Eighth Circuit Finds Reliance Standard Did Not Abuse Its Discretion in Terminating Disability Benefits for Claimant with Charcot-Marie-Tooth Disease

In McIntyre v. Reliance Standard Life Ins. Co., No. 21-3063, __F.4th__, 2023 WL 4673615 (8th Cir. July 21, 2023), Plaintiff-Appellee Melissa McIntyre brought suit under 29 U.S.C. § 1132(a)(1)(B); ERISA Section 502(a)(1)(B), against Defendant-Appellant Reliance Standard Life Insurance Company (“Reliance”) for terminating her long-term disability (“LTD”) benefits. She alleges that she is Totally Disabled and entitled to LTD benefits due to symptoms of Charcot-Marie-Tooth disease (“CMT”), a degenerative neurological disease that damages peripheral nerves. This is the second time the Eighth Circuit Court of Appeals has considered this matter. Previously, the court reversed the district court’s award of summary judgment to Plaintiff, finding that the district court erred in applying de novo review. The district court was to review Reliance’s decision using a “sliding scale” abuse-of-discretion review. The district court again decided the matter and ruled in favor of Plaintiff, finding that Reliance abused its discretion, had a conflict of interest, and did not have substantial evidence supporting its claims decision. Reliance again appealed. In this round, the Eighth Circuit ruled in favor of Reliance and reversed the district court’s award of benefits and attorneys’ fees. Circuit Judge Melloy wrote a dissenting opinion in favor of affirming the district court.

The court first noted that it could only reverse Reliance’s decision if it was “arbitrary and capricious,” meaning it was unreasonable or not supported by substantial evidence. The court considered whether substantial evidence supported Reliance’s decision to terminate Plaintiff’s LTD benefits based on its conclusion that she could work a sedentary full-time job. The court found that substantial evidence did support Reliance’s decision, including that Plaintiff: (1) could independently do household chores and personal tasks; (2) could teach classes, enter her dogs into competitions, walk and manipulate objects with her hands (as seen on surveillance); (3) was not given more treatment by her doctor than use of pain medications, dietary interventions, and strength training; and (4) was found able to do “office work with no tasks that require balance” by an in-person independent medical evaluation conducted by Dr. Bushara.

Though there was evidence supporting Plaintiff’s position, the court found that this evidence did not negate the substantial evidence supporting Reliance’s decision. Plaintiff argued that: “(1) there was no evidence of improvement in her degenerative medical condition to explain Reliance’s decision to terminate, (2) Reliance relied on her dog-training activities in its decision to terminate despite knowing of these activities when paying benefits, (3) Dr. Bushara’s opinion did not logically follow from his analysis, (4) Reliance withheld relevant evidence from its reviewers, (5) Reliance misrepresented facts in the record, and (6) Reliance relied on comments in the medical record taken out of context.” The court addressed and rejected these arguments.

The court also determined that neither Reliance’s lateness in deciding Plaintiff’s appeal nor its financial conflict of interest warranted the conclusion that Reliance abused its discretion. Even though Reliance did improperly delay in deciding Plaintiff’s appeal, there was no indication that the delay stemmed from trying to find a doctor sympathetic to Reliance or otherwise rigging the appeals process against her. Reliance had good grounds to request an IME, including that Plaintiff’s doctor’s supportive letter came a year after she had last seen Plaintiff and indicated impairment beyond what was reflected in the treatment notes. The court also found that past judicial decisions against Reliance did not mean its conflict of interest should be given significant weight. These past decisions did not identify any specific policies or practices that may have caused Reliance to arbitrarily deny claims, nor did they demonstrate a systemic problem or history of biased claims administration. For these reasons, the court vacated the district court’s judgment and fee award to Plaintiff.