Opinion ID: 689981
Heading Depth: 1
Heading Rank: 4

Heading: interpretation of the american policy

Text: 31 The district court held that the American policy's exclusion of bypass surgery was unambiguous and enforceable. We agree. 32 As an initial matter, we dispose of Peterson's argument that we adopt as federal common law a prohibition against exclusions of bypass surgery. Although Congress has authorized us to formulate a nationally uniform federal common law to supplement the explicit provisions and general policies set out in ERISA, Menhorn v. Firestone Tire & Rubber Co., 738 F.2d 1496, 1500 (9th Cir.1984), mandating specific types of coverage and defining the scope of such a mandate would exceed the scope of the authority granted because Congress did not regulate the substantive content of welfare benefit plans, Metropolitan, 471 U.S. at 732, 105 S.Ct. at 2385. As we stated in Blau v. Del Monte Corp., 748 F.2d 1348, 1353 (9th Cir.1984), cert. denied, 474 U.S. 865, 106 S.Ct. 183, 88 L.Ed.2d 152 (1985), ERISA mandates no minimum substantive content for employee welfare benefit plans, and therefore a court has no authority to draft the substantive content of such plans. See also Davidowitz v. Delta Dental Plan of California, Inc., 946 F.2d 1476, 1480-81 (9th Cir.1991) (refusing to prohibit non-assignment clauses in welfare benefit plans under federal common law). To do so would go beyond filling an interstitial 'gap' in ERISA, DeVoll v. Burdick Painting, Inc., 35 F.3d 408, 412 (9th Cir.1994), and would run counter to the Supreme Court's interpretation: The authority of courts to develop a 'federal common law' under ERISA is not the authority to revise the text of the statute. Mertens v. Hewitt Assocs., --- U.S. ----, ----, 113 S.Ct. 2063, 2070, 124 L.Ed.2d 161 (1993) (citations omitted). 33 Peterson argues that, even under existing federal law, the exclusion of bypass surgery in the American policy is ambiguous and therefore unenforceable. He maintains that the exclusion of bypass surgery does not necessarily exclude coronary bypass surgery because the term's context in the policy suggests that it excludes only unnecessary bypass surgeries, such as those used to treat morbid obesity. In Peterson's view, if American intended to exclude treatment of heart disease, one of the nation's biggest killers, it should have highlighted the exclusion prominently rather than place it at the end of a paragraph including procedures that are frequently unnecessary. 34 Peterson maintains that the exclusion is unenforceable under the doctrines of contra proferentem  and reasonable expectations. Under the doctrine of contra proferentem, we construe ambiguous language in an insurance contract against the insurer. See Kunin v. Benefit Trust Life Ins. Co., 910 F.2d 534, 538-39 (9th Cir.), cert. denied, 498 U.S. 1013, 111 S.Ct. 581, 112 L.Ed.2d 587 (1990). Under the reasonable expectations doctrine, as a matter of federal common law governing ERISA contracts, even an unambiguous exclusion may be unenforceable unless it is sufficiently clear, plain, and conspicuous to overcome a layperson's reasonable expectations. Saltarelli v. Bob Baker Group Medical Trust, 35 F.3d 382, 385-86 (9th Cir.1994). 35 Peterson's reliance on Saltarelli and Kunin is misplaced. The doctrines enunciated in those cases apply only when a provision in an insurance policy is either ambiguous or not sufficiently conspicuous. We have no doubt that the term bypass surgery encompasses coronary bypass surgery; it stretches the imagination to suggest that a reasonable person would understand the term to include only gastric bypass to control morbid obesity. Moreover, the exclusion of bypass surgery not only was included in the policy, but also was highlighted as one of only four exclusions in a Statement of Understanding signed by Peterson. The exclusion was unambiguous and conspicuous.