Sixth Circuit Denies Reliance Standard “Third Bite at the Apple” in Long-Term Disability Benefit Dispute

In Jordan v. Reliance Standard Life Insurance Company, No. 22-5234, 2023 WL 5322417 (6th Cir. Aug. 18, 2023), Plaintiff-Appellant Beth Jordan appealed the district court’s grant of summary judgment to Defendant Reliance Standard Life Insurance Company in this dispute over the payment of long-term disability benefits for the period covering August 2, 2016 to September 18, 2017. The Sixth Circuit Court of Appeals reversed the district court’s judgment and remanded the case to the district court with directions to award Jordan long-term disability benefits.

Reliance Standard paid Jordan LTD benefits under the terms of a fully insured ERISA-governed group plan after finding her disabled in July 2009 from her occupation as a nurse anesthetist due to the symptoms of Lyme disease. Reliance Standard terminated Jordan’s disability benefits in 2015, just prior to the change in the policy’s definition of disability, and she appealed the decision. After Reliance Standard failed to issue a timely decision on her appeal, Jordan filed suit. Reliance Standard successfully challenged Jordan’s lawsuit on the basis that she failed to exhaust her administrative remedies before filing a claim in federal court. The district court remanded the case to Reliance Standard, who required that Jordan undergo an independent medical examination (“IME”). By that time, February 2018, Jordan had already returned to work. Based on the IME, Reliance Standard paid Jordan additional benefits through August 1, 2016, but denied them after that date. Notably, prior to Jordan starting work in September 2017, she had been diagnosed and treated for breast cancer with a bilateral mastectomy. Jordan again appealed Reliance Standard’s decision, which was unsuccessful.

In Jordan’s second trip to federal court, the district court found that Reliance Standard’s failure to adequately consider Jordan’s appeal letter and her doctor’s opinion, in addition to the “inadequate” peer review reports, deprived Jordan of ERISA’s requirement of a full and fair review. The district court again remanded the case to Reliance Standard so that it could provide specific reasons for its conclusions and fairly consider Jordan’s academic schedule during her claimed period of disability. After its second review of Jordan’s claim, Reliance Standard again upheld its decision. This time the district court sided with Reliance Standard.

On appeal, the Sixth Circuit found that “Reliance Standard’s conclusory findings are not sufficiently supported by credible medical evidence” and that it “acted arbitrarily and capriciously.” The court explained that Reliance Standard gave short shrift to Jordan’s treating doctor’s opinion and improper weight to its own doctors, whose opinions were not reliable and based on unsupported assumptions. The court found it problematic that Reliance Standard did not give its reviewers a copy of Jordan’s doctor’s letter disagreeing with their opinions. The court also rejected Reliance Standard’s attempt to rely on surveillance it conducted in 2015 since the period in dispute is after August 2016 and Reliance Standard continued to pay Jordan even after it obtained the surveillance. The court found Jordan’s doctor’s evidence to clearly establish her entitlement to benefits. Rather than a remand to Reliance Standard for “a third bite at the apple,” the court issued a remand with instructions to enter judgment in favor of Jordan.