Unum was found quilty of requring LTD applicants to file for Social Security Disability even if the applicant was not entitled or eligible for Social Secuity Disability. The court found that UNUM conduct was a violation of the false claim’s Act and fined UNUM $11,000 for each violation.
If you have been required by UNUM to file a claim for Social Security Disability, contact Cavey and Barrett.
The full text of the decision is found below
“2009 U.S. Dist. LEXIS 24340, *
UNITED STATES OF AMERICA, ex rel. PATRICK J. LOUGHREN, Plaintiff, v. UNUMPROVIDENT CORP., et al., Defendants.
Here, although each claim must be evaluated one-by-one, the Court has already resolved the essential legal issues that undergird all of the claims. Evidence at trial suggested that Unum had a general policy of requiring claimants for Long-Term Disability (“LTD”) insurance to file an application for SSDI as soon as they had been disabled for six months, making no separate subjective evaluation regarding whether the claimant actually met the SSA’s requirements. (See, e.g., Trial Tr. vol. 14, 38-41, Oct. 15, 2008 testimony of Unum claim administrator regarding a letter sent to a claimant “based on the time frame she’s been out of work” stating that “[s]ince your disability has extended beyond five months, to receive an unreduced disability benefit, we encourage you to apply for Social Security Disability Insurance benefits.”); Trial Tr. vol. 3, 122-23, Sept. 24, 2008 (Unum employee testifying that claims handlers had access to a manual instructing [*7] them that “[i]f it is anticipated that the disability will be more than a short duration, the claimant will be asked to apply for SSDI.”); Trial Tr. vol. 4, 22-23, Sept. 25, 2008 (testimony regarding a document stating that, for at least one major claim site, “[g]enerally, if disabled over six months, SSDI advocacy pursued,” and describing a similar policy at another site); Trial Tr. vol. 4, 64-67, Sept. 25, 2008 (testimony of former Unum employee that Unum “would say to the insured, if they believed that the disability was going to last more than six months, they would tell them that they needed to apply for Social Security Disability. . . . It was just simply a duration analysis” and other eligibility requirements were not considered); Trial Tr. vol. 5, 39-45, Sept. 26, 2008 (testimony of former Unum employee that Unum’s policy was to tell insureds that they were required to apply for SSDI with “no assessment with respect to the Social Security requirements” so long as a claimant’s “disability was going to extend beyond five months.”); Trial Tr. vol. 9, 139-142, Oct. 3, 2008 (testimony of Unum employee that internal review indicated that claimants whose disabilities were expected [*8] to last more than six months were told to apply for SSDI .)
While not contesting that they coerced insureds to file for SSDI benefits if they expected their disability to extend beyond six months, Defendants have argued that they cannot be liable under the False Claims Act for knowingly causing claimants to file requests for SSDI benefits so long as the SSA knew of the facts that made such claims false. The Court has rejected this legal argument because claimants must state that they are eligible for SSDI, that is, that they expect to be disabled for at least twelve months. While Unum does not fill in the application itself, Unum threatens to reduce the insureds’ LTD benefits by an amount equal to the insureds’ potential SSDI benefits if the insureds refuse to apply. (See, e.g., Trial Tr. vol. 2, 87-90, Sept. 23, 2008.) There is no possibility that trial of the remaining claims will moot this core legal question. At the same time, without resolution on appeal, the claims of the remaining fifty-five claimants will be tried on the same theory of liability and with the same instructions given to the jury. Given that it took four weeks to try the claims of six claimants, trying the remaining [*9] claims will undoubtedly be extremely time consuming. See Comite Pro Rescate De La Salud v. P.R. Aqueduct and Sewer Auth., 888 F.2d 180, 184 (1st Cir. 1989) (finding Rule 54(b) judgment warranted where “the remaining claims . . . may take considerable time to try” and where “it seems unlikely that a determination of the remaining claims would moot (or lead to settlement of) the issues”).
Entry of final judgment would also be in the public interest. See Quinn v. City of Boston, 325 F.3d 18, 27 (1st Cir. 2003) (stating that the “most important factor counseling in favor of allowing an immediate appeal in this case is the public interest.”). Presumably, were the Court of Appeals to affirm this Court’s decision, the Defendants would cease to require LTD insureds to file claims for SSDI benefits without an individualized assessment of eligibility. Other insurance companies apparently have similar policies. Such a change would not only lighten the SSA’s significant workload, but, for Unum’s sick and disabled insureds, it would also ease the process of attaining the LTD benefits for which they have paid. As such, there is no “just reason for delay” and entry of judgment under Rule 54(b) is [*10] appropriate.
All that remains is to assess damages and penalties against Unum. The jury found that Unum committed two violations of the False Claims Act and that the government had sustained $ 425 of damages because of each claim, for a total amount of $ 850. Violators of the False Claims Act are “liable to the United States Government for a civil penalty of not less than [$ 5,500] and not more than [$ 11,000], plus 3 times the amount of damages which the Government sustains because of the act of that person . . . .” 31 U.S.C. § 3729(a); 28 C.F.R. § 85.3(a)(9). Generally, treble damages are mandatory. See Vt. Agency of Natural Res. v. United States ex rel. Stevens, 529 U.S. 765, 786 n.16 (2000). Trebling the jury’s finding of the Government’s damages results in a total damage award of $ 2,550. As for civil penalties, the evidence at trial indicated that Unum forced insureds to file SSDI claims as soon as they had been disabled for six months, with no regard for the statutory eligibility requirements. Unum’s defense seems to be that it should not be required to sort through all of these claims, choosing instead to foist the hassle on the SSA. Unum’s method of sloughing its work off on [*11] the SSA was to force sick and injured insureds, who had paid Unum good money for their LTD benefits, to apply for SSDI or face a drastic reduction in their LTD benefits, typically their primary income stream. Although Unum had the contractual right to ask these people to apply for SSDI or face a cut in their benefits if Unum determined that they might qualify for SSDI (see, e.g., Trial Tr. vol. 4, 103-105, Sept. 25, 2008), Unum made no such individualized determination in most cases. The Court finds Unum’s conduct extremely troubling. As such, I assess the fullest amount of civil penalties allowed by the False Claims Act, $ 11,000 for each of the two false claims that Unum caused to be filed.”
Answering these broad-based questions isn’t easy. Help is a phone call away. You can contact Nancy Cavey, an experienced long-term disability attorney at 727-894-3188.