FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

YVETTE WILLIBY,

Plaintiff-Appellee,

v.

AETNA LIFE INSURANCE CO.,

Defendant-Appellant.

No. 15-56394

D.C. No.

2:14-cv-04203-

CBM-MRW

OPINION

Appeal from the United States District Court

For the Central District of California

Consuelo B. Marshall, District Judge, Presiding

Argued and Submitted April 5, 2017

Pasadena, California

Filed August 15, 2017

Before: Milan D. Smith, Jr. and N. Randy Smith, Circuit 

Judges, and Gary Feinerman, District Judge.*

Opinion by Judge Feinerman

 * The Honorable Gary Feinerman, United States District Judge for 

the Northern District of Illinois, sitting by designation.
2 WILLIBY V. AETNA LIFE INS. CO.

SUMMARY**

Employee Retirement Income Security Act

The panel vacated the district court’s judgment in favor 

of the plaintiff in an action under the Employee Retirement 

Income Security Act, challenging the termination of shortterm disability benefits.

The panel held that the district court erred by reviewing 

the denial of the plaintiff’s benefits claim de novo, rather 

than for an abuse of discretion. The short-term disability 

plan included a discretionary clause, and thus by its terms 

called for abuse of discretion review. The panel held that 

California Insurance Code § 10110.6, which invalidatessuch 

discretionary clauses in insurance plans, applied even though 

the disability plan was self-funded. ERISA, however, 

preempted § 10110.6 insofar as it applied. The panel 

remanded for the district court to review the benefits denial 

under the correct standard.

COUNSEL

Matthew G. Kleiner (argued), San Diego, California, for 

Defendant-Appellant.

Christian J. Garris (argued), Los Angeles, California, for 

Plaintiff-Appellee.

 ** This summary constitutes no part of the opinion of the court. It 

has been prepared by court staff for the convenience of the reader.
WILLIBY V. AETNA LIFE INS. CO. 3

OPINION

FEINERMAN, District Judge:

Plaintiff-Appellee Yvette Williby worked for The 

Boeing Company, which provided her with short-term 

disability payments through a plan that it self-funded. 

Defendant-Appellant Aetna Life Insurance Company 

administered the plan. After Aetna determined that Williby 

was not disabled and terminated her benefits, Williby 

brought suit under the Employee Retirement Income 

Security Act of 1974 (ERISA), 29 U.S.C. §§ 1001–1461. 

Applying de novo review, the district court held that Aetna 

improperly denied Williby’s claim. See Williby v. Aetna Life 

Ins. Co., No. 2:14-CV-042032015 WL 5145499 (C.D. Cal. 

Aug. 31, 2015). Aetna appeals, contending that the district 

court should have reviewed the denial only for abuse of 

discretion. Aetna is correct, so we vacate and remand to the 

district court for reconsideration under the proper standard 

of review.

BACKGROUND

Boeing’s short-term disability (STD) benefit plan for its 

employees pays them between sixty and eighty percent of 

their salary if, because of a disability, they cannot perform 

their usual job responsibilities or other similar work at 

Boeing. The STD plan is self-funded, meaning that Boeing 

does not purchase an insurance policy to cover its plan 

obligations; rather, Boeing pays benefits from its own 

coffers, and retains Aetna to administer the plan. See FMC 

Corp. v. Holliday, 498 U.S. 52, 54 (1990) (describing selffunded ERISA plans). There is a 26-week limit on STD 

benefits, after which the employee must apply for long-term 

disability (LTD) benefits.
4 WILLIBY V. AETNA LIFE INS. CO.

The STD plan expressly provides Aetna with “full 

discretionary authority to determine all questions that may 

arise,” including whether and to what extent a plan 

participant is entitled to benefits. This provision is known 

as a “discretionary clause.” See Standard Ins. Co. v. 

Morrison, 584 F.3d 837, 840–41 (9th Cir. 2009) (describing 

discretionary clauses). The presence of a discretionary 

clause typically means that a court reviewing an adverse 

benefits determination will do so only for abuse of 

discretion. See Firestone Tire & Rubber Co. v. Bruch, 

489 U.S. 101, 115 (1989); Abatie v. Alta Health & Life Ins. 

Co., 458 F.3d 955, 963 (9th Cir. 2006) (en banc).

Williby worked for Boeing as a Supply Chain Specialist, 

a position that required her to problem-solve, interact with 

customers and vendors, conduct research, and assess 

technical issues. In September 2011, she was briefly 

hospitalized after suffering either a stroke or a stroke-like 

episode. In November 2012, Williby found herself 

experiencing chronic headaches and other problems that 

caused her difficulty at work. In December 2012, she saw a 

neurologist, Dr. David Edelman, who performed various 

assessments. Computerized cognitive tests showed that 

Williby’s overall cognitive function fell within a normal 

range, and an MRI revealed no “acute infarct”—brain tissue 

damage—and no hemorrhage. But Williby’s executive 

functions—the ability to organize information and to 

respond quickly and accurately—“predicted a moderate 

likelihood of ‘mild cognitive impairment.’” Dr. Edelman 

found that Williby suffered from “migraine, acute but illdefined cerebrovascular disease, and vascular dementia 

uncomplicated,” and on those premises concluded that she 

should go on disability “pending further testing.” On 

December 12, 2012, Williby left her employment at Boeing, 

never to return.
WILLIBY V. AETNA LIFE INS. CO. 5

Aetna approved Williby for STD benefits from 

December 20, 2012 through February 28, 2013 based on Dr. 

Edelman’s testing and conclusions. However, Aetna denied 

Williby STD benefits for the period from February 28, 2013 

through June 2013. Dr. Vaughn Cohan, the Aetna-retained 

neurologist responsible for the denial, reviewed the file, 

spoke with Dr. Edelman by telephone, and concluded that 

Williby could still work because, despite her executive 

function impairments, her cognitive function was normal 

overall, the MRI showed no “acute” abnormalities, and she 

had not undergone formal neuropsychological testing to 

follow up on Dr. Edelman’s initial tests.

At several points between April and November 2013, Dr.

Edelman reaffirmed his conclusion that Williby was unable 

to work. Also, between June 2013 and December 2013, 

Williby saw a second neurologist, a neuropsychologist, a 

psychologist, and a psychiatrist, all of whom agreed that she 

exhibited cognitive impairment and the majority of whom 

specifically determined that it disabled her from working.

After Aetna terminated Williby’s STD benefits, she 

appealed the decision within Aetna, armed with the 

additional doctors’ reports. Aetna hired an occupational 

medicine specialist and a neuropsychologist to review the 

case. Both reviewers concluded that there was insufficient 

objective documentation of Williby’s disability, with the 

occupational medicine specialist explaining that any 

impairment was “self-reported” and “primarily based on 

mood disorder/behavioral issues,” and the 

neuropsychologist concluding that “the provided 

information did not include sufficient findings to 

corroborate” Williby’s claimed cognitive impairments or 

their interference with her work. Aetna upheld its decision 

to deny benefits in February 2014, determining that “there 
6 WILLIBY V. AETNA LIFE INS. CO.

was insufficient medical evidence to support continued 

disability” after February 28, 2013.

Williby then sued Aetna in the Central District of 

California for “breach of plan and recovery of plan benefits” 

under ERISA, invoking ERISA’s jurisdictional provision, 

29 U.S.C. § 1132(e). A bench trial ensued, based on the 

administrative record.

The district court reviewed de novo Aetna’s denial of 

benefits, notwithstanding the STD plan’s discretionary 

clause. The court did so based on its view that California 

Insurance Code § 10110.6—which voids any discretionary 

clause in “a policy, contract, certificate, or agreement . . .

that provides or funds life insurance or disability insurance 

coverage”—governed the STD plan. In so holding, the court 

rejected Aetna’s argument that Boeing’s STD plan was 

beyond the scope of § 10110.6 because it was self-funded. 

The district court did not discuss whether ERISA preempted 

§ 10110.6 under the circumstances of this case.

The district court then held that Williby was disabled 

from at least February 28, 2013 through June 20, 2013—

when she would have reached the 26-week limit for 

receiving STD benefits—and that Aetna’s decision to 

terminate her STD benefits sooner was improper. The court 

reasoned that there was no basis for Aetna’s finding that 

Williby was disabled before February 28 but not after, as 

“[n]othing in the record suggests that Plaintiff’s cognitive 

impairment ceased or improved” after that date. The court 

also gave “more weight to those doctors who treated 

Plaintiff”—all of whom concluded that she demonstrated 

cognitive impairment—and noted that Aetna’s doctors 

simply reviewed the treating doctors’ work.
WILLIBY V. AETNA LIFE INS. CO. 7

In a footnote, the court added that its ultimate conclusion 

would remain the same “[e]ven under an abuse of discretion 

standard” and even “viewing Aetna’s decision with no 

degree of skepticism since Aetna did not have . . . a direct 

financial incentive to deny benefits since benefits are funded 

by Boeing.” The court explained briefly that Aetna’s 

benefits denial failed to clear even the low abuse of 

discretion bar for two reasons: (1) every doctor who treated 

Williby thought she was disabled or demonstrated 

considerable cognitive impairment; and (2) although Aetna 

relied on a “lack of objective clinical support” in terminating 

her STD benefits, it never had its physicians examine 

Williby or asked her to undergo any particular testing.

Aetna timely appealed.

DISCUSSION

This appeal requires us to determine whether the district 

court selected and applied the proper standard of review in 

this case. We find that it did not.

I. The Abuse of Discretion Standard Governs Judicial 

Review of Aetna’s Denial of STD Benefits

“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.” Estate of Barton v. ADT Sec. 

Servs. Pension Plan, 820 F.3d 1060, 1065 (9th Cir. 2016) 

(quoting Abatie, 458 F.3d at 962).

Because it contains a discretionary clause, the STD plan 

by its terms calls for abuse of discretion review. The district 

court reviewed the benefits denial de novo, however, 

because it concluded that California Insurance Code 
8 WILLIBY V. AETNA LIFE INS. CO.

§ 10110.6 invalidated such discretionary clauses. On 

appeal, Aetna mounts a two-pronged attack on that 

conclusion. First, it contends that § 10110.6 does not apply 

to self-funded plans like the Boeing STD plan at issue here. 

Second, and in the alternative, it contends that even if 

§ 10110.6 does apply to Boeing’s plan, ERISA preempts it. 

So the district court’s de novo review was appropriate only 

if § 10110.6 applies to the STD plan and ERISA does not 

preempt § 10110.6 under the circumstances of this case. 

Otherwise, the appropriate standard of review was abuse of 

discretion.

A. Section 10110.6 Applies to Boeing’s Plan

Section 10110.6 states, in relevant part:

(a) If a policy, contract, certificate, or 

agreement offered, issued, delivered, or 

renewed . . . that provides or funds life 

insurance or disability insurance coverage for 

any California resident contains a provision 

that reserves discretionary authority to the 

insurer, or an agent of the insurer, to 

determine eligibility for benefits or coverage

. . . that provision is void and unenforceable.

Cal. Ins. Code § 10110.6(a). The provision defines a 

“discretionary authority” provision as one that “confer[s] 

discretion on an insurer or other claim administrator to 

determine entitlement to benefits” and that, “in turn, could 

lead to a deferential standard of review by any reviewing 

court.” Id. at § 10110.6(c). The provision bans the 

enforcement of discretionary clauses in California. See 

Orzechowski v. Boeing Co. Non-Union Long-Term 

Disability Plan, Plan No. 625, 856 F.3d 686, 692 (9th Cir. 

2017) (“[I]f any discretionary provision is covered by the 
WILLIBY V. AETNA LIFE INS. CO. 9

statute, ‘the courts shall treat that provision as void and 

unenforceable.’”) (quoting Cal. Ins. Code § 10110.6(g)).

Aetna argues that § 10110.6 does not apply to Boeing’s 

self-funded STD plan because the statute targets only 

“insurer[s]” and “insurance,” which (according to Aetna) 

Boeing and its self-funded plan are not. This argument fails 

to persuade. True enough, the reach of § 10110.6(a) is 

limited to “a policy, contract, certificate, or agreement . . .

that provides or funds life insurance or disability insurance

coverage” (emphases added). But § 22 of the California 

Insurance Code defines “insurance” broadly as “a contract 

whereby one undertakes to indemnify another against loss, 

damage, or liability arising from a contingent or unknown 

event.” Cal. Ins. Code § 22. The text of § 22, and by 

extension of § 10110.6(a), thus encompasses not only a 

traditional insurance policy issued by a traditional insurer, 

but also any “contract [that] . . . indemnif[ies] . . . against 

loss . . . arising from a contingent . . . event.” We recognized 

precisely this point in Orzechowski, observing that 

“§ 10110.6(a) regulates entities engaged in insurance, even 

if they are not insurance companies,” because it “is directed 

at insurance, not insurers.” 856 F.3d at 694 (internal 

quotation marks and citation omitted).

The question then becomes whether Boeing provided 

“insurance” through its STD plan. “Section 22 has been 

interpreted as requiring two elements: (1) shifting one 

party’s risk of loss to another party; and (2) distribution of 

that risk among similarly situated persons.” Auto. Funding 

Grp., Inc. v. Garamendi, 7 Cal. Rptr. 3d 912, 915 (Cal. Ct. 

App. 2003). Boeing’s contractual promise to pay its 

employees a portion of their usual salary if a medical 

problem rendered them unable to work fits this definition, 

for by offering a self-funded STD plan, Boeing (1) shifted 
10 WILLIBY V. AETNA LIFE INS. CO.

risk of financial loss due to injury from employees to itself 

and (2) spread that risk over its workforce. See Selmon v. 

Metro. Life Ins. Co., 277 S.W.3d 196, 202 (Ark. 2008) 

(characterizing a self-funded LTD plan as a “risk-pooling 

agreement”); Julie K. Swedback, The Deemer Clause: A 

Legislative Savior for Self-Funded Health Insurance Plans 

Under the Employee Retirement Income Security Act of 

1974, 18 Wm. Mitchell L. Rev. 757, 787 (1992) (“While an 

employer has the choice to fund its own benefit plan or to 

purchase a plan from an insurance company, the only 

distinguishable difference . . . in the nature of the benefit

plan is the source of the funding. Even when an employer 

chooses to fund its own benefit plan, the plan provides a 

benefit schedule, assumes liability through a contractual 

document for payment of claims accorded by the benefit 

schedule, and designates the amount of employee 

contribution based on insurance principles of risk 

distribution.”); Introduction—Fundamentals of SelfFunding, Employer’s Guide to Self-Insuring Health Benefits 

¶ 200, available at 2001 WL 35727768 (“[H]istorically, 

self-funding was used primarily by large companies that 

employed enough workers to establish their own sizeable 

risk pool and had significant cash flow that would allow 

them to bear the risk of paying claims without fear that the 

risk would harm the company substantially.”).

Aetna retorts that Boeing’s STD plan can constitute 

“insurance” under California law only if “the risk element of 

the contract is the principal object and purpose of the 

agreement.” See Transp. Guar. Co. v. Jellins, 174 P.2d 625, 

629 (Cal. 1946) (holding that the relevant question is not 

“whether risk is involved or assumed,” but rather “whether 

that or something else to which it is related in the particular 

plan is its principal object and purpose”) (citation omitted); 

Garamendi, 7 Cal. Rptr. 3d at 916. The cases on which 
WILLIBY V. AETNA LIFE INS. CO. 11

Aetna relies for this proposition concern risk-shifting 

provisions that were just one element of a broader contract 

whose primary object was not risk-shifting. See Jellins, 

174 P.2d at 631 (holding that a contractual promise to 

perform maintenance on and procure insurance for a truck 

was not “insurance” because “the major part of [Party A’s] 

service [to Party B] is the supplying of labor”); Garamendi, 

7 Cal. Rptr. 3d at 919–20 (holding under Jellins that an 

optional provision of a used car loan that shifted some risk 

from the buyer to the seller was not “insurance”); see also 

Truta v. Avis Rent A Car Sys., Inc., 238 Cal. Rptr. 806, 814 

(Cal. Ct. App. 1987) (holding under Jellins that a “tangential 

risk allocation provision” did not make a rental car contract 

“insurance” because its “principal object and purpose” 

remained “the rental of an automobile”). Here, by contrast, 

the principal purpose of Boeing’s STD plan was to shift risk, 

and thus Aetna’s cases confirm, rather than refute, our 

conclusion that the plan is “insurance” under California law.

In sum, Aetna provides no sound reason to depart from 

the text of § 22, which brings within the scope of § 10110.6 

Boeing’s self-funded STD plan.

B. ERISA Preempts Application of § 10110.6 to 

Boeing’s Self-Funded STD Plan

The next question is whether ERISA preempts § 10110.6 

insofar as it applies to Boeing’s plan. ERISA contains three 

interrelated provisions governing its express preemption of 

state law: the “preemption clause,” the “saving clause,” and 

the “deemer clause.” FMC Corp., 498 U.S. at 57–58. The 

preemption clause provides that ERISA “shall supersede any 

and all State laws insofar as they may . . . relate to any 

employee benefit plan” covered by ERISA. 29 U.S.C. 

§ 1144(a); see Orzechowski, 856 F.3d at 692. That clause 

“is conspicuous for its breadth. It establishes as an area of 
12 WILLIBY V. AETNA LIFE INS. CO.

exclusive federal concern the subject of every state law that 

relates to an employee benefit plan governed by ERISA.” 

FMC Corp., 498 U.S. at 58 (internal quotation marks and 

brackets omitted).

The saving clause creates a carve-out from the 

preemption clause, sparing from ERISA preemption—

“[e]xcept as provided in” the deemer clause, of which more 

in a moment—“any law of any State which regulates 

insurance, banking, or securities.” 29 U.S.C. 

§ 1144(b)(2)(A); see FMC Corp., 498 U.S. at 58. “So, 

although ERISA has broad preemptive force, its saving 

clause then reclaims a substantial amount of ground.” 

Orzechowski, 856 F.3d at 692 (internal quotation marks 

omitted).

Finally, the deemer clause qualifies the scope of the 

saving clause, reviving preemption for certain laws that the 

saving clause might otherwise carve out from the preemption 

clause. The deemer clause states that no “employee benefit 

plan [covered by ERISA] . . . shall be deemed to be an 

insurance company or other insurer . . . for purposes of any 

law of any State purporting to regulate insurance companies 

[or] insurance contracts.” 29 U.S.C. § 1144(b)(2)(B). 

“Under the deemer clause, an employee benefit plan 

governed by ERISA shall not be ‘deemed’ an insurance 

company, an insurer, or engaged in the business of insurance 

for purposes of state laws ‘purporting to regulate’ insurance 

companies or insurance contracts.” FMC Corp., 498 U.S. at 

58. The Supreme Court has rejected the proposition that the 

deemer clause applies only to “state insurance regulations 

that are pretexts for impinging upon core ERISA concerns.” 

Id. at 63. Instead, a state insurance regulation is preempted 

to the extent it operates directly on an ERISA plan, even if 

its stated intent is not pretextual. See id. at 61–65.
WILLIBY V. AETNA LIFE INS. CO. 13

In Orzechowski, this court held, for purposes of the LTD 

plan at issue there, that although § 10110.6 fell within the 

scope of the preemption clause, it was “saved” from 

preemption by the saving clause. 856 F.3d at 692–95. 

Orzechowski followed Standard Insurance Co. v. Morrison, 

584 F.3d 837 (9th Cir. 2009), which held that a Montana ban 

on discretionary clauses in insurance contracts was not 

preempted because it fell within the saving clause. Id. at 

849. Significantly, neither Orzechowski nor Morrison

addressed the deemer clause, and the reason reveals a key 

distinction between those two cases and this one.

Unlike Boeing’s STD plan, the disability plans at issue 

in Orzechowski and Morrison were not self-funded; rather, 

they were funded by insurance policies. See Orzechowski, 

856 F.3d at 689; Morrison, 584 F.3d at 840 (noting that the 

state regulatory practice under review applied only to 

“insurance contract[s]”). This matters because the Supreme 

Court in FMC Corp. held that the deemer clause’s scope 

turns on the presence or absence of traditional insurance. If 

the state law is applied to a traditional insurance policy, then 

the state law falls outside the deemer clause and thus within 

the saving clause—even if the insurance policy backstops an 

ERISA plan. On the other hand, if the state law is applied to 

an ERISA plan itself, which is how such laws operate on 

self-funded plans, the law falls within the deemer clause and 

thus is preempted, even if it is a bona fide insurance 

regulation that only incidentally affects ERISA concerns. 

See FMC Corp., 498 U.S. at 64. The result is a simple, 

bright-line rule: “if a plan is insured, a State may regulate it 

indirectly through regulation of its insurer and its insurer’s 

insurance contracts; if the plan is uninsured, the State may 

not regulate it.” Id. The Court thus concluded: “We read the 

deemer clause to exempt self-funded ERISA plans from state 

laws that ‘regulat[e] insurance’ within the meaning of the 
14 WILLIBY V. AETNA LIFE INS. CO.

saving clause.” Id. at 61; see Scharff v. Raytheon Co. Short 

Term Disability Plan, 581 F.3d 899, 907 (9th Cir. 2009) 

(“[U]nder ERISA’s ‘deemer clause,’ state insurance 

regulation of self-funded plans is preempted by ERISA.”). 

Thus, for a self-funded disability plan like Boeing’s, the 

saving clause does not apply, and state insurance regulations 

operating on such a self-funded plan are preempted.

This point is so clear that Williby does not dispute that 

ERISA preempts § 10110.6 as applied to self-funded ERISA 

plans. Williby instead asserts—for the first time in this 

litigation—that Boeing’s STD plan is not an ERISA plan at 

all. Citing Bassiri v. Xerox Corporation, 463 F.3d 927, 929 

(9th Cir. 2006), she argues that the STD plan is actually a 

“payroll practice” and therefore exempt from federal 

regulation under ERISA.

That argument is untenable at this late juncture. Here, 

not only did Williby press exclusively ERISA-based claims 

in the district court, she staked federal jurisdiction on the 

foundational premise that ERISA governs her suit. Williby 

has thus forfeited any claim that the STD plan was an 

ERISA-exempt “payroll practice.” See Armstrong v. Brown, 

768 F.3d 975, 981 (9th Cir. 2014) (“[A]n issue will generally 

be deemed waived on appeal if the argument was not raised 

sufficiently for the trial court to rule on it.”); Komatsu, Ltd. 

v. States S.S. Co., 674 F.2d 806, 812 (9th Cir. 1982) 

(deeming an issue waived where the party had “relied . . .

exclusively” in the district court on other arguments).

ERISA therefore applies to Boeing’s self-funded STD 

plan and preempts § 10110.6’s application thereto. The 

district court thus should have honored the plan’s 
WILLIBY V. AETNA LIFE INS. CO. 15

discretionary clause and reviewed Aetna’s denial of benefits 

to Williby, not de novo, but for abuse of discretion.1

II. Remand Is Necessary To Permit the District Court to 

Properly Apply the Abuse of Discretion Standard

The question remains whether there is any need to 

remand. Williby argues that the district court has already 

applied the abuse of discretion standard and that the panel 

should simply affirm on that ground. Aetna counters that the 

district court paid only lip service to the abuse of discretion 

standard and applied it improperly, and so should be asked 

to revisit the issue on remand. Whether an ERISA plan 

administrator abused its discretion is a legal determination 

that we review de novo. See Nolan v. Heald Coll., 551 F.3d 

1148, 1153 (9th Cir. 2009).

The parties’ briefing of this issue focuses on whether the 

district court applied what is known as the “treating 

physician rule.” The treating physician rule was a rule of 

thumb, formerly applied in this circuit, under which a court 

reviewing a benefits denial would “give[] especially great 

weight to the opinion of a claimant’s treating physician.” 

Jordan v. Northrop Grumman Corp. Welfare Benefit Plan, 

 1 Before proceeding, we address a question that might occur to the 

attentive reader: If the court was going to hold § 10110.6 preempted by 

ERISA in the context of Boeing’s STD plan, why not just assume for the 

sake of argument that § 10110.6 applied to Boeing’s plan rather than 

affirmatively hold as a matter of California law that it does? The reason 

is that the Supreme Court has described preemption as “a two-step 

process of first ascertaining the construction of the two statutes and then 

determining the constitutional question whether they are in conflict.” 

Chi. & Nw. Transp. Co. v. Kalo Brick & Tile Co., 450 U.S. 311, 317 

(1981) (quoting Perez v. Campbell, 402 U.S. 637, 644 (1971)). Applying 

that precedent faithfully required that we first resolve the California law 

issue to determine the necessity of addressing the preemption question.
16 WILLIBY V. AETNA LIFE INS. CO.

370 F.3d 869, 878 (9th Cir. 2004), overruled on other 

grounds as recognized by Salomaa v. Honda Long Term 

Disability Plan, 642 F.3d 666, 673–74 (9th Cir. 2011). The 

rule required ERISA plan administrators to “either accept the 

opinion of a claimant’s treating physician, or, if the 

administrator rejects that opinion, come forward with 

specific reasons for that decision, based on substantial 

evidence in the record.” Id. (internal quotation marks 

omitted). The Supreme Court rejected the treating physician 

rule in Black & Decker Disability Plan v. Nord, 538 U.S. 

822 (2003), holding that “courts have no warrant to require 

administrators automatically to accord special weight to the 

opinions of a claimant’s physician; nor may courts impose 

on plan administrators a discrete burden of explanation when 

they credit reliable evidence that conflicts with a treating 

physician’s evaluation.” Id. at 834. The parties disagree 

whether the district court ran afoul of that holding.

The district court offered this explanation for its 

conclusion that Aetna abused its discretion in terminating 

Williby’s STD benefits:

Aetna’s decision was illogical, 

implausible, or without support in inferences 

that could reasonably be drawn from facts in 

the record because (1) all of the doctors who 

personally treated Plaintiff concluded that 

she was disabled or demonstrating 

considerable cognitive impairment; and 

(2) Aetna’s reviewing doctors cited to lack of 

objective clinical support, but there is no 

evidence that Aetna requested for Plaintiff to 

be examined by its physicians or undergo the 

specific testing it needed to support an 

objective, clinical finding of functional 
WILLIBY V. AETNA LIFE INS. CO. 17

impairment. See, e.g., Salomaa v. Honda 

Long Term Disability Plan, 642 F.3d [666,] 

666–76 (9th Cir. 2011).

This does sound perilously close to the treating physician 

rule. But we need not decide whether the district court 

actually applied that rule because, regardless, the court did 

not identify or implement the correct standard.

The district court said it was “viewing Aetna’s decision 

with no degree of skepticism since Aetna did not have a 

conflict of interest.” That statement properly recognized that 

when a plan administrator is also the payor of the employee’s 

benefits and thus has a direct financial incentive to deny 

claims, the resulting “conflict of interest” becomes a 

significant contextual factor in the abuse of discretion 

analysis. See Metro. Life Ins. Co. v. Glenn, 554 U.S. 105, 

112, 117 (2008); Harlick v. Blue Shield of Cal., 686 F.3d 

699, 707 (9th Cir. 2012) (“[O]ur review is tempered by 

skepticism when the plan administrator has a conflict of 

interest in deciding whether to grant or deny benefits.”) 

(internal quotation marks omitted). We explained the 

significance of an administrator’s conflict of interest for 

abuse of discretion review in Montour v. Hartford Life & 

Accident Insurance Co., 588 F.3d 623 (9th Cir. 2009):

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. In these circumstances, the 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 the administrator, the existence of a 
18 WILLIBY V. AETNA LIFE INS. CO.

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.

Id. at 629–30 (internal quotation marks and citation omitted). 

But when the administrator and payor are one and the same,

[s]imply construing the terms of the 

underlying plan and scanning the record for 

medical evidence supporting the plan 

administrator’s decision is not enough, 

because a reviewing court must take into 

account the administrator’s conflict of 

interest as a factor in the analysis.

More particularly, the court must 

consider numerous case-specific factors, 

including the administrator’s conflict of 

interest, and reach a decision as to whether 

discretion has been abused by weighing and 

balancing those factors together. Under this 

rubric, the extent to which a conflict of 

interest appears to have motivated an 

administrator’s decision is one among 

potentially many relevant factors that must be 

considered.

Id. at 630 (internal citations omitted). Aetna has no such 

conflict of interest here, as Boeing funded the STD plan. Yet 

the district court supported its abuse of discretion holding 

with a lone citation to Salomaa v. Honda Long Term 
WILLIBY V. AETNA LIFE INS. CO. 19

Disability Plan, 642 F.3d 666 (9th Cir. 2011), a case where 

the administrator did have a conflict of interest. Id. at 674.

The district court’s exclusive reliance on Salomaa leaves 

us unable to say with the requisite level of certainty that it 

applied the correct standard. Because a conflict of interest 

existed in Salomaa, the abuse of discretion review was of the 

probing variety described in Montour; that level of review is 

inappropriate here. See id. at 673–76. Moreover, our 

observation in Salomaa that “every doctor who personally 

examined [the employee] concluded that he was disabled” 

was just one factor among many contributing to the court’s 

skepticism of the administrator’s conclusion that the 

employee was not disabled; we also noted, among other 

things, that the plan administrator failed to consider that the 

plaintiff had been awarded Social Security disability 

payments and that its shifting explanations were at odds with 

the medical records. See id. at 676. The district court here 

did not rely on such circumstances in holding that Aetna 

abused its discretion.

Faced with only the district court’s recital of the abuse of 

discretion standard and a single citation to an inapposite 

case, we cannot be confident that the district court applied 

the abuse of discretion standard correctly. We therefore 

remand to allow the district court to review the benefits 

denial anew under the correct standard. In remanding, we 

express no opinion as to what the outcome should be. See 

Arizona v. City of Tucson, 761 F.3d 1005, 1015 (9th Cir. 

2014).

CONCLUSION

For the foregoing reasons, the district court’s judgment 

is VACATED and the matter is REMANDED for further 

consideration consistent with this opinion.