Insurance Company Surveillance Proves . . . Nothing

What Does Insurance Company Surveillance Prove About Disability? 

Nothing – that is what Liberty Life Assurance Company of Boston (“LLACOB” or “Liberty Life”) has again been told.  In Bigham v. Liberty Life Assurance Co. of Boston, — F.Supp.3d –, LLACOB secretly filmed the claimant over several days, and then terminated her benefits.  When Ms. Bigham sued, LLACOB insisted that its surveillance video “proved” she was not disabled.  In an Order issued on December 11, 2015, the United States District Court disagreed:

After reviewing the surveillance footage and the rest of the record, the Court disagrees with Liberty Life’s analysis and conclusions. The surveillance footage neither proves nor disproves that Ms. Bigham’s documented chronic intractable pain, fibromyalgia, seronegative spondyloarthropathy, cervical and lumbar degenerative disc disease, and related conditions prevent her from doing her job. Ms. Bigham has never claimed that she cannot walk or lift a small dog. Indeed, Liberty Life acknowledges that “Plaintiff’s doctors reviewed the surveillance and each submitted a declaration that nothing in the video was inconsistent with plaintiff’s self-reports.” Just because Ms. Bigham did not grimace or limp in this limited window of surveillance does not mean that she is not experiencing significant pain at the time, or more importantly, at other times, and frequently. The surveillance footage does not show Ms. Bigham in a workplace setting, or performing any of the complex tasks associated with her prior position at Amazon. Nor does it catch Ms. Bigham in a lie, as implied by Liberty Life in their briefing . . .

Bigham v. Liberty Life Assurance Co. of Boston, — F.Supp.3d –, 2015 WL 8489417, at *7 (W.D. Wash. Dec. 11, 2015).

Five months earlier, LLACOB was given the same message in Anderson v. Liberty Mut. Long Term Disability Plan.  As in Bigham, LLACOB denied disability benefits and, when sued, trotted out video surveillance it had surreptitiously obtained of the claimant.  The Court stated:

Defendants argue that the surveillance evidence brings into question whether Ms. Anderson “actually experiences the severe dizziness, fatigue and nausea which she claims prevent her from performing her occupation.” To the contrary, the surveillance evidence neither proves nor disproves Ms. Anderson’s claims of intermittent vertigo, fatigue, nausea, disequilibrium, and related issues which prevent her from doing her job.

Anderson v. Liberty Mut. Long Term Disability Plan, — F.Supp.3d –, 2015 WL 4523452, at *8 (W.D. Wash. July 27, 2015).  The Court further observed that “LLACOB obtained surveillance of Ms. Anderson after she submitted her final appeal for LTD benefits and relied upon that surveillance as a basis for denying her appeal, when Ms. Anderson had no opportunity to review and respond to that surveillance.  This was a procedural violation contravening the purpose of ERISA.”  Id., — F.Supp.3d. –, 2015 WL 4523452, at *10 n 5.  In making that observation, the Court cited an earlier case involving LLACOB, Prado v. Allied Domecq Spirits & Wine Grp. Disability Income Policy, 800 F. Supp. 2d 1077 (N.D. Cal. 2011).   In Prado, Liberty Life used the same ruse – it waited until the claimant had exhausted all of his appeals before undertaking surveillance, thereby depriving him of the opportunity to review and respond to the surveillance.  The United States District Court strongly disapproved of that tactic:

Yet another factor is Liberty’s reliance, at the eleventh hour, on the surveillance footage. “[A]n administrator that adds, in its final decision, a new reason for denial, a maneuver that has the effect of insulating the rationale from review, contravenes the purpose of ERISA.” Abatie, 458 F.3d at 974. “This procedural violation must be weighed … in deciding whether [the administrator] abused its discretion.” Id.  While Liberty’s initial denial was premised on a lack of evidence of physical impairment, its final decision hinged on the Plaintiff’s lack of credibility in light of the surveillance footage. Furthermore, Liberty’s last-minute reliance on the surveillance footage did not give Plaintiff an opportunity to respond to this basis for denial.

Prado v. Allied Domecq Spirits & Wine Grp. Disability Income Policy, 800 F. Supp. 2d 1077, 1097-98 (N.D. Cal. 2011).

LLACOB may want to re-read the Ninth Circuit opinion in Montour v. Hartford Life & Acc. Ins. Co., 588 F.3d 623, 633 (9th Cir. 2009) – where the Court found that Hartford Insurance Company “overstates and over-relies on surveillance” of the claimant.  If insurers have been slow to catch on to the failings of surveillance, the federal district courts have not.  “The Ninth Circuit has admonished district courts not to overly rely on surveillance video, particularly where the restrictions are consistent with the video surveillance.”  Bertelsen v. Hartford Life Ins. Co.:1 F. Supp. 3d 1060, 1073 (E.D. Cal. 2014) (citing Montour, 588 F.3d at 633).

Surveillance of disability insurance beneficiaries generally proves nothing.  That is particularly true when the person is beset with a condition that has ups and downs, causing good days and bad days.  The kind of skepticism, distrust and suspicion that prompts use of surveillance may have suited the Stasi, but it almost always falls short when used by insurers fulfilling fiduciary duties to their insureds.