good morning your honor sir may it please the court the unlink or on behalf of metropolitan life insurance company this case is about the standard of review under a ressa federal statute the supreme court described in concrete as representing quote a careful balancing act between ensuring fair and prompt enforcement of rights under a plan and the encouragement of the creation of such plans deferential abuse of discretion review the supreme court noted it's critical to this frame critical critical years does it say anything about that in the statute in the statute no in the default rule is what the default through rule under the supreme court's decision in firestone is the that quote deference promotes efficiency by encouraging resolution of benefits disputes through internal it ministre to proceedings rather than costly litigation it also promotes predictability these are congress's goals uniformity predictability efficiency the court said it promotes predictability as an employer can rely on the expertise of the plan administrator rather than worrying about unexpected and inaccurate plan interpretations that might result from the knowledge of judicial review moreover the status of the attorney for the award here the the district court stated that decision pending the outcome of the appeal at this point the district judge has said he intends to ward fees but has not yet maybe will so they can always subtle whoso second do you agree that if the nova review applies to you need to affirm here i haven't seen any briefing by you all met met life has not appealed that aspect but this but this case is also about your honor your honors fontayne the tenth to interpret that regulation that you just spoke of judge hamilton a regulation promulgated by the illinois insurance director to strip in a recipe land administrator not an insurer of it right to grant discretionary authority to the plans claim administrator but that's not quite right is it a relief plan wants to something sure then this regulation would not apply would a self funded plan would would not be covered by th so it's only if you actually want to use insurance that the regulation applies right the the regulation is clear though your honor that it is limited to insurers reserving to themselves discretionary authority really it's phrased yes your honor that's not the way i read it simply applies to the content of the document right doesn't say to reserves discretion but it actually does your honor reserve discretion to the health carrier or not it doesn't matter who reserves the discretion i know but it's says that it must be offered or issued by the health care so the health carrier that's offering their issuing the document that's covered by this regulation which must be an insurance policy contract certificate endorsement rider or application or agreement must be offered or issued by the health care here containing a pretty provision purporting to reserve this question through the health carrier so does your discretionary authority reservation govern the terms of the insurance in this case the the delegation of discretion is contained in a separate doesn't i know does it govern the terms of the insurance i wouldn't say that it governs the terms of the end sure and how does it have any effect it has an effect on the standard of review that courts will apply after a claim determination is made it doesn't separate from the insurance yes your honor it is if you want it it has the same effect it would have in a self insured plan here on earlier point and i have how does how do you reconcile your position on this with the supreme court's decision unum against ward which explained that this kind of gamesmanship about just avoiding state regulation by putting it in a different document that still governs the terms of the insurance won't work in unity were there wasn't an issue with respect to a separate document that the notice provisions that issue and ward were contained in the policy themselves unlike the granted discretionary authority at issue here and that's an important distinction because on its face was that distinction evident in the opinion well it was evident at at page three sixty four that the notice provisions were in the policy we're talking about apples and oranges under your arms interpretation of eleven zero forty one d states would be powerless to alter the terms of the insurance relationship  insurers could displace any state regulation simply by inserting a country term and when documents that interpretation would virtually read the saving clause to receive that's exactly what you're doing here isn't well it's not really what we're arguing here your honor because again it wasn't it wasn't meant life that reserved to itself discretionary authority it was mayor brown the plan administrator that granted metlife discretionary authority mayor brown a sophisticated international law firm could have rejected using those pages it could have put out its own plan document an issue that document to its employees but instead it offered the plan document that we have here to its employees it provided that document to its employees metlife did not issue that document to mayor brown's w resolving a dispute over the terms of the insurance correct or no your honor we're talking about a plan benefits the insurance policy here is a funding mechanism for benefits under the plan we're talking we're talking about discretionary authority got to say this is a genius well it's a great way to avoid state insurance laws but it's i mean it has never been a part of insurance law the only the only until two thousand and five i understand that the only application of a discretionary clause comes in a recess an area that the supreme court has basically staked out exclusive terrain over the court has made very clear the importance of deferential review it has been very clear about that i read to you excerpts from concrete before where the court couldn't have been clear that deferential review facilitates congressional intent they wanted but you agree that conkwright says nothing about preemption no that's true your honor but there is an aspect of preemption and we're not talking about statutory under under arrest itself but where where state law would interfere with the speaker if that if it can't you direct me to some arista cases from the supreme court where they have applied implied preemption we have one of the most elaborate mvention issue that you raise from you know the word and it's an important it's important in light of in light of what i've stated about the supreme court's holdings regarding deferential review metlife as i've also stated it isn't and was not attempting to circumvent anything because deferential review is such an important part of a risk in the standard that courts will apply to planned benefit determinations if anything it's fine tain that is attempting to circumvent those those holdings from the supreme court deferential review it's very clear that when a plan grants discretion as this one does the standard of review is in fact the deferential abuse of discretion standard  i would like to talk a little bit more about preemption your honour's so if the court holds if the court holds that the district court in frontin correctly interpreted section two thousand one point three then the position that a rest must preempt the regulation because it would not be specifically directed at the insurance industry i know you have concerns about that judge judge hamilton but it's true so the extraordinary position may or with respect metlife does not agree with that your honor metlife did not reserve for itself discretion mayor brown granted discretionary authority to metlife that is an important distinction your honor the regulation simply does not cover that scenario at all it is not met life position that a risk is saving clause only exempt from preemption those state laws that regulate planned funding nor is it met life position that the regulation on its face targets plant administrators and or sponsor life in the plan document in the pages following the certificate after the certificate there is a section in which the plan administrator which is mayor brown granted discretionary authority to the plan to do sherry's which includes met life section that's binding on the employees and partners the insurers under the insurance costs are correct i wouldn't say it's it's binding on them your honor it's merely it's merely part of a recent was founded based on trust law and trust principles and the supreme court said applying those trusts principles we will apply a deferential standard overview you know when to say well it said we will founded on principles of trust law and it's oh you're absolutely right but for the regulation out there but i i have trouble seeing how you weigh the application of the rule of the regulation by simply putting this on a separate piece of paper if the if the if the delegation of discretion were in the insurance policy or certificate we would be having we could be having a different so why does the regulation apply to rider or agreement because because those are other documents that the state insurance director has jurisdiction over the the enabling statutes here are very clear that the insurance director in illinois only has authority to withhold or withdraw approval of insurance documents when they contain certain offensive provisions he does not have power over non insurance documents so if you've got a side deal with  third party payer in this case mayor brown to refuse to comply with state law the state has nothing to say about simply because it's a side deal although it governs the terms of the payment of benefits for the nonpayment of benefits to the participants and that there was no side deal here your honor mayor mayor brown because this is central to the terms of your reservation of discretionary authority had but as i said earlier your honor metlife did not reserve discretionary authority except out of mayor brown granted he would accept it metlife is a claims for douche area and must administer the plans  right no no your is that you did not insist on applying discretionary review an arbitrary capricious review in district court in the courts which you do in the courts we argue that it's discretionary review applies because of the grant of discretion is in the plan but during the claims process it doesn't affect met likes obligation to administer claims in accordance with the plan one way shape or form know it's in the plan that there was no side there was no side deal here mayor brown chose to provide that document as its plan document which it has the obligation to do under arrest it could have used its own document but it did not use the document that that we have in front of us here today but it's important because if we talk about the enabling statutes i wouldn't say that it was part of the negotiations and quite honestly your honor i'm not really sure if it was part of that is taken into account in pricing i don't know the answer to that one of the amicus briefs are for on which one tells us that the difference between discretionary authority in their benefit plans unlike the indirect or collateral impact of the state laws on providers in kentucky miller and miller the supreme court considered whether a wrestler preempted kentucky's any willing provider laws and those laws basically said that h m o s could not discriminate against a provider who agrees to all the terms and conditions of the plan the law is the any one provider laws by their terms and pose no threat to bishops or requirements on the providers and had an indirect effect on the providers but were directed at insurers the court stated in kentucky miller quote regulations directed toward certain toward certain entities will almost always perceivable other entities from doing what the regulated entity is what the regulations forbid this is not the situation we have here the the any willing provider laws in miller had an indirect effect on the providers so the caught court found the laws were specifically directed at the insurance industry to fund pain is correct section two thousand one point three would have a laws of the state of illinois twice in the policy once in the policy itself once in the certificate the policy indicated that it would conform the policy with the provisions of state law that is entirely consistent with the universe as ward rush prevention will and with every other supreme court case that has considered a comparable issue going back to the original case regarding the savings clause of a risk about life versus massachusetts once met life agreed to bind itself to state law which it had to as a condition of doing business in the states it was subject to section two thousand and one twenty three of the or no regulations met life is trying mightily to evade that metlife is argued that if this court upholds two thousand one point three it would amount to heresy or it would create a parade of horribles that would allow states to interfere with basic federal civil procedure none of that is true rush prudential versus moran drew the line rush prevention indicated that so long as the state law does not interfere with either arista records or the arista statutory scheme that law will be saved from preemption what's the timing between the law and a negotiation that is contrary to the illinois regulation went into effect as of july first two thousand  oddly the court looks at the at the plaintiff's appendix the first page indicates that the group ductile insurance policy but evidently what occurred here is they had the disability coverage certificate was made a part of this policy the group policy is just basically a wrap around policy with the providing the actual coverage so when metlife issued the disability they did it knowing full well that illinois had prohibited discretionary clauses there were two choices here that negate the arguments that metlife has made in this case if mayor brown truly wanted deferential review they didn't have to insure they chose to purchase insurance which implies that metlife knew that whatever insurance policy they would buy would protect their partners their lawyers and the other individuals covered by this policy by the provisions that are set forth in the illinois insurance code second if metlife did not want to be bound by this and that life could have chosen you know the policy explicitly states that it was issued in the state of illinois so met life's theory about this uniformity is not a valid whatsoever because any mayor brown employee covered by this policy whether they live in illinois or indiana or wherever the policy is subject to the laws of the state of illinois so they are going to receive uniform protection so if mid life loses this case and mayor brown says we really want differential review they can just work through have the policy issued in a different state and in the illinois employees are not protected by the  i believe that policy does exist that prospect does exist but i would consider it to be unlikely especially since mayor brown is based in chicago and likely to issue the policy in the state of illinois unfortunately that's a problem arista and there's no question that there are states that the court has seen the ne i see amicus brief approximately half the states have approved similar bans half the states have not but one would ask why mayor brown would want to provide coverage for its partners and attorneys that would provide less protection than they would have if they were in another state you know i mean it's a mark it's a market and everybody wants to save money but pretty l a t is i think people want more protection too and this this court has had a history of issuing opinions going back to her burger versus standard that talks about that the discretionary clause gives less protection to the insurers so it's clear the room and the history of unum and it's taking advantage of discretionary review as a business strategy is also clear absolutely so based on the cases that are from the supreme court that clearly allow for this type of arrangement to take place in clearly allow for a clause such a section two thousand one point three to be effective and to trump any other provision in effect that's read into the policy under there are read into the plan under the supreme court cases and as your hon hamilton pointed out in the in met life presentation both rush credential versus moran in this court in larsen versus united health care citing rush credential for exactly the proposition that if it were permissible to write language such as what life is relying on into a document other than the insurance policy it would essentially negate the entire savings cla and that's something that congress would not have been visioned or would not want to see happen once the savings clause was written into the arrest of stature and also like to ask you good one issue about the scope of the regulation that is  applies only to discretion to interpret the terms of the contract or to provide standards of interpretation of or or review that are inconsistent with the law of the state mental life is arguing that this is not a question of contract interpretation this is just a question of evaluating specific evidence in this one case and i understand that it may be a difficult line to draw but can you a vision in vision cases in which there really is no dispute about interpretation one that comes to my mind would be one for example where everybody might agree that if the player two scoops objective complaints pain etc are true then she's disabled but a doctor says she's milling around in all you've got is a straight credibility question would two thousand one point three apply in such a case i think it still would wash because it's in the supreme court's firestone decision the supreme court explicitly stated that the dyno for review doesn't just apply to policy language interpretation that the validity of a claim is likely to turn on the interpretation of the terms if the policy explicitly says something then it's not a matter of applying discretion or not it's just going to be that's going to be the determination novo standard or the arbitrary and capricious stand in the pit in the problem where the only issue is credibility though how is that an issue contra i don't see that that can ever be the single issue because there still would have to be interpretation of the terms of the policy as far as what the definition of disability is in the contract if the contract let's say  said the only evidence that will be considered by the plan administrator is objective evidence such as x rays and m r i s blood tests then if it turns on an issue of credibility the policy is quite clear on that point but otherwise the definition of disability unable to perform your occupation is going to necessarily entail consideration of a variety of factors in interpretating how to apply that definition to the facts presented i think what you're to let me put words in our mouth that i think what you're saying is that there is no workable line separating contract interpretation from benefit determination exactly even though i've tried to come up with at least an extreme example in which it might be simple enough to say this is just about credibility exactly unless the court has any further questions we will the court excuse me oh robins fingered harry for the secretary of labor supporting appellee fontaine as amicus the illinois law in this case is exactly the kind of state law that was purposely saved from arista preemption by the savings clause the laws within the area of historic state sovereignty insurance regulation which congress explicitly reserved to the states and mccarran ferguson and later deliberately chose to exempt such state laws from mr preemption supreme court has said the savings clause reclaims a substantial amount of ground from preemption and laws regulating the terms of insurance contracts are saved as laws regulating insurance like the laws the supreme court found saved in other parts of the supreme court's two part test for laws to be state it's specifically directed towards entities engage in insurance and it substantially affects risk pooling arrangements belonging to the first prong by imposing obligations on insurers with respect to their insurance practices the fact that it also impacts other entities is a relevant if it's grounded in a policy concern specific to the insurance industry that it's directed towards entities engaged in insurance and like the supreme court said in kentucky association the law they are the any willing provider law was specifically directed towards insurers even though it equally prevented providers from entering into contracts with insurers and the fed and the court said the fact that law has significant effects on non insurers does not prevent it sick in this case the law states the purpose is to protect insurance consumers by disallowing provisions that encourage deception and misrepresentation specifically it says exceptions and conditions that unreasonably or deceptively affect the risk reported to be assumed in the general coverage of the policy and the fact that the discretionary clause in the plan document not the insurance policy makes no difference under you know in unum the insurer argued that the plan document did not contain the notice prejudice law and therefore applying the state law would conflict with the receipt for a four in one d that says you have to act by the terms of the plan document and the supreme court rejected that they said the absence of the term in the plan document is not a conflict because then insurers would be able to displace any state regulation by having a contrary term in the plan document in that case it was the absence of the term as it is here and the supreme court rejected that argument this law meets the second prong substantially affecting risk pooling because it requires insurance policies to emit certain terms and provisions and imposes conditions on the right to engage in the business of insurance and as the court said in kentucky association where the awb law there altered the scope of permissible bargains between insurers notice prejudiced rule change the bargain because it dictated to the insurance company the conditions under which it had to pay for the risk to suit and by invalidating that term in the plan it affected the pool this illinois law similarly alters the scope of permissible bargains between insurers and insureds the law directly controls the terms of insurance contracts by prohibiting insurers and insurance from entering into contracts that include discretionary cl consistency with the rissa there is no conflict because this law does not create any new remedies there are no tort reputed damage claims as in laws that have been disallowed by the supreme court the law is enforced in a normal way in a suit for benefits  and rush prudential said once a mandated benefit is incorporated into an insurance policy purchased by the plan and therefore incorporated into the plan itself the required term in this case the required deletion of a term becomes part of the plan and then claims under the enforced in the usual way and as the ninth circuit said in morrison it's the same decision maker the federal courts it's the same familiar processes it has not changed the remedy in any way arbitration and that's what i think that means the court said it didn't mean to imply states were free to create other forms of binding arbitration to provide an overworked view and that's because that would be creating a different substantive remedy not the kind unforced and courts and it would change the statutory scheme i think that's why the court was so careful to say that the independent review was not in fact like arbitration a pretty close look at them if you close but they were assumingly independent medical review would be were favorable to two participants i think they were yes but the court went through analysis of why although it seems superficially to be like binding arbitration it was not it was different the supreme court said in firestone and rush credential the to no go is the default standard and deferential review is the exception this court has also said that after conkwright in the comrie case rush credential has said that plans are not entitle to differential review rissa does not require it directly or indirectly therefore this law does not conflict with the rest if there are no further questions your honor for these reasons we request  from benefits eligibility discretion this this court stated in mars versus motorola quote the issue in this case is the interpretation of a plan document rather than the application of the plans pretty area for an award of benefits to particular facts  and the quotation from firestone even even that quotation the quotation that mr the boss you had read distinguishes between the two when it uses eligibility for benefits or to construe the terms of the plan it uses that the strength of referring to them  separately they're not the same thing the other the other point that i'd like to raise quickly is in rush potential the supreme court simply left open the possibility that a broadband discretion outside the h m o context could interfere with congress's goals for uniformity and judge hamilton you were right to point out what the department of labor to footnote seventeen and while the the text of that footnote does mentioned arbitration that the court was very clear that they were not looking to essentially create a broadside to deferential review with the rest credential case they were limited to the the law at issue there the h m o law that created this additional layer of review on the deferential standard of review in rush order plans right that seems pretty broad to me in in rush credential it was limited to that the state law the h m o law that created an additional  seventeen it says rather we hold that the feature of section four dash ten that provides a different standard overview with respect to mixed eligibility decisions from what would be available in court i e the deferential use discretion standard of review is not enough to create a conflict that undermines congressional policy in favor of uniformity of remedies the supreme court and conkwright specifically said what what the importance of deferential review was sue facilitating congressional polygon crpe limited russian and i wouldn't say left open in that footnote seventeen by the supreme court and in russia prudential and come cry came in and filled the centrally that gap with with that information with that statement from an income crowd also i'd also like to quickly talk about  the ninth circuit decision and morse and now morrison similar to the six circuits decision and ross the grants of discretion on the discretionary language those they were both in the policy is again as i stated to you earlier in my opening remarks that the the granted discretion here is not in the policy it's in the separate plan document or pages of the plan document the ninth circuit implied that if deferential review was a cornerstone of the rest of it may have decided the case a little differently the court stated firestone's explicit acceptance of the noble standard coupled with glenn's acknowledgement that the conflict of interest could prove great importance in some cases indicates a highly deferential review is not a cornerstone of a recess in conkwright the court said it is a cornerstone of  while not using that exact word it talked about the importance of deferential review your honors met life respectfully request the sport reversed the district court's entry of judgment with respect to the group benefits apply the abuse of discretion standard or review affirm that life benefits fermentation and your judgment in met my family thank you thank you thanks to all counsel has to be taken under advisement