Court Opinion

ID: 9492596
Source: CourtListenerOpinion
Date Created: 2023-08-05 14:44:58.591101+00
Date Added: 2024-06-11T17:55:23.180240
License: Public Domain

RIPPLE, Circuit Judge,
dissenting.
The question in this case is whether the Gates Health Care Plan (“the Plan”), by denying Ms. Carr medical benefits for surgeries related to an excluded gastric stapling, interpreted the Plan contrary to its plain language, thus acting arbitrarily and capriciously.
As the majority notes, the Plan vests the Gates Health Care Plan Review Committee (“the Committee”) with discretion to administer the Plan. This provision requires a reviewing court to overturn the Committee’s decision only if it is arbitrary and capricious. See Firestone Tire and Rubber Co. v. Bruch, 489 U.S. 101, 115, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989); Hightshue v. AIG Life Ins. Co., 135 F.3d 1144, 1147 (7th Cir.1998). The court’s review must be to determine if the Committee’s interpretation of the Plan is unreasonable. See Ross v. Indiana State Teacher’s Ass’n Ins. Trust, 159 F.3d 1001, 1009 (7th Cir.), cert. denied, — U.S. -, 119 S.Ct. 1113, 143 L.Ed.2d 109 (1999). An interpretation is unreasonable if it conflicts with the plain language of the Plan. See, e.g., Cozzie v. Metropolitan Life Ins. Co., 140 F.3d 1104, 1109 (7th Cir.1998) (“It is well established that it is the language of an ERISA plan that controls.”); Dewitt v. Penn-Del Directory Corp., 106 F.3d 514, 520 (3d Cir.1997) (“A plan administrator may have discretion when interpreting the terms of the plan; however, the interpretation may not controvert the plain language of the document.”); Canseco v. Construction Laborers Pension Trust, 93 F.3d 600, 606 (9th Cir.1996) (“We have consistently explained that ‘trustees abuse their discretion if they ... construe provisions of [a] plan in a way that clearly conflicts with the plain language of the plan.’ ” (quoting Johnson v. Trustees of Western Conference of Teamsters Pension Trust Fund, 879 F.2d 651, 654 (9th Cir.1989))), cert. denied, 520 U.S. 1118, 117 S.Ct. 1250 (1997); O’Shea v. First Manhattan Co. Thrift Plan & Trust, 55 F.3d 109, 112 (2d Cir.1995) (“However, ‘[w]here the trustees of a plan impose a standard not required by the plan’s provisions, or interpret the plan in a manner inconsistent with its plain words, or by their interpretation render some provisions of the plan superfluous, their actions may well be found to be arbitrary and capricious.’ ” (quoting Miles v. New York State Teamsters Conference Pension & Retirement Fund Employee Pension Benefit Plan, 698 F.2d 593, 599 (2d Cir.1983))); Loyola Univ. of Chicago v. Humana Ins. Co., 996 F.2d 895, 903 (7th Cir.1993) (“This is a contract case and the language of the benefit plan controls.”).
1.
The majority opinion states that “the language of the Plan controls as does the Committee’s ruling as long as it is reasonable.” Slip op. at 297. I also believe the language of the Plan controls; I do not believe, however, that the Committee acted reasonably in interpreting the document contrary to its plain language. In my view, the majority pays far too little *298attention to the pertinent language of the Plan.1 Examination of the language must be the first step in determining whether the Committee’s interpretation is unreasonable.
2.
“Because this is a matter of interpretation of an ERISA plan, we look to federal common law principles of contract interpretation to guide our inquiry.” Ross v. Indiana State Teacher’s Ass’n Ins. Trust, 159 F.3d 1001, 1011 (7th Cir.), cert. denied, — U.S. -, 119 S.Ct. 1113, 148 L.Ed.2d 109 (1999). “It is a well-settled principle of contract construction that where a contract contains both general and specific provisions relating to the same subject, the specific provision controls.” Medcom Holding Co. v. Baxter Travenol Lab., Inc., 984 F.2d 223, 227 (7th Cir.1993). In the current case, two provisions of the Plan are relevant to the issue before us: (1) cosmetic or surgical procedures and (2) gastric stapling. These provisions state in pertinent part:
[T]he following are specifically excluded services and benefits ...
2. Cosmetic or surgical procedures [such as] any services performed in connection with the enlargement, reduction, implantation or change in appearance of a portion of the body....
19. Gastric stapling or diversion for weight loss.
Because specific provisions control over general provisions, the gastric stapling exclusion applies here, not the cosmetic procedures exception. In examining the gastric stapling exclusion of the Plan, it is useful to contrast its language with the language of the cosmetic or surgical procedures exception. The cosmetic procedures exception extends to include “any services performed in connection with the enlargement, reduction, implantation, or change in appearance of a portion of the body.” Notably, similar descriptive language does not follow the gastric stapling exclusion. The presence of such language in the cosmetic procedures exception, compared with the absence of such language in the gastric stapling exclusion, suggests strongly “gastric stapling” was not intended to include anything beyond the actual gastric stapling.
The majority opinion argues that the phrase “in connection with” should be read broadly, such that complications of the gastric stapling fall into the exclusions category. Although the majority’s interpretation of Kraut v. Wisconsin Laborers Health Fund, 992 F.2d 113, 118 (7th Cir.1993) is accurate, and the phrase “in connection with” should be read broadly, two flaws exist in its application of Kraut to Ms. Carr. First, the “in connection with” language is found in the cosmetic procedures exclusion. To lift the phrase from that exclusion, and apply it in the gastric stapling exclusion, is inconsistent with the plain language of the Plan. Seventeen exclusions are listed between cosmetic procedures and gastric stapling; to carry that phrase down to gastric stapling is not a natural reading of the plain language. Second, this circuit in Fuller v. CBT Corp., 905 F.2d 1055, 1057 (7th Cir.1990) recognized, in dicta, that complications of uncovered procedures should be covered. Ms. Carr admits her gastric stapling in 1979 should have been excluded from coverage. Her 1995 surgeries, however, were designed to remedy complications of gastric stapling, not gastric stapling. These procedures are entirely separate from her original surgery. Therefore, even though the Committee properly excluded the initial gastric stapling, her complications from the excluded gastric stapling should be covered.
*299The majority concludes that it can only review the Committee’s interpretation of the Plan, not the Plan language under the arbitrary and capricious standard.” Slip op. at 296. However, by ignoring the unambiguous, plain language of the Plan, the Committee interpreted the document contrary to its plain language and therefore acted unreasonably. Accordingly, I respectfully dissent.

. The majority opinion states in part: “The Committee interpreted their Plan to include complications related to the non-covered procedure itself.... The Court can only review the Committee's interpretation of the Plan, not the Plan language under the arbitrary and capricious standard.” Slip op. at 296.