NOT FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

NEIL SORGER, 

Plaintiff-Appellant, 

 v. 

NOVARTIS CORPORATION DEATH

BENEFIT & DISABILITY PLAN,

METROPOLITAN LIFE INSURANCE 

COMPANY,

Defendants-Appellees.

No. 20-15224

D.C. No. 3:19-cv-00105-JSC

MEMORANDUM*

Appeal from the United States District Court

For the Northern District of California

Jacqueline Scott Corley, Magistrate Judge, Presiding

Argued and Submitted May 14, 2021

San Francisco, California

Before: NGUYEN and COLLINS, Circuit Judges, and BURGESS,* Chief 

District Judge.

Neil Sorger appeals from the district court’s order concluding that Novartis 

Corporation Death Benefit and Disability Plan (the “Plan”) and Metropolitan Life 

* This disposition is not appropriate for publication and is not precedent 

except as provided by Ninth Circuit Rule 36-3.

 The Honorable Timothy M. Burgess, Chief United States District 

Judge for the District of Alaska, sitting by designation.

FILED

AUG 25 2021

MOLLY C. DWYER, CLERK

U.S. COURT OF APPEALS
2 

Insurance Company (“MetLife,” and together, “Appellees”) did not abuse their 

discretion in terminating Sorger’s supplemental long term disability (“LTD”)

benefits pursuant to the Plan’s pre-existing condition clause in the Summary Plan 

Description.

1

 We have jurisdiction pursuant to 28 U.S.C. § 1291. We affirm. 

The Plan is a self-funded plan governed by ERISA that provides the LTD

benefits coverage at issue. Plan participants are entitled to basic LTD benefits 

equal to 50% of the participant’s total pay, and participants may purchase 

supplemental LTD coverage to be eligible to receive an additional 17% of total 

pay. The funds for supplemental LTD benefits are held in a Voluntary Employee 

Benefit Association (“VEBA”) Trust. Novartis is reimbursed from the VEBA 

Trust for supplemental LTD benefits paid out under the Plan. MetLife serves as 

Claims Administrator and Plan Administrator, meaning, it determines whether a 

1 The Summary Plan Description provides that “[i]f 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.” The Plan defines a “pre-existing 

condition” as:

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

supplemental LTD coverage took effect:

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

• took prescription medications or had medications prescribed, or

• had symptoms or conditions which would cause a reasonably prudent 

person to seek diagnosis, care, or treatment.
3 

Plan participant is eligible to receive benefits under the Plan. Because the parties 

are otherwise familiar with the factual and procedural history of the case, we need 

not further recount it here.

I.

First, Sorger argues that the district court erred by reviewing the 

supplemental LTD benefits decision under an abuse of discretion standard rather 

than de novo. “We review de novo a district court’s choice and application of the 

standard of review to decisions by fiduciaries in ERISA cases. We review for clear 

error the underlying findings of fact.” Abatie v. Alta Health & Life Ins. Co., 458 

F.3d 955, 962 (9th Cir. 2006) (en banc) (citation omitted). “Whether a plan is an 

ERISA plan is a finding of fact.” Steen v. John Hancock Mut. Life Ins. Co., 106 

F.3d 904, 913 (9th Cir. 1997). Once it is determined that a plan is governed by 

ERISA, we review the denial of benefits “under a de novo standard unless the 

benefit plan gives the administrator discretionary authority to determine eligibility 

for benefits or to construe the terms of the plan.” Montour v. Hartford Life & 

Accident Ins. Co., 588 F.3d 623, 629 (9th Cir. 2009) (simplified) (quoting Burke v. 

Pitney Bowes Inc. Long-Term Disability Plan, 544 F.3d 1016, 1023 (9th Cir. 

2008)). “Where . . . the plan ‘does grant such discretionary authority, we review 

the administrator’s decision for abuse of discretion.’” Id. (quoting Saffon v. Wells 

Fargo & Co. Long Term Disability Plan, 522 F.3d 863, 866 (9th Cir. 2008)). “The 
4 

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

however, depends on whether the administrator has a conflicting interest.” Id. 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.

The district court did not commit clear error when it found that the Plan 

sponsored by Novartis was the only ERISA plan at issue in this case. The district 

court found that Sorger presented no evidence that the VEBA Trust was used as 

anything other than a funding mechanism for the Plan’s supplemental LTD 

benefits or that the VEBA Trust is a separate ERISA Plan. The district court also 

found that the predecessor to the VEBA Trust was implemented to pay for certain 

employee benefits on a tax-advantaged basis; however, by the time Sorger joined 

the Plan, the VEBA Trust was only used as a funding mechanism for supplemental 

LTD benefits. Sorger did not present any argument on appeal that would disturb 

the district court’s finding.

Having concluded that there is only one ERISA plan at issue, we further 

conclude that the district court properly determined that MetLife’s decision should 

be reviewed under an abuse of discretion standard. We must evaluate de novo 

whether the Plan “unambiguously gives the plan administrator discretion to 

determine eligibility or construe the plan’s terms.” Burke, 544 F.3d at 1023–24. 
5 

Here, the district court correctly concluded that there is no structural conflict of 

interest and that the Plan unambiguously gives MetLife discretion to determine 

eligibility and construe the Plan’s terms. 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”; and (2) “decide all questions of 

eligibility and determine the amount, manner and time of payment of any 

benefits.”

The Summary Plan Description states that MetLife is the Claims 

Administrator for the LTD benefits under the Plan and that it “is responsible for 

processing and deciding all claims for benefits . . . as well as all appeals of denied 

claims.” There is no conflict of interest because Novartis, through the VEBA 

Trust, funds the supplemental LTD benefits, while MetLife has total discretion to 

determine who receives the benefits. Sorger does not dispute that the Plan 

delegates authority to MetLife. Instead, Sorger predicates his argument against the 

application of an abuse of discretion standard on there being two ERISA plans, 

which he did not establish.

Since the district court did not clearly err by finding only one ERISA plan at 

issue, and there is no conflict of interest vis-à-vis MetLife, the district court 

properly reviewed MetLife’s decision under an abuse of discretion standard. 
6 

II.

Second, the district court did not abuse its discretion in concluding that the 

pre-existing condition clause in the Summary Plan Description was valid. Under 

abuse of discretion review, we must consider whether the decision was “(1) 

illogical, (2) implausible, or (3) without support in inferences that may be drawn 

from the facts in the record.” Salomaa v. Honda Long Term Disability Plan, 642 

F.3d 666, 676 (9th Cir. 2011) (quoting United States v. Hinkson, 585 F.3d 1247, 

1262 (9th Cir. 2009) (en banc)). “[A]n administrator’s denial of benefits must be 

upheld ‘if it is based upon a reasonable interpretation of the plan’s terms and if it 

was made in good faith.’” Moyle v. Liberty Mut. Ret. Benefit Plan, 823 F.3d 948, 

957–58 (9th Cir. 2016) (quoting McDaniel v. Chevron Corp., 203 F.3d 1099, 1113 

(9th Cir. 2000)). Sorger argues that the pre-existing condition clause in the 

Summary Plan Description is invalid because the Plan says that MetLife will 

establish the pre-existing condition limitations, but MetLife did not create the 

relevant limitation here. Contrary to Sorger’s argument, by the plain language of 

the Plan and Task Orders, MetLife was not limited to only enforcing conditions it 

created.2 By its terms, the Plan expressly incorporates, in its entirety, the Summary 

2 The Task Orders govern, in part, MetLife’s scope of duties under the Plan. For 

example, the Task Order No. 2 states “[Novartis] and MetLife acknowledge that 

MetLife assumes the responsibility and discretionary authority for approving or 

denying Plan Benefits in whole or part.”
7 

Plan Description prepared by Novartis. Moreover, Task Order No. 2, which is an 

agreement between Novartis and MetLife, expressly incorporates the Summary 

Plan Description prepared by Novartis. Given MetLife’s “express discretionary 

authorit[y]” to, in pertinent part, “construe and interpret the terms of the Plan,” 

MetLife has discretion to construe and enforce the Summary Plan Description. To 

the extent Sorger argues that the Plan impermissibly delegates authority to 

MetLife, that argument fails because Novartis sets the terms of the Summary Plan 

Description, which MetLife agreed to accept under the Task Order. The terms of 

the Plan give MetLife “express discretionary authorit[y]” to “delegate authority 

with regard to its responsibilities.” This includes the Plan’s reference to “preexisting condition limitations as established from time to time by the Claims 

Administrator.”

III.

Third, the district court properly found the pre-existing condition clause to 

apply by its terms. MetLife did not abuse its discretion by (1) interpreting part of 

the pre-existing condition clause as requiring twelve consecutive months as an 

active employee; (2) applying the pre-existing condition clause even though Sorger

assertedly was not diagnosed with or specifically treated for his pre-existing 
8 

condition during the look-back period3; and (3) determining that the pre-existing 

condition clause did not expire on January 1, 2014.

In construing an ERISA plan, courts must “apply contract principles derived 

from state law . . . guided by the policies expressed in ERISA and other federal 

labor laws.” Gilliam v. Nev. Power Co., 488 F.3d 1189, 1194 (9th Cir. 2007) 

(alteration in original) (quoting Richardson v. Pension Plan of Bethlehem Steel 

Corp., 112 F.3d 982, 985 (9th Cir. 1997)). 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.’” Id. (alteration in original) (quoting 

Richardson, 112 F.3d at 985). MetLife’s interpretation will be upheld “so long as 

[it] does not construe the language of the plan unreasonably or render its decision 

without explanation.” Montour, 588 F.3d at 630.

Sorger’s argument that MetLife abused its discretion by not considering 

Sorger to be an “active employee” under the Plan was properly rejected by the 

district court. The Plan states that “[i]f you should become disabled because of a 

pre-existing condition, no supplemental LTD benefits are payable under this plan 

for that disability unless . . . you have been an active employee under this plan for 

[twelve] consecutive months.” The district court reasoned that the pre-existing 

3 Sorger elected the supplemental LTD benefits coverage effective January 1, 

2013. The relevant three-month look-back period is October 1, 2012, to December 

31, 2012. 
9 

condition limitation specifically qualifies “employee” with “active,” which shows 

that Novartis intended Plan participants to actively work for at least twelve 

consecutive months before receiving supplemental LTD benefits for a pre-existing 

condition. Sorger’s argument that MetLife abused its discretion by not counting 

the time Sorger was receiving disability benefits under the Plan stretches the plain 

language of the Plan and is unpersuasive.

Sorger also argues that the pre-existing condition clause does not apply even 

if we adopt the district court’s interpretation. Sorger cites McLeod v. Hartford Life 

& Accident Insurance Co., 372 F.3d 618, 625 (3d Cir. 2004), for the proposition 

that Sorger was not treated specifically for the condition which MetLife 

determined was pre-existing and that MetLife improperly terminated his 

supplemental LTD benefits as a result. McLeod is distinguishable because the 

McLeod court applied a heightened standard of review to the benefits 

determination, and “no one even suspected” that the appellant’s symptom was 

connected to the appellant’s pre-existing condition. Id. at 624. Here, the district 

court properly applied the more deferential abuse of discretion standard, and the 

record shows that Sorger “received medical treatment, consultation, care, or 

services” for his pre-existing condition. In light of Family Nurse Practitioner 

(“FNP”) Nancy Bryant’s notes from Sorger’s November 2, 2012 office visit, it

cannot be reasonably argued that “no one even suspected” Sorger suffered from the 
10 

condition with which he was ultimately diagnosed.

Finally, Sorger’s argument that the pre-existing condition clause does not 

apply to any disability after January 1, 2014, is similarly unavailing. The Plan 

states that Sorger’s “supplemental LTD coverage for [a] pre-existing condition will 

not take effect for [twelve] months after the effective date of [his] supplemental 

LTD coverage.” The district court properly concluded that this language addresses 

the effective date of the supplemental coverage, meaning, Sorger would be able to 

seek supplemental LTD benefits coverage for his pre-existing condition beginning 

January 1, 2014. It does not, however, negate the pre-existing condition clause

altogether or otherwise negate terms of the Plan which may prevent Sorger from 

obtaining supplemental LTD coverage for a pre-existing condition. 

IV.

Fourth, MetLife did not abuse its discretion in denying coverage for Sorger’s 

pre-existing condition. We hold that MetLife had support for its decision based on 

Sorger’s visit to FNP Bryant in November 2012 and the report of Independent 

Physician Consultant Dr. Warren Taff, who reviewed Sorger’s extensive medical 

records and concluded that Sorger’s condition “was most likely underlying and did 

exist prior to a definitive diagnosis being reached.” Dr. Taff further concluded that 

Sorger “received ‘consultation or care for symptoms’” associated with his preexisting condition when he visited FNP Bryant in November 2012. While the pre-
11 

existing condition clause would also apply if Sorger “took prescription medications 

or had medications prescribed” for his pre-existing condition during the look-back 

period, the record indicates that Sorger may have been prescribed certain 

medications to specifically treat other conditions not at issue here. Even if we 

were to agree with Sorger on this point, we would still conclude that MetLife did 

not abuse its discretion in concluding that Sorger “received medical treatment, 

consultation, care, or services” for his pre-existing condition during the look-back 

period. Accordingly, MetLife’s decision was not illogical, implausible, or without 

support in the factual record.

AFFIRMED.