FRIEDRICH v. INTEL CORPORATION, 181 F.3d 1105 (9th Cir. 1999)-Before: Myron H. Bright, * Betty B. Fletcher, and David R. Thompson, Circuit Judges.
Intel's long-term disability plan was self-funded. It excluded from coverage any disability that "arises out of, relates to, is caused by or results from . . . mental, emotional or psychiatric illness or disorder of any type . . ." The Plan defined "Objective Medical Findings" as: a measurable abnormality which is evidenced by one or more standard medical diagnostic procedures including laboratory tests, physical examination findings, X-rays, MRI's, EEG's, ECG's, "Catscans" or similar tests. Objective medical findings do not include physicians' opinions or other third party opinions based solely on the acceptance of subjective complaints.
Joseph Friedrich worked for Intel as a managing engineer from 1971 until he became disabled, resulting in his termination by Intel on October 5, 1993. Mr. Friedrich suffered from flu-like symptoms, which included fatigue, headache, sore throat, general shakiness. Plaintiff was diagnosed with major depression. Plaintiff was diagnosed with chronic fatigue syndrome (CFS). A specialist, Dr. Jay Goldstein concurred in the diagnosis of CFS after performing a SPECT scan.
The Plan denied Friedrich's claim for LTD benefits on two independent grounds: Friedrich lacked objective medical evidence that substantiated a disability, and his symptoms stemmed from psychiatric disorders. Plaintiff appealed. As part of the appeal, Intel scheduled five medical examinations by physicians it selected. Intel received reports from these physicians stating in pertinent part that Friedrich exhibited psychiatric health problems but not a physical health problem. In addition, an Intel physician claimed that CFS is not a "true physical disease." According to Intel's denial of Friedrich's appeal, the five medical examiners failed to identify any objective medical findings to substantiate a "disability" as defined by the LTD Plan. Before denial of the appeal, Intel failed to notify Friedrich that it had received medical reports that could be made available for review and comment by Friedrich.
Plaintiff requested reconsideration of his claim, and submitted additional documentation, including EEG examination results and a neuropsychological exam by an expert in testing for cognitive effects of CFS. Intel responded that the LTD Plan did not provide for reconsideration of the Intel Disability Appeals Committee decision. Friedrich submitted another request for reconsideration two weeks later based upon a Social Security Disability finding of disability. After Intel refused to reconsider the claim, Friedrich sued.
The district court denied cross-motions for summary judgment. The district court reviewed the plan's denial by applying the de novo standard of review. The Plaintiff received benefits and attorneys' fees following a bench trial. Intel appealed.
Ninth circuit held that the district court did not err in applying the de novo standard of review. Correct standard of review was the de novo standard since Intel acts as a fiduciary in apparent conflict with its beneficiaries, including Friedrich. See Atwood v. Newmont Gold Co., 45 F.3d 1317, 1322 (9th Cir. 1995).
Court also found that Intel denied Plaintiff "full and fair" appeals procedure as required by ERISA. See 29 U.S.C. § 1133(2). Intel's Appeals Committee had access only to disorganized and unexplained raw data from Friedrich's treating physicians to counter carefully drafted opinions by examining physicians selected by the administrator. In essence, the claims process utilized by Intel denied Friedrich the opportunity to demonstrate disability on the basis of CFS.
Distinct Court admitted additional medical evidence from Plaintiff. Ninth Circuit held that the district court required additional evidence to conduct an independent de novo review of the benefit claim denial and, therefore, did not abuse its discretion when it admitted further evidence. Ninth Circuit also agreed that the District Court did not err in in refusing to allow Intel to submit additional evidence. It agreed that Intel had plenty of opportunity to introduce evidence during the appeal process.
Ninth Circuit also found that Plaintiff introduced objective medical evidence of the CFS. Court also found there was sufficient evidence to support Plaintiff's contention that his mental problems were secondary to CFS.
Court affirmed award of attorneys' fees by district court and also awarded fees on appeal.
