times,
OG ES En 14
Restatement (Second) of Trusts § 170(1) (1959)............ ll
Restatement (Second) of Trusts § 187.....................c00 ll
INTEREST OF AMICUS CURIAE
Legal Services for the Elderly (LSE) of New York
City, New York, submits this brief amicus curiae,
pursuant to Supreme Court Rule 37, in support of the
petition for issuance of a writ of certiorari to the United
States Court of Appeals for the Seventh Circuit for review
of its judgment in Elvis Kobs v. United Wisconsin
Insurance Co., 400 F.3d 1036 (7th Cir. 2005). Both
Petitioner and Respondent have consented in writing to
its submission.
Founded in 1968, LSE is the oldest organization in
the country devoted to the provision of legal services to
the indigent elderly. LSE specializes in cases involving
Social Security and Supplemental Security Income,
Medicaid, and disability, pension, and other private
employee benefits. LSE assists legal services lawyers by
co-counseling in law reform litigation and by providing
advice, pleadings, memoranda of law, and briefs amicus
curiae.
Like the case at bar, many of LSE’s cases have
addressed issues concerning adjudicative fairness,
including several successful challenges to the procedures
used in adjudicating entitlement to employee benefics.?
' Pursuant to Sup. Ct. R. 37.6, LSE’s counsel] of record hereby
certifies that this brief was authored in whole by LSE attorneys, and
that no individual or entity other than amici curiae LSE has
contributed monetarily to the preparation or submission of this brief.
* Outside of the employment arena, LSE has been active in
challenging procedures that deny the indigent elderly fair and just
adjudications of their rights. See, eg., Varshavsky v. Perales, 202
A.D.2d 155, 608 N.YS.2d 184 (N.Y. App. Div. 1994) (successfully
resisting an attempt by the State of New York to eliminate face-to-face
hearings at home for the homebound disabled), Kendrick ». Sullivan,
784 F. Supp. 94, 102 (S.D.N.Y. 1992) (granting class certification and
denying motion to dismiss in action ultimately settled by reopening of
cases decided by biased administrative law judge) (“The right to an
impartial adjudication is a basic element of due process. This aspect of
See Bunting v. McCall, 280 A.D.2d 774, 719 N.Y.S.2d 907
(N.Y. App. Div. 2001) (requiring evidentiary hearing to
determine whether application for benefits was timely);
Ortiz v. Regan, 769 F. Supp. 570 (S.D.N.Y 1991) (finding
that agency's failure to hold pre-deprivation hearing for
termination of benefits violated procedural due process);
Weaver v. New York City Employees’ Retirement System,
717 F. Supp. 1039 (S.D.N.Y. 1990) (holding that officials’
actions in terminating benefits violated procedural due
process). In recognition of LSE’s contributions and
expertise in employee benefits, the Administration on
Aging (AoA), part of the U.S. Department of Health &
Human Services, has awarded several multi-year grants
to LSE to provide advice and advocacy to individuals with
pension problems throughout New York and New Jersey.
The Seventh Circuit’s rule attacked by Petitioner—
namely, that “dual-role” insurers’ are considered to act
neutrally in the absence of specific evidence provided by
the claimant showing a conflict of interest—is
substantially the same as that followed by the Second
Circuit and the district courts subject to its authority.
These courts are the principal forums in which LSE
litigates cases involving ERISA-governed benefit plans.
Ten years ago, when the Second Circuit first announced
its highly deferential standard in Pagan v. NYNEX
Pension Plan, 52 F.3d 438 (2d Cir. 1995), LSE
immediately understood its potential significance and
appeared as amicus curiae in support of an unsuccessful
motion for reconsideration.
Unfortunately, in the ten years since Pagan was
decided, LSE’s fea: ..-ve been confirmed, as the opinion
has become one «’ | 1e most frequently cited employee
due process applies equally in an administrative setting as it does in a
judicial forum.”).
* As noted by Petitioner, a “dual-role” insurer both makes benefits
eligibility determinations and is financially responsible for paying any
benefits it grants. Pet. 2.
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.