Court Opinion

ID: 3066877
Source: CourtListenerOpinion
Date Created: 2015-10-15 20:06:57.667307+00
Date Added: 2024-06-11T11:41:29.045806
License: Public Domain

United States Court of Appeals
                                                                       Fifth Circuit
                                                                    F I L E D
              IN THE UNITED STATES COURT OF APPEALS
                       FOR THE FIFTH CIRCUIT                        March 14, 2006
                      ______________________
                                                                Charles R. Fulbruge III
                            No. 05-50567                                Clerk
                       ______________________

ALTON ROBINSON,

                                                   Plaintiff - Appellant,
                                       v.

AETNA LIFE INSURANCE COMPANY,

                                           Defendant - Appellee.
                       ______________________

          Appeal from the United States District Court
                for the Western District of Texas
                      _____________________

Before GARWOOD, DAVIS, and BENAVIDES, Circuit Judges.

BENAVIDES, Circuit Judge:

     This is an appeal from a district court’s grant of summary

judgment in an ERISA case.        Alton Robinson complained below that

Aetna Life Insurance wrongly terminated his disability benefits.

The district court granted summary judgment in favor of Aetna.               On

appeal, Robinson claims the following errors: (1) Aetna failed to

provide him with a full and fair review; (2) the district court

considered evidence outside the administrative record; and (3)

Aetna’s decision to terminate his benefits is not supported by

evidence in the administrative record.        Agreeing with Robinson on

each point,   we   vacate   and   remand    with    instructions    to   enter

judgment in favor of Robinson.
                              I.   BACKGROUND

     Appellant    Robinson    worked       as   a   sales   representative   for

Glazer’s Wholesale Drug Company, Inc. (“Glazer”), a wholesale

distributor of alcoholic beverages. Robinson’s job required him to

drive 800 to 1000 miles per week.               In March of 2002, Robinson

suffered a stroke, which permanently impaired the peripheral vision

in his right eye.    His doctors advised that it would be dangerous

for him to drive.

     Unable to continue at his position with Glazer, Robinson

applied to Appellee Aetna for long-term disability benefits. Aetna

served as the administrator and insurer for Glazer’s employee

welfare benefits plan (“the Plan”).             The Plan provides long-term

disability benefits when beneficiaries are “totally disabled.” The

Plan further explains that beneficiaries are totally disabled when

they are unable to perform the “material duties” of their “own

occupation[s].”    In August of 2002, Aetna concluded that Robinson

qualified as totally disabled.         It determined that Robinson could

not perform the material duties of a “field sales rep” because that

job “required [him] to drive 25%+ of the time.”                  Consequently,

Aetna approved Robinson’s claim for benefits.

     Eighteen months later, Aetna received an attending physician’s

statement from Robinson’s treating physician, Dr. Isaac Loose.                 A

question on the form asked what restrictions the physician had

placed on the patient.       As examples, the form listed: “Activities

of Daily Living, Driving, Lifting, Pulling, Pushing, and Amounts,

                                       2
etc.”    In response, Dr. Loose wrote, “None.”          He also wrote that

Robinson had “no restrictions due to ocular history.”           Construing

this as an indication that Robinson’s condition had improved, Aetna

terminated Robinson’s benefits.          Robinson asked Aetna to review

this decision.

     Robinson’s appeal included a new letter from Dr. Loose, which

clarified or corrected the attending physician’s statement.              The

letter concluded, “Driving is hazardous for this patient especially

in heavy traffic areas.    Please review his disability benefits.”

Robinson also included a letter from another treating physician,

Dr. C. Armitage Harper, who similarly wrote, “It is unsafe for

[Robinson] to drive any vehicle with this visual field loss.”

Seeking to resolve the apparent discrepancy between Dr. Loose’s two

statements, Aetna referred Robinson’s file to one of its own

physicians, Dr. Oyebode A. Taiwo.             Dr. Taiwo determined that

Robinson’s condition was serious and permanent and that he was

incapacitated from any occupation which required the operation of

a motor vehicle.

     Considering   this   evidence       on   review,   Aetna   upheld   the

termination but changed its reasons for the decision. It explained

to Robinson by letter that it had spoken to a vocational consultant

and determined that driving was not a material duty of a sales

representative1 in the general economy.         The administrative record
     1
       The parties contest whether Robinson should be classified
as a “field sales representative” or a “sales representative.”
The administrative record uses both labels. Neither party

                                     3
does not reflect that Aetna contacted a vocational consultant.               In

its review letter, Aetna told Robinson that he had exhausted his

administrative remedies.

      Robinson sued under the Employee Retirement Income Security

Act (“ERISA”) “to recover benefits due to him under the terms” of

the Plan.     29 U.S.C. § 1132(a)(1)(B) (2000).              At the close of

discovery, Aetna moved for summary judgment.               On March 29, 2005,

the   district    court   granted      Aetna’s   motion,    and   this   appeal

followed.

                          II.    STANDARD OF REVIEW

      This Court reviews summary judgments de novo in ERISA cases,

applying the same standards as a district court.                  See Baker v.

Metropolitan Life Ins., 364 F.3d 624, 628 (5th Cir. 2004).

                                III.   DISCUSSION

A.    PROCEDURAL CHALLENGE TO AETNA’S REVIEW

      Robinson complains that Aetna failed to follow ERISA-mandated

procedures.      In relevant part, ERISA provides:

      In accordance with regulations of the Secretary, every
      employee benefit plan shall–

      (1) provide adequate notice in writing to any participant

explains the substantive difference, if any, between the two
designations. For brevity and convenience, we will refer to
Robinson as a sales representative. We do not intend this to
have any legal import. The dispute over the proper label for
Robinson’s occupation is really about (1) the definitions of “own
occupation” and “material duties” as a matter of law and (2)
whether, under those definitions, driving is a material duty
required by Robinson’s occupation as a matter of fact. Those
matters are discussed in Part III, infra.

                                        4
       or beneficiary whose claim for benefits under the plan
       has been denied, setting forth the specific reasons for
       such denial, written in a manner calculated to be
       understood by the participant, and

       (2) afford a reasonable opportunity to any participant
       whose claim for benefits has been denied for a full and
       fair review by the appropriate named fiduciary of the
       decision denying the claim.

29 U.S.C. § 1133 (2000).             Challenges to ERISA procedures are

evaluated under the substantial compliance standard.                 See Lacy v.

Fulbright & Jaworski, 405 F.3d 254, 257 (5th Cir. 2005); Hackett v.

Xerox Corp. Long-Term Disability Income Plan, 315 F.3d 771, 775

(7th Cir. 2003); Marks v. Newcourt Credit Group, Inc., 342 F.3d

444,    460   (6th   Cir.   2003).          This   means   that    “[t]echnical

noncompliance” with ERISA procedures “will be excused” so long as

the purposes of section 1133 have been fulfilled.                 White v. Aetna

Life Ins. Co., 210 F.3d 412, 414 (D.C. Cir. 2000).

       Robinson argues that he was denied the full and fair review

mandated by section 1133(2) in two ways.           First, he points out that

Aetna did not provide review of its specific basis for rejecting

his claim.    Second, he highlights Aetna’s failure to identify the

vocational expert upon whom it allegedly relied.

       Aetna’s specific reason for terminating Robinson’s benefits

has never     been   reviewed   at    the    administrative   level.       Aetna

initially notified Robinson that it terminated his benefits because

it believed he was able to drive.            Upon review, Aetna changed its

reasoning.     Aetna informed Robinson for the first time in its

                                       5
review letter that it had determined his occupation did not require

driving and told Robinson that he had exhausted his administrative

remedies.     Robinson never had an opportunity to contest at the

administrative level this new basis for terminating his benefits.

Aetna points out that it did review the ultimate decision that

Robinson was not totally disabled.               It argues that this was

sufficient.    We disagree and hold that section 1133 requires an

administrator to provide review of the specific ground for an

adverse benefits decision.

       Subsection (1)’s mandate that the claimant be specifically

notified of the reasons for an administrator’s decision suggests

that it is those “specific reasons” rather than the termination of

benefits generally that must be reviewed under subsection (2). See

McCartha v. Nat’l City Corp., 419 F.3d 437, 446 (6th Cir. 2005)

(holding that an administrator failed to substantially comply with

section 1133 where the initial notice of termination failed to

state   one   of   the   grounds   on    which    it    ultimately    relied).

Furthermore, this Court has previously read the two subsections of

section 1133 as complementing each other.              In Schadler v. Anthem

Life Insurance, this Court explained that “the requirement that the

administrator disclose the basis for its decision is necessary so

that    beneficiaries    can   adequately    prepare      for   any   further

administrative review . . . .”      147 F.3d 388, 394 (5th Cir. 1998)

(internal punctuation omitted).         The notice requirements of ERISA

                                     6
help ensure the “meaningful review” contemplated by subsection (2).

Id. (quoting Halpin v. W.W. Grainger, Inc., 962 F.2d 685, 689 (7th

Cir. 1992)); see Hackett, 315 F.3d at 775 (stating that effective

review requires “a clear and precise understanding of the grounds

for the administrator’s position”). Additionally, mandating review

of the specific ground for a termination is consistent with our

policy of encouraging the parties to make a serious effort to

resolve their dispute at the administrator’s level before filing

suit in district court.            See Vega v. Nat’l Life Ins. Serv., Inc.,

188 F.3d 287, 300 (5th Cir. 1999) (en banc).                         Thus, Aetna failed to

comply with section 1133(2) when it terminated Robinson’s benefits

without reviewing the specific ground for that decision.

      In his second section 1133(2) argument, Robinson faults Aetna

for not disclosing its vocational consultant.                              ERISA regulations

require      administrators        to    “[p]rovide            for     the    identification

of . . . vocational experts whose advice was obtained on behalf of

the   plan     in    connection        with       a       claimant’s       adverse     benefits

determination        .    .   .   .”     29       C.F.R.       §   2560.503–1(h)(3)(iv).

Furthermore, the procedures governing disability plans                               “will not

. . . be deemed to provide a claimant with a reasonable opportunity

for   a   full      and   fair    review      of      a    claim     and     adverse   benefit

determination unless [they] comply with the [regulation requiring

disclosure of vocational experts].”                       29 C.F.R. § 2560.503–1(h)(4).

Aetna failed to comply with this regulation.

                                              7
      Aetna does not directly dispute Robinson’s claim that it

violated ERISA regulations by failing to disclose the identity of

its   vocational    consultant.            Instead,       it     maintains      that    it

substantially      complied      with     ERISA        despite    the     “de   minimus

procedural    violations        alleged        by    Robinson.”          Yet,   the    two

procedural errors shown by Robinson, taken together, amount to more

than mere technical noncompliance or a de minimus violation.

Aetna’s shifting justification for its decision and failure to

identify its vocational expert meant that Robinson was unable to

challenge Aetna’s information or to obtain meaningful review of the

reason his benefits were terminated.                  Consequently, Aetna did not

substantially comply with section 1133.

B.    SUBSTANTIVE CHALLENGE TO TERMINATION OF BENEFITS

      Aetna   terminated      Robinson’s            benefits    upon     deciding      that

driving was not a material duty of Robinson’s own occupation.

Robinson argues that this finding is not supported by concrete

evidence in the administrative record. Before we assess the merits

of this argument, we must address two preliminary issues.                        First,

we consider what information was properly before the district

court.   Second, we discuss the proper standard for evaluating

Aetna’s decision.

      1. The Dictionary of Titles Is Evidence Outside the
         Administrative Record and May not Be Considered

      Aetna   attached     to     its     motion       for     summary     judgment     an

occupation description from the Department of Labor’s Dictionary of

                                           8
Occupation Titles (“DOT”).    The DOT entry states that twenty-eight

activities are more important than operating motor vehicles for a

sales representative in the general economy.         Robinson argues that

the district court erred by considering this information, which was

not in the record when Aetna terminated his benefits.                Aetna

responds that the DOT is merely regulatory authority supporting

Aetna’s reasonable construction of the Plan.

      In Vega, this Court stated, “A long line of Fifth Circuit

cases stands for the proposition that, when assessing factual

questions, the district court is constrained to the evidence before

the plan administrator.”      188 F.3d at 299 (emphasis added).        We

believe that the DOT entry is evidence that addresses a “factual

question.”   Although it is styled as a dictionary, the DOT actually

represents extensive fact gathering and detailed data analysis.

See Dionida v. Reliance Standard Life Ins., 50 F. Supp. 2d 934, 939

n.3 (N.D. Cal. 1999).      Moreover, several of our sister Circuits

have recognized that an administrator makes a finding of fact when

it   determines   the   material   duties   of   a   certain   occupation.

Kinstler v. First Reliance Life Ins., 181 F.3d 243, 252–53 (2d Cir.

1999) (labeling as a “fact issue” the material duties of a given

occupation); see Lasser v. Reliance Standard Life Ins., 344 F.3d

381, 387–88 (3d Cir. 2003); Gallagher v. Reliance Standard Life

Ins., 305 F.3d 264, 270–73 (4th Cir. 2002).2            Accordingly, the
      2
      Aetna mistakenly relies on Gallagher to support its
argument that the district court properly considered the DOT.

                                    9
district court erred in considering the DOT entry because that

evidence was not in the administrative record.3

     2. Aetna’s Decision Will Be Assessed Under a Modified Abuse of
        Discretion Standard

     Where a plan grants the administrator discretion to determine

claims for benefits, claimants may recover under ERISA only if the

administrator’s   rejection   of    their   claim   was   an   abuse   of

discretion. See Atteberry v. Memorial-Hermann Healthcare Sys., 405

F.3d 344, 347 (5th Cir. 2005).       The parties agree that the Plan

vests Aetna with such discretion.

     In this case, Aetna has an “inherent conflict of interest”

because it serves both as the administrator and insurer under the

Plan.    See Lain v. UNUM Life Ins., 279 F.3d 337, 343 (5th Cir.

2002). A conflicted administrator merits less deference. See Vega

v. Nat’l Life Ins. Serv., Inc., 188 F.3d 287, 299 (5th Cir. 1999)

(en banc).   This Court applies a “sliding scale” to determine how

much deference to give: “[t]he greater the evidence of conflict on

the part of the administrator, the less deferential our abuse of

discretion standard will be.”      Id. at 297.   In Lain, we confronted

a case where, as here, the insurer and administrator were the same

Aetna misses the critical distinction between this case and
Gallagher: the DOT information in Gallager was in the
administrative record.
     3
      There are “certain limited exceptions” to the prohibition
on considering information outside the administrative record.
Estate of Bratton v. Nat’l Union Fire Ins., 215 F.3d 516, 521
(5th Cir. 2000). Aetna does not argue that any of these
exceptions apply.

                                   10
entity.    279 F.3d at 343.      As we did in Lain, we will assume

arguendo that an administrator with such a conflict is “entitled to

all but a modicum” of the deference afforded to unconflicted

administrators.     Id.   Under this standard, the basis for Aetna’s

decision must be supported by “some concrete evidence in the

administrative record.”      Vega, 188 F.3d at 302.

     3.    No Concrete Evidence Supports Aetna’s Decision

     Aetna found that “driving is not considered a material duty of

a sales representative in the general economy.”              Once the DOT

definition is appropriately removed from consideration, however, we

find a lack of concrete evidence to support this conclusion.

     The only dispute is an evidentiary one; the parties do not

disagree over how the Plan should be interpreted.            As discussed

above, the Plan provides benefits to claimants who are unable to

perform “the material duties of [their] own occupation[s].”         Aetna

has interpreted the term “own occupation” to mean employment of the

same general character as the plaintiff’s job in the general

economy.     Aetna has explained that the “material duties” of an

occupation    are   the   “essential    tasks”   generally   required   of

employees in the occupation.     Additionally, the Plan provides, “If

solely due to disease or injury, you are unable to earn more than

80% of your adjusted predisability earnings, you will not be deemed

to have performed the material duties of your own occupation on

that day.”    Robinson does not dispute Aetna’s right to reasonably

                                   11
interpret   the   terms   of   the   Plan   and   does   not   challenge   the

reasonableness of its construction.

     Under the Plan as interpreted by Aetna, the record would have

to reveal some concrete evidence that driving was not an essential

task required of employees in positions comparable to Robinson’s

job in the general economy.4         The record does not contain such

concrete evidence.    The letter rejecting Robinson’s appeal states

that Aetna spoke to a vocational consultant, who advised that

driving was not a material duty of a sales representative in the

general economy. Yet no vocational analysis appears in the record.

Indeed, Aetna does not rely on its alleged conversation with a

vocational consultant in arguing that its termination of benefits

was reasonable.    It relies instead on DOT information outside the

administrative record.

     The record does reflect that Robinson was required to drive

800 to 1000 miles per week at his job as a sales representative for

     4
      At oral argument, Aetna contended that Robinson would not
merit benefits even if driving is a material duty of Robinson’s
own occupation. If Robinson were able to perform any one of the
material duties of his own occupation, Aetna argued, he would not
be totally disabled under the Plan.   Aetna failed to raise this
issue in its brief, and so the argument is waived. See, e.g.,
Strong v. BellSouth Telecomm. Inc., 137 F.3d 844, 853 n.9 (5th
Cir. 1998). Additionally, this was not the reason Aetna gave for
terminating Robinson’s benefits. Vega requires us to review the
actual “basis for [the administrator’s] denial” of benefits, not
its post-hoc rationalization. 188 F.3d at 299. Accordingly, we
express no opinion on the merits of Aetna’s argument that
claimants are only totally disabled under the Plan if they are
unable to perform each and every material duty of their own
occupation.

                                      12
Glazer.   According to Aetna’s own internal analysis, driving took

up “25%+” of Robinson’s work day.          Contrary to Aetna’s contention,

its definition of the term “own occupation” does not render the

tasks required by Robinson’s Glazer job irrelevant.           In Kinstler,

the   Second   Circuit    explained    how    particular   duties   of   the

plaintiff’s job were important for determining what duties were

material to her occupation in the general economy:

      Though her precise duties do not define her regular
      occupation, in this case they well illustrate the duties
      of a director of nursing at a small health care facility,
      and nothing in the record provides any basis for thinking
      that such a position at a facility comparable to hers
      requires [different duties].

181 F.3d at 253 (emphasis added); see Lasser, 344 F.3d at 388

(holding that the plaintiff’s particular duties were relevant in

defining the material duties of an orthopedic surgeon).

      Robinson’s duties at Glazer serve to illustrate the duties

that a sales representative at a comparable firm might perform. As

in Kinstler, no evidence in the administrative record suggests that

Robinson’s driving duties are atypical of sales representatives.

See Mitchell v. Fortis Benefits Ins., 2005 WL 1793641, *6 (4th Cir.

July 29, 2005) (unpublished) (holding that the administrator abused

its discretion in determining that driving was not a material duty

of a chemical sales representative where the plaintiff’s position

involved driving 1500 to 2000 miles per week).             In sum, Aetna’s

finding that driving is not a material duty of Robinson’s own

occupation     is   not   supported    by    concrete   evidence    in   the

                                      13
administrative record.

                    IV.    CONCLUSION AND DISPOSITION

     Although Robinson did not move for summary judgment in the

district court, we have the authority to grant judgment in his

favor.    See Black Warrior Elec. Membership Corp. v. Mississippi

Power, 413 F.2d 1221,          1226 (5th Cir. 1969); Matter of Continental

Airlines, 981 F.2d 1450, 1458 (5th Cir. 1993) (“This court has the

power to render summary judgment for a nonmoving party . . . .”)

Awarding judgment to a party that did not move for summary judgment

below is proper where (1) there is no genuine issue of material

fact and (2) the opposing party has had a full opportunity to (a)

brief the legal issues and (b) develop a record.               See Monumental

Life Ins. v. Hayes-Jenkins, 403 F.3d 304, 315 n.21 (5th Cir. 2005).

     First, there is no genuine issue of material fact here.                We

have concluded both that Aetna failed to substantially comply with

ERISA    procedures      and    that   Aetna   abused    its   discretion   by

terminating Robinson’s benefits.             Second, Aetna was required to

develop its factual record at the administrative level.              See Vega,

188 F.3d at 302.      Lastly, Aetna fully briefed the relevant legal

issues both before this Court and below.              Accordingly, we VACATE

and REMAND    to   the    district     court   with   instructions   to   enter

judgment in favor of Robinson and determine the amount of damages.5

     5
        We reject Aetna’s suggestion that remand to the administrator is
required. In Vega, as here, no concrete evidence supported the
administrator’s basis for denying benefits. We declined a remand to allow the
administrator “another opportunity to make a record” because “each of the

                                        14
parties” must “make its record before the case comes to federal court.” See
Vega, 188 F.3d at 302 n.13. For the same reason, we believe that remand is
inappropriate here.

                                     15