The opinion of the court was delivered by: Charles J. Siragusa United States District Judge
This is an action to recover long-term disability insurance benefits, brought pursuant to the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001 et seq. Plaintiff, who claims to be disabled due to leukemia and depression, contends that Defendant's decision denying him benefits was arbitrary and capricious. Now before the Court is Defendant's motion for summary judgment (Docket No. [#9]) and Plaintiff's cross-motion for summary judgment (Docket No. [#11]). For the reasons that follow, Defendant's application is denied, Plaintiff's application is granted, and this matter is remanded for further proceedings.
The issue presented in this case is whether Defendant arbitrarily and capriciously denied Plaintiff long-term disability benefits. Under the relevant plan, Plaintiff was entitled to receive such benefits if he had a "Total and Permanent Disability" ("TPD"), defined as "the inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or to be of long, continued and indefinite duration." (West 0205).*fn1 On this point, the following are the relevant facts of the case, about which there is little dispute.
Between 1978 and July 2003, Plaintiff was employed by Corning as a Skilled Machine Operator.*fn2 At all relevant times, Defendant maintained the Corning Incorporated Pension Plan for Hourly Employees ("the Plan"), which was an employee benefits plan governed by ERISA. Plaintiff was an hourly employee who was covered by the Plan. As mentioned above, the Plan provided long-term disability benefits to employees with a TPD.
The Plan also granted the Plan Administrator discretion to "determine all questions relating to . . . the eligibility of persons to receive benefits [under the Plan]." (West 0276-0277). The Corning Incorporated Benefits Committee ("the Committee") was the Plan Administrator. However, the Committee delegated its authority to a third-party corporation, CORE, INC., whose Peer Review Analysis division was in turn acquired by another entity, MCMC, LLC ("MCMC"). Consequently, MCMC assumed the role of claims administrator for long-term disability claims under the Plan. For the sake of convenience, and except as otherwise noted, in this Decision and Order the Court will refer to the Committee, CORE, and MCMC, collectively, as "the Committee."
The Plan provided a mechanism for claimants to appeal adverse determinations. Specifically, Section 9.3 of the Plan, Amendment No. 3 to July 1, 2000 Restatement, entitled "Total and Permanent Disability Claims Review Procedure," set forth a detailed procedure involving an initial determination and two levels of appeals. The relevant portions of the provision are as follows:
If a claim for benefits is denied, in whole or in part, a Participant or Beneficiary . . . will receive a written notice of the denial. The notice will be written in a manner calculated to be understood by the Participant or Beneficiary and will include:
1. the specific reason(s) for the denial,
2. references to the specific Plan provisions on which the benefit determination was based,
3. a description of any additional material or information necessary to perfect a claim and an explanation of why such information is necessary,
4. a description of the Plan's appeals procedures and applicable time limits, and
5. a statement regarding the right to obtain upon request and free of charge, a copy of internal rules or guidelines relied upon in making this determination, and if the determination is based on medical necessity or experimental treatment or similar exclusion limit, an explanation of the scientific or clinical judgment for the determination, applying the terms of the Plan to the relevant medical circumstances.
If a claim for benefits is denied, a Participant or Beneficiary . . . may appeal the denied claim in writing within 180 days of receipt of the written notice of denial. The Participant or Beneficiary may submit any written comments, documents, records and any other information relating to the claim. Upon request, the Participant or Beneficiary will also have access to, and the right to obtain copies of, all documents, records and information relevant to his or her claim free of charge.
A full review of the information in the claim file and any new information submitted to support the appeal will be conducted. The claim decision will be made by individuals who were not involved in the initial benefit determination, nor will such individuals be subordinate to any person involved in the initial benefit determination. This review will not afford any deference to the initial benefit determination.
If the initial adverse decision was based in whole or in part on a medical judgment, the Committee will consult with a healthcare professional who has appropriate training and experience in the field of medicine involved in the medical judgment, was not consulted in the initial adverse benefit determination and is not a subordinate of the healthcare professional who was consulted in the initial adverse benefit determination.
If the claim on appeal is denied in whole or in part, a Participant or Beneficiary will receive a written notification of the denial. The notice will be written in a manner calculated to be understood by the claimant and will include:
1. the specific reason(s) for the adverse determination,
2. references to the specific Plan provisions on which the determination was based,
3. a statement regarding the right to receive upon request and free of charge reasonable access to, and copies of, all records, documents and other information relevant to the benefit claim,
4. a description of the Plan's review procedures and applicable time limits, and
5. a statement [that] the claimant has the right to obtain upon request and free of charge, a copy of the internal rules or guidelines relied upon in making this determination, and if the determination is based on medical necessity or experimental treatment or similar exclusion or limit, an explanation of the scientific or clinical judgment for ...