Resource Center

Sedgwick Claims Management Services, the Plan Administrator for the ERISA-governed Long-Term Disability Plan for employees of Eli Lilly and Company (“Lilly”), terminated former Human Resources Director Cathleen Kennedy’s Long-Term Disability benefits once she entered the “any occupation” definition phase of the disability plan. Ms. Kennedy suffered from fibromyalgia that had been long established through her regular medical care and prior Independent Medical Examination’s performed at the request of the Plan.

Following termination of her disability benefits, Ms. Kennedy filed an administrative appeal with Sedgwick for reinstatement of her benefits. As part of the appeal process, Ms. Kennedy underwent an Independent Medical Exam at the request of Sedgwick and an additional Sedgwick doctor performed a peer file review of her medical records. Following this process, Sedgwick’s termination decision was upheld and Ms. Kennedy filed suit in federal court.

Judge William Lawrence of the United States District Court for the Southern District of Indiana ruled in Ms. Kennedy’s favor. One of the issues Judge Lawrence cited was the Sedgwick peer file review doctor’s insistence that the data did not support restrictions or limitations of Ms. Kennedy. Judge Lawrence stated, “This is the same type of insistence on objective evidence to demonstrate the symptoms of fibromyalgia that was rejected” previously by the Seventh Circuit Court of Appeals. This reasoning is in agreement with a long line of decisions around the country concluding that objective medical evidence is not required to prove disability from fibromyalgia. The judge also believed that the peer file review doctor suggested in his report that fibromyalgia is never disabling.

Judge Lawrence concluded, “Having examined the evidence cited by Lilly as supporting the [termination] decision and finding that none of it actually provides the necessary support, the Court is left to echo the conclusion drawn by the Seventh Circuit in Hawkins [v. First Union Corp.]¹: “[t]he record contains nothing more than scraps to offset the evidence presented by [Kennedy] and by [her treating doctor]” and, accordingly, the [termination] decision fails to satisfy even the deferential arbitrary and capricious standard” of review.

^{1. Hawkins v. First Union Corp., 326 F.3d 914, 919↩}