The opinion of the court was delivered by: STEWART DALZELL, District Judge
After paying disability benefits to Florence Hunter for eight
years, Federal Express Corporation ("FedEx") discontinued those
benefits in December of 2002 because it determined that Hunter
had failed to show that she was still entitled to them. Pursuant
to Section 502 of the Employee Retirement Income Security Act
("ERISA"), 29 U.S.C. § 1132 (2004), Hunter brought this action to
restore her disability benefits. The parties' motions for summary
judgment*fn1 are now before us. Factual Background
FedEx's Long Term Disability Plan (the "Plan"), see
App.*fn2 279-325, is an employee welfare benefit plan within
the meaning of ERISA, see Stip. ¶ 1, 28 U.S.C. § 1002(1)
(2004). Under the Plan, a covered employee is entitled to long
term disability benefits if she submits "proof" that she "has
incurred a Disability." App. 295. A "Disability" can mean either
an "Occupational Disability"*fn3 or a "Total
Disability,"*fn4 but all disabilities must be "substantiated by significant
objective findings which are defined as signs which are noted on
a test or medical exam and which are considered significant
anatomical, physiological or psychological abnormalities which
can be observed apart from the individual's symptoms." App. 287.
The Plan names FedEx as its Administrator and empowers the
Administrator to "receive, evaluate and process all . . . claims
and . . . allow payment of benefits under the Plan in accordance
with its terms." See App. 285-86, 318. FedEx, however, elected
to outsource the initial evaluation and processing of claims to
Kemper. See App. 464-98. The Plan and the Kemper outsourcing
agreement both recognize that FedEx has "sole and exclusive
discretion" to determine whether it will pay long term disability
benefits to any claimant under the Plan. App. 312; see also
id. at 466, 469. To that end, the Plan explains that "[n]o
Disability Benefit shall be paid . . . unless and until the
Administrator has received . . . information sufficient for the Administrator to determine, in its sole and exclusive
discretion that a Disability exists." App. 312.
If Kemper denies benefits to a claimant, then FedEx's Benefit
Review Committee ("BRC") must "conduct[a] review of denial of
benefits and provid[e] the claimant with written notice of the
decision reached." App. 315. The Plan vests the BRC with the
authority "to interpret the Plan's provisions in accordance with
its terms with respect to all matters properly brought before
it," and its decision is "final, subject only to a determination
by a court of competent jurisdiction that the committee's
decision was arbitrary and capricious." App. 316-17; see also
id. at 319.
When FedEx awards long term disability benefits, those benefits
are deducted "exclusively out of the assets constituting the
Trust Fund."*fn5 App. 310. Every fiscal year, FedEx
contributes to this Trust Fund "in such amounts as are
actuarially determined to be sufficient to fund on a level basis
the benefits provided" under the Plan. Id. FedEx has no
responsibility to make additional contributions to the Trust Fund
if the fund lacks sufficient assets to pay the benefits due under
the Plan. Id. On the other hand, FedEx's contributions to the
Trust Fund are "irrevocabl[e]," and the Trust Fund's assets may
be used only "for the exclusive purpose of providing Disability Benefits to Covered Employees and
for defraying reasonable expenses of administering the Plan."
Even after an employee has begun to receive benefits, she "may
be required, as the Administrator shall determine, to submit
continuing proof of Disability." App. 312. If an employee "fails
to provide information, as requested by, and within the time set
by, the Administrator," her benefits may be terminated. App. 297;
see also id. at 313.
Florence Hunter began her career at FedEx on January 9, 1984.
Stip. ¶ 17. She stopped working on July 15, 1994 due to
complications with a pregnancy, App. 46, and she began to receive
short term disability benefits on July 29, 1994, Stip. ¶ 21. On
October 13, 1994, a few days after giving birth to her child,
Hunter experienced a cerebral vascular accident ("CVA") that
is, a left posterior occipital parietal infraparenchymal
hemorrhage. App. 46-47. As a result of the CVA, Hunter
"essentially lost her ability to read as well as most of her
ability to comprehend and utilize information received visually."
App. 47. Apparently recognizing the seriousness of her condition,
FedEx continued to provide a short term disability benefits to
Hunter until her twenty-six weeks of eligibility ended on January
26, 1995. Stip. ¶ 21; App. 516. As soon as her eligibility for short term disability benefits expired, Hunter immediately began
to receive long term disability benefits pursuant to the Plan.
Stip. ¶ 22.
A few weeks later, Hunter applied for disability insurance
benefits under the Social Security Act, 42 U.S.C. § 423 (2004).
App. 48. Apparently to substantiate her Social Security
application, Hunter arranged for Dr. Roderick J. Hafer to conduct
a neuropsychological evaluation on July 1, 1996.
Dr. Hafer observed that on a "subjective measurement" of her
reading ability Hunter could not "sustain a concentrated effort
for more than three or four minutes" and could not "comprehend
the meanings of words or sentences" for more than that length of
time. App. 80. He also noted "[s]ignificant deficits . . . in
both Verbal and Visual memory, with somewhat more difficulty in
the ability to process and retain information when presented
verbally." App. 82. Despite relatively mild impairment in most
areas, Dr. Hafer concluded that the cumulative effect of Hunter's
deficits resulted in "severe cognitive impairment." App. 83.
The Social Security Administration's ALJ asked Dr. Milton
Alter, a neurologist, to review Dr. Hafer's report and Hunter's
other medical records. Relying on Dr. Alter's opinion that Hunter
suffered a severe impairment, the ALJ awarded disability
insurance benefits on December 11, 1996. App. 46-48. There is
nothing in the record to suggest that Hunter has not continued to receive Social Security benefits
since late 1996.
In September, 2002, Kemper began to investigate whether Hunter
remained eligible for long term disability benefits. App. 236.
Dr. Jeffrey Perlson, Hunter's primary care physician, reported,
on September 19, 2002, that Hunter could work at a job that did
not require reading. App. 44, 189. When Kemper received Dr.
Perlson's report, it arranged an independent medical examination
("IME") to confirm whether Hunter could in fact return to some
job. See App. 238-42. Dr. Grant T. Liu*fn6 conducted this
IME of Hunter on November 19, 2002. App. 182.
Dr. Liu took Hunter's medical history, reviewed some of her
medical records, and examined her body. Still, he had "no formal
reports of any CAT scans or MRI's or descriptions of her
hospitalizations," and he did not perform a "formal visual field
test." App. 183. Perhaps because of these limitations, Dr. Liu
found "no visual field deficits or acuity deficits" and "no
objective evidence for visual reading problems." Id. Thus, he
concluded that there was "no reason why [Hunter] cannot work a
minimum of twenty-five hours a week at an occupation."*fn7
Id. On November 27, 2002, after receiving Dr. Liu's report, a
Kemper employee telephoned Hunter to inform her that in three
days she would no longer receive long term disability benefits.
App. 242-44. Kemper confirmed the decision to terminate benefits
in a December 6, 2002 letter, explaining that "clinical
documentation . . . d[id] not substantiate an inability to work a
minimum of twenty-five hours per week at any compensable
occupation." App. 68. On December 24, 2002, Hunter's attorney
notified Kemper that she planned to appeal the termination of her
long term disability benefit. App. 70.
Soon after appealing Kemper's decision, Hunter underwent two
important medical tests. First, Dr. Paul Suscavage, an
optometrist, performed an eye examination on December 28, 2002.
Though Dr. Suscavage noted that Hunter had "[g]ood central vision
with current use of spectacles," he also found "marked field
loss" and "stereo vision reduced to 25%." App. 39. The second
examination was an MRI of Hunter's brain that Dr. Ira J.
Braunschweig, a radiologist, performed on December 30, 2002. The
MRI produced "[n]o evidence of acute/subacute infarction,
extra-axial fluid collection or suspicious mass lesion," but it
did reveal "an area of chronic hemorrhagic infarction . . . in
the left occipital lobe." App. 28. For some reason, several months passed
before Hunter's attorney provided these two reports to Kemper.
See App. 20-25.
Soon after her appointments with Dr. Suscavage and Dr.
Braunschweig, Hunter underwent a neuropsychological evaluation.
Over the course of the two-day evaluation in January, 2003, Dr.
Joseph I. Tracy identified her "most significant deficits" as
being in "visual perceptual and visuospatial reasoning." App.
166. Other deficits included "difficulty judging relationships,
reproducing them, reasoning in visuospatial terms and engaging in
rapid visual scanning." Id. Hunter also showed "weak conceptual
rule learning and difficulty with coordinated movements" and
"reduced mental speed and flexibility." Id. Another "area of
deficit [was] memory"; Hunter had "reduced scores in both
visuospatial and verbal memory," including "[m]ost notably . . .
reduced retention for the material over time." Id. Dr. Tracy
considered his findings consistent with those of Dr. Hafer,
except perhaps that Dr. Tracy identified "anterior dysfunction"
that had eluded Dr. Hafer. Id. Based on these findings, Dr.
Tracy "consider[ed] . . . Hunter disabled."*fn8 Id. Dr. Jay Klazmer met with Hunter on January 23, 2003, and he
noted that Hunter continued to "manifest difficulties with
reading, night driving, recurring headaches, memory problems and
word retrieval difficulties." App. 156. After reviewing her
recent MRI and speaking with Dr. Tracy, Dr. Klazmer concluded
that the effects of her CVA continued to "preclude her from
returning to work in her former capacity and will impair her
ability to obtain any type of commensurable employment for which
she was reasonably qualified." App. 157. Apparently believing
that this opinion sufficed to establish Hunter's disability,
Hunter's attorney informed Kemper on March 12, 2003 that it could
consider her appeal. App. 173.
After receiving the March 12 letter, Kemper forwarded Hunter's
medical records*fn9 to three doctors for "peer review" of
the seriousness of her condition. Kemper asked the doctors to
determine whether the records "reveal[ed] a functional impairment
that would preclude [Hunter] from engaging in any compensable
employment for a minimum of twenty-five hours per
week."*fn10 App. 205, 208, 211. The doctors issued written opinions on this question without
examining Hunter for themselves.
The first peer reviewer, Dr. Gerald Goldberg, a neurologist,
relied heavily on Dr. Liu's relatively positive assessment of
Hunter's condition, but he failed to note that Dr. Liu lacked the
benefit of an MRI and a "formal visual field test" when he
formulated his opinion. See App. 205. Although Dr. Goldberg
recognized that Dr. Klazmer had reviewed an MRI, Dr. Goldberg
simply concluded that the brain damage revealed by the MRI "would
not be a deterrent for working at any occupation," without
explaining why he rejected Dr. Klazmer's opposite conclusion.
Id. Dr. Goldberg also admitted that he could not comment on the
effect of the deficits that Dr. Tracy's neuropsychological
testing identified. App. 206. Nevertheless, Dr. Goldberg
concluded that "there is nothing [in the evidence that he
reviewed] to suggest that she has a functional impairment that
would preclude the claimant from engaging in any compensable
employment for a minimum of twenty five hours per week." Id.
To address Dr. Goldberg's concerns that a neuropsychologist
evaluate Dr. Tracy's findings, Kemper also solicited a peer
review from Dr. Devon Carpenter. Dr. Carpenter focused
principally on Dr. Hafer's 1996 report and Dr. Tracy's 2003 report, and he concluded that "even though
[Hunter] continues to report the presence of multiple cognitive
complaints, the results of the intellectual and memory assessment
measures do not support the presence of a functional impairment
which would preclude [her] from engaging in any compensable
employment a minimum of 25 hours per week, especially since
cognitive scores typically stabilize or improve following a
stroke, not decline."*fn11 App. 208. Notwithstanding his
prediction that Hunter's cognitive abilities would "stabilize or
improve," Dr. Carpenter did not mention that Dr. Tracy found few
significant differences between Hunter's condition in 2003 and
the condition that Dr. Hafer described in 1996. See App. 166.
Finally, Kemper asked Dr. Russell Superfine, an internist, for
his opinion about the severity of Hunter's impairments.
Recognizing the limitations of his "internal medicine
perspective," Dr. Superfine "deferred to [Kemper's] concurrent
neurology and neuropsychology reviews" for an evaluation of
Hunter's cognitive limitations. App. 212. In his opinion,
however, Hunter's other limitations would not preclude her "from
performing any compensable occupation a minimum of twenty five
hours per week." Id. While considering the peer review reports that Drs. Goldberg,
Carpenter, and Superfine submitted, FedEx noticed that Kemper had
solicited opinions as to whether Hunter could work twenty-five
hours per week when the Plan defined Total Disability to mean an
inability to engage in "substantially gainful activity." See
supra note 4. The BRC decided to defer consideration of
Hunter's appeal "to obtain additional information from Kemper."
App. 5; App. 13 (reporting FedEx's request to "correct the
disability definition in the peer reviews"). On April 24, 2003,
Kemper sent Hunter a letter that was much the same as the
December 6, 2002 letter that had informed her that her long term
disability benefits had been terminated, except that the revised
letter referenced the correct definition of Total Disability.
Compare App. 15-16 (revised letter) with App. 68-69 (original
letter). Kemper also asked ...