Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_05-cv-00994/USCOURTS-caed-2_05-cv-00994-0/pdf.json

Nature of Suit Code: 791
Nature of Suit: Employee Retirement Income Security Act (ERISA)
Cause of Action: 29:1132 E.R.I.S.A.-Employee Benefits

---

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

1

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF CALIFORNIA

TIMOTHY FREITAS

Plaintiff,

v.

DELTA FAMILY-CARE DISABILITY

AND SURVIVORSHIP PLAN,

Defendant. 

CIV-S-05-994 DFL PAN

MEMORANDUM OF OPINION 

AND ORDER

Plaintiff Timothy Freitas (“Freitas”) brings this action

against defendant Delta Family-Care Disability and Survivorship

Plan (the “Plan”) for long-term disability benefits.

I.

The Plan is a non-contributory employee welfare benefit plan

as defined in 29 U.S.C. § 1002(1) of the Employee Retirement

Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001, et seq. 

(Pl.’s Response to DSUF ¶ 1.) It provides long-term disability

benefits, as well as other benefits, to non-pilot Delta Air Lines

employees. (Id.) The Administrative Committee (“Committee”) is

the Plan administrator and the named fiduciary. (Id.) The

Case 2:05-cv-00994-DFL-PAN Document 35 Filed 05/15/06 Page 1 of 12
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

2

Committee delegated the initial determination of disability to

Aetna Life Insurance Company (“Aetna”). (Def.’s Mot. for Summ.

J. at 4.) 

Under the terms of the plan, if Aetna denies a claim for

long-term disability benefits, the claimant may appeal that

decision. (Id. at 5.) The claimant’s first appeal is to Aetna. 

If Aetna denies the appeal, the claimant may then appeal to the

Committee. (Id.)

Section 4.03 of the plan defines the criteria for long-term

disability benefits: 

the Employee shall be eligible for Long Term Disability

provided he is disabled at that time as a result of

demonstrable injury or disease . . . which will

continuously and totally prevent him from engaging in

any occupation whatsoever for compensation or profit,

including part-time work. 

(Arpin Decl. Ex. B at 29.) Until February 6, 2003, Freitas

worked as a customer service agent for Delta Air Lines. (Pl.’s

Response to DSUF ¶ 9.) On February 19, 2003, Freitas told Aetna

that he had been diagnosed with a spinal tumor. (Pl.’s Response

to DSUF ¶ 10.) Freitas had developed multiple myeloma, a

particularly aggressive form of cancer. (Id.) Over the next

sixth months, Freitas was hospitalized a number of times and

received radiation and chemotherapy treatments. (Id.) On June

5, 2003, Freitas began receiving long-term disability benefits. 

(Pl.’s Response to DSUF ¶ 11.) On June 1, 2004, the Plan ended

Freitas’s long-term disability payments. (Def.’s Response to

PSUF ¶ 14.) 

Case 2:05-cv-00994-DFL-PAN Document 35 Filed 05/15/06 Page 2 of 12
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

3

On May 19, 2004, Freitas appealed the denial of long-term

disability benefits. (Arpin Decl. Ex. C at 192.) On August 24,

2004, Aetna upheld the denial of Freitas’s long-term disability

benefits. (Id. at 254-56.) On November 20, 2004, Freitas

appealed the denial of these benefits to the Committee. (Id. at

64.) On April 6, 2005, the Plan informed Freitas that the

Committee had upheld the denial of his claim for long-term

disability benefits. (Id. at 7-12.) Because the Plan requires a

claimant to be continuously disabled to receive long-term

disability, the Committee did not find relevant reports stating

that Freitas was disabled after June 1, 2004. (Id.) 

Freitas moves for summary judgment arguing that he is

entitled to long-term disability benefits. In its cross motion

for summary judgment, the Plan argues that its decision to uphold

the denial of benefits was not an abuse of discretion.

II. 

A. Standard of Review

1. Whether the Plan has Discretionary Authority

 The Plan administrator’s decision to deny or terminate

benefits under an ERISA plan is reviewed “under a de novo

standard unless the benefit plan gives the administrator or

fiduciary discretionary authority to determine eligibility for

benefits or to construe the terms of the plan.” Firestone Tire &

Rubber Co. v. Bruch, 489 U.S. 101, 115, 109 S.Ct. 948 (1989). 

“When the plan gives the administrator or fiduciary discretionary

authority to determine eligibility for benefits, that

Case 2:05-cv-00994-DFL-PAN Document 35 Filed 05/15/06 Page 3 of 12
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

4

determination is reviewed for abuse of discretion.” Gatti v.

Reliance Standard Life Ins. Co., 415 F.3d 978, 981 (9th Cir.

2005) (citations omitted).

The Plan argues that the benefit plan grants its Committee

discretionary authority in reviewing Freitas’s claim. (Def.’s

Mot. at 11.) Section 12.02 of the plan states:

The Administrative Committee shall have the broadest

discretionary authority permitted under law in the

exercise of all of its functions including, but not

limited to, deciding questions of eligibility [and]

interpretation . . . . 

(Arpin Decl. Ex. A at 55.) A number of courts have found that

this language grants the Plan discretionary authority. See

Turner v. Delta Family-Care Disability and Survivorship Plan, 291

F.3d 1270, 1273-74 (11th Cir. 2002); Delta Family-Care Disability

and Survivorship Plan v. Marshall, 258 F.3d 834, 837 (8th Cir.

2001); Paramore v. Delta Air Lines, Inc., 129 F.3d 1446, 1451-53

(11th Cir. 1997); see also Madden v. ITT Long Term Disability

Plan, 914 F.2d 1279, 1284 (9th Cir. 1990) (finding a plan that

stated “[the administrator] shall have the exclusive right . . .

to interpret the Plan and to decide any all matters arising

hereunder” to be subject to the abuse of discretion standard). 

Because the plan explicitly vests the Committee with the power to

determine eligibility for benefits, the court reviews the

Committee’s decision for abuse of discretion, unless Freitas can

show that one of the two exceptions discussed below applies in

this case.

2. Freitas’s Arguments for De Novo Review

Case 2:05-cv-00994-DFL-PAN Document 35 Filed 05/15/06 Page 4 of 12
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

 The amendment shortens the time allowed for initial 1

responses to forty-five days (from sixty) and removes the

language that says that violations of the time limitations will

result in the claim being “deemed denied.” 29 C.F.R. §

2560.503-1(f)(3). The alterations apply to claims filed on or

after January 1, 2002. See 65 Fed.Reg. 70,246; 29 C.F.R. §

2560.503-1(o). Because the pre-amendment regulation does not

apply here, Freitas’s argument is even more difficult to make. 

5

Freitas argues that the court should review the Committee’s

denial of long-term benefits under a de novo standard for two

reasons: (1) the Plan did not issue a timely decision on

Freitas’s appeal; and (2) the Plan directed the reviewing doctor

to deny Freitas’s claim. (Pl.’s Mot. at 11.)

a. Untimely Decision on Appeal

Freitas argues that the court should review the Committee’s

denial de novo because the Plan failed to issue a timely decision

on Freitas’s appeal. (Pl.’s Mot. at 11.) It appears that the

Plan may have violated some of the ERISA timing regulations. See

29 C.F.R. section 2560.503-1(i). However, even if the Plan

violated those regulations, it does not result in de novo review. 

Prior to an amendment in 2000, the ERISA regulations

included a sixty-day time limit for making a decision on review,

which could be extended to 120 days. See Gatti, 415 F.3d at 1

981-82. If the administrator failed to make a decision within

those time limits, the claim was “deemed denied on review.” Id. 

The Ninth Circuit has only addressed procedural violations of the

ERISA regulations prior to the 2000 amendment. Id. at 982

(holding that where the plan administrator fails to comply with

the time limits set forth in former § 2560.503-1(h), the

Case 2:05-cv-00994-DFL-PAN Document 35 Filed 05/15/06 Page 5 of 12
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

6

plaintiff is entitled to deem administrative remedies exhausted,

but not entitled to de novo review because “violations of the

time limits established in 29 C.F.R. § 2560.503-1(h) are

insufficient to alter the standard of review”); Jebian v.

Hewlett-Packard Co. Employee Benefits Org. Income Protection

Plan, 349 F.3d 1098, 1105-06 (9th Cir. 2003) (deciding “only that

where the plan itself provides that a particular procedural

violation results in an automatic decision rather than one

calling for the exercise of the administrator’s discretion, that

provision is as enforceable as the provision giving the

administrator discretionary authority under other

circumstances”). 

Neither Gatti nor Jebian applies to this situation. Here,

neither the benefits plan, nor the ERISA regulations contain the

deemed denied language. In addition, neither the Plan nor

Freitas treated the appeal as “deemed denied.” Rather, it is

clear from the Plan’s continuing contact with Freitas - - indeed,

the Plan asked both for additional information and notified him

that it needed additional time to address his initial appeal - -

that the Plan exercised judgment in making its decision. 

Therefore, even assuming that the Plan violated certain ERISA

timing regulations, the court rejects Freitas’s argument that it

should therefore apply a de novo standard of review.

b. Influence on Reviewing Physician

Freitas also argues that the court should apply de novo

review because the Plan influenced the decision of a reviewing

Case 2:05-cv-00994-DFL-PAN Document 35 Filed 05/15/06 Page 6 of 12
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

7

physician. (Pl.’s Mot. at 12.) Freitas claims that this action

was improper, but he does not explain why. 

Freitas appears to contend that the Plan breached a

fiduciary duty. See Futamura v. Unum Life Ins. Co. of Amer., 305

F.Supp.2d 1181, 1189 (W.D. Wash. 2004) (analyzing alleged

pressuring of a reviewing physician as a conflict of interest). 

If the Plan encouraged a reviewing physician to deny Freitas’s

claim, then it acted in conflict with Freitas’s interest in

receiving a fair appeal. Therefore, the court addresses this

argument under the case law for conflict of interest.

The claimant has the burden to show a serious conflict of

interest. Jordan v. Northrop Grumman, 370 F.3d 869, 875 (9th

Cir. 2003). To make this showing, the claimant must demonstrate

more than the simple fact that the insurer has an interest which

conflicts with the award of benefits. Id. Instead, the claimant

must present “material, probative evidence . . . tending to show

that the fiduciary’s self interest caused a breach of the

administrator’s fiduciary obligations to the beneficiary.” 

Atwood v. Newmont Gold Co., 45 F.3d 1317, 1323 (9th Cir. 1995). 

If the claimant produces such evidence, then a rebuttable

presumption arises that the insurer breached a fiduciary duty. 

Tremain, 196 F.3d at 976. 

Freitas bases his argument on seven e-mails between three

Plan employees: (1) Dr. Susan Northrup (the reviewing physician);

(2) Dorinda Smith; and (3) Suzanne M. Arpin (Secretary of the

Committee of Delta Air Lines, Inc.). (See Arpin Decl. Ex. C at

Case 2:05-cv-00994-DFL-PAN Document 35 Filed 05/15/06 Page 7 of 12
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

8

29-31.) Freitas argues that Arpin and Smith told Dr. Northrup

what to say in order to deny the claim. (Pl.’s Mot. at 12.) 

Freitas notes that Dr. Northrup’s final paragraph in the denial

letter incorporated suggestions from Arpin and some language

Smith wrote. (Pl.’s Opp’n at 7.) Because these employees of the

Plan helped Dr. Northrup draft her opinion, Freitas claims that

they advocated the denial of his claim in breach of a fiduciary

duty. (Pl.’s Mot. at 12.)

However, these e-mails do not meet the showing required to

shift the burden to the Plan. The first e-mail shows that Dr

Northrup had already determined that Freitas could perform some

work on June 1, 2004. In the subsequent e-mails, Arpin and Smith

encourage Dr. Northrup to expand on her analysis because a one

line opinion would most likely not hold up under review. Their

suggestions to Dr. Northrup to include specific information about

the drugs Freitas used addresses the lack of analysis in the

opinion, not the opinion itself. This does not show that the

Plan breached a fiduciary obligation to Freitas. Therefore, the

court rejects Freitas’s argument to apply a de novo standard of

review based on a conflict of interest.

B. Freitas’s Evidence and Declaration

The Plan moves to strike Freitas’s declaration and exhibits. 

(Def.’s Mot. to Strike at 2.) The Plan argues that because these

items contain information outside the administrative record, the

court cannot consider them. (Id.) 

“The abuse of discretion standard permits the district court

Case 2:05-cv-00994-DFL-PAN Document 35 Filed 05/15/06 Page 8 of 12
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

9

to ‘review only the evidence presented to the [plan] trustees.’”

Taft v. Equitable Life Assurance Soc’y, 9 F.3d 1469, 1471 (9th

Cir. 1993) (quoting Jones v. Laborers Health & Welfare Trust

Fund, 906 F.2d 480, 482 (9th Cir. 1990)). However, a court may

consider evidence outside the administrative record “to determine

if a plan administrator’s decision was affected by its conflict

of interest.” Tremain v. Bell Industries, Inc., 196 F.3d 970,

977 (9th Cir. 1999).

The evidence presented by Freitas includes documents that

are not in the administrative record. In addition, Freitas

includes statements in his declaration without a citation to the

administrative record. (See, e.g., Freitas Decl. ¶ 16.) Because

Freitas does not argue that the evidence outside the record shows

a conflict of interest, the court GRANTS the Plan’s motion to

strike Freitas’s declaration and exhibits.

C. Review under Abuse of Discretion

This is a sad case. There is no question that plaintiff

suffers from a severe form of cancer and that he has been unable

to return to his former employment. There is also no question

that he has been totally unable to work during different periods

of time after February 2003. However, unfortunately for

plaintiff, the long term disability benefits provided under the

terms of the plan are limited and unavailable even to someone as

sick as plaintiff. In this circumstance, it becomes the

unpleasant duty of the court to apply the terms of the plan,

howsoever harsh and limited.

Case 2:05-cv-00994-DFL-PAN Document 35 Filed 05/15/06 Page 9 of 12
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

10

Under the abuse of discretion standard, the court “can set

aside the administrator’s discretionary determination only when

it is arbitrary and capricious.” Jordan, 370 F.3d at 875. The

Ninth Circuit has held “that a decision ‘grounded on any

reasonable basis’ is not arbitrary or capricious, and that in

order to be subject to reversal, an administrator’s factual

findings that a claimant is not totally disabled must be ‘clearly

erroneous.’” Id. (citations omitted). 

An ERISA administrator abuses its discretion only if it: (1)

renders a decision without explanation; (2) construes provisions

of the plan in a way that conflicts with the plain language of

the plan; or (3) relies on clearly erroneous findings of fact. 

Bendixen v. Standard Ins. Co., 185 F.3d 939, 944 (9th Cir. 1999);

Atwood, 45 F.3d at 1323-24. “[T]he abuse of discretion standard

permits the district court to ‘review only the evidence presented

to the [plan] trustees.’” Taft, 9 F.3d at 1471 (quoting Jones,

906 F.2d at 482). 

The Committee framed the issue on review as: “whether, as of

June 1, 2004, Mr. Freitas was disabled as a result of his

conditions to the extent that he would be continuously and

totally prevented from engaging in any occupation whatsoever for

compensation or profit including part-time work.” (Arpin Decl.

Ex. C at 8.) It based its decision on section 4.03 of the plan

which defines the eligibility for long- term disability: “the

Employee shall be eligible for Long Term Disability provided he

is disabled at that time as a result of demonstrable injury or

Case 2:05-cv-00994-DFL-PAN Document 35 Filed 05/15/06 Page 10 of 12
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

11

disease . . . which will continuously and totally prevent him

from engaging in any occupation whatsoever for compensation or

profit, including part-time work.” (Arpin Decl. Ex. B at 29.)

The Plan cites a number of letters from Freitas’s treating

physicians stating that his health was improving and that he was

no longer disabled. First, the Plan cites a January 12, 2004

letter from Dr. Kim stating “we feel at this point, the patient

will not be able to return to his previous job as lifting and

assisting in heavy lifting tasks. However, we think that he is

capable to be retrained for a lighter job in the same field.” 

(Arpin Decl. Ex. C at 224.) Second, the Plan cites a January 27,

2004 letter from Dr. Rodler and Dr. Wun stating that “the patient

was seen by Dr. Kim of Neurosurgery recently who said the patient

should not engage in any heavy lifting in the future. This will

impact on the patient’s job since he previously was involved in

heavy lifting at the airport. We have submitted papers on his

behalf to see if his job can be revised in the future so that he

will still be able to work.” (Id. at 229-300.) Third, the Plan

cites a March 25, 2004 letter from Drs. Rodler and Wun that

states Freitas “reports he is feeling extremely well.” (Id. at

241.) In addition, the two doctors state “he has been advised

not to do any heavy lifting and not to engage in any work which

requires lifting more than 10 pounds.” (Id.) This evidence is

persuasive. In multiple reports, Freitas’s doctors give their

opinion that he can return to some kind of work. 

Based on the numerous medical opinions stating that Freitas

Case 2:05-cv-00994-DFL-PAN Document 35 Filed 05/15/06 Page 11 of 12
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

12

could return to work, the Plan presents sufficient evidence that

it did not abuse its discretion in upholding the denial of

Freitas’s disability benefits to shift the burden to Freitas. In

response Freitas has failed to show that the Plan: (1) rendered a

decision without explanation; (2) construed provisions of the

plan in a way that conflicts with the plain language of the plan;

or (3) relied on clearly erroneous findings of fact. Therefore,

the court DENIES Freitas’s motion for summary judgment and GRANTS

the Plan’s motion for summary judgment.

III.

 For the reasons stated above, the court: (1) GRANTS the

Plan’s motion for summary judgment; and (2) DENIES Freitas’s

motion for summary judgment. The clerk shall enter judgment.

IT IS SO ORDERED.

Dated: May 12, 2006

DAVID F. LEVI

United States District Judge

Case 2:05-cv-00994-DFL-PAN Document 35 Filed 05/15/06 Page 12 of 12