The opinion of the court was delivered by: Leon Jordan United States District Judge
This civil action is brought pursuant to the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001, et seq., for the recovery of long term disability benefits ("LTD"). Now before the court are "Plaintiff's Motion for Judgment on the Administrative Record" [doc. 10], filed by Velva J. Herin ("Herin"), and "Defendants' Motion for Judgment on the Record" [doc. 14], filed by The Prudential Insurance Company of America ("Prudential") and Mastercraft Boat Company ("Mastercraft'). For the reasons stated herein, defendants' motion will be denied. Herin's motion will be granted and her claim will be remanded to Prudential for further evaluation consistent with this opinion.
Prudential issued to Mastercraft an insurance plan (the "Plan") that provides LTD benefits. [A.R. 001, 029].*fn1 Mastercraft is the Plan administrator. [A.R. 052]. Prudential is the claims administrator. [A.R. 052].
Herin was formerly employed by Mastercraft as a lamenator and was covered by the Plan. [A.R. 059]. She filed a claim for benefits in December 2003, advising that she could not work due to what she termed "seizures" or a "movement disorder." [A.R. 059-63]. After initially denying the claim [A.R. 250], Prudential eventually determined that Herin was entitled to LTD benefits effective August 24, 2003, due to "a possible diagnosis of small fiber neuropathy." [A.R. 259-61].
The Plan establishes two LTD phases: [Initially], [y]ou are disabled when Prudential determines that: you are unable to perform the material and substantial duties of your regular occupation due to your sickness or injury; and you have a 20% or more loss in your indexed monthly earnings due to that sickness or injury.
After 24 months of payments, you are disabled when Prudential determines that due to the same sickness or injury, you are unable to perform the duties of any gainful occupation for which you are reasonably fitted by education, training or experience.
We may require you to be examined by doctors, other medical practitioners or vocational experts of our choice. Prudential will pay for these examinations. We can require examinations as often as it is reasonable to do so. [A.R. 030] (bold in original, italics added).
By letter dated August 23, 2005, applying the "unable to perform the duties of any gainful occupation" standard, Prudential notified Herin that her LTD benefits would be terminated effective immediately, as the initial twenty-four month period had expired. [A.R. 276]. Herin submitted a request for reconsideration. Prudential again concluded that she does not meet the "unable to perform any reasonable occupation" standard [A.R. 288], following Herin's submission of additional medical records and following a file review by neurologist Susan Pierson. [A.R. 342-45].
Herin then filed a second administrative appeal and again submitted additional medical records. After Dr. Pierson's second file review [A.R. 348-50], Prudential issued its final denial by letter dated June 26, 2006. [A.R. 296]. This action followed.
In Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (1989), the United States Supreme Court held that "a denial of benefits challenged under § 1132(a)(1)(B) is to be reviewed under a de novo standard unless the benefit plan gives the administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe the terms of the plan." Id. at 115. However, if a plan grants the administrator or fiduciary the appropriate discretionary authority, this court must review the decision at issue under the "highly deferential arbitrary and capricious standard of review . . . ." Yeager v. Reliance Standard Life Ins. Co., 88 F.3d 376, 380 (6th Cir. 1996). A plan's grant of discretionary authority to the administrator or fiduciary must be "express." See Perry v. Simplicity Eng'g, 900 F.2d 963, 965 (6th Cir. 1990).
The Plan language cited in section I of this opinion, defining "disability," clearly and expressly grants Prudential sole discretion in determining benefits eligibility. [A.R. 030]. The Summary Plan Description further states that Prudential "has the sole discretion to interpret the terms of the Group Contract, to make factual findings, and to determine eligibility for benefits." [A.R. 52-53]. The court concludes that the grant of discretion to Prudential in this case is sufficient to trigger the arbitrary or capricious standard of review, and Herin makes no meaningful argument to the contrary.
Herin does correctly note that there is an inherent conflict of interest in this case because Prudential is the decision maker for LTD claims as well as the entity that pays benefits. However, the existence of such a conflict does not alter the standard of review. Marchetti v. Sun Life Assurance Co. of Can., 30 F. Supp. 2d 1001, 1007 (M.D. Tenn. 1998). Rather, the administrator's conflict of interest is a factor to be considered by the court in its review of the administrative decision. See id.; Miller v. Metro. Life Ins. Co., 925 F.2d 979, 984 (6th Cir. 1991).
The court will accordingly consider this inherent conflict of interest as a factor in determining whether Prudential's decision was arbitrary or capricious. Additional relevant factors that the court will consider include Prudential's choice to employ a file review rather than a physical examination, see Calvert v. Firstar Fin., Inc., 409 F.3d 286, 295 (6th Cir. 2005), and the depth of Prudential's consideration of the Social Security Administration's finding of disability. See Glenn v. MetLife, 461 F.3d 660, 669 (6th Cir. 2006).
III. Administrative Record
Herin consulted with neurologist John Fang in February 2003 due to complaints of tremors. [A.R. 323]. She reported intermittent "jerking episodes" that began in August 2002, with corresponding episodes of weakness. [A.R. 323-24]. Herin told Dr. Fang that her symptoms began shortly after the anniversary of her father's death, which had "caused her to feel quite depressed." [A.R. 324]. While Dr. Fang observed "slight truncal shaking" in Herin's gait, he otherwise found "no hyperkinetic movement or other abnormal movement evident during today's examination." [A.R. 326]. He also found Herin's short-term memory to be intact. [A.R. 326]. Dr. Fang wrote, "She has also noticed some odd total body jerking which she said that she has had video taped, but unfortunately, the video tape was not available today." [A.R. 324]. Dr. Fang invited Herin to supply him with a copy of the video for his review ...