Opinion ID: 186441
Heading Depth: 2
Heading Rank: 2

Heading: The Level of Deference Owed the Committee's Interpretation

Text: 35 Before analyzing the specific facts of this case, we consider the level of deference owed to the Committee's interpretation of the SBC Plan. In Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989), the Supreme Court held that a denial of benefits challenged under [29 U.S.C.] § 1132(a)(1)(B) 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. In this latter category of cases, the standard of review—variously described by the Court as arbitrary and capricious and abuse of discretion review—is plainly deferential. See id. at 111-15, 109 S.Ct. 948. This court has defined the Firestone deferential standard as one of reasonableness. Block v. Pitney Bowes, Inc., 952 F.2d 1450, 1452, 1454 (D.C.Cir.1992). 36 In this case, Wagener and Champoux concede that the terms of the SBC Plan give the Committee discretionary authority to construe the Plan. See Appellants' Br. at 23. Nevertheless, plaintiffs argue that this court should apply heightened scrutiny to the Committee's interpretation of the SBC Plan, because they maintain that they have pleaded facts demonstrating that members of the Benefit Plan Committee had conflicts of interest. Plaintiffs find support for this position in Firestone, where the Court indicated that, [o]f course, if 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 `facto[r] in determining whether there is an abuse of discretion.' Firestone, 489 U.S. at 115, 109 S.Ct. 948 (alteration in original) (quoting RESTATEMENT (SECOND) OF TRUSTS § 187 (1959)). 37 The Firestone Court's opaque direction about how courts should review discretionary benefits denials by potentially conflicted [plan] fiduciaries in ERISA cases has bedeviled the federal courts ever since. Pinto v. Reliance Standard Life Ins. Co., 214 F.3d 377, 378 (3d Cir.2000). Pinto identified three approaches that federal appellate courts have taken in reviewing decisions of conflicted plan administrators that otherwise would be subject to only arbitrary and capricious or abuse of discretion review under Firestone: (1) shifting the burden to require conflicted administrators to prove that their interpretation was not motivated by self-interest when that interpretation was apparently reasonable but would not survive de novo review; (2) reviewing decisions of administrators who have been influenced by a conflict of interest de novo; and (3) employing a sliding-scale approach, which accords different degrees of deference depending on the apparent seriousness of the conflict. See id. at 390-92 (collecting cases). Pinto embraced the sliding-scale approach, which it identified as the majority position. See id. at 379, 392-93. 38 The plaintiffs in this case maintain that they have pleaded adequate facts to demonstrate that the disputed decisions of the Committee warrant no deference, because they were tainted by conflicts of interest. On the record here, we need not determine (1) whether plaintiffs have pleaded adequate facts to suggest that the Committee operated under a conflict of interest under Firestone or, (2) assuming plaintiffs have pleaded sufficient facts, what the appropriate standard of review should be. As explained below, if we accept plaintiffs' allegations as true, it is clear that the officials responsible for administering the Plan construed the Plan in a manner that discriminated against plaintiffs in violation of the Plan's plain terms. An interpretation of the Plan that rests on impermissible discrimination is clearly unreasonable and, therefore, it fails whether we apply de novo review or a deferential standard of review. See Springfield, Inc. v. Buckles, 292 F.3d 813, 818 (D.C.Cir.2002) (declining to decide which standard of review to apply to an agency interpretation of a statute, when the court would have upheld the agency's interpretation under either of the two possible alternative standards). 39