The Ninth Circuit Court of Appeals reversed and remanded the district court's judgment in favor of defendants Standard Insurance Company ("Standard") and M.T.C. Manufacturing Long Term Disability Insurance Plan.
The district court held that Standard, as the plan administrator, did not abuse its discretion in denying benefits under the long-term disability plan purchased by M.T.C. International, LLC. The Court of Appeals reversed, holding while the district court reached its decision after the Circuit's decision in Abatie v. Alta Health & Life Insurance Co., 458 F.3d 955, 966-69 (9th Cir. 2006) (en banc) and after the Supreme Court issued its decision in Metropolitan Life Insurance Co. v. Glenn, 554 U.S. 105, 128 S. Ct. 2343, 171 L. Ed. 2d 299 (2008), it did not have the benefit of Montour v. Hartford Life & Accident Insurance Co., 588 F.3d 623, 631-32 (9th Cir. 2009). Montour made it clear that Abatie had "abrogated a line of cases" such as Jordan v. Northrop Grumman Corp. Welfare Benefit Plan, 370 F.3d 869, 631 (9th Cir. 2004), which the district court had relied.
The Court of Appeals reversed and remanded to the district court with instructions to apply the structural conflicts framework as elucidated in Montour. Specifically, the Court of Appeals noted that under Montour, a proper administrative process will meaningfully discuss a claimant's award of social security benefits. Here, Standard mentioned the fact of Salz's award without analyzing the basis for the award. The Court of Appeals also noted that while use of the Department of Labor's Dictionary of Occupational Titles (1991) ("DOT") is appropriate, Standard's exclusive reliance on the DOT failed to take into account Salz's own occupation. While the policy stated that Standard was not limited to looking at the way the claimant performed work for the claimant's employer, a proper administrative review required Standard to analyze, in a reasoned and deliberative fashion, what the claimant actually did before it determined the claimant's occupation "Material Duties". Here, Standard failed to do so.
Finally, the Court of Appeals noted that even if Standard's exclusive reliance on the DOT had been proper, the way in which Standard relied on it was unreasonable. Standard's evaluation of Salz's job used the DOT's "sedentary" classification, which specified that "[s]edentary work involves sitting most of the time." Standard, however, also accepted that Salz could not sit for a prolonged period of time in a fixed position, such as sitting at a computer. Standard stated that Salz's managerial occupation "would typically allow for maximum self regulated flexibility in position change," but the Court of Appeals could not locate anything in the DOT (and no evidence in the administrative record) to support this conclusory statement. Thus, the case was reversed and remanded.
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