this court whether the application of california insurance code section one zero one one zero point six voided discretionary clauses in self funded by arista raised this issue before the district court your honor this preemption issue was not raised before the district court but it is an issue of law and can be raised for the first time on appeal it can but that's up to us whether or not we decide to treat it that way  that's correct your honor and one of the reasons i encourage you to consider this issue for the first time on appeal is that if you look at the district court decisions that we cited to this court the martin decision and the johnson to both of those decisions talk about and criticize the district court's decision in this case and why they criticize the district court's decision in this case is because this case is being  forth as authority that arista does not preempt self funded plans and because of that martin johnson distinguishing criticized will be because we'll be actually talk about f n c which is the united states standard of review was abuse of discretion with no degree of skepticism it would still conclude that you had prematurely terminated the benefits for a number of reasons a lot as you recall that if i'm wrong or seems to be saying is that even was offered in the alternative to the day of a review of the district court and it's what now says that under abuse of discretion review it would real it would review the same way and i ding it cited to first point was that it was finding interest i means that the he that's making a decision on the disability claim in entity it's paying the benefits on that disability claim inherent conflict of interest whereby the maker is going to try to make a decision in this case it's a self funded plan meaning that boeing is the one that funds the benefits and at night is the one that makes the decision so there is no structural conflict of interest that was a den however it does not mean that the process of sending it back and giving helen a fair trial so to speak under the correct standard every view of the crack facts is a moot point i think it's it would be fundamentally unfair to say well we believe that the dish records going to go ahead and and then not give us a chance to go back and make that argument before the court no that would also give us the ability to come back to the court of appeal and say the district court didn't change its decision but here look at the facts that are presented here under the correct standard every view we went to prepared i that's my understanding o of the missions in this case no your honor how would we do it differently you would evaluate that the decisions based on the merits and compare them and so in this case you would have to about your new argument on appeal i would argue that they are different and they are different because whether access is fundamentally factual issue where application of a risk and the preemption doctrine is a legal issue that can be apply for the first time on a payroll practice ultimately whether it's a pay or practiced plan depends on where the funds are coming from how similar the payments are being made to be similar to normal compensation that's being processed and us determine those actual determinations in order to make a decision as to whether this is a payroll practice plan right that's that's correct your honor right i'm just trying to understand your argument every doctor who actually examined will be thought she was disabled even though at a set there was a lack of objective that any physician examiner or undergoing a particular preemption issue which you're interested in the benefit of sending it back i mean you can't change the facts alter the facts what would be an abuse of discretion but what would the abuse of discretion be if the district court said the same thing and ruled the same counsel in that case offered the plaintiff for and i m e specifically offered the insurance company said she's available briony go ahead and take it insurance company refused to take it the all of the medical evidence in that case overwhelmingly supportive disability so based on this skeptical that the court is required to give when you have a conflict of interest in sonoma or something selema the court basically said the insurer's refusal to conduct an i am e has to be reviewed with such skepticism that if they had conducted the i am me the conclusion probably would have been that the plaintiff was disabled in that case that those facts don't exist here even treating physicians themselves in this case don't definitely not in a dramatic fashion but they are a little bit all over the board with respect to the plaintiff's condition especially if you look at the time period in question from february to june of two thousand and thirteen for example the treating dr adelman one of the things that he talks about was he was originally diagnosed with migraines and that was part of her disabling condition but then he changed his mind said no it's not the migraines it's the disabling condition in the peer review or peer to peer review conferences she said that these conditions were largely subjective and based on his own based on the self reported complaints of the plaintiff he also said that in in examining her he didn't notice any positive deficits and so that you have these all these different various facts that go into it so regardless of whether or not and i and he was taken based on the facts as they present themselves there you know under abuse of discretion there is a reasonable basis by which i deny this particular claim you want to say five minutes or less than that now you want to save the balance of your time to respond to your opponent i think just one point i'd like to make very quickly would be with respect to the united states supreme court which has already decided that the deem or clause exams self funded plans from state laws that regulate decision to base necessarily means that the insurance code section that we're dealing with would also be preempted by state law with respect to that i would reserve the balance of my time that your hon yes that's what i can do not going to give an abuse of discretion review you're going to review a case on a little bit different analysis than abuse when i read the court's decision and that's why i talked to your own and about it it seems to me that the district court was trying to decide who to give deference to district court that's not an abuse pandered at all fraction standard and then don't give me abuse of discretion a yes substitute their own idea of a good time and say they've done it that seems to be what they've done here but this judge has done i standard that the court felt applied so what you're going to argue to me is everything except that one footnote surely showed a novel but that one footnote which really did not apply abuse of discretion is enough for me to say it's ok i believe the statement in the footnote is ever even if i looked at this under the busa discretion standard i would find that denying disability benefits to someone who's had a stroke and has mental cognitive problems that would be an abuse of discretion that is not applying the busa discretion standard that's what i'm saying i read that and i said well i appreciate what you said but you really haven't applied the standard if you're going to apply the standard then add and i get some deference so you're going to have to decide why abused its discretion and what it did i think it did that he doesn't talk about that at all keep the court of appeals off my back so i said this is abuse of discretion decision this is the way i decided and this is why so stay off of me i made my decision she didn't do that if she did on that had been easy i  discretion to the underlying yeah to make these decisions the underlying judge can make that decision on a basis that totally foreign from what you might do and yet you've got to sustain it because you've got give deference because it's got to be out of there or it's got to be out of the question it's got to have no foundation no way to sustain what they did appoint  you indicate that what you did was right just one of the two most outrageous things that the did from your perspective i think that the two things are basically ignoring the cat scans the n testing that was done it's in the record and those are things that were done there's no testing that a said well gee if only you had done this we could have some evidence of this just thing nor them  did they ignore them or they just didn't credit basically well one of their doctor said i don't have any of this testing i don't have it and that's the problem with not having at  out and hire a doctor to examine the patient if this is not an application of the treating physician role something other physicians who the examined the insured here the patient this is well being the only person ever see her in person were the treating physicians and i just decided to save some money and not hire someone to actually look at her and examiner and reach a conclusion problem comes in that there is no case and you can yes that   would be making a different vision but when there is objective testing that i guess there's no question you have some great stuff there's no question if i had been the judge down there and i'd been wanting to fashion my decision to pass the appropriate test i'd know what to say my worry is that the judge did not know what to say or didn't say it and knew it i understand your i think one issue which we haven't really discussed which is an important issue that sort of larger than this case is this california insurance code statute i think is very clear it applies if insurance for example well aren't you really are s t d a payroll practice is not subject to a risk of issue that's actually a separate issue this is this court this circuit has has actually decided this discretion case out of montana but has never decided anything relating to this in california surance code section which clearly does regulate the business of insurance so that under the long term disability benefits in this case which are insured by and that there's no question that the discretionary language is stricken by the operation of the statute because it's something that regulates the business of insurance which is safe from a risk of preemption waiving  a waiver argument i'm sorry are are you waiving her of the preemption argument by your argument i don't think so it seems to me that what you're saying is i i didn't ever see anything in anything you put before me where you said i can't make this argument it's waived oh i have no that argument oh well then we can fully address the preemption argument in your mind i think so yes you are even though they didn't make it in the disregard the district court is actually the one that raised the issues to a sponsor a at the trial and there was oral argument on the subject and then it appears in the  see an argument as to why the statute wasn't preempt when i saw was that you pivoted to the payroll practice issue i don't think it and there are many cases in the district courts thomas being one that came out regulate the business of insurance are exempt from a recent preemption distinguished holiday case the oh the f m c ok that case was when the supreme court was dealing with a total i did plan where there long term disability benefits in this case i don't mean here is not the insurer at ms just the administrator and following is the self insure of the short term disability benefits but long term disability benefits and that's why the question is is this all one plan in one document which is what the master plan says it is the only master plan says this is one large plan all these benefits short term is all part of one plan and the discretionary language in the policy or in these documents rather is in the master policy which covers all the benefits some insured and some not and it's also in the summary plan description that's the separate and they're the discretionary  and disability plan section so i would argue that this insurance code section because it regulates the business of insurance because the long term disability benefits are insured it voids that provision  honor in that case both the long term and the short term disability benefits were self funded the only involvement in met life in that case was as an administrator they were not insuring any of the benefits anybody no insurance there's nothing that was insured they were just in it so here because there is no discretionary clause only in the s t d part of these documents the  that the that the discretionary clause would would stay in that regard us of the statute if at was merely an administrator but here they are insuring some of the benefits and that's why that's a crime ensuring the short term benefits now their involve long term benefits falls both short term and long term under this case it will and if she got to the end of the short term she might get on to the longer well that never got on the long term right yes that's true aetna has a practice now of denying people right before they get to the end of the short term disability benefits being honest truth is an answer my good colleagues  after really say this never involved a long term the only part of it that might have involved a longer is that if she had completed the short term she might have been able to go the longer that's certainly true that the short term disability benefits were not exhausted because the benefits were denied by and i would argue in its own self interest so as to not have to pay the long term disability benefits in this are you don't think it was and you're saying all if you will preference is the standard but then you're saying that it with respect to the long term plan which you said is part and parcel of the whole thing that as is insuring the plan so it does have an interest and you have a different standard is that and what you're really arguing is because they're insuring the long term and the california statute would not be preempted as to that plan that's your argument exactly are that's what i understand your argument is is that one more question so in your read brief you argued that this is a payroll practice if it's a pay well practiced as a result ply is not by its own terms the department of labor has decided that anything that is a payroll practice and short term disability benefits can sometimes be a payroll practice and i would argue here that they are because the cases there's very few cases i've cited the cases that i was able to find even if only sixty percent of the benefits are paid off as it's processed through payroll like normal payments are made to the employees it can be considered a payroll practice it's made out of general funds it's not coming out of a tru recipe plan it's not onerous a case so what's your cause of action if a receipt doesn't apply i think for the short term disability benefits and this of course only applies to those arrests it definitely would plot a long term i think it would just be a matter of breach of the plan it just wouldn't which is the cause of action in the complaint it just wouldn't sound under arrest it would sound under i think it would just be general contract law and where is the federal jurisdiction if it's just contract law it would be diversity of citizenship and do we know what we will be citizenship is probably california do we know what adnan citizenship is i believe it's in the complaint but i'm certain it is not for you i think it's it was i didn't realize that it was even self funded we didn't have the documents when we initially filed you ever amend the complaint to allege your state law cause of action is apparel practice and i did away from arista i did not this is on page five of the administrative record dealing that there was no acute infarct nor hemorrhage and no mass the that the reference to having no testing i believe was in our light neurological testing that was done by dr when and based asked for the testing if you look at the initial denial that are at page six zero six there's a specific request for a neurological neurosis a neuro psychological testing the thomas decision thomas a decision that was decided after willoughby and that decision was based on will be did not reference f m c and is improper for the same reasons that will be is improper are you going to address argument that this is all one offers a group of a whole host of different plans and they can be entity's part of the master plan is this short term disability plan and that is the plan is separate from and has distinct requirements from the long term disability plan the short term disability plan as is funded by boeing and administered by aetna it's not insured in any way shape or form and the fact that there is a separate benefit that's being offered to boeing employees in the for long term disability plan which is insured is a separate plan that's going to be addressed and have different a different houses to it and i  hear a long term disability plan insurance code would apply to that and for the discretionary language but we're not the short term disability plan for the long term disability and as an insurance rule should not be it's not an issue in this case we have it we don't know if she qualifies for long term disability benefits the short term disability benefits is  you conclude this we would like to see that this court be remanded to address this issue with respect to the creation because it's setting a precedent which district court having difficulty following and there is now a split in authority with thomas and will be as well as the other two decisions martin johnson but ultimately the only two decisions that have correctly address the situation are martin johnson which is the controlling authority in this case