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Rowe v. United of Omaha Life Insurance

United States District Court, E.D. Tennessee

March 17, 2017

DAWN ROWE, Plaintiff,
v.
UNITED OF OMAHA LIFE INSURANCE, Defendant.

          MEMORANDUM OPINION

          Thomas A. Varlan CHIEF UNITED STATES DISTRICT JUDGE.

         This Employee Retirement Income Security Act (“ERISA”) case is before the Court on the Report and Recommendation (“R&R”) issued by United States Magistrate Judge C. Clifford Shirley, Jr. [Doc. 22]. In the R&R, Judge Shirley recommends that plaintiff's Motion for Judgment on the Record [Doc. 16] be granted in part, and that defendant's Motion for Judgment on the Administrative Record [Doc. 14] be denied. Defendant filed an objection to the R&R [Doc. 23], and plaintiff responded [Doc. 24].

         I. Standard of Review

         A court must conduct a de novo review of those portions of a magistrate judge's report and recommendation to which a party objects unless the objections are frivolous, conclusive, or general. See 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 72(b)(3); Smith v. Detroit Fed'n of Teachers, Local 231, 829 F.2d 1370, 1373 (6th Cir. 1987); Mira v. Marshall, 806 F.2d 636, 637 (6th Cir. 1986). “Objections disputing the correctness of the magistrate's recommendation, but failing to specify the findings believed to be in error are too general and therefore insufficient.” Stamtec, Inc. v. Anson, 296 F. App'x 516, 519 (6th Cir. 2008) (citing Spencer v. Bouchard, 449 F.3d 721, 725 (6th Cir. 2006)). The Court “may accept, reject, or modify, in whole or in part, the findings or recommendations” made by the magistrate judge. 28 U.S.C. § 636(b)(1).

         II. Analysis[1]

         This case arises from defendant's decision to deny plaintiff long-term disability benefits. In the R&R, Judge Shirley found that defendant's decision to deny benefits does not withstand the arbitrary and capricious standard of review and recommended that the case be remanded for further consideration. Defendant raises four objections to the R&R. Specifically, defendant objects to: (1) the application of the arbitrary and capricious standard of review; (2) the finding that it is unclear which medical provider opinion defendant credited; (3) the determination that plaintiff's failure to apply for Social Security benefits is not relevant; and (4) the recommendation that plaintiff be given sixty days to supplement the Administrative Record with additional information on remand. Furthermore, in the event that the Court accepts Judge Shirley's recommendations, defendant seeks guidance on the remand process. The Court will address each of these objections in turn.

         A. Application of the Arbitrary and Capricious Standard of Review

         In its first objection, defendant argues that Judge Shirley failed to appropriately apply the arbitrary and capricious standard of review. Specifically, defendant argues that Judge Shirley failed to give defendant's decision to deny benefits the extreme deference required by Sixth Circuit precedent, and it also argues that certain cases that Judge Shirley relied upon are distinguishable from this case. The Court will address each of these arguments in turn.

         1. Deference to Defendant's Decision

         In the R&R, Judge Shirley recommended that this case be remanded because he could not determine based on the record whether defendant's decision to deny benefits “was the result of a deliberate, principled, reasoning process” [Doc. 22 p. 21]. In particular, Judge Shirley found that it was unclear from the record to what extent defendant credited and relied on the opinions of two nurse practitioners, each of whom opined that plaintiff had, for medical reasons, certain workplace limitations.

         Defendant makes several arguments in support of its contention that Judge Shirley did not afford defendant's denial decision the proper amount of deference. First, defendant argues that Judge Shirley did not correctly apply the arbitrary and capricious standard of review because he did not cite and follow McClain v. Eaton Corp. Disability Plan, 740 F.3d 1059 (6th Cir. 2014), a recent Sixth Circuit decision that discusses and applies the arbitrary and capricious standard of review.

         In McClain, the Sixth Circuit noted that courts often describe the arbitrary and capricious review as deferential but not “toothless, ” and not being a mere “rubber stamp” on the plan administrator's decision. See Id. The McClain court cautioned against the “invocation of teeth and rubber stamps” and emphasized that the standard of review is “extremely deferential.” See Id. The Sixth Circuit further noted that “a decision reviewed according to the arbitrary and capricious standard must be upheld if it results from a deliberate principled reasoning process and is supported by substantial evidence.” Id. at 1064-65.

         The Court has considered this argument in light of the R&R, and finds that it is not well taken. While it is true that the R&R does not cite to McClain, Judge Shirley cited and discussed a number of cases that emphasize the deferential nature of arbitrary and capricious review [See Doc. 22 p. 18 (citing Goetz v. Greater Ga. Life Ins. Co., 649 F.Supp.2d 802, 811 (E.D. Tenn. 2009) (“[T]he administrator's benefit determination is reviewed under the highly deferential arbitrary and capricious standard of review.”))]. Furthermore, although Judge Shirley did state that arbitrary and capricious review is not “toothless, ” he cited the Sixth Circuit decision Glenn v. Metlife, 461 F.3d 660 (6th Cir. 2006), for the proposition that an administrator's decision will be upheld “if it is the result of a deliberate, principled reasoning process and if it is supported by substantial evidence.” Id. at 666. This language mirrors the language used by the Sixth Circuit in McClain to describe the arbitrary and capricious standard. See 740 F.3d at 1065. Therefore, while Judge Shirley may not have directly cited to McClain, he cited other Sixth Circuit caselaw that makes the same point-that arbitrary and capricious review is highly deferential and that an administrator's decision will be upheld “if it is the result of a deliberate, principled reasoning process and if it is supported by substantial evidence.” See id.; Glenn, 461 F.3d at 666.

         Defendant next contends that Judge Shirley did not afford defendant's decision the proper deference because he focused on “how and the way” that defendant articulated its denial of benefits decision, as opposed to the ultimate denial decision itself [Doc. 23 p. 4]. In support of this argument, defendant details the review process that plaintiff's request for benefits underwent, and notes that under Sixth Circuit precedent “the ultimate issue in an ERISA denial of benefits case is not whether discrete acts by the plan administrator are arbitrary and capricious but whether its ultimate decision denying benefits was arbitrary and capricious.” McClain, 740 F.3d at 1066 (quoting Spangler v. Lockheed Martin Energy Sys., Inc., 313 F.3d 356, 362 (6th Cir. 2002)). Defendant thus appears to argue that Judge ...


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