Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_19-cv-00105/USCOURTS-cand-3_19-cv-00105-1/pdf.json

Parties Involved:
Metropolitan Life Insurance Company
Defendant
Novartis Corporation
Defendant
Novartis Corporation Death Benefit & Disability Plan
Defendant
Neil Mark Sorger
Plaintiff

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United States District Court 

Northern District of California 

UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF CALIFORNIA 

NEIL MARK SORGER,

Plaintiff, 

v. 

NOVARTIS CORPORATION DEATH 

BENEFIT & DISABILITY PLAN, et al., 

Defendants. 

Case No. 19-cv-00105-JSC 

FINDING OF FACTS AND

CONCLUSIONS OF LAW RE: 

PARTIES’ DISPOSITIVE 

MOTIONS 

Re: Dkt. Nos. 40, 42

Neil Mark Sorger sues Novartis Corporation Death Benefit and Disability Plan and 

Metropolitan Life Insurance Company (together, “Defendants”) pursuant to the Employee 

Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1132, for terminating his 

supplemental long-term disability benefits. (Dkt. No. 1.)1

 Now before the Court are the parties’ 

dispositive motions.2

 (See Dkt. Nos. 40-15, Ex. B (filed under seal) & 42.)3 After careful 

consideration of the parties’ briefing and the administrative record, and having had the benefit of 

oral argument on January 16, 2020, the Court concludes that an abuse of discretion standard 

applies and finds that Defendants did not abuse their discretion in terminating Plaintiff’s 

supplemental disability benefits. 

1 Record citations are to material in the Electronic Case File (“ECF”); pinpoint citations are to the 

ECF-generated page numbers at the top of the documents. 

2

 All parties have consented to the jurisdiction of a magistrate judge pursuant to 28 U.S.C. § 

636(c). (Dkt. Nos. 6 & 15.) 

3

 Defendants characterizes their dispositive motion as a “trial brief,” (Dkt. No. 40-15, Ex. B), and 

Plaintiff has filed a motion for summary judgment, (Dkt. No. 42). At oral argument the Court 

clarified with the parties that the Court would review the parties’ respective motions under the 

Federal Rule of Civil Procedure 52 “Findings and Conclusions” standard. See Hoffman v. Screen 

Actors Guild Producers Pension Plan, 757 F. App’x 602, 606 (9th Cir. 2019).

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BACKGROUND 

I. Factual Background 

 A. The Parties 

Plaintiff was employed by Novartis Corporation (“Novartis”) as a pharmaceutical sales 

representative starting in December 2012; he became disabled four months later, in April 2013, 

due to a lumbar spine condition. (Dkt. No. 1 at ¶ 4; see also Dkt. Nos. 40-3, Ex. A-2 at 135 & 40-

10, Ex. A-9 at 351 (filed under seal).) Defendant Novartis Corporation Death Benefit and 

Disability Plan (“the Plan”) is a self-funded “welfare benefit plan” governed by ERISA that 

provides the long-term disability coverage at issue. (Dkt. No. 40-14, Ex. A-13 at 4 (filed under 

seal).) Defendant Metropolitan Life Insurance Company (“MetLife”) is the “Claims 

Administrator and Plan Administrator” that determines whether a Plan participant is entitled to 

benefits under the Plan. (Id. at 25; see also Dkt. No. 40-3, Ex. A-2 at 24 (Summary Plan 

Description (2012 ed.) listing MetLife as “Claims Administrator and Plan Fiduciary”).)4

 

B. The Plan 

 The Plan became effective as of January 1, 2013; it provides self-insured short-term and 

long-term disability benefits to eligible Novartis employees, as well as death benefits and survivor 

income benefits. (Dkt. No. 40-14, Ex. A-13 at 4.) Novartis sponsors the Plan. (Id.) Under the 

Plan’s terms, Novartis Benefits Committee acts as the Plan Administrator unless it designates 

another entity “to act as Plan Administrator.” (Id. at 4, 16; see also Dkt. No. 40-3, Ex. A-2 at 24.) 

The Plan further provides that the Plan Administrator may appoint a “Claims Administrator to 

handle the administration of claims.” (Dkt. No. 40-14, Ex. A-13 at 16.) “Supplement A” to the 

Plan provides, in pertinent part: 

4

 The Plan states that it is “amended and restated” and “effective as of January 1, 2013.” (See Dkt. 

No. 40-14, Ex. A-13 at 1.) However, the Summary Plan Description submitted by Defendants and 

cited by both parties is dated “January 2012.” (See Dkt. No. 40-3, Ex. A-2 at 1.) At oral argument 

the Court noted that “Supplement A” to the Plan provides that “[t]he eligibility for and terms of 

the Disability Plan are set forth in this Plan document and in the Summary Plan Description for the 

Disability Plan, which is hereby incorporated into the Plan as if fully set forth herein, to the extent 

not inconsistent with the terms hereof.” (Dkt. No. 40-14, Ex. A-13 at 25.) The parties agreed that 

the cited language indicates that the 2012 Summary Plan Description (2012 ed.) is incorporated 

into the Plan. 

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Short-term and long-term disability benefits under the Disability Plan 

are administered pursuant to an Administrative Services Only (ASO) 

agreement between Novartis Corporation and Metropolitan Life 

Insurance Company (MetLife). The eligibility for and terms of the 

Disability Plan are set forth in this Plan document and in the Summary 

Plan Description for the Disability Plan, which is hereby incorporated 

into the Plan as if fully set forth herein, to the extent not inconsistent 

with the terms hereof. The Claims Administrator and Plan 

Administrator for the Disability Plan is MetLife. 

(Id. at 25.) 

 To be eligible for long-term disability benefits under the Plan, a participant must have 

“received 26 weeks of short-term disability [b]enefits (52 weeks if a resident of the State of 

California).” (Id. at 12.) There are two levels of long-term disability benefits under the Plan. (See

id.) First, the Plan provides basic long-term disability benefits to eligible participants at a rate of 

50% of the employee’s total pay. (Id.) The benefit is paid monthly. Second, a participant may 

purchase “supplemental long-term disability coverage” (“supplemental benefit”) that pays an 

additional 17%, for a monthly benefit equal to 67% of the participant’s total pay. (Id.) The 

supplemental benefit is “subject to pre-existing condition limitations as established from time to 

time by the Claims Administrator.” (Id.) 

 The January 2012 Summary Plan Description includes a “Pre-existing Condition Rule for 

Supplemental LTD Coverage,” that provides, in pertinent part: 

If you have a pre-existing condition and elect supplemental LTD 

coverage, your supplemental LTD coverage for that pre-existing 

condition will not take effect for 12 months after the effective date of 

your supplemental LTD coverage. A pre-existing condition is an 

injury, sickness, or pregnancy for which you, in the three months 

before your supplemental LTD coverage took effect: 

x received medical treatment, consultation, care, or services, 

x took prescription medications or had medications prescribed, or 

x had symptoms or conditions which would cause a reasonably prudent 

person to seek diagnosis, care, or treatment. 

If you should become disabled because of a pre-existing condition, no 

supplemental LTD benefits are payable under this plan for that 

disability unless your elimination period (see Qualifying for LongCase 3:19-cv-00105-JSC Document 48 Filed 01/22/20 Page 3 of 26
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Term Disability)5 starts after you have been an active employee under 

this plan for 12 consecutive months. 

(Dkt. No. 40-3, Ex. A-2 at 12.) 

The Plan provides that “[b]enefits shall be paid from the Sandoz Wanderer Employee 

Benefits Trust, or any successor thereto.”6

 (Dkt. No. 40-14, Ex. A-13 at 14; see also id. at 20 

(“All costs of the Plan, including Plan benefits and Plan administrative expenses shall be paid by 

the Employer either through the [VEBA Trust], contracts of insurance (if any), or from the general 

assets of the Employer.”) Novartis currently pays basic long-term disability benefits “from its 

general funds.” (Id. at 35.) The VEBA Trust is “used to hold employee contributions for the 17% 

[supplemental benefit],” and Novartis “reimburses itself from the VEBA [Trust]” to cover the 

supplemental benefit payments. (Id.) Long-term disability benefits under the Plan are only paid 

for a period of 24 months unless the participant’s “[d]isability resulted from schizophrenia, bipolar 

disorder, dementia or organic brain disease.” (Id. at 15.) 

C. Plaintiff’s Benefit Payments Under the Plan 

 Plaintiff is a Plan participant and currently receives the basic long-term disability benefit at 

the 50% pre-disability earnings rate for bipolar disorder. (Dkt. No. 1 at ¶¶ 2, 6.) He elected 

coverage for the supplemental benefit effective January 1, 2013. (See Dkt. No. 40-3, Ex. A-2 at 

135.) 

 Plaintiff filed a claim for long-term disability benefits under the Plan in September 2013 

for a lumbar spine condition and depression. (Dkt. No. 40-10, Ex. A-9 at 361, 365-66.) Because 

Plaintiff purchased supplemental benefit coverage effective January 1, 2013, MetLife conducted a 

review of the time period between October 1, 2012 through December 31, 2012 (“the look-back 

5 A participant’s “elimination period occurs when [the participant] receive[s] benefits under the 

company’s short-term disability plan for the maximum 26-week period.” (Dkt. No. 40-3, Ex. A-2 

at 11.) 

6

 It is undisputed that the Sandoz Trust referenced in the Plan is the Sandoz Corporation Voluntary 

Employees’ Beneficiary Association Master Trust (“VEBA Trust”), effective January 1, 1994. 

(See Dkt. No. 40-2, Ex. A-1 at 1 (filed under seal).) Indeed, an internal Novartis document dated 

September 12, 2018 indicates that “Legacy Sandoz implemented a VEBA (Voluntary Employee 

Benefit Association) Trust on January 1, 1994 to pay for certain employee benefits on a tax 

advantaged basis.” (See Dkt. No. 40-14, Ex. A-13 at 35.) Novartis amended the VEBA Trust 

effective October 2018 to, among other things, make “[a]ll references to the ‘Company’ or 

‘Sandoz Corporation’” mean “Novartis Corporation.” (Id. at 28.) 

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period”) to determine whether his back condition or depression were pre-existing conditions. (Id.

at 366.) On October 10, 2013, MetLife closed Plaintiff’s claim because he returned to work 

October 1, 2013; further, he did not meet the 26-week elimination period. (Id. at 368-71.) 

 Plaintiff stopped working in February 2014 and renewed his claim for long-term disability 

benefits after maxing out his short-term disability benefits. (Id. at 377-79.) Plaintiff again sought 

benefits for disability due to his lumbar spine condition and “psychological limitations.” (Id. at 

395-96.) By letter dated April 4, 2014, MetLife approved Plaintiff for the basic benefit effective 

February 19, 2014 for the lumbar spine condition that originally became disabling in April 2013. 

(Id. at 351.) The letter advised Plaintiff that his basic benefit would expire on February 18, 2016, 

pursuant to the 24-month “maximum benefit duration” for his musculoskeletal condition. (Id. at 

352.) The letter also states that MetLife was reviewing Plaintiff’s claim to determine whether he 

was eligible for the supplemental benefit. (Id.) 

 A MetLife claim activity report entry dated April 16, 2014 indicates that Plaintiff contacted 

MetLife and inquired whether “he could receive benefits beyond the 24 [months] for bipolar 

[disorder].” (Id. at 430.) MetLife responded that it “would need medical documentation to 

support his inability to work due to the bipolar disorder.” (Id.) MetLife continued to investigate 

Plaintiff’s claim for supplemental benefits and issued a letter to Plaintiff in January 2015 

approving supplemental benefit coverage for his lumbar spine condition. (Dkt. No. 40-9, Ex. A-8 

at 438 (filed under seal).) The letter states, in pertinent part: 

It was determined that you were not treated for your lumbar back 

condition from October 1, 2012 through December 31, 2012, and 

therefore eligible for the supplemental coverage of 67%. 

Please note that MetLife confirmed that you were treated for 

depression with Dr. Bryant on November 2, 2012. Based on this 

information if your disabling condition is no longer due to your 

lumbar back condition and/or medical information no longer supports 

[that it is disabling], and your disability condition is due to a mental 

health condition you would not be eligible for the supplemental 

coverage amount. 

(Id. at 439.) Thus, MetLife approved the supplemental benefit effective February 19, 2014, based 

on Plaintiff’s lumbar spine condition. (Id.) 

 In June 2015, MetLife issued a letter to Plaintiff stating, in pertinent part: “In reviewing 

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your claim, the medical documentation indicates that you are [d]isabled due to lumbar disc 

degeneration. This diagnosis falls under the Plan’s limited benefit provision . . ., and has a 

limitation of 24 months of benefits.” (Id. at 340.) The letter also noted that “bipolar disorder” did 

not fall under the same 24-month limitation. (Id. at 339.) MetLife requested, in pertinent part, 

copies of Plaintiff’s most recent mental health treatment notes. (Id. at 340.) 

 In November 2015, MetLife engaged Dr. Randy Rummler, a Board-certified Psychiatrist, 

to review the medical record and issue a report regarding Plaintiff’s bipolar disorder. (Id. at 131-

39.) Dr. Rummler’s report notes a diagnosis from Plaintiff’s treating mental health provider of 

bipolar disorder in July 2015, “untreated until [Plaintiff] was in his early 30’s.” (Id. at 135.) Dr. 

Rummler also cites a July 2015 treatment note stating that Plaintiff had been on the same 

psychiatric medication “for 2-3 years.” (Id.) The report further lists treatment records dated 

November 2012 through October 2015, some of which indicated symptoms of depression and 

treatment for mental health issues. (See id. at 135-39.) Dr. Rummler ultimately concluded, 

however, that there was “inadequate information to support impairment” at any time since January 

2015. (Id. at 138-39.) 

 MetLife issued a letter to Plaintiff on January 15, 2016, stating, in pertinent part: 

Based on review of your entire file, our records indicate that you will 

have received 24 months of LTD benefits on February 18, 2016 for 

low back pain, and this is the maximum period payable under the Plan 

for Neuromuscular, Musculoskeletal, or Soft Tissue Disorder. 

Therefore, your benefits are scheduled to end on February 18, 2016. 

No additional benefits will be payable after February 18, 2016, and 

your disability claim will have been paid in full in accordance with 

the terms of the Plan. 

(Id. at 116-15.) In July 2016, Plaintiff appealed MetLife’s termination of his long-term disability 

benefits, asserting that he is unable to work because of “a combination of bipolar disorder and 

significant musculoskeletal findings.” (Dkt. No. 40-5, Ex. A-4 at 105-09 (filed under seal).) Two 

months later, MetLife issued Plaintiff a letter stating that it was reversing the termination and 

reinstating his benefits, effective October 5, 2016, because the information submitted established 

that he remained disabled under the Plan due to his bipolar disorder. (Dkt. No. 40-4, Ex. A-3 at 

268 (filed under seal); see also Dkt. No. 40-5, Ex. A-4 at 13-24 (opinion of Independent Physician 

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Consultant Dr. Mark Schroeder, Board-certified Psychiatrist, who reviewed the record and opined 

that since February 2016, Plaintiff “ha[d] been experiencing severe symptoms of Bipolar disorder, 

associated with functional impairment” in areas related to employment).) There is no dispute that 

MetLife paid the reinstated benefits at the 67% supplemental benefit rate. 

D. Termination of Supplemental Benefit Based on Pre-Existing Condition 

In October 2017, MetLife reviewed the claim to determine whether Plaintiff’s bipolar 

disorder was a pre-existing condition. (Dkt. No. 40-12, Ex. A-11 at 235 (MetLife claim activity 

report entry noting “[t]here is a note on the claim on 1-13-15 that states claim is not pre-x for back 

condition but if psych/bipolar becomes primary it is pre-x”) (filed under seal).) A Psychiatric 

Clinical Specialist reviewed the claim and determined that Plaintiff received treatment for his 

bipolar disorder during the look-back period. The Specialist’s opinion was based on a November 

2012 treatment record from family nurse practitioner (“FNP”) Nancy Bryant. (Id. at 245-46.) 

Nurse Bryant’s treatment note under “ASSESSMENT” includes a diagnosis of “29689; Oth 

Manic-Depressive Psychosis,” an active psychiatric medication regimen, and Plaintiff’s selfreported history of “[d]epressive illness for the past 17 years.” (Dkt. No. 40-10, Ex. A-9 at 234-

35.) The Specialist opined that the treatment note indicated that Plaintiff “received treatment for 

what was then the ICD-9-CM diagnosis of 296.89, Bipolar Disorder, not elsewhere classified.” 

(Dkt. No. 40-12, Ex. A-11 at 246.) 

 The following month MetLife issued Plaintiff a letter informing him that his bipolar 

disorder did not meet the criteria for the supplemental benefit because it was a pre-existing 

condition. (Dkt. No. 40-4, Ex. A-3 at 204.) The letter cites the November 2012 treatment record, 

and states, in pertinent part: “Upon review of your claim file, it has been determined that you 

received medications and consultations and care during the [p]re-existing look back period of 

October 1, 2012 through December 31, 2012 for Bipolar disorder.” (Id. at 204-05.) The letter 

indicates that Plaintiff’s supplemental benefit would be terminated effective February 18, 2016 

and his claim would continue under the basic long-term disability rate of 50% as of February 19, 

2016. (Id. at 205.) 

 In June 2018, Plaintiff appealed the termination of his supplemental benefit. (Dkt. No. 40-

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3, Ex. A-2 at 290.) Plaintiff asserted that the “bipolar 1 diagnosis” reflected in the November 

2012 treatment note was only a working or “‘rule out’ diagnosis,” and submitted statements from 

his mental health providers, including Nurse Bryant, who treated him during the look-back period 

for “depressive disorder,” not bipolar disorder. (Id. at 296-97; see also id. at 299 (August 30, 

2018 statement from Nurse Bryant stating that the preliminary bipolar diagnosis on November 

2012 “was not precise and was only a rule out mode or suspected category,” and it was not until 

July 2014 that the diagnosis of bipolar disorder was definitive).) Plaintiff requested reinstatement 

of the additional 17% supplemental benefit rate. 

 MetLife engaged Independent Physician Consultant Dr. Warren Taff, a Board-certified 

psychiatrist, to review Plaintiff’s claim file and address whether the medical evidence supports 

that Plaintiff “received medical treatment, consultation, care or services, and/or had medication 

prescribed from 10/1/2012 through 12/31/12” for symptoms of bipolar disorder. (Id. at 229, 231.) 

Dr. Taff’s report clarifies, in pertinent part: 

[T]he Bipolar condition was most likely underlying and did exist prior 

to a definitive diagnosis being reached, however the documentation 

does not convincingly support that the claimant was being specifically 

treated for the condition of Bipolar disorder from 10/01/12 through 

12/31/12. My determination is based primarily on the report of FNP 

Bryant, who is being taken at her word to provide a truthful account 

of the facts and reports that the claimant was started on Zyprexa for 

sleep due to failure of other sleep medications, and Lamictal for 

resistant depression. Of course diagnostic formulation and ongoing 

treatment planning is a fluid process, and eventually the diagnosis of 

Bipolar disorder was made. However, without specific clinical 

evidence of past manic or hypomanic episodes or treatment for such 

to satisfy the diagnostic criteria of Bipolar disorder in the specified 

time period, it is wholly reasonable that the diagnosis of Bipolar was 

not considered until more clinical evidence presented. As such and 

until a definitive diagnosis was made, the prior diagnosis would hold, 

taking precedence over any rule-out or working diagnosis. The 

question as I am understanding it appears to be whether the claimant 

received “consultation or care for symptoms for the condition of 

Bipolar disorder,” and not whether the claimant’s provider was aware 

of the diagnosis and was specifically treating the diagnosis of Bipolar 

disorder. If this is indeed the question, then yes indeed the claimant 

received “consultation or care for symptoms or [sic] the condition of 

Bipolar disorder” although providers’ [sic] report that at that time 

Bipolar disorder was a rule-out diagnosis. 

(Id. at 231.) Dr. Taff further opined that “[t]he evidence supports that the claimant was being 

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treated for Bipolar symptoms with Bipolar and antipsychotic medications, despite the fact that 

Bipolar disorder was considered by providers to be a rule-out diagnosis in the [look-back] time 

period.” (Id. at 232.) 

On August 29, 2018, MetLife notified Plaintiff that it had completed its review of “the 

entire file” and determined that Plaintiff “did not satisfy the requirements of the supplemental 

coverage”; thus, “denial of the supplemental coverage was appropriate.” (Dkt. No. 40-3, Ex. A-2 

at 135.) The letter cites Dr. Taff’s opinion that Plaintiff “received consultation and care for his 

bipolar disorder symptoms from October 1, 2012 through December 31, 2012,” and includes the 

pre-existing condition limitation in its entirety. (Id. at 136-37.) 

II. Procedural History 

Plaintiff filed his complaint seeking review of MetLife’s decision pursuant to ERISA, 29 

U.S.C. 1132, on January 8, 2019. (Dkt. No. 1 at ¶ 1.) Defendants answered the complaint on 

April 18, 2019, after the parties stipulated to extensions of time. (See Dkt. No. 21.) Thereafter, 

the Court issued a Pretrial Scheduling Order setting a deadline for filing “dispositive motions” in 

this action and a hearing date for those motions, specifying that the hearing would be a Rule 52 

bench trial. (Dkt. No. 28 at 1.) The parties subsequently stipulated to several continuances, which 

the Court granted. (See Dkt. Nos. 32, 37, 39.) On November 18, 2019, Defendants filed their 

dispositive motion and the Administrative Record, (Dkt. No. 40 (filed under seal)), and Plaintiff 

moved for summary judgment, (Dkt. No. 42). The Court heard oral argument on January 16, 

2020. 

DISCUSSION 

The issue in this case is whether MetLife’s cancellation of Plaintiff’s supplemental benefit 

on the basis that it was “pre-existing” was proper. As an initial matter, however, the parties 

dispute the standard of review that applies to this Court’s review of MetLife’s determination. 

I. Standard of Review 

 A plan participant may sue under ERISA “to recover benefits due to him under the terms 

of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future 

benefits under the terms of the plan.” 29 U .S.C. § 1132(a)(1)(B). “[A] denial of benefits 

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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.” Firestone Tire & Rubber Co. v. Burch, 489 U.S. 

101, 115 (1989). “When a plan unambiguously gives the plan administrator discretion to 

determine eligibility or construe the plan’s terms, a deferential abuse of discretion standard is 

applicable.” Burke v. Pitney Bowes Inc. Long-Term Disability Plan, 544 F.3d 1016, 1023-24 (9th 

Cir. 2008). Plaintiff asserts that the Court must review MetLife’s determination de novo. 

Defendants counter that the abuse of discretion standard applies because the Plan includes a 

discretionary clause. (Dkt. No. 40-15, Ex. B at 16-17.) The Court agrees that the abuse of 

discretion standard applies. 

The Plan contains an unambiguous provision giving the Plan Administrator the “express 

discretionary authorit[y]” to, in pertinent part: (1) “construe and interpret the terms of the Plan, 

and to resolve all ambiguities, inconsistencies or omissions therein”; (2) “decide all questions of 

eligibility and determine the amount, manner and time of payment of any benefits.” (Dkt. No. 40-

14, Ex. A-13 at 16.) Further, the Plan gives the Plan Administrator the power to delegate its 

authority with regard to its responsibilities under the Plan and “to appoint or name a Claims 

Administrator to handle the administration of claims.” (Id.) Based on the Plan’s unambiguous 

grant of discretionary authority to the Plan Administrator to construe the Plan’s terms and decide 

questions of eligibility, and also bestow such authority on the Claims Administrator, the abuse of 

discretion standard applies.7

 See Firestone, 489 U.S. at 115. 

Plaintiff argues that there are two plans at issue in this case: (1) the “primary plan” or 

“Plan 1” (i.e., the Plan); and (2) “Plan 2” (the VEBA Trust), which funds the supplemental benefit 

7 Defendants’ motion asserts that “because the Plan is self-insured, ERISA preempts California 

Insurance Code § 10110.6, and therefore the discretionary clause remains enforceable.” (See Dkt. 

No. 40-15, Ex. B at 17-18 (citing Williby v. Aetna Life Ins. Co., 867 F.3d 1129, 1136 (9th Cir. 

2017)).) Plaintiff does not address ERISA preemption of California Insurance Code § 10110.6 in 

his moving papers. (See generally Dkt. Nos. 42 & 44.) Indeed, Plaintiff clarified at oral argument 

that ERISA preemption of California state law is not at issue in this case, and the Plan’s 

discretionary clause is valid. Thus, the Court need not address the issue of preemption. See 

Saffon v. Wells Fargo & Co. Long Term Disability Plan, 522 F.3d 863, 867 (9th Cir. 2008) (“The 

parties haven’t briefed the preemption question in depth, and we do not consider it.”). 

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provided under the Plan. (Dkt. No. 42 at 11.) Plaintiff asserts that the de novo standard applies 

because the VEBA Trust neither “provides for the exercise of discretion by the ERISA fiduciary, 

nor reserves the right to delegate discretion.” (Id.) Plaintiff’s argument fails, however, because he 

presents no evidence that the VEBA Trust is anything other than a funding mechanism for the 

supplemental benefit provided by the Plan, or that the VEBA Trust is a separate and active ERISA 

plan of which Plaintiff was ever a participant. Instead, the only ERISA plan that has ever been at 

issue in this action is the Plan sponsored by Novartis. (See Dkt. Nos. 1 at ¶ 2 (alleging that 

Plaintiff “is a plan participant in the Novartis Corporation Death Benefit & Disability Plan”) & 16 

(Joint Case Management Conference Statement identifying the Plan as the ERISA plan at issue).) 

Because it is undisputed that the Plan “gives the administrator or fiduciary discretionary authority 

to determine eligibility for benefits or to construe the terms of the plan[,]” the abuse of discretion 

standard applies. See Firestone, 489 U.S. at 115. 

“The manner in which a reviewing court applies the abuse of discretion standard, however, 

depends on whether the administrator has a conflicting interest.” Montour v. Hartford Life & 

Accident Ins. Co., 588 F.3d 623, 629 (9th Cir. 2009). If “the same entity that funds an ERISA 

benefits plan also evaluates claims,” then “the plan administrator faces a structural conflict of 

interest” because “benefits are paid out of the administrator’s own pocket.” Id. at 630. Plaintiff 

does not argue that a structural conflict exists and, indeed, a conflict does not exist because 

Novartis funds the Plan but does not evaluate claims. 

The Summary Plan Description identifies MetLife as the “Claims Administrator and Plan 

Fiduciary” and provides, in pertinent part:

MetLife is responsible for processing and deciding all claims for 

benefits under [the Plan], as well as all appeals of denied claims. 

Benefits are payable under the [Plan] only if MetLife determines, in 

its discretion, that the claimant is entitled to them. 

MetLife is also the [P]lan’s fiduciary . . ., which means that MetLife 

has the authority and discretion to interpret [the Plan], to determine 

all questions arising under or related to the [Plan], including all 

questions of fact and questions of eligibility to participate and obtain 

benefits, and to determine the amount, manner, and time of payment 

of any benefits under the plans. MetLife’s decisions are final and 

binding. 

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(Dkt. No. 40-3, Ex. A-2 at 24.) 

Thus, Novartis sponsors the Plan and funds the long-term disability benefits from its 

general funds, funds the supplemental benefit by way of the VEBA Trust, and MetLife is the 

Claims Administrator and Plan Fiduciary that evaluates claims under the Plan and makes 

eligibility and payment determinations. (See Dkt. No. 40-3, Ex. A-2 at 24; see also id. at 65 (2011 

“General Services Agreement Task Order” (“2011 Task Order”) between Novartis and MetLife 

providing that “MetLife does not insure and is not liable for Plan Benefits” and “liability is always 

the obligation of [Novartis]”).) In other words, there is no structural conflict of interest because 

the entity paying the benefits at issue (Novartis by way of the VEBA Trust) is not the same entity 

that decides who gets paid (MetLife). “In the absence of a conflict, judicial review of a plan 

administrator’s benefits determination involves a straightforward application of the abuse of 

discretion standard.” Montour, 588 F.3d at 629. 

“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.” Boyd v. Bert Bell/Pete Rozelle NFL 

Players Retirement Plan, 410 F.3d 1173, 1178 (9th Cir. 2005). With this standard in mind, the 

Court addresses MetLife’s determination to terminate Plaintiff’s supplemental benefit payment. 

II. MetLife did not Abuse its Discretion 

 Defendants assert that MetLife’s decision to terminate Plaintiff’s supplemental benefit was 

not an abuse of discretion because the evidence demonstrates that his bipolar disorder was a “preexisting condition” under the Plan, which precludes entitlement to supplemental long-term 

disability benefits. (Dkt. No. 40-15, Ex. B at 21.) The Court agrees. 

 Under the abuse of discretion standard: 

[T]he plan administrator’s decision can be upheld if it is grounded on 

any reasonable basis. In other words, where there is no risk of bias 

on the part of an administrator, the existence of a single persuasive 

medical opinion supporting the administrator’s decision can be 

sufficient to affirm, so long as the administrator does not construe the 

language of the plan unreasonably or render its decision without 

explanation. 

Montour, 588 F.3d at 629-630 (internal quotation marks and citations omitted). Put another way, 

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to hold that MetLife abused its discretion in terminating Plaintiff’s supplemental benefit, the Court 

“would have to conclude that the entire record leads to a ‘definite and firm conviction that a 

mistake has been committed’ by [MetLife].” See Boyd, 410 F.3d at 1179 (quoting Concrete Pipe 

& Prods. of California, Inc. v. Constr. Laborers Pension Tr. for S. California, 508 U.S. 602, 622 

(1993)). The record does not support that conclusion. 

A. MetLife explained its benefits decision 

First, the correspondence from MetLife to Plaintiff indicates that MetLife did not render its 

decision to terminate Plaintiff’s supplemental benefit without explanation. Instead, MetLife 

clearly communicated to Plaintiff the bases for its initial determination in November 2017 and its 

August 2018 decision affirming that determination on appeal. Further, MetLife’s claim activity 

reports indicate that Plaintiff was in regular contact with MetLife’s claims specialists, and 

MetLife’s correspondence to Plaintiff explained how he could contact MetLife to discuss his 

benefits. 

B. MetLife reasonably construed the Plan 

 Second, MetLife reasonably construed the Plan. See Montour, 588 F.3d at 630. In 

construing an ERISA plan, courts must “apply contract principles derived from state law . . . 

guided by policies expressed in ERISA and other federal labor laws.” Gilliam v. Nevada Power 

Co., 488 F.3d 1189, 1194 (9th Cir. 2007) (internal quotation marks and citation omitted); see also 

Evans v. Safeco Life Ins. Co., 916 F.2d 1437, 1439 (9th Cir. 1990) (holding that “the interpretation 

of ERISA insurance policies is governed by a uniform federal common law”). Thus, the “terms in 

an ERISA plan should be interpreted in an ordinary and popular sense as would a [person] of 

average intelligence and experience.” Gilliam, 488 F.3d at 1194 (alteration in original) (internal 

quotation marks and citation omitted). Further, if a plan’s terms are ambiguous, courts may 

“examine extrinsic evidence to determine the intent of the parties.” Richardson v. Pension Plan of 

Bethlehem Steel Corp., 112 F.3d 982, 985 (9th Cir. 1997). 

 The Summary Plan Description, expressly incorporated into the Plan, provides, in pertinent 

part: 

Pre-existing Condition Rule for Supplemental LTD Coverage 

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If you have a pre-existing condition and elect supplemental LTD 

coverage, your supplemental LTD coverage for that pre-existing 

condition will not take effect for 12 months after the effective date of 

your supplemental LTD coverage. A pre-existing condition is an 

injury, sickness, or pregnancy for which you, in the three months 

before your supplemental LTD coverage took effect: 

x received medical treatment, consultation, care, or services, 

x took prescription medications or had medications prescribed, 

or 

x had symptoms or conditions which would cause a reasonably 

prudent person to seek diagnosis, care, or treatment. 

If you should become disabled because of a pre-existing condition, no 

supplemental LTD benefits are payable under this plan for that 

disability unless your elimination period (see Qualifying for LongTerm Disability) starts after you have been an active employee under 

this plan for 12 consecutive months. 

(Dkt. No. 40-3, Ex. A-2 at 12.) Under the final paragraph, if a participant becomes disabled 

because of a pre-existing condition, he will never receive supplemental disability benefits for that 

disability unless he has been an active employee under the plan for 12 consecutive months. If he 

has been an active employee for 12 consecutive months preceding his elimination period (shortterm disability benefits), then under the first paragraph he can receive supplemental disability 

benefits for a disabling pre-existing condition, with such benefits beginning 12 months after the 

effective date of the supplemental benefit coverage. By terminating Plaintiff’s supplemental 

benefits because of a pre-existing condition, MetLife therefore implicitly found that Plaintiff had 

not been an active employee under the plan for 12 consecutive months before the commencement 

of his elimination period. 

 At the January 16, 2020 hearing, Plaintiff argued for the first time that the phrase “active 

employee under this plan for 12 consecutive months” is at issue, and that MetLife abused its 

discretion by not considering Plaintiff an “active employee” under the Plan given that he had been 

a Novartis employee “under” the Plan since it became effective in January 2013. Plaintiff appears 

to argue that in calculating the 12 consecutive months as an active employee, Defendants should 

have counted the time Plaintiff was receiving disability benefits under the Plan. Plaintiff’s belated 

argument fails because MetLife did not abuse its discretion in not considering time that Plaintiff 

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was not working and instead receiving disability benefits as time spent as “an active employee 

under the plan.” 

First, Plaintiff’s June 2018 letter of appeal—drafted by his then-counsel—recognizes that 

Plaintiff “did not work for Novartis for 12 consecutive months before he had to leave work due to 

disability.” (See Dkt. No. 40-3, Ex. A-2 at 291.) The administrative record supports that 

statement and demonstrates that Plaintiff actively worked for Novartis from December 20, 2012 

through April 9, 2013, (see Dkt. No. 40-3, Ex. A-2 at 135), and again from October 1, 2013 

through February 11, 2014, (see Dkt. No. No. 40-10, Ex. A-9 at 464). 

Second, Plaintiff’s June 2018 letter of appeal—drafted by his then-counsel—interprets the 

pre-existing condition limitation in the same manner as Defendants. Plaintiff’s letter states, in 

pertinent part: 

According to Novartis policy, if an individual has received medical 

treatment, consultation, care or services during the 3-month period; 

or if he took medications or was prescribed them during that period; 

or if he had symptoms that would have caused a reasonably prudent 

person to get care, then the pre-existing condition exists and a 

claimant cannot receive benefits at the 67% level unless he was able 

to work for 12 continuous months before the disability 

commences. 

Because the issue on appeal concerns only the 3-month period from 

October 1, 2012 to December 2012, the documentation in support of 

[Plaintiff’s] claim is concise and directed solely at the issue –

whether his bipolar was a pre-existing condition under the Novartis 

plan. 

(Dkt. No. 40-3, Ex. A-2 at 296 (emphasis added).) In other words, until oral argument on January 

16, 2020, Plaintiff had communicated that he understood that the “active employee under this 

plan” language in the limitation meant “actively working.” 

Third, Defendants’ interpretation (consistent with Plaintiff’s earlier interpretation) is the 

only interpretation that makes sense and, in any event, is not an abuse of discretion. The preexisting condition limitation does not state “participant under this plan” or even simply an 

“employee under this plan”; instead, it specifies “active employee under this plan.” The only 

reasonable interpretation for qualifying “employee” with “active” is that Novartis intended to 

require a participant under the Plan to actively work for at least 12 consecutive months before 

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being able to receive the supplemental benefit for a condition that pre-existed the participant’s 

enrollment in the supplemental benefits plan but later became disabling. 

C. MetLife did not rely on clearly erroneous findings of fact

 Finally, MetLife did not “rel[y] on clearly erroneous findings of fact,” and instead based its 

decision on a persuasive medical opinion. See Boyd, 410 F.3d at 1178-79. A Psychiatric Clinical 

Specialist first reviewed the claim and determined that during the look-back period, and 

specifically, on November 12, 2012, Plaintiff “received treatment for what was then ICD-9-CM 

diagnosis of 296.89, Bipolar Disorder, not elsewhere classified,” and “also received medications 

used in the treatment of bipolar disorder.” (See Dkt. No. 40-12, Ex. A-11 at 245-47 (citing the 

treatment record of Nurse Bryant and opining “that the antipsychotic medication Zyprexa and 

anticonvulsant Lamictal are frequent and commonly prescribed medications for the condition of 

Bipolar Disorder,” and that Clonazepam is “common treatment for panic/anxiety and or seizure 

disorders, as well as Pristiq which is used in treatment for depressive disorders and/or depressive 

episodes”).) That determination is reasonably supported by Nurse Bryant’s treatment note, which 

includes a diagnosis of “29689; Oth Manic-Depressive Psychosis” and an active psychiatric 

medication regimen. (Dkt. No. 40-10, Ex. A-9 at 234-35.) The treatment note also reports 

Plaintiff’s subjective “Psychiatric History,” stating, in pertinent part: “Depressive Illness for the 

past 17 years. Off and on, in cycles. Depression much improved since he is not crushing his 

Pristiq.” (Id. at 234.) 

Dr. Taff’s July 2018 independent medical opinion then confirmed that Plaintiff received 

“consultation or care for symptoms or [sic] the condition of Bipolar disorder” and “was being 

treated for Bipolar symptoms with Bipolar and antipsychotic medications, despite the fact that 

Bipolar disorder was considered by providers to be a rule-out diagnosis in the [look-back] time 

period.” (Dkt. No. 40-3, Ex. A-2 at 231-32.) Dr. Taff rendered his opinion after reviewing 

Plaintiff’s mental health treatment records from August 2012 through June 2018. (See id. at 227-

29.) Because Dr. Taff is a psychiatrist and his opinion reflected a thorough review of the relevant 

medical evidence, MetLife did not abuse its discretion in finding his opinion persuasive. See 

Boyd, 410 F.3d at 1179 (noting that “even a single persuasive medical opinion may constitute 

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substantial evidence upon which a plan administrator may rely in adjudicating a claim”). 

Plaintiff argues that “the record does not reflect that he was treated [for] or had symptoms 

of a Bipolar disorder during [the look-back period].” (Dkt. No. 42 at 6 (citing Plaintiff’s mental 

health treatment records).) This argument fails for the reasons previously stated. MetLife based 

its final determination to affirm the termination of Plaintiff’s supplemental benefit on the opinion 

of Dr. Taff, who reviewed the medical evidence and opined that Plaintiff “received consultation or 

care for symptoms” of bipolar disorder during the look-back period and “[t]he evidence supports 

that the claimant was being treated for Bipolar symptoms with Bipolar and antipsychotic 

medications, despite the fact that Bipolar disorder was considered by providers to be a rule-out 

diagnosis” during the look-back period. (See Dkt. No. 40-3, Ex. A-2 at 231-32.) MetLife did not 

abuse its discretion in relying on Dr. Taff’s opinion, which expressly considered the records cited 

by Plaintiff. See Boyd, 410 F.3d at 1179 (“We hold that a mere tally of [medical] experts is 

insufficient to demonstrate that an ERISA fiduciary has abused its discretion, for even a single 

persuasive medical opinion may constitute substantial evidence upon which a plan administrator 

may rely in adjudicating a claim.”); see also Kaiser v. Standard Ins. Co., 314 F. App’x 921, 922-

23 (9th Cir. 2008) (finding no abuse of discretion in plan administrator’s “decision to rely upon its 

consultants rather than upon the opinions of [the plaintiff’s] physicians, or, ultimately, in its 

consideration of the consulting physicians’ opinions during its handling of the review process”). 

Plaintiff’s citation to McLeod v. Hartford Life & Accident Co., 372 F.3d 618 (3rd Cir. 

2004) fails to persuade otherwise and is distinguishable on its facts. First, McLeod involved a 

“heightened arbitrary and capricious standard [of review]” based on a structural conflict of interest 

that is not present here. See 372 F.3d at 623-24. That standard of review factored heavily in the 

court’s determination; specifically:

[The defendant] would have us hold that receiving medical care “for 

symptoms” of a pre-existing condition encompasses receiving care 

for symptoms that no one even suspected were connected with the 

later diagnosed ailment but which were later deemed not 

inconsistent with it, but a heightened standard of review will not 

countenance such a strained interpretation. In a case of heightened 

review, where the plan administrator is not afforded complete, 

freewheeling discretion, we must be especially mindful to ensure 

that the administrator's interpretation of policy language does not 

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unfairly disadvantage the policy holder. ERISA was enacted “‘to 

promote the interests of employees and their beneficiaries in 

employee benefit plans' and to ‘protect contractually defined 

benefits.’” Were the Plan's language the subject of non-heightened 

discretionary review, and had [the defendant] provided a plausible 

reason for its interpretation, then perhaps the result would be 

different.

Id. at 624 (emphasis added) (internal citations omitted). 

Here, in contrast, the Plan’s language is subject to “non-heightened discretionary review” 

and Defendants have “provided a plausible reason for [their] interpretation.” See id. Second, 

McLeod did not involve a working or rule-out diagnosis of the condition at issue during the lookback period. Instead, in McLeod, “no one even suspected” during the look-back period that the 

symptoms of the later-diagnosed condition were connected to that condition. See id. That is not 

the case here; indeed, Nurse Bryant’s March 2018 statement in support of Plaintiff’s 

administrative appeal states that “[d]uring the dates of November 12, 2012 through July 14, 2014, 

the Bipolar Diagnosis was uncertain,” and “should not have been considered as a conclusive 

diagnosis but a working diagnosis.” (See Dkt. No. 40-3, Ex. A-2 at 299 (stating that “[t]he 

preliminary diagnosis was not precise and was only in a rule out mode or suspected category for 

the November 12, 2012 medical visit”).) Thus, McLeod does not help Plaintiff. 

*** 

 In sum, Defendants did not abuse their discretion in determining that Plaintiff’s bipolar 

condition was a pre-existing condition under the terms of the Plan and terminating Plaintiff’s 

supplemental benefit accordingly. 

D. Plaintiff’s other arguments 

 Plaintiff asserts that Defendants nonetheless wrongfully terminated his supplemental 

benefit because: (1) the pre-existing condition limitation “was never properly authorized”; (2) “it 

ceased to apply as of January 1, 2014”; and (3) the Plan does not contain a provision authorizing 

MetLife to grant supplemental benefits and “retroactively change its decision.” (Dkt. No. 42 at 6.) 

 1. MetLife was authorized to enforce the pre-existing condition limitation 

The Plan’s description of the supplemental benefit provides, in pertinent part: “Such 

supplemental long-term disability coverage shall be subject to pre-existing condition limitations as 

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established from time to time by the Claims Administrator.” (Dkt. No. 40-14, Ex. A-13 at 12.) 

Plaintiff asserts that the pre-existing condition rule set forth in the Summary Plan Description is 

“unauthorized” because the Summary Plan Description, which is the only Plan document that 

contains the pre-existing condition limitation, was prepared by Novartis instead of Claims 

Administrator MetLife, and MetLife “was never asked to, and did not, author any rules for preexisting conditions.” (Dkt. No. 42 a 7-8.) Plaintiff’s argument fails to persuade. 

 First, it makes no sense to interpret the Plan’s supplemental benefit provision as granting 

sole authority to the Claims Administrator to create such pre-existing condition limitations 

because doing so would mean that the Plan’s sponsor—Novartis—is precluded from creating such 

rules or that MetLife is precluded from enforcing the pre-existing condition rule that Novartis had 

already created. Indeed, the Summary Plan Description containing the pre-existing condition rule 

at issue was authored before the Plan became effective on January 1, 2013 and was expressly 

incorporated into the Plan. (See Dkt. No. 40-14, Ex. A-13 at 25.) The Plan provides, in pertinent 

part, that “eligibility for and terms of the [ ] Plan” described in the Summary Plan Description are 

fully incorporated into the Plan “as if fully set forth” in the Plan itself. (Id.) It follows that any 

rules Novartis set forth in the Summary Plan Description are conclusive and binding on Plan 

participants, as long as such rules are not inconsistent with the Plan’s terms. Plaintiff cannot 

reasonably argue that the pre-existing condition rule is inconsistent with the Plan’s terms when the 

Plan expressly provides that pre-existing condition limitations may apply to the supplemental 

benefit. Thus, the more reasonable interpretation of the provision is that the Claims Administrator 

has the authority to apply the pre-existing condition limitation in making determinations regarding 

the supplemental benefit, not that the Claims Administrator is authorized to enforce such a 

limitation only if the Claims Administrator—and not the author of the Plan and Summary Plan 

Description—creates it. 

 Further, that Novartis and not MetLife authored the Summary Plan Description is of no 

moment because the Task Order setting forth MetLife’s duties as Claims Administrator and Plan 

Fiduciary expressly incorporates the Summary Plan Description. “Appendix B: Summary Plan 

Description” of the Task Order provides, in pertinent part:

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[T]he portions of the Summary Plan Description pertaining to 

disability income benefits administered by MetLife under and 

subject to the terms and conditions of this Task Order are 

incorporated by reference in their entirety as Appendix B: Summary 

Plan Description. 

(Dkt. No. 40-3, Ex. A-2 at 74.) The Task Order also provides, that: 

each time [a Summary Plan Description] is itself modified, Appendix 

B: Summary Plan Description will be deemed to have been amended 

to incorporate such modified [Summary Plan Description] as of the 

time MetLife has been given notice of the changes reflected in such 

modified [Summary Plan Description]. 

(Id. at 65.) In other words, each time Novartis issues a Summary Plan Description, the portions 

concerning “disability income benefits” are incorporated in their entirety in the Task Order 

governing MetLife’s duties as Claims Administrator. Thus, MetLife was not only authorized to 

enforce the pre-existing condition limitation in terminating Plaintiff’s supplemental benefit, it was 

required to consider its application because the rule was incorporated by reference in the Task 

Order. 

 Simply put, the pre-existing condition limitation cited in MetLife’s decision was 

“authorized” because it was created by the Plan’s sponsor, set forth in the Summary Plan 

Description, and incorporated into the Plan itself. As Claims Administrator, MetLife is charged 

with interpreting and enforcing the terms of the Plan, and that is precisely what MetLife did. 

Plaintiff’s citation in his reply to CIGNA Corp. v. Amara, 563 U.S. 421 (2011) does not 

counsel a different result. The Amara Court held that “summary documents, important as they 

are, provide communication with beneficiaries about the plan, but that their statements do not 

themselves constitute the terms of the plan for purposes of [an ERISA claim].” 563 U.S. at 438. 

The Ninth Circuit has interpreted Amara as standing for “either of two fairly simple propositions”: 

“(1) the terms of the [Summary Plan Description] are not enforceable when they conflict with 

governing plan documents, or (2) the [Summary Plan Description] cannot create terms that are not 

also authorized by, or reflected in, governing plan documents.” Mull for Mull v. Motion Picture 

Indus. Health Plan, 865 F.3d 1207, 1210 (9th Cir. 2017) (quoting with approval Eugene S. v. 

Horizon Blue Cross Blue Shield of N.J., 663 F.3d 1124, 1131 (10th Cir. 2011)). Neither situation 

applies here. First, the terms of the Summary Plan Description do not conflict with the Plan; the 

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Plan references pre-existing condition limitations and the Summary Plan Description sets forth the 

limitations in detail. Second, and similarly, the Summary Plan Description does not create new 

terms but instead sets forth a rule reflected in the Plan; indeed, the Summary Plan Description “is 

part of the [P]lan itself.” See Mull for Mull, 865 F.3d at 1210 (“Amara does not prohibit this type 

of arrangement.”). 

Plaintiff’s argument that the Plan’s reference to “pre-existing condition limitations as 

established from time to time by the Claims Administrator” constitutes an impermissible 

delegation of authority under ERISA similarly fails. Plaintiff asserts: 

[T]he plan sponsor may not delegate to someone else the right to 

determine, and alter, the terms of the plan, especially without 

reserving the final right to approve of those terms. To the extent, 

therefore, that the plan purported to make MetLife responsible for the 

terms of its pre-existing condition language, that is an improper 

delegation, and the pre-existing condition language, had MetLife 

provided any would not be a valid part of [the Plan]. 

(Dkt. No. 42 at 10.) Plaintiff posits that his argument presents an “interesting question” that 

“appears to be one of first impression,” and asks whether such delegation “make[s] the plan, to 

that extent, illusory?” (Id. at 9.) 

 The Court need not address that question, however, because Plaintiff is wrong to the extent 

he argues that the Plan’s reference to “pre-existing condition limitations” constitutes an 

impermissible delegation of authority to alter the terms of the Plan. The Plan itself gives the Plan 

Administrator “authority to control and manage the operation and administration of the Plan,” 

including the “express discretionary authorit[y]” to, in pertinent part “delegate authority with 

regard to its responsibilities” to a Claims Administrator. (Dkt. No. 40-14, Ex. A-13 at 16.) Those 

responsibilities include “adopt[ing] such rules, regulations and bylaws as it deems necessary or 

desirable.” (Id. at 17.) Further, the Plan provides that “[a]ll determinations, interpretations, rules, 

and decisions of the Plan Administrator or its delegate shall be conclusive and binding upon all 

persons having or claiming to have any interest or right under the Plan.” (Id. at 18.) Thus, the 

Plan’s reference to “pre-existing condition limitations as established from time to time by the 

Claims Administrator” is consistent with the authority granted in the Plan Administrator to 

delegate its discretionary authority to determine rules of eligibility. More importantly, Plaintiff’s 

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argument raises a non-issue because Novartis as Plan Sponsor created the precise rule at issue—

the pre-existing condition limitation—and that rule does not conflict with the terms of the Plan for 

the reasons previously stated. 

 2. The pre-existing condition limitation did not expire on January 1, 2014 

 Plaintiff next asserts that the pre-existing condition limitation “does not apply to any 

disability after January 1, 2014” because he elected the supplemental benefit effective January 1, 

2013, and the limitation provides: 

If you have a pre-existing condition and elect supplemental LTD 

coverage, the supplemental LTD coverage for that pre-existing 

condition will not take effect for 12 months after the effective date of 

your supplemental LTD coverage. 

(Dkt. No. 42 at 13 (emphasis added).) Plaintiff interprets that provision as meaning that the 

limitation does not “apply more than one year after the effective date of the coverage.” (Dkt. No. 

44 at 5.) Thus, Plaintiff asserts that “the pre-existing limitation ended well before [he] was 

disabled by bipolar condition” and began receiving benefits for that condition in February 2016. 

(Id. at 5.) 

Defendants counter that Plaintiff misinterprets the provision, and that it “simply provides 

that, if you have a pre-existing condition, and you elect coverage for supplemental LTD benefits, 

then you would not actually be covered for those benefits for that pre-existing condition until 12 

months after the effective date of coverage.” (Dkt. No. 43-2, Ex. A at 15-16.) In other words, the 

language “relates to the date of coverage, and not to the eligibility for benefits themselves.” (Id. at 

16.) The Court agrees. The plain language of the provision supports Defendants’ reading that it 

applies to the effective date of supplemental benefit coverage for a pre-existing condition and does 

not concern whether a pre-existing condition falls within the scope of the limitation and bars the 

supplemental benefit. Indeed, that is the only reasonable interpretation. 

3. MetLife did not abuse its discretion in revisiting supplemental benefit 

award 

Plaintiff also argues that MetLife’s determination was improper because “[t]here is no 

provision of the plan which permits it to simply change its mind about an award of benefits.” 

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(Dkt. No. 42 at 14.) Plaintiff is wrong. The Summary Plan Description provides that as Claims 

Administrator, “MetLife is responsible for processing and deciding all claims for benefits under 

[the Plan], as well as all appeals of denied claims. Benefits are payable under the [Plan] only if 

MetLife determines, in its discretion, that the claimant is entitled to them.” (Dkt. No. 40-3, Ex. A2 at 24.) Further, as Plan Fiduciary, “MetLife has “discretion to interpret [the Plan], to determine 

all questions arising under or related to the [Plan], including all questions of fact and questions of 

eligibility to participate and obtain benefits, and to determine the amount, manner, and time of 

payment of any benefits under the plans.” (Id.) 

MetLife told Plaintiff in 2015 that he would not be eligible for supplemental coverage for a 

disabling mental health condition because of the pre-existing condition limitation for supplemental 

benefits: 

It was determined that you were not treated for your lumbar back 

condition from October 1, 2012 through December 31, 2012, and 

therefore eligible for the supplemental coverage of 67%. 

Please note that MetLife confirmed that you were treated for 

depression with Dr. Bryant on November 2, 2012. Based on this 

information if your disabling condition is no longer due to your 

lumbar back condition and/or medical information no longer 

supports [that it is disabling], and your disability condition is due to 

a mental health condition you would not be eligible for the 

supplemental coverage amount. 

(Dkt. No. 40-9, Ex. A-8 at 439 (emphasis added).) Despite that 2015 determination, when 

MetLife reinstated Plaintiff’s long-term disability benefits in 2016 in light of the evidence of his 

bipolar disability it reinstated the supplemental benefits as well. The following year, however, 

MetLife revisited its decision to pay Plaintiff at the supplemental benefit rate for his bipolar 

disorder, consistent with its 2015 determination that Plaintiff’s mental health condition was preexisting. Plaintiff does not cite any caselaw or anything in the Plan which suggests that MetLife 

did not have the authority to do so. 

 Because MetLife had the authority and discretion to revisit its previous decision to award 

the supplemental benefit and did not abuse its discretion in doing so, the Court declines to address 

Plaintiff’s single reference to the “doctrine of unilateral mistake.” The Court also notes that 

MetLife did not seek reimbursement for the supplemental benefits previously paid; instead, it 

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stopped future payments of such benefits. 

E. Other issues 

Plaintiff’s motion includes a section that contains several statements of law, specifically 

that: (1) “exclusions and limitations of coverage must be ‘clear, plain, and conspicuous’; (2) “the 

burden of proof on limitations and exclusions from coverage lies with the plan”; (3) [a]mbiguities 

created by the plan drafters are construed against the plan, as the rule of contra preferentem [sic] 

applies in all 50 states”; and (4) the Summary Plan Description must give Plan participants notice 

of their rights and duties under the Plan in accordance with 29 U.S.C. § 1022(a). (Dkt. No. 42 at 

12.) However, Plaintiff provides no argument in connection with these statements of law, and the 

Court addresses them accordingly. 

 First, the pre-existing limitation in the Summary Plan Description is “clear, plain, and 

conspicuous enough to negate layman [Plaintiff’s] objectively reasonable expectations of 

coverage.” See Scharff v. Raytheon Co. Short Term Disability Plan, 581 F.3d 899, 905 (9th Cir. 

2009) (noting that the “reasonable expectations doctrine” applies to ERISA insurance plans). Preexisting limitations are referenced in the Plan and the limitation is set forth in clear, plain language 

in the Summary Plan Description. Further, the limitation is easily identifiable within the body of 

the Summary Plan Description by a headline that is a different color and larger size than the text 

below it. (See Dkt. No. 40-3, Ex. A-2 at 12 (“Pre-existing Condition Rule for Supplemental LTD 

Coverage”).) For the same reasons, the relevant section of the Summary Plan Description is 

“sufficiently accurate and comprehensive to reasonably apprise such participants and beneficiaries 

of their rights and obligations under the plan.” See 29 U.S.C. § 1022(a). 

 Second, Defendants have satisfied their burden of demonstrating that the pre-existing 

condition limitation applies because MetLife did not abuse its discretion by applying the limitation 

for the reasons previously stated. Finally, the doctrine of contra proferentem does not apply in 

interpreting ambiguous terms in an ERISA-covered plan where, like here, the plan “grants the 

administrator discretion to construe its terms.” Blankenship v. Liberty Life Assurance Co. of 

Boston, 486 F.3d 620, 625 (9th Cir. 2007). The only question for the reviewing court in such 

cases is whether the administrator’s interpretation is reasonable. Day v. AT&T Disability Income 

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Plan, 698 F.3d 1091, 1098 (9th Cir. 2012). As previously discussed, MetLife’s interpretation of 

the pre-existing condition limitation as it applied to Plaintiff’s bipolar condition was reasonable. 

// 

III. Defendants’ Administrative Motions to File Under Seal

A party must demonstrate “compelling reasons” to seal judicial records attached to a 

dispositive motion. Kamakana v. City & Cnty. of Honolulu, 447 F.3d 1172, 1179 (9th Cir. 2006). 

Further, parties moving to seal documents must comply with the procedures set forth in Civil 

Local Rule 79-5. The rule permits sealing only where the parties have “establishe[d] that the 

document or portions thereof is privileged or protectable as a trade secret or otherwise entitled to 

protection under the law.” Civ. L.R. 79-5(b). 

 Defendants move to file under seal the entire administrative record, consisting of 4,829 

pages, and the unredacted versions of their trial brief and opposition to Plaintiff’s motion for 

summary judgment. (See Dkt. Nos. 40 & 43.) Defendants assert that the material warrants sealing 

“because it contains extensive confidential and private information about Plaintiff, including 

personal identifiers such as his social security number, date of birth, and home address,” as well as 

medical records containing “Plaintiff’s private health information, which is protected by the 

Health Insurance Portability and Accountability Act (HIPAA).” (Dkt. No. 40.) 

The Court agrees that sealing the material is warranted because it includes Plaintiff’s 

personal medical information and multiple references to personal identifying information; 

Plaintiff’s privacy interests in such information outweigh the public’s general right to access court 

documents. See, e.g., Sullivan v. Prudential Ins. Co. of Am., No. 2:12-cv-01173-GEB-DAD, 2012 

WL 3763904 (E.D. Cal. Aug. 29, 2012) (granting parties’ joint motion to lodge administrative 

record in ERISA action under seal because it “contain[ed] references to sensitive information”); 

San Ramon Reg’l Med. Ctr., Inc. v. Principal Life Ins. Co., No. C 10-02258 SBA, 2011 WL 

89931, at *1 n.1 (N.D. Cal. Jan. 10, 2011) (sua sponte sealing confidential medical information 

deemed confidential under HIPAA). Further, because the record spans thousands of pages and is 

replete with Plaintiff’s personal medical and identifying information, redaction is impracticable. 

Accordingly, the Court grants Defendants’ administrative motions to seal in their entirety. 

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This Order shall be provisionally filed under seal and the parties shall meet and confer to redact 

the portions of the Order that quote any sealed material. The parties shall provide the Court with 

their proposed redactions within 14 days of this Order. 

CONCLUSION 

For the reasons stated above, and pursuant to Federal Rule of Civil Procedure 52, the Court 

concludes that an abuse of discretion standard of review applies. The Court further finds that 

Defendants did not abuse their discretion in determining that Plaintiff’s bipolar condition was preexisting and terminating his supplemental benefit pursuant to the Plan’s pre-existing condition 

limitation. 

This Order disposes of Docket Nos. 40, 42, and 43. 

IT IS SO ORDERED. 

Dated: January 22, 2020 

 

JACQUELINE SCOTT CORLEY 

United States Magistrate Judge 

JACQUELINE SCOTT CORLEY

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