Source: http://openjurist.org/974/f2d/631
Timestamp: 2013-05-22 22:00:19
Document Index: 786677010

Matched Legal Cases: ['§ 502', '§ 1132', '§ 15', '§ 15', '§ 15', '§ 15', '§ 35', '§ 35', '§ 35', '§ 35', '§ 1132', '§ 1002', '§ 6', '§ 15', '§ 15', '§ 35']

974 F2d 631 Kenneth Wildbur v. Arco Chemical Co | OpenJurist
974 F. 2d 631 - Kenneth Wildbur v. Arco Chemical Co	Home974 f2d 631 kenneth wildbur v. arco chemical co
974 F2d 631 Kenneth Wildbur v. Arco Chemical Co 974 F.2d 631
16 Employee Benefits Cas. 1235
KENNETH E. WILDBUR, Sr., et al., Plaintiffs-Appellants,v.ARCO CHEMICAL CO., et al., Defendants-Appellees.
Oct. 12, 1992.As Modified on Denial of Rehearing andDenial of Suggestion for RehearingEn Banc Dec. 7, 1992.
A denial of benefits challenged under § 502(a)(1)(B) of ERISA, 29 U.S.C. § 1132(a)(1)(B), is reviewed under a de novo standard unless the plan gives the administrator "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, 109 S.Ct. 948, 956, 103 L.Ed.2d 80 (1989). If the administrator has discretionary authority, a reviewing court applies an abuse of discretion standard. Id. Discretionary authority cannot be implied; an administrator has no discretion to determine eligibility or interpret the plan unless the plan language expressly confers such authority on the administrator. Cathey v. Dow Chemical Co. Medical Care Program, 907 F.2d 554, 558 (5th Cir.1990), cert. denied, --- U.S. ----, 111 S.Ct. 964, 112 L.Ed.2d 1051 (1991).
We conclude that although § 15.11 does not expressly give the administrator authority to construe plan terms, it does expressly give the administrator discretionary authority to determine eligibility for benefits. Section 15.11 says that after reviewing the evidence it11 believes necessary, the administrator "shall make an independent determination of the applicant's eligibility for benefits under the Plan" and that decision "shall be final and conclusive upon all persons if supported by substantial evidence in the record." This language satisfies one of the alternative Firestone criteria for review under an abuse of discretion standard because it expresses, i.e., puts into words, the authority of the administrator to determine eligibility. That authority is "independent," i.e., it cannot be made by anyone else, and it is "final and conclusive," if supported by substantial evidence.12
We reject plaintiffs' argument that a de novo standard must apply because of the absence of the word "discretion" in the sentence of § 15.11 that states that the administrator has the power to make an "independent determination of an applicant's eligibility for benefits...." We agree with the District of Columbia Circuit that "[t]he Court in Firestone surely did not suggest that 'discretionary authority' hinges on incantation of the word 'discretion' or any other 'magic word.' Rather, the Supreme Court directed lower courts to focus on the breadth of the administrators' power--their 'authority to determine eligibility for benefits or to construe the terms of the plan' ..." Block v. Pitney Bowes Inc., 952 F.2d 1450, 1453 (D.C.Cir.1992). Accord, De Nobel v. Vitro Corp., 885 F.2d 1180, 1187 (4th Cir.1989) ("There are obviously no magic words required to trigger the application of one or another standard of judicial review ..."). Although the expression of the ARCO plan administrator's discretionary authority to determine eligibility may not be as obvious as in some of the cases where we have found similar discretion, we are satisfied that, taken as a whole, § 15.11 expresses the discretion of the plan administrator to determine eligibility. Our analysis of § 15.11 necessarily leads us to conclude that the district court erred in applying a de novo standard of review.
III. WHAT EVIDENCE IS RELEVANT TO REVIEW UNDER AN ABUSE OF
DISCRETION STANDARD?
Application of the abuse of discretion standard may involve a two-step process. First, a court must determine the legally correct interpretation of the plan. If the administrator did not give the plan the legally correct interpretation, the court must then determine whether the administrator's decision was an abuse of discretion. E.g., Jordan v. Cameron Iron Works, Inc., 900 F.2d 53, 56 (5th Cir.), cert. denied, --- U.S. ----, 111 S.Ct. 344, 112 L.Ed.2d 308 (1990).13 In answering the first question, i.e., whether the administrator's interpretation of the plan was legally correct, a court must consider:(1) whether the administrator has given the plan a uniform construction,
Batchelor v. International Brotherhood of Electrical Workers Local 861 Pension & Retirement Fund, 877 F.2d 441, 445-48 (5th Cir.1989). Although the fact that an administrator's interpretation is not the correct one does not in itself establish that the administrator abused his discretion, "[w]hen [his] interpretation of a plan is in direct conflict with express language in a plan, this action is a very strong indication of arbitrary and capricious behavior." Id. at 445, quoting Dennard v. Richards Group, Inc., 681 F.2d 306, 314 (5th Cir.1982).
If a reviewing court concludes that the administrator's interpretation of the plan was incorrect and proceeds to the second step of our abuse of discretion analysis, three additional factors become relevant. One of these (which really involves two separate questions), the factual background of the determination and any inferences of a lack of good faith, may, at least on the question of good faith, require the court to review evidence that was not presented to the administrator.14 This is especially true because we have instructed district courts to evaluate inferences of lack of good faith on a sliding scale.
We note that 'the arbitrary and capricious standard may be a range, not a point. There may be in effect a sliding scale of judicial review of trustees' decisions ...--more penetrating the greater is the suspicion of partiality, less penetrating the smaller that suspicion is ...'.
Lowry v. Bankers Life & Casualty Retirement Plan, 871 F.2d 522, 525 n. 6 (5th Cir.), cert. denied, 493 U.S. 852, 110 S.Ct. 152, 107 L.Ed.2d 111 (1989). Consistent with this analysis, the Eleventh Circuit has observed that "a wrong but apparently reasonable interpretation is arbitrary and capricious if it advances the conflicting interest of the fiduciary at the expense of the affected beneficiary or beneficiaries unless the fiduciary justifies the interpretation on the ground of its benefit to the class of all participants and beneficiaries." Brown v. Blue Cross & Blue Shield of Alabama, Inc., 898 F.2d 1556, 1566-67 (11th Cir.1990), cert. denied, --- U.S. ----, 111 S.Ct. 712, 112 L.Ed.2d 701 (1991).
Perhaps because the focus of our prior decisions was to define and apply the appropriate standard of review, we do not appear to have explicitly stated that evidence beyond the administrative record may be considered by a reviewing court. Although our abuse of discretion analysis and the manner in which we have applied it submits to no other reasonable interpretation,15 we now make manifest that a district court is not confined to the administrative record in determining whether, under our analytical framework, a plan administrator abused his discretion in making a benefit determination. This is not to say that a litigant dissatisfied with an administrator's benefit determination is free to disregard the evidence before the administrator and relitigate in court the historical facts surrounding a claim. We have long held that in conducting review under an abuse of discretion standard, a district court should evaluate the administrator's fact findings regarding the eligibility of a claimant based on the evidence before the administrator, assuming that both parties were given an opportunity to present facts to the administrator. See Denton v. First National Bank of Waco, 765 F.2d 1295, 1304 (5th Cir.1985); Lowry v. Bankers Life & Casualty Retirement Plan, 865 F.2d 692, 694 (5th Cir.), reh'g denied, 871 F.2d 522, cert. denied, 493 U.S. 852, 110 S.Ct. 152, 107 L.Ed.2d 111 (1989). Yet, in these and other opinions, we have also explained how other evidence, not dealing with the historical facts underlying the benefit determination, and therefore usually not in the administrative record, was relevant under our abuse of discretion analysis.
Defendants argue that allowing a district court to consider evidence not in the administrative record would undermine the utility and integrity of the administrative process. Without focusing on particular types of evidence or the reasons they could be relevant to judicial review, the district court adopted this argument, reasoning that if district courts were to consider evidence not presented to the administrator, they would become "substitute plan administrators" and in so doing, would frustrate ERISA's goal of prompt resolution of claims by plan fiduciaries.16
The district court found support for its ruling in the Sixth Circuit's decision in Perry v. Simplicity Engineering Div. of Lukens General Industries, Inc., 900 F.2d 963 (6th Cir.1990). In Perry the district court granted summary judgment for the plan administrator after concluding that under an arbitrary and capricious standard the administrative record supported the decision to deny Perry benefits because he was not totally disabled while covered by his employer's disability plan. The court refused to reconsider its decision in light of evidence from a vocational expert that Perry had become disabled while he was covered by his employer's plan. The Sixth Circuit held that the district court should have used a de novo standard of review but affirmed the summary judgment after concluding that no other result was possible even if a de novo standard had been used. Id. at 967.
In Sandoval v. Aetna Life & Casualty Ins. Co., 967 F.2d 377 (10th Cir.1992), the Perry rationale was found persuasive in the context of a review of a benefit determination under an arbitrary and capricious standard. Sandoval's long-term disability benefits under his employer's plan were terminated after the plan administrator determined that he was no longer totally disabled, and the plan review committee upheld this decision. Although Sandoval was represented by counsel before the administrative review committee, neither he nor his counsel informed the committee that he continued to be disabled not only because of his prior physical impairments, but also because he was suffering from psychological impairment. Before the district court, however, Sandoval presented evidence of psychological impairment, and the court found that he was in fact psychologically disabled. The court nevertheless affirmed the decision to terminate Sandoval's benefits because he had never offered evidence or argued psychological impairment during the administrative review process, and based on the record before it, the administrator's decision to terminate Sandoval's disability benefits was not arbitrary and capricious.
The Tenth Circuit affirmed. Citing Perry, the court concluded that "[i]n 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." 967 F.2d at 380. Like the Sixth Circuit, the Tenth Circuit concluded that a contrary rule would result in increased expense and delay of benefit determinations by plan administrators.17
Perry and Sandoval do not reflect a consensus among the circuits on this issue; the Eleventh and Third Circuits have held that a district court may consider evidence that was not before the plan administrator. In Moon v. American Home Assurance Co., 888 F.2d 86 (11th Cir.1989), the district court granted summary judgment to the plaintiffs for accidental death benefits under a group travel accident insurance policy issued by the defendant. Without deciding whether the district court should have applied ERISA instead of state insurance law, the Eleventh Circuit concluded that the judgment could be affirmed under an ERISA de novo standard because that standard was essentially the same as the state law standard of review used by the district court. Of importance to this case was the Eleventh Circuit's conclusion that limiting a trial court conducting de novo review to the facts available to the administrator at the time of the decision was "contrary to the concept of a de novo review." Id. at 89.18
The Third Circuit reached the same conclusion in Luby v. Teamsters Health, Welfare & Pension Trust Funds, 944 F.2d 1176, 1184-85 (3d Cir.1991). The district court, in order to determine whether a deceased plan member had signed beneficiary cards, examined evidence of his signature on other documents that were not before the plan administrator. In affirming the district court the Third Circuit held that although limiting the district court to review of the evidence considered by the plan administrator was appropriate where a deferential standard of review applied, such a limitation made no sense when the administrator's decision was reviewed de novo, especially where, as in the case before it, there was no administrative record to review on the crucial issue of who executed the benefit cards. Id. at 1184-85.
We believe that it is unnecessary to resolve the conflict between Moon and Perry to determine whether the district court properly admitted the expert testimony at issue in this case, although we note that in earlier decisions we appear to have accepted without discussion a district court's consideration on de novo review of evidence not presented to the plan administrator. See, e.g., Heidgerd v. Olin Corp., 906 F.2d 903 (2d Cir.1990). Even if we accepted the Sixth Circuit's view that a court's de novo review of the denial of ERISA benefits should be limited to the information presented to the administrator who denied the claim--an issue we do not decide--we believe that evidence regarding the proper interpretation of the terms of the plan, like the expert testimony here, would be treated differently from evidence intended to establish a particular historical fact regarding the claimant, like the evidence of the date of total disability at issue in Perry. Consideration of evidence relevant to plan interpretation on de novo review does not implicate the Sixth Circuit's concern that courts would become "substitute plan administrators," particularly since de novo review under the Firestone standard presupposes that the administrator's role does not include discretion to interpret the terms of the plan. Indeed, at least one circuit has suggested, without deciding, that it may be appropriate under Firestone to apply different standards of review to claim denials based on factual determinations and claim denials based on interpretation of the terms of the plan.
Masella v. Blue Cross & Blue Shield of Connecticut, Inc., 936 F.2d 98, 104 (2d Cir.1991). We recently held that it is appropriate under Firestone to apply different standards of review to claim denials based on factual determinations and denials based on interpretations of plan language. In Pierre v. Connecticut General Life Ins. Co., 932 F.2d 1552 (5th Cir.), cert. denied, --- U.S. ----, 112 S.Ct. 453, 116 L.Ed.2d 470 (1991), the district court reviewed a plan administrator's denial of accidental death benefits to a widow under her husband's ERISA plan. Applying a de novo standard of review, the court held that hearsay evidence considered by the administrator was untrustworthy and in the absence of that evidence there was an insufficient evidentiary basis to support the administrator's denial of benefits.
"First, he must determine the facts underlying the claim for benefits. Second, he must then determine whether those facts constitute a claim to be honored under the terms of the plan. [Firestone ] addressed the proper standard of review that is to be given to the plan administrator's second determination. [It] did not speak to the first."
Although it can be argued that our decisions in Denton, Lowry, and Pierre would support a decision by a district court conducting an abuse of discretion review to limit its review of the historical facts underlying a claim to those presented to the plan administrator,19 that is not what the district court did in this case. Instead, the court concluded, as a matter of law, that the administrator's interpretations of the plans' eligibility criteria were correct. In other words, using the nomenclature of our two-step abuse-of-discretion analysis, the district court held that the administrator's interpretations of the plans' eligibility criteria was consistent with a fair reading of the plans. This distinction makes Perry and Sandoval inapposite since they both involved district court review of a plan administrator's determination of questions of historical fact. Like the Second Circuit in Masella, we believe that evidence beyond the administrative record showing inconsistent plan interpretation by the administrator, as well as evidence relevant to the other elements of our abuse of discretion analysis, does not "implicate the Sixth Circuit's concern [and the concern of the district court in this case] that courts would become 'substitute plan administrators....' " 936 F.2d at 104. We therefore conclude that evidence that is relevant in determining whether under our two-step framework, an administrator's interpretation of a plan was legally correct, and if not, whether the administrator abused his discretion, may be considered by a district court even if this evidence was not part of the administrative record.
IV. DID THE DISTRICT COURT ERR IN FAILING TO CONSIDER
In their briefs plaintiffs present a number of factual and legal arguments why the district court's refusal to consider what plaintiffs characterize as their "best evidence and arguments"20 led the district court to err in holding that plaintiffs were not entitled to the benefits they sought. Ideally, to determine whether the district court erred we would identify the evidence that the court did not consider and then determine whether it was relevant under our abuse-of-discretion analysis. If so, we would then decide whether the district court's failure to consider this evidence was reversible error.
In this case the record we have been presented prevents us from engaging in this type of analysis. For example, plaintiffs argue that the district court erred in failing to consider other ARCO interpretations of the word "terminated" as used in § 35.2 of the ARRP. The evidence cited by plaintiffs includes evidence from the second phase of the administrative process dealing with interpretations given by the plan administrator to § 35.2 and similarly worded provisions of the ARRP, and other evidence not presented at the second hearing. We cannot tell from the record, however, whether the district court considered either of these types of evidence. The court was obviously aware of some of this evidence, but whether that knowledge affected the court's decision is not clear. At certain places in the court's Memorandum Ruling it appears that the court may have been influenced by some of this evidence. For example, in footnote 3 to conclusion of law 6 the court stated that it "has had extreme difficulty in deciding this case given the close question of plan language interpretation. This task has not been made any easier by the obvious efforts of Atlantic Richfield to ignore the language and meaning of Section 35 to provide for Section 35 benefits to certain select employees in their personnel and legal departments."21
Yet, counterbalanced against this type of equivocal reference to evidence or arguments that the court did not identify, is the court's explicit statement in conclusion of law 3 that "[i]n reviewing the ARRP committee's decision, we conclude that we consider only the evidence contained in the administrative record."22 In a similar vein, in conclusion of law 6 the court stated:
Section 35 of the Atlantic Richfield Retirement Plan has not been historically interpreted consistent with the wording of subsection 4.1(b) of the Atlantic Richfield Special Termination Allowance Plan. Irrespective of the lack of interpretive history of Section 35, this Court finds, as a matter of law, that the language 'terminated from employment, due to the continuing consolidation of the company' refers to the termination from all employment and not merely that the employee was no longer being compensated by Atlantic Richfield. (emphasis ours)23
We cannot tell from these statements whether the district court was aware of evidence of contrary interpretations of § 35.2 but consciously chose not to let this evidence affect its decisionmaking process, or whether the court evaluated it but concluded that it did not overcome the court's conclusion as to the meaning of the plans' eligibility criteria.24
We are also in doubt as to what the district court meant by its statement that it considered "only evidence contained in the administrative record."25 Plaintiffs argue that the court declined not only to consider facts and arguments raised in the crossmotions for summary judgment that were never presented to the plan administrator, but that the court also declined to consider "remanded facts," that is, facts and arguments first presented to the plan administrator on remand. Plaintiffs attempt to buttress this argument by referring us to a copy of their Post Hearing Memorandum responding to questions raised by the court during oral argument. The Post Hearing Memorandum, which together with an accompanying letter to the district judge26 were docketed with the court's Memorandum Ruling, contains numerous underscorings and marginal comments indicating that someone carefully read and evaluated it. Among these comments is the note that the reader would "not consider" certain evidence urged by plaintiffs' counsel.27 Directly opposite this notation is plaintiffs' argument that the court should consider the affidavit of Kenneth Terrell, a former regional manager for ChemLink, as evidence that ARCO had previously told ChemLink employees that they would receive enhanced retirement benefits provided by § 35, and that other ChemLink employees did receive enhanced benefits even though they continued working for ChemLink after PONY bought it. This affidavit (Exhibit B to Plaintiffs' Opposition to Defendants' Motion for Summary Judgment) was executed on April 14, 1989, and was submitted to the ARRP committee as part of the second remand. The "not consider" notation is even more puzzling because the court referred to unspecified evidence of this type in footnote 3 of its Memorandum Ruling.
Although we recognize that under Fed.R.Civ.P. 52(a) "[f]indings of fact and conclusions of law are unnecessary on decisions on motions under Rule 12 or 56 ...," we are also mindful of our requirement that a district court explain its reasons for granting a motion for summary judgment in sufficient detail for us to determine whether the court correctly applied the appropriate legal test. E.g., Myers v. Gulf Oil Corp., 731 F.2d 281, 283-84 (5th Cir.1984). Our decision should not be understood as broadening in any way our prior precedent regarding the sufficiency required of a district court's explanation of its reasons for granting a motion for summary judgment. We do not accept plaintiffs' argument that the district court's failure to expressly list or refer to each factual and legal argument raised by plaintiffs means that the court did not consider these facts and arguments. Nor are we intimating that all six of the elements that may affect a district court's abuse-of-discretion analysis are present in every case, or that if all of them are potentially relevant in a particular case, that a district court must refer to them in deciding a case. We are mindful that in many cases the parties may not raise all of these elements, and that elements that are raised may not be supported by sufficient summary judgment evidence to create a genuine issue of material fact.
But in the context of this case, where we are to draw all legitimate factual inferences in favor of the nonmovant, where the district court acknowledged that in deciding a "close question of plan language interpretation" it would not consider evidence not presented to the plan administrator, where we have extreme difficulty determining what evidence and arguments the court did consider, and where the evidence that the court arguably did not consider may be relevant under the proper analytical framework for evaluating the administrator's denial of benefits, we conclude that it is necessary to vacate the judgment and remand for a fuller analysis of the evidence under the appropriate standard of review.28 We intimate no opinion as to the correctness of the ultimate decision of the district court affirming the administrator's decisions. The district court may well have reached the right decision. On the record before us, however, we are unable to perform our coordinate role of reviewing the decision of the district court because we cannot tell whether the court properly evaluated all of the potentially relevant evidence.
Plaintiffs argue that they should have been allowed to depose both counsel on all advice they gave the plans, including advice given during the two remands after this suit was filed, because the attorney-client privilege cannot be asserted by an ERISA plan fiduciary against plan beneficiaries such as plaintiffs. An ERISA plan is a separate legal entity from its sponsor, 29 U.S.C. § 1132(d), and a plan's administrator owes a fiduciary duty to the plan's beneficiaries, not its sponsor. See 29 U.S.C. §§ 1002(21), 1103(a) and (c)(1), and 1104(a)(1). When an attorney advises a plan administrator or other fiduciary concerning plan administration, the attorney's clients are the plan beneficiaries for whom the fiduciary acts, not the plan administrator. Washington-Baltimore Newspaper Guild, Local 35 v. Washington Star Co., 543 F.Supp. 906, 909 (D.D.C.1982). Therefore, an ERISA fiduciary cannot assert the attorney-client privilege against a plan beneficiary about legal advice dealing with plan administration. Id.
The magistrate judge found that there had never been a mutuality of interest that would create a fiduciary relationship between ARCO's trial counsel, Shapiro, and the plan beneficiaries because all of Shapiro's communications with the plan administrator were made for the purpose of defending the pending lawsuit and did not deal with plan administration. This finding is supported by Defendants' Response to Plaintiffs' Supplemental Discovery Memorandum,29 and plaintiffs do not dispute it in their briefs before this court. We therefore AFFIRM the magistrate judge's ruling that Shapiro was not subject to discovery about his communications with plan administrator.
The magistrate judge allowed plaintiffs to depose ARCO's in-house counsel, Anderson, about communications with the plan administrator before the lawsuit was filed because she found that Anderson "did previously perform in a fiduciary capacity toward the plaintiffs when he acted as legal counsel to the administrator of the ARRP/STAP during times prior to the institution of this suit."30 The magistrate judge found, however, that after suit was filed "the mutuality of interests between the plaintiffs and Mr. Anderson, which is a prerequisite to the existence of the fiduciary exception to the attorney/client privilege, ceased to exist ... as the interests of the administrator, the remaining beneficiaries, and the plan itself, and the interests of the plan-beneficiaries diverged at that point."31 The magistrate judge therefore held that discovery into Anderson's communications with the plan administrator after the suit was filed was "protected by the attorney-client privilege and/or the work product doctrine."32
We express no opinion on the scope of the attorney-client privilege, however, because even if plaintiffs were correct on this argument, we would still affirm the magistrate judge's decision. In addition to the attorney-client privilege, the magistrate judge found that discovery into Anderson's communications with plan administrator after plaintiffs' suit was filed was protected by the attorney work product doctrine. Plaintiffs have not challenged that ruling. Because the attorney work product doctrine fosters interests different from the attorney-client privilege, it may be successfully invoked against a pension plan beneficiary even though the attorney-client privilege is unavailable. Helt v. Metropolitan District Comm'n, 113 F.R.D. 7, 12 (D.Conn.1986) ("The plaintiff does 'not stand in the same position with respect to the attorney, for whom the work-product rule is designed to benefit, as [he does to his] own trustees.' "). By failing to address this issue in their briefs, plaintiffs have abandoned it. See, e.g., United States v. Lindell, 881 F.2d 1313, 1325 (5th Cir.1989), cert. denied, 493 U.S. 1087, 110 S.Ct. 1152, 107 L.Ed.2d 1056 (1990). We therefore decline to disturb the magistrate judge's conclusion that discovery against Anderson was protected by the work product doctrine.
The ARRP does not contain similar language defining termination from employment. Plaintiffs argue that a conflict exists between criteria for eligibility in p 4.1(b) of the STAP and the criteria in Schedule M and that the Schedule M criteria controls. Defendants argue that p 4.1(b) applies because it does not conflict with Schedule M, and because, even if there is a conflict, plaintiffs are also ineligible under Schedule M
At some stages of the administrative process a separate STAP committee considered and denied plaintiffs' STAP claims. For simplicity we will refer to both plans' administrators as the ARRP committee
Defendants' Exhibits J-21 and J-22
R.Vol. 6, p. 676
R.Vol. 10, p. 1313
Both the magistrate judge and the district court referred to an "arbitrary and capricious" standard of review in describing the more deferential standard that may apply instead of a de novo standard if the plan satisfies the criteria articulated in Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989). Although our pre-Firestone decisions generally employed an "arbitrary and capricious" vernacular, e.g., Denton v. First National Bank of Waco, 765 F.2d 1295, 1304 (5th Cir.1985), after Firestone we have usually described this more deferential alternative to de novo review as review under an "abuse of discretion" standard. See Jordan v. Cameron Iron Works, Inc., 900 F.2d 53, 56 n. 1 (5th Cir.), cert. denied, --- U.S. ----, 111 S.Ct. 344, 112 L.Ed.2d 308 (1990). Nevertheless, both this court and district courts in this circuit have continued to use both terms to describe the same deferential standard of review. E.g., Penn v. Howe-Baker Engineers, Inc., 898 F.2d 1096, 1100 (5th Cir.1990). Although we employ in this opinion what we describe as the abuse of discretion standard, we detect only a semantic, not a substantive, difference in this label and the "arbitrary and capricious" label used in this case by the magistrate judge and district court
Memorandum Ruling, 765 F.Supp. at 895
Because § 6.6 of the STAP contains language that is the same as § 15.11 of the ARRP in all material respects, for the sake of brevity our discussion will only refer to § 15.11 of the ARRP. Our analysis applies to both plans
The administrator is a committee
In one of our early ERISA decisions, Dennard v. Richards Group, Inc., 681 F.2d 306, 314 (5th Cir.1982), we cited with approval a definition of an "arbitrary and capricious" standard as one that required a reviewing court to determine if the decision of the plan fiduciary is "supported by substantial evidence" and is based on correct interpretations of law. Although we have no desire to wade into the largely semantic disagreement among other circuits about how to label this deferential standard of review, we are nonetheless confident that if a decision is supported by substantial evidence and is not erroneous as a matter of law, it is not arbitrary and capricious. See Sandoval v. Aetna Life & Casualty Ins. Co., 967 F.2d 377 and n. 4 (10th Cir.1992)
The genesis of this two-step, multiple-part analysis appears to be Dennard v. Richards Group, Inc., 681 F.2d 306, 314 (5th Cir.1982)
Although the other elements--internal consistency and applicable regulations--would generally appear to be less susceptible to extra-record evidence, we express no opinion whether evidence apart from the administrative record could also be relevant to these elements
In Batchelor we evaluated the testimony of a pension fund actuary and evidence of the pension plan's total assets before concluding that the plan would not face substantial unanticipated costs if the plaintiff were to prevail, 877 F.2d at 445. In Jordan we lamented the failure of either party to present the district court evidence of the administrator's actions in handling claims similar to the plaintiff's and evidence concerning unanticipated costs. 900 F.2d at 56. In Penn v. Howe-Baker Engineers, Inc., 898 F.2d 1096, 1101 (5th Cir.1990), we affirmed the judgment of the district court after a bench trial because we concluded that the trial testimony and exhibits of the plaintiff and two of the defendant's employees provided an adequate basis for the district court to conclude that the plan administrator's denial of pension benefits was not arbitrary or capricious. In Kennedy v. Electricians Pension Plan, IBEW # 995, 954 F.2d 1116, 1123-24 (5th Cir.1992), both the district court and this court evaluated evidence offered at trial by the plan administrator of the substantial costs that would result from a decision favorable to the plaintiff. We also noted "the scant evidence" presented by both parties before the district court on the factual background and good faith of the plan fiduciary. 954 F.2d at 1124-25. In one of our few decisions reviewing a district court's de novo review of a benefit determination, Schultz v. Metropolitan Life Ins. Co., 872 F.2d 676, 679-80 (5th Cir.1989), we implicitly approved the district court's use of affidavit evidence offered to show inconsistent treatment of other similar claims by the plan administrator
Memorandum Ruling, 765 F.Supp. at 895-896
In Oldenburger v. Central States Pension Fund, 934 F.2d 171, 174 (8th Cir.1991), the Eighth Circuit stated that judicial review under an arbitrary and capricious standard was limited to the evidence before the plan administrator. Like Perry and Sandoval, the case turned on an issue of historical fact--whether the plan member was an employee at his normal retirement date. Because the Eighth Circuit's opinion does not indicate that plaintiff sought to introduce evidence before the district court that was not considered by the plan administrator, its statement regarding what evidence the court could consider appears to be dicta
The court's opinion does not say what additional evidence the district court considered
See Davidson v. Prudential Ins. Co. of America, 953 F.2d 1093, 1095 (8th Cir.1992) (district court reviewing denial of disability benefits under de novo standard did not abuse its discretion in refusing to consider additional evidence of disability where employee failed to present it to plan administrator). We do not, however, read Pierre or our other decisions as limiting judicial review of all fact determinations made by a plan administrator to the administrative record. For example, in this case the ARCO plan administrator found that it had consistently interpreted the eligibility requirement in § 35.2. We have consistently stated that courts may consider evidence outside the administrative record of other benefit determinations in deciding whether the administrator has uniformly interpreted plan language, and we see no reason the role of a court in undertaking this analysis should be truncated merely because a plan administrator may have considered some of the same evidence
Plaintiffs' Brief at 12
Memorandum Ruling, 765 F.Supp. at 896
In their briefs the parties expend considerable effort in arguing, from the plaintiffs' standpoint, that the district court failed to consider other relevant evidence, and from the defendants' standpoint, that the court may have considered that evidence, but did not mention it, or, alternatively, that the evidence was not relevant anyway. Because we vacate the judgment and remand for further consideration by the district court, we do not attempt to respond to those arguments, even assuming that it would be possible to do so on this record
R.Vol. 10, pp. 1324, 1325
R.Vol. 10, p. 1333
We are mindful of the district court's statement that it would reach the same result under an arbitrary and capricious review, but as we have attempted to explain above, the court's Memorandum Ruling does not apply the analytical framework necessary for us to evaluate the court's decision under that type of review, i.e., abuse of discretion review. When faced with a similar problem in Dennard v. Richards Group, Inc., 681 F.2d 306, 314 (5th Cir.1982), we employed the same approach we reluctantly apply here
R.Vol. 6, p. 660
Ruling at p. 7
Ruling at p. 8
Home974 f2d 631 kenneth wildbur v. arco chemical co