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Thomas P. Davis and Marvina Jenkins v. Unum Group and Its Predecessors and Subsidiaries

June 16, 2011


The opinion of the court was delivered by: DuBOIS, J.



In this action, plaintiffs Marvina Jenkins and Thomas P. Davis allege that disability insurer and administrator Unum Group and its predecessors and subsidiaries (collectively, "defendants" or "Unum") engaged in a scheme by which defendants "implemented bad faith claims handling practices resulting in the improper denial or determination of disability claims." (Remand Compl. ¶ 12.) The Remand Complaint alleges three counts against defendants, brought under various provisions of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq., and the Racketeer Influenced and Corrupt Organizations Act ("RICO"),

18 U.S.C. § 1961 et seq.*fn1 Count I is Jenkins's individual claim for benefits under ERISA § 502(a)(1)(B). In Count II plaintiffs seek injunctive relief to compel defendants to establish an "independent and fair procedure" to review all long-term disability claim "denials, terminations, or buy-outs at less than par by Unum" pursuant to ERISA §§ 502(a)(2) and (3). (Remand Compl. ¶ 47(A).) Count III is a claim under RICO in which plaintiffs allege that defendants' scheme violates 18 U.S.C. §§ 1962(b), (c), and (d).

Presently before the Court is defendants' motion for partial summary judgment. Defendants seek summary judgment only as to Counts II and III of the Remand Complaint. For the reasons that follow, defendants' motion is granted.


A.The Parties

Defendants act both as direct insurers who issue long-term disability insurance policies, and also as third-party administrators for self-insured welfare benefit plans. (Remand Compl. ¶ 9; Answer to Remand Compl. ¶ 9.)

Jenkins was a participant in a welfare benefit plan offered by her employer and established, insured, and administered by defendants. (Remand Compl. ¶¶ 9, 39, 44.) Jenkins alleges that she became disabled on April 20, 1999, and thereafter received disability insurance benefits from defendants beginning January 13, 2000. (Id. ¶¶ 40-41.) On November 1, 2000, defendants retroactively terminated her benefits from September 14, 2000 forward. (Id. ¶ 41.)

Unlike Jenkins, whose benefit plan was both established and administered by defendants, Davis was a participant in a long-term disability insurance plan established by his employer and administered by defendants. (Id. ¶ 9.) Davis alleges that he became disabled on July 16, 1991, and thereafter submitted a claim for disability insurance benefits, which was approved and paid through February 13, 2001, when one of the defendants recommended terminating his benefits. (Defs.' Stmt. of Undisputed Material Facts ¶¶ 6-7; Pls.' Resp. to Defs.' Stmt. of Undisputed Material Facts ¶¶ 6-7.) In 2004, Davis's employer reversed its position and agreed to pay him all benefits, plus interest and attorney's fees. (Defs.' Stmt. of Undisputed Material Facts ¶ 8; Pls.' Resp. to Defs.' Stmt. of Undisputed Material Facts ¶ 8.)

B.Procedural History

A complaint was initially filed in this Court on February 19, 2003. On September 2, 2003, the MDL Panel ordered the case transferred to the Eastern District of Tennessee ("MDL court") for consolidation with other ERISA actions against Unum. The plaintiffs in the MDL filed a Consolidated Amended Complaint on February 25, 2004. In re UnumProvident Corp. ERISA Benefits Denial Actions, No. 1:03-md-1552, 2010 WL 323191, at *1 (E.D. Tenn. Jan. 19, 2010).

On November 14, 2004, UnumProvident Corporation ("UnumProvident"), which was renamed "Unum Group" in 2007, (Remand Compl. ¶ 6; Answer to Remand Compl. ¶ 6), entered into a multi-state regulatory settlement agreement ("RSA") with the Department of Labor ("DOL") and insurance regulators from Maine, Massachusetts, and Tennessee. Id. The RSA became effective on December 20, 2004, and has been signed by 48 state or territorial insurance commissioners. Id. Under the RSA, UnumProvident agreed to make certain changes to their claims handling practices and to re-review previously denied or terminated claims under those new practices. Id.

Defendants moved for summary judgment on July 1, 2005, and discovery in the MDL closed in July 2007. On September 4, 2007, the MDL court granted plaintiffs' April 9, 2004 motion for class certification, but was subsequently reversed by the Sixth Circuit on January 12, 2009. Id.; Romberio v. UnumProvident Corp., 385 F. App'x 423 (6th Cir. 2009).

On January 19, 2010, the MDL court granted in part, and otherwise declined to rule on, defendants' motion for summary judgment. The MDL court granted summary judgment on plaintiffs' claim for "injunctive relief in the form of court-supervised reformation of Defendants' nationwide claim-handling procedures," concluding that the claim "has been rendered moot by the RSA." In re UnumProvident Corp., 2010 WL 323191, at *3. In so ruling, the MDL court noted that the RSA "requires and implements new practices and procedures," "creates internal and external oversight mechanisms," and "provides significant oversight to be provided by the DOL and state regulators." Id. That court, however, declined to grant summary judgment on plaintiffs' request for an independent review of their claims, concluding that because the re-review provided under the RSA was entirely voluntary, the RSA had not rendered plaintiffs' claim for independent review moot. Id. at *4. The MDL court also declined to rule on any other ground for summary judgment, concluding that those issues should be left for resolution by the transferor courts. Id. at *4-*5.

On June 8, 2010, the MDL Panel remanded Jenkins and Davis's action to this Court. On June 22, 2010, this Court ordered plaintiffs to file and serve a Complaint for Proceedings on Remand. Plaintiffs filed a Remand Complaint on July 26, 2010, alleging that since early 1995, defendants designed and implemented a bad-faith scheme to improperly deny or terminate disability insurance claims. (Remand Compl. ¶¶ 12-15.) The Remand Complaint asserts two counts under ERISA and one count under RICO. Count I seeks court review of Jenkins's claim for individual benefits under ERISA § 502(a)(1)(B). Count II, brought pursuant to ERISA §§ 502(a)(2) and (3), seeks court appointment of a Special Master to supervise defendants' creation and maintenance of an independent and fair procedure to review all long-term disability claim denials, terminations, and buy-outs at less than par. In Count III, plaintiffs allege RICO violations under 18 U.S.C. §§ 1962(b), (c), and (d), and seek, inter alia, economic damages, interest, and attorney's fees.

Defendants filed the present motion for summary judgment on August 20, 2010. On September 3, 2010, the Court adopted the parties' joint proposed scheduling order, which established a schedule for briefing on defendants' pending motion for summary judgment and provided that "[w]ithin 30 days of the issuance of a decision on the pending motion for summary judgment, the parties will submit a joint proposed scheduling order, if any is necessary." (Order of September 3, 2010, Document No. 37.) The parties' September 3, 2010 proposed ...

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