Rare Employee Benefits Win

Federal court upholds claim against Chevron of man living with AIDS

Administrators of employee benefits plans enjoy significant discretion under federal law, so it is rare for a claimant to prevail in court in a dispute over benefits. But, on October 20, Antonio Di Giovanni of San Francisco, who is living with AIDS, prevailed, winning a motion for summary judgment on his claim that Chevron Corporation’s long-term disability plan violated his rights by cutting off his long-term disability benefits without following it own procedures.

Senior Federal District Judge Samuel Conti ordered the benefits plan officials to reconsider their decision and calculate the back benefits owed to Di Giovanni.

Employee benefit plans are governed by the federal Employee Retirement Income Security Act, or ERISA.

Di Giovanni was hired as an administrative assistant by Chevron in 1988. Two years later, he left work, “complaining of stress and depression,” and was diagnosed the same year as being HIV-positive. Chevron approved his application for long-term disability benefits in writing in mid-1991, based on a diagnosis of “major depression.”

When the initial 18 months period of benefits was set to expire, the plan investigated whether Di Giovanni was entitled to continued benefits. Medical officers obtained a letter and medical documentation from Di Giovanni’s doctor, and approved the extension.

However, Chevron also notified Di Giovanni that he was responsible for submitting regular updates from his doctor, despite the fact that he had earlier provided documentation that his symptoms–– severe progressive peripheral neuropathy––were “truly incapacitating” and that his “prognosis for return to any occupation is zero.” (At this time, more than a decade ago, treatments for AIDS-related conditions were limited in effectiveness.)

Di Giovanni provided some updated physician’s statements, but his various doctors showed an irritating lack of consistency in how they filled out the forms. Several, however, indicated that he would “never return to work” due to his deteriorating physical condition.

In late 1995, the Dominion Life Foundation, where Di Giovanni received treatment, wrote to the benefits plan: “Considering the degenerative nature of his disease, we find it unproductive to continue filling these forms out at a cost to the patient. Therefore, unless you can provide this office with some compelling reason that necessitates the need for our client to continue to present these forms to his doctor for completion at a cost to him given the nature of his illness and that every other insurance company waives this process in consideration of an HIV (AIDS) diagnosis, we will be unable to accommodate your request at this time.”

For a period extending into 1999, Di Giovanni was caught in the middle between Dominion and the benefits plan staff over whether the medical updates were necessary and appropriate. Details of the ongoing dispute sound, in Conti’s summary, hauntingly familiar to anybody who has ever had to tangle with an insurance company computer in the hands of rigid clerical employees.

When Di Giovanni missed several doctor’s appointments and new forms didn’t get filed, his long-term disability benefits were cancelled, and the plan resisted all attempts by him to get the decision reversed, even refusing to appoint an independent medical examiner to evaluate his condition, something guaranteed in the Chevron plan.

In desperation, Di Giovanni sued.

Conti used diplomatic language in characterizing the conduct of the Chevron plan administrator, but he found that it was “an abuse of discretion to terminate Plaintiff’s LTD benefits. We emphasize that we are not deciding Plaintiff’s disability status or his entitlement to benefits under the Plan. Rather, we are saying that based on the evidence before us, we cannot find substantial evidence to support the Defendants’ decision. Furthermore… we find certain aspects of Defendants’ conduct problematic under the circumstances of this case.”

Conti found that in making its decision to terminate Di Giovanni’s benefits, the Plan had “departed greatly from the process” spelled out in its own internal procedures, failing to advise Di Giovanni directly that his benefits were in danger, failing to obtain a vocational evaluation of his potential to return to work, failing to resolve all discrepancies in its records about his case, and most importantly, failing to comply with the requirement that “when a difference of opinion exists between Medical Department staff and claimant’s attending physician, an Independent Medical Examination must be obtained.”

Score one for a determined PWA in his ongoing battle with the bureaucracy.

But Di Giovanni’s quest for benefits doesn’t end here, since Conti could not, consistent with ERISA, just order their payment. Instead, under the statute, the matter has to be sent back to the plan administrator, on whose tender mercies Di Giovanni must now rely. Of course, a failure by the plan administrator to respond in good faith could land the matter back before Conti for more severe action.

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