           IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT  United States Court of Appeals
                                                    Fifth Circuit

                                                                            FILED
                                                                         October 22, 2008

                                       No. 07-20900                   Charles R. Fulbruge III
                                                                              Clerk

KATHLEEN BERNARDO,

                                                  Plaintiff-Appellant,
v.

AMERICAN AIRLINES INC, Long Term Disability Plan,

                                                  Defendant-Appellee.



               Appeal from the United States District Court for the
                           Southern District of Texas
                              USDC 4:07-CV-372


Before DAVIS, CLEMENT, and ELROD, Circuit Judges.
PER CURIAM:*
       Plaintiff Kathleen Bernardo appeals from the judgment of the district
court granting summary judgment in favor of Defendant American Airlines, Inc.,
Long Term Disability Plan and dismissing her claims for long-term disability
benefits against Defendant. For the reasons set forth below, we vacate and
remand.




       *
         Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.
R. 47.5.4.
                                        No. 07-20900

                                               I.
       Kathleen Bernardo was employed by American Airlines, Inc. (“American
Airlines”) as a Manager of Airport Services.                 As an employee, Bernardo
participated in the American Airlines Inc., Long Term Disability Plan (the
“Plan”). The Plan is a welfare benefit plan under ERISA sponsored by American
Airlines.1 From November 2002 until November 2003, Bernardo was placed on
“paid Management Leave of Absence (Extended Management Sick Leave).”
       In August 2003, Bernardo was diagnosed with aplastic anemia by Dr.
Lawrence Rice, who specializes in hematology. Bernardo was treated with
cyclosporin A and prednisone. In February 2004, Bernardo sought long-term
disability benefits under the Plan. Metropolitan Life Insurance Company
(“MetLife”), the Plan’s third-party administrator, received Bernardo’s complete
claim for benefits in March 2004. Bernardo’s claim for long-term disability
benefits included a letter from Dr. Rice, Bernardo’s treating physician, stating
that she was unable to work “due to severe pansytopena and side effects of
medication, including profound fatigue, tremors, and nausea.” Based on this
information, MetLife determined that Bernardo became totally disabled on May
20, 2003,2 and as such, MetLife approved long-term disability benefits for
Bernardo effective November 19, 2003 through April 30, 2005.


       1
         The Plan defines “disability” in relevant part as follows: “During the first 24 months
for which [long-term disability] benefits are payable, you are considered totally disabled if you
are not gainfully employed in any type of job for wage or profit or are unable to perform major
and substantial duties of your own occupation because of sickness or accidental bodily injury.
After 24 months for which benefits are payable, you are considered totally disabled if you are
not gainfully employed in any type of job for any employer or are unable to engage in major
and substantial duties of any occupation or employment for wage or profit for which you have
become reasonably qualified by training, education or experience.”
       2
         MetLife, by letter dated March 26, 2004, notified Bernardo that the Plan had approved
her claim for long-term disability benefits based on her becoming disabled on May 20, 2003 due
to aplastic anemia. However, the effective date of these benefits was November 19, 2003
because American Airlines paid Bernardo salary continuation/sick pay through November 18,
2003.

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                                  No. 07-20900

      Between March 26, 2004 and August 31, 2005, Bernardo provided three
letters to MetLife from Dr. Rice explaining that Bernardo was in her second
remission from aplastic anemia, having side effects from the cyclosporin A
treatment, and had developed bilateral cataracts with significant visual
impairment. Bernardo provided MetLife with additional medical records, and
MetLife decided to extend her long-term disability benefits through August 31,
2005. However, MetLife also warned Bernardo that it would need additional
medical information to substantiate her claim for any future long-term disability
benefits.
      MetLife re-evaluated Bernardo’s claim. After reviewing the medical
information provided by Bernardo and her physicians, as well as speaking with
Bernardo’s physicians directly, MetLife decided to deny Bernardo’s long-term
disability benefits past August 2005.       MetLife denied Bernardo’s benefits
because the records “did not substantiate that she was totally disabled.” MetLife
relied on that portion of Dr. Rice’s letter which stated that Bernardo was in her
second remission from aplastic anemia and Dr. Minh Dong’s report finding no
disability from Bernardo’s cataracts. MetLife notified Bernardo of this decision
on September 2, 2005.
      In September 2005, Bernardo sought a first-level appeal from MetLife’s
decision to deny her benefits and included reports from Dr. Rice and Dr. Dong.
However, MetLife upheld its decision to deny her long-term disability benefits.
      Bernardo then filed a second-level appeal in January 2006 with the Plan’s
Pension Benefits Administration Committee (“PBAC”), which had granted
Charlotte Teklitz, its Managing Director, the authority to decide all second-level
appeals for the Plan regarding health and welfare benefits plans.
      Her second appeal included letters from: Bernardo, Dr. Rice, and two from
Dr. Lee Pollack, a neurologist. Dr. Rice’s letter of January 13, 2006 stated that
Bernardo had been under his care for over two years “with a relapsing variant


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of aplastic anemia.” His letter also stated that Bernardo was treated with
cyclosporin A and,
      [n]otes in my chart reflect that Ms. Bernardo has complained of
      neurologic symptoms almost from her first visit with me. Symptoms
      have included tremors, parethesias, unsteadiness and imbalance,
      vertigo-like problems, dysuria, headaches and others. . . . She has
      been undergoing extensive evaluation by a neurologist who has
      found objective abnormalities of MRI scans, spinal fluids and other
      tests.

This appeal also included two letters dated November 16, 2005 and January 18,
2006 from the neurologist, Dr. Pollack. The November 16, 2005 letter simply
stated “Totally disabled due to cyclosporin A neurotoxicity.” The January 18,
2006 letter stated:
      The patient [Bernardo] was placed on Cyclosporin A due to her
      aplastic anemia and thrombocytopenia, and she slowly began to
      develop progressive systemic and neurologic symptoms including
      headache, dizziness, near syncope, disorientation, as well as sweats
      and tremors. Other symptoms include episodic vertigo, which is at
      times disabling. . . . Her neurological examination is abnormal.

Dr. Pollack’s conclusions were:

      [t]his patient is thought to have Cyclosporin neurotoxicity, which
      has been well described in literature. She has hard evidence of
      central nervous system abnormalities. . . . Based on reasonable
      medical probability, she has a full neurological disability to
      Cyclosporin A neurotoxicity, which was required for this patient in
      order to preserve life, given the setting of life threatening aplastic
      anemia . . . . Whether or not this neurological disability will be
      permanent is uncertain: however, I expect that this patient will
      remain in this disabled condition at least for several years while the
      Cyclosporin A clears from her system. Subsequent to that,
      reassessment can be performed to determine if persistent disability
      is present or not.

      The PBAC had two Network Medical Review(“NMR”) Elite Physicians, Dr.
Nelson Chao and Dr. George Yanik, review Bernardo’s claim for benefits. Dr.


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                                  No. 07-20900

Yanik, a Board-Certified Ophthalmologist, reviewed Bernardo’s medical
information, including the letters from Drs. Rice and Pollack. He found that the
cataracts were not disabling.
      Dr. Chao is Board-Certified in Oncology and Internal Medicine and is a
Professor of Medicine and Immunology at Duke University. Dr. Chao also
reviewed the medical records along with information obtained from MetLife. He
agreed with MetLife’s determination that Bernardo was not totally disabled
under American Airline’s description of her job. Dr. Chao’s report states:
      The most recent medical records suggest that she in fact is doing
      quite well from a neurological standpoint and that she has no
      physical findings and there are no concerns regarding aplastic
      anemia. The neurological symptoms of cyclosporine toxicity are not
      clear.
      ....
      . . . The detailed explanation citing clinical information is that she
      no longer has aplastic anemia . . . . She may have some side effects
      from cyclosporine. These do not appear to be overwhelming. If
      there are concerns regarding neurotoxicity a consult from a
      neurologist may be of some use although it is likely that the findings
      of neurotoxicity do not preclude her from working.

Based on the reports from Dr. Yanik and Dr. Chao, the PBAC (through Ms.
Teklitz) affirmed the Plan’s decision to terminate Bernardo’s long-term disability
benefits.
      Bernardo then filed suit against the Plan in the district court challenging
the Plan’s decision to terminate her long-term disability benefits as of August 31,
2005. The Plan filed a motion for summary judgment, and Bernardo filed a
response which the district court treated as a cross motion for summary
judgment. In November 2007, the district court granted summary judgment in
favor of the Plan, and dismissed Bernardo’s suit on the basis that,
      [t]he plan’s decision was not an abuse of discretion. The plan
      reviewed MetLife’s findings, the medical records of Bernardo, and
      an independent study by two doctors, who found that Bernardo was


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                                  No. 07-20900

      not totally disabled as defined by the plan . . . . Substantial
      evidence exists, therefore, to support the plan’s decision to end her
      benefits because Bernardo was not totally disabled.

 Bernardo appeals.

                                       II.
                                       A.

      Summary judgment is proper when the pleadings and evidence before the
court show that no genuine issue exists as to any material fact, and that the
moving party is entitled to judgment as a matter of law. FED. R. CIV. P. 56 (C).
In this circuit, an ERISA plan administrator’s factual decisions are reviewed for
abuse of discretion. Vercher v. Alexander & Alexander Inc., 379 F.3d 222, 226
(5th Cir. 2004). A plan administrator abuses its discretion if it acts arbitrarily
or capriciously. Meditrust Fin. Servs. Corp. v. Sterling Chems. Inc., 168 F.3d
211, 214 (5th Cir. 1999).       When reviewing to determine whether the
administrator’s decision was arbitrary and capricious, the court should affirm
the decision if it is supported by “substantial evidence.” Id. at 215. A decision
is arbitrary, and thus not supported by substantial evidence, if “made without
a rational connection between the known facts and the decision or between the
found facts and the evidence.” Id. (quoting Bellaire Gen. Hosp. v. Blue Cross
Blue Shield of Mich., 97 F.3d 822, 828–29 (5th Cir. 1996).
                                       B.
      Bernardo argues that substantial evidence does not support the Plan’s
denial of benefits and the district court erred in granting summary judgment to
the Plan.
      The Plan’s decision to terminate Bernardo’s long-term disability benefits
effective August 31, 2005 is based on the Plan’s view that “[t]he information
presented in support of [Bernardo’s] claim no longer substantiates [her] inability
to perform [her] occupational duties.” The denial letter was based on progress

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                                 No. 07-20900

notes from Bernardo’s treating physician, Dr. Rice, and her ophthalmologist, Dr.
Dong, as well as the reports of the NMR Elite Physicians, Dr. Chao and Dr.
Yanik. With regard to Bernardo’s aplastic anemia, the denial letter cites Dr.
Rice’s progress notes and Dr. Chao’s report in support of the fact that Bernardo
had been in her second remission from aplastic anemia for over six months. The
denial letter also cites Dr. Dong’s opinion and Dr. Yanik’s report in support of
the fact that Bernardo’s current visual impairment was not disabling and did not
preclude Bernardo from performing her duties as a Manager of Airport Services
with American Airlines.
      Based on our review of the record, these conclusions do not reflect a
rational connection between the known facts and the decision to deny benefits.
Although the denial letter addresses Bernardo’s aplastic anemia and cataracts,
it does not mention her cyclosporin A neurotoxicity covered in Dr. Rice’s and Dr.
Pollack’s reports. The reports of Bernardo’s treating neurologist, Dr. Pollack,
dated November 16, 2005 and January 18, 2006, are the primary direct evidence
of Bernardo’s cyclosporin A neurotoxicity. Dr. Pollack’s note dated November 16,
2005 simply, but clearly, states: “Totally disabled due to Cyclosporin A
neurotoxicity.” Dr. Pollack’s two-page letter, dated January 18, 2006, detailed
Bernardo’s relevant medical history, her symptoms, a summary of diagnostic
tests he performed on her and his reasons for finding her totally disabled from
the reaction to cyclosporin.
      Dr. Rice’s January 13, 2006 letter also documented Bernardo’s
neurological symptoms, which he thought “represented toxicity from
cyclosporin.” It is impossible to reconcile Dr. Chao’s report with the reports of
Dr. Rice and Dr. Pollack. Significantly, Dr. Chao does not purport to explain
why the severe symptoms found by Dr. Pollock and Dr. Rice were not disabling.
      This is not a situation in which the reviewing physicians reached a
different medical conclusion from the medical evidence in a claimant’s file or


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                                  No. 07-20900

where other evidence of the claimant’s condition contradicts the diagnosis of the
treating physician, such as occurred in cases relied on by the Plan.           See
Sweatman v. Commercial Union Ins. Co., 39 F.3d 594 (5th Cir. 1994) (insurer did
not abuse its discretion in denying benefits based on its own investigation and
the reports of its medical consultants, which differed from the diagnosis of the
treating physician); Vercher, 379 F.3d 222 (5th Cir. 2004).
      Unlike the cases the Plan relied upon in this case, an unexplained gap
exists between Dr. Pollack’s report finding disability and his explanation for this
finding and the conclusory report of Dr. Chao, who found no disability. There is
no evidence in the record that Dr. Chao considered the reports of Dr. Rice and
Dr. Pollack with regard to Bernardo’s cyclosporin A neurotoxicity, except for Dr.
Chao’s speculation that Bernardo “may have some side effects from cyclosporin”
but these “do not appear to be overwhelming.” The plan administrator and the
reviewing physicians have presented no evidence that contradicts the treating
physicians’ conclusion that Bernardo “is 100% disabled from work, and likely has
been since the onset of Cyclosporin A usage.” Based on this record, the Plan
abused its discretion in denying long-term disability benefits to Bernardo and
the district court erred in granting summary judgment in favor of the Plan on
this record.
                                       III.
      For the reasons stated above, the summary judgment of the district
court rejecting Bernardo’s claim for long-term disability benefits is vacated.
We remand this case to the district court to enter judgment in favor of
Bernardo.
      VACATED and REMANDED.




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