Court Opinion

ID: 9491575
Source: CourtListenerOpinion
Date Created: 2023-08-05 14:17:48.921093+00
Date Added: 2024-06-11T17:54:49.576875
License: Public Domain

TRAGER, District Judge,
Concurring:
I join the Per Curiam opinion, but I think it important to note an issue not adequately addressed by defendant’s alternative argument that forms the basis for the per cu-riam’s affirmance.
Defendant’s Benefit Claims Appeal Committee (“Committee”) asserts that its interpretation of the Summary Plan Description (“SPD”) should control unless it is found to be arbitrary and capricious. The Committee claims that the failure of the district court to accord appropriate deference to the Committee’s interpretation of the SPD will have a negative impact on the Committee’s authority to interpret the plan in the future and possibly an adverse impact on the plan’s financial stability. However, defendant’s contention that the “arbitrary and capricious” standard of review should apply to an SPD raises a difficult issue. That issue is whether the assumption that defendant makes throughout its argument, that Firestone Tire and Rubber Co. v. Bruch, 489 U.S. 101, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989) is applicable to a summary plan description in the same way as it is to a full plan, is correct.
In Firestone, the Supreme Court addressed the'issue of the appropriate standard for reviewing a plan administrator’s interpretation of a plan. The Court held that a “denial of benefits ... 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.” Firestone, 489 U.S. at 115, 109 S.Ct. 948. Subsequent cases in this Circuit make clear that, in such a case, the appropriate standard of review is whether the plan administrator’s decision is “arbitrary and capricious.” See Pagan v. NYNEX Pension Plan, 52 F.3d 438, 441 (2d Cir.1995)(and cases cited therein). In light of these holdings, and the provisions both in the UTC plan and SPD granting the Committee authority to interpret “the Plan,” the Committee argues that its decision should be considered under a deferential standard of review, which the district court failed to do.
The present case, however, does not turn on the Committee’s interpretation of the UTC Plan, but rather on its interpretation of the SPD. Under ERISA § 1022, employees are entitled to use and rely on an SPD, in lieu of the full plan, as their main source of benefits information. The statute states that the SPD is to be
written in a manner calculated to be understood by the average plan participant, and shall be sufficiently accurate and com*162prehensive to reasonably apprise such participants and beneficiaries of their rights and obligations under the plan.
29 U.S.C. § 1022(a)(1). An SPD attempts to define a plan’s key terms in simpler, more concise language, while remaining accurate and comprehensive. In particular, an SPD must contain information pertaining to “circumstances which may result in disqualification, ineligibility, or denial or loss of benefits.” Id. at § 1022(b).1 Hence, it would seem that under the policy objectives of § 1022, an employee should be entitled to rely on his or her reasonable reading of an SPD, even if the full plan contains provisions negating that reading. See Heidgerd v. Olin Corp., 906 F.2d 903, 907 (2d Cir.1990)(ERISA “contemplates that the. summary will be an employee’s primary source of information regarding employment benefits, and employees are entitled to rely on descriptions”).2 It can, therefore, be argued, that applying Firestone to SPD’s would undermine the policy objectives behind Congress’s creation of an SPD requirement because it would require a court to uphold a plan administrator’s non-arbitrary and capricious interpretation of an ambiguity or omission in an SPD even if the participant reasonably relied on an alternate, more favorable, reading of the SPD’s terms.
On the other hand, an argument could be made that the trustees’ interpretation of the SPD ought to control. That is, if the rule were that an employee is entitled to rely on his reasonable interpretation of the SPD, even if another reasonable or perhaps more reasonable — and ipso facto non-arbitrary and capricious — interpretation is posited by the plan administrator, the administrator would be encouraged to close any potential loopholes or ambiguities in the SPD. As a result, the SPD would become more complex, longer and inevitably more difficult to understand, thereby undermining Congress’s goal of having SPD’s that the average employee can comprehend.
In the present case, there is no need to resolve this issue because, assuming the Committee’s interpretation of the SPD is subject to a de novo review, the SPD here cannot reasonably be interpreted as plaintiff contends.

. Congress’s motivation for mandating that employers provide plan participants with SPD’s was, among other considerations, its conclusion "that ERISA's predecessor legislation had failed to provide adequate notification of rights for the plan participants.” Pierce v. Security Trust Life Ins. Co., 979 F.2d 23, 26-27 (4th Cir.1992). These concerns were expressed in House and Senate Reports. See H.R. Rep. No. 807, 93rd Cong., 2d Sess. 60 (1974), reprinted in 1974 U.S.C.C.A.N. 4639, 4640, and S.Rep. No. 383, 93rd Cong.2d Sess. (1975), reprinted in 1974 U.S.C.C.A.N. 4639, 4890, 4935.

. Cases holding that in the event of a conflict between an SPD and a plan, the former controls, implicitly rest on the idea that participants are entitled to rely on the SPD, despite the terms of the plan. See Hansen v. Continental Ins. Co., 940 F.2d 971, 981 (5th Cir.1991)("Any other rule would be, as Congress recognized, grossly unfair to employees and would undermine ERISA's requirement of an accurate and comprehensive summary.”).