NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS FILED
FOR THE NINTH CIRCUIT FEB 04 2014
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
JOEL SALZ, No. 12-55728
Plaintiff - Appellant, D.C. No. 2:06-cv-01821-GW-E
v.
MEMORANDUM*
STANDARD INSURANCE COMPANY
and MTC MANUFACTURING LONG
TERM DISABILITY PLAN,
Defendants - Appellees.
Appeal from the United States District Court
for the Central District of California
George H. Wu, District Judge, Presiding
Argued and Submitted December 3, 2013
Pasadena, California
Before: SCHROEDER, NOONAN, and CLIFTON, Circuit Judges.
In 2004, Joel Salz (“Salz”) was injured on the job. Salz applied for, and was
granted, Social Security benefits. Salz also applied for, and was denied, long-term
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
disability benefits. In 2006, Salz sued Standard Insurance Company (“Standard”)
and MTC Manufacturing Long Term Disability Plan (“MTC”) claiming improper
denial of his claim for long-term disability benefits pursuant to the Employee
Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001 et seq. The
district court ruled, in 2009, that Standard’s denial was proper. Salz appealed.
In a June 1, 2010, memorandum disposition, we reversed and remanded with
instructions to “apply the structural conflicts framework as elucidated in Montour
[v. Hartford Life & Accident Insurance Co., 588 F.3d 623 (9th Cir. 2009)],”
specifying four “nonexhaustive facts and circumstances the [district] court should
consider on remand.” These were: Standard’s failure to meaningfully discuss
Salz’s award of Social Security benefits; Standard’s failure to account for Salz’s
“Own Occupation”; Standard’s “unreasonable” reliance on the Dictionary of
Occupational Titles (“DOT”); and Standard’s “conclusory statement” that Salz’s
managerial occupation “would typically allow for maximum self regulated
flexibility in position change.” On remand, the district court, in a 2012 opinion,
again held that Standard did not abuse its discretion in denying Salz long-term
disability benefits. Salz appeals.
Social Security Benefits. We instructed the district court to consider
Standard’s failure to address substantively the contrary Social Security
2
Administration (“SSA”) determination. The district court agreed that Standard had
not meaningfully discussed Salz’s award of Social Security benefits. The district
court held, however, that Standard’s failure to address substantively the contrary
SSA determination was not grounds for reversal because, “in Montour, . . . failure
to provide a full explanation for the difference between the SSA’s finding of
disability and an ERISA plan administrator’s finding of non-disability . . . was
[not] reversible error per se.” Even if the failure to meaningfully evaluate a social
security disability award is not reversible error per se, it is still a significant error
that the district court must appropriately weigh in determining whether a plan
administrator abused its discretion. See Salomaa v. Honda Long Term Disability
Plan, 642 F.3d 666, 679 (9th Cir. 2011) (“Evidence of a Social Security award of
disability benefits is of sufficient significance that failure to address it offers
support that the plan administrator’s denial was arbitrary, an abuse of discretion”).
We tasked the district court with determining (which it did) whether Standard had
properly accounted for a contrary SSA determination (which Standard had not).
Nothing more. The district court erred.
Own Occupation. The district court determined that Standard need not
consider “the manner in which a claimant ha[d] historically performed his or her
job requirements”—need not, in other words, consider Salz’s Own Occupation.
3
This determination contravenes our instruction and the language of the long-term
disability policy. Pursuant to the policy, Standard is “not limited to looking at the
way [a claimant] perform[s] [his or her] job for [his or her] Employer, but
[Standard] may also look at the way the occupation is generally performed in the
national economy.” The inference, as this court noted previously, is that Standard
must look at the way a claimant performs his job for his employer. It may not look
solely at how the job is generally performed in the national economy. The district
court erred.
Unreasonable Reliance on the DOT. The district court failed to consider
Standard’s “unreasonable” reliance on the DOT. We previously found, quoting the
DOT, that “[s]edentary work involves sitting most of the time,” which is precisely
what Salz cannot do painlessly. The district court concluded that “sedentary” as
used in the DOT is a measure of strength and that, therefore, “[b]y being labeled
‘Sedentary,’ [i]t does not mean that the employee is required to sit in order to
perform his or her duties.” Perhaps; but even if Salz is not required to do so—and
this fact is itself far from settled—it is clear from Salz’s job analysis that sitting is
exactly what Salz does for most of the workday. The district court erred.
Maximum Flexibility. Finding no record evidence supporting Standard’s
claim that Salz’s occupation “would allow for maximum flexibility,” we instructed
4
the district court to consider this conclusory claim when applying Montour’s
structural conflicts framework. Upon doing so, the district court determined that
“it would seem to be common sense, if nothing else, that an individual acting in a
managerial capacity would be able to change his positioning as needed in order to
avoid discomfort.” But this “common sense” is very much in dispute and,
therefore, is not judicially noticeable. See United States v. Chapel, 41 F.3d 1338,
1342 (9th Cir. 1994) (court may only take judicial notice of adjudicative facts “not
subject to reasonable dispute” (quoting Fed. R. Evid. 201)). The district court
claims to have found record evidence supporting Standard’s statement, but then
cites to a report by Selvi Springer, a Standard consultant. This citation does little
to assuage our concern that Standard—which, as both funding source and
administrator, operates under a conflict of interest—was improperly motivated
when it denied Salz’s benefits. See Montour, 588 F.3d at 630, 637. The district
court erred.
The district court has not adequately explained how the structural conflicts
framework can result in a denial of benefits. We therefore REVERSE and
REMAND to the district court to order the award of benefits.
5
FILED
No. 12-55728, Salz v. Standard Insurance Company, et al. FEB 04 2014
MOLLY C. DWYER, CLERK
CLIFTON, Circuit Judge, dissenting: U.S. COURT OF APPEALS
I respectfully dissent. Our court’s previous memorandum disposition
remanded the case to the district court for further proceedings. It did not order
benefits or command that the district court reach a specified result. If it had
intended to dictate the result, it would have done so, saving the parties and the
court substantial time and effort. It did not.
I would affirm the judgment of the district court.