Court Opinion

ID: 218309
Source: CourtListenerOpinion
Date Created: 2011-06-08 00:02:02+00
Date Added: 2024-06-11T17:28:35.742142
License: Public Domain

FILED
                            NOT FOR PUBLICATION                              JUN 07 2011

                                                                         MOLLY C. DWYER, CLERK
                    UNITED STATES COURT OF APPEALS                        U .S. C O U R T OF APPE ALS

                            FOR THE NINTH CIRCUIT

JOAN LAFFERTY,                                   No. 10-35688

              Plaintiff - Appellee,              DC No. 6-08 cv 6318 TC

  v.
                                                 MEMORANDUM *
PROVIDENCE HEALTH PLANS;
EUGENE FREEZING AND STORAGE
GROUP HEALTH PLAN,

              Defendants - Appellants.

                   Appeals from the United States District Court
                             for the District of Oregon
                  Thomas M. Coffin, Magistrate Judge, Presiding

                        Argued and Submitted May 2, 2011
                                Portland, Oregon

Before:       TASHIMA, BEA, and IKUTA, Circuit Judges.

       Defendant-Appellant Providence Health Plans (“Providence”) appeals from

the district court’s grant of judgment in favor of Plaintiff-Appellee Joan Lafferty.

Lafferty filed suit under the Employee Retirement Income Security Act of 1974, as

          *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
amended (“ERISA”), 29 U.S.C. §§ 1001-1461, after Providence refused to pay for

the treatment of Lafferty’s rare, malignant brain tumor. Lafferty requested pre-

authorization for Interarterial chemotherapy with blood brain barrier disruption

(“BBBD”). Providence denied coverage because the sought BBBD treatment was

“experimental/investigational.” We have jurisdiction pursuant to 28 U.S.C.

§ 1291, and we reverse.

      Where, as here, the district court tries a case on a written record, we will not

disturb its findings of fact unless clearly erroneous. Kearney v. Standard Ins. Co.,

175 F.3d 1084, 1095 n.6 (9th Cir. 1999) (en banc) (citing Fed. R. Civ. P. 52(a)).

We review conclusions of law de novo. Navajo Nation v. U.S. Forest Serv., 535

F.3d 1058, 1067 (9th Cir. 2008). We also review de novo a district court’s choice

and application of the standard of review to an ERISA plan administrator’s

decision. Abatie v. Alta Health & Life Ins. Co, 458 F.3d 955, 962 (9th Cir. 2006)

(en banc).

      1.     The district court erred by reviewing de novo Providence’s decision to

deny coverage. It should have reviewed for abuse of discretion. Firestone Tire &

Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989). The exception to deferential

review of the decisions of plan administrators does not apply in this case. See

Abatie, 458 F.3d at 971. Although there are some troubling aspects to

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Providence’s review of Lafferty’s initial grievance and subsequent appeals, these

do not amount to the “wholesale and flagrant disregard of ERISA procedural

requirements” that the Abatie court identified as a failure to exercise discretion,

warranting de novo review. Id. at 971–72. Because we conclude that this case

does not fall in the “rare class of cases” controlled by the Abatie exception to

deferential review, we decline to reach the question of whether Conkright v.

Frommert, 130 S. Ct. 1640 (2010), abrogates Abatie.

      2.     Providence did not abuse its discretion in refusing to pay for

Lafferty’s treatment. We may not disturb the plan administrator’s decision if it is

reasonable. Salomaa v. Honda Long Term Disability Plan, No. 08-55426, 2011

WL 2040934, at *7 (9th Cir. May 26, 2011). “Reasonableness does not mean that

we would make the same decision.” Id. at *8. Rather, to determine whether there

has been an abuse of discretion, the court must

      consider whether application of a correct legal standard was “(1)
      illogical, (2) implausible, or (3) without support in inferences that may
      be drawn from the facts in the record.” That standard makes sense in
      the ERISA context, so we apply it, with the qualification that a higher
      degree of skepticism is appropriate where the administrator has a
      conflict of interest.

Id. (quoting United States v. Hinkson, 585 F.3d 1247, 1262 (9th Cir. 2009) (en

banc)). We do not discern implausibility or the absence of logic in Providence’s

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decision to deny coverage. Moreover, Providence’s conclusion that Lafferty’s

treatment was experimental, and therefore not covered, is supported by facts in the

record. In addition, because Lafferty did not indicate, at any time before filing suit,

that, in the alternative, she was requesting coverage for interarterial chemotherapy

without BBBD, it was reasonable for Providence not to authorize such alternative

coverage.

      We therefore conclude that, even factoring in the irregularities in

Providence’s review process, its decision to deny coverage was not unreasonable.

Accordingly, the judgment of the district court is

      REVERSED.

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