White v. Eaton Corporation Short Term Disability Plan, - F.3d - (4th Cir., decided January 21, 2009) - United States District Court for the Fourth Circuit - Robert E. Hoskins

On January 21, 2009, the Fourth Circuit issued its per curiam decision in White v. Eaton Corporation Short Term Disability Plan.  I represent Mr. White who sought disability benefits under a self-funded ERISA governed disability plan.  The plan denied the claim and after exhausting administrative remedies we filed suit.  The district court reversed the claim decision holding that Eaton abused its discretion.  (Click here to view the district court’s decision)  I had argued that there was evidence of a significant conflict of interest, but the district court did not address that issue finding, instead, that even under a most deferential standard of review there was an abuse of discretion.  The plan appealed and we argued the case in Richmond, Virginia during the October 2008 term of court. 

The Fourth Circuit also declined to address the evidence about a significant conflict of interest.  The court acknowledged that Eaton “was operating under a conflict of interest when it denied White’s benefits claim”, but then states:

“White argues that Eaton has shown a history of biased claims administration and that Eaton’s conflict of interest should therefore weigh heavily in our balancing of the Booth factors. Because we do not consider Eaton’s conflict of interest central to our conclusion that it abused its discretion in denying White’s benefits, we decline to address how much importance to give the conflict in this case.” 

Eaton has a practice of “sticking” by its claim decisions and they feel so strongly about their cause that if you do beat them in the district court they generally appeal to the Circuit Court.  Accordingly, they and I have accumulated several cases out of Richmond over the years.  Most notably, round 1 which went to my client in Donovan v. Eaton Corporation, 462 F.3d 321 (4th Cir. 2006) (Click here to view a discussion of Donovan) and the last round which went their way in Evans v. Eaton Corporation, 514 F.3d 315 (4th Cir. 2008) (Click here to view a discussion of Evans).  The White opinion discusses both Donovan and Evans and finds that White’s “case is substantially similar to Donovan.  In both cases, Eaton has either failed to elaborate on, or outright ignored, evidence favorable to the claimant.”  Particularly, the court notes “deficiencies in the plan’s decision-making process . . . reflected especially in its treatment of White’s FCE, its failure to address conflict explanation of White’s job requirements, and its failure to adequately address medical evidence supporting White’s claims.”  In the end, the court distinguishes the facts before it in White from Evans and states:

“. . . the Plan failed to address evidence favorable to White “thoughtfully and at length.” Evans, 514 F.3d at 326. It relied on a fundamentally flawed FCE, based its determination on a description of White’s lifting duties that was contradicted by evidence in the record and disregarded medical evidence favorable to White, even though the evidence met the Plan’s own definition of “objective findings.” Eaton’s failure to seriously engage in a discussion of White’s favorable evidence suggests that, as in Donovan, Eaton abused its discretion by denying White benefits. See Donovan, 462 F.3d at 329 (finding an abuse of discretion where there was a “wholesale disregard” of evidence in the claimant’s favor); Glenn v. Metropolitan Life Ins. Co., 461 F.3d 660, 672 (6th Cir. 2006) (finding an abuse of discretion in a case where the administrator “offered no explanation for its resolution of [an inconsistency in the evidence] or, for that matter, whether it was given any consideration at all”), aff’d, 128 S. Ct. 2343 (2008).” 

Click here to view the Fourth Circuit’s decision in White.