Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_04-cv-03307/USCOURTS-cand-4_04-cv-03307-0/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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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

DEBRA CARTER,

Plaintiff,

v.

HEWLETT-PACKARD COMPANY and

HEWLETT- PACKARD COMPANY INCOME

PROTECTION PLAN,

Defendants.

 /

No. C 04-3307 CW

ORDER GRANTING

DEFENDANTS’

MOTION FOR

JUDGMENT UNDER

RULE 52 AND

DENYING

PLAINTIFF’S

MOTION FOR

SUMMARY JUDGMENT

Plaintiff Debra Carter moves, pursuant to Federal Rule of

Civil Procedure 56, for summary judgment that she is entitled to

long-term disability benefits under Defendant Hewlett-Packard

Company Income Protection Plan (IPP). Defendants oppose the

motion and move for judgment under Federal Rule of Civil

Procedure 52. The matter was heard on April 15, 2005. Having

considered the parties’ papers, the evidence cited therein and

oral argument on the motions, the Court DENIES Plaintiff’s

motion for summary judgment and GRANTS Defendants’ motion for

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1 The Court did not consider any facts outside of the

administrative record in ruling on these motions. Thus,

Plaintiff’s motion to strike the declaration of Janet Curry

(Docket No. 33) is DENIED as moot.

2

judgment under Rule 52. 

BACKGROUND

The following facts are taken from the administrative

record (AR).1 Plaintiff was employed by Defendant HewlettPackard Company from June, 1984 until she became disabled on

September 17, 2002. At all times relevant to this action,

Plaintiff was covered by the IPP, which is a self-funded

benefits plan organized under the Employee Retirement Income

Security Act (ERISA). The IPP is administered, according to its

terms, by Volunteer Plan Administrators, Inc. (VPA).

An employee insured under the IPP is entitled to up to

fifty-two weeks of short-term disability benefits if he or she

is “totally disabled,” which means “continuously unable to

perform each and every duty of his or her Usual Occupation.” AR

475. Beyond the fifty-two week short-term benefits period, the

employee is entitled to long-term disability benefits only if he

or she is “continuously unable to perform any occupation for

which he or she is or may become qualified by reason of his or

her education, training or experience.” Id. Disabilities

resulting from a mental or nervous disorder are only considered

total disabilities, for purposes of long-term disability

benefits, if the individual is confined to a hospital or a longterm care facility. AR 476. The IPP defines mental and nervous

disorders as, inter alia, those conditions contributed to by

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mental illness as well as those exhibiting any behavioral or

psychologic manifestations, and it explicitly excludes

fibromyalgia. Id. In addition, benefits for long-term

disability due to mental or nervous disorders are only paid for

fifty-two weeks after the initial short-term disability period. 

AR 477.

An amendment to the IPP that took effect January 1, 2002

states as follows: “The Claims Administrator [VPA] shall have

the discretionary power to construe the language of the Plan and

make the decision on review on behalf of the Company.” Prior to

the amendment, the IPP expressly granted discretionary authority

to the Hewlett-Packard Company Employee Benefits Organization to

construe the language of the IPP. The IPP’s summary plan

description, which is distributed to employees along with the

IPP, does not expressly state that VPA has discretionary

authority, although it does state, “The determination of whether

you are totally disabled shall be made by the claims

administrator and shall be based on objective medical evidence.” 

AR 525. The summary plan description contains the following

disclaimer: “This section provides the highlights of the Plan,

but it is far shorter and less technical than the official Plan

documents. The official Plan documents are always used to

determine when and what benefits will be provided under the

Plan.” AR 522.

When Plaintiff became disabled in September, 2002, she

began to receive short-term disability benefits, which she would

continue to receive for fifty-two weeks, for depression, anxiety

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and fibromyalgia. In May, 2003, Plaintiff filed her claim for

long-term disability benefits. On her claim form, Plaintiff

listed as her disabling injuries interstitial cystitis,

fibromyalgia and fatigue. Plaintiff had also been diagnosed

with irritable bowel syndrome by at least one physician, but she

did not list that ailment on her claim form. AR 163-64. 

Plaintiff’s attending physician, Thomas Snyder, attached a

statement of disability, in which he diagnosed Plaintiff with

chronic interstitial cystitis and noted that she was in posttreatment for cervical cancer. Dr. Snyder stated that Plaintiff

required hourly unscheduled restroom breaks, which could last as

long as fifteen minutes, and pain medication. Dr. Snyder also

noted that Plaintiff’s psychological state was “tenuous at

best,” that she suffered from depression, and that her emotional

factors contributed to her physical and functional limitations. 

AR 103. As part of VPA’s review of Plaintiff’s claim for longterm disability benefits, her medical file was reviewed by Dr.

Gerald Weingarten, although Dr. Weingarten did not personally

examine her. 

On September 16, 2003, VPA denied Plaintiff’s claim for

long-term benefits. The denial stated that Plaintiff had

provided evidence that she suffered from depression, anxiety and

fibromyalgia. However, VPA stated that denial of benefits was

appropriate because the IPP states that fibromyalgia is not

considered for purposes of long-term disability, and mental

disorders only constitute total long-term disability if the

patient is hospitalized. AR 476. 

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On March 1, 2004, Plaintiff timely appealed the denial. 

Specifically, Plaintiff argued that VPA had failed to consider 

(1) the physical impairments caused by interstitial cystitis and

irritable bowel syndrome, and (2) that Plaintiff’s conditions

were exacerbated by her mental impairments. AR 24. In support

of her argument, Plaintiff relied in part on a January 20, 2004

letter from Dr. Hernan Alvarado. Dr. Alvarado noted that Dr.

Snyder (who had since retired) diagnosed Plaintiff with

interstitial cystitis and stated, “This condition is

characterized by flare ups and episodes of well being but during

the flare up episodes patients do need to go to the bathroom

more frequently. For that reason we tend to request that these

patients are given breaks on a relatively frequent basis.” AR

34. On April 22, 2004, VPA denied Plaintiff’s appeal. In its

denial, while noting Dr. Snyder’s diagnoses and Dr. Alvarado’s

letter, VPA stated that the conditions afflicting Plaintiff,

including the mental disorders and fibromyalgia, did not

constitute total disability under the IPP. VPA also noted that

Plaintiff took several medications for her mental disorders that

made her drowsy and caused diarrhea and abdominal pain, but

concluded that the IPP did not consider the effect of mental

disorders on function when making a total disability

determination. AR 9-11.

Plaintiff filed her complaint on August 13, 2004. At a

case management conference on December 17, 2004, the Court

stated that a bench trial pursuant to Rule 52 would be held on

April 15, 2005. See Kearney v. Standard Ins. Co., 175 F.3d

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1084, 1094-95 (9th Cir. 1999).

DISCUSSION

I. Standard of Review

ERISA provides Plaintiff with a federal cause of action to

recover the benefits she claims are due under the Plan. 29

U.S.C. § 1132(a)(1)(B). The standard of review of a plan

administrator's denial of ERISA benefits depends upon the terms

of the benefit plan. Absent contrary language in the plan, the

denial is reviewed under a de novo standard. Firestone Tire &

Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989). However, if "the

benefit plan expressly gives the plan administrator or fiduciary

discretionary authority to determine eligibility for benefits or

to construe the plan’s terms," an abuse of discretion standard is

applied. Id.; Taft v. Equitable Life Assurance Soc’y, 9 F.3d

1469, 1471 (9th Cir. 1993). The Ninth Circuit has also referred

to this as an "arbitrary and capricious" standard. McKenzie v.

Gen. Tel. Co. of Cal., 41 F.3d 1310, 1314 & n.3 (9th Cir. 1994);

Taft, 9 F.3d at 1471 n.2 (use of the term "arbitrary and

capricious" versus "abuse of discretion" is a "distinction

without a difference").

The IPP plainly grants VPA discretionary authority to

interpret the language of the IPP and to review claim denials. 

In fact, the Ninth Circuit, in a recent case, noted that the IPP

gives VPA discretionary authority to construe the language of

the plan. Lamantia v. Voluntary Plan Adm’rs, Inc., 401 F.3d

1114, 1123 (9th Cir. 2005). Plaintiff does not dispute this. 

Rather, Plaintiff argues that the summary plan description that

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accompanies the IPP does not state that VPA has discretionary

authority. Thus, Plaintiff argues, the two plan documents

conflict with one another, and the document most favorable to

the plan participant must control.

In support of this argument, Plaintiff cites Bergt v. Ret.

Plan for Pilots Employed by MarkAir, Inc., 293 F.3d 1139 (9th

Cir. 2002) and Banuelos v. Constr. Laborers’ Trust Funds for S.

Cal., 382 F.3d 897 (9th Cir. 2004). Both cases are

distinguishable on their facts, and neither case supports

Plaintiff’s position. In Bergt, the plaintiff was eligible to

participate in a retirement plan under the master plan document,

but the summary plan description unambiguously prevented him

from participating. 293 F.3d at 1144. The court held that the

master plan document controlled: “The plan master document is

the main document that specifies the terms of the plan, and

employees should be entitled to rely on its unambiguous

provisions.” Id. at 1145. In Banuelos, an amended version of

the benefits plan contained a longer vesting period than the

original version, thereby disqualifying the plaintiff. 382 F.3d

at 900-01. The court ruled that the plaintiff should get the

benefit of the shorter vesting period. Id. at 904.

Here, Plaintiff has failed to identify a conflict or

ambiguity created by the summary plan description. The IPP is

clear that VPA is granted discretionary authority over

disability determinations and review of claim denials. The

summary plan description does not contain conflicting language;

to the contrary, the summary expressly states that the

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determination of total disability will be made by VPA. 

Plaintiff, citing Kearney, argues that the language in the

summary description is insufficient to bestow discretionary

authority. Standing alone, that is true, but Plaintiff does

not, and cannot, dispute that the IPP language is sufficient to

confer such authority, and the summary plan description does not

take it away.

II. Alleged Conflict of Interest

Plaintiff argues that, even if the VPA had discretionary

authority, that discretionary authority was lost due to the

administrator’s inherent and actual conflict of interest. 

Plaintiff contends that, because VPA was subject to termination

by Hewlett-Packard, an inherent conflict existed in its

determination of claim denials. In support of this argument,

Plaintiff cites Nord v. Black & Decker, 296 F.3d 823 (9th Cir.

2002). However, in that case, Black & Decker both funded the

benefits plan and acted as the plan’s administrator. Id. at

828. Here, Hewlett-Packard funds the IPP, but VPA, which is

paid by Hewlett-Packard a flat quarterly rate that is not based

upon the number of claims that it processes or the benefits that

it awards or denies, makes disability determinations and rules

on claim denials. Thus, Nord is inapposite. Plaintiff has not

shown that an inherent conflict of interest existed. 

Nor has Plaintiff demonstrated that VPA had an actual

conflict of interest in her case. The only support Plaintiff

gives for this argument is her contention that VPA should have

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made a different determination on her claim for long-term

disability benefits. That assertion alone is insufficient to

establish an actual conflict of interest.

The IPP unambiguously grants discretionary authority to

VPA, and is not contradicted by the summary plan description. 

Moreover, Plaintiff has not demonstrated that VPA had a conflict

of interest when it denied her claim. Thus, the Court must

apply an abuse of discretion standard of review.

III. Abuse of Discretion Review

Plaintiff contends that VPA abused its discretion in

denying her claim for long-term benefits. Plaintiff argues that

(1) VPA ignored Plaintiff’s diagnoses of interstitial cystitis

and irritable bowel syndrome, (2) VPA lacked objective medical

evidence for denying her claim for total disability, (3) VPA

failed to conduct a vocational assessment of Plaintiff, and (4)

VPA improperly discounted Plaintiff’s somatoform pain disorder

and physical impairments caused by medications for her mental

disorders because the summary plan description is ambiguous as

to what constitutes a mental disorder.

Plaintiff’s first argument fails because the diagnoses of

both interstitial cystitis and irritable bowel syndrome are

directly addressed in VPA’s denial of Plaintiff’s appeal from

the initial determination. AR 10. Second, VPA did not abuse

its discretion in twice finding that Plaintiff’s physical

limitations did not meet the definition of total disability

stated in the IPP, nor did it lack objective medical evidence

for denying Plaintiff’s claims. Dr. Weingarten’s conclusion,

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upon reviewing Plaintiff’s medical record, was that Plaintiff’s

physical symptoms and limitations were caused, at least in part,

by her mental and nervous disorders. That is the same

conclusion reached by Plaintiff’s treating physician, Dr.

Snyder. AR 103. Under the terms of the IPP, Plaintiff was not

totally disabled, and therefore was not entitled to long-term

disability benefits, based upon diagnoses of mental disorders,

fibromyalgia or somatoform pain disorder. As Defendants note,

it is irrelevant whether the Court agrees with Hewlett-Packard’s

decision to cover generally physical disabilities but to limit

strictly its coverage of mental disorders. VPA was within its

discretion in finding that Plaintiff’s physical limitations,

which included pain, discomfort, and frequent trips to the

restroom, did not completely preclude her from working. 

Critically, no physician, including Dr. Snyder, has ever found

that Plaintiff’s physical disorders and limitations alone

preclude her completely from working. In fact, the letter

Plaintiff submitted from Dr. Alvarado suggests that Plaintiff

was not totally disabled as a result of interstitial cystitis

and irritable bowel syndrome, but rather that she could be

employed but would need bathroom breaks on a relatively frequent

basis during flare ups of her condition.

Third, VPA did not abuse its discretion in failing to

conduct a vocational assessment of Plaintiff. In McKenzie v.

Gen. Tel. Co. of Cal., 41 F.3d 1310, 1317 (9th Cir. 1994), the

Ninth Circuit ruled that “consideration of vocational evidence

is unnecessary where the evidence in the administrative record

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supports the conclusion that the claimant does not have an

impairment which would prevent him from performing some

identifiable job.” The court also noted that “the language of

the ‘any occupation’ standard is not demanding.” Id. Here, VPA

did not abuse its discretion in determining, from the objective

medical evidence, that Plaintiff was not permanently disabled by

a physical impairment. In fact, Dr. Weingarten concluded that

the only accommodation Plaintiff would require as a result of

her physical impairments was allowance for frequent restroom

breaks. AR 18. Dr. Alvarado, Plaintiff’s physician, suggested

the same.

Finally, Plaintiff’s argument that her somatoform pain

disorder and side effects caused by medication for mental

illness entitle her to long-term benefits must be rejected. 

Plaintiff acknowledges that the IPP's definition of mental

illness includes somatoform pain disorder, but she nevertheless

argues that, because the summary plan description is ambiguous

as to what exactly constitutes a mental disorder, Plaintiff

should get the benefit of the more favorable plan document. 

Similarly, the IPP states that its mental illness limitation

applies to all disabilities “contributed to by mental illness,”

which the VPA interpreted to include side effects from

medications for mental disorders. Nevertheless, Plaintiff

argues that the summary plan description is also ambiguous on

this issue. Again, however, Plaintiff has not shown that the

summary plan description contradicts the IPP on these points. 

VPA did not abuse its discretion by following the unambiguous

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language in the IPP and denying Plaintiff’s claim for long-term

benefits.

For the foregoing reasons, the Court is unable to conclude

that VPA abused its discretion or was arbitrary and capricious

in denying Plaintiff’s claim for long-term disability benefits.

IV. Additional Short-Term Benefits

Plaintiff argues that, for mental or nervous disorders, the

IPP provides for an additional fifty-two weeks of benefits after

the initial fifty-two week short-term benefit period. However,

the IPP is clear that a plan participant is entitled only to

fifty-two weeks of short-term disability benefits. Thus,

Plaintiff cannot claim another year of short-term benefits

simply by claiming a different disabling condition. Moreover,

the IPP is clear that a participant may only receive long-term

benefits for a disabling mental disorder if the individual is

hospitalized. The VPA did not abuse its discretion when it

concluded, on two different occasions, that Plaintiff was not

totally disabled under that definition. Thus, Plaintiff is not

entitled to further benefits.

CONCLUSION

For the foregoing reason, the Court DENIES Plaintiff’s

motion for summary judgment (Docket No. 14), GRANTS Defendants’

motion for judgment under Federal Rule of Civil Procedure 52

(Docket No. 15), and DENIES as moot Plaintiff’s motion to strike

(Docket No. 33). Each party shall bear its own costs. The

Clerk shall enter judgment and close the file.

IT IS SO ORDERED.

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Dated: 6/2/05 /s/ CLAUDIA WILKEN 

CLAUDIA WILKEN

United States District Judge

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