Opinion
Civ. No. 99-2835 Section "A" (4).
March 1, 2000.
Before the Court is defendants' Motion for Summary Judgment seeking dismissal of plaintiff's complaint as a matter of law pursuant to FRCP Rule 56. Formal opposition was filed on behalf of the plaintiff. Thereafter, a slew of memoranda (i.e., response, reply, sur-reply and response to sur-reply etc.) ensued. It is indeed an understatement to say the matter has been adequately briefed, the parties positions are quite clear and are all part of the record in this case. There is no need for an oral hearing in this ERISA case regarding the subject motion and the matter is deemed submitted on the briefs and the documents of record in this case. For the reasons set forth below, defendants' motion for summary judgment is DENIED.
I. Contentions of the Parties.
Simply stated, the defendants' position is that plaintiff's suit is barred for failure to exhaust his administrative remedies. Alternatively, defendants submit that because plaintiff was not a "member in service" as defined by Plan Section 6(c) at the time of his reapplication for disability pension benefits, he is not eligible to retire with a disability pension under the clear terms of the collectively bargained for plan. Defense counsel argues that: "Plan Section 6(a) unambiguously provides that only a `Member in Service' is eligible to retire with a disability pension." Defense counsel explains that "a person receiving AS [accident sickness] benefits `shall be a Member in Service for the purposes of Section 6 only for the period of time in which he is receiving such benefits.'" Essentially, defendants urge the Court to accept the following deduction as the only reasonable interpretation of the Plan terms — that "an individual whose AS benefits have expired [i.e., the plaintiff Stanley Jourdan] is no longer a `Member in Service' under Plan Section 6, and thus cannot be eligible for disability pension."
Defendants' Memorandum in Support of Motion for Summary Judgment at p. 6.
Id. (citing, Defendants' Exhibit "A", Plan Section 6(c).
Id.
Plaintiff's counsel submits that defendants' argument is flawed in several respects, to wit: (1) the plain wording of Plan Section 6(a) does not provide that only Members in Service are eligible to receive disability pension benefits; (2) Plan Section 6(c) does not, as defense counsel submits, define "Member in Service" but rather simply states that "a Member in Service shall include a person who is receiving accident and sickness benefits. . . ."; and thus, (3) the "Member in Service" provision set forth in Plan Section 6(c) neither clearly delimits and/or defines eligibility for disability pension under the Plan. Finally, plaintiff's position is that even assuming that Plan Section 6(c) does somehow define "Member in Service" for purposes of Section 6, such would have no effect on Plan Section 6(b) which does not utilize that term at all and instead allows "Members" [i.e., a differently defined term under the Plan] to become deemed permanently and totally disabled.
See, Plaintiff's Second Reply Brief, at p. 2, wherein plaintiff's counsel observes: "This repeated claim is . . . baffling considering that Section 6(a) merely provides that `. . . a Member in Service is eligible to receive disability benefits.'"
Id.
Id. at pp. 2-3.
II. Procedural Background.
It is not disputed that in August of 1992, Stanley Jourdan ("Jourdan"), the plaintiff in this case, began working for the defendant, Domino Sugar Corporation ("Domino Sugar"). After twenty-five years of working for Domino Sugar, the plaintiff developed a number of ailments which by October 10, 1997 caused him to assume an inactive status at the refinery.
As of October 10, 1997, Jourdan was considered "totally disabled" under the AS short-term disability plan, a less rigorous standard than that required for long term disability benefits under the Pension Plan and began receiving AS benefits. [Defendants' Exhibit "B"]. Via certified letter dated February 3, 1998, Jourdan was advised by Domino Sugar's Ms. Sandra Cosse that his accident and sickness (AS) benefits were projected to expire on April 11, 1998 and further that: "a participant who meets the specified service and/or age requirements may apply to receive disability retirement pension benefit upon the expiration of accident and sickness benefits" and the "participant is required to apply for the disability retirement benefit prior to the expiration of AS benefits." [Defendants' Exhibit "D"/Plaintiff's Exhibit "B"].
Jourdan did as suggested by Ms. Cosse, and on March 27, 1998 timely applied for disability pension benefits prior to the expiration of his AS benefits. Jourdan, then under the care of the orthopedic surgeon, Dr. Robert E. Ruel, Jr., submitted his Physician's Report of Disability along with the application for disability pension benefits. At that point in time, Dr. Ruel was of the opinion that Jourdan was still capable of performing some sedentary work, and thus, did not meet the stringent standard of "unable to engage in any gainful activity" as required by the Plan. Also, as part of the application process Dr. Paul Naccari examined Jourdan and similarly opined and stating that Jourdan's prognosis was unknown.
The record is uniformly to the effect that at the time Jourdan assumed inactive status and was receiving AS benefits his ailment included: herniated disks, hammer toe, severe arthritis of the knee, back and neck, carpal tunnel syndrome affecting his right hand, diabetes mellitus, and chronic fatigue as a result of sleep apnea.
It is not disputed that both physicians, Drs. Ruel and Naccari, indicated on the Physician's Report of Disability that Jourdan was able to engage in some gainful activity. For that reason, Jourdan's first application for disability pension under Plan Section 6 was denied. It is further not disputed that Jourdan did not appeal the June 1998 denial of his first application for disability pension benefits.
See, Domino Sugar Corporation's Certified Letter dated June 11, 1998, denying disability retirement benefits [Defendants' Exhibit "H" and Plaintiff's Exhibit "G"].
As counsel for plaintiff aptly points out, any appeal of the denial of his first application for disability pension benefits would have amounted to a frivolous appeal. The consensus of the physician's opinions at the time was that Jourdan's condition had not yet deteriorated to the point which would warrant certification that he was "unable to engage in any substantial gainful activity." Thus, Jourdan's AS benefits expired at a time when his diagnosed chronic degenerative conditions had not yet deteriorated to the point of permanent and total disability within the meaning of Plan Section 6(b).
Over the next seven months, Jourdan's physical condition continued to deteriorate to the point when in December of 1998, his physicians could certify with utter candor that he was unable to engage in any substantial gainful activity. See, Dr. Ruel's December 1998 Report [Plaintiff's Exhibits "E" and "F"].
Section 6 of the Plan provides:
Retirement for Disability
(a) If a Member in Service who has not attained Normal Retirement Age is 55 or over or has 15 or more Years of Credited Service when he becomes permanently and totally disabled, he may retire with disability pension after such disability shall have continued for a period corresponding to the period during which the accident and sickness benefits are payable to the Member under the group insurance plan established pursuant to the Corporation and the bargaining agent. . . . (emphasis added).
(b) A Member shall be deemed to have become permanently and totally disabled for purposes of this Section 6 if the Corporation shall have received a written opinion of a physician designated by the Corporation for that purpose, to the effect that
(1) such Member is (i) unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months, or (ii) in the case of an individual who has attained the age of 55 and is blind, unable by reason of such blindness to engage in substantial gainful activity requiring skills or abilities comparable to those of any gainful activity in which he has previously engaged with some regularity and over a substantial period of time;
(2) such disability does not consist of chronic alcoholism or addiction to narcotics;
(3) such disability did not result form his having engaged in a felonious act; and
(4) such disability was not the result of an intentionally self-inflicted injury, service in the armed forces of any country, or warfare or acts of a public enemy.
(c) For purposes of this Section 6, a "Member in Service" shall include a person who is receiving accident and sickness benefits under the group insurance plan established pursuant to the provisions of the collective bargaining agreement between the Corporation and the bargaining agent, and who was a Member in Service immediately prior to receipt of such benefits, but any such person shall be a Member in Service for purposes of Section 6 only for the period of time in which he is receiving such benefits.
(d) A Member retired for disability may be required to submit to such medical examination as may be requested by the Corporation at any time and from time to time prior to the age of 65, but not more often than semiannually, to determine whether he is eligible to receive or continue to receive the disability pension. . . .
See, The Plan [Defendants' Exhibit "A"/Plaintiff's Exhibit "C"].
The summary judgment evidence is to the effect that again this time in December of 1998, Jourdan claimed disability retirement benefits by submitting Physician's Reports of Disability stating that Jourdan was "unable to engage in any substantial gainful activity." He did so because with the passage of months and further deterioration of his physical condition, medical opinion was overwhelmingly to the effect that he had become totally disabled as of December 1998.
In late December 1998 or early January 1999, Jourdan supplied the Plan Benefits Coordinator, Mr. Rodney M. Hebert, with Dr. Ruel's December 1998 Physician's Report, and three of his other treating physicians' reports seeking a determination that his physical condition was so deteriorated that he was entitled to a disability pension benefits under the Plan. Mr. Hebert acknowledged receipt of plaintiff's December 1998/January 1999 written submissions.
Defendants' Exhibit "I"/Plaintiff's Exhibit "H".
See, Affidavit of Rodney M. Hebert, at para. 10 [Attachment #1 to Defendants' Motion for Summary Judgment].
Jourdan's telephone contact with Mr. Hebert on a number of occasions in the following months regarding the status of his request for disability retirement benefits, was to no avail. It is undisputed in the summary judgment record that Jourdan's second request (i.e., his December 1998/January 1999 submission) for disability pension benefits was in fact received by the Benefits Manager, but it was never processed, and it never garnered any written response. See, Affidavit of Rodney Hebert [Attachment 1 to Defendant's Motion for Summary Judgment].
It was not until counsel for the plaintiff inquired in writing as to the status of Jourdan's January 7, 1999 application for disability benefits, that any response was forthcoming. On June 4, 1999, the defendants' response per Rodney Hebert's letters was essentially that Jourdan's January 1999 written submission seeking a determination that a disability pension was due was not considered and would receive no consideration. Rodney Hebert, the Benefits Manager, explained that "there is no provision in the Plan under which such a `reapplication' can occur."
Defendants' Exhibit "J"/Plaintiff's Exhibit "K".
Defendants' Exhibit "K"/Plaintiff's Exhibit "L".
The issue before the Court is precisely as the defendants' state: Whether the Plan by its terms permits or prohibits application for disability retirement benefits on more than one occasion by a Member or a Member in Service? The Court has scoured the Plan and cannot find any provision limiting the number of applications for benefits for Members or Members in Service. Plan Section 6 does not mention the word application at all, and does not make application for disability pension benefits a one-time affair.
Plan Section 6(a) merely provides that a Member in Service may retire with disability pension "when he becomes permanently and totally disabled." Likewise, Plan Section 6(b) provides, that a Member "shall be deemed permanently and totally disabled if the Corporation shall have received a written opinion of a physician designated by the Corporation for that purpose, to the effect that (1) such Member is (i) unable to engage in any substantial gainful activity. . . ."
The Court further notes that the plain wording of Plan Section 6(d) recognizes that a Member's permanent and total disability within the meaning of Section 6(b) is neither a static nor permanent state. Section 6(d) provides that if it is determined that a Member is no longer permanently and totally disabled, his disability pension shall cease. Whereas, disability pension payment may cease on account of an improved physical condition, nothing in the Plan precludes or excludes reinstatement of payments in the event that a totally disabling condition remanifests itself.
Section 6(d) recognizes the eventuality that what may be adjudged a permanent and totally disabling condition at a discrete period of time may resolve or go into a period of remission. Such could easily be the case with a cancer victim, who experiences a period of remission of perhaps months, a year or even several years such that he becomes capable of some gainful employment. Under such circumstances Plan Section 6(d) stands as authority for terminating the Member's disability pension. There appears to be no provision prohibiting such Member from again applying for a disability pension in the event of a recurrence of the permanent and total disability.
Also, Plan Section 23(f) provides that "[a] `Member' may claim any benefit due him under the plan by mailing to the last known address of the Committee a written application outlining to the best of the Member's knowledge or ability, the nature, amount and form of such benefit. . . ." (emphasis added). Plan Section 23(f) further provides that the "Committee shall establish procedures f or, and make decisions as to, allowance or denial of any claims for benefits. . . ."
Plaintiff's counsel reminds the Court that Jourdan's Complaint includes the allegation that the "Committee's refusal to consider or process plaintiff's January 7, 1999 application was arbitrary, capricious and an abuse of the Committee's discretion."
Plaintiff's Complaint, at para. XVII.
III. Analysis.
Summary judgment is appropriate only when there are no genuine issues as to any material facts, and the moving party is entitled to judgment as a matter of law. FRCP Rule 56(c). Factual controversies are solved in favor of the nonmoving party, when both parties have submitted evidence of contradictory facts.Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994) (en banc).
Defendants contend that plaintiff's claim for disability retirement benefits pursuant to Plan Section 6 is barred because plaintiff failed to exhaust his administrative remedies by: (1) not appealing the denial of his March 1998 application for disability pension benefits; and (2) the Plan does not permit a second or a reapplication for disability pension benefits.
ERISA does not specifically require a claimant to exhaust his administrative remedies. Hall v. National Gypsum Co., 105 F.3d 225, 231 (5th Cir. 1997). The rule of the Fifth Circuit, however, is that except in the case of futility, a "plaintiff generally must exhaust administrative remedies afforded by an ERISA plan before suing to obtain benefits wrongfully denied." Chailland v. Brown Root, Inc., 45 F.3d 947, 950 (5th Cir. 1995).
In this particular case, the Court is convinced by the summary judgment record that any effort to appeal this most apparent obstinate refusal to process and/or respond to Jourdan's claim for disability retirement benefits would be futile. The Court here notes that the defendants' refusal to process the plaintiff's December 1998 claim for disability benefits (his second) appears to be predicated on several contentions. The first was defendants' contention that plaintiff's written submission (i.e., physicians' reports documenting that Jourdan was "unable to engage in any substantial gainful activity") was not an application for benefits.
Plaintiff's December 1998/January 1999 written submission to the Plan consisted of several physicians' reports documenting that Jourdan "was unable to engage in any substantial gainful activity." This language closely parallels the disability described under Plan Section 6 which affords disability pension benefits for permanent and total disability. Under Plan Section 6, either Members and/or Members in Service who are "unable to engage in any substantial gainful activity" and meet certain other requirements including time in service are entitled to a disability pension. The Benefits Manager's failure to discern a request or application for disability pension on the basis of plaintiff's second written submission is particularly troubling considering that Jourdan had only nine months earlier made a written claim for disability retirement pension under Domino Sugar Corporation Chalmette Refinery Pension Plan 006. That "Application" was made on a company form and filed before plaintiff's AS benefits expired per the instruction of the benefits coordinator, Sandra Cosse. Jourdan was further instructed in writing that the failure to submit such application prior to the termination of AS benefits, would foreclose on his eligibility for any disability pension benefits in the future.
The Court here reiterates that Plan Section 23, entitled "Administration," provides that a "Member may claim any benefit due him under the Plan by mailing to the last known address of the Committee a written application outlining to the best of the Member's ability, the nature, amount, and form of such benefit . . . ."
The summary judgment record further reflects that any appeal of the refusal to process the plaintiff's claim for disability pension benefits would have to be addressed to Rodney M. Hebert, defendants' Manager of Benefit Programs Systems. The benefits Manager, Rodney M. Hebert, is the very same individual who refused to process, recognize, and/or respond in any manner whatsoever to plaintiff's December 1998/January 1999 request for disability pension benefits. Under the precise circumstances of this case documented in the summary judgment record, the Court cannot find as a matter of law that the plaintiff's ERISA claim is barred for failure to exhaust his administrative remedies before filing suit. It would be fair to assume that with the Benefits Manager, Rodney Hebert, in charge of both processing claims for benefits, as well as, receiving and processing Member's appeals, any appeal or plea for review of the Benefits Manager's own refusal to process or respond to Jourdan's claim for disability pension benefits would have similarly been laid to rest in the Benefits Manager's office.
In his letter of June 11, 1998 denying pension benefits, the Benefits Manager, Rodney Hebert, instructed the plaintiff that appeals should be addressed to his office and that he would receive it for the Plan Committee/Administrator for further processing. [Defendants' Exhibit "H"]
The Court notes that Mr. Hebert's response to plaintiff's counsel's inquiry as to the status of Jourdan's January 7, 1999 disability pension application can easily be categorized as both "hostile" and "flip."
In Walker v. Walmart, 159 F.3d 938, 940 (5th Cir. 1998), the Fifth Circuit observed:
Congress expressly intended ERISA Plans to be `written in a manner calculated to be understood by the average plan participant,' and need only be sufficiently accurate and comprehensive to reasonably apprise such a participants and beneficiaries of their rights and obligations under the plan.'Id.
In the case at bar, the Committee never responded to and in fact, the defendants' Plan Benefits Manager refused to respond to and/or process Jourdan's January 7, 1999 written claim for Plan Section 6 disability pension benefits. The Plan Section 6 utilizes two defined terms interchangeably (i.e., "Member" and "Member in Service"). The Plan Committee or Plan Administrator has to date not taken a position or made any factual determinations with respect to eligibility since Jourdan's application was never processed. From the motion papers, however, it is apparent that the Plan Committee's position is that: (1) the Plan permits only one application per benefit per "Member"/"Member in Service"; and (2) the Plan requires a request for benefits be submitted on a company form application for benefits and will recognize no other written submission as an application for benefits despite a Member's best efforts to identify the benefit he claims per Plan Section 23(f).
The summary judgment record admits that plaintiff was advised by Domino Sugar: (1) to apply for disability pension benefits prior to the expiration of his AS benefits on April 11, 1998; and (2) if he did not do so, he would be unable to to retire with a disability pension in the future. Per the Benefits Manager's instruction, Jourdan had just such an application on file before the expiration of his AS benefits. It was not until nine months later, however, that plaintiff met the physical disability requirement of "unable to engage in any substantial gainful activity." Once Jourdan was permanently and totally disabled on account of his degenerative conditions, the Benefits Manager then refused to process the plaintiff's January 7, 1999 claim for disability benefits.
In Firestone Tire Rubber Co. v. Bruch, 109 S.Ct. 948 (1989), the Supreme Court held that a denial of benefits under ERISA "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 plan. If the administrator or fiduciary has discretionary authority, the reviewing court should apply an abuse of discretion standard." 108 S.Ct. at 956.
Jourdan does not dispute that the Plan gives the Committee discretionary authority to interpret the Plan. Plaintiff's position is that Plan Section 6 utilizes the defined terms "Member" and "Member in Service" interchangeably and in any event, Plan Section 6(b) unambiguously allows a "Member" to be deemed permanently and totally disabled. Thus, as fiduciaries of an ERISA Plan, defendants have the obligation to implement the plan provisions as written and, in any event, in the manner understood by the average plan participant. Plaintiff's position is that summary judgment record is to the effect that the defendants have not acted in accordance with the written terms of the Plan making summary judgment inappropriate and, in any event, premature in light of outstanding discovery.
Plan Section 1(c) defines "Member" as follows: "`Member' means an Employee participating in the Plan as provided in Section 2, below." [Defendants' Exhibit "A"]
Plan Section 1(f) defines "Service" as follows: "`Service' means Regular Full-Time Service as an Employee, as defined in subsection (b), above, or the Corporation, or Regular Full-Time Service in the employ of the Corporation in a capacity other than Employee, as so defined, commencing as of the date of an Employee's original employment by the Corporation, and such Employee or in such other capacity, in Regular Full-Time Service, and terminating on the date of his death, retirement, normal retirement or the date as of which Service is broken (whichever occurs first), except that Service before the year in which the Employee attains age 18 is disregarded." [Defendants' Exhibit "A"].
The Court agrees that at the very least, the defendants motion for summary judgment is premature. Plaintiff has outstanding discovery regarding a potential conflict on the part of the Plan Administrator, and whether such conflict influenced the manner in which the Benefits Manager short circuited claims processing in Jourdan's case.
The Court simply cannot say based on the summary judgment record that as a matter of law: (1) that the pertinent language in the Plan is unambiguous; or (2) that the Benefits Manager's interpretation of the Plan was reasonable; or (3) that it was not an abuse of discretion or breach of fiduciary duty to sanction the Benefits Manager's decision to completely ignore Jourdan's December 1998 written claim for disability pension benefits; or (3) that it was not an abuse of discretion or fiduciary duty to support the Benefits Managers' determination that Jourdan's December 1998 written claim that he was "unable to participate in any substantial gainful activity" was not a request for benefits at all; or (4) that it was not an abuse of discretion or breach of fiduciary duty for the Plan Administrator to limit its consideration of requests for benefits by Members to consideration of one such application per member per benefit without any written rules to that effect.
When reviewing a decision under the abuse of discretion doctrine, the district court must first determine the legally correct interpretation of the plan's provisions and, second, determine if there has been an abuse of discretion in light of the interpretation given by the Plan Administrator.Kennedy v. Electricians' Pension Plan IBEW No. 995, 954 F.2d 1116, 1121 (5th Cir. 1992).
In the case it bar, the Plan Administrator made the decision not to respond to Jourdan's written claim of January 7, 1999 to the effect that he was "unable to engage in any substantial gainful activity."
In determining the legally correct interpretation of the Plan, this Court must consider three issues: (1) whether the Administrator has given the Plan a uniform construction; (2) whether the Administrator's reading of the plan is fair and reasonable; and (3) whether the interpretation results in substantial unanticipated costs. Id. at 1121. In determining whether an abuse of discretion has occurred, there are three factors to consider: (1) the internal consistency of the Plan under the interpretation given by the Administrator; (2) any relevant regulations formulated by the appropriate administrative agency; and (3) factual background of the determination and inferences of lack of good faith. Id. at 1124.
As to the issue of uniform construction of the Plan, the facts at issue leave this Court guessing. In the first place, plaintiff's January 7, 1999 request was favored with no response, whatsoever. The summary judgment record admits several different explanations for the determination that no response was appropriate. The stated reason in Mr. Rodney M. Hebert's June 4th, 1999 letter to plaintiff's counsel [Defendants' Exhibit "K"], is that no provision in the Plan permits a reapplication for benefits. Mr. Hebert's January 12, 2000, affidavit testimony states yet different reasons: (1) no action was taken because no action was necessary since in December 1998, plaintiff was not a "Member in Service" and not eligible to apply; and (2) the documents plaintiff submitted in December of 1998 were not considered to be an application for benefits within the meaning of the Plan. See, Affidavit of Rodney Hebert, at para. 9, 10, 11 [Attachment 1 to Defendants' Motion for Summary Judgment].
Counsel for plaintiff advises that discovery in this vein remains outstanding. The Court has before it no Committee minutes, or written procedures, rules or regulations established by the Committee or promulgated by the Plan Administrator for the purpose of carrying out the provisions of the Plan which might address the issues.
The Court notes that every ERISA "employee benefit plan shall be established and maintained pursuant to a written instrument." 29 U.S.C. § 1102(a). This Court is bound by ERISA's emphatic preference for written agreements and cannot on summary judgment give effect to unwritten rules which: (1) prohibit more than one application for disability benefits; (2) which may determine what constitutes an "application" within the meaning of the Plan; or (3) which may preclude a Member from submitting applications for disability pension benefits.
Here again, the Court notes that Plan Section 23(f) permits "[a] `Member' to claim any benefit due him under the Plan." [Defendants' Exhibit "A"]
The Court notes that the question of whether Jourdan was or was not a "Member" or a "Member in Service" at the time of December 1998 application for pension benefits on account of inability to engage in any substantial gainful activity is a question of fact. Factual determinations made by ERISA plan administrators are to reviewed under an abuse of discretion standard. Pierre v. Connecticut General Life Ins. Co., 932 F.2d 1552, 1562 (5th Cir. 1991).
In the case at bar and according to the Benefits Manager's June 4, 1999 letter, the Plan Administrator and/or Committee did not make a determination of whether Jourdan was or was not either a "Member" or a "Member in Service" within the meaning of the Plan for purposes of considering his eligibility for the claimed disability pension benefit. The claims process was never invoked on account of Jourdan's December 1998 request. Instead, the Benefits Manager Rodney Hebert refused to process the written request for reasons previously noted. The only factual determinations which are part of the administrative record are not with respect to eligibility in December 1998 for disability pension benefits. Factual determinations which are part of the administrative record pertain to the denial of Jourdan's March 1998 application for disability pension benefits.
The Court notes that this case is in its early stages and it cannot yet be determined whether the matter should be remanded to the Committee and/or Plan Administrator for factual determinations. There is some authority for the proposition that it is for the trier of fact to make any such determination in the first instance. See, Perry v. Simplicity Engineering, 900 F.2d 963, 966 (6th Cir. 1990) (holding that the court may consider evidence contained in the administrative record). Cases likePerry, supra, however, turn on an issue of historical fact — whether the plan member was an employee at his normal retirement date.
The Fifth Circuit, in Vega v. National Life Insurance Services, Inc., 188 F.3d 287, 299 (5th Cir. 1999), notes a long line of its cases which stand for the proposition that, when assessing factual questions, the district court is constrained to the evidence before the plan administrator. However, the Vega court further noted exceptions which would permit the district court to stray from the administrative record, to wit:
To date, those exceptions have been related to either interpreting the plan or explaining medical terms and procedures relating to the claim. Thus, evidence related to how the administrator interpreted terms of the plan in other instances is admissible. See, Wildbur v. ARCO Chemical Co., 974 F.2d 631, 639 n. 15 (5th Cir. 1992) (compiling cases).188 F.3d at 302.
The Vega court concluded that decisions involving conflict of interests would be reviewed under an abuse of discretion standard — i.e., giving deference to the administrator's decision. However, it noted that the amount of deference accorded to an administrator will decrease the more the administrator labors under an apparent conflict of interests. Id. at 302.
It is noteworthy that the Fifth Circuit in Vega, observed that the court owes deference to an administrator's reasoned decision, and that it owes no deference to an administrator's unsupported suspicions. Finding no concrete evidence in the administrative record to support denial of the claim, the Fifth Circuit reversed the district court, and held that administrator abused its discretion and remanded to the district court for a determination of damages and reasonable attorney's fees. 188 F.3d at 302.
Also, the Fifth Circuit has cautioned against allowing a case to oscillate between the courts and the administrative process, since it encourages neither the aggrieved party nor the plan administrator to make its record before the case comes to federal court. The Fifth Circuit explained:
We decline to remand to the administrator to allow him to make a more complete record on this point [i.e., whether a material misrepresentation was made]. We want to encourage each of the parties to make its record before the case comes to federal court, and to allow the administrator another opportunity to make a record discourages this effort. Second, allowing the case to oscillate between the courts and the administrative process prolongs a relatively small matter that, in the interest of both parties, should be quickly decided. Finally, we have made plain in this opinion that the claimant only has an opportunity to make his record before he files suit in federal court, it would be unfair to allow the administrator greater opportunity at making a record than the claimant enjoys. Id. at 302 n. 13.
For all of the above and foregoing reasons,
IT IS ORDERED that defendants' Motion for Summary Judgment is DENIED since there exist material issues of fact and plaintiff's discovery requests remain outstanding.
cc: all counsel of record