Court Opinion

ID: 9482440
Source: CourtListenerOpinion
Date Created: 2023-08-05 08:50:45.172858+00
Date Added: 2024-06-11T17:49:00.191937
License: Public Domain

VAN GRAAFEILAND, Circuit Judge,
concurring in result:
Our duties as an intermediate appellate court are two-fold in nature. First, we are duty-bound to decide issues before us in accordance with the law as laid down by the Supreme Court. See Holcomb v. Murphy, 701 F.2d 1307, 1310 (10th Cir.), cert. denied, 463 U.S. 1211, 103 S.Ct. 3546, 77 L.Ed.2d 1394 (1983); United States v. City of Philadelphia, 644 F.2d 187, 192 n. 3 (3d Cir.1980); In re Continental Inv. Corp., 586 F.2d 241, 248 (1st Cir.1978), cert. denied, 440 U.S. 981, 99 S.Ct. 1789, 60 L.Ed.2d 241 (1979). Second, we should make our stare decisis pronouncements as clear as possible so that our district court judges and future litigants will have no misunderstanding as to how the law will be applied in this circuit. See Matter of McLynn, 739 F.2d 1395, 1401 (9th Cir.1984). We should not misinterpret what the Supreme Court has said in order to achieve a desired result in a particular case. If we are satisfied that a trial court reached the correct result but on grounds different from those prescribed by the Supreme Court, we should say so and affirm with that understanding. Helvering v. Gowran, 302 U.S. 238, 245, 58 S.Ct. 154, 157, 82 L.Ed. 224 (1937); Office & Professional Employees Int’l Union, Local 2 v. Washington Metro. Area Transit Auth., 724 F.2d 133, 139 (D.C.Cir.1983). Because I am troubled by the manner in which my colleagues justify their decision to affirm, I write separately.
It is clear beyond cavil that the plan administrators in the instant case had discretionary authority to interpret and construe the plan and to determine all questions of eligibility. Accordingly, our pivotal task is to decide whether the district court used the proper standard in reviewing the administrators’ exercise of that discretion. In Holt v. Winpisinger, 811 F.2d 1532, 1535 (D.C.Cir.1987), we said, quoting Danti v. Lewis, 312 F.2d 345, 348 (D.C.Cir.1962), that the proper test is “ ‘whether the trustees have acted arbitrarily, capriciously or in bad faith; that is, is the decision of the Trustees supported by substantial evidence or have they made an erroneous decision on a question of law.’ ” That was the law of this circuit when the district court announced its decision, and the district court, citing Holt and Danti, supra, quite properly applied it:
Most federal appellate courts have ruled that a court reviewing a decision of a plan’s trustees under ERISA may overturn the decision only if it is found to be arbitrary, capricious, made in bad faith, or in derogation of law. The District of Columbia Circuit follows this standard.
Block v. Pitney Bowes Inc., 705 F.Supp. 20, 22 (D.D.C.1989) (citations omitted).
Unless the above-quoted law of the circuit was changed by the Supreme Court’s decision in Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989), this panel, following established principles of stare decisis, should not take it upon itself to alter it. Although the courts of appeal that have considered the question are not in agreement concerning whether Firestone effected a change in the standard of review, I agree with those courts which hold that it has. See Jones v. Laborers Health & Welfare Trust Fund, 906 F.2d 480, 481 (9th Cir.1990); Batchelor v. Int’l Bhd. of Elec. Workers Local 861 Pension & Retirement Fund, 877 F.2d 441, 442-43 (5th Cir.1989); Boyd v. Trustees of the United Mine Workers Health & Retirement Funds, 873 F.2d 57, 59 (4th Cir.1989).
The principal issue in the instant case is the same as was before the Supreme Court in Firestone, viz., “plan interpretation”. 489 U.S. at 108, 109 S.Ct. at 953. Was the administrators’ denial of benefits to Block based upon a correct interpretation of the term “total disability” as defined in the *1457plan? The Firestone Court said that “ERISA abounds with the language and terminology of trust law”, and that “[i]n determining the appropriate standard of review for actions under § 1132(a)(1)(B), we are guided by principles of trust law.” Id. at 110-11, 109 S.Ct. at 953-54. It then quoted section 187 of the Restatement (Second) of Trusts, which states: “Where discretion is conferred upon the trustee with respect to the exercise of a power, its exercise is not subject to control by the court except to prevent an abuse by the trustee of his discretion.” Id. at 111, 109 S.Ct. at 954.
A fair reading of the Court’s discussion that followed demonstrates that it adopted the American Law Institute’s abuse of discretion standard of review and rejected the arbitrary and capricious standard of review that had been adopted by most federal courts. See id. at 113-14, 109 S.Ct. at 955-56. The Court held that, unless a plan gives the administrator discretion to determine eligibility for benefits or to construe the terms of the plan, a denial of benefits should be reviewed under a de novo standard. Id. at 115, 109 S.Ct. at 956. More to the point, the Court concluded: “Of course, if a benefit plan gives discretion to an administrator or fiduciary who is operating under a conflict of interest, that conflict must be weighed as a ‘facto[r] in determining whether there is an abuse of discretion.’ Restatement (Second) of Trusts § 187, Comment d (1959).” Id.
One might contend that the last quoted statement is substantially dictum because the Firestone administrator did not have discretionary authority. However, the Court was not pronouncing dictum when it said that the abuse of discretion standard of section 187 was the proper one to apply. Id. at 111, 114, 109 S.Ct. at 954, 956.
Although it is obvious to me that the Supreme Court discerned a difference in meaning between the terms “arbitrary and capricious” and “abuse of discretion”, my colleagues apparently disagree. I have no desire to engage them in the type of semantic exchange that has troubled judges, lawyers and commentators in their discussions of administrative law appeals. See 5 Kenneth C. Davis, Administrative Law Treatise ch. 29 (2d ed. 1984). As Professor Davis wisely said, “refining the verbalisms about scope of review is not merely unprofitable but harmful.” Id. at 363.
It cannot be gainsaid, however, that it is more difficult to define and compare two separately-worded standards than it would be to define only one. If, as my colleagues contend, the two terms at issue herein have substantially the same meaning, there is no need to “clutter up the law”, id., with unnecessary complexities and explanations. I would simply hold that the proper standard is “abuse of discretion” and affirm on the ground that, while the district court did not apply the correct rule of law, the result it reached was the same as if the correct rule had been applied. See Lowry v. Bankers Life & Casualty Retirement Plan, 871 F.2d 522, 524-25 (5th Cir.1989).