Opinion ID: 169422
Heading Depth: 2
Heading Rank: 3

Heading: The Plan's Denial of Benefits Was Arbitrary and Capricious

Text: 72 Under the arbitrary and capricious standard, we must determine whether the Plan's decision to deny benefits based on its interpretation of the WFSP and CBA was reasonable and made in good faith. Fought, 379 F.3d at 1003. In conducting this review, we typically consider whether: (1) the decision was the result of a reasoned and principled process, (2) is consistent with any prior interpretations by the plan administrator, (3) is reasonable in light of any external standards, and (4) is consistent with the purposes of the plan. Id. We need not determine that the Plan's interpretation was the only logical one, nor even the best one. Finley v. Hewlett-Packard Co. Employee Benefits Org. Income Protection Plan, 379 F.3d 1168, 1176 (10th Cir.2004). Instead, the decision will be upheld unless it is not grounded an any reasonable basis. Id. 73 In this case, the arbitrary and capricious review encompasses the contract law standard of ambiguity. A provision of a contract is ambiguous if it susceptible to more than one reasonable interpretation. Hickman v. GEM Ins. Co., 299 F.3d 1208, 1212 (10th Cir. 2002). A decision denying benefits based on an interpretation of an ERISA provision survives arbitrary and capricious review so long as the interpretation is reasonable. Finley, 379 F.3d at 1176. Consequently, if a plan provision is ambiguous, and the plan administrator adopts one of two or more reasonable interpretations, then the plan administrator's decision to deny benefits based on that interpretation survives arbitrary and capricious review. To the contrary, if the plan provision is unambiguous, and the plan administrator's interpretation differs from the unambiguous meaning, then the plan administrator's interpretation is unreasonable, and the decision to deny benefits based on that interpretation is arbitrary and capricious. See Swaback v. Am. Info. Techs. Corp., 103 F.3d 535, 540 (7th Cir.1996); Lickteig v. Bus. Men's Assurance Co. of Am., 61 F.3d 579, 585 (8th Cir.1995); Lockhart v. United Mine Workers 1974 Pension Trust, 5 F.3d 74, 78 (4th Cir.1993). Thus, the starting point in this and similar cases is to determine whether the relevant plan provision is ambiguous. See Hickman, 299 F.3d at 1212. If we determine that the plan provision is unambiguous, then we must construe it as a matter of law. Id. 74 In determining whether the WFSP's eligibility language is ambiguous, the language must be given its common and ordinary meaning as a reasonable person in the position of the plan participant would have understood the words to mean. Id. (emphasis added). The WFSP states: Any member of a recognized or certified collective bargaining unit [shall not be eligible to participate] unless coverage under the plan is included under the collective bargaining agreement. Aplt.App. at 118. The Woods Cross CBA states: Except as hereinafter limited, all benefits arranged by the Company for its employees generally shall be available to employees covered by this Agreement. Id. at 125 (emphasis added). The CBA states that included plans and benefits include among others: [some fourteen listed examples]. Id. The language in the Spokane CBA is essentially identical. 75 These provisions are unambiguous. A union employee is covered by the WFSP, so long as the WFSP is included under the collective bargaining agreement. The CBA contains a catch-all provision stating that all benefits arranged by the Company for its employees generally shall be available to unionized employees. The CBA then lists a number of example benefits, but those listed benefits are, by inclusion of the language among others not exclusive. Consequently, Plaintiffs are participants in the WFSP so long as it is arranged by the Company for its employees generally. 76 The Company's articulated rationale for denying coverage, however, was that the list of benefits and policies that are applicable to the employees covered by the [Woods Cross CBA] is quite detailed and although reference is made to the Layoff Plan, another severance benefit plan of Phillips Petroleum, there is no reference to, or inclusion of the Work Force Stabilization Plan.  Id. at 969 (emphasis added). This interpretation of the WFSP and CBA is unreasonable because it conflicts with the unambiguous language of the catch-all provision and the express statement that the example benefits listed are illustrative rather than exclusive. In the Plan's interpretation, language of inclusion has become language of exclusion. The Plan counters that coverage under the Plan cannot be included in the CBAs by implication. Aplee. Br. at 43. Even accepting this principle, the CBA expressly includes all benefits that are arranged by the Company for its employees generally. Consequently, the Plan's decision to deny benefits based on its interpretation of the WFSP and CBA is arbitrary and capricious.