Seventh Circuit Reverses District Court for Not Properly Considering ERISA Claimant’s Ability to Perform Occupation Due to Sitting and Cognitive Limitations

In Scanlon v. Life Insurance Co. of North America, No. 22-1121, — F.4th —-, 2023 WL 5617127 (7th Cir. Aug. 31, 2023), a matter involving a dispute over the denial of ERISA-governed long-term disability benefits, the Seventh Circuit Court of Appeals reversed the district court’s judgment in favor of Defendant Life Insurance Company of North America (“LINA”). The court held that the district court committed clear error in: (1) failing to consider Plaintiff’s ability to sit at his desk for eight hours a day and perform the cognitive requirements of his Systems Analyst job during regular work hours, (2) finding that Plaintiff’s pain was relieved and his pain reports unreliable; and (3) determining the reliability of a Functional Capacity Evaluation (“FCE”) based on whether Plaintiff’s doctors found him to be disabled.

Plaintiff worked for McKesson Corporation as a Windows Systems Administrator. When McKesson could not accommodate his disability, he sought LTD benefits from McKesson’s LTD carrier, LINA. To qualify for benefits, Plaintiff must (1) perform the “material duties” of his regular occupation and (2) earn 80% or more of his indexed earnings from working in his occupation. The policy defines “regular occupation” as “[t]he occupation the Employee routinely performs at the time the Disability begins.” LINA “consider[s] the duties of the occupation as it is normally performed in the general labor market in the national economy,” as opposed to the requirements of a specific employer. LINA denied Plaintiff’s claim and he appealed with supportive information, including extensive medical records, records from the VA, a residual functional capacity evaluation completed by his doctor, and an FCE report. LINA upheld its denial based on medical reviews done by Drs. Joseph Sentef and Krishna Padiyar, doctors who never evaluated Plaintiff in person.

The district court reviewed LINA’s decision de novo since the policy did not give LINA discretionary authority to decide benefits eligibility. It found that Plaintiff did not meet his burden of proving that he was entitled to LTD benefits by the preponderance of the evidence. Plaintiff appealed citing several errors made by the district court, a few of which the Seventh Circuit agreed with.

First, the court looked at Plaintiff’s job as it is performed in the national economy. The parties agreed that the job is of a Systems Analyst, which is a sedentary job. The court explained that for an 8-hour sedentary workday, it means no more than 2 hours and 40 minutes of standing, among other physical requirements. Additionally, Systems Analysts must perform several cognitive tasks. The court took issue with the district court’s analysis of the FCE, which documented that Plaintiff has physical limitations due to his chronic pain. The FCE concluded that Plaintiff could only sit 15 minutes and stand 45 minutes at a time, and in total, he can sit up to 2 hours and 50 minutes and stand up to 4 hours and 22 minutes in a day. This prevents him from working full-time. The district court did not consider Plaintiff’s inability to sit for extended periods of time and did not explain how Plaintiff could earn 80% or more of his regular income. On remand, the district court is to consider Plaintiff’s ability to sit when analyzing the physical demands of his job.

The court also explained that Plaintiff’s inability to sit is relevant to whether he can earn at least 80% of his pre-disability income. The district court found that Plaintiff could perform his job 6.5 hours a day, presumably if he alternates between sitting and standing. But Plaintiff’s job requires sitting and he can only sit for less than three hours. On remand, the district court must explain its reasoning for its finding that Plaintiff can earn 80% of his income.

The court also found that the district court did not properly consider Plaintiff’s pain. The FCE report noted that Plaintiff’s pain reports may be considered unreliable but that overall, his pain ratings were reliable 75% of the time and he put forth full effort during the evaluation. The FCE’s conclusions were also supported by an assessment completed by Plaintiff’s provider who treated him for several years. The district court questioned the FCE’s reliability on the basis that none of Plaintiff’s providers “flatly” stated that he is unable to perform his regular occupation. “The correct question to ask is ‘whether the results are consistent or conflicting with other medical examinations.’” The district court also wrongly concluded that Plaintiff obtained pain relief through various treatments. The record shows that Plaintiff’s pain relief was only temporary.

Additionally, the court found that the district court did not adequately consider the effect of Plaintiff’s chronic sleep disorders on his ability to perform the cognitive requirements of a Systems Analyst, which includes thinking critically, conferring with others, and making decisions in a timely and reliable manner. On remand, the district court must address Plaintiff’s ability to perform the cognitive aspects of his job with the limitations in the record.