The Magic of Surveillance
How Insurance Companies Use Common Everyday Activities to Undermine Disability Claims
By: Michael A. McKuin
The Use of Surveillance vs. the Right of Privacy
Insurance companies frequently arrange video surveillance of claimants. Although it may feel like an invasion of privacy, as long as it’s conducted “reasonably”, the courts will allow it. As cynical as it sounds, I often tell clients, “Forget about your right of privacy. For all practical purposes, you gave it up when you filed a disability claim.” Of course, that’s not true in a strictly “legal” sense (and there are definitely limits on how intrusive an investigation may be). But in a practical sense, it's probably good advice. Sadly, I've had clients, who wanted to settle their cases, just to get the insurance companies “off their backs".
On the upside, however, I have seldom seen anything of significance uncovered as a result of surveillance. But because of the darkness of the lighting, the graininess of the video, the ticking time stamp at the bottom of the picture and the unawareness of the “subject”, people tend to look suspicious, even if they’re just going about their lives doing everyday activities. In one case a private investigator parked outside my client’s home, starting at 6:20 a.m. Over the ensuing 8 hours, he shot a total of 9 ½ minutes of video, obtained by following her car to a department store, following her into the store and shooting video, while hiding behind clothing racks. This was done, while she and her teen-age daughter shopped for underwear. Absolutely nothing of importance was observed. But later on a report by one of the insurance company’s reviewing doctors stated that it was his opinion, based solely on the videotape, that my client was not disabled because she was “seen standing and walking into the store, with no pain behaviors noted on observation.” What exactly is a “pain behavior"? Who the hell knows? The degree of pain one experiences is inherently immeasurable.  There is no particular objective finding that acts as a “pain meter”. Since pain itself cannot be observed, it is not always susceptible to “demonstration” or “objective” documentation. It is not possible, for example, to “see” a headache, nor can it always be objectively determined. Therefore, if subjective evidence is credible and relevant, it should not be discounted by an insurer, when conducting an ERISA-mandated claim review. 
Surveillance Reports vs. Surveillance Video
Surveillance reports written by private investigators are often based on the investigator’s biased observations. But very often, when you view the actual video itself, a different picture emerges from what is depicted in the surveillance report. In one case, the investigator actually put the following statement into his report, “I believe that the claimant is a sketchy guy that lives literally a few doors down from me (or did) in my apartment complex.” This so-called “sketchy guy” was a Supervisor of Technical Support for a major corporation and a former member of the United States Marine Corps Reserve.
In another case, the surveillance was only part of a full-blown, intrusive investigation that stretched out for months, while the insurer conducted an endless inquiry into every aspect of my client’s life; conducting multiple surveillances; amassing medical records going as far back into the his past as it could go; gathering tax returns; and prying into his personal information, including an attempt to obtain his personnel file. The first round of surveillance went on for several days, resulting in a 13 page report. Six months later, another investigator followed my client around for three more days, giving rise to a 15 page report. On another occasion, the investigator actually peeked through my client's window to try to observe activity inside his home.
This was all a monumental waste of time, as nothing much was observed. However, the insurance company nevertheless denied his LTD claim, based primarily on the surveillance reports and a report by a reviewing doctor. The denial letter stated, “We observed your ability to walk, bend, twist, and reach . . . you did not exhibit any obvious signs of neck or low back discomfort.” What exactly is an “obvious sign of neck or back discomfort"? Once again, who knows? Although certain manifestations of pain can often be observed, pain itself cannot. After I was retained, I obtained and viewed all of the boring videotape, in addition to all of the other information gathered by the insurer. It was worthless, as I pointed out in my appeal. At that point, the insurer backed down and paid the claim.
It should be mentioned that on several occasions before retaining me, this same client requested copies of the surveillance videotape that was relied upon to deny his claim. The insurer refused to produce it, which clearly violated his ERISA procedural rights. This is not an uncommon experience. Insurers frequently withhold evidence until after a lawsuit was filed. (Sometimes, even then, they won’t produce certain things without a court order). This is done so as to avoid any possibility that the claimant might rebut the self-generated evidence.
Are these practices lawful? Absolutely not. The case law is clear that in order for there to be a “full and fair” review, the insurer “must inform the participant of what evidence he relied upon and provide him with an opportunity to examine the evidence and to submit written comments or rebuttal documentary evidence.” The claimant must have all the necessary information at a time when he still has a meaningful opportunity for appeal.  The federal regulations also impose a clear duty on ERISA administrators to produce any and all “relevant” data, upon request and anything generated during the course of the insurer’s investigation is “relevant” under the regulations. 
Combining Surveillance with Events Arranged by the Insurance Company, which Require “Activity”
It's a bit of a dirty trick, but it is not uncommon for an insurance company to arrange video surveillance of the claimant as he or she travels to and from an Independent Medical Exam (IME), arranged by the insurer. The insurance company's hope is that its private investigator will observe some kind of “activity” that its reviewing doctors, and claims examiners can construe in a way that will undermine a claim of disability.
In one such case, involving severe cognitive deficits, the insurer arranged for three days of surveillance to be done in conjunction with one day of neuropsychological testing that it had also arranged. In the instructions that were given to the private investigator, the claims examiner said, “We would like to know if claimant does any driving. Would like to get some idea of what kinds, if any, activities claimant does during the day.” Over the entire three day period, only 12 minutes of activity was observed, most of which was associated with going to and from the examination locale. The report of this surveillance stated that my client was “found . . . to be minimally active.” The reason for the neuropsyche testing was understandable. But since no amount of surveillance could observe the existence of a cognitive deficit, the reason for the surveillance was unclear.
The most egregious use of surveillance I’ve ever seen was farcical and resulted in some stinging remarks by the judge in a published opinion by the court in the case of Collins v. Liberty Life Assur. Co. of Boston, 988 F.Supp.2d 1105 (C.D. CA 2013). Liberty ordered multiple days of surveillance to be conducted over a 5-days period. No significant claim-related activity was observed. So Liberty arranged for an IME and was kind enough to also arrange transportation to and from the exam for Mr. Collins and his wife. But, oddly, their ride home didn’t show up until an hour after the exam was over, forcing them to stand out on the street and pace back and forth in front of a building in downtown San Francisco on a winter day, while they waited for the ride home. Since they had no way of knowing exactly when it would arrive, what else were they supposed to do?
During the entire hour that they stood in front of the building, a private investigator was parked across the street with camera rolling, shooting videotape of the two of them as they either stood or paced. From this observation, the private investigator concluded in his report that Mr. Collins “did not display any restrictions.” In denying his claim, the claims examiner concluded that he was “observed being active". A reviewing doctor looked at the video and stated one of the most preposterous medical opinions I’ve seen. He concluded:
“The accompanying surveillance video conflicts with the portrayal in the medical record of Mr. Collins as Mr. Collins portrays himself to be in severe pain with significant limitations in his ability to stand and walk and stay in one place at any time. He reports significant problems with confusion. He does not appear confused or with pain behaviors during the video surveillance or the surveillance interview. He maintains his composure. There is no cognitive dysfunction or slurring of speech noted. He ambulates well and is without wincing, clutching, holding or any other pain-behaviors. He is social, as he is with a companion, on the phone with another party, and situated comfortably in busy and public places.”
In the final appeal denial letter the claims examiner cited the doctor’s review of the surveillance video, and noted “The surveillance tape shows him able to be in public and sustain activities.” At trial, Liberty’s attorneys did their best to paint Mr. Collins as a hypochondriac or deadbeat, who hatched a plan one day to flush his entire life down a toilet, fake a disability claim and game the system. This classic “blame the victim” strategy is characteristic of a rape defense and is reminiscent of Sir Walter Scott’s proverbial “tangled web”  They also stressed in their legal brief that over 43 minutes of video was obtained, which showed Mr. Collins ambulating, standing, stretching and socializing normally.” As ludicrous as all this sounds, it’s exactly what happened, but the trial judge would have none of it, commenting in her opinion: “Setting aside the fact that the man claims to be in pain and Liberty allowed him to sit/stand for over forty minutes, Liberty did not explain exactly what else Collins could have done other than either sit, stand, or pace while he waited for his ride to come transport him home. Would it have made more of a difference if Collins had writhed in pain on the pavement in front of the camera rather than as soon as he returned home and could climb into his bed?” 
However, surveillance is not always a waste of an insurance company’s time. In a case I obviously had to decline, the insurer first did a personal interview with the claimant. During that interview, the claimant was observed using braces on his back and knee and a cane for standing and walking. The field representative noted these things in his report of that interview. Two weeks later the insurer conducted surveillance and he was observed using no assistive devices and supposedly performing activities in excess of what he said he could do. He could not explain the reason for this factual discrepancy and that effectively put an end to his LTD claim.
 Hawkins v. First Union Corp. Long-Term Disability Plan, 326 F.3d 914, 919 (7th Cir.2003) (“Pain often . . . cannot be detected by laboratory tests.” ); Montour v. Hartford Life & Accident Ins. Co., 588 F.3d 623, 635 (9th Cir. 2009). (“Dr. Sukhov, based his conclusion of non-disability in part on the lack of objective medical data to support Montour's alleged pain levels, in addition to the lack of a self-reported pain scale or some form of quantification of the impact of his pain on his functional abilities. It would probably have been unreasonable for Hartford to require Montour to produce objective proof of his pain level, per Dr. Sukhov, or to reject his subjective claims of ‘excess pain’ based solely on Dr. Brown's observation. See Smolen v. Chater, 80 F.3d 1273, 1281-82 (9th Cir. 1996); Fair v. Bowen, 885 F.2d 597, 601-03 (9th Cir. 1989); see also Saffon v. Wells Fargo & Co. Long Term Disability, 522 F. 3d 863, at 872-73 & n.3 (9th Cir., 2008).” and see, "American Medical Association, Guides to the Evaluation of Permanent Impairment" 566 (5th ed. 2001) (“Pain is subjective. Its presence cannot be readily validated or objectively measured.”). Also see, "AMA Guides to the Evaluation of Permanent Impairment" 31 (6th ed. 2008), which suggests there are five factors to be considered in evaluating pain: (1) Congruence with established conditions; (2) Consistency over time and situation; (3) Consistency with anatomy and physiology; (4) Agreement between observers; and (5) Inappropriate illness behavior.
 Courts have recognized an inherent problem with the objective evidence standard and have consistently held that subjective claims of pain need not be supported by objective medical evidence. Rather, there must be a medically determinable impairment that reasonably can be expected to produce such symptoms. See e.g., Gallagher v. Schweiker, 697 F.2d 82 (2d Cir. 1983); Wiggins v. Schweiker, 679 F.2d 1387 (11th Cir. 1982); Walden v. Schweiker, 672 F.2d 835 (11thCir. 1982); Ware v. Schweiker, 651 F.2d 408 (5th Cir. 1981), cert. denied, 455 U.S. 912 (1982); Norris v. Schweiker, 553 F. Supp. 783 (W.D. Ark. 1982); Alvarez v. Secretary of Health & Human Services, 549 F. Supp. 897, 900 (E.D. Pa. 1982). See also, Duncan v. Continental Cas. Co., 1997 U.S. Dist. LEXIS 1582, *14-*15, Civ. No. 96-2421, 1997 WL 88374, at *4 (N.D. Cal. Feb. 10, 1997) (holding that an insurance company could not deny a claim for long-term disability benefits based on a lack of objective medical evidence when the original policy did not refer to the objective medical evidence standard and never defined that term); Palmer v. Univ. Med. Grp & Std. Ins. Co., 994 F.Supp. 1221 (D.OR 1998) (Insurer improperly elevated “objective medical evidence” to an absolute prerequisite.); Ace v. Aetna Life Ins. Co., 139 F.3d 1241 (9th Cir. 1998), (the Court noted that Aetna’s own “Claim Handling Guidelines” instructed claim analysts to “consider subjective complaints of the claimant as well as objective evidence” and gave as an example “[a] disability claimant [who] genuinely appears to be in pain, although there are no objective medical findings.”); Montour v. Hartford Life & Accident Ins. Co., 588 F.3d 623, 635 (9th Cir. 2009). See Smolen v. Chater, 80 F.3d 1273, 1281-82 (9th Cir. 1996); Fair v. Bowen, 885 F.2d 597, 601-03 (9th Cir. 1989); Saffon v. Wells Fargo & Co. Long Term Disability, 522 F. 3d 863 (9th Cir., 2008) at 872-73 & n.3”.).
 Jebian v. Hewlett Packard, 349 F.3d 1098, 1107 (9th Cir, 2003); D’Emanuele v.Montgomery Ward & Co, Inc., 1987 U.S. Dist. LEXIS 16830 (C.D. CA 1987); Halpin v. W.W. Grainger, Inc., 962 F.2d 685, 689 (7th Cir. 1992). Palmer v. Univ. Med. Grp & Std. Ins. Co., 994 F. Supp. 1221, 1240 (D.OR 1998). See also, Donato v. Metropolitan Life Ins. Co., 19 F.3d 375 (7th Cir. 1994).
 29 CFR 2560.503-1(h)(3)(iii) provides “full and fair review” of an adverse benefit determination requires that “a claimant shall be provided, upon request . . . copies of all documents, records, and other information relevant to the claimant's claim for benefits. Whether a document, record, or other information is relevant to a claim for benefits shall be determined by reference to paragraph (m)(8) of this section.” Subsection m(8) of that regulation (Definitions) states: “A document, record, or other information shall be considered 'relevant' to a claimant's claim if such document, record, or other information . . . (i) Was relied upon in making the benefit determination; (ii) Was submitted, considered, or generated in the course of making the benefit determination, without regard to whether such document, record, or other information was relied upon in making the benefit determination.”
 “Oh what a tangled web we weave, when first we practice to deceive!” Sir Walter Scott, Marmion, Canto 6, Stanza 17 (1808).
 Collins v. Liberty Life Assurance Company of Boston, 988 F.Supp.2d 1105, 1129 (CD, CA 2013).
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