Court Opinion

ID: 9486383
Source: CourtListenerOpinion
Date Created: 2023-08-05 11:46:50.341825+00
Date Added: 2024-06-11T17:51:42.009922
License: Public Domain

JOHNSON, Circuit Judge,
dissenting:
Were the issue before this Court and the facts within this case as the majority portrays them, this writer would be constrained to concur. However, Texaco has not asked this Court to determine whether its plan administrator abused his discretion by finding that Mr. Duhon was, in fact, qualified or could become qualified to perform a job. Texaco instead asks this Court to decide that the plan administrator was not required to make such a finding. In Texaco’s view, as long as an employee is physically capable of performing a job — even if un qualified and in capable of becoming qualified to perform that job — he is no longer disabled under Texaco’s Long Term Disability Plan. The majority ignores this, the true issue, before the Court. It creates another, less defensible, issue; ignores evidence in the administrative and appellate record; and disregards Fifth Circuit precedent which, if applied, compels affir-mance of the district court’s decision. This writer cannot concur and therefore respectfully dissents.
By disregarding Texaco’s point of error here, the majority reviews this ease as if a factual finding were in dispute. However, there is no disputed fact finding at issue in this case. Texaco’s plan administrator did not find that Mr. Duhon was actually qualified or could become qualified to perform a job.1 Texaco’s sole claim is that it correctly interpreted the Long Term Disability Plan as requiring no finding that an employee is or can become qualified to perform work.
This Court has specifically set out a two-step process for reviewing plan-interpretation cases. Contrary to the majority’s portrayal of Wildbur v. ARCO Chemical Co., the application of this process is not discretionary. Fifth Circuit case law — which is binding on this Court — makes it abundantly clear that the application of the two-step process in plan-interpretation cases is mandatory. Courts reviewing an administrator’s interpretation of a plan must first determine whether the plan administrator provided a legally correct interpretation of the plan. If the administrator’s interpretation is not legally correct, courts must then determine whether the administrator abused his or her discretion in interpreting the plan. Jones v. SONAT, Inc., 997 F.2d 113, 115, 116 (5th Cir.1993) (“In analyzing [the] Committee’s interpretation of [the plan], we must first decide whether the Committee’s interpretation of the plan was ‘legally correct.’ ... Having decided that the Committee’s interpretation was ‘legally incorrect,’ we must next determine whether the Committee abused its discretion.” (emphasis added)); Jordan v. Cameron Iron Works, Inc., 900 F.2d 53, 56 (5th Cir.), cert. denied, 498 U.S. 939, 111 S.Ct. 344, 112 L.Ed.2d 308 (1990) (“First, the court must determine the legally correct interpretation of the Plan’s provisions.... If the administrator has not given a plan the legally correct interpretation, the court must then determine whether the administrator’s interpretation constitutes an abuse of discretion.” (emphasis added, quotation marks deleted)); Batchelor v. International Board of Electric Workers Local 861 Pension and Retirement Fund, 877 F.2d 441, 444-45 (5th Cir.1989) (“First, the court must determine the [legally] correct interpretation of the Plan’s provisions- [Then w]e must determine whether the [administrators’] interpretation rises to an abuse of discretion.” *1311(emphasis added; quotation marks deleted)).2 Cases decided prior to Firestone Tire and Rubber Co. v. Bruch, though reviewed under the arbitrary and capricious standard, also determined that application of the two-step process was mandatory. See, e.g., Denton v. First National Bank, 765 F.2d 1295, 1304 (5th Cir.1985) (“First, the court must determine the correct interpretation of the Plan’s provisions. Second, the court must determine whether the Plan administrators acted arbitrarily or capriciously.” (emphasis added)).
To establish the legally correct interpretation of a benefit plan, courts are to consider 1) whether the plan administrator has given the plan a uniform construction, 2) whether the interpretation comports with a fair reading of the plan, and 3) whether different interpretations of the plan will result in unanticipated costs. Jordan, 900 F.2d at 56; Wildbur v. ARCO Chemical Co., 974 F.2d 631, 637-38 (5th Cir.1992). We have no information as to the Texaco plan administrator’s previous interpretations of the benefit plan. However, it seems clear — and the majority apparently agrees — that Texaco’s Long Term Disability Plan requires Texaco to prove two things: Texaco must prove that the employee in question is physically capable of performing a job (“physical-capability element”), and it must prove that “he or she is, or may become, qualified [to perform a job] by training, education, or experience” (“qualification element”).3
Texaco completely ignores the qualification element in the plan’s “permanent total disability” definition. It does not argue that the “plan does not require the availability of an alternate job as a prerequisite to termination of long-term disability benefits,” as the majority asserts. Maj. Op. at 1308. Texaco instead argues that its plan does not contain a qualification element at all. Texaco proffers one, and only one, point of error:
The District Court erred in holding that the Texaco Long-Term Disability Plan required the determination of whether plaintiff was or could become qualified to perform work for which he was physically capable of performing prior to any termination of disability benefits under the Plan.4 (Emphasis added).
Texaco, Inc. Brief at iv, 16.
Texaco’s deletion of the second element— one of only two elements in the “permanent total disability” definition — is anything but a “fair reading” of the plan. Additionally, Texaco has not claimed that administering the plan under the correct construction will result in the expenditure of unanticipated costs. Thus, under Jordan and Wildbur, Texaco’s interpretation of the plan is legally, indeed patently, incorrect. It directly conflicts with the clear language in the Long-Term Disability Plán by rendering totally nugatory a required element in the plan.
A legally incorrect interpretation does not automatically signal an abuse of discretion. Courts must consider the following in review-’ ing plan interpretations for abuse of discretion: 1) whether the plan is internally consistent under the administrator’s interpretation, 2) the existence of any relevant regulations formulated by appropriate administrative agencies, and 3) the factual background of the plan administrator’s determination and any inferences of a lack of good faith. Wild-*1312bur, 974 F.2d at 638. Additionally, “[w]hen [the administrator’s] interpretation of a plan is in direct conflict with express language in a plan, this action is a very strong indication of arbitrary and capricious behavior.” Id. (quoting Batchelor v. International Brotherhood of Electrical Workers Local 861 Pension and Retirement Fund, 877 F.2d 441, 445 (5th Cir.1989)). Moreover, unless a plan administrator shows that his interpretation benefits all plan participants, his reasonable, but incorrect, interpretation of the plan constitutes an abuse of discretion if it advances the fiduciary’s interest at the expense of the affected beneficiary. Id; Brown v. Blue Cross and Blue Shield of Alabama, Inc., 898 F.2d 1556, 1566-67 (11th Cir.1990), cert. denied, 498 U.S. 1040, 111 S.Ct. 712, 112 L.Ed.2d 701 (1991); accord Jones v. SONAT, Inc., 997 F.2d 113, 116 (5th Cir.1993).
In my view, the application of each of these rules to the facts of this case points emphatically to an abuse of discretion. The administrator’s omission of an entire element of the permanent disability definition is completely inconsistent and directly conflicts with the plain language of the plan. Texaco’s interpretation is therefore anything but reasonable. Even if such a construction were reasonable — and it certainly is not — a finding of abuse of discretion would still be inevitable, for the administrator’s construction of the plan promotes Texaco’s interests at the expense of Mr. Duhon. The administrator’s interpretation makes Texaco’s job of proving no disability inordinately easier and therefore raises an inference of a lack of good faith.
Further, as the majority acknowledges, a possible conflict in interest exists here. This Court faced a similar eonflict-in-interest situation in Jones v. SONAT, Inc. There, the plaintiff sued his employer, Southern Natural Gas Co. (“SONAT”), challenging SONAT’s denial of disability benefits. After determining that the benefit review committee had incorrectly construed the plan, this Court relied upon three facts to decide that SONAT had abused its discretion: 1) the members of the benefit review committee were all SO-NAT corporate officers, 2) the committee’s interpretation of the plan reduced benefit outlays and therefore advanced SONAT’s interests at the employee’s expense, and 3) the committee failed to properly justify its interpretation of the plan by showing that plan participants would be benefitted thereby. 997 F.2d at 116.
The facts in Jones are strikingly similar to the facts in this case. The plan administrator here was a Texaco employee.5 Also, as in Jones, Texaco’s interpretation of the plan advances its interests of reducing benefit outlays at the expense of disabled employees: That interpretation allows Texaco to discontinue disability payments to those employees who, though physically capable of performing a job, are unqualified and unable to become qualified to perform a job. Finally, Texaco has not attempted to justify its interpretation of the plan by showing that plan participants are benefitted by the deletion the qualification element. Thus, under Jones, Wildbur, and Brown, Texaco has undoubtedly abused its discretion in interpreting the plan. The district court therefore correctly granted Mr. Duhon’s motion for summary judgment.
Had Texaco sufficiently proved that Mr. Duhon was or could have become qualified to perform a job — and appealed on that ground — this writer might agree with the majority’s disposition of this case. However, Texaco could never have sufficiently proved that Mr. Duhon was or could become qualified to perform a job on the record before the plan administrator. The record belies the majority’s conclusion that Mr. Duhon is “able to perform the functions of some identifiable job.”6 Maj. Op. at 1308. Mr. Duhon’s *1313family physician and one of Texaco’s own physicians concluded without contradiction that Mr. Duhon was physically and permanently in capable of performing “any job for which he is qualified.”7 Hence, Texaco, bearing the burden of proof on both the physical-capability element and the qualification element, was required to prove that Mr. Duhon could have become qualified to perform a job.
However, Texaco failed — indeed refused— to show that Mr. Duhon could have become so qualified. Contrary to the majority’s rendition of the facts, the record provides no information whatever as to Mr. Duhon’s prior experience in the “work-a-day world” other than the fact that he drove a truck for Texaco from July 29, 1985, to March 1, 1989. All three doctors consulted in this case agreed that Mr. Duhon could no longer drive trucks, so the record contains no evidence that Mr. Duhon is physically capable of performing a job which he once performed in the “work-a-day” world. Further, while it is true that Mr. Duhon is a high school graduate, the fact of the matter is that many moons have passed since his graduation in 1947.8 Nothing in the record reveals that Mr. Duhon ever used or honed any of the skills he gained in school — whether reading, writing, or otherwise. Yet the majority presumes that Mr. Duhon — a man with limited work experience and limited education, who cannot bend, stoop, squat, or lift more than twenty-five pounds,9 who cannot stand for longer than thirty minutes at a time and requires a special chair for sitting,10 and who is physically incapable of performing any job for which he is qualified — is “employable throughout the work place today.” That presumption is, at best, specious. This writer is more than confident that senior citizens are engaged in fruitful employment throughout this nation; however, those citizens are not hindered by limitations — physical and otherwise — which Mr. Duhon endures.
Mr. Duhon properly pointed to the lack of evidence of the qualification element to the district court, and Texaco did not contend that such evidence existed. Under the Supreme Court’s clear mandate in Celotex Carp. v. Catrett, Mr. Duhon sufficiently met his burden of proving that no genuine issue of material fact existed. 477 U.S. 317, 325, 106 S.Ct. 2548, 2554, 91 L.Ed.2d 265 (1986) (holding that “the burden on the moving party [in summary judgment cases] may be discharged by ‘showing’ — that is, pointing out to the district court — that there is an absence of evidence to support the nonmoving party’s case” (emphasis addéd)). Thus, the district court correctly granted summary judgment in Mr. Duhon’s favor. That decision should be affirmed.

. Even if there were such a finding — and there is not — Texaco waived any alleged error with re*1311spect to that finding, for it did not appeal on that ground.

. The majority's explanation for disregarding these cases — asserting that the plan administrator did not abuse his discretion in finding that Mr. Duhon was or could become qualified to perform a job — is misleading. As explained earlier, the administrator made no such finding.

. Article 2.07 of the plan reads:
"Permanent total disability” or “disabled" means that during the first 24 months following an Employe’s LTD separation date, the Employe is unable to perform the normal duties of his or her regular or comparable job assignment with the Company. Thereafter, "disabled” or “permanent total disability” means the Employe is unable to perform any job for which he or she is, or may become, qualified by training, education, or experience.

.Hence, the majority postures the issue it addresses. The plan administrator did not interpret "the phrase 'any job for which he ... is, or may become qualified’ actually to include any job that required only ‘sedentary to light work.’ ” Maj. Op. at 1308 (emphasis in original). Texaco makes clear the fact that the administrator interpreted the qualification phrase as being completely non-existent.

. In fact, the Long-Term Disability Plan specifically states that “[t]he Company shall, in any case, determine what constitutes permanent and total disability, when the same commenced, and at any time reverse or alter any such determination.” (Emphasis added).

. The record also belies the majority's “emphasis” that only six exhibits were made a part of the administrative record. The administrative record included at least 18 exhibits. It may have contained even more, for Texaco was not forthcoming in turning over the administrative record to Mr. Duhon. In fact, counsel for Mr. Duhon complained several times to the district court about Texaco’s refusal to comply with his requests for the administrative record. The appellate record does not affirmatively indicate that *1313Texaco completely complied with those discovery requests.

. Interestingly, after reviewing the conclusions of all three doctors consulted here, Texaco’s own health department advised Texaco to continue Mr. Duhon's long-term disability benefits.

. Texaco did not even direct the district court's attention to Mr. Duhon’s high school education. Texaco instead rested its case in the district court, as it has in this Court, on its position that the benefit plan does not require proof that an employee is or can become qualified to perform a job.

. Dr. Lahasky, a Texaco physician, determined that Mr. Duhon could not lift anything at all.

. The majority correctly notes that no medical records support Mr. Duhon’s statement that he cannot stand for longer than 30 minutes and requires a special chair for sitting. However, Texaco, which shouldered the burden of proving that Mr. Duhon was not permanently disabled, proffered no evidence which rebutted Mr. Du-hon’s claim. His claimed standing and sitting limitations are therefore undisputed.