In Baker v. Hartford Life Insurance Company, No. 10-2899 (3rd Cir. 2011) (Non Precedential Opinion), the plaintiff, Luciana Baker (“Baker”), brought suit under ERISA against the defendant, Hartford Life Insurance Company (“Hartford”), for denying her claim for long-term disability (“LTD”) benefits under a plan maintained by her employer (the “Plan”). Hartford was the claims administrator and insurer under the Plan. The district court determined that Hartford’s denial of the claim was not arbitrary or capricious, and granted summary judgment against Baker. Baker appealed.
Baker suffered from chronic back pain. She filed a claim for LTD benefits under the Plan due to this pain. The Plan stated that “Disability” means that during the Elimination Period and the following 24 months, Injury or Sickness causes physical or mental impairment to such a degree of severity that the claimant is: (1) continuously unable to perform the Material and Substantial Duties of her Regular Occupation; and (2) not Gainfully Employed. During Hartford’s review of Baker’s claim, Baker’s employer produced a Physical Demands Analysis. The Analysis indicated that Baker’s “typical work day entail[ed] seven (7) hours of sitting, a half-an-hour of standing (.5) total, and a half-an-hour of walking (.5).” The Analysis further indicated that Baker could “[a]lternate sitting and standing as needed.” The employer also offered to modify Baker’s work station “regarding sitting v. standing ratio.” Shortly after its receipt of the Physical Demands Analysis, Hartford corresponded with Dr. Cooke. He confirmed that Baker’s “only activity limitations and restrictions were to limit prolonged sitting and avoid heavy lifting.” Hartford then denied Baker’s claim for the LTD benefits, after concluding that she was able to perform the “essential duties” of her position.
In analyzing the case, the Third Circuit Court of Appeals (the “Court”) noted that Hartford, as claims administrator, was vested with discretion to determine Plan eligibility and an employee’s entitlement to benefits. As such, its decision to deny Baker’s claim for LTD benefits may be reversed only if it was arbitrary or capricious, that is, if it was without reason, unsupported by substantial evidence or erroneous as a matter of law. The Court also said that, since Hartford both evaluates claims and pays benefits, Hartford has a conflict of interest which must be taken into account as a factor in determining whether Hartford was arbitrary or capricious.
The Court concluded that Hartford had not acted arbitrarily or capriciously in denying Baker’s claim for LTD benefits. It said that, to be eligible for long-term disability under the Plan, Baker had to prove that she was continuously unable to perform the material and substantial duties of her regular occupation. As Dr. Cooke indicated, prolonged sitting was the central obstacle to Baker’s resumption of her duties. Dr. Cooke, however, informed Hartford that Baker could return to work if she could avoid sitting for prolonged periods. Baker’s employer was open to modifying Baker’s work station so that the “sitting v. standing ratio” was more conducive to Baker’s requirements. Baker did not carry her burden to show that, in spite of the modifications, she was unable to perform the necessary functions of her occupation. As such, the Court upheld the district court’s summary judgment against Baker.