Source: http://openjurist.org/967/f2d/377
Timestamp: 2013-05-24 14:05:01
Document Index: 186011192

Matched Legal Cases: ['§ 1132', '§ 1133', '§ 1133', '§ 2560', '§ 1133', '§ 1132', '§ 1132']

967 F2d 377 Sandoval v. Aetna Life and Casualty Insurance Co L | OpenJurist
967 F. 2d 377 - Sandoval v. Aetna Life and Casualty Insurance Co L	Home967 f2d 377 sandoval v. aetna life and casualty insurance co l
967 F2d 377 Sandoval v. Aetna Life and Casualty Insurance Co L 967 F.2d 377
Dan M. SANDOVAL, Plaintiff-Appellant,v.AETNA LIFE AND CASUALTY INSURANCE CO. and Metropolitan LifeInsurance Co., Defendants,andAtlantic Richfield Co.; Arco Coal Co.; and Thomas L.Jacobs & Associates, Inc., Defendants-Appellees.
Id. at 2-3. He specifically disagreed with Dr. Moon's previous diagnosis of "a C-8 and D-1 radiculopathy," stating that it was "not substantiated by the examination and x-rays that [he] reviewed." Id. at 3. Dr. Walsky recommended that Sandoval receive counseling, vocational rehabilitation, and exercise therapy, and noted that Sandoval "obviously d[id] not ever intend to be involved in gainful employment." Id. at 4. Based on this information, a Jacobs employee determined that Sandoval was no longer totally disabled under the plan's definition. Jacobs therefore terminated Sandoval's benefits.
Although not styled as such, Sandoval's complaint arises under 29 U.S.C. § 1132(a)(1)(B).3 The district court found, and the parties do not dispute, that Jacobs had discretionary authority to determine eligibility for benefits. Because the plan gave the administrator this discretion, the district court reviewed Jacobs' actions under an arbitrary and capricious standard. See Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 109-11, 109 S.Ct. 948, 953-54, 103 L.Ed.2d 80 (1989) (in action brought under section 1132(a)(1)(B), discretionary actions of fiduciary reviewed under arbitrary and capricious standard); Woolsey v. Marion Lab., Inc., 934 F.2d 1452, 1457 (10th Cir.1991); Pratt v. Petroleum Prod. Management Inc. Employee Sav. Plan & Trust, 920 F.2d 651, 657-58 (10th Cir.1990).4
The district court's holding that the administrator's decision was not arbitrary and capricious is a legal conclusion. Hence, our review of the district court's decision, although not the underlying administrator's decision, is plenary. See Pratt, 920 F.2d at 658; cf. Phillips v. Alaska Hotel & Restaurant Employees Pension Fund, 944 F.2d 509, 515 (9th Cir.1991) (district court's decision whether trustees acted arbitrarily or capriciously is mixed question of law and fact, reviewed de novo), cert. denied, --- U.S. ----, 112 S.Ct. 1942, 118 L.Ed.2d 548 (1992).
III. Scope of District Court's Review
Although the district court concluded that Sandoval was psychologically disabled at the time Jacobs terminated his benefits, the court also found that the Review Committee was unaware of this disability because Sandoval failed to bring it to the Review Committee's attention. In determining whether the plan administrator's decision was arbitrary and capricious, the district court generally may consider only the arguments and evidence before the administrator at the time it made that decision. See Perry v. Simplicity Engineering, 900 F.2d 963, 967 (6th Cir.1990); Voliva v. Seafarers Pension Plan, 858 F.2d 195, 196 (4th Cir.1988) ("[T]he court must consider only the record before the plan administrator at the time it reached its decision. [Courts should not consider or rely] upon evidence not part of the administrative record. [Nor should courts] consider arguments that do not appear in the administrative record.") (citations omitted); Danti v. Lewis, 312 F.2d 345, 349-50 (D.C.Cir.1962) (court should consider only evidence and arguments before trustee). As the Sixth Circuit stated in Perry:
An administrator's decision is not arbitrary or capricious for failing to take into account evidence not before it. Cf. LeFebre v. Westinghouse Elec. Corp., 747 F.2d 197, 208 (4th Cir.1984) (trustees under no duty to seek out evidence contradicting evidence before them). The evidence of psychological disability developed long after the review process does not render Jacobs' decision arbitrary or capricious.
Nonetheless, Sandoval argues that the district court's subsequent finding that he was psychologically disabled requires a "remand" to the plan administrator for a new determination of disability. In support of this argument, Sandoval cites Wardle v. Central States, Southeast & Southwest Areas Pension Fund, 627 F.2d 820 (7th Cir.1980), cert. denied, 449 U.S. 1112, 101 S.Ct. 922, 66 L.Ed.2d 841 (1981). In Wardle, the Seventh Circuit stated:
ERISA provides that a plan must follow certain procedural steps when denying or terminating benefits to a plan participant. First, the plan must provide the participant with written notice of the denial which sets forth the specific reasons underlying the decision. 29 U.S.C. § 1133(1). Second, the plan must "afford a reasonable opportunity ... for a full and fair review by the appropriate named fiduciary of the decision denying the claim." Id. § 1133(2). Labor regulations specify that the review procedure must permit the claimant to "(i) [r]equest a review upon written application to the plan; (ii) [r]eview pertinent documents; and (iii) [s]ubmit issues and comments in writing." 29 C.F.R. § 2560.503-1(g)(1).
Sandoval argues that he failed to receive a "full and fair review" of the decision to terminate his benefits, pursuant to 29 U.S.C. § 1133(2). We have previously held that receiving a "full and fair review" requires " 'knowing what evidence the decision-maker relied upon, having an opportunity to address the accuracy and reliability of the evidence, and having the decision-maker consider the evidence presented by both parties prior to reaching and rendering his decision.' " Sage v. Automation, Inc. Pension Plan & Trust, 845 F.2d 885, 893-94 (10th Cir.1988) (quoting Grossmuller v. International Union, United Auto. Aerospace & Agric. Implement Workers, Local 813, 715 F.2d 853, 858 n. 5 (3d Cir.1983)).
Given that Jacobs complied with the statutory and regulatory requirements, Sandoval cannot complain that the procedures followed were unfair. Congress intended these review procedures "to help reduce the number of frivolous lawsuits under ERISA; to promote the consistent treatment of claims for benefits; to provide a nonadversarial method of claims settlement; and to minimize the costs of claims settlement for all concerned." Amato v. Bernard, 618 F.2d 559, 567 (9th Cir.1980). Absent such safeguards, mounting costs of administering a plan might discourage employers from establishing such plans. Cf. Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 54, 107 S.Ct. 1549, 1556, 95 L.Ed.2d 39 (1987) (civil enforcement scheme of 29 U.S.C. § 1132 "represents a careful balancing of the need for prompt and fair claims settlement procedure against the public interest in encouraging the formation of employee benefit plans."). Based upon our review of the record, Sandoval received a full and fair review.
V. Support by Substantial Evidence
Finally, we must consider whether Jacobs' determination that Sandoval was not disabled was arbitrary and capricious because it was unsupported by substantial evidence. " 'Substantial evidence is such evidence that a reasonable mind might accept as adequate to support the conclusion reached by the [decisionmaker].' Substantial evidence requires 'more than a scintilla but less than a preponderance.' " Flint v. Sullivan, 951 F.2d 264, 266 (10th Cir.1991) (citations omitted).
29 U.S.C. § 1132(a)(1)(B) provides:
George Lee Flint, Jr., ERISA: The Arbitrary and Capricious Rule Under Siege, 39 Cath.U.L.Rev. 133, 147-48 (1989) (footnote omitted). This Circuit has phrased the precise standard of review in several ways. See, e.g., Woolsey, 934 F.2d at 1456-57 (administrator's decision upheld unless "arbitrary and capricious, not supported by substantial evidence or erroneous on a question of law"); Naugle v. O'Connell, 833 F.2d 1391, 1393-94 (10th Cir.1987) (trustee's decision reviewed under arbitrary and capricious standard; "[a] decision is neither arbitrary nor capricious if it is based on substantial evidence and is not the result of a mistake of law"). The Supreme Court refers to the district court's review as simply "the arbitrary and capricious standard." Bruch, 101 U.S. at 109, 109 S.Ct. at 953. In our view, both lack of substantial evidence and a mistake of law would be indicia of arbitrary and capricious actions and thus may be subsumed under the arbitrary and capricious label. See Danti v. Lewis, 312 F.2d 345, 348 (D.C.Cir.1962). Other potential indicia of arbitrary and capricious actions include bad faith or conflict of interest by the fiduciary. See, e.g., Bruch, 489 U.S. at 115, 109 S.Ct. at 956. Thus, in describing the standard of review as simply arbitrary and capricious, we intend no departure from our prior case law.
Home967 f2d 377 sandoval v. aetna life and casualty insurance co l