FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

CARA A. BURKE, 

Plaintiff-Appellant, No. 06-15341

v. D.C. No.  CV 04-4483 MHP PITNEY BOWES INC. LONG-TERM

DISABILITY PLAN, OPINION

Defendant-Appellee. 

Appeal from the United States District Court

for the Northern District of California

Marilyn H. Patel, District Judge, Presiding

Argued and Submitted

December 7, 2007—San Francisco, California

Submission Withdrawn January 24, 2008

Resubmitted July 17, 2008

Filed September 19, 2008

Before: Betty B. Fletcher, A. Wallace Tashima, and

Johnnie B. Rawlinson, Circuit Judges.

Opinion by Judge Tashima

13299
COUNSEL

Constantin V. Roboostoff, Roboostoff & Kalkin, San Francisco, California, for the plaintiff-appellant. 

Nicole A. Diller, Morgan Lewis & Bockius, San Francisco,

California, for the defendant-appellee.

OPINION

TASHIMA, Circuit Judge: 

Cara Burke appeals the district court’s order granting summary judgment to Pitney Bowes Inc. Long-Term Disability

Plan on Burke’s claims arising from the Plan Employee Benefits Committee’s termination of her long-term disability benefits. We have jurisdiction pursuant to 28 U.S.C. § 1291, and

we vacate and remand for further proceedings consistent with

this opinion and the Supreme Court’s recent decision in Metropolitan Life Insurance Co. v. Glenn, ___ U.S. ___, 128

S.Ct. 2343 (2008).

I.

BACKGROUND

A. Facts

Burke was hired by Pitney Bowes Management Services

(“Pitney”) as a sales employee in December 1995 and qualified for coverage under Pitney’s Long-Term Disability Plan

(the “Plan”). The Plan is subject to the requirements of the

Employee Retirement Income Security Act of 1974

(“ERISA”). 29 U.S.C. § 1001 et seq. The Plan’s Employee

Benefits Committee (the “Committee”) is responsible for the

Plan’s general administration,1 while Pitney’s Disability and

1The record does not disclose the Committee’s makeup, but the parties

argue the case on the assumption that it is a “management” committee

controlled by the employer and we accept that assumption. 

13302 BURKE v. PITNEY BOWES
Benefits Department is delegated the day-to-day responsibilities. The Committee is the final decision-maker regarding

benefits eligibility. 

Benefits paid out by the Plan come from the Plan’s Trust,

which is funded in part by Pitney and in part by employee

contributions. The Committee has the authority to determine

the amounts of the employer and employee contributions to

the Trust, but it is unclear from the record what portion of the

Trust is funded by the employees, as opposed to by Pitney.

The Trust fund is a Voluntary Employees’ Beneficiary Association (“VEBA”) Trust;2

 therefore, the money paid into the

Trust cannot revert back to Pitney. 

In June 1998, Burke was injured in a work-related car accident, which caused her back and neck injuries, and caused her

to miss five days of work. One month later, Burke was injured

again in a car accident, this time not work-related. The second

accident aggravated the injuries from the earlier accident, and

Burke was subsequently diagnosed with multilevel lumbar

degenerative disc disease, spinal stenosis, and lumbar radidulopathy.3

 Burke went on disability leave on October 26, 1998,

and has not since returned to work. 

Burke asserts that she requested a claim form to apply for

long term disability (“LTD”) benefits under the Plan in March

1999.4 The Plan, however, contests that Burke requested a

claim form at that time, and responds that she did not actually

request a LTD claim form until September 10, 2000. On Sep2

See 26 U.S.C. § 501(c)(9); Treas. Reg. § 1.501(c)(9)-1. 

3Burke received workers compensation benefits following those accidents. 

4A September 10, 2000, letter indicates that Burke requested a claim

form in 1999. This letter, however, was excluded from evidence by the

district court, along with other documents, because the district court found

that those documents were not part of the administrative record. See Part

III.B, infra. 

BURKE v. PITNEY BOWES 13303
tember 22, 2000, the Plan responded to Burke’s request by

asserting that Burke was not eligible for benefits under section 5.8(j) of the Plan because her disability was excluded as

a work-related injury.5 On May 8, 2001, the Plan provided

Burke’s counsel with the requested LTD claim form, stating:

[The Plan] conditions the payment of long term disability (“LTD”) benefits on the employee having

first completed 22-weeks of short term disability

(“STD”). As further mentioned, we have no record

of Ms. Burke’s filing a claim with Pitney Bowes for

STD benefits. . . . Notwithstanding that Ms. Burke

failed to file an STD claim with Pitney Bowes and

that the deadline for filing such claim has long since

expired, we will allow Ms. Burke to file a claim for

LTD benefits.

Burke submitted her LTD claim in June 2001. Burke’s LTD

claim was denied by the Plan, which determined that Burke’s

injuries were excluded from coverage as a work-related

injury. Burke filed a lawsuit in the Northern District of California under ERISA on May 20, 2002, and on September 26,

2002, Burke and the Plan reached a settlement in which the

Plan agreed to pay Burke LTD benefits. The settlement agreement provided that Burke would receive: 

monthly long-term disability benefits pursuant to the

terms, process and procedures of the Plan, as long as

she continues to meet the Plan’s definition of “Total

Disability” and otherwise remains eligible under the

Plan. This provision is in no way meant to alter or

modify the terms, process or procedures set forth in

the Plan for receiving benefits under the Plan.

5Section 5.8(j) provides that “no Monthly Disability Income shall be

payable to a Participant if it is determined that such Participant’s Total

Disability: . . . (j) was due to occupational or work-related injury or illness.” 

13304 BURKE v. PITNEY BOWES
Burke’s eligibility for future benefits will be solely

governed by the terms, process and procedures of the

Plan and ERISA. Accordingly, this Agreement does

not guarantee Burke any future long-term disability

benefits except as determined by the Plan administrator under the terms, process, and procedure of the

Plan and ERISA. 

In September 2003, the Plan’s physician-consultant, Dr.

Broder, requested that Dr. Barry perform an independent

medical examination (“IME”) of Burke to determine whether

she met the Plan’s definition of “Totally Disabled.” Section

2.33(a) defines a Participant as being “Totally Disabled” or

having a “Total Disability” as:

Participant is unable (a)(i) to perform the material

duties of his or her own occupation for a maximum

period of twelve (12) months after the Qualifying

Period, and (ii) that thereafter the Participant is

unable, because of injury or illness, to engage in any

gainful occupation or profession for which he is, or

could become, reasonably suited by education, experience or training; provided, however, that the

amount of earnings that the Participant would

receive from engaging in such occupation or profession would be less than sixty percent of the Participant’s annual or annualized earnings immediately

prior to the event giving rise to the Total Disability.

Dr. Barry examined Burke on October 9, 2003. His report

stated:

My impression is that Ms. Burke has an objectively

normal physical and neurologic examination, but she

demonstrates a very high level of self-perceived

impairment. At this point, it appears that her

described pattern of subjective symptoms are unsupported by any abnormal objective physical or neuroBURKE v. PITNEY BOWES 13305
logic findings. . . . Given Ms. Burke’s objectively

normal evaluation, I feel she can return to light work

at the current time, with no lifting, pushing or pulling over 30 pounds, and no repeated bending.

On November 3, 2003, the Plan notified Burke that it was

terminating her benefits because it determined that she was

not “totally disabled for any occupation as defined in Section

2.33(a) of the Plan.”

6

On January 6, 2004, Burke appealed the Plan’s decision

and requested that the Plan produce “all documents or other

writings which were submitted, considered, or generated in

the course of making the decision to terminate Ms. Burke’s

benefits, without regard to whether such document, record, or

other information was relied upon in making the benefit determination.” 

On February 6, 2004, the Plan produced some of the documents requested in Burke’s January 6, 2004 letter, but added

that:

All “correspondence, memoranda, notes or other

materials” in Ms. Burke’s disability claim’s file

relating to the decision to terminate benefits on

November 1, 2003 [have been enclosed with this

correspondence. However,] I have not included documents “submitted, considered or generated” in connection with the October 2001 decision to deny

disability benefits (resulting in the Settlement Agreement, dated September 26, 2002). Ms. Burke or your

6

In making this determination, the Plan relied primarily on a review of

medical information from Dr. Barry, although the notification indicated

that the Plan also considered a report from Dr. Gypson. Dr. Gypson, who

was one of Burke’s treating physicians, reported that Burke can read and

write but is restricted because she cannot sit or walk for more than fifteen

minutes or lift more than fifteen pounds. 

13306 BURKE v. PITNEY BOWES
office submitted the majority of such documents, and

I assume you retained copies. Nonetheless, copies

will be sent upon request.

On March 4, 2004, the Plan wrote to Burke’s counsel, first

stating:

[T]here are no “additional materials or information

necessary” for Ms. Burke to perfect her claim. We

have all materials necessary for the Employee Benefits Committee to review Ms. Burke’s appeal of the

termination of [LTD] benefits. That said, the Committee would consider any additional information not

previously provided in support of Ms. Burke’s position that she is “Totally Disabled” as defined in the

[Plan].

The Plan also wrote, again, that the Plan did not provide

Burke with the documents related to the 2001 decision to

deny Burke benefits because the Plan assumed Burke had

retained copies, but noted that the Plan would send Burke

copies if she so requested. The Plan added that it was enclosing the documents provided by Dr. Broder to Dr. Barry in

connection with the latter’s October 2003 IME, and that “the

majority of those documents are already part of Ms. Burke’s

file (submitted by Ms. Burke prior to the September 26, 2002

Settlement Agreement).” 

On May 5, 2004, Burke’s counsel provided the Plan’s

counsel with copies of medical reports prepared by Dr.

Zwerin and a Functional Capacity Evaluation (“FCE”) prepared by Lok Chan, an occupational therapist. Dr. Zwerin

determined that Burke was incapable of returning to work

because of an “[i]nability to engage in employment at any

level due to being bed bound for up to a week at a time, 3-4

days a week regularly secondary to sciatica and back pain”

and an “[i]nability to engage in work at a desk without standBURKE v. PITNEY BOWES 13307
ing or walking or lying down every 10-15 minutes for 30-45

minutes.” Dr. Zwerin also stated:

Dr. Barry’s preposterous conclusions aside, Ms.

Burke has objective findings on MRI and discography which are entirely compatible with her clinical

presentation. Her imaging studies demonstrate findings which also conform to her complaints. Ms.

Burke’s pain drawing today shows none of the histrionics which Dr. Barry apparently used as the basis

for his conclusions. . . . Aside from Dr. Barry, no

physician has suggested that she is lying, hysterical

or engaging in symptom magnification. Given that

he saw her on but one occasion and at least 4 other

physicians have seen her on multiple occasions with

observations reinforced by an entire team of PhD,

PT/OT and other professionals without anyone ever

concluding that her presentation was other than legitimate, the conclusions of Dr. Barry are clearly

devoid of legitimacy. 

Similarly, Chan stated:

Ms. Burke is unable to tolerate prolonged static sitting or standing positions. She requires frequent

changes and shifting of positions to remain comfortable. Based on the results of this FCE, Ms. Burke

currently is unable to return to any type of gainful

employment. She does not meet any of the physical

demand characteristics of work as defined by the

Department of Labor.

After reviewing Chan’s FCE, Dr. Zwerin reported “I had

believed Ms. Burke was incapable of returning to the workforce. This evaluation is certainly in accord with my findings

on clinical examination. Thus I would conclude that the FCE

findings are in concert with my own opinions on this matter.”

13308 BURKE v. PITNEY BOWES
The Plan’s counsel acknowledged receipt of those reports

on May 20, 2004, and requested an independent FCE to corroborate the evidence. An independent FCE by PhysioMetrics, Inc. was conducted on June 28, 2004 in Burke’s home,

and concluded that Burke:

demonstrated a SUB-CONSISTENT effort. The

effort was less than consistent; however, the individual’s true functional capacity is likely to be close to

the actual abilities demonstrated during the FCE. . . .

Ms. Burke lifted to the SEDENTARY level for waist

to overhead lifting. Ms. Burke did not, however, participate in the floor to waist lifting. As such, we are

unable to document her overall work level classification as defined by the U.S. Department of Labor in

the Dictionary of Occupational Titles. This does not

suggest, however, that Ms. Burke does not have a

work level classification. Rather, we are simply

unable to establish one at this time based on the

results of the FCE. Further, according to the published research, most SEDENTARY level jobs simply require a tolerance for sitting and hand use, both

of which Ms. Burke demonstrated. . . . There was no

job analysis available for Ms. Burke. If a job analysis is available, the results of this FCE can be used

to determine safe return to work levels and to set

rehabilitation goals. At a minimum, Ms. Burke can

at least work at the levels identified within this

report.

On July 6, 2004, the Plan notified Ms. Burke of its request

that Dr. Barry review the FCE report and perform an orthopedic spinal evaluation of Burke on August 23, 2004, noting that

it intended to present Burke’s appeal to the Committee in September, provided that it received Dr. Barry’s report by that

time. Burke’s counsel responded by stating that Burke would

not submit to another examination by Dr. Barry, calling the

requested examination unreasonable and unnecessary because

BURKE v. PITNEY BOWES 13309
Dr. Barry had already expressed his opinion of Burke’s condition. 

On July 20, 2004, the Plan informed Burke’s counsel that

“refusing to attend the evaluation provides procedural

grounds for benefits termination (pursuant to Section 5.7(d) of

the [Plan]).”

7

 Burke’s counsel again stated that the requested

evaluation was unreasonable. 

Although Dr. Barry did not personally examine Burke a

second time, he reviewed the FCE conducted by PhysioMetrics, the report from Dr. Zwerin, and a report from Dr. Wolfe

from May 17, 2004, and concluded:

I stand by my report of October 9, 2003, in which I

felt Ms. Burke had a described pattern of subjective

symptoms, which were, on the whole, unsupported

by abnormal objective physical or neurologic findings. . . . Certainly, there has been no testing to suggest that Ms. Burke has objective residuals from

what apparently were low-impact-energy rear-end

motor vehicle accidents in June and July 1998, six

years ago.

7Section 5.7 states: 

[T]he Monthly Disability Income payable to a Participant may be

suspended or discontinued if the Participant: . . . (d) refuses to

attend an independent medical examination which is scheduled

within a reasonable distance from the Participant’s primary residence or for which the Company has made reasonable arrangements for the Participant to attend; (e) is no longer Totally

Disabled. 

In addition, Section 5.8 states: 

[N]o Monthly Disability Income shall be payable to a Participant

if it is determined that such Participant’s Total Disability: . . . (h)

cannot be verified to the satisfaction of the Disability Department

because the Employee fails to undergo or complete one or more

independent medical exams with a licensed physician or clinical

psychologist prescribed by the Committee. 

13310 BURKE v. PITNEY BOWES
On September 27, 2004, the Committee met to consider

Burke’s appeal, and determined that:

Ms. Burke’s refusal to attend a second IME with Dr.

Barry was a violation of the LTD plan [Section

5.7(d)] giving rise to a procedural ground for denial

of benefits. The members found the IME request to

be reasonable given the new medical reports and

FCE submitted by Ms. Burke in support of her

appeal, the dated nature of the prior IME, and the

fact that the Disability Department had arranged

transportation for Ms. Burke to and from the IME,

which was a reasonable distance from Ms. Burke’s

home. The Committee further agreed that Ms.

Burke’s initial and current claim were not submitted

within the LTD Plan’s time limitations [under Section 5.4(a)8

], which provided another basis for the

denial of the appeal. In addition to finding procedural grounds for the denial of LTD benefits, the

Committee felt denial was appropriate based on Ms.

Burke’s physical condition. The members were not

persuaded by the evidence submitted by Ms. Burke

regarding her inability to work. The Committee

8Section 5.4 states: 

[T]he payment of benefits under the Plan is subject to the following: (a) An Employee must support his or her initial claim for

benefits by submitting, in a form and manner determined by the

Disability Department, written proof substantiating the occurrence, character and extent of the disability before the expiration

of the one year period commencing on the date of Total Disability. Thereafter, as requested by the Disability Department from

time to time, the Employee may be required to submit conclusive

medical evidence of the continuance of his or her Total Disability. As a condition to the payment of benefits under the Plan, the

Disability Department shall have the right to direct such

employee to submit from time to time to an independent medical

examination by a licensed or board certified physician or clinical

psychologist designated by the Disability Department and/or follow a prescribed treatment program. 

BURKE v. PITNEY BOWES 13311
found Dr. Barry’s IME . . . to be more credible than

the opinion of Dr. Zwerin. The members were

moved by the fact that Ms. Burke’s physician, Dr.

Gypson, reported that she could perform activities of

daily living with some limitations. . . . Based on the

various medical reports and other materials in the

file, including the reports of Drs. Barry and Gypson,

the Committee found Ms. Burke capable of performing ‘light work,’ as defined by the US Department of

Labor. Finally, the Committee felt Ms. Burke did not

provide evidence sufficient to establish that her injuries were not subject to the LTD Plan’s exclusion of

disabilities caused by a work-related injury. Upon

return to the workforce, the members found Ms.

Burke capable of earning at least $30,326.40 per

year (60% of pre-disability earnings) in a sedentary,

light-duty job given her education (college degree in

Political Science) and work experience. 

B. Procedural history

Burke commenced this action on October 22, 2004. In it,

she challenges the Committee’s decision under ERISA

§ 502(a)(1)(B) and (3). Both parties filed motions for summary judgment. Burke sought to admit certain documents that

were part of her 2001 claim, to which the Plan objected on the

ground that they were not part of the administrative record.

The district court granted the Plan’s motion for summary

judgment and denied Burke’s motion, sustaining the Plan’s

evidentiary objection.9

First, the district court held that the disputed evidence was

not part of the administrative record because there was “no

evidence in the record that the documents at issue were before

the Committee at the time of its decision,” and “plaintiff

9Earlier, the district court had ruled that the Committee’s decision

would be reviewed under an abuse of discretion standard. 

13312 BURKE v. PITNEY BOWES
never submitted the documents at issue . . . for her current

claim.” As a result, it did not consider the evidence at issue.

Second, the district court concluded that the Committee did

not act arbitrarily in relying on Dr. Barry’s evaluation in finding that Burke was not “Totally Disabled.” The district court

also concluded that the Committee’s decision had “a reasonable factual basis,” and “given the highly deferential standard

of review in this case,” it concluded “that the Committee’s

decision that plaintiff was not ‘totally incapacitated’ and

could enter the workforce has a reasonable factual basis and

was within its discretionary authority.” The district court further concluded, however, that “the Committee’s determination

with respect to the level of earnings that plaintiff would be

able to procure is an abuse of discretion as it appears to be

based on mere conjecture rather than on a reasonable factfinding process,” because it considered no vocational evidence. 

Finally, the district court granted the Plan’s motion for

summary judgment because of Burke’s refusal to attend the

scheduled, second IME, holding that the refusal provided “an

independent basis for the denial.” The district court declined

to consider the other procedural grounds for termination of

benefits found by the Committee. 

Burke filed a timely notice of appeal. 

II.

STANDARD OF REVIEW

The Supreme Court has held that a denial of benefits “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. Bruch, 489 U.S.

101, 115 (1989) (“Firestone Tire”). When a plan unambiguBURKE v. PITNEY BOWES 13313
ously gives the plan administrator discretion to determine eligibility or construe the plan’s terms, a deferential abuse of

discretion standard is applicable. See Abatie v. Alta Health &

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

The Plan here unambiguously grants the Committee the discretion to construe the Plan’s terms. As a result, an abuse of

discretion standard is appropriate. 

As noted, the Plan is administered by the Committee and

funded by the Trust, which, in turn, is funded by contributions

from Pitney and Pitney’s employees. The district court considered whether, based on this structure, the Plan operated

under a conflict of interest. Relying on Atwood v. Newmont

Gold Co., Inc., 45 F.3d 1317, 1322-23 (9th Cir. 1995), the

district court held that there was no conflict of interest

because Burke failed to produce evidence “that the fiduciary’s

self-interest caused a breach of the administrator’s fiduciary

obligations.” (Quoting Atwood, 45 F.3d at 1323.)10

[1] Subsequent to the district court’s decision, however,

this circuit, sitting en banc, overruled Atwood and created a

new framework for applying the abuse of discretion standard,

which was, of course, not applied by the district court. See

Abatie, 458 F.3d at 965-69 (overruling Atwood, and holding

that a structural conflict of interest exists when an administrator acts as both the funding source and administrator of the

plan that must be taken into account as a factor in determining

whether an abuse of discretion occurred). 

10Under Atwood, “a structural conflict of interest did not necessarily

alter the standard of review.” Abatie, 458 F.3d at 966. The plan participant

was instead required to present “ ‘material, probative evidence, beyond the

mere fact of the apparent conflict, tending to show that the fiduciary’s

self-interest caused a breach of the administrator’s fiduciary obligations to

the beneficiary.’ ” Id. (quoting Atwood, 45 F.3d at 1323). Upon such a

showing, the burden “shifted to the administrator to prove that the conflict

of interest did not affect its decision to deny benefits.” Id. Only if the

administrator failed to carry this burden did the standard of review change

to de novo. Id. 

13314 BURKE v. PITNEY BOWES
Even more recently, the Supreme Court set forth a framework, similar to the one provided in Abatie, in considering

whether the dual role of administering and funding an ERISA

plan creates a conflict of interest, and if so, how that conflict

should be considered in evaluating whether a plan administrator has abused its discretion. Metropolitan Life Ins. Co. v.

Glenn, ___ U.S. ___, 128 S.Ct. 2343, 2346 (2008)

(“MetLife”). The Court noted that “[i]n ‘determining the

appropriate standard of review,’ a court should be ‘guided by

principles of trust law’ ” and that “[i]f ‘a benefit plan gives

discretion to an administrator or fiduciary who is operating

under a conflict of interest, that conflict must be weighed as

a ‘factor in determining whether there is an abuse of discretion.’ ” Id. at 2347-48 (emphases in the original) (citing Firestone Tire, 489 U.S. at 115). 

The Court further stated: 

[The answer is clear that there is a conflict of interest] where it is the employer that both funds the plan

and evaluates the claims. In such a circumstance,

“every dollar provided in benefits is a dollar spent by

. . . the employer; and every dollar saved . . . is a dollar in [the employer’s] pocket.” The employer’s fiduciary interest may counsel in favor of granting a

borderline claim while its immediate financial interest counsels to the contrary. Thus, the employer has

an “interest . . . conflicting with that of the beneficiaries,” the type of conflict that judges must take into

account when they review the discretionary acts of

a trustee of a common-law trust.

Id. at 2348 (quoting Bruch v. Firestone Tire & Rubber Co.,

828 F.2d 134, 144 (3rd Cir. 1987) (“Bruch”); Restatement

§ 187, Comment d). The ERISA LTD plan at issue in MetLife,

however, was an insurer administrated and funded plan. Id. at

2346. The Court stated that the structural conflict “is less

clear where . . . the plan administrator is not the employer

BURKE v. PITNEY BOWES 13315
itself but rather a professional insurance company,” but nonetheless concluded that a conflict does exist in those circumstances. Id. at 2349-50. 

Having concluded that a conflict of interest existed where

an insurer both funded and administered an ERISA LTD plan,

the Court then discussed how that conflict should be considered in evaluating the insurer’s exercise of its discretion. The

Court noted that the abuse of discretion standard of review

still applied despite the structural conflict of interest. Id. The

reviewing court, however, must: 

take account of the conflict when determining

whether the trustee, substantively or procedurally,

has abused his discretion. . . . [C]onflicts are but one

factor among many that a reviewing judge must take

into account. . . . [T]he word ‘factor’ implies,

namely, that when judges review the lawfulness of

benefit denials, they will often take account of several different considerations of which a conflict of

interest is one. . . . In such instances, any one factor

will act as a tiebreaker when the other factors are

closely balanced, the degree of closeness necessary

depending upon the tiebreaking factor’s inherent or

case-specific importance. The conflict of interest at

issue here, for example, should prove more important (perhaps of great importance) where circumstances suggest a higher likelihood that it affected

the benefits decision, including, but not limited to,

cases where an insurance company administrator has

a history of biased claims administration. It should

prove less important (perhaps to the vanishing point)

where the administrator has taken active steps to

reduce potential bias and to promote accuracy, for

example, by walling off claims administrators from

those interested in firm finances, or by imposing

management checks that penalize inaccurate deci13316 BURKE v. PITNEY BOWES
sionmaking irrespective of whom the inaccuracy

benefits. 

Id. at 2350-51 (internal citations omitted). 

III.

DISCUSSION

A. Consideration of the Plan in light of MetLife 

[2] Because the district court applied the now overruled

Atwood framework for evaluating structural conflicts of interest, and did not consider the Plan in light of MetLife and Abatie, we must remand this case for further proceedings. In

remanding, we note that the Plan at issue here is unlike the

plan at issue in MetLife for a number of reasons that may be

significant to the district court’s analysis. 

[3] First, and most significantly, the Plan’s structural conflict is mitigated by the fact that benefits paid by Pitney’s Plan

are paid out of the Plan’s Trust; they are not paid directly by

Pitney, so that there is no direct financial impact on Pitney

resulting from the distribution of benefits.11 There is some

pre-MetLife support for the proposition that there is no conflict of interest when plan benefits are paid out of a trust. See,

e.g., Post v. Hartford Ins. Co., 501 F.3d 154, 164 n.6 (3d Cir.

2007) (stating that “when the employer both funds and administers the plan, but pays benefits out of a fully funded and segregated ERISA trust fund rather than its operating budget, no

structural conflict of interest is created”); Gilley v. Monsanto

Co., Inc., 490 F.3d 848, 856 (11th Cir. 2007) (stating that “no

conflict of interest exists where benefits are paid from a trust

that is funded through periodic contributions so that the provider incurs no immediate expense as a result of paying bene11In addition, as a VEBA trust fund, money once paid into the Trust

cannot revert back to Pitney. 

BURKE v. PITNEY BOWES 13317
fits”); Vitale v. Latrobe Area Hosp., 420 F.3d 278, 282-83

(3rd Cir. 2005) (holding that a heightened version of abuse of

discretion standard was not applicable because plan benefits

were paid out of a separate trust fund); de Nobel v. Vitro

Corp. 885 F.2d 1180, 1191-92 (4th Cir. 1989) (holding that

there was no conflict of interest from an employer-funded

plan where plan funds were held in a trust because there is no

direct and immediate expense to the employer from the payout of benefits). 

[4] In light of MetLife, however, we disagree with those

cases and hold that even when a plan’s benefits are paid out

of a trust, a structural conflict of interest exists that must be

considered as a factor in determining whether there was an

abuse of discretion. We reach this conclusion because, even

though benefits are not paid directly by Pitney, Pitney obviously still has a financial incentive to keep claims’ experience

under the Plan as low as possible — the less the Trust pays

out as benefits, the less Pitney will ultimately need to contribute to the Trust to maintain its solvency. Thus, although the

impact may be less direct, there is nonetheless a close relationship between benefits paid by the Trust and the money

Pitney must provide from its general assets to fund the Trust.

In discussing plans administered and funded directly by

employers, the Supreme Court stated that “ ‘every dollar provided in benefits is a dollar spent by . . . the employer; and

every dollar saved . . . is a dollar in [the employer’s] pocket.’

The employer’s fiduciary interest may counsel in favor of

granting a borderline claim while its immediate financial

interest counsels to the contrary.” MetLife, 128 S.Ct. at 2348

(quoting Bruch, 828 F.2d at 144). Similarly, even when benefits are paid out of a trust, instead of directly by an employer,

the employer has a financial incentive to deny claims because

every dollar not paid in benefits is a dollar that will not need

to be contributed to fund the Trust. Although this impact is

indirect, and therefore a less significant conflict compared to

plans with benefits paid directly by employers, a structural

13318 BURKE v. PITNEY BOWES
conflict of interest does exist. Thus, the structural conflict of

interest must be considered as a factor in evaluating whether

the Plan abused its discretion in terminating Burke’s benefits.

See Abatie, 458 F.3d at 968 (recognizing that structural conflicts of interest come in a variety of forms that should be

weighed accordingly, and stating that “[a]n egregious conflict

may weigh more heavily (that is, may cause the court to find

an abuse of discretion more readily) than a minor, technical

conflict might. But in any given case, all the facts and circumstances must be considered”). 

[5] Second, the fact that Pitney’s employees make some

contribution to the Trust tends to lessen the structural conflict

of interest. Thus, to maintain the Trust’s solvency, Pitney is

only required to pay a portion of the benefits actually paid out

by the Trust, as the remaining funds come from employee

contributions. This fact mitigates the structural conflict of

interest. It does not, however, eliminate the conflict because

although there is not a dollar-for-dollar correlation, it still

remains true that the more that the Trust pays out in benefits,

the more Pitney must contribute to maintain the Trust’s solvency. 

[6] Third, unlike the plan at issue in MetLife, Pitney’s Plan

is an employer administered and funded plan.12 The Supreme

Court indicated that it viewed employer funded and administered plans as creating a greater structural conflict than an

insurer administered and funded plan.13 MetLife, 128 S.Ct. at

12We must obviously leave for another day the effect of a plan that is

jointly-administered by the employer and employee representatives. See

footnote 1, supra. 

13Although the Supreme Court noted that plans funded and administered

by employers more clearly create a conflict of interest, the Court stated

that despite this difference, “a legal rule that treats insurance company

administrators and employers alike in respect to the existence of a conflict

can nonetheless take account of the [differences between dual-role insurers and employers] so far as it treats those, or similar, circumstances as

diminishing the significance or severity of the conflict in individual

cases.” MetLife, 128 S.Ct. at 2350 (emphases in the original). 

BURKE v. PITNEY BOWES 13319
2348-50; but see, e.g., Vitale, 420 F.3d at 282 (stating that

“employer fiduciaries have ‘incentives to avoid the loss of

morale and higher wage demands that could result from the

denial of benefits;’ these incentives are absent, or at least

attenuated, when an insurer serves as an ERISA fiduciary”)

(quotation source omitted); Smathers v. Multi-Tool, Inc., 298

F.3d 191, 197-98 (3rd Cir. 2002) (stating “we have explained

that the risk of a conflict of interest is decreased where the

administrator and funder of the plan is the employer, rather

than an insurance company, because the employer has ‘incentives to avoid the loss of morale and higher wage demands

that could result from denials of benefits’ suggesting that

there is at least some counter to the incentive not to pay

claims,” though recognizing that this conflict-mitigating factor is lessened when the claimant is no longer an employee)

(quotation source omitted). Because the Plan is administered

by Pitney, rather than an insurer, this aspect of the Plan tends

to increase the Plan’s structural conflict of interest in comparison to the plan at issue in MetLife, 128 S.Ct. at 2348-50. 

[7] Based on the above considerations, although there are

aspects of the Plan that cut both ways, the Plan creates less

of a structural conflict of interest than the structural conflict

of interest that exists with the typical dual-role plan. That

said, a structural conflict of interest does exist and, as a result,

it must be “consider[ed] . . . as a factor in determining

whether [the Plan] has abused its discretion in denying

[Burke’s LTD claim].” MetLife, 128 S.Ct. at 2346. Because

the district court did not consider the Plan’s structural conflict

of interest as a factor in making its decision, we vacate the

district court’s ruling and remand for further proceedings consistent with this opinion.14

14We also do not decide on this appeal whether it was an abuse of discretion for the Committee, alternatively, to base its decision on the procedural ground that Burke refused to attend the second IME. In reviewing

this, and any other procedural issue, anew under the MetLife/Abatie standard, the district court should address whether the Plan was prejudiced by

13320 BURKE v. PITNEY BOWES
B. Evidentiary ruling

[8] We also vacate the district court’s ruling that it could

not consider the supplemental evidence submitted by Burke

because it was not part of the administrative record, in light

of our remand of the case on the merits. It is the general rule,

of course, that when applying an abuse of discretion standard

to an ERISA plan, the district court’s review is limited to the

administrative record. Abatie, 458 F.3d at 970. But in excluding the disputed evidence, while observing that there was “no

evidence in the record that the documents at issue were before

the Committee at the time of its decision,” and that “plaintiff

never submitted the documents at issue,” the district court

failed to consider the peculiar circumstances of this case. 

When Burke asked the Plan to provide her with copies of

all of the relevant records, the Plan noted that it was not sending her copies of any documents “submitted, considered or

generated” in connection with her earlier claim and settlement

because it “assume[d] you retained copies” of those documents. Later, the Plan stated to Burke in connection with

another request for documents that “the majority of those documents are already a part of Ms. Burke’s file (submitted by

Ms. Burke prior to the September 26, 2002 Settlement Agreement).” (Emphasis added.) Given this correspondence about

Burke’s file, it is understandable that Burke assumed that her

earlier papers were a part of her current file, and Burke may

have been lulled into such a mistaken belief by the Plan’s representations, an issue the district court should consider when

it reconsiders its evidentiary ruling. 

the procedural default or, absent such prejudice, whether it would be an

abuse of discretion to deny benefits for such a harmless error. 

Likewise, given our remand, we have no occasion to review the district

court’s ruling as to Burke’s post-injury level-of-earnings capacity, which

is not directly challenged on this appeal. 

BURKE v. PITNEY BOWES 13321
Further, even if this evidence is not part of the administrative record, the district court may “consider evidence outside

the administrative record to decide the nature, extent, and

effect on the decision-making process of any conflict of interest. . . .” Abatie, 458 F.3d at 970. Here, for example, the Committee asserts that Burke is ineligible for benefits because she

did not file a timely claim, but the excluded evidence indicates that Burke may have made a timely request for an LTD

benefits claim form and was told that she was not eligible.

The district court may consider this evidence to the extent it

is relevant in determining whether the structural conflict of

interest influenced the Committee’s decision to terminate

Burke’s benefits.15

[9] Similarly, the district court may consider evidence outside the administrative record if it determines that procedural

irregularities prevented the full development of the administrative record. See id. at 973 (stating that “the court may take

additional evidence when the [procedural] irregularities have

prevented full development of the administrative record”).

Here, for example, there is some evidence of procedural irregularities, as the Committee considered a basis for terminating

her benefits on appeal that was not part of the Plan’s initial

decision to terminate her benefits — specifically, the timeliness of her claim. As a result, Burke had no reason to submit

evidence into the administrative record regarding the timeliness of her claim, as she was not made aware that the Committee was considering that as a basis for terminating her

benefits on appeal. Thus, to the extent there was a procedural

irregularity by the Plan in considering a basis for terminating

Burke’s benefits on appeal without any notice to Burke of that

basis, the district court can consider evidence outside the

administrative record that is absent from that record due to the

procedural irregularity. See id.

15Whether to permit discovery into the nature, extent, and effect of the

Plan’s structural conflict of interest is also a matter within the district

court’s discretion. 

13322 BURKE v. PITNEY BOWES
IV.

CONCLUSION

For the foregoing reasons, we vacate the district court’s

grant of summary judgment and remand for reconsideration of

whether the Plan’s termination of Burke’s LTD benefits constituted an abuse of discretion under the newly-established

MetLife/Abatie standard, as well as the associated procedural

issues. 

The parties shall bear their own costs on appeal. 

VACATED and REMANDED.

BURKE v. PITNEY BOWES 13323