Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_07-cv-01046/USCOURTS-casd-3_07-cv-01046-2/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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- 1 - 07CV1046

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

RAY A. DELOACH,

Plaintiff,

CASE NO. 07CV1046-LAB (CAB)

ORDER DENYING PLAINTIFF'S

MOTION FOR SUMMARY

JUDGMENT AND GRANTING

DEFENDANTS' MOTION FOR

SUMMARY JUDGMENT 

[Dkt Nos. 16, 17]

vs.

SAN DIEGO GAS & ELECTRIC

COMPANY, a California Corporation;

SAN DIEGO GAS & ELECTRIC

COMPANY PENSION PLAN; SEMPRA

ENERGY,

Defendants.

This matter is before the court on the parties' cross-motions for summary judgment

in this action seeking disability benefits from an employer's plan covered by the Employee

Retirement Income Security Act of 1974 ("ERISA"). Defendants San Diego Gas & Electric

Company ("SDG&E"), San Diego Gas & Electric Company Pension Plan, and Sempra

Energy ("Sempra") (collectively "Defendants") filed a Motion For Summary Judgment

("Motion"). Dkt No. 17. Plaintiff Ray A. DeLoach ("DeLoach" or "Plaintiff") filed a CrossMotion For Summary Judgment ("Cross-Motion"). Dkt No. 16. Each side filed an Opposition

to the other's motion, and each filed a Reply to the other's Opposition. Pursuant to Civil

Local Rule 7.1 (d)(1), the court finds the issues presented appropriate for decision on the

papers and without oral argument. For the reasons discussed below, Defendants' Motion

is GRANTED, and Plaintiff's Cross-Motion is DENIED.

Case 3:07-cv-01046-LAB-CAB Document 33 Filed 09/24/08 Page 1 of 27
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- 2 - 07CV1046

I. BACKGROUND

DeLoach was an employee performing the duties of a heavy equipment operator for

SDG&E until 1998, at which time he became, and allegedly remains, continuously disabled.

Compl. ¶¶ 6-7. He was at that time a participant in the San Diego Gas & Electric Company

Pension Plan ("Plan"), an employee welfare benefit plan as defined by 29 U.S.C. § 1002(1),

offering, among other things, total disability income ("TDI") benefits. Compl. ¶¶ 7-8. He

attached as Exhibit A to the Complaint, incorporated therein by reference, "a three page

summary of the PLAN" he represented was the only plan document he had received despite

repeated requests for "a copy of the PLAN documents that set forth all of his rights and

obligations under the PLAN." Compl. ¶ 8. DeLoach alleges he experienced chronic neck

and back pain, bilateral knee problems, and the side effects of pain medication persisting

for several years. He applied for Plan TDI benefits when he became eligible in the fall of

2000 after exhausting his sick leave accumulated over his 23 years of SDG&E employment.

Defendants approved the claim, but paid him no benefits because he was receiving Workers'

Compensation Disability benefits at the time, which were scheduled to terminate in June

2006. Compl. ¶ 12. 

The parties' Joint Statement of Undisputed Facts establishes DeLoach was born

June 29, 1957, is a high school graduate, and was an employee of SDG&E from 1976 until

1998. During his employment period, he participated in the Plan. The Plan's TDI benefit for

qualifying participants defines "Total Disability" as a participant's illness or injury that:

"Prevents him from performing the duties assigned and required of him for the Employer's

job classification or job description as of the date of illness or injury; or after 24 months of

continuous disability, prevents him from engaging in any substantially gainful occupation for

wages or profit for which he is reasonably qualified by education, training, or experience."

Undisputed Fact No. 6. The Plan provides the amount of TDI benefits shall be the equal of

the greater of: "(a) The participant's primary benefit under the Federal Social Security Act,

or (b) Any early retirement benefit payable under the Plan at the time the Total Disability

commences." Undisputed Fact No. 7. The Plan further provides: "The TDI benefit amount

Case 3:07-cv-01046-LAB-CAB Document 33 Filed 09/24/08 Page 2 of 27
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- 3 - 07CV1046

is reduced by the amount of any other income from Employer sick leave, Workers'

Compensation, occupational disease laws, or pursuant to the disability income provisions

of any state laws." Undisputed Fact No. 8.

The parties agree DeLoach sustained an injury on the job in October 1997. In

October 2000, he submitted a claim for TDI benefits. The Plan administrators approved the

claim under the "own occupation" definition of disability, and referred the file to an outside

vendor to estimate the amount of his TDI benefit. Undisputed Fact Nos. 9-11. The vendor

reported his estimated TDI benefit was $592.50 per month, an amount less than the

Workers' Compensation benefits DeLoach was then receiving through that program of

$680.00 per month as Permanent Partial Disability Benefits. Undisputed Fact Nos. 12; see

Def. Mot. P&A 5:14-16 & Exh. E, p. E661. DeLoach's "workers' compensation benefits

exceeded his estimated TDI benefits and the Plan's offset provisions prevented him from

collecting TDI." Def. Mot. P&A 5:16-19 ("Because the TDI was less than Plaintiff's worker's

compensation benefits, the Plan monitored the claim in coordination with the worker's

compensation claim").

In April 2005, DeLoach received an award of Social Security disability benefits

retroactive to April 2003. Undisputed Fact No. 13. Defendants notified him the Social

Security award might change the status of his TDI benefits. The Plan had arranged for Dr.

Kane to perform an independent medical examination to determine DeLoach's eligibility for

further benefits, an examination he performed in February 2006, followed by a report of his

findings to the Plan. Undisputed Fact Nos. 14-16. Dr. Kane concluded DeLoach was not

disabled from all occupations. By letter dated April 6, 2006, the Plan informed DeLoach of

its determination he was not entitled to TDI benefits. He appealed that determination by

letter dated May 9, 2006 and thereafter submitted additional documentation and medical

records, including a Functional Capacity Evaluation ("FCE") performed by Barbara

Tourtellott, an occupational therapist. Undisputed Fact Nos. 17-18.

In December 2006, the Plan's Benefits Committee ("Committee") met to consider

DeLoach's appeal. The Committee decided to await the results of a December 11, 2006

Case 3:07-cv-01046-LAB-CAB Document 33 Filed 09/24/08 Page 3 of 27
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- 4 - 07CV1046

Agreed Medical Examination by Dr. Harvey Wieseltier before making a final determination.

In February 2007, the Committee reviewed Dr. Wieseltier's report and conclusion that

DeLoach was able to perform the duties of a computer repair technician, an occupation

SDG&E had paid to train DeLoach to perform in the aftermath of his disability. By letter

dated March 8, 2007, the Plan informed DeLoach that the benefits denial was upheld on

appeal. DeLoach asked the Committee to reassess its decision in a letter dated

April 10, 2007. Undisputed Fact Nos. 19-22. 

DeLoach received Long-Term Disability ("LTD") benefits from the Plan for two years

associated with the 1997 work injury to his knees and back under the "own occupation"

definition of LTD. Def. Mot. P&A 1:6-9. It is Defendants' position DeLoach was not eligible

for continued benefits thereafter because he was not disabled from "any occupation" as

required under Plan TDI definitions. Def. Mot. P&A 1:10-13. They contend the Plan

correctly found DeLoach was eligible for no disability benefits after two years -- neither LTD

nor TDI -- because he did not meet the requirement he be "unable to perform the duties of

any gainful occupation for which he was reasonably suited by education, training, or

experience," as confirmed by two independent physicians, because he "was re-trained (at

Defendants' expense) as a computer repair technician," and the two physicians confirmed

his "ability to perform that occupation." Def. Mot. P&A 1:15-19 

DeLoach's Complaint asserts a single cause of action for payment of benefits

pursuant to 29 U.S.C. § 1132. That statutory provision, in pertinent part, authorizes civil

actions brought by an ERISA plan participant to recover benefits due, to enforce rights

conferred, or to clarify rights to future benefits under the terms of the participant's plan.

29 U.S.C. § 1132(a)(1)(A),(B). DeLoach alleges he "is entitled under the PLAN to disability

benefits, contributions and credits to his pension fund, continued health, dental, vision

benefits, continued life insurance and other benefits pursuant to the terms of the PLAN," as

well as reasonable attorneys' fees and costs pursuant to 29 U.S.C. § 1132(g)(1).

Compl. ¶ 15. He seeks the value of his denied benefits and a declaration he is entitled to

ongoing Plan benefits. Compl. 3:27-28. 

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- 5 - 07CV1046

Defendants seek summary judgment in their favor on grounds DeLoach is not entitled

to any of the benefits he seeks in this action, the Plan administrator's decision to deny his

claim was reasonable under the applicable abuse of discretion standard of review, and

defendants SDG&E and Sempra Energy are not proper parties. They move for summary

adjudication of five issues, with judgment in their favor disposing of the entire action: (1) the

standard of judicial review in this action is abuse of discretion; (2) the scope of the court's

review is limited to the Administrative Record; (3) Defendants' decision denying DeLoach's

claim for ERISA benefits was not arbitrary, capricious, or unreasonable; (4) a determination

SDG&E is not a proper party to this action; and (5) a determination Sempra is not a proper

party to this action. Dkt No 17.

DeLoach seeks summary judgment awarding him past and future benefits, asserting

entitlement to judgment because the termination of benefits in April 2006 and the denial of

his administrative appeal in March 2007 were improper. Dkt No. 16, 1:5-7. He contends:

the Plan "abused its discretion by relying on clearly erroneous findings of fact . . . and in

relying on a medical report that failed to consider or address all the evidence;" and the Plan

violated his rights to a full and fair review when it performed a "bait and switch" by advising

him it was relying on Dr. Kane's report to terminate his benefits, then relying on new

evidence in denying his appeal. Dkt No. 16, 1:7-13. Alternatively, he asks the court to

summarily adjudicate two "sub-issues:" first, "[t]hough the Plan grants [the Pension

Committee] full discretion to administer and interpret the Plan, the pension committee did

not delegate discretionary authority to the Benefits Committee who actually terminated [his]

benefits" (Dkt No. 16, 1:16-21); second, he seeks a determination of "the proper amount of

past benefits" the Plan should have paid him because he "was granted total disability status

by the Plan from December 2000 through April 2006 [but] was never paid any benefits due

to a gross miscalculation of benefits to which [he] was entitled" (Dkt No. 16, 21:22-25).

DeLoach urges the Court to apply the de novo standard of review (Dkt No. 16, 22:7-23:8),

but argues under either the abuse of discretion or the de novo standard, the only

"reasonable conclusion" is that he is entitled to TDI benefits because the Plan "unreasonably

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- 6 - 07CV1046

relied upon the report of Dr. Wieseltier in the face of overwhelming conflicting medical

evidence to deny [his] appeal" and made a clearly erroneous factual finding based on that

incomplete report lacking a complete analysis of all the evidence. Dkt No. 23:11-17.

II. DISCUSSION

A. ERISA

 In enacting ERISA, Congress intended to:

"protect . . . participants in employee benefit plans and their

beneficiaries, by requiring disclosure and reporting to

participants and beneficiaries of financial and other information

with respect thereto, by establishing standards of conduct,

responsibility, and obligations for fiduciaries of employee benefit

plans, and by providing for appropriate remedies, sanctions, and

ready access to the Federal courts."

Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 44 (1987), quoting 29 U.S.C. § 1001(b). 

"ERISA comprehensively regulates, among other things, employee welfare benefit

plans that, 'through the purchase of insurance or otherwise,' provide medical, surgical, or

hospital care, or benefits in the event of sickness, accident, disability, or death." Pilot Life,

481 U.S. at 44, citing 29 U.S.C. § 1002(1) (deciding ERISA pre-empts state common law tort

and contract actions asserting improper processing of a claim for benefits under an insured

employee benefit plan). Pension plan regulation is exclusively a federal concern. Pilot Life,

481 U.S. at 45-46; see Alessi v. Raybestos-Manhattan, Inc., 451 U.S. 504 (1981). 

D. Pertinent Plan Terms

The Plan is provided as part of Exhibit A to the Green Declaration, pages A524

through A639, associated with the cross-motions. Dkt No. 18. In pertinent part, the Plan

provides TDI benefits are available to employees who have attained the age of 35 and have

completed 10 years of service with the company. There is no dispute DeLoach meets those

requirements. There is also no dispute the amount of TDI benefits awardable to qualifying

participants is equal to the greater of:

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 "9.1.1 The Pension Committee ('Committee') shall be a 'Named Fiduciary' within the 1

meaning of Section 402(a) of [ERISA] with respect to the control and management of the operation

and administration of the Plan." Exh. A, pp. A594-595.

 "9.1.2 The Committee shall appoint a Plan Administrator who may, but need not be, a

2

member of the Pension Committee, who shall serve at the pleasure of the Pension Committee. The

Plan Administrator shall be the 'Plan Administrator' within the meaning of Section 3(16) of ERISA and

Section 414(g) of the Internal Revenue Code of 1986, as amended. The Plan Administrator shall

- 7 - 07CV1046

(a) The Participant's primary benefit under the Federal Social

Security Act, -- or –

(b) Any Early Retirement Benefit payable under the Plan at the time Total

Disability commences.

Exh. A-00574.

The Plan defines "Total Disability" as an injury or illness that:

1.9.1 Prevents [the Participant] from performing the duties

assigned and required of him for the Employer's job classification

or job description as of the date of illness or injury [referred to by

the parties as the "Own Occupation" period]; or

1.9.2 After 24 months of continuous disability, prevents him from

engaging in any substantially gainful occupation for wages or

profit for which he is reasonably qualified by education, training,

or experience [referred to by the parties as the "Any

Occupation" period].

Ex. A-00536-537.

The amount of TDI benefits is to be calculated by comparison to other income:

5.5.3 The amount of monthly Total Disability income shall be

equal to the greater of:

(a) The Participant's primary benefit under the Federal Social

Security Act, or 

(b) Any Early Retirement Benefits payable under the Plan at the

time total Disability commences.

Such monthly Total Disability income shall be reduced by the

amount of any other income from Employee sick leave, Worker's

Compensation, occupational disease laws, or pursuant to the

disability income provisions of any state laws.

Ex. A, p. A574.

The Plan provides for the creation of a Pension Committee to administer the Plan, and 1

confers on the Pension Committee the authority to appoint the Plan Administrator, while 2

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have such powers and duties with respect to the control and administration of the Plan as may be

delegated to it by the Committee." Exh. A, p. A595.

 "9.3 The Committee shall administer the Plan in accordance with its terms and applicable 3

law and shall have all necessary and appropriate powers to carry out the provisions of the Plan. The

Committee shall have full discretion to administer and interpret the Plan and to determine eligibility

for benefits under the Plan. Any action or determination of that Committee involving the

administration, application or interpretation of the Plan or eligibility for benefits under the Plan shall

be final, conclusive and binding on all persons. In particular, but not by way of limitation, the

Committee shall have the following powers and duties: [¶] 9.3.1 To resolve all questions respecting

administration, interpretation, and application of the Plan. [¶] To resolve all questions respecting

eligibility for participation, eligibility for receipt of benefits, and the amount of benefits." Exh. A p.

A597.

 "The Committee from time to time may allocate to one or more of its members, and the 4

Committee and the Plan Administrator and Investments Administrator may delegate to any other

persons or organizations, any of their respective responsibilities and powers with respect to the

operation and administration of the Plan." Exh. A, p. A601.

- 8 - 07CV1046

retaining for the Pension Committee full discretion to administer and interpret the Plan and

to determine eligibility for benefits under the Plan. The Committee's retained authority

3

includes the authority to delegate its responsibilities and powers, including its discretionary

authority, to other persons or organizations.4

Defendants represent, as supported by the Green Declaration exhibits, the Committee

delegated discretionary authority:

At a May 1998 Board Meeting, the Directors of SDG&E

voted to appoint the members of the Sempra Energy Pension and

Benefits Committee to serve as the Pension Committee for the

Plan. During the same month, the Sempra Energy Board of

Directors voted to establish the Sempra Pension and Benefits

Committee. The Board delegated to this Committee full

discretionary authority over the Company's benefit plans, and

further stated that the Pension and Benefits Committee would be

deemed a "named fiduciary" under ERISA. In November 1999,

the Pension and Benefits Committee established a Benefits

Subcommittee to handle benefit claims. The Benefits

Subcommittee was, accordingly, the entity which exercised the

discretion granted to the Pension and Benefits Committee to

make claims determinations [although the initial claims decision

on benefits claims is made by Disability Management Services,

which administers both the worker's compensation program and

claims for TDI benefits under the Pension Plan].

 Dkt No. 17, 4:11-24, n. 1 (citations to Exhibits omitted).

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- 9 - 07CV1046

C. Legal Standards

1. Standards Of Review For ERISA Plan Benefits Determinations

An ERISA-regulated plan must be administered "in accordance with the documents

and instruments governing the plan insofar as such documents and instruments are

consistent with the provisions of [ERISA]." Blau v. Del Monte Corp., 748 F.2d 1348, 1353

(9th Cir. 1984), cert. denied, 474 U.S. 865 (1985), quoting 29 U.S.C. § 1104(a)(1)(D). If the

Plan gives the administrator or fiduciary the discretionary authority to determine a participant's

eligibility for benefits and to construe the terms of the Plan, the courts review a denial of

benefits for abuse of discretion. Firestone Tire and Rubber Co. v. Bruch, 489 U.S. 101, 115

(1989) (deciding issues arising under Section 1132(a)(1)(B) and interpretation of the term

"participant" in Section 1002(7) for a class of laid off workers seeking termination pay they

alleged was owed them under their ERISA plan). ERISA explicitly authorizes suits against

fiduciaries and plan administrators to remedy statutory violations, including breaches of

fiduciary duty and lack of compliance with plans. Id.,

In Firestone, the employer maintained for its employees three pension and welfare

benefit plans governed in different ways by ERISA: a termination pay plan, a retirement plan,

and a stock purchase plan. Firestone was itself the sole source of funding for those plans

without establishing separate trust funds from which to pay benefits. That Court concluded

de novo review was the appropriate standard to apply to Firestone's denial of benefits,

framing the question presented to be a determination of "the appropriate standard of review

in [29 U.S.C.] § 1132(a)(1)(B) actions challenging denials of benefits based on plan

interpretations." Id. at 108 (emphasis added). "We express no view as to the appropriate

standard of review for actions under other remedial provisions of ERISA." Id. The Firestone

Court, in consideration of the observation "the validity of a claim to benefits under an ERISA

plan is likely to turn on the interpretation of terms in the plan at issue," held "a denial of

benefits challenged under § 1132(a)(1)(B) is to be 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." Id. at 115. 

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- 10 - 07CV1046

DeLoach acknowledges there are "two scopes of review that apply to ERISA cases,"

contending the "default standard is a de novo review by the court" unless the Plan "grants

discretionary authority to the administrator," in which case "an abuse of discretion standard

will apply." Pl. Mot. P&A 12:8-11, citing Firestone, 489 U.S. at 115. To avoid application of

the abuse of discretion standard to his case, DeLoach argues:

The Plan grants the Pension Committee "full discretion to

administer and interpret the Plan and to determine eligibility for

benefits under the Plan" (Ex. A-00597, ¶ 9.3). DELOACH

acknowledges this would grant the Pension Committee

discretionary authority that would trigger the abuse of discretion

standard of review. However, the Pension Committee did not

exercise its discretion in terminating DELOACH's benefits. The

Pension Committee delegated the function of determining

eligibility for benefits to the Benefits Committee created in

November 1999. It was the Benefits Committee that terminated

DELOACH's benefits by its letter dated April l6, 2006 and denied

his appeal by letter dated March 8, 2007 (Ex. A-00640).

Pl. Mot. P&A 12:12-19.

While acknowledging the Plan grants the Pension Committee the authority to delegate

"any of their respective responsibilities and powers with respect to the operation and

administration of the Plan" (Ex. A-00601), DeLoach argues "the Pension Committee did not

delegate its discretionary powers to the Benefits Committee." Pl. Mot. P&A 12:20-23. For

purposes of selecting the proper standard of review, he argues: "The question that is at issue

is whether the Pension Committee properly delegated its discretionary authority to the Benefit

Committee." Pl. Mot. P&A 12:24-25. DeLoach relies on the November 16, 1999 minutes of

the Pension Committee creating the Benefits Committee to argue for de novo review on

grounds the new committee was only empowered to "handle benefits claims, [and] have

authority to make ministerial amendments to qualified plans." Pl. Mot. P&A 13:1-4, quoting

Ex. 3-92. He urges rejection of Defendants' broad reading of the delegation of authority to

the Benefits Committee to "handle benefits claims." He argues: "There is no specific

delegation of the discretionary authority to determine eligibility for claims and more

importantly no authority whatsoever to interpret the terms of the Plan," with no other evidence

"presented by the Plan to support a finding that the Benefits Committee was granted full

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discretionary authority to determine eligibility and to construe the terms of the Plan." Pl. Mot.

P&A 13:4-8, citing Stennett Decl. ¶¶ 6-7. He cites Kearney v. Standard Ins. Co., 175 F.3d

1084, 1089 (9th Cir. 1999) (en banc) for the proposition that unless ERISA plans grant power

to construe or interpret the terms of the plan, they are insufficient to confer discretionary

authority on the administrator, but merely identify the plan administrator's tasks, in which case

de novo review applies. 

The Kearney court reconciled disparate decisions on the standard of review district

courts must apply in ERISA cases, "whether de novo or abuse of discretion, of a plan

administrator's decision." Kearney, 175 F.3d at 1086. That court, applying Firestone,

determined the de novo review standard applied to the ERISA plan and its administration at

issue there because the conferral of discretion in the plan document was not unambiguous,

but reinforced the distinction "a deferential standard of review for actions by trustees is

'appropriate when the trustee exercises discretionary powers.'" Id. at 1088, quoting Firestone,

489 U.S. at 111. DeLoach also cites Shane v. Albertson's, Inc., 504 F.3d 1166, 1170-71 (9th

Cir. 2007) for the proposition de novo review is the proper standard of review after a court

finds "the Plan trustees had failed to properly delegate their discretionary authority to the

Plan's Review Committee who terminated the employee's disability benefits" without

authorization. Pl. Mot. P&A 13:9-25. DeLoach summarily argues: "The Pension Committee

did not grant the Benefits Committee discretionary authority to determine eligibility for benefits

or to construe the terms of the Plan," so "the de novo standard of review applies" to these

cross-motions. Pl. Mot. P&A 13:26-28.

Defendants observe DeLoach "concedes that where a benefit plan allocates

discretionary authority to the plan administrator, the Court's review is limited to abuse of

discretion on the administrative record," and argue in this case, "there is proper allocation,"

leaving as the "only material issue . . . whether the administrator's decision was reasonable."

Def. Opp. P&A 2:6-9, 3:6-11 ("because the Plan clearly and unambiguously confers discretion

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 Defendants explain the Pension Committee "became the Sempra Pension and Benefits

5

Committee post-merger." Def. Opp. P&A 11:16-17.

 The Pension Committee (subsequently the Sempra Pension and Benefits Committee) is 6

a named fiduciary with "full discretion to administer and interpret the Plan and to determine eligibility

for benefits under the Plan." Green Decl. Exh. A, p. A597. "[A]ny action of the Committee shall be

final and conclusive and binding on all persons,"and the Committee "may delegate to any other

persons or organizations its fiduciary responsibilities and powers with respect to the operation and

administration of the Plan." Id. p. A601.

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upon the Sempra Pension and Benefits Committee[ ], which decided Plaintiff's claim through 5

its Benefits Subcommittee," they "need not prove the existence of a triable issue of fact to

avoid summary judgment," but rather "need only demonstrate that the Benefits Committee

did not abuse its discretion in denying Plaintiff's claim for additional TDI benefits"). 

The court is persuaded by Defendants' demonstration the Plan language adequately

confers discretion on the then-Pension Committee as a named fiduciary with "full discretion

to administer and interpret the Plan and to determine eligibility for benefits under the Plan,"

and to "delegate to any other person or organization its fiduciary responsibilities and powers

with respect to the operation and administration of the Plan," and that the Pension Committee

properly exercised its discretionary authority by delegating to the Pension and Benefits

Committee authority to "handle benefits claims," an assignment necessarily entailing the

exercise of discretion "to interpret plan terms and to make final benefits determinations." Der.

Mot. P&A 10:17-27, citing Exh. A, A-597. See Abatie v. Alta Health & Life Ins. Co., 458 F.3d

955, 963-64 (9th Cir. 2006) (there are no "magic words" necessary in order to confer

discretion, but the case law requires language granting the power to interpret plan terms and

to make final benefits determinations be "unambiguous"). The Plan language establishes the

Plan's authority to -- and undisputed facts substantiate it did -- delegate its discretionary

authority to the Pension and Benefits Committee to interpret Plan terms and to make final

Plan benefits determinations as essential components of claims handling. A grant of 6

discretion in the Plan document may extend to the fiduciary's employment of an agent to

perform actual claims processing. Madden v. ITT Long Term Disability Plan, 914 F.2d 1279

(9th Cir. 1990). The "arbitrary and capricious" standard of review applies to a claim decision

made by a claims review fiduciary exercising properly delegated authority. 

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7

any conflicted fiduciaries because the entity making the initial benefits determination (DMS) is

different from the entity deciding appeals of those decisions (the Benefits Committee). See Dkt No.

17, p. 12 n. 5. DeLoach attempts to raise a conflict of interest issue in his Opposition to Defendants'

motion to "alter[] the court's level of review," in reliance on Abatie, 458 F.3d 955 (9th Cir. 2006),

which overturned a line of cases placing the burden on the claimant to produce unrebutted evidence

of a "serious" conflict of interest. Pl. Opp. 3:12-24. While DeLoach is correct about the change in

the law, he falls short of identifying what conflict the administrator purportedly had which purportedly

caused a failure of a full and fair review of his claims. No "structural" conflict like that in Abatie is

demonstrated, where the insurer was also the claims administrator. "Rather, this case involves a

self-funded plan, where the initial determination is made by a completely disinterested entity

(Disability Management Services) and an independent review on appeal is conducted by the Benefits

Committee. Because the Plan is fully funded, there is no evidence that the Benefits Committee has

any financial incentive to deny claims or otherwise limit payment of TDI payments," so the court's

review of this case under the abuse of discretion standard is not impacted by any purported conflict

of interest. Def. Reply 3:24-4:5. 

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In accordance with the logic and reasoning of Firestone,

we hold that where (1) the ERISA plan expressly gives the

administrator or fiduciary discretionary authority to determine

eligibility for benefits or to construe the terms of the plan and (2)

pursuant to ERISA . . . a named fiduciary properly designates

another fiduciary, delegating its discretionary authority, the

"arbitrary and capricious" standard of review for ERISA claims

brought under § 1132(a)(1)(B) applies to the designated ERISAfiduciary as well as to the named fiduciary.

Maddon, 914 F.2d at 1283-84.

As substantiated in the Plan document and other of the Green Declaration exhibits,

the Pension and Benefits Committee created a sub-committee (the Benefits Committee) for

the purpose of claims handling pursuant to "its discretionary authority, not only to make finial

claims decisions, but also to create its own mechanism for claims handling, including but not

limited to, creating the Benefits Sub-Committee for the purpose of exercising that authority."

Def. Mot. P&A 12:5-22. "Because the Pension and Benefit Committee created the Benefits

Sub-Committee, in accordance with the Plan provisions, the claims decisions are essentially

Pension and Benefit Committee decisions made pursuant to the power, and the discretion,

granted to the Pension and Benefits Committee under the terms of the Plan." Def. Mot. P&A

12:13-18, citing Exh. A, A-597, A-601. Accordingly, the court rejects DeLoach's contention

the proper standard of review of his benefits denial is de novo. Instead, the court finds the

proper standard to apply in reviewing the denial of his claimed TDI benefits is abuse of

discretion. See Firestone, 489 U.S. at 111; Abatie, 458 F.3d at 963-64; Taft v. Equitable Life 7

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Assurance Soc'y, 9 F.3d 1469, 1471 (9th Cir. 1993), abrogation of premise a district court errs

in hearing additional evidence of disability not presented to Plan administrator recognized in

Saffron v. Wells Fargo & Co. Long Term Disability Plan, 522 F.3d 863, 873 n.2 (9th Cir.

2008), citing Abatie, 458 F.3d at 973.

A reviewing court applying the abuse of discretion review standard must uphold the

Trustees' decision to deny benefits unless the decision is shown to have been without any

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

court need only determine whether the plan administrator construed plan provisions in a way

that conflicts with the plain language of the plan); see Snow v. Standard Ins. Co., 87 F.3d

327, 330 (9th Cir. 1996), overruled on other grounds Kearney, 175 F.3d 1084 ("the exercise

of that discretion is reviewed under the arbitrary or capricious standard, or for abuse of

discretion, which comes to the same thing"); see also Horan v. Kaiser Steel Ret. Plan, 947

F.2d 1412, 1417 (9th Cir. 1991) (a decision by an employee benefit plan's fiduciaries "is not

arbitrary unless it is 'not grounded on any reasonable basis'") (citation omitted); see Firestone,

489 U.S. at 115. The touchstone of "arbitrary and capricious" conduct is unreasonableness;

Eley v. Boeing Co., 945 F.2d 276, 279 (9th Cir. 1991) (ERISA plan administrators abuse their

discretion by rendering decisions without any explanation or by construing provisions in a way

that clearly conflicts with the plain language of the plan); see also Taft, 9 F.3d at 1473 ("an

administrator also abuses its discretion if it relies on clearly erroneous findings of fact in

making benefit determinations"). 

2. Summary Judgment

 Normally, summary judgment is appropriate if the evidence presented "show[s] that

there is no genuine issue as to any material fact and that the moving party is entitled to

judgment as a matter of law." FED.R.CIV.P.("Rule") 56(c); see Taylor v. List, 880 F.2d 1040,

1045 (9th Cir. 1989); see also Arpin v. Santa Clara Valley Transp. Agency, 261 F.3d 912, 919

(9th Cir. 2001). However, in the Ninth Circuit, "[w]here the decision to grant or deny benefits

is reviewed for abuse of discretion, a motion for summary judgment is merely the conduit to

bring the legal question before the district court and the usual tests of summary judgment,

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8

provisions conferring on ERISA Plan administrators discretionary authority over benefits decisions

will overturn a benefits decision, applying the abuse of discretion standard, only when presented with

evidence of a serious misconstruction of the Plan documents or an absence of reasoning in the

benefit denial, citing Atwood v. Newmont Gold Co., Inc., 45 F.3d 1317, 1323-24 (9th Cir. 1995)

(articulating a test placing the burden on ERISA plaintiffs to consider the influence of conflicts of

interest only if the plaintiff brought forth evidence of a "serious conflict of interest," in which case de

novo review would supplant abuse of discretion review). However the Atwood test was overruled by

Abatie, 458 F.3d 955, 966-67 "in its entirety" based on three articulated errors, not on "other grounds"

as Defendants represent.

 A thoughtful dissent in Shane explains why it may be persuasively argued the abuse of

9

discretion standard ought to have been applied in the circumstances of that case. 

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such as whether a genuine issue of material fact exists, do not apply." Bendixen, 185 F.3d

at 942. 

 The Abatie court articulated an approach to ERISA benefits denial cases it deemed

reflected the Supreme Court's instructions in Firestone: "We read Firestone to require abuse

of discretion review whenever an ERISA plan grants discretion to the plan administrator, but

a review informed by the nature, extent, and effect on the decision-making process of any

[kind of] conflict of interest that may appear in the record." Abatie, 458 F.3d at 967-68

8

(emphasis added). Nevertheless, the de novo standard of review will apply if the benefits

decision was arrived at through an unauthorized delegation procedure not contemplated in

the plan. See, e.g., Shane, 504 F.3d at 1170-71 (although an ERISA self-funded LTD plan

granted its trustees discretionary authority over benefits decisions, the de novo standard of

review, rather than the abuse of discretion review standard, applied to a termination of

benefits challenge where the employer's medical review committee ("MRC"), acting as an

appropriate trustee delegate as permitted under the plan, made the ultimate termination

determination, but not before the trustee had first transferred discretionary authority to a

company executive, who in turn purported to transfer such authority to the MRC; that

procedure was not contemplated in the plan, so the body that terminated the claimants LTD

benefits (although falling within the scope of persons or bodies eligible to receive the

Trustee's discretionary authority) was not properly vested with the requisite discretionary

authority to review the claim); see also Jebian v. Hewlett-Packard Co. Employee Benefits 9

Organization Income Protection, 349 F.3d 1098, 1105 (9th Cir. 2003) ("When an

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unauthorized body that does not have fiduciary discretion to determine benefits eligibility

renders such a decision . . . deferential review is not warranted") (citation omitted); Abatie,

458 F.3d 955, 964-65 (9th Cir. 2006) (de novo review is appropriate when administrator acts

in "flagrant disregard of procedural requirements of ERISA," whereas other procedural

irregularities are a matter to be weighed in deciding whether an administrator's decision was

an abuse of discretion, including even administrator conflict of interest allegations).

Reviewing courts must defer to the administrative decision, rather than reviewing

benefits denials de novo, if the grant of discretionary authority in the Plan terms is

"unambiguous[]." Kearney, 175 F.3d at 1090; see Abatie, 458 F.3d at 964-65 (ERISA plan

that gives administrator full and final authority to interpret the terms of the plan and to

determine benefits eligibility, vesting that authority exclusively in the administrator, is subject

to abuse of discretion review).

E. Evidentiary Record 

1. Defendants' Evidentiary Objections

Defendants object to portions of the DeLoach Declaration (Dkt No. 22) and the

Stennett Declaration (Dkt No. 23) provided in support of his Cross-Motion. The DeLoach

Declaration reviews the payments he received as Social Security disability benefits for the

period December 2002 to November 2008. He also traces his experience in computer repair

training, his exhaustion in June 2006 of Workers' Compensation permanent disability

benefits, his decisions about medical payments and surgery, his experience in December

2006 when he saw Dr. Wieseltier, and his correspondence after the Plan notified him in

March 2007 his appeal for TDI benefits was denied, and his attempt to have Workers'

Compensation counsel instruct Dr. Wieseltier to review the FCE he had declined to review

before as beyond the scope of what he was asked to do. Defendants object on grounds the

entire DeLoach Declaration is irrelevant and not probative of any issue before the Court

reviewing administrative fact finding for abuse of discretion. They further object his

Declaration contains hearsay, is objectionable based on the best Evidence Rule, lacks

foundation for certain representations, and its probative value is outweighed by prejudicial

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impact and confusion of issues. The Court need not rule on the specific objections because

the administrative record and Defendants' undisputed course of conduct provide the

appropriate foundation for a ruling on the cross-motions. Defendants also object to the

Sennett Declaration in its entirety on relevancy, lack of probative value, and misstatement of

the record grounds, among other things. Again, the Court does not rely on its contents in

ruling on these cross-motions. 

2. Administrative Record

The Abatie court reviewed the variation of approach among the circuits on the question

of the evidence a court may consider when a participant sues a plan administrator to

challenge its decision to deny benefits. Abatie, 458 F.3d at 969-70. Citing cases from the

2nd, 4th, 5th, 7th, 10th, and 11th Circuits, Abatie observes: "Many circuits limit a district court

to the administrative record when the court is reviewing a case on the merits for an abuse of

discretion; consideration of new evidence is permitted only in conjunction with de novo review

of a denial of benefits." Id. The Ninth Circuit has "adhered to a similar rule." Abatie, 458

F.3d at 970, citing Jebian, 349 F.3d at 1110), Kearney, 1757 F.3d at 190-91, Mongeluzo v.

Baxter Travenol Long Term Disability Benefit Plan, 46 F.3d 938, 944 (9th Cir. 1995). In

observing "a subtler question arises when a court must decide how much weight to give a

conflict of interest under the abuse of discretion standard," the Abatie court found the court

may consider evidence outside the record in making that determination. Id. at 970. That

court nevertheless reiterated the general rule: "we continue to recognize that, in general, a

district court may review only the administrative record when considering whether the

plan administrator abused its discretion, but may admit additional evidence on de novo

review." Id. at 970 (emphasis added). District courts may take additional evidence whenever

"[procedural] irregularities have prevented a full development of the administrative record."

Abatie, 458 F.3d at 973. However, no procedural irregularity was responsible for the absence

of particular evidence DeLoach now argues the reviewing entity ought to have considered

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 The Court notes two cases Defendants rely on to support their proposition that "only 10

evidence that was presented to the plan trustee or administrator" may be reviewed by a court

conducting a review of an administrator's factual findings for an abuse of discretion (Taft, 9 F.3d1469

(9th Cir. 1993) and McKenzie v. General Tel. Co. of California, 41 F.3d 1310 (9th Cir. 1994)) were

abrogated by Saffon v. Wells Fargo & Co. Long Term Disability Plan, 522 F.3d 863, 865 (9th Cir.

2008) on that point (deciding the question whether an ERISA plan administrator properly terminated

benefits because of its beneficiary's failure to produce evidence of her disability) in consideration of

the Abatie holding the district court may hear additional evidence when "procedural irregularities have

prevented full development of the record." Id., citing Abatie, 458 F.3d at 973. 

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to "complete" the medical record. He articulates no conflict of interest. This Court will apply 10

the abuse of discretion standard of review rather than the de novo standard.

The Administrative Record includes documents from the Workers' Compensation file

created by Disability Management Services ("DMS"), "the SDG&E entity that performed the

first level of claims review [as well as] DeLoach's claim for worker's compensation benefits."

Green Decl. ¶ 6. Exhibits attached to the Green Declaration include a "list of the Temporary

Disability, Temporary Total Disability, Permanent Partial Disability, and Vocational

Rehabilitation payments that SDG&E and Sempra made to Deloach." Green Decl. 3:16-18,

Exh. E pp. E657-663. That record reflects DeLoach's Temporary Total Disability payments

ended in March 2004, his Temporary Total Disability payments ended the same month, and

his Permanent Disability payments re-commenced at the rate of $680 per month. Id. 3:18-20,

Exh. E p. E664. The record also notes Hartford, the insurance company for SDG&E's LTD

plan, determined DeLoach did not qualify for benefits under the LTD plan after June 2002.

Id. 3:20-23, Exh. E p. E665. The record also included evidence SDG&E paid for DeLoach

to be retrained to work as a computer repair technician as he could not return to heavy

equipment operation. The Benefits Committee also considered evidence DeLoach provided,

including an FCE report generated in association with his Social Security proceedings through

which he was awarded disability benefits. 

The reasons for the denial of Plan benefits are material to the analysis and affect the

degree of deference appropriate to the denial decision, as is the course of dealing between

the claimant and the Plan. Saffron. 522 F.3d at 873 n. 2. Similarly, the cause of any alleged

failure to develop the administrative record and the new evidence itself may be considered.

Id. The record here does not permit the construction that the administrative proceedings

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failed to have "a meaningful dialogue" with the claimant in the course of obtaining a complete

medical record or otherwise to develop the administrative record. Cf. Saffron, 522 F. 3d at

873 n. 2. 

DeLoach's appeal asserted the Plan had "mis-read Dr. Kane's report by omitting his

requirement that DELOACH be weaned off his medications before returning to the job

market," and he provided "additional medical records from Dr. Yoon, Dr. Thigpen and Dr.

Harris substantiating his disability and necessity of pain medications." Pl. Mot. P&A 10:21-24.

He also "pointed out the differences of the physical capacity evaluations of Dr. Kane and Dr.

Harris and provided objective verification of his physical limitations." Pl. Mot. P&A 10:25-27.

The Committee drew its own conclusions from its "careful review" of the record which

included a body of evidence dating back to 1998, with stated reasons for its determination the

evidentiary record as a whole supported a finding DeLoach would be able to work in the new

occupation as a computer hardware technician for which he was trained in his vocational

rehabilitation. See Green Decl. Exh. A, p. A348 (Dr. Kane's February 14, 2006 Report was

based on a complete history of DeLoach's injuries, not merely the left knee injury, and a

thorough physical examination); see also Id. at p. A336 (DeLoach's treating physician, Dr.

Harris, stated in a notation on April 6, 2006, after his review of Dr. Kane's February report:

"It is my opinion that the patient should be able to perform the job he was trained for under

these medications"). Moreover, DeLoach's objections to Dr. Wieseltier's report on grounds

his examination was "limited" because he did not review certain Kaiser records or the FCE

are blunted by the Committee itself having considered those documents. Green Exh. A, pp.

A640-642. In addition, the FCE is not a medical record, was not prepared by a health care

professional, and by its own terms "should not be construed to establish any specific level of

permanent disability." Id., p. A262. 

DeLoach substantiates the Benefits Committee advised him by letter dated

December 26, 2006 that it was tabling his appeal until it received a report from Dr. Wieseltier

who saw him in December 2006 under the Workers' Compensation system. Ex. A-00121.

DeLoach represents he brought with him to Dr. Wieseltier's office at the time of that

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examination the FCE report, but Dr. Wieseltier refused to review it because it was not part

of the records SDG&E had requested he review. Pl. Mot. P&A 11:4-9. In early February

2007, DeLoach's counsel asked the Benefits Committee to make a decision on his appeal.

While acknowledging the Committee advised DeLoach it was awaiting Dr. Wieseltier's report,

he represents "Dr. Wieseltier's evaluation was limited to the issue of whether the Workers'

Compensation should continue to pay for ongoing chiropractic care." Pl. Mot. 11:11-14, citing

Ex. A-00072-73. By letter dated March 8, 2007, the Benefits Committee advised him it was

denying his appeal based on the December 2006 report of Dr. Wieseltier, which restated the

disability rating he had given DeLoach in 2004. Exh. A-00640, Exh. A-00518. 

By letter dated April 10, 2007, DeLoach requested the Benefits Committee reassess

its position in light of the limited scope of Dr. Wieseltier's review, contending his

December 2006 report "was not based on a current view of all the medical records,

(specifically the Functional Capacity Evaluation) and was limited to merely those injuries that

were related to his Workers' Compensation claim (excluding the hip lesion, neck, and

cognitive issues)" forming part of his then-current medical condition. Pl. Mot. P&A 11:20-24.

DeLoach pointed out his counsel had contacted Dr. Wieseltier's office to request he perform

a full evaluation in consideration of all injuries and all the medical evidence, but Dr. Wieseltier

had refused, "indicating that he limits his practice to performing agreed medical evaluations

under the Workers' Compensation field and will not review any documentation or issues

unless presented by the Workers' Compensation attorney." Pl. Mot. P&A 11:24-12:1.

DeLoach told the committee SDG&E's Workers' Compensation attorney, Jeffrey Jones,

refused to ask Dr. Wieseltier to expand his review of DeLoach's condition. Pl. Mot P&A

12:1-4, citing Exh. A-00051. Deloach represents the Plan did not respond to his request the

review be more comprehensive.

F. Cross-Motions Merits

The cross-motions call upon the Court to consider whether the Benefits Committee

abused its discretion when it denied DeLoach's appeal of the DMS determination he was not

entitled to TDI benefits because of its findings he was not precluded from "any occupation" --

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in particular, repairing computers, an occupation SDG&E paid to train him to perform after his

work injuries precluded him from returning to his prior occupation -- and all Plan benefits

accordingly ceased at the conclusion of the two-year period during which he received LTD

benefits, despite the Plan's earlier TDI finding and despite a subsequent Social Security

Administration disability award. That award was predicated on a non-physician's opinion

DeLoach's residual functional capacity limitations would not permit him to perform even the

tasks required of a computer repair person.

DeLoach challenges the manner in which the Plan interpreted the record rather than

any ambiguity in a Plan provision affecting entitlement to TDI benefits. He argues for

summary judgment on grounds: the Plan improperly calculated his benefits; the Plan abused

its discretion in denying him the right to on-going disability benefits (in particular by

terminating his TDI benefits, by denying the administrative appeal in unreasonable reliance

on a medical opinion purportedly based on an incomplete analysis of all the record, and by

failing to provide him a full and fair review); and he is entitled to benefits under a de novo

standard of review. The Court rejected the latter argument for the reasons recited above.

Defendants argue for summary judgment in their favor on grounds: the Benefits

Committee's decision should be reviewed for abuse of discretion, with the scope of the court's

review limited to the administrative record; and the Plan Administrator did not abuse its

discretion because it reasonably concluded, based on the administrative record, DeLoach

was not disabled from "any occupation." 

SDG&E paid for Plaintiff to be re-trained to work as a computer

repair technician. Two Board certified physicians concluded that

Plaintiff had the ability to perform that occupation on a full time

basis. The Benefits Committee considered all of the evidence

that Plaintiff submitted (including the FCE report), and found the

opinions of Dr[s]. Kane and Wieseltier (an agreed upon medical

examiner who evaluated Plaintiff repeatedly over a period of

several years) more persuasive than the FCE report and the

Social Security award. Several opinions in this Circuit, published

and unpublished, hold that even where a decision is solely based

on the opinion of an independent medical expert there is not

abuse of discretion. [Citations omitted]. . . . Simply put, the Plan

administrator's decision is more than adequately supported

by the independent medical evaluations, and therefore

Plaintiff cannot sustain his burden of demonstrating

entitlement to TDI benefits under the Plan.

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 "Defendants have made no showing that there has been any review of the powers and 11

duties delegated to the Benefit Committee in conformance with the terms of the Plan since the

Benefit Committee was formed in 1999." Pl. Opp. 3:2-4.

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Def. Mot. P&A 15:1-17 (emphasis added).

Defendants argue "the question before the Court is not which side's interpretation is

more persuasive, but rather, whether the Plan's determination is 'reasonable,' i.e., not based

on clearly erroneous findings of fact or a construction that conflicts with the plain language

of the Plan." Def. Mot. P&A 15:22-25, citing McDaniel v. Chevron Corp., 203 F.3d 1099, 1113

(9th Cir. 2000), citing Canseco v. Construction Laborer's Pension Trust, 93 F.3d 600, 606 (9th

Cir. 1996).

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. . . . [¶] "A finding

is 'clearly erroneous' when although there is evidence to support

it, the reviewing [body] on the entire evidence is left with the

definite and firm conviction that a mistake has been committed."

Concrete Pipe and Products of California, Inc. v. Construction

Laborers Pension Trust for Southern California, 508 U.S. 602,

622 . . . (1993) [citation omitted]. We will uphold the decision of

an ERISA plan administrator "if it is based upon a reasonable

interpretation of the plan's terms and was made in good faith."

Estate of Shockley v. Alyeska Pipeline Serv. Co., 130 F.3d 403,

405 (9th Cir. 1997).

Boyd v. Bert Bell/Pete Rozelle NFL Players Retirement Plan, 410 F.3d 1173, 1178 (2005).

DeLoach opposes Defendants' motion on grounds the Benefits Committee purportedly

was never granted discretionary authority by the Pension Committee. Pl. Opp. 1:1-2. He

suggests a procedural deficiency in reliance on Plan paragraph 9.7. That paragraph

addresses "Allocation and Delegation of Fiduciary Responsibilities" and imposes an obligation

to "review[] periodically" the delegated powers and duties. DeLoach argues unpersuasively

that review obligation is a condition of an effective delegation. Absent proof of periodic

review, he unpersuasively contends an otherwise proper delegation of fiduciary responsibility

can be negated as a purported failure to comply with Plan procedures. The Court found 11

above the delegation was proper, and finds here "periodic review" of the expressly delegated

\ \

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powers and duties is immaterial to whether the powers and duties were properly delegated

in the first instance.

In reaching its decision to deny DeLoach TDI benefits, the Benefits Committee found

the independent medical examiners' opinions of both Dr. Kane and Dr. Wieseltier (an agreed

medical examiner who had examined DeLoach repeatedly over a period of several years

beginning in 1999) to be more persuasive on the "any occupation" issue than the Social

Security proceeding's FCE evaluation, although they expressly considered the entire record.

The February 23, 2007 Benefits Committee meeting minutes reflect the considerations and

evidence relied on to deny DeLoach's appeal, after continuances for the purpose of full

development of the record as is also substantiated in the administrative record beginning with

a Benefits Committee meeting on June 28,2006. See Green Decl. Exh. A, A1-A12.

The February 23,2007 minutes recite the procedural history of DeLoach's appeal to

the Committee from December 18, 2006, at which time: "the Committee had significant

discussions, consulted with Norma Tsutsui of [DMS], reviewed the opinion of Norman Kane

dated February 7, 2006 which indicated that Mr. DeLoach was not totally disabled, . . .

reviewed the Social Security Disability Insurance Award, as well as, medical opinions and

other material provided by Mr. DeLoach's attorney." Green Exh. A, p. A10. By that time, the

DMS representative informed the Committee DeLoach had seen the Agreed Medical

Examiner, Dr. Wieseltier. "Given the potential value of a report by a neutral physician agreed

to by the parties through the workers' compensation process, and further, who had previously

examined Mr. DeLoach and reported on his condition, the matter was tabled pending receipt

of the Agreed Medical Examiner report." Id.

Despite DeLoach's attorney's opinion regarding the relevance of the Agreed Medical

Examiner's report based on its purported narrow scope, the Committee resumed the appeal

proceedings on February 23, 2007 and considered that and other augmentations to the

evidentiary record:

However, the Agreed Medical Examiner report analyzed

and re-evaluated Mr. DeLoach's condition. In addition to

reviewing the AME report, the Committee reviewed all additional

materials provided by Mr. DeLoach's counsel. This included

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reports by Thomas W. Harris, his treating physician at Pain Care,

as well as the Functional Capacity Evaluation Report prepared by

Barbara Tourtellott at Fit to Work, Inc. at the request of Mr.

DeLoach's attorney. Ms. Tourtellott is a registered Occupational

Therapist, Licensed Occupational Therapist and Certified

Evaluation Specialist. She concluded that Mr. DeLoach does not

currently demonstrate the ability to perform work at a level

required in the competitive labor market on either a full or parttime basis. She specifically indicates that he is unable to perform

the Certified Computer Support Technician position for which he

has received vocational training paid for by the San Diego Gas

& Electric Company. . . through the worker's compensation

process.

Dr. Wieseltier, the Agreed Medical Examiner, reiterated

and confirmed his prior opinion that Mr. DeLoach would be able

to perform the physical demands of the job of Certified Computer

Support Technician.

The Committee further notes that there is no indication

provided by Mr. DeLoach or his counsel that his disability rating

under workers' compensation has been modified in light of any

medical reports developed by Mr. DeLoach's counsel.

Ms. Tsutsui also informed the Committee that Mr.

DeLoach was continuing to take computer courses relating to the

Computer Support Technician position. The Committee engaged

in lengthy discussion. Because of the high standards imposed,

the Committee carefully considers an award of Social Security

Disability Insurance Benefits in evaluating entitlement in making

its determination. However, after careful consideration the

Committee determined that even higher priority should be

given to a neutral physician agreed to by the parties in the

course of an adversarial (workers' compensation)

proceeding.

Green Decl. Exh. A, pp.; A10-A11 (emphasis added).

The February 23, 2007 Minutes conclude with the unanimous determination to deny

DeLoach's appeal. Green Decl. Exh. A, p. A11. The March 8. 2007 letter informing him of

that result described in considerably greater detail the medical records and opinions the

Committee relied on, including but not limited to quoted passages from medical records, in

particular orthopedic surgeon Dr. Kane's February 7, 2007 report, and orthopedic surgeon

Dr. Wieseltier's December 11, 2006 report regarding DeLoach's limitations, confirming his

May 24, 2004 results of DeLoach's physical capabilities. Green Decl. Exh. A, pp. A640-641.

Applying the significantly deferential standard of review to the Plan's exercise of its

discretionary authority to approve or deny TDI disability benefits under the express provisions

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administrative record compel a finding the Committee did not abuse its discretion: "• Plaintiff alleged

that he was totally disabled from any occupation due to his orthopedic injuries (and, on appeal, due

to his pain medication). • Two different orthopedic surgeons, including an agreed upon medical

evaluator, concluded that Plaintiff was able to perform an occupation for which he was qualified. •

No orthopedist (including Plaintiff's own treating physician, Dr. Harris) has ever opined that Plaintiff

is totally disabled from any occupation. • Plaintiff's current pain management physician has not

reported any symptoms from Plaintiff's pain medication that would prevent him from working, and at

least two physicians (Dr. Kane and Dr. Harris) have stated the contrary." Def. Reply 7:7-16. From

that summary, Defendants argue: "the decision that DeLoach is not entitled to additional TDI

benefits was not unreasonable and does not constitute an abuse of the discretion conferred to the

Committee under the terms of the Plan," citing, inter alia, Jordan v. Northrup Grumman Corp.

Welfare Benefit Plan, 370 F.3d 869, 879 (9th Cir. 2004), McDaniel, 203 F.3d at 1113. Def. Reply

7:17-23.

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in the controlling Plan, the Court finds no abuse of discretion. The administrative record

reveals the Committee carefully considered the material medical and vocational evaluations,

then reasonably exercised its discretion, with express justifications for the weight and

significance it attributed to the various records, in reaching its decision. In particular, as

DeLoach argues the Committee unduly considered Dr. Wieseltier's most recent report without

further input from DeLoach, the Court finds eminently reasonable the persuasive weight the

Committee assigned to that physician's opinions predicated on his long-term familiarity with

DeLoach's condition. The Committee similarly had and found persuasive Dr. Kane's

February 7, 2006 opinion indicating DeLoach was not totally disabled, despite the

considerable weight it also states it gave to the Social Security Administration's determination

DeLoach was entitled to disability insurance benefits. 

12

With respect to DeLoach's additional contention he is entitled to corrected and

additional "back pay" benefits, in reliance on the May 2005 Social Security Administration's

determination he was totally disabled from any employment, the evidence he was receiving

over $1,500.00 per month was before the Committee. Leaving aside the amount "offset"

challenges, the Plan approved disability payments to DeLoach under the "own occupation"

definition of disability for two years based on his October 2000 claim. Undisputed Fact Nos.

10, 11. Any benefits payment after December 2002 would only be appropriate under the "any

occupation" definition, as the Plan defines "total disability" as a circumstance which expressly

does not arise until after 24 months of continuous disability passes, with the claimant at that

point required, for benefits eligibility, to be unable to engage in "any substantially gainful

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occupation for wages or profit for which he is reasonably qualified by education, training, or

experience." Undisputed Fact No. 6. Defendants trace, with citations to the record,

DeLoach's failure to cooperate in DMS's attempts to augment the record as the 24-months

of disability payments deadline approached. Without proof of total disability from any

occupation, he could not continue under the Plan terms to receive any more disability

benefits, as set out in both the Plan document and the summary plan description. Undisputed

Fact No. 6. In November 2002, he did not keep a medical evaluation appointment DMS

scheduled for him. In 2005, he notified DMS he had received the social security award

retroactive to 2003, with an offset for his workers' compensation benefits. DMS notified

DeLoach at that time it needed to investigate further, including with a medical evaluation,

whether he met the Plan's "any occupation" definition. Def. Reply 8:2-23. DMS stated at that

time his eligibility for TDI Plan benefits had not been determined, and could not be

determined without the medical examination. All those communications occurred concurrently

with DeLoach's ongoing workers' compensation claim, and included repeated references in

the record to "2 yr TDI eval" alerting him to the approaching expiration of the approved

benefits period unless he submitted to the additional medical evaluation pertinent to the "any

occupation" determination, undermining his suggestion he did not know about the additional

requirements for continued benefits beyond two years. The record thus reflects "meaningful

dialogue" and communications occurred during the period 1998 through 2007, including

submission and exchange of medical and benefits information, vocational rehabilitation which

Dr. Harris approved in 1999, and Dr. Wieseltier's reports in 2004 and 2006 opining DeLoach

was able to perform gainful work. Def. Reply 9:1-17. 

All DeLoach's arguments directed to calculation errors associated with the amount of

TDI benefits he seeks are mooted by the finding the Plan reasonably found he failed to show

he is totally disabled from "any occupation." The Court is unable to find the Benefits

Committee's decision constituted an abuse of discretion, as it was not unreasonable nor

clearly erroneous nor in conflict with Plan language. The administrative record contains

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ample support for the Benefit Committee's finding DeLoach was ineligible for Plan benefits

beyond the two year "own occupation" period. 

C. Proper Parties

Defendants argue Sempra and SDG&E are not proper parties to this action. The court

finds it need not decide the issue, in consideration of its conclusion Defendants are entitled

to summary judgment on the Plan benefits claim, disposing of this action in its entirety.

III. CONCLUSION AND ORDER

For all the foregoing reasons, IT IS HEREBY ORDERED Plaintiff's Cross-Motion For

Summary Judgment is DENIED, and Defendants' Motion For Summary Judgment is

GRANTED, disposing of all claims and all parties and terminating the case. 

IT IS SO ORDERED.

DATED: September 24, 2008

HONORABLE LARRY ALAN BURNS

United States District Judge

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