Court Opinion

ID: 44969
Source: CourtListenerOpinion
Date Created: 2010-04-25 22:31:04+00
Date Added: 2024-06-11T17:17:21.179129
License: Public Domain

[DO NOT PUBLISH]

              IN THE UNITED STATES COURT OF APPEALS

                      FOR THE ELEVENTH CIRCUIT
                                                                 FILED
                                                        U.S. COURT OF APPEALS
                        ________________________          ELEVENTH CIRCUIT
                                                           NOVEMBER 3, 2006
                              No. 06-11322                 THOMAS K. KAHN
                          Non-Argument Calendar                 CLERK
                        ________________________

                     D. C. Docket No. 03-03065-CV-P-S

KENNETH CHARLES EADY,

                                                    Plaintiff-Appellant,

                                   versus

AMERICAN CAST IRON PIPE COMPANY,

                                                    Defendant-Appellee.

                        ________________________

                 Appeal from the United States District Court
                    for the Northern District of Alabama
                       _________________________

                             (November 3, 2006)

Before ANDERSON, CARNES and WILSON, Circuit Judges.

PER CURIAM:

     Kenneth Eady appeals the district court’s grant of summary judgment to his

former employer, American Cast Iron Pipe Company (“ACIPCO”), in his action for
disability benefits, filed pursuant to § 502(a)(1)(B) of the Employee Retirement

Income Security Act of 1974 (“ERISA”). On appeal, Eady argues that the district

court employed the wrong standard of review of the pension plan’s decision and that

the plan’s decision was made in bad faith.

      ERISA does not provide a standard to review decisions of a plan administrator.

In Firestone Tire and Rubber Co. v. Bruch, 489 U.S. 101, 109 S.Ct. 948 (1989), the

Supreme Court looked to the principles underlying trust law as largely defining the

role and responsibilities of a plan fiduciary or administrator. More specifically, the

Court reasoned that, “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

(internal citation and quotation marks omitted). Applying these principles, the Court

established a range of standards that pertain to benefits determinations under ERISA:

      a denial of benefits challenged under § 1132(a)(1)(B) 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 . . . . 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.

Id. at 115, 109 S.Ct. at 956-57 (citations and quotation marks omitted).

      Consistent with the Court's directive in Firestone, we have adopted three

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standards of review for plan interpretations: (1) de novo, applicable where the plan

administrator is not afforded discretion, (2) arbitrary and capricious when the plan

grants the administrator discretion, and (3) heightened arbitrary and capricious where

there is a conflict of interest. Buckley v. Metropolitan Life, 115 F.3d 936, 939 (11th

Cir.), rehearing denied, 129 F.3d 617 (11th Cir. 1997) (citing Marecek v. BellSouth

Services, Inc., 49 F.3d 702, 705 (11th Cir. 1995)).

      It is clear from our precedent that de novo review is not appropriate in this case

because the plan at issue grants discretion to the administrator. The plan provides

that the administrator has the right and duty to construe the plan, decide all questions

of eligibility, and determine the amount, time and manner of all payments. See

Buckley, 115 F.3d at 939. Additionally, we agree with the district court that the

heightened arbitrary and capricious standard does not apply because of the way that

the plan is structured. Like the plan in Turner v. Delta Family-Care Disability, 291

F.3d 1270 (11th Cir. 2002), the ACIPCO plan is funded via irrevocable periodic

contributions. As Eady points out, the plan provides that the only time that ACIPCO

can receive money from the plan is if benefits were awarded erroneously and the

overpayment can only be recouped for the prior year. Because Eady is not seeking

reinstatement of benefits but instead the award of benefits, there is no conflict of

interest. Because there is no conflict of issue, we review the plan administrator’s

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decision denying disability benefits to determine if it was arbitrary or capricious.

      As long as a reasonable basis appears for the plan administrator’s decision, it

must be upheld as not being arbitrary or capricious, even if there is evidence that

would support a contrary decision. Jett v. Blue Cross & Blue Shield of Ala., 890 F.2d

1137, 1140 (11th Cir. 1989). “When conducting a review of an ERISA benefits denial

under an arbitrary and capricious standard (sometimes used interchangeably with an

abuse of discretion standard), the function of the court is to determine whether there

was a reasonable basis for the decision, based upon the facts as known to the

administrator at the time the decision was made.” Id. at 1139.

      Here, the district court assumed arguendo that the decision made by the plan

administrator was incorrect. However, it determined that the decision was not

arbitrary or capricious based on the information that the administrator had in front of

it. As the district court noted, ACIPCO did not dispute Eady’s diagnosis of Chronic

Fatigue Syndrome; rather, it disputed the severity. This determination was based on

Dr. Pitts’ conclusions and bolstered by the videotape surveillance of Eady. We

cannot say that, given the record in front of it, the administrator’s decision was

arbitrary or capricious.

AFFIRMED.1

      1
          Eady’s request for oral argument is denied.

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