(CN) – Honda must award long-term disability payments to a 47-year-old man suffering from extreme Chronic Fatigue Syndrome, the 9th Circuit ruled, finding that the insurance company’s denial of those benefits was “implausible” and “illogical.”
The federal appeals court in Pasadena reversed a District Court ruling that said Honda’s ERISA plan administrator was right in denying benefits to Samuel Salomaa.
By all accounts, Salomaa, who attended Harvard and Massachusetts Institute of Technology, was an ideal employee of the American Honda Motor Company in Southern California for more than 20 years before he took ill in 2003. Fellow employees and supervisors described him as an active, hard-working and intelligent man, and, according to one supervisor quoted in the ruling, “one of the few people in Southern California to walk or jog to work.”
That all changed after a bout with the flu in 2003. After three days off sick, Salomaa returned to work a changed man. Small tasks left him completely exhausted, and he even showed signs of diminished intellectual capacity.
After seeing several doctors he was eventually diagnosed with Chronic Fatigue Syndrome, a disease for which there are few objective tests and on which doctors rely primarily on patient-reported symptoms for diagnoses. Nevertheless, doctors who examined Salomaa reported that he had one of the worse cases of the disease they had ever seen, according to the ruling.
In 2005 Salomaa applied for long-term disability under the Employee Retirement Income Security Act. The manager on his case denied the claim, arguing that there were no objective physical findings to show that he was sick. The claim manager also noted that Salomaa had not lost weight in the ordeal, when in fact he had lost some 14 percent of his body weight in six months, the ruling states.
Even after Salomaa sent a letter to the claim manager from his doctor claiming that Salmoaa’s case was one of the most severe examples of Chronic Fatigue Syndrome he’d seen in 15 years, the claim manager issued a final denial in May 2005.
The director of the New Jersey Medical School Chronic Fatigue Syndrome/Fibromyalgia Center also wrote to the manager after personally examining Salomaa, saying that he had as severe a case of the elusive disease as the doctor had yet seen.
Such expert testimony was enough to convince to the Social Security Administration that Salmoaa was disabled and grant him full disability. But the insurance company was unmoved.
Salomaa sued the plan in District Court in 2006, claiming wrongful denial of benefits. The district court ruled for the insurance company, emphasizing that “the degree to which Salomaa’s diagnosis depended on his own symptom reports because of the lack of objective laboratory or other findings,” according to the ruling.
On appeal, the three-judge appeals panel issued a strongly worded reversal.
“In this case, the plan abused its discretion,” Judge Andrew Kleinfeld wrote for the court. “Its decision was illogical, implausible, and without support in inferences that could reasonably be drawn from facts in the record, because: (1) every doctor who personally examined Salomaa concluded that he was disabled; (2) the plan administrator demanded objective tests to establish the existence of a condition for which there are no objective tests; (3) the administrator failed to consider the Social Security disability award; (4) the reasons for denial shifted as they were refuted, were largely unsupported by the medical file, and only the denial stayed constant; and (5) the plan administrator failed to engage in the required ‘meaningful dialogue’ with Salomaa.”
Kleinfeld went on to write that the plan administrator’s decision was based on a conflict of interest that created an “incentive to cheat.”
“One can understand the frustration of disability plan administrators with claims based on such diseases as chronic fatigue syndrome and fibromyalgia,” he wrote. “Absence of objective proof through x-rays or blood tests of the existence or nonexistence of the disease creates a risk of false claims. Claimants have an incentive to claim symptoms of a disease they do not have in order to obtain undeserved disability benefits. But the claimants are not the only ones with an incentive to cheat. The plan with a conflict of interests also has a financial incentive to cheat. Failing to pay out money owed based on a false statement of reasons for denying is cheating, every bit as much as making a false claim.”
The panel ruled 2-1 that the “plan violated its procedural obligations and violated its substantive obligation by abusing its discretion and judging the disability claim arbitrarily and capriciously,” and reversed.
Writing in dissent before her death on Feb. 26, Judge Cynthia Holcomb Hall questioned the majority’s logic on several fronts, including that the physicians who actually examined Salomaa should be given more weight then those who didn’t.
“The majority first draws attention to the fact that the doctors who personally examined Salomaa found that he was disabled,” she wrote. “Those doctors who found otherwise, the majority explains, did not personally meet with Salomaa. The majority then derives importance from this fact, suggesting (without outright stating) that doctors who personally examine claimants are somehow more reliable than doctors who do not personally examine claimants. It then implies that the plan’s decision not to personally examine Salomaa evinces an abuse of discretion. It is unclear from the opinion why the majority adopts these views, as it provides no clear reason why a doctor who personally examined Salomaa should be given more authority or attention than one who didn’t, and no clear reason why a lack of personal examination precipitates an abuse of discretion. Perhaps no reasons were given because no reasons exist.”