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A Federal Court Overturns AETNA's Termination of Total Disability Benefits to a Claimant, finding that AETNA'S decision was Arbitrary and Capricious.

In a recent case, Patterson v. Aetna Life Insurance Company, No. CV 15-8156, 2017 WL 4786562 (D.N.J. Oct. 23, 2017), the United States District Court for the District of New Jersey, determined that Aetna's termination of Christopher Patterson's Long Term Disability Benefits was arbitrary and capricious. Mr. Patterson was employed by First Consulting Group, Inc. ("FCG"), which provided Long Term Disability Benefit coverage to its employees under the Long Term Disability group policy (the "LTD Policy"). The LTD Policy provided that disability occurs when an employee is unable to perform the material duties of their "own occupation" solely because of the disease or injury; and when the employee's work earnings are 80% less of their adjusted pre-disability earnings.

In 2001, Mr. Patterson underwent a surgical procedure. Following the procedure he continued working until 2006, at which time he was granted Short Term Disability Benefits. He underwent surgery again in 2007, resulting in his inability to work. Aetna approved Mr. Patterson's claim for Long Term Disability Benefits which were eligible to be paid for 30 years, as long as he remained disabled under the terms of the LTD Policy.

Following its approval of benefits, Aetna continuously "investigated" Mr. Patterson's continued eligibility for benefits. To this end, Aetna hired multiple investigators to place Mr. Patterson under surveillance. Each investigator observed no activity by Mr. Patterson. Moreover, Aetna also sought a labor market survey in order to determine if there were jobs that Mr. Patterson could perform with his limitations, which would allow him to earn 80% of his pre-disability income. However, they found none.

Undeterred, in 2013, Aetna once again hired multiple investigators to clandestinely observe Mr. Patterson. This time, the investigators observed Mr. Patterson engaging in "some" activity, all of which was consistent with his disability. Following this, Aetna ordered a review of Mr. Patterson's case. The Aetna hired reviewer determined that Mr. Patterson was able to work at a sit / stand workstation, without ever performing a physical examination of Mr. Patterson. Based on this, Aetna notified Mr. Patterson that his Long Term Disability Benefits were being terminated. Mr. Patterson submitted a mandatory appeal to Aetna with supporting documentation from his medical professionals. Aetna hired a second reviewer, who also determined that Mr. Patterson was able to perform the material duties of his past occupation, without physically examining Mr. Patterson. Aetna upheld its decision and Mr. Patterson filed a lawsuit.

The court determined that the relevant question was whether Mr. Patterson could perform the material duties of his own occupation, which the court defined as the "duties performed before [Mr. Patterson's] onset of disability." The court also determined that the DOT and O*Net listings which Aetna relied on to identify Mr. Patterson's material duties did not include his actual duties for FCG. The court went on to find that there was no substantial evidence in the record to support that Mr. Patterson could perform the material duties of his occupation, stating that "Defendants decision not to conduct an additional independent medical examination, its inconsistent findings, and its retroactive determination that Patterson was never entitled to LTD benefits, are all factors that weigh in favor of finding arbitrariness and capriciousness." The court also determined that the proper remedy is "retroactive reinstatement" of the benefits necessary. Therefore, the court denied Aetna's motion for summary judgment and granted Mr. Patterson's motion for summary judgement, awarding benefits, as well as interest on past-due benefits, costs, and attorneys' fees.

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