District Court Incorrectly Held Claim Determination Was Arbitrary and Capricious

In her article published in the September issues of The Brief Case: DRI Committee News, Randi F. Knepper explores the facts and reasoning behind the Third Circuit Court vacating the District Court for the Western District of Pennsylvania’s decision holding that a claim determination terminating long term disability benefits was arbitrary and capricious. 

The Third Circuit Court of Appeals vacated a decision by The Western District of Pennsylvania holding that a claim determination terminating long term disability (LTD) benefits was arbitrary and capricious. Hawks v. PNC Financial Services Group, Inc., 2024 WL 3664599 (3d Cir. Aug. 6, 2024). In vacating the District Court’s decision, the Third Circuit held that it was neither arbitrary nor capricious that the claim administrator:

1. considered the participant’s “own occupation” as performed in the “national economy” as opposed to the demands of the participant’s “own occupation” based upon the plan’s definition of “own occupation;”
2. gave appropriate weight to the opinions of the participant’s treating physicians; and
3. relied upon paper reviews of the participant’s medical records and did not seek an independent medical examination.

The Third Circuit further held:

1. the Court should not replace its judgment for that of the claim administrator and “give lip service” to the standard of review;
2. the administrator could not err in not considering a medical report that was not before it at the time it rendered the final claim determination;
3. a medical report that was not part of the administrative record should not be considered by the Court; and
4. it was the participant’s burden to demonstrate that she remained disabled and not the claim administrator’s burden to disprove disability.

In what is arguably dicta in a non-precedential decision, the Third Circuit further held that while the administrator considered the Social Security Administration’s (SSA) finding of disability, where there was substantial evidence to support the claim determination, not addressing the SSA’s findings is neither arbitrary nor capricious.

Read the full article.