Opinion ID: 202450
Heading Depth: 3
Heading Rank: 1

Heading: The Benefits Decision

Text: We begin with Otero's challenge to Pharmacia's denial of Plan benefits. It is undisputed that because the Plan reserved interpretative discretion to its administrators,5 judicial review of Pharmacia's eligibility determination is limited to ascertaining whether the administrator's decision was arbitrary or capricious. Leahy v. Raytheon Co., 315 F.3d 11, 15 (1st Cir. 2002). Thus, while we review summary judgment decisions de novo, Mattias-Correa amendments to the long-term disability plan. Otero has not appealed these rulings. 5 The relevant provision of the Plan provides that: The company or its delegate will determine, in its or their sole discretion, the eligibility of each terminated Employee to participate in the Plan, the amount of Benefits to which a terminated Employee is entitled, and the manner and time of payment of the Benefits . . . . Any decisions, actions or interpretations to be made under the Plan by [Pharmacia] . . . shall be made in its respective sole discretion, not in any fiduciary capacity and need not be uniformly applied to similarly situated individuals and shall be final, binding and conclusive upon all parties. -7- v. Pfizer, Inc., 345 F.3d 7, 12 (1st Cir. 2003), where, as here, the underlying decision is subject to arbitrary and capricious review, we evaluate the district court's determination by asking whether the aggregate evidence, viewed in a light most favorable to the non-moving party, could support a rational determination that the plan administrator acted arbitrarily in denying a claim for benefits, Leahy, 315 F.3d at 18. In other words, the question here is whether the district court correctly concluded that Pharmacia's interpretation of the Plan's language, and its ultimate benefits determination based upon that interpretation, were reasonable. Liston v. Unum Corp. Officer Severance Plan, 330 F.3d 19, 24 (1st Cir. 2003). Pharmacia had determined that, because Otero's research associate position had been eliminated due to a transfer of the job to an affiliated business, and because Otero was offered a comparable position as a microbiologist, he was not eligible to receive separation benefits. Otero argues that, according to the Plan, an employee whose job elimination results from a transfer to an affiliated business is only ineligible to receive benefits when the transfer is a product of the total or partial sale of the company. The eligibility provision that Otero cites provides, in relevant part, that: benefits under the Plan shall not be provided to any Employee [whose] employment termination is due to . . . (6) his or her transfer to an affiliate company or its transfer due to the -8- total or partial sale of the Company, either by the sale of its stocks or assets in which the Employee is offered a Similar Position. (Emphasis added). Since no sale precipitated the transfer of his job, Otero argues, this exception to benefits eligibility is inapplicable. We disagree. Otero's argument relies on an inoperative version of the Plan. Otero's proffered language comes from a certified translation of a Spanish language document that had been circulated to employees at the Puerto Rico plant and was itself a translation of the original English language Plan. But the Spanish language translation explicitly stated on its front page that any terminological discrepancy between it and the original English language version would be resolved in accordance with the terms of the original Plan, and that copies of the original English language Plan would be made available at Human Resources. Thus, the original English language Plan is the controlling document. Because the original Plan does not require that the transfer of the job be due to a sale of the company for the ineligibility provision to be triggered, Otero's argument fails.6 Under the 6 The eligibility provision of the original Plan provides: The Company shall grant Benefits to any Terminated Employee whose services are terminated by reason of Job Elimination . . . . Notwithstanding anything herein to the contrary, a Terminated Employee will not [receive separation benefits] if his or her employment is discontinued due to [inter alia] -9- controlling Plan language, we see no basis to deem unreasonable Pharmacia's interpretation that an employee is ineligible to receive separation benefits when his job is eliminated due to either a transfer to an affiliated business or a total or partial sale of the company, and he is offered a comparable position with the company.7 Otero also argues that Pharmacia acted unreasonably by designating the move of the fermentation process from Arecibo to Kalamazoo as a transfer to an affiliate business. In Otero’s view, the move to the Kalamazoo facility could not be a transfer because that facility already operated a fermentation plant. Where, as here, a term is not defined by the benefits plan, we give it an ordinary and popular reading as would a [person] of average intelligence and experience. Richardson v. . . . a transfer to an affiliated business, the sale of Pharmacia & Upjohn, Inc. or any portion thereof, either through a sale or exchange of stock or assets, or the outsourcing of a division, department, business unit or function where the employee has been offered a comparable position with the Company or the new employer. 7 Additionally, there is a presumption that judicial review is limited to the evidentiary record presented to the administrator. See Liston, 330 F.3d at 23-24. Because the Plan administrator was located in the mainland United States, and the original English language Plan was the controlling version, we presume that it was the version that informed the administrator's decision. Otero has not presented any basis to believe otherwise, nor has he presented any argument for why we should consider the Spanish language version the controlling document. -10- Pension Plan of Bethlehem Steel Corp., 112 F.3d 982, 985 (9th Cir. 1997); Kolkowski v. Goodrich Corp., 448 F.3d 843, 850 (6th Cir. 2006); see also 29 U.S.C. § 1022 (A summary plan description of any employee benefit plan . . . shall be written in a manner calculated to be understood by the average plan participant . . . .). The term transfer is commonly defined as to convey from one person, place, or situation to another. Merriam-Webster's Collegiate Dictionary 1249 (10th ed. 2001). That the Kalamazoo facility may have already maintained a fermentation plant is not by itself inconsistent with this definition. Otero has presented no evidence that Pharmacia failed to convey some level of capacity from Arecibo to Kalamazoo. Indeed, the record suggests that Pharmacia conveyed the function of the Arecibo plant to Kalamazoo to save on electricity costs. Accordingly, Pharmacia's interpretation was not unreasonable. Finally, Otero argues that Pharmacia’s denial of benefits was arbitrary and capricious because the positions of microbiologist and research associate are not comparable. The Plan defines Comparable Position as: employment with the Company or a successor employer in which the individual's level of responsibilities is substantially similar, as determined by the Company, to the individual's immediately prior position with the Company, requiring similar skill levels and offering similar pay (within 10%) and in which the Employee is not asked to move his or her principal business location more than 50 miles. -11- Otero concedes that the positions pay identical salaries, are performed within the same principal business location, and require the same educational background and basic skill levels. Nevertheless, he contends that the level of responsibilities of a microbiologist are not substantially similar to those of a research associate. Otero argues that a microbiologist has less substantial supervisory responsibilities, is not on call 24 hours a day, and has no office, cellular phone or beeper. The district court was unpersuaded, finding that the positions were comparable because Otero's qualifications fulfilled the requirements of both jobs. While the positions' respective levels of responsibility are not identical, the Plan only requires that they be substantially similar as determined by the Company. Employing the company's traditional methodology for comparing two positions, Pharmacia found that, based on job descriptions, job requirements, salary, educational requirements and banding (the company's general method for systematizing position responsibilities), the positions of research associate and microbiologist were in fact comparable. Otero states that as a microbiologist he would no longer be producing millions in money for [the company] as he had before, and that he would no longer be responsible for highly valuable company products and equipment. Statements at this level of abstraction, however, do not establish that the administrator's -12- decision was arbitrary. See Liston, 330 F.3d at 25 (holding that the appellant's claim that she was no longer responsible for developing and implementing growth and service strategies as well as piloting new work processes was too abstract to stand as proof of diminished responsibility under the company's employee benefits plan, and therefore was not enough to make the company's denial of benefits arbitrary and capricious). Nor do Otero's more concrete arguments -- that the microbiologist is not on call, and has no office, cellular phone or beeper -- suffice to negate the otherwise substantially similar level of responsibilities, benefits and qualifications of the positions. In light of the broad interpretive discretion that Pharmacia reserved to itself, see supra note 5, we cannot say that its determination was arbitrary and capricious.