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November 21, 1997


The opinion of the court was delivered by: SHADUR


 Consuela Quinn ("Quinn") has brought this Employee Retirement Income Security Act ("ERISA") action against Blue Cross and Blue Shield Association ("Blue Cross") under 29 U.S.C. § 1132(a)(1)(B). *fn1" Quinn seeks disability income benefits under an employee benefit plan administered by Blue Cross.

 Both sides have now moved for summary judgment under Fed.R.Civ.P. ("Rule") 56. They have complied with this District Court's Rule ("GR") 12(M) and 12(N) *fn2" and have now briefed the cross-motions fully, so that the motions are ready for decision. Although both motions must be denied for the reasons set forth in this memorandum opinion and order, this action is dismissed without prejudice, coupled with a direction to Blue Cross to deal with Quinn's claims appropriately.

 Summary Judgment Standards

 Familiar Rule 56 principles impose on a party seeking summary judgment the burden of establishing the lack of a genuine issue of material fact ( Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986)). For that purpose this Court must "read[] the record in the light most favorable to the non-moving party," although it "is not required to draw unreasonable inferences from the evidence" ( St. Louis N. Joint Venture v. P & L Enters., Inc., 116 F.3d 262, 264-65 n.2 (7th Cir. 1997)). Where as here cross-motions for summary judgment are involved, it is necessary to adopt a dual perspective--one that this Court has often described as Janus-like--that sometimes involves the denial of both motions. That occasion for such a dual denial does not arise here, because the underlying facts are not in dispute. Instead the parties are at odds about whether, as a matter of law, Blue Cross properly exercised its duties as administrator of Quinn's benefit plan.


 Quinn began working at Health Care Service Corporation ("Health Care") in July 1990. Health Care is a licensee of Blue Cross doing business as Blue Cross and Blue Shield of Illinois. As a Blue Cross licensee, Health Care participates in its Non-Contributory National Long Term Disability Program ("Program") (BC 12(M) P7). Blue Cross sponsors, and a committee of its board of directors--the National Employee Benefits Committee("Benefits Committee")--administers, the Program. Funding for the Program, however, comes not from Blue Cross but exclusively from a trust financed by participating employer contributions (Q. 12(N) P15). Quinn became insured under the Program several months after she began working at Health Care.

 Quinn stopped working as a Health Care payroll accounts assistant on July 14, 1994 after receiving a hysterectomy. Health Care granted her short-term disability benefits while she recuperated from that operation. But the hysterectomy apparently exacerbated pelvic and urinary tract discomfort with which Quinn had a longstanding problem. In September 1994 Quinn underwent a cystoscopy (a direct visual examination of the bladder using a scope) that led her doctors to suspect that she suffered from interstitial cystitis, a non-bacterial inflammation of the urinary bladder that can cause pain and increased frequency of urination (Q. 12(N) P15). Quinn began to see Dr. Anthony Schaeffer, chairman of the Northwestern University Medical School Department of Urology, to treat her condition (BC 12(M) P37). Dr. Schaeffer confirmed that Quinn was suffering from interstitial cystitis and placed her on a treatment protocol (Q. 12(N) P32).

 In February 1995 Quinn, citing her interstitial cystitis, applied for long-term disability benefits under the Program. Blue Cross referred her to Dr. Dennis Pessis, also a urologist, for an independent medical exam on May 4, 1995 (Q. 12(N) P30). Dr. Pessis reported that Quinn should be off of work for at least four weeks to give Dr. Schaeffer's treatment a chance to take effect, at which point Dr. Schaeffer could re-evaluate Quinn for a possible return to work (BC 12(M) P48). Blue Cross later approved Quinn's benefits claim, retroactive to January 1, 1995 and continuing through August 31, 1995, so that Quinn could follow Dr. Schaeffer's treatment course and submit additional medical evidence (BC 12(M) P49; Grant Aff. P28).

 In late August Blue Cross again consulted with Dr. Schaeffer to determine whether Quinn was still unable to work because of the cystitis. Dr. Schaeffer expressed his opinion that Quinn was not disabled in a telephone conversation with a Blue Cross nurse (BC 12(M) P50). In reliance on Dr. Schaeffer's statement and after an internal review of Quinn's claim by Blue Cross' Medical Director Dr. E. Richard Blonsky, Blue Cross sent Quinn a letter on September 19, 1995 stating that she did not have a disability as defined by the Program (BC 12(M) P53).

 Quinn appealed that decision to the Claims Appeals Committee ("Appeals Committee") in November 1995 and, after that appeal was denied, took her final appeal to the Secretary of the Benefits Committee in February 1996. As part of those appeals Quinn submitted evidence of additional medical evaluations that she had received from Dr. Pessis and from another treating urologist, Dr. Donald Hoard. Both of those physicians concurred that the physical pain and frequent need to urinate caused by Quinn's condition totally prevented her from working (Q. 12(N) P35). Quinn also submitted evidence that she had applied for and received disability benefits from the Social Security Administration ("SSA") during her appeals process (Q. 12(N) PP35, 36).

 Nonetheless Quinn's appeals were unsuccessful. First the Appeals Committee and then the Benefits Committee Secretary Dorothy Calhoon ("Calhoon") reviewed her file and decided against awarding her disability benefits. Quinn now challenges the final denial of her claim.

 Standard of Review

 Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115, 103 L. Ed. 2d 80, 109 S. Ct. 948 (1989) *fn3" has set out the definitive standards for judicial review of benefit eligibility and health plan interpretations:


Consistent with established principles of trust law, we hold 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 plan administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe the terms of the plan.

 Plans that confer discretionary power on the administrator are reviewed under the highly deferential arbitrary-and-capricious standard ( Chojnacki v. Georgia-Pacific Corp., 108 F.3d 810, 814 (7th Cir. 1997)). Here the Program unequivocally confers such discretionary authority upon Blue Cross and the Benefits Committee to determine employees' eligibility for plan benefits (BC 12(M) P12).

 Quinn concedes that Firestone controls this case, but she argues that a more searching standard of review should apply because Blue Cross operated under a conflict of interest when it denied Quinn her benefits. In that respect Donato v. Metropolitan Life Ins. Co., 19 F.3d 375, 380 n.3 (7th Cir. 1994) has characterized the arbitrary-and-capricious test as a "sliding scale standard" that may be adjusted in consequence of a fiduciary's conflict of interest. Quinn claims that such a conflict arises here because Blue Cross acted as both insurer and administrator for the Program.

 But that argument suffers from a crippling factual error. Even though Blue Cross sponsors and administers the Program via its internal committees, it neither funds nor otherwise insures the Program. Instead, participating employers such as Health Care contribute to a trust that funds the Program's administrative expenses and benefit payments. Accordingly Blue Cross does not itself stand at financial risk due to the payment of benefits to Quinn, so it has no problematic conflict of interest (an issue already resolved in Bali v. Blue Cross and Blue Shield Ass'n, 873 F.2d 1043, 1047 n.5 (7th Cir. 1989), which found no conflict of interest in a similar ERISA case involving another Health Care employee suing Blue Cross for denial of benefits under the identical Program).

 This Court must therefore apply an unfettered arbitrary-and-capricious standard of review in this case. To survive a summary judgment motion, Quinn must show that Blue Cross "abused their discretion--which is to say, that they were not just clearly incorrect but downright unreasonable" ( Fuller v. CBT Corp., 905 F.2d 1055, 1058 (7th Cir. 1990)). Quinn suggests three different ways, discussed hereafter, in which Blue Cross essentially acted arbitrarily or capriciously. *fn4"

 Effect of Conflicting Medical Testimony

 Quinn first argues that it was an abuse of discretion for Blue Cross not to credit the opinions of Drs. Hoard and Pessis. As said earlier, both of them found Quinn totally unable to work because of her pain and her frequent need to urinate. *fn5" Quinn contends that Dr. Blonsky's review of her case file was the only contradictory medical evidence on which Blue Cross could have based its denial of disability benefits--an arbitrary reliance on the opinion of a reviewing doctor in the face of recommendations by treating physicians. In that regard Quinn points to the holding in Donaho v. FMC Corp., 74 F.3d 894, 900-01 (8th Cir. 1996) that it was an abuse of discretion for a plan administrator to deny benefits to a person based solely upon the conclusions of a reviewing physician that were contradicted by an examining physician and two treating physicians.

 But that position requires a complete rejection of Dr. Schaeffer's independent evaluation of Quinn--something that this Court cannot do on Quinn's Rule 56 motion. After all, Dr. Schaeffer told Tracey Thorpe, a nurse case manager at Blue Cross, in a telephone conversation that after examining Quinn he believed that her interstitial cystitis should not prevent her from working. Although Quinn proffers two bases for taking no account of Dr. Schaeffer's opinion, neither is persuasive.

 First, Quinn asserts that it would violate Blue Cross policy to consider an opinion given over the phone that was not confirmed in writing. That misstates the facts, for Quinn has shown no such policy. Instead there is unrefuted testimony that Blue Cross prefers, but does not require, that physicians confirm opinions given over the phone in writing (Calhoon Dep. 14). Because not all doctors send in written confirmations, the written activity log that nurse case managers keep of their phone conversations serves as a backup written medium (Calhoon Dep. 27). It cannot be considered arbitrary or capricious for Blue Cross to have considered Dr. Schaeffer's opinion even in the absence of a written confirmation, especially when Blue Cross did obtain the medical records upon which Dr. Schaeffer's opinion rested.

 Second, Quinn points out some errors in Dr. Schaeffer's medical records that she claims raises questions about their validity. While there were some inaccuracies in parts of the report, there was also unrefuted evidence that mistakes of those kinds (in one instance mislabeling Quinn's gender and in another instance misstating her race) are not uncommon in medical records due to the hazards of transcribing dictation (Blonsky Dep. 79-80). There is no evidence that the substantive medical tests and data in the reports upon which Dr. Schaeffer based his conclusions were inaccurate in any way. Such obvious clerical errors are too obviously trivial to discredit Dr. Schaeffer's opinion.

 Most importantly, Dr. Schaeffer's opinion was that of a prestigious urologist who had actually been Quinn's specialist physician at the time of the Blue Cross determination of no disability and who had provided an unequivocal and reasoned judgment on that issue. Thus Donaho is inapposite because Blue Cross was not at all solely dependent--as Quinn would have it--upon Dr. Blonsky's review of Quinn's file. Instead Blue Cross was presented with conflicting credible medical evidence as to the severity of Quinn's condition. Both Dr. Schaeffer and Dr. Blonsky felt that Quinn's condition was not severe enough to disable her from working. Drs. Pessis and Hoard disagreed. Even if it might be accepted that heavier weight is to be ascribed to the opinions of specialists in the field (thus discounting Dr. Blonsky's opinion), nothing in the law compels Blue Cross to play a mere numbers game by accepting a majority view. Particularly given Dr. Schaeffer's stature, Blue Cross could surely have decided for either side without acting arbitrarily or capriciously. Accordingly, it cannot be labeled an abuse of discretion for Blue Cross to have decided to accept the Schaeffer-Blonsky view rather than the opposing Pessis-Hoard opinion.

 Effect of Conflicting Social Security Determination

 Quinn's second line of attack is a variant on her first. She contends that Blue Cross abused its discretion by not deferring to the SSA determination that Quinn was disabled. It is undisputed that SSA granted Quinn disability benefits, and Quinn submitted evidence of that fact to Blue Cross before her final appeal was heard.

 Here Quinn is wrong on the law: Social Security disability determinations do not have a binding effect on ERISA plan administrators. As this Court has observed in this very context ( Chandler v. Underwriters Labs., Inc., 850 F. Supp. 728, 737 (N.D. Ill. 1994)):


After all, it is entirely possible for different factfinders to view even identical evidence in different ways and for neither of them to be vulnerable to attack as arbitrary and capricious.

 And in this instance the Program itself explicitly rejects any conclusive effect to SSA decisions (Jt. App. Tab B, BC0432). Moreover, in this instance SSA did not even have access to all the relevant facts before Blue Cross, for SSA's decision was made without access to Dr. Schaeffer's opinion of Quinn's nondisability.

 Again the arbitrary-and-capricious standard sinks Quinn's motion. It was not an abuse of discretion for Blue Cross to consider and reject SSA's conclusion in view of the opposite opinion of Drs. Schaeffer and Blonsky.

 Effect of Absence of Vocational Determination

 Quinn's final assertion is that Blue Cross acted arbitrarily or capriciously when it decided that Quinn could return to work without making a vocational study of Quinn's former position at Health Care, her physical limitations and the applicable job market. Instead, Benefits Committee Secretary Calhoon appears to have made the final determination that Quinn could work based on the evidence in Quinn's claim file and on Calhoon's personal knowledge of the Chicago job market. Whether that approach was reasonable depends heavily upon the terms of the Program itself and on the information available to Calhoon about Quinn's employment history and physical capabilities.

 To begin with, whether the absence of a formal vocational study is an abuse of discretion can be assessed only in light of what the Program requires from Blue Cross. Obviously the less stringent the requirements of the Program, the more likely it is that a less formal vocational review is reasonable.

 On that score Program § 1(p)(Jt. App. Tab A, BC0483) defines disability in these terms:


"Disabled" means that a Participant is determined on the basis of medical evidence satisfactory to the Committee, wholly prevented, by reason of mental or physical disability, from engaging in any occupation comparable to that in which he was engaged for the Employer, at the time his disability occurred.

 And the Program Summary elaborates (Jt. App. Tab B, BC0431):


Since the Program is designed to provide income protection, you will not be eligible for benefits if your medical condition allows you to work in another job that has a salary level or range similar to your current job.

 While the showing demanded by the Program is thus not stringent, it still obligates Blue Cross to make the factual determination that a program participant could work at a job comparable to what the person initially held, carrying a similar salary. Quinn last worked for Health Care as a payroll accounts assistant earning approximately $ 26,000 a year (BC 12(M) P3). Blue Cross had to find that Quinn was capable of holding a comparable job in a similar salary range before denying her disability benefits.

 Making such a factual determination requires at least some good faith investigation. As the Program administrator, Blue Cross had a fiduciary duty to "discharge [its] duties with respect to the plan solely in the interest of the participants and beneficiaries" (Section 1104(a)(1)). That duty includes the responsibility to investigate matters essential to the denial of Quinn's claim. As stated in Brown v. Blue Cross & Blue Shield of Alabama, Inc., 898 F.2d 1556, 1566 n.11 (11th Cir. 1990), quoting Colket v. St. Louis Union Trust Co., 52 F.2d 390, 391 (8th Cir. 1931):


Good faith requires an honest effort to ascertain the facts upon which its exercise must rest and an honest determination from such ascertained facts....If [the fiduciary] knew of matters concerning which honesty would require investigation, and failed to act, cannot, in law, be regarded as having exercised good faith, and its action would be arbitrary.

 Although that standard may not demand a formal vocational study, it surely requires enough of a good faith investigation to support a reasoned determination. Blue Cross falls far short of that here.

 Calhoon's ignorance of Quinn's job duties at Health Care is a telling example of Blue Cross' failure to fulfill its duty to investigate Quinn's claim fully. All that Calhoon knew about Quinn's last position at Health Care was that her job title was "payroll accounts assistant" (Calhoon Dep. 19-20). There is no record evidence that Calhoon made any effort whatever to obtain information about Quinn's actual job duties. Calhoon seems rather to have assumed that any clerical job would suffice to meet the Program's standard of comparability.

 That minimalist approach might perhaps suffice if Calhoon had really ascertained not only that any clerical job was reasonably "comparable" to the one that Quinn had held but also that Quinn was capable of performing some clerical job, but there is no evidence that Calhoon made a reasonable inquiry into that latter issue either. It is undisputed that Quinn suffered from interstitial cystitis. Calhoon did not investigate whether that condition imposed limitations on Quinn's ability to perform clerical jobs. *fn6" Drs. Hoard and Pessis clearly believed that it did. Drs. Schaeffer and Blonsky opined that Quinn was not totally disabled from working, but the record is bare of either doctor's view as to whether there were any limitations on her ability to work. In such an evidentiary vacuum, Calhoon had no predicate for assuming that Quinn's interstitial cystitis placed no restrictions on her ability to perform clerical work in the face of the contrary medical evidence on that point.

 Finally, the wholly ipse dixit nature of any determination by Calhoon that other clerical jobs were similar in salary range to Quinn's former position represents a final nail in the Blue Cross coffin. Though Calhoon said that she knew the value of Quinn's job in the marketplace, her stated certainty in the absence of any specific knowledge about Quinn's job duties is more than mysterious. Indeed, the only record evidence in that respect is that Calhoon knew that the secretaries in her own office in Chicago received approximately equivalent salaries (Calhoon Dep. 29). That paucity of evidence eliminates any basis for a finding that Quinn would have been able to obtain a similar salary even if there were limitations on her ability to work clerical jobs.

 In light of Blue Cross' failure to investigate properly whether Quinn was capable of finding a comparable job at a similar salary, this Court is compelled to find that Blue Cross' denial of Quinn's claim was arbitrary and capricious. And that compels denial of Blue Cross' motion for summary judgment. But on the other side of the coin, this Court cannot grant Quinn's Rule 56 motion, for the record also does not show that Quinn's claim must be granted as a matter of law. Blue Cross may still be entitled to refuse Quinn's claim, but only if it conducts an appropriate investigation into Quinn's capability of finding a comparable job at a similar salary.


 Under such circumstances Gallo v. Amoco Corp., 102 F.3d 918, 923 (7th Cir. 1996) calls for sending this case back to Blue Cross so that it may conduct the necessary factual inquiry. *fn7" Accordingly the parties' cross-motions for summary judgment are denied, Blue Cross' determination is vacated and Quinn's claim is indeed sent back to Blue Cross for further action. Blue Cross is directed to reconsider whether it should grant or deny Quinn's claim after it has conducted appropriate further proceedings in accordance with this opinion to determine whether Quinn is capable of working at a job comparable to her last position at Health Care--and is able to earn a similar salary at such a job. This action is dismissed without prejudice to enable Blue Cross to do so.

 Finally, because the disposition of this matter has been triggered by Blue Cross' plain error despite its having the benefit of an extraordinarily generous standard of review, this Court holds that Quinn is the "prevailing party" for purposes of Rule 54(d) *fn8" and accordingly orders that taxable costs be awarded in favor of Quinn and against Blue Cross. This should not however be misunderstood as a determination (one that this Court has not made) that such status calls for an award of attorneys' fees to Quinn under Section 1132(g)(1)--instead no fees will be awarded to either party.

 Milton I. Shadur

 Senior United States District Judge

 Date: November 21, 1997

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