T hi s di s pos i t i on i s notappr opr i a t e f orpubl i c a t i on and i s notpr e c e de nt * e xc e pta s pr ovi de d by9th C i r . R . 36- 3. NOT F OR P UB L I CAT I ON UN I TE D STATE S C OU RT OF APPE ALS FOR T HE NI NTH CI RC UI T B AR B AR A S T E R I O, P la in tif

f - A p p e lla n t, v. H M L IF E (f

orm er l y kno w n as H I G H M A RK LI FE I N SU RA N CE C OMP AN Y) ; DI AB E T E S WE L L L ON G T E R M DI S AB I L I T Y P L AN ; T HE PLA N /PO LI CY PRO V I D ED BY DI ABET ES W EL L T O I TS EM PL OY EE S TH RO U G H H I G H M A RK LI FE I NS UR AN C E C OMP AN Y G R OU P POLI CY NO . 9 1 1 5 5 3 - B AND / OR I TS PLA N A D M I N I STRA TO R, D efen d an t s - A p p el l ees. N o. 08- 17426 D. C. No . 2 : 0 6 - c v - 0 1 0 4 5 - M CE GG H ME MOR AN DU M *

A pp ea l fr om the U ni t ed S t at es D i stri ctC ou rt f o rth e E a s te rn D is tr ic t o f C a lif o rn ia M orr i s on C . E ngl a nd, D i s tr i c tJ udge , P r e s i di ng A r gue d a nd S ubm i tt e d F e brua ry11, 2010 S a n F r a n c is c o , C a lif

o rn ia 

# FI LED MA R 04 2010 M OLLY C. DW Y ER, CLERK U . S. C O U R T OF APPE ALST he H onor abl e T hom a s S . Z i l l y , S e ni orU ni t e d S t a t e s D i s tr i c tJ udge ** f orthe W e s t e rn D i s tr i c tof W a s hi ngt on, s i tt i ng byde s i gna t i on.

2 B e f o r e : T HO MP S ON a n d Mc KE OWN, C i r c u i tJ u d g e s , a n dZ I L L Y, S e ni or ** D i stri ctJudg e. A p p e lla n t, B a rb a r aS te r io ap p e a ls th e d is tr ic t c o u rt’s e n tryo f ju d g m e n t in f a v o ro f H M L if e , a n in s u r a n c e c o m p a n ya d m in is tr a to rth a t d e n ie dS te r io ’s c la im f o rlo n g te rm d is ab ilityu n d e ra n e m p lo y e e p la n g o v e rn e db yE R I S A . S te r io , a form erre ce pt i on i st , cl ai m s s he i s di sabl ed pri m ar i l y due t o sci at i c pai n, re stri ct ed m obi l i tya nd de pr e s s i on f ol l ow i ng s e ve r a l hi p s ur ge r i e s . W e ha ve j ur i s di c t i on u n d e r2 8 U .S .C . § 1 2 9 1 . W e c o n c lu d e th a t H M L if e ab u s e dits d is c r e tio n in denyi ng S t er i o b enef

i t s, and w e r ever se and rem and for the di stri ctcourtt o ent er j ud gm enti n h erfavo r. S te r io h a s u n d e r g o n e m u ltip le h ip r e v is io n s u r g e r ie s f o llo w in g h ip r e pl a c e m e nts ur ge ryi n 1975. I n J a nua ry2000, S t e r i o unde rw e nthe rm os tr e c e nt t o t al h i p rev i si o n su rg ery, aft er w h i ch sh e d ev el o p ed p o st o p erat i v e co m p l i cat i o n s, i ncl ud i ng sc i at i c pai n and nu m bn es s and w eakn es s i n h erri gh tl eg and foo t . In D e c e m b e r2 0 0 0 , S te r io s to p p e d w o rk in g . I n J a n u a ry2 0 0 2 , th e S o c ia l S e c u r ity A dm i ni s tr a t i on ( “ S S A ” ) de t e rm i ne d tha tS t e r i o w a s pe rm a ne nt l ydi s abl e d a nd a w a r d e d h e rb e n e f

its .3

In 20 03 , S t er i o app l i ed for l on g t erm di sabi l i ty benef i t s w i th H M L i fe , w hi ch i s both the i nsurerand the adm i ni stra t or of S t er i o’ s E R IS A pl an. H M L i fe engaged B r o a d s p ir e S e rv ic e s to p r o c e s s S te r io ’s c la im . B r o a d s p ir e , in tu rn , h ir e ds ix i nde pe nde ntphy s i c i a ns t o r e vi e w S t e r i o’ s m e di c a l r e c or ds . T he r e vi e w i ng ph ys i ci ans a l l concl ud ed thatS t er i o w as no tdi sabl ed. B roadspi re i ni t i al l y deni ed S t e r i o’ s c l a i m a nd H M L i f e de ni e d S t e r i o’ s appe a l , both c onc l udi ng tha tthe obj ec t i ve m edi ca l evi dence di d n otsupp orther di sabi l i ty c l ai m . T he di stri ctcourt c o n d u c te d ab e n c h tr ia l a n d c o n c lu d e dth a t H M L if e d idn o t ab u s e its d is c r e tio n in l i gh tof “ confl i ct i ng evi dence. ” Stan da rd of R ev i ew T he di stri ctcourtcorr ec t l y c on cl ud ed thatan abuse of di sc re t i on st andard ap p lie s to H M L if

e ’s d e n ia l o f

b e n e f its . Se e A bat i e v . A l ta H e al th & L i

f e I ns . C o. , 4 5 8 F .3 d 9 5 5 , 9 6 2 ( 9 th C ir . 2 0 0 6 ) ( e n b a n c ) ( “W e r e v ie w d e n o v o ad is tr ic t c o u rt's c h o ic e a n d ap p lic a tio n o f th e s ta n d a r do f

r e v ie w to d e c is io n s b yf id u c ia r ie s in E R I S A c a s e s .” ) . W h e r e , a s h e r e , th e P la n u n a m b ig u o u s lyp r o v id e s d is c r e tio n to the a dm i ni s tr a t or , the s t a nda r d of r e vi e w s hi f

t s “ f r om the de f

aul tof de novo t o the m ore l eni entabuse of di sc re t i on . ” Id . a t 9 6 3 . See a l so B urke v. P i tney B ow es Inc. L ong- T e rm D is abi l i t

yP lan, 5 4 4 F .3 d1 0 1 6 , 1 0 2 3 - 2 4 ( 9 th C ir . 2 0 0 8 ) .4

Th e Pl a n g i v e s H M Li f

e f u l l a n de x c l u s i v e au th o r i tyt o a d mi n i s t e rc l a i ms a n d i n t e rp r e tth e p o l i c y . T h i s l a n g u a g e u n a m b i g u o u s l yc o n f e r s d i s c r e t i o n o n HM L i fe even tho ug h i tdo es no tuse the w ord “ di sc re t i on . ” A b a tie , 4 5 8 F .3 da t 9 6 3 - 6 4 . W e r e j e c tS t e r i o’ s c ont e nt i on tha tthe di s tr i c tc ourts houl d ha ve appl i e d ade novo s t a nda r d be c aus e the r e i s no “ pl a n” doc um e nt , onl ya n i ns ur a nc e pol i c y . T he in s u r a n c e p o lic yis th e p la n d o c u m e n t in th is c a s e . Se e C in e lli v . Se c u r ityP a c ific C or p. , 61 F . 3d 14 37 , 14 41 (9th C i r. 19 95 ) ( “ [I ] ti s c l ear thatan i nsurance pol i cy m a yc ons t i tut e the ‘ w r i tt e n i ns trum e nt ’ of a n E R I S A pl a n . . . . ” ) ; 29 U . S . C . §§ 1 0 0 2 a n d 1 1 0 2 ( a ) ( 1 ) . W e al so rej ectS t eri o ’ s co n t en t i o n th atd e n o v o rev i ew ap p l i es b ecau se B r o a d s p ir e , n o t H M L if e , in itia llyd e n ie dh e rc la im . B r o a d s p ir e ’s in itia l d e c is io n is i nsuffi ci entt o revertthe st andard of revi ew t o d e nov o b ec ause H M L i fe u n q u e s tio n ab lym a d e th e f in a l d e c is io n to d e n yS te r io b e n e f its o n ap p e a l. See G at t iv . R e l i anc e Standard L i f e I ns . C o. , 415 F . 3d 978, 985 ( 9th C i r . 2005) (“ [P ] ro ced u ral v i o l at i o n s o f E R IS A d o n o tal t er th e st an d ard o f rev i ew u n l ess th o se vi ol a t i ons a r e s o f

l a gr a nta s t o a l t e rthe s ubs t a nt i ve r e l a t i ons hi p be tw e e n the e m p lo y e ra n d e m p lo y e e . . . .” ) ; A ba t i e, 458 F . 3d a t971 ( s a m e ) . T hi s c a s e doe s notC

f . N el son v. E G &G E nergy Measure m ent s G roup , Inc. , 37 F . 3d 1384, 1 13 88 -89 (9th C i r. 19 94 ) ( appl yi ng de no vo re vi ew w here an un autho ri ze d e m p lo y e e m a d e th e b e n e f its d e c is io n ) ; B la u v . D e l Mo n te C o r p ., 748 F . 2d 1348 ( 9 th C ir . 1 9 8 4 ) , a b r o g a tio n o n o th e rg r o u n d s r e c o g n iz e d

b yD y tr t v . Mo u n ta in State T e l. & T e l. C o. , 921 F . 2d 889, 894 n. 4 ( 9th C i r . 1990) ( appl y i ng de novo r e v ie w w h e r e th e a d m in is tr a to rk e p t th e p o lic yd e ta ils s e c r e t) . 5 f a ll in to th e “r a r e c la s s o f c a s e s ” th a t r e v e rt b a c kto d e n o v o r e v ie w . A ba t i e, 458 F . 3d a t971. 1 C o n f l i ct o f In terest A l though the di s tr i c tc ourtc orr e c t l yc hos e the abus e of di s c r e t i on s t a nda r d, it d idn o t ap p lyth a t s ta n d a r d p r o p e r ly . In E R IS A ca se s, abuse of di sc re t i on re vi ew i s “ i nform ed by the nature, ext ent , and eff

ec ton the deci si on -m aki ng proces s of any confl i ctof i nt er es tthat m ayappear i n the re cord. ” A b a tie , 4 5 8 F .3 da t 9 6 7 . T h u s , w h e r e , a s h e r e , a s truc tur a l c onf

l i c te xi s t s be c aus e the i ns ur a nc e c om pa nya dm i ni s tr a t orboth f unds an d ad m i n i st ers th e P l an , “ th e co u rtm u stco n si d er n u m ero u s case-sp eci fi c fact o rs, i ncl ud i ng the adm i ni stra t or' s c on fl i ctof i nt er es t , and reac h a deci si on as t o w hether di sc re t i on has bee n abu se d b y w ei gh i ng and b al anci ng tho se fa ct ors t og ether. ” Montourv . H

ar t f ord L i f e & A c c . I

ns . C o. , 5 8 8 F .3 d6 2 3 , 6 3 0 ( 9 th C ir . 2 0 0 9 ) . I n A b a tie , a nd l a t e ri n Montour , w e provi ded speci fi c f ac t ors thata c ou rt s h o u ldw e ig h in d e te rm in in g w h e th e ra n a d m in is tr a to rab u s e dits d is c r e tio n . See6

A b a tie , 4 5 8 F .3 da t 9 6 8 - 9 6 9 , 9 7 2 , 9 7 4 ; Montour , 5 8 8 F . 3 dat6 3 0 . U n fo rtu n at el y, th e d is tr ic t c o u rt d idn o t h a v e th e b e n e f it o f th e a d d itio n a l g u id a n c e p r o v id e din Montoura s tha tc a s e w a s de c i de d a f t e rthe di s tr i c tc ourte nt e r e d j udge m e nt . O ur de c i s i on i n Montour , t oge the rw i th ourde c i s i on i n A b a tie a n dth e r e c o r din th is c a s e , m a k e c le a rth a t H M L if e ab u s e dits d is c r e tio n in d e n y in g S te r io b e n e f its . F irst, th e q u an ti ty an d q u ality o f th e m ed ical ev id en ce su p p o rts S terio ’s d is ab ilityc la im . Montour , 5 8 8 F .3 da t 6 3 0 . H M L if e r e je c te dS te r io ’s c la im s t a t i ng the r e w a s no obj e c t i ve m e di c a l e vi de nc e s upport i ng he rdi s abi l i ty , butthe f a c ts s h o w o th e rw is e . A n E M G te s t c o n f irm e dth a t S te r io h a dr ig h t s c ia tic n eu ro p ath y aft er h er l asth i p rev i si o n su rg ery. T w o M R I ex am s rev eal ed ex cess m e t a l a rt i f

a c t s i n S t e r i o’ s pe l vi s r e gi on. T w o x- r a ye xa m s r e ve a l e d bone thi nni ng in S te r io ’s r ig h t f

o o t. S te r io ’s r e c o r d s s h o w c o n s is te n t u s e o f s tr o n g p a in m ed icatio n . A F u n ctio n al C ap ac ity E v alu atio n (“F C E ”) su b m itted b y S terio ’s tr e a t i ng phy s i c i an r e port e d tha tS t e r i o c oul d nots i t , s t a nd orw a l k f orm or e tha n 1- ho ur a day . B oth o f S t er i o’ s tre at i ng ph ys i ci ans c on cl ud ed thatshe w as pe rm a ne nt l ydi s abl e d, w hi c h i s c ons i s t e ntw i th the e va l ua t i ons of S t e r i o’ s tr e a t i ng neurol og i stand tw o o rtho pedi st s. H M L i fe fa i l ed t o cre di tthi s r el i abl e m edi ca l e v id e n c e . A b a tie , 4 5 8 F .3 d a t 9 6 8 .7

S ec o n d , H M L ife f

ailed to d isti n g u ish o r e v en ac k n o w led g e th e S S A ’s contrarydi sabi l i ty det erm i nat i on despi t e havi ng kn ow l edge of i t . W hi l e H M L i fe w as “ no tbo un d b y the S S A ’ s det erm i nat i on , [i t s] com pl et e di sr egar d for a c on trary co n cl u si o n w i th o u tso m u ch as an ex p l an at i o n rai ses q u est i o n s ab o u tw h eth er [i t s] a dve r s e be ne f

i t s de t e rm i na t i on w a s the pr oduc tof apr i nc i pl e d a nd de l i be r a t i ve re as on i ng proces s. ” Montour , 5 8 8 F .3 da t 6 3 5 ( in te rn a l q u o ta tio n m a rk s o m itte d ) .

“ I n f a c t , n o td i s t i n g u i s h i n g th e S S A' s c o n tr a ryc o n c l u s i o n m a yi n d i c a t e [ HM L i fe ’ s] fa i l ure t o con si der r el evantevi dence. ” I d. T h ir d , H M L if

e f a ile d to c o n d u c t a n in - p e r s o n m e d ic a l e v a lu a tio n o f S te r io . Montour , 5 8 8 F. 3 d a t6 3 4 . A l th o u g h th e Pl a n d i dn o tr e q u i r e a n i n - p e r s o n e x a m, H M L i f e ’ s c hoi c e t o r e l yon apur e pape rr e vi e w , a s i n Montour , “ r a i s e s que s t i ons aboutthe thor oughne s s a nd a c c ur a c yof the be ne f

i t s de t e rm i na t i on . . . a s i ti s not c l e a rthe P l a n pr e s e nt e d [ the s i x r e vi e w i ng doc t or s ] w i th a l l of the r e l e va nt evi dence. ” Id . ( i nt e rna l quot a t i on m a rks , c i t a t i ons , a nd br a c ke t s om i tt e d) . N otone of H M L i f e ’ s s i x r e vi e w i ng phy s i c i a ns “ m e nt i one d the S S A ’ s c ontr a ryc onc l us i on, note ve n t o di s c ountordi s a gr e e w i th i t , w hi c h i ndi c a t e s tha tthe ym a ynotha ve even been aw ar e of i t . ” Id . ( in te rn a l q u o ta tio n m a rk s a n db r a c k e ts o m itte d ) . F o u rth , H M L i fe fai l ed t o ad eq u at el y i n v est i g at e S t eri o ’ s cl ai m an dreq u est n e c e s s a rye v id e n c e . A b a tie , 4 5 8 F. 3 da t9 6 8 . H M Li f e d i dn o tp r o c u r e th e SSA8

f ile o ra s kS te r io to d o s o . N o rd idH M L if e r e q u e s t a n ys p e c if

ic e v id e n c e th a t it, o rits r e v ie w in g p h y s ic ia n s , c o n c lu d e dw a s n e c e s s a ryto p r o v e u p S te r io ’s c la im . Se e Montour , 5 8 8 F .3 d a t 6 3 6 ( r e q u ir in g a“p la n a d m in is tr a to rd e n y in g b e n e f its in the f i r s ti ns t a nc e t o not i f

ythe c l a i m a nt. . . of

w ha ta ddi t i ona l i nf

orm a t i on w oul d be nece ss ary t o p er fe ctthe cl ai m . ”) (i nt ernal qu ot at i on m arks om i tt ed). F or exam pl e, one r e vi e w i ng phy s i c i a n di s m i s s e d S t e r i o’ s os t e oa rthr i t i s di a gnos i s be c aus e no

“ b o n e d e n s i tys tu d y ” h a d b e e n p e r f o rme d . A n o th e rd i s mi s s e dSt e r i o ’ s FCE b ec au se itre li ed o n u n sp ec ified ex am s, x -r ay s, an dev alu atio n s. H M L ife’s m edi ca l di re ct or si m i l ar l y di sc re di t ed the F C E because i tpu rport edl y l ac ked an a c tu a l o b je c tiv e e v a lu a tio n . Y e t, H M L if e f a ile dto c o m m u n ic a te th e s e s p e c if ic d e f ic ie n c ie s to S te r io o ra s kh e rto s u p p le m e n t th e r e c o r d . See i d. ; B oo ton v. L oc khe e d Me di c al

B e n. P lan , 11 0 F . 3d 14 61 , 14 63 (9th C i r. 19 97 ) ( “ [I ] f the pl an adm i ni stra t ors bel i eve thatm ore i nform at i on i s nee ded t o m ake are as on ed deci si on , they m ustas k for i t . ”) ; Sa ffo n v . W

e lls Fa r g o & C o . L o n gT

e rm D is a b ility P lan , 52 2 F . 3d 86 3, 87 1 (9th C i r. 20 08 ). F i nal l y, H M L i fe vi ol at ed E R IS A ’ s proce du re s by “ t ac k[i ng ] on a new r e a s on f orde ny i ng be ne f

i t s i n [ i t s ] f

i na l de c i s i on, the r e bypr e c l udi ng [ S t e r i o] f r om re spon di ng t o thatra t i on al e f or deni al atthe adm i ni stra t i ve l evel . ” A b a tie , 458 F . 3d at97 4. H M L i fe ’ s r evi ew i ng ph ys i ci ans c on ce ded thatS t er i o w as i n fac t9

di sabl ed du ri ng the t i m e s he w as ho spi t al i ze d i n res po nse t o tw o m ent al b re ak d o w n s. In it s f

in al d ec isio n , H M L ife a d d ed fo r th e f irst ti m e th at S terio ’s hos pi t a l i z a t i ons di d note nt i t l e he rt o l ong t e rm be ne f i t s be c aus e s he w a s not deem ed di sabl ed atthe on se tof her di sabi l i ty e ff ec t i ve dat e and because m ent al heal th cov er age e nd s a t24 m on ths. H M L i fe ’ s l as t -m i nu t e a dd i t i on of a new r e a s on f orde ni a l s ugge s t s notonl yac onf l i c tof i nt e r e s t , butc a n a l s o be

“ ca t egori ze d as aprocedural i rr egul ar i ty w here , as here , [S t er i o w as ] fore cl osed fr om pres ent i ng any r es po nse t o the new re as on . ” Id . a t 9 7 4 n .9 . T h e s e f a c to r s , ta k e n to g e th e r , s h o w th a t H M L if e ab u s e dits d is c r e tio n in d en yi n g S t eri o b en efi t s. A n aw ard o f retro act i v e b en efi t s i s ap p ro p ri at e b ecau se H M L i f e ’ s de ni a l of

be ne f i t s i s c ontr a ryt o the f

a c tua l r e c or d. G rosz -Salom on v. P aul R e v e r e L i

f e I ns . C o. , 23 7 F . 3d 11 54 , 11 63 (9th C i r. 20 01 ). W e there fore r e ve r s e a nd r e m a nd t o the di s tr i c tc ourtw i th di r e c t i ons t o e nt e rj udge m e nti n f a vor o f S te r io a n d to c a lc u la te th e a m o u n t o f r e tr o a c tiv e b e n e f

its to w h ic h S te r io is e n title d u n d e rth e P la n . Si lv e rv . E x e c . CarL e as i ng L ong- T e rm D is abi l i t

yP lan , 466 F . 3d 727, 736 ( 9th C i r . 2006) ( r e ve r s i ng de ni a l of be ne f i t s unde rE R I S A a nd re m andi ng t o d i stri ctcourtt o cal cul at e aw ar d o f benefi t s) . T he di stri ctcourtSee U ni ted St ee l

W orke rs of A m . v. R et. Incom e P lan f or H ou rl y- R ated 2 E m ployees of

A SA R C O , Inc. , 51 2 F . 3d 55 5, 56 4 (9th C i r. 20 08 ) ( “ [A ] s ageneral ru l e, th e p rev ai l i n g p arty o n an E R IS A cl ai m i s en t i t l ed t o att o rn ey' s fees, u n l ess s pe c i a l c i r c um s t a nc e s w oul d r e nde rs uc h an a w a r d unj us t . ” ) ( i nt e rna l quot a t i on m a rk s o m itte d ) ; B lanke ns hi p v . L i be r t

yL i f e A s s ur anc e C o. of

B os ton , 486 F . 3d 62 0, 62 7 (9th C i r. 20 07 ) ( “ A di stri ctcourtm ayaw ar d p re j ud gm enti nt er es ton an aw ar d o f E R IS A benefi t s a ti t s di sc re t i on . ”) . 10 s houl d a l s o de t e rm i ne w he the rS t e r i o i s e nt i t l e d t o a tt orne yf e e s a nd pr e

j udgm e nt in te r e s t. 2 RE V E RS E D A ND RE MAND E D.