Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_04-cv-03307/USCOURTS-cand-4_04-cv-03307-2/pdf.json

Nature of Suit Code: 791
Nature of Suit: Employee Retirement Income Security Act (ERISA)
Cause of Action: 29:1001 E.R.I.S.A.: Employee Retirement

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United States District Court

For the Northern District of California

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United States District Court

For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

DEBRA CARTER,

Plaintiff,

v.

HEWLETT-PACKARD COMPANY and HEWLETTPACKARD COMPANY INCOME PROTECTION

PLAN,

Defendants. /

No. C 04-3307 CW

ORDER GRANTING 

SUMMARY JUDGMENT

FOR DEFENDANTS

Plaintiff Debra Carter appealed this Court’s grant of judgment

in favor of Defendants Hewlett-Packard Company and Hewlett-Packard

Company Income Protection Plan. The Ninth Circuit remanded the

case in light of its recent decision in Abatie v. Alta Health &

Life Insurance Co., 458 F.3d 955 (9th Cir. 2006) (en banc). The

parties filed supplemental cross-motions for summary judgment

addressing Abatie and its impact, if any, on this case. Having

reviewed Abatie, the parties' papers and the evidence cited

therein, the Court concludes that Abatie does not alter the Court's

previous ruling that the administrator, Volunteer Plan

Administrators, Inc. (VPA), did not abuse its discretion in denying

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United States District Court

For the Northern District of California

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Plaintiff’s claim for long-term disability benefits. Therefore,

the Court again grants judgment in favor of Defendants.

DISCUSSION

In its prior order, the Court found that the plan here

unambiguously grants discretionary authority to VPA and, therefore,

the abuse of discretion standard applied. Although Plaintiff

claimed there was a conflict of interest, the Court found none. It

is undisputed that the insurer here does not act both as the plan

administrator and the funding source for benefits; therefore, there

is no structural conflict of interest. And, because there is no

structural conflict of interest, the Ninth Circuit’s decision in

Abatie to overrule Atwood v. Newmont Gold Co., 45 F.3d 1317 (9th

Cir. 1995), is not relevant to this case. 

In addition to overruling Atwood, however, the Ninth Circuit

addressed what standard of review the district court should apply

when the administrator fails to follow procedural requirements. 

Abatie, 458 F.3d at 971. The court noted that it had recently held

that an administrator’s failure to comply with ERISA procedural

requirements generally does not alter the standard of review from

abuse of discretion review to de novo review. Id. (citing Gatti v.

Reliance Standard Life Ins. Co., 415 F.3d 978, 985 (9th Cir.

2005)). But, the court recognized that, when “an administrator

engages in wholesale and flagrant violations of the procedural

requirements of ERISA, and thus acts in utter disregard of the

underlying purpose of the plan as well,” the court will “review de

novo the administrator’s decision to deny benefits.” Id. As an

example of “this kind of egregious act,” the court described the

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administrator’s actions in Blau v. Del Monte Corp., 748 F.3d 1348

(9th Cir. 1984). There, the administrator kept the policy details

secret from the employees, offered the employees no claims

procedure, and did not provide the employees in writing the

relevant plan information: “in other words, the administrator

‘failed to comply with virtually every applicable mandate of

ERISA.’” Abatie, 458 F.3d at 971 (quoting Blau, 748 F.2d at 1353).

Plaintiff argues that, here, there were flagrant procedural

violations and, therefore, the Court should review de novo VPA’s

decision to deny Plaintiff long-term disability benefits. 

Reviewing the record, however, the Court does not find any flagrant

violations of ERISA procedure. Under Abatie, abuse of discretion

remains the proper standard of review. 

Plaintiff also argues that there were procedural

irregularities. Abatie instructs, 

A procedural irregularity, like a conflict of interest, is a

matter to be weighed in deciding whether an administrator’s

decision was an abuse of discretion. When an administrator

can show that it has engaged in an “ongoing, good faith

exchange of information between the administrator and the

claimant,” the court should give the administrator’s decision

broad deference notwithstanding a minor irregularity. A more

serious procedural irregularity may weigh more heavily.

Id. at 972 (quoting Jebian v. Hewlett-Packard Co. Employee Benefits

Org. Income Protection Plan, 349 F.3d 1098, 1109 (9th Cir. 2003)

(citations omitted)). Plaintiff, however, points to no procedural

irregularity that weighs against VPA's decision. Indeed, most of

Plaintiff’s arguments concerning “procedural irregularities” are

based on disagreements with VPA’s decision on the merits, not VPA’s

procedures. Any procedural irregularity Plaintiff cites is minor.

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Abatie also instructs that, when a plan administrator has

engaged in a procedural irregularity that has affected the

administrative record, the district court should reconsider the

administrator's denial after the plaintiff has been given an

opportunity to submit additional evidence. Here, however,

Plaintiff points to no procedural irregularity that “prevented full

development of the administrative record.” See id. at 972-73. 

Therefore, the Court need not consider any additional evidence.

Applying Abatie, and weighing any minor procedural

irregularities and the merits of VPA’s decision, the Court is again

unable to conclude that VPA abused its discretion or was arbitrary

and capricious in denying Plaintiff’s claim for long-term

disability benefits. 

CONCLUSION

For the foregoing reasons, the Court GRANTS summary judgment

in favor of Defendants and DENIES Plaintiff’s supplemental motion

for summary judgment. Each party shall bear its own costs. The

Clerk shall enter judgment and close the file. 

IT IS SO ORDERED.

Dated: 1/17/07 

CLAUDIA WILKEN

United States District Judge

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