ERISA-Second Circuit Rules That Letter Denying Claim For Short Term Disability Benefits Complies With ERISA Claims Procedure

In Tortora v. SBC Communications, Inc., No. 10-3478-cv (2nd Cir. 2011) (Summary Order), the plaintiff, Susan Tortora (“Tortora”), had been a participant in an employer-sponsored health care plan (the “Plan”). The Plan provided disability benefits. Claims for disability benefits under the Plan were administered by defendant Sedgwick Claims Management Services, Inc. (“Sedgwick”). Segwick had denied Tortora’s claim under the Plan for a short-term disability benefit. In denying the benefit, Sedgwich had relied on the medical reports of several of its own physicians. Tortora later filed this suit for the benefit under ERISA. The district court granted summary judgment against her. The questions in this case for the Second Circuit Court of Appeals (the “Court”): (1) Did Sedgwick’s denial letter satisfy ERISA’s notice requirements, by giving sufficient notice of how Tortora may perfect her claim, and (2) did Sedgwick give adequate consideration to the medical views of Tortora’s treating physicians?

As to question (1), the Court reviewed the letter in which Sedgwick denied Tortora’s claim for disability benefits. The letter contained various information, including: (a) a reference to the Plan’s definition of “disability”; (b) a statement that the claim denial was not based on missing or incomplete medical information, but rather, that the medical evidence from Sedgwick’s own doctor’s report did not support the existence of a disability; (c) that Tortora could provide additional medical information supporting an inability to work; (d) a description of the plan’s review procedures; and (e) a concluding statement that “[c]linical information does not document a severity of your condition(s) that supports your inability to perform your occupation.”

The Court concluded that the letter sufficiently informed Tortora of how she could perfect her claim. This was apparent, said the Court, based on her subsequent appeals in which she submitted additional documentation for a medical diagnosis. Further, even prior to the issuance of that denial letter, Tortora had numerous opportunity (12 chances in fact) to perfect her claim. At the least, Sedgwick had substantially complied with ERISA’s notice requirements, whose purpose is to “provide claimants with enough information to prepare adequately for further administrative review or an appeal to the federal courts.” Thus, there was no ERISA violation with respect to the denial letter.

As to question (2), the Court noted that where, as here, the written plan documents for the Plan gave Sedgwick discretionary authority to determine eligibility for benefits, Sedgwick’s denial of Tortora’s claim for benefits will not be overturned by the Court unless it is arbitrary and capricious. The Court said that ERISA does not require a claims administrator to automatically accord special weight to the opinions of a claimant’s physician. Also, courts may not impose on claims administrators a discrete burden of explanation when they credit reliable evidence that conflicts with a treating physician’s evaluation. As such, particularly since it had obtained reliable medical reports from several of its own physicians, the Court concluded that Sedgwick’s denial of Tortora’s claim for disability benefits was neither arbitrary nor capricious.

Answering questions (1) and (2) in the above manner, the Court affirmed the district court’s summary judgment against Tortora.

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