Opinion ID: 4580326
Heading Depth: 3
Heading Rank: 1

Heading: The Severance Plan

Text: With respect to the Severance Plan, Mr. Romo makes two arguments: First, that the district court erred by reviewing only for abuse of discretion; second, that there was a genuine dispute as to material facts. Neither argument succeeds. When a benefit plan governed by ERISA grants the plan administrator “discretionary authority to determine eligibility for benefits or to construe the terms of the plan”—as is the case here—courts review the plan administrator’s decision for abuse of discretion. Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989). While Mr. Romo contends that de novo review was appropriate because the plan administrator failed to render a timely decision, this court has repeatedly declined to modify the standard of review “based on the administrator’s failure to substantially comply with the 5 Case: 19-11008 Document: 00515613810 Page: 6 Date Filed: 10/23/2020 No. 19-11008 procedural requirements of ERISA.” Lafleur v. La. Health Serv. & Indem. Co., 563 F.3d 148, 159 (5th Cir. 2009); see also Wade v. Hewlett-Packard Dev. Co., 493 F.3d 533, 538 (5th Cir. 2007), abrogated on other grounds by Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 242 (2010) (“Wade has cited no direct authority by the Supreme Court or the Fifth Circuit dictating a change in the standard of review based upon procedural irregularities alone, and we see no reason to impose one.”).1 Our review, like that of the district court, is therefore for abuse of discretion alone. Under that standard, “[e]ven if an ERISA plaintiff support[s] his claim with substantial evidence, or even with a preponderance, he will not prevail for that reason. Rather, it is the plan administrator’s decision that must be supported by substantial evidence, and, if it is, the administrator’s decision must prevail.” Foster v. Principal Life Ins. Co., 920 F.3d 298, 304 (5th Cir. 2019) (emphasis, citation, and quotation marks omitted). “Substantial evidence is more than a scintilla, less than a preponderance, and is such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” Id. (citation omitted). A plan administrator’s decision is arbitrary only when it is “made without a rational connection between the known facts and the decision or between the found facts and the evidence.” Id. (citing Holland v. Int’l Paper Co. Ret. Plan, 576 F.3d 240, 246–47 (5th Cir. 2009)). Here, the Severance Plan provides that an employee may be fired for just cause if he 1 Moreover, if the plan administrator had not substantially complied with ERISA, the appropriate remedy would be remand to the plan administrator—not a change in the standard of review. See Lafleur, 563 F.3d at 157 (“Remand to the plan administrator for full and fair review is usually the appropriate remedy when the administrator fails to substantially comply with the procedural requirements of ERISA.”) 6 Case: 19-11008 Document: 00515613810 Page: 7 Date Filed: 10/23/2020 No. 19-11008 (i) willfully fails to perform his/her duties with the Company or any of its affiliates; (ii) commits theft, fraud, dishonesty or misconduct involving the property, business or affairs of the Company or any of its affiliates or in the performance of his/her duties; (iii) willfully breaches or fails to follow any material term of his or her employment agreement; (iv) is convicted of a crime which constitutes an indictable offense; or (v) engages in conduct which would be treated as cause by a court of competent jurisdiction in the jurisdiction in which the [e]ligible [e]mployee is employed. The plan administrator’s denial letter explained that she had made the following findings: • Mr. Romo missed several key deadlines; • “[J]ust before the termination of his employment, Mr. Romo failed to perform several key tasks that were central to an important business divestiture, including failing to keep journal entry records or any other records to account for the movement of millions of dollars of [c]ompany funds between business accounts”; • Mr. Romo’s supervisor “repeatedly counseled him on the need to meet deadlines and perform as expected”; and • “[T]here were incidents where subordinate employees of Mr. Romo experienced confusion or frustration because Mr. Romo was not responsive to their needs.” Those details, which are not in dispute, led the plan administrator to conclude that the facts fully supported a “just cause” termination under the Severance Plan, which precluded Mr. Romo from receiving severance benefits. 7 Case: 19-11008 Document: 00515613810 Page: 8 Date Filed: 10/23/2020 No. 19-11008 Given the facts before the plan administrator, her finding can hardly be characterized as arbitrary. As such, Waste Connections is entitled to summary judgment with respect to the Severance Plan claims.