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Jones v. Mountaire Corp. Long-term Disability Plan: ERISA - error not having parties brief key question; remand

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
___________
No. 07-3118
___________
Larry G. Jones, *
*
Plaintiff - Appellee, **
Appeal from the United States
v. * District Court for the Eastern
* District of Arkansas.
Mountaire Corporation Long Term *
Disability Plan; Prudential Insurance *
Company of America, *
*
Defendants - Appellants. *
___________
Submitted: April 18, 2008
Filed: September 11, 2008
___________
Before LOKEN, Chief Judge, JOHN R. GIBSON and MELLOY, Circuit Judges.
___________
MELLOY, Circuit Judge.
Plaintiff Larry G. Jones was a participant in a long-term disability plan (the
plan) provided by Mountaire Corporation (Mountaire) and established pursuant
to the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C.
1001 et seq. Mountaires plan was insured by Prudential Insurance Company of
America (Prudential), which was also the claims administrator. Jones filed for
benefits under the plan. Prudential denied the claim, and Jones lost his two
subsequent appeals. Jones then filed this action in the district court, which awarded
him long term disability benefits. Mountaire and Prudential appeal, arguing that the
1The O*Net is a database of occupational requirements and worker attributes.
It describes occupations in terms of the skills and knowledge required, how the work
is performed, and typical work settings. It can be used by businesses, educators, job
seekers, human resources professionals, and the publicly funded Workforce
Investment System to help meet the talent needs of our competitive global economy.
www.doleta.gov/programs/ONET/ (last visited Aug. 4, 2008).
2Employment and Training Admin., U.S. Dept of Labor, Dictionary of
Occupational Titles (4th ed. rev. 1991). The DOT was created by the Employment
and Training Administration, and was last updated in 1991. It is included on the
Office of Administrative Law Judges web site because it is a standard reference in
several types of cases adjudicated by the office of Administrative Law Judges,
especially labor-related immigration cases. The DOT, however, has been replaced by
the O*NET. www.oalj.dol.gov/LIBDOT.HTM (last visited Aug. 4, 2008).
-2-
district court erred by (1) raising the issue of a different job database, the Occupational
Information Network (O*Net),1 for the first time in its order; (2) determining that
Prudential inappropriately used the Dictionary of Occupational Titles (the DOT)2
to evaluate Joness regular occupation under the plan; (3) reviewing de novo
Prudentials decision; and (4) awarding benefits under the plan. We remand to the
district court.
I. Background
A. The Long Term Disability Plan
Under the plan, a beneficiary is disabled and qualifies for benefits if Prudential
determines that the beneficiary is unable to perform the material and substantial duties
of his regular occupation due to sickness or injury. The plan defines regular
occupation as the occupation the beneficiary routinely performed when his disability
began. Prudential looks at the occupation as it is normally performed instead of how
the work tasks are performed for a specific employer or at a specific location. As the
3A bulla is a fluid-filled blister that compresses functional lung tissue.
-3-
claims administrator, Prudential has discretion to determine benefits eligibility under
the plan.
B. Joness Medical History
Jones has had a myriad of health problems. In 1998, Jones had a triple by-pass,
and in 2004, a stent was placed in his right coronary artery. In June 2005, Jones saw
his primary care physician, Dr. Ransom (the physician), regarding chest pain. His
chest x-ray showed bullous3 emphysema. In July 2005, Jones underwent a hernia
surgery. In September 2005, Jones visited his cardiologist, Dr. Henderson (the
cardiologist), who noted in a report to the physician that Joness heart was doing
well and that its rhythm was regular. A September 2005 CT scan showed extensive
emphysema throughout both lungs. In October 2005, a thoracic surgeon, Dr.
Aguinaga (the surgeon), performed a cervical mediastinoscopy, bronchoscopy,
thoracoscopy, and right upper lobe resection. The surgeon discovered severe bullous
emphysema throughout Joness right lung. A suspicious lesion in the right lung was
benign.
C. Prudentials Review for Disability Benefits
Jones worked for Mountaire as a sales representative, selling animal feed
products. He promoted sales to dealers and feeders within a five-state region. His job
included traveling frequently, attending trade shows, setting up displays for dealers,
and conducting quarterly inventories. He also recommended proper feeds for animals,
visited farms, and occasionally worked with large animals. His job required him to
spend long hours on his feet, stoop, and lift and move inventoryup to fifty-pound
bags of feedin a dusty, dirty environment. Joness last day at Mountaire was on
September 30, 2005.
-4-
Jones filed a claim for long term disability benefits on November 2, 2005, and
indicated his job was sedentary. Jones stated that he was unable to work because he
had emphysema and could no longer work around dust and chemicals. Mountaire
completed an employer statement, which also stated that Joness job was sedentary.
In November 2005, the physician and surgeon filled out forms, certifying that
Jones could not return to work. The physician stated that stress and physical exertion
would increase Joness breathing problems and that Jones was incapacitated and
would likely worsen in the future. He diagnosed Jones with progressive chronic
emphysema and coronary artery disease. The physician noted, however, that Jones
had the functional ability to do sedentary work. The surgeon stated that due to
progressive lung disease, Jones should not do physical labor or be exposed to
chemical agents.
Prudential denied Joness claim on December 20, 2005 based on the opinion of
its nurse, Nurse Gillis, who reviewed Joness medical records and found that the
alleged disability lacked support. The nurse noted the lack of recent chest x-rays or
pulmonary function tests to support the physicians assertion that breathing problems
rendered Jones disabled and noted Jones was stable from a cardiac standpoint.
Prudential explained that the medical records indicated no sudden worsening of his
condition at the date of disability and that Jones previously had worked despite his
condition.
Jones appealed the denial and submitted additional medical records. Joness
three treating doctors wrote letters stating that because of the combined effects of
coronary artery disease and emphysema, Jones was incapable of returning to work.
The cardiologist opined that Mr. Jones is totally disabled for performing anything
more than the most sedentary type occupation. The physician stated that Mr. Jones
is totally and permanently disabled to hold gainful employment. The physician also
placed restrictions on Jones relating to standing, walking, lifting, climbing, balancing,
4272.357-010 SALES REPRESENTATIVE, ANIMAL-FEED PRODUCTS
(wholesale tr.): Sells livestock- and poultry-feed products to farmers and retail
establishments: Suggests feed changes to improve breeding of fowl and stock.
Performs other duties as described under SALES REPRESENTATIVE (retail trade;
wholesale tr.) Master Title. May specialize in selling feed supplements and be
designated Sales Representative, Cattle-And-Poultry Feed Supplements (wholesale
tr.). GOE: 08.02.01 Strength: L GED: R4 M3 L4 SVP: 6 DLU: 77. Employment
and Training Admin., supra note 2, at 226 (emphasis omitted).
-5-
kneeling, crawling, and reaching overhead, as well as restrictions relating to exposure
to gas, dust, fumes, or changes in temperature. The surgeon opined that Jones is
presently incapacitated and likely will remain so in the future.
Jones also submitted a job description showing that his job was not sedentary.
The description indicated that Joness duties included lifting up to fifty-pound bags
of feed. Mountaire also added duties to the job description: visiting farms, handling
large animals, and participating in quarterly inventories, which require standing,
stooping, lifting, and moving inventory for hours in a dusty and dirty environment.
Prudentials rehabilitation specialist, Mr. Chretien, reviewed Joness job
description and determined his regular occupation as defined by the plan. The
rehabilitation specialist concluded that it was Sales Representative, Animal-Feed
Products4 under the DOT. The DOT classified the job as light, which means the job
includes the ability to exert up to twenty pounds of force occasionally and up to ten
pounds of force frequently and to walk and stand for periods of time.
Prudential Medical Director Dr. Kowalski reviewed Joness medical records
and concluded that his medical history did not prevent Jones from doing a light-duty
job. Prudential contacted Jones and asked if there was any supplemental information.
In response, the surgeon submitted an office visit note dated November 2005. In it,
the surgeon stated that Jones has markedly improved from his [first visit postsurgery]
although he continues to have pleuritic type right chest wall pain, appears
-6-
well and in no distress, and has rhythmic heart tones. Finally, the surgeon stated that
the chest x-ray today is satisfactory and showed marked resolution of his right upper
lobe infiltrates noted earlier in June of this year. Prudential also contacted Jones to
inquire about his heart treatment. Jones responded that his last stress test was prior
to his last day at work and that he had not seen his cardiologist since his surgery in
October 2005.
Prudential Claim Manager Mr. Furman summarized Joness medical history and
concluded that Jones could perform light work. The claim manager noted specifically
that Joness cardiologist reported that Jones had been doing well, that Jones made no
reports of shortness of breath, and that no diagnostic test results supported a finding
of an impairment. On March 3, 2006, Prudential notified Jones that he did not meet
the plans definition of disabled, based on Mountaires job description and the DOTs
definition of light work.
On March 16, 2006, Jones appealed again, requesting that Prudential look at
Joness actual job duties to make sure the chosen DOT job title accurately portrayed
his work requirements. Jones noted that the DOT job description did not reflect that
he was exposed to various chemicals, frequently stooped, kneeled, and crouched, and
lifted up to fifty-pound bags of feed. Jones also requested an independent review by
a third-party specialist. Jones included a copy of a treadmill stress test conducted
earlier that month. The cardiologists final impression was that Jones had a fair
to poor exercise tolerance. Jones also indicated he was having a breathing test
performed that day. Jones lastly requested that Prudential contact Joness treating
doctors to receive a report on his physical abilities and limitations.
Prudential complied with Joness requests. First, a second vocational
rehabilitation specialist, Mr. Schwartzkopf, reviewed Joness and Mountaires job
descriptions and found the chosen DOT job title was accurate even if it described less
physical exertion than Joness actual job. The second rehabilitation specialist noted
-7-
that Jones could share or delegate the heavier work if necessary. A Prudential medical
director, Dr. Bachman, reviewed Joness pulmonary function test (PFT) and
concluded that the results were consistent with very mildly impaired PFT. After
considering the treadmill test in addition to the other information, the medical director
opined that Jones was in poor physical conditioning, had poor exercise tolerance, but
was not impaired from performing his job as a result of his lung and heart conditions.
Second, Prudential sent work status forms to Joness primary care physician and
surgeon. The surgeon indicated that Jones was no longer a patient. The physician
reported that Jones could not drive, be exposed to gas, dust, or fumes, and could stand
only one hour per day, due to his lung disease. Third, Prudential gave Joness claim
file to a third-party specialist, Dr. Brown, who was an internal medicine physician
specializing in pulmonology, for an independent review. After reviewing the file, the
third-party specialist stated Joness tests results were on the lower limit of the normal
range and showed no progression of worsening. He concluded Jones had no
functional impairments and only is limited by poor physical fitness. Ultimately,
Prudential issued a final denial of benefits to Jones.
Jones, having exhausted his appeals with Prudential, filed this appeal in district
court. See 29 U.S.C. 1132(a)(1)(B) (authorizing a claimant to bring suit). The
district court awarded long term disability benefits, after granting Joness motion for
summary judgment. The district court reviewed de novo Prudentials decision
because the court determined that Prudential had a conflict of interest as insurer and
claims administrator and because Prudential failed to examine all relevant facts. The
district court found five procedural irregularities in the administrative record,
including a narrow and outdated application of the Department of Labors
occupational information. The district court criticized Prudentials vocational
experts for relying on the DOT because it was last updated in 1977, was superceded
by the O*Net, and did not give a detailed description of work environments. Further,
the district court accused the experts of being either unqualified or dishonest
because they failed to keep abreast of the latest information. The district court
5http://www.occupationalinfo.org/onet/49005a.html (last visited Aug. 4, 2008).
-8-
focused on Prudentials failure to consult the O*Net, which superceded the DOT and
was more descriptive of Joness work setting and job, categorized as 49005A Sales
Representatives, Agricultural.5 The district court criticized Prudential for failing to
reference the O*Net, which stated that Joness work context involves frequent
exposure to pollutants, gases, dust, and extremes in temperatures. The district court
noted that Jones repeatedly requested Prudential to review whether it had selected the
proper job description title and repeatedly submitted evidence personally and from his
treating doctors that he worked in a dusty environment, which adversely affected his
breathing and lung condition.
II. Discussion
We review de novo the district courts grant of summary judgment to Jones.
Menz v. Procter & Gamble Health Care Plan, 520 F.3d 865, 869 (8th Cir. 2008). A
grant of summary judgment is proper if the evidence, viewed in the light most
favorable to the nonmoving party, demonstrates there are no genuine issues of
material fact and the moving party is entitled to judgment as a matter of law. Med.
Liab. Mut. Ins. Co. v. Alan Curtis LLC, 519 F.3d 466, 471 (8th Cir. 2008). We
review de novo the district courts determinations of law. Id.
Prudential argues that the district court erred in raising the issue of the O*Net
for the first time in its ruling and erred in determining that the use of the DOT was
inappropriate. We do not reach the issue of whether the district court properly used
the O*Net because we find the district court erred by failing to give the parties an
opportunity to brief the issues of the merits of and the differences between the two
databases, and the reasons that Prudential used the DOT instead of the O*Net.
Neither party had raised the use of the DOT versus the O*Net in its briefing of the
appeal before the district court. The district court, in its own research, identified the
-9-
potential procedural irregularity. While we do not fault the district court for raising
the issue, it should have offered the parties an opportunity to address the issue, rather
than basing its ruling on an issue that neither party had identified or briefed.
We remand to the district court with instructions to allow the parties to brief the
O*Net issue. We note that the district court may want to consider remanding the case
to Prudential to reconsider Joness application for disability benefits under the O*Net
and its description of Joness working environment. Cf. Sloan v. Hartford Life and
Accident Ins. Co., 475 F.3d 999, 1007 (8th Cir. 2007)) (holding that the district court
did not err by failing to remand the case to allow the claims administrator the first
opportunity to calculate a financial offset because the administrators contention
regarding the offset had no legitimate basis); Chronister v. Baptist Health, 442 F.3d
648, 656 (8th Cir. 2006) (holding that the district court properly remanded the case
to the claims administrator for further proceedings because the court rejected the
administrators sole reason for denying reinstatement of the claimants disability
benefits).
Prudential challenges the district courts determination that a de novo review
applied to Prudentials denial of benefits, arguing that the district court should have
reviewed the denial for abuse of discretion because Prudential had discretion whether
to grant benefits. See Weidner v. Fed. Express Corp., 492 F.3d 925, 928 (8th Cir.
2007) (stating that the deferential abuse of discretion standard generally applies if a
plan administrator has express discretion to interpret benefit provisions and to
determine benefit eligibility). The Supreme Court has address[ed] the appropriate
standard of judicial review of benefit determinations by fiduciaries or plan
administrators under ERISA. Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101,
105 (1989); see Metro. Life Ins. Co. v. Glenn, 128 S. Ct. 2343, 2348 (2008). The
Supreme Court held that if a benefit plan gives discretion to an administrator or
fiduciary who is operating under a conflict of interest, that conflict must be weighed
as a factor in determining whether there is an abuse of discretion. Firestone, 489
-10-
U.S. at 115 (quotation omitted). We note that the Supreme Court recently clarified
the law regarding the conflict of interest that arises when a claims administrator and
an insurer of a plan are the same entity. See Metro. Life, 128 S. Ct. at 2343. In
Metropolitan Life, the Supreme Court held that an entity that is both the claims
administrator and payor of benefits has a conflict of interest. Id. at 2348. The
Supreme Court stated that the standard of review of benefits determinations should be
a combination-of-factors method where the conflict of interest serves as a
tiebreaker when the other factors are closely balanced and is more important . . .
where circumstances suggest a higher likelihood that it affected the benefits decision
and less important . . . where the administrator has taken active steps to reduce
potential bias and to promote accuracy. Id. at 2351. We decline to apply this
combination-of-factors method in the first instance and remand to the district court
for reconsideration of the standard of review.
III. Conclusion
Accordingly, we reverse the district courts grant of summary judgment in favor
of Jones and remand for further proceedings consistent with this opinion.
______________________________
 

 
 
 

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