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July 15, 2004.


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

A. The Plan

  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." App. 311-12.

  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.

  B. Hunter's Condition

  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.

  C. Peer Reviews

  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 ...

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