Ninth Circuit Affirms AT&T’s Denial of Long-Term Disability Benefits

In Walker v. AT&T Benefit Plan No. 3, No. 22-55450, 2023 WL 3451684 (9th Cir. May 15, 2023), the Ninth Circuit considered Plaintiff-Appellant Kevin Walker’s appeal of the district court’s decision affirming Defendants-Appellees’ AT&T Umbrella Benefit Plan No. 3 and AT&T Services, Inc. (collectively “AT&T”) decision to deny his claim for long-term disability benefits. Sedgwick Claims Management Services, Inc. is the third-party administrator of the Plan and the entity which denied Walker’s long-term disability benefits and his administrative appeal. The district court ruled in Defendants’ favor after concluding he was not entitled to Plan benefits. The Ninth Circuit affirmed.

To receive long-term disability benefits under the Plan, Walker had to demonstrate that he was totally disabled by a “sickness, injury or other medical, psychiatric or psychological condition that prevents [them] from engaging in any occupation or employment for which [they] are qualified or may reasonably become qualified, based on training, education or experience.” Further, Walker had to show that he is “incapable of performing the requirements of an occupation or employment other than an occupation or employment with a base rate of pay that is less than 50 percent of [their] Pay at the time [they] became entitled to Long-Term Disability Benefits.” The Plan requires participants to submit “[o]bjective medical information sufficient to show that [he] is Disabled.”

The court reviewed the district court’s grant of summary judgment de novo, applying abuse of discretion review to Defendants’ decision. The court explained that minor ERISA procedural violations typically do not alter the abuse of discretion standard of review. Walker argued that “Sedgwick denied him a full and fair review by violating several procedural requirements and by not considering all of Walker’s evidence.” The district court agreed with Walker that Sedgwick committed procedural errors, including violation of 29 C.F.R. § 2560.503-1(g)(1)(iii) because Sedgwick failed to inform Walker that it needed his entire Social Security Disability Insurance (“SSDI”) file. This prevented the full development of the record. The district court did ultimately consider all the new proposed facts in Walker’s favor but still concluded that none of the new evidence materially disputes the evidence in the record. The court explained that even if Sedgwick’s errors warranted de novo review, Walker cannot show that Sedgwick erred, and he is entitled to LTD benefits.

The court explained that Walker is not entitled to long term disability benefits because there was a consensus that Walker could work with some restrictions though he claimed disability by chronic pain. Walker also argued he could not perform “any occupation” identified in the transferable skills assessments (“TSAs”) obtained by Sedgwick. Initially, Sedgwick found eight alternative occupations that Walker could perform but its final TSA found only two sedentary jobs that he could perform given his physical limitations. Even though the court acknowledged that “the TSAs do vary without adequate explanation, the final TSA lists two sedentary jobs that provide at least 50% of Walker’s prior pay that he could perform given his physical limitations: Repair Order Clerk and Utility Clerk Locator.” Walker argued that the TSAs did not consider his training and experience, but the court rejected this argument because the Plan only requires that Walker be “qualified or may reasonably become qualified based on training, education, or experience” for “any occupation.” Walker could become qualified with some additional training, which Walker conceded. Even though Walker’s disability is supported by his SSDI award, the SSA decision does not bind ERISA plan administrators. And the SSDI file corroborates Walker’s ability to perform work with restrictions and does not show that Walker could not perform any job without some reasonable training. The Plan and SSA have different disability requirements.  For these reasons, the court affirmed the decision of the district court in favor of AT&T.