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In re UnumProvident Corp.

September 4, 2007


The opinion of the court was delivered by: Chief Judge Curtis L. Collier


MDL Case No. 1:03-MD-1552



Before the Court is the motion for class certification (Court File No. 29) filed by plaintiffs Theresa Keir, Michelle Lynn Washington, Karen Gately, Thomas Rocco, Thomas P. Davis, Marvina Jenkins, Edmundo M. Rombeiro and the proposed class members (collectively, "Plaintiffs").*fn1 Defendants UnumProvident Corporation ("UnumProvident"), First Unum Life Insurance Company, Next Level Group Long Term Disability Plan, Next Level Communications, The Paul Revere Life Insurance Company, Colonial Life & Accident Insurance Company, Provident Life & Accident Insurance Company, J. Harold Chandler, Shirley Hoiland, Carol Jewel, Robert E. Olman, and Mary Patrick (collectively "Defendants") filed a response in opposition to Plaintiffs' motion (Court File No. 43). Plaintiffs then filed a reply brief (Court File No. 50). On July 18, 2007, the Court held oral arguments on Plaintiffs' motion. For the following reasons, the Court will GRANT Plaintiffs' motion (Court File No. 29).


This multi-district litigation involves allegations that UnumProvident and its subsidiaries devised and implemented an elaborate and corporate-wide scheme to illegally deny or terminate the long-term disability claims of thousands of disabled Americans, all in violation of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq. (Court File No. 20, Consolidated Amended Class Action Complaint ("CAC"), at ¶ 1)*fn2 . According to the CAC, Unum-Provident is the leading provider of group disability insurance in the United States (id.). The named plaintiffs are individuals insured under group long-term disability benefit plans/policies underwritten and managed by UnumProvident's subsidiaries (id. at ¶ 9). Plaintiffs brought this action "to stop these illegal and alarming practices and to ensure that past, current and future victims obtain a full and fair review of their claims" (id. at ¶ 8).

Plaintiffs identify a variety of practices allegedly carried out by Defendants, including:

a. Instituting targets, budgets, or goals for cost-savings to be attained through the denial and termination of claims; the claims do not receive a proper review by a fiduciary and are denied or terminated based upon UnumProvident's financial targets rather than the medical and vocational evidence concerning claimants' disabilities;

b. Providing financial incentives to in-house physicians who will "rubber stamp" previously made business decisions; the physicians thus ignore their appropriate ethical obligations and overlook strong medical evidence that would ordinarily require a disability claim to be approved;

c. Implementing of compensation and/or bonus plans that reward Company management for denying or terminating as many claims as possible to meet special financial goals set by the Company;

d. Authorizing more senior in-house doctors to alter the written reports of other "uncooperative" in-house doctors in order to justify a claim denial or termination;

e. Creating secret documents for each claim, at the time that claims are filed, that, upon information and belief, sets a target date for cutting off future disability payments; these "Duration Management" documents reflect business decisions made by non-medical claims personnel as to when the [C]ompany believes claim payments should stop in the future; physicians are not involved in creating these secret documents which are kept outside of the claims file and withheld from claimants, their attorneys, and reviewing courts, and are not produced in discovery during litigation;

f. Encouraging a game among the in-house physicians called the practice of "insurance medicine"; these in-house physicians are prompted, encouraged, and pressured into (1) changing their valid medical opinions as to a claim-ant's disability in order to justify a business-driven claim denial; (2) closing their eyes to numerous sources of medical evidence that support a claimant's disability; (3) remaining quiet about their personal medical opinions that require further analysis, review, testing, and follow up that would reveal the claimant's obvious disability; and (4) putting "canned" statements into their written reports that, on the surface, appear to validate a previous decision by claims personnel to terminate ongoing disability payments to a claimant or to deny a claim in the first instance;

g. Recruiting claims personnel who have a reputation for "closing claims" (cutting off the ongoing monthly benefits of disabled individuals);

h. Designing a system in which claimants who have multiple disabling conditions will never receive an integrated overview as to how all of the disabling conditions combine to disable the claimant; by deliberately fragmenting the claim into a number of pieces and preventing a comprehensive review of individuals with "co-morbid" conditions, the Company ensures that the claimant will not receive a comprehensive and fair review of the claim; and

i. Employing numerous other practices that pressure claims handling personnel into causing claims to be denied or terminated without receiving a proper review.

(id. at ¶ 7(a)-(i)). Plaintiffs argue that since UnumProvident put "its own financial interest above the disabled individuals who have been placed in its trust," UnumProvident "caused egregious and routine breaches of fiduciary duty under ERISA" (id. at ¶ 8). Plaintiffs request certification of this action as a class action pursuant to Fed. R. Civ. P. 23(b)(2), as they seek injunctive and declaratory and not monetary relief.

On July 18, 2007 the Court held a hearing on this motion. Counsel for each side vigorously argued their respective positions. From these arguments the Court understands the parties do not contest two of the prerequisites required for class certification, i.e. numerosity and commonality. However, the parties do dispute the issues of typicality and adequacy of representation. The parties also disagree strongly over the weight this Court ...

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