United States District Court, Northern District of Illinois, Eastern Division
September 13, 2000
CONSUETA QUINN, PLAINTIFF,
THE NON-CONTRIBUTORY NATIONAL LONG TERM DISABILITY PROGRAM AND BLUE CROSS AND BLUE SHIELD DEFENDANTS.
The opinion of the court was delivered by: Shadur, District Judge.
MEMORANDUM AND OPINION ORDER
Consuela Quinn ("Quinn") has brought this Employee Retirement Income
Security Act ("ERISA") action under 29 U.S.C. § 1132(a)(1)(B)
("Section 1132(a)(1)(B)") in her continuing attempt to get long term
disability income benefits from Blue Cross and Blue Shield Association
("Blue Cross"). Quinn has also named as an added defendant the employee
welfare benefits plan from which she seeks those benefits, the
non-Contributory National Long Term Disability Program ("Program"). As
the later discussion reflects, this case is a retread before this Court,
having earlier climbed up the hill to our Court of Appeals and then
having climbed down again.
As a result of this second go-round, both sides have again moved for
summary judgment under Fed. R. Civ. P. ("Rule") 56 and have relatedly
complied with this District Court's LR 56.1.*fn1 At this point those
motions are fully briefed and ready for decision. For the reasons stated
in this memorandum opinion and order Blue Cross' motion is granted,
Quinn's motion is
denied and this action is dismissed with prejudice.
Summary Judgment Standards
No case citations are really needed to support the universally
established principle that Rule 56 requires the facts to be viewed from
the nonmovant's perspective. So where as here cross-motions for summary
judgment are filed, it becomes necessary to adopt a dual perspective
— one that this Court has often described as Janus-like. In this
case, though, no material facts are in dispute. Instead the question is
one of law: whether Blue Cross properly exercised its duties as
administrator of Quinn's benefit plan.
Most of the relevant facts are recited in this Court's earlier opinion
("Opinion I," 990 F. Supp. 557 (N.D. Ill. 1997)) and in that of the Court
of Appeals ("Opinion II," 161 F.3d 472 (7th Cir. 1998)) and will
therefore not be repeated at length. In a nutshell, however, Quinn worked
for Health Care Service Corporation ("Health Care") a Blue Cross licensee
that participates in the Program. While on short-term disability in 1994
after a hysterectomy, Quinn was diagnosed with interstitial cystitis, a
non-bacterial inflammation of the urinary bladder that can cause pain and
frequent urination. Citing that condition, in February 1995 Quinn applied
for long-term disability benefits under the Program. Conflicting medical
testimony was presented, with Drs. E. Richard Blonsky and Anthony Schaef
for opining that Quinn was not disabled and Drs. Dennis Pessis and Donald
Hoard offering the opposite view. Based on the former opinions, to which
Blue Cross gave greater weight, it denied Quinn's benefits claim. That
determination was then upheld on administrative appeal.*fn2
Quinn next filed an ERISA action pursuant to Section 1132(a)(1)(B).
On the ensuing cross-motions for summary judgment, this Court determined
that while 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" (Opinion I at 561), Blue Cross did abuse
its discretion by its "failure to investigate properly whether Quinn was
capable of finding a comparable job at a similar salary . . ." (Id. at
563) That decision was initially coupled with an order remanding the
matter to Blue Cross for further consideration, but when Quinn requested
reconsideration under Rule 59(e) this Court determined that Halpin v.
W.W. Grainger. Inc., 962 F.2d 685, 697 (7th Cir. 1992) called instead for
granting the retroactive reinstatement of Quinn's benefits.*fn3
On appeal, the Court of Appeals agreed with this Court that Blue Cross'
vocational skills determination had been made arbitrarily (Opinion II at
We agree that [Blue Cross] was under no obligation to
undergo a full-blown vocational evaluation of Quinn's
job, but [it] was under a duty to make a reasonable
inquiry into the types of skills Quinn possesses and
whether those skills may be used at another job that
can pay her the same salary range as her job with
But the Court of Appeals held that Gallo v. Amoco Corp., 102 F.3d 918
(7th Cir. 1996) rather than Halpin controlled the particular facts of the
case.*fn4 So the Court
of Appeals sided with this Court's original
ruling*fn5 so that "the case should be remanded to the Program Secretary
to make a more adequate assessment of whether Quinn is disabled as
defined by the Program, specifically whether her vocational skills enable
her to obtain another job with a comparable salary" (Opinion II at ¶
On remand Blue Cross placed Quinn's claim at the point when claims are
first presented to the Claims Appeals Committee ("Appeals Committee") (BC
St. ¶ 42). In response Quinn "notified Blue Cross that it [sic] would
not consider the remand proceedings to be in compliance with the [Court
of Appeals'] ruling unless the review was performed independently" (Q.
Mem. 2; see also Jt.App. Tab E, BC1001). Nevertheless Quinn submitted a
substantial number of items in support of her appeal (BC St. ¶ 45)
(1) a report of diagnostic vocational assessment
performed on Quinn on March 29, 1999 by Cheryl R.
Hoiseth ["Hoiseth"]; (2) Hoiseth'S curriculum vitae;
(3) an "Updated Report of Donald E. Hoard, M.D." dated
March 16, 1999; (4) notes of bladder instillations
performed on 9/29/97, 11/24/97, 3/23/98, 5/18/98,
7/20/98, 9/28/98, 1/11/99, and 3/22/99; (5) a sworn
statement from Dr. Donald E. Hoard dated March 21,
1997; and (6) a portion of the Social Security
Administration's determination granting Quinn
Much of that material was discounted by Blue Cross because it considered
that evidence relating to Quinn's health after August 31, 1995 (the date
her original benefits had ended) was irrelevant to the issue whether Blue
Cross' 1995 denial of Quinn's long-term disability benefits was wrong.*fn7
As for Hoiseth's diagnostic vocational assessment, she is a specialist
in vocational counseling and a recognized vocational expert, but not a
physician (Q. St. ¶ 1). Her work in this instance encompassed an
interview with Quinn at Quinn's home, an incomplete vocational test*fn8
and a review of the medical documentation (id. ¶ 2). She concluded
that Quinn "is not a candidate for employment," basing that opinion on
(id. ¶ 6 ):
1) the opinions of treating doctors, 2) the
instability of Quinn's medical condition and the
likelihood of absences due to treatment . . . [and] 3)
frequent interruptions during the evaluation and the
fatigue caused by the evaluation.
Hoiseth also stated that her 1999 conclusion was applicable to August
1995 as well (id. ¶ 7).*fn9
For its part, Blue Cross also hired a vocational consultant, National
Healthcare Resources ("National"), to conduct a vocational study (BC St.
¶ 64)*fn10 National was provided with information about Quinn's
experience, her work activities with Health Care*fn11 and Dr.
Schaeffer's opinion that Quinn needed unrestricted access to a bathroom
(id. ¶¶ 58-59, 64)*fn12 National compared Chicago Tribune
advertisements from August 1995 with Quinn's qualifications and salary
requirements and then communicated with matching employers to determine
if Quinn would have had such unrestricted access to a nearby restroom
(id. ¶¶ 65-67). Based on that analysis, National concluded that Quinn
could have, in August 1995, found a job paying a comparable salary and
with the appropriate medical restrictions (Jt.App. Tab F, BC1314-15).
As a result, the Appeals Committee again denied Quinn's claim for
long-term disability benefits.*fn13 Quinn's administrative appeal to the
Assistant Secretary of the Benefits Committee (which is the "plan
administrator" for ERISA purposes) was also denied (BC St. ¶¶ 75-82).
Having once again exhausted her administrative remedies, Quinn has
returned to this Court.
Standard of Review
Q. Mem. 3 seeks de novo review, arguing that Herzberger v. Standard
Ins. Co., 205 F.3d 327 (7th Cir. 2000) negates Quinn's earlier
stipulation and the Court of Appeals' holding that Blue Cross' decision
is subject to deferential review.*fn14 Quinn is wrong. Herzberger, id.
at 329 sought to answer this question: (id. at 329)
The issue is whether language in plan documents to the
effect that benefits shall be paid when the plan
administrator upon proof (or satisfactory proof)
determines that the applicant is entitled to them
confers upon the administrator a power of
discretionary judgment, so that a court can set it
aside only if it was "arbitrary and capricious," that
is, unreasonable, and not merely incorrect.
In doing so, Herzberger, id. at 330 sought "to clarify" the law and "to
state a general rule." But while the opinion did set out "safe harbor"
language to ensure deferential review, the stated "general rule" did not
mandate the use of that language, instead finding it sufficient for "the
plan [to] contain language that, while not so clear as our `safe harbor'
proposal, indicates with the requisite if minimum clarity that a
discretionary determination is envisaged" (id. at 331)
Here, Program § 1(p) (emphasis added) states that a person is
"disabled" when he is:
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. The determination as
to whether a Participant is "Disabled" shall be based
on medical evidence satisfactory to the Committee in
its sole discretion.
That unambiguous vesting of discretion requires the rejection of the Q.
Mem. 5 contention that the language is "uncertain and ambiguous." Rather
than "minimum clarity," its clarity is more than abundant.*fn15
Before Herzberger, Opinion II has held at 474:
Furthermore, the Program gives full discretion to [a]
Committee to construe the Program and its terms and to
determine all questions that arise under it.
That has been left untouched by Herzberger — the "sole discretion"
vested in the Committee plainly commands giving its determination
deferential review (see Herzberper, 205 F.3d at 332).*fn16
Nor, as Q. R. Mem. 3 would have it, does Blue Cross' "bad faith
evaluation . . . result in forfeiture of deference" as discussed in
Friedrich v. Intel Corp., 181 F.3d 1105 (9th Cir. 1999). Friedrich, id.
at 1110 upheld "the district court's determination that [the] claims
administrator . . . administered [plaintiff's] claim as an adversary
`bent on denying his claim' and `oblivious to her fiduciary obligations
as administrator of the . . . Plan" and "that [defendant] failed to
provide a `full and fair' appeals procedure as required by ERISA." But
that description simply does not fit this case.
To be sure, this Court's anticipation when the case was sent back by
the Court of Appeals was that Blue Cross' review the second time around
could very likely reach the same conclusion as before, so that the
current outcome did not come as a surprise. After all, nothing that this
Court said in Opinion I or that the Court of Appeals said in Opinion II
required Blue Cross to reverse its original evaluation of the competing
medical opinions. And as for the rest of Blue Cross' post-remand
consideration, the discussion in the next section of this opinion
confirms that nothing in the record suggests anything other than a good
faith effort on its part to arrive at a fair result. (id.).*fn17
Where as here such broad discretion is reposed in a plan
administrator, judicial intervention is appropriate only where the
decision is arbitrary and capricious (Firestone Tire & Rubber Co. v.
Bruch, 489 U.S. 101, 115 (1989); Carr v. Gates Health Care Plan,
195 F.3d 292, 294 (7th Cir. 1999)). And our Court of Appeals has
regularly phrased that demanding standard in terms of the administrator's
decision having to be "downright unreasonable" (Carr, 195 F.3d at 294) or
"completely unreasonable" (Mers v. Marriott Int'l Group Accidental Death
& Dismemberment Plan, 144 F.3d 1014, 1021 (7th Cir. 1998)). This opinion
turns, then, to that inquiry.
Evaluation of Blue Cross' Determination
It is not of course this Court's function to reevaluate the medical
evidence, either that presented in the first instance or that collected
since. Instead, as already indicated, this Court's role is to ensure that
Blue Cross made a "reasonable inquiry" in conducting its vocational
evaluation and that its determination was not arbitrary and capricious.
In that respect, Blue Cross is correct in looking only at evidence that
bears on Quinn's condition in 1995. While post-1995 medical examinations
might shed light on Quinn's condition back then, any ailments not
connected to Quinn's condition in August 1995 are simply not relevant to
the issue of her disability or nondisability in 1995.
As for Quinn's primary contentions on this appeal, Q. Mem. 6 first
argues that Blue Cross' adverse determination on remand was in bad faith
The record on remand shows that defendant treated the
Court of Appeals decision as a roadmap to an "appeal
proof" denial of benefits rather than a directive to
conduct a fair and unbiased review of Quinn's claim.
But this opinion has already explained the unfairness of such a
criticism, which appears just as result-oriented as it accuses Blue Cross
of being. Nothing presented by Quinn suggests that the Opinion II
"roadmap" was reconfigured by Blue Cross to produce an arbitrary result.
Instead Blue Cross' inquiry faithfully followed the mandate of the Court
of Appeals, which did not require "a full-blown vocational evaluation"
but only a "reasonable" one (Opinion II at 476). And it can hardly be
said that following the directive of our Court of Appeals is "arbitrary
Q.Mem. 6 also contends that Blue Cross erred because it "refused
Quinn's request for an independent review even though the language from
both this court and the court of appeals was extremely critical of
defendant's conduct."*fn18 But in voicing that criticism as to an aspect
of Blue Cross' original decision, neither this Court nor the Court of
Appeals suggested that an independent review was necessary. To the
contrary, this case was remanded by the Court of Appeals for "the Program
Secretary to make a more adequate assessment of . . . whether [Quinn's]
vocational skills enable her to obtain another job with a comparable
salary" (Opinion II at 479). In short, the earlier rulings did nothing to
remove the discretion allowed Blue Cross under the Program so long as
that discretion was not abused.
Quinn's other arguments that Blue Cross' discretion was abused induce a
sense of deja vu. Q. Mem. 7-9 urges that Blue Cross should have
considered the opinions of Drs. Hoard and Pessis and given weight to the
ruling of the Social Security Administration ("SSA") in making its
assessment. But those are the same arguments originally rejected by this
Court and then affirmed on appeal. While Quinn seeks to place those
arguments in the context of the remand, the analysis is the same.
For example, Q.R. Mem. 5 says that National was not given factors cited
by Drs. Pessis and Hoard such as "the effects of pain, sleeplessness, and
periodic absences due to treatments. . . ." But just as it was not an
abuse of discretion for Blue Cross to have discounted those opinions, so
it was not an abuse for Blue Cross not to have passed that information on
to National. It is after all the Committee that has discretion to sort
through and choose between contradicting medical opinions, so that Blue
Cross was entitled to present National with the medical information that
Blue Cross in its discretion considered representative of Quinn's
condition (including work restrictions). To provide conflicting medical
information to outside persons with no relevant medical training would
obviously tend to move that discretion away from the Committee.*fn19
That same analysis undercuts Blue Cross' failure to give Hoiseth's
vocational evaluation to National. As Q. Mem. 2 acknowledges:
Hoiseth's opinion was well-supported from several sources,
including two urologists, Drs. Donald Hoard and Dennis
Pessis; as well as the Social Security finding. . . .
But as Opinion I at 562 has already said, it was within the Committee's
reasonable discretion to discount conflicting medical testimony and the
SSA's conclusion "in view of the opposite opinion of Drs. Schaeffer and
Blonsky." Blue Cross was not required to submit to National a report
based primarily on information that the Committee had rejected in its
Quinn's motion is sunk by the "arbitrary and capricious" standard. Blue
Cross's inquiry and conclusion as to the vocational determination were
not "completely unreasonable," so that the discretion granted to it under
the Program was not abused. And Quinn has not put forth any persuasive
evidence to support a finding of bad faith on the part of Blue Cross.
This Court therefore denies Quinn's motion, grants Blue Cross' motion and
dismisses this action with prejudice.