The Fifth U.S. Circuit Court of Appeals has reversed a decision by U.S. District Judge Karen Gren Scholer of Dallas to order a near doubling of benefits for a retired National Football League running back who is disabled from injuries he sustained as a player.
While commending Judge Scholer “for her diligent work chronicling a lopsided system aggressively stacked against disabled players” and observing that the retired player, Michael Cloud, “is probably entitled to the highest level of disability pay,” just as Judge Scholer ordered, a Fifth Circuit panel of Judges Don Willett, Andrew Oldham and Kurt D. Engelhardt said it had “no choice but to reverse” her order under the rules of the NFL’s retirement plan.
To qualify for the benefits ordered by Judge Scholer — amounting to about to $265,000 a year — the appellate panel said Cloud needed to show that his circumstances had changed between 2014, when he was awarded annual disability benefits of about $135,000, and 2016, when he appealed to the board for the higher payment.
Under the rules of the NFL’s retirement plan, once a player is awarded “total and permanent disability” benefits, as Cloud was in 2014, those benefits continue at the assigned level unless the player can demonstrate that changed circumstances — for example, the emergence of a new and different impairment — entitle him to be moved to a higher-paying category.
“Cloud did not, and cannot, demonstrate changed circumstances. … We therefore have no choice but to reverse the district court’s judgment,” the Oct. 6 appellate order said. It instructed Judge Scholer to enter a judgment in favor of the NFL’s retirement plan, which is administered by a board of three representatives appointed by the NFL Players Association and three by the NFL Management Council.
Representing the retirement plan before the Fifth Circuit were Edward Meehan and Michael Junk of the Groom Law Group of Washington, D.C., who were lead trial counsel last year before Judge Scholer; Nolan C. Knight of Munsch Hardt in Dallas; and Pratik A. Shah and James E. Tysse of Akin Gump Strauss Hauer & Feld in Washington.
Representing Cloud were Christian S. Dennie of Trophy Club, Texas; and Matthew Nis Leerberg and Kip D. Nelson of Fox Rothschild’s North Carolina offices. Dennie, formerly with Fox Rothschild in Dallas, was Cloud’s lead counsel at trial.
Cloud, now 48, was an All-American running back at Boston College drafted by the Kansas City Chiefs in 1999. He later played for the New York Giants and the New England Patriots, where he was a member of the Super Bowl XXXVIII championship team.
On Oct. 31, 2004, while with the Giants, Cloud sustained a concussion as a result of a helmet-to-helmet hit in a game against the Minnesota Vikings. That was one of at least seven major concussions he sustained in his NFL career, his lawyers said. Cloud’s injuries forced him into retirement in March 2006. An administrative judge from the Social Security Administration ruled in 2014 that Cloud was totally and permanently disabled as a result of his on-the-field injuries.
Among Cloud’s neurological and psychological impairments, his lawyer said at trial, are migraine headaches, memory loss, vertigo, depression, inattention, insomnia, difficulty making decisions and unpredictable irritability.
He has rarely worked since his football career ended.
On May 15, 2020, Cloud sued the retirement plan in federal court over the denial of his application for higher benefits.
In June 2022, at the conclusion of a six-day bench trial, Judge Scholer ruled in the ex-player’s favor, with scathing words for the retirement plan’s board.
In an 84-page memorandum opinion and order, she said the board abused its discretion, acted arbitrarily and capriciously, and relied on “tortuous reasoning” and “cherry-picked information” to justify paying Cloud less than he was entitled to.
Rather than sincerely evaluating Cloud’s claim, she wrote, the board based its finding almost entirely on cursory research by a paralegal from the Groom Law Group, the plan’s longtime outside counsel.
According to evidence presented at trial, the board denied Cloud’s appeal during a 10-minute meeting on Nov. 16, 2016, in which it also decided 113 other cases — an average of about one every five seconds.
“Afterwards, board members could not remember anything about Cloud’s application,” Cloud’s appellate brief said.
Cloud’s case, Judge Scholer wrote, typified the retirement plan’s handling of claims by disabled ex-players.
“Behind the curtain,” she wrote, “is the troubling but apparent reality that these abuses by the board are part of a larger strategy engineered to ensure that former NFL players suffering from the devastating effects of severe head trauma are not awarded … [maximum] benefits.”
Judge Scholer ordered the retirement plan to increase Cloud’s yearly disability payment from its present $135,000 to the $265,000 maximum retroactive to May 1, 2014. Including pre-judgment interest, she said, Cloud was owed roughly $1.281 million.
The retirement plan appealed, and oral arguments took place on Sept. 7.
The appellate panel did not disagree with Judge Scholer’s withering assessment of how the retirement plan does business.
“We commend the district court for its thorough findings — devastating in detail — which expose the NFL plan’s disturbing lack of safeguards to ensure fair and meaningful review of disability claims brought by former players who suffered incapacitating on-the-field injuries, including severe head trauma,” the appellate ruling said.
However, it said, in light of Cloud’s inability to demonstrate changed health circumstances between his 2014 benefits award and his 2016 appeal, “we are compelled to hold that the district court erred in awarding top-level benefits to Cloud.”