Post v. Hartford Ins Co

Opinions of the United
2007 Decisions States Court of Appeals
for the Third Circuit

9-13-2007

Post v. Hartford Ins Co
Precedential or Non-Precedential: Precedential

Docket No. 05-4927

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 PRECEDENTIAL

UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT

No. 05-4927

CAROL A. POST,

Appellant

v.

HARTFORD INSURANCE COMPANY

Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. Civil Action No. 04-cv-03230)
District Judge: Honorable Robert F. Kelly

Argued January 17, 2007

Before: McKEE, AMBRO and STAPLETON, Circuit Judges

(Opinion filed September 13, 2007)
Donald P. Russo, Esquire (Argued)
117 East Broad Street
P.O. Box 1980
Bethlehem, PA 18016

Counsel for Appellant

Brian P. Downey, Esquire (Argued)
Pepper Hamilton
200 One Keystone Plaza
North Front and Market Streets
P.O. Box 1181
Harrisburg, PA 17108-1181

Stacey I. Gregory, Esquire
Pepper Hamilton
18th & Arch Streets
3000 Two Logan Square
Philadelphia, PA 19103

Counsel for Appellee

OPINION OF THE COURT

AMBRO, Circuit Judge

Carol Post believes that she is entitled to long term
disability benefits under her former employer’s disability plan.

2
Her treating physicians maintain that she is disabled. On the
other hand, Hartford Insurance Company, the plan administrator
(who also happens to fund the plan), has hired reviewing
physicians who maintain that Post is not disabled. In other
words, the central issue in this case—whether Post is
disabled—is a “battle of the experts.”

“Battle-of-the-experts” cases are often easy for a
reviewing court. If the trial court’s standard of review is
arbitrary and capricious, then Hartford usually wins when it has
produced sufficient evidence supporting its position. It cannot
be said to have acted arbitrarily, and summary judgment in its
favor is appropriate. On the other hand, if the standard is de
novo, then summary judgment for either party must be vacated
because there is credible evidence on both sides of the key fact
question.

But this case, a claim that ERISA benefits were
improperly denied, is anything but easy, for the trial court’s
standard of review is neither arbitrary and capricious (at least in
its traditional form) nor de novo. In these cases, district courts
must select a standard of review that accords with the extent to
which the plan administrator operates under a conflict of
interest. Here we conclude that the District Court did not select
the proper standard of review, and so we vacate and remand for
consideration under the standard we deem to apply.

We affirm, however, the Court’s grant of summary

3
judgment on Post’s claim for breach of fiduciary duty because
it is barred by res judicata.

I. Facts and Procedural History

Carol Post was in a serious car accident in November
1993, just a few days after having major dental surgery. At the
time, she was employed as a dentist by Overlook Hospital in
Summit, New Jersey. She sustained a whiplash injury in the
accident, but she nonetheless attempted to return to work soon
afterward. After six days of working, she was forced to stop
because of intractable pain. Overlook, however, offered for her
to try working as a pharmacist for a while (as she has both
dentistry and pharmacy degrees), and she accepted. She
returned to work in December 1993, but was forced to take
nearly a day off each week because of pain. After nine months
of off-and-on working, she resigned due to pain in September
1994. During this period, she tried numerous physical therapy
treatments, none of which significantly improved her condition.
She returned to work again in January 1995, but resigned four
months later because of continuing pain. She has not worked
since.

Post’s medical record is voluminous. Between 1993 and
2003, she visited 14 doctors. Her pain management regimens
ranged from traditional treatments like prescription drug
combinations, trigger-point injections, and various forms of
physical therapy, to more exotic treatments like acupuncture and

4
biofeedback. She reports that none has given her significant
relief. Her primary treating physician is currently Dr. Carolyn
Britton, a professor of neurology at Columbia University.
According to Dr. Britton, Post suffers from chronic post-
traumatic pain syndrome characterized by severe myofacial
pain; regular, debilitating headaches accompanied by sensitivity
to light, nausea, and vomiting; irritable bowel syndrome; and
insomnia. Dr. Britton believes that this syndrome is directly
attributable to Post’s car accident and that it renders her disabled
from any sustained employment.

In keeping with Dr. Britton’s determination, Post’s view
of the record is that it indicates that she sustained a traumatic
whiplash injury that sensitized her central nervous system, thus
triggering the development of chronic pain syndrome. This is
Dr. Britton’s diagnosis, and it is supported by a number of other
evaluations in the record.

Hartford, on the other hand, believes that the record
indicates that Post suffered no more than a whiplash injury that
has now healed. While it concedes that Post continues to report
pain, it contends that the record contains no reliable diagnosis of
a recognized debilitating condition. In support of its view,
Hartford primarily relies on the reports of Dr. Ekaterina
Malievskaia, its reviewing physician, and Dr. Christopher
Lynch, who performed an independent medical examination.
Hartford also cites the opinions of Drs. Michael John Fiore and

5
Joel Harris,1 who evaluated Post in 1994 and 1996, respectively.

1
Dr. Harris’s conclusion on the issue of disability is, at best,
unclear. On a Hartford form, he indicated that Post could sit,
stand, walk, and drive for one hour each in an eight-hour
workday. The form asked that he circle for each activity a
number between one and eight. Zero was not an option. In any
event, his responses indicate that she could sit, stand, walk, and
drive for a total of four of eight hours. It is unclear how she
could maintain employment without sitting, standing, walking,
or driving for the other four hours of a typical day.
In addition Dr. Harris noted that Post could not lift or
carry any weight at all, not even one pound. Nor could she
climb, balance, stoop, kneel, crouch, crawl, reach, handle,
finger, or feel.
Hartford and our dissenting colleague focus on the fact
that, in a section asking what degree of work Post could tolerate,
Harris checked “sedentary work.” This was the least intensive
option available. The form did not provide a way of responding
that the patient could not tolerate work at all.
In the comments section of the form, Dr. Harris wrote:
Severe pain — head, neck, & lower jaw.
Back pain limits any mobility without
severe pain. Cannot sit in chair for
treatment without pain.
These comments and responses render the form, at the least,
ambiguous as to Post’s condition. Read most fairly, the great
weight of the form indicates a significant level of disability. It
takes a highly selective reading to conclude that it indicates that
Post was capable of working (without sitting, standing, walking,

6
 This case is governed by the Employee Retirement
Income Security Act (“ERISA”), 29 U.S.C. §§ 1001–1461,
because Overlook Hosiptal’s disability plan (the “Plan”) is an
“employee welfare benefit plan” as defined by 29 U.S.C.
§ 1002(1). Post filed a disability claim with Hartford,
Overlook’s disability carrier, soon after she ceased working in
1995. Hartford approved her claim, subject to periodic renewal.
To be considered “totally disabled” under the Plan after
December 6, 1997, she had to be “prevented by [d]isability from
doing any occupation or work for which [she was] or could
become qualified.”

From 1995 until 2002, Hartford paid out benefits. In
August 1998, the Social Security Administration approved
Post’s application for disability benefits, citing intractable
cervical pain, chronic pain syndrome, and fibromyalgia 2 as the

or driving, for half of the workday).
2
In the words of Judge Posner, fibromyalgia is
a common, but elusive and mysterious, disease,
much like chronic fatigue syndrome, with which
it shares a number of features. See Frederick
Wolfe et al., “The American College of
Rheumatology 1990 Criteria for the Classification
of Fibromyalgia: Report of the Multicenter
Criteria Committee,” 33 Arthritis & Rheumatism
160 (1990); Lawrence M. Tierney, Jr., Stephen J.
McPhee & Maxine A. Papadakis, Current

7
relevant diagnoses. Soon after Post was approved for Social
Security benefits, Hartford asked her to submit a copy of the
administrative decision so that it could offset her benefits. She
responded through counsel that Hartford was not entitled to an
offset under the plain language of the Plan, but she did provide
Hartford with a copy of the decision. Hartford eventually
relented and accepted Post’s reading of the Plan.

For reasons not apparent from the record, sometime in

Medical Diagnosis & Treatment 1995 708-09
(1995). Its cause or causes are unknown, there is
no cure, and, of greatest importance to disability
law, its symptoms are entirely subjective. There
are no laboratory tests for the presence or severity
of fibromyalgia. The principal symptoms are
“pain all over,” fatigue, disturbed sleep, stiffness,
and—the only symptom that discriminates
between it and other diseases of a rheumatic
character—multiple tender spots, more precisely
18 fixed locations on the body (and the rule of
thumb is that the patient must have at least 11 of
them to be diagnosed as having fibromyalgia) that
when pressed firmly cause the patient to flinch.
All these symptoms are easy to fake, although few
applicants for disability benefits may yet be aware
of the specific locations that if palpated will cause
the patient who really has fibromyalgia to flinch.
Sarchet v. Charter, 78 F.3d 305, 306–07 (7th Cir. 1996).

8
late 1999 Hartford took a renewed interest in Post’s claim. The
company surveilled her and reported in its claim notes that
surveillance was unsuccessful, as she was not seen leaving her
house. Hartford also began requesting copies of Post’s tax
records, ostensibly to take a non-Social Security income offset,
as the Plan allowed. It provides that “Hartford has the right to
require, as part of Proof of Loss: (1) your [Post’s] signed
statement identifying all Other Income Benefits, and (2)
[s]atisfactory proof to the Hartford that you and your
Dependents have duly applied for all Other Income Benefits
which are available. The Hartford reserves the right to
determine if proof of loss is satisfactory.” Hartford contends
that the “proof . . . that you . . . have duly applied for all Other
Income Benefits” language gives it the right to demand tax
returns, though it is not clear how a tax return would reflect
whether Post had applied for other income benefits. The plain
language of this provision does not authorize the review of tax
returns. (Incidentally, the tax returns confirm that Post was not
receiving any income during the disputed period.)

In June 2001, Hartford determined that Post should
submit to an independent functional capacity evaluation to
confirm her disability. This was permissible under the Plan.
Hartford hired a third-party service to notify Post of its request
and to set up the evaluation. Because Post had requested that all
communication go through counsel, the service’s operator
phoned her attorney to schedule the evaluation. Here, the
confusion began. As Hartford’s counsel explained at oral

9
argument, apparently the service’s operator told Post’s attorney
that Post had requested that he be phoned to schedule the
evaluation—meaning simply that Post had requested that all
communication go through him. Post’s attorney took the
statement to mean that Post had requested the evaluation; thus,
when he spoke with Post and found that she knew nothing about
it, he relayed to the service that she had not requested it. It then
reported to Hartford that Post had refused an evaluation in
violation of the Plan. No written request was ever made.

In lieu of a functional capacity evaluation, Hartford
referred Post’s file to its medical director, Dr. Malievskaia. She
conducted a paper review and concluded that Post was not
disabled because of a lack of objective findings, specifically the
absence of 11 of 18 potential trigger points that would support
a diagnosis of fibromyalgia.

In January 2002, Hartford terminated Post’s benefits. In
its termination letter, Hartford quoted the Plan’s termination
triggers, putting the following in bold font: “the date you refuse
to be examined, if The Hartford requires an examination.” The
letter went on to cite as the bases for termination Post’s alleged
failure to submit to an evaluation at Hartford’s request and Dr.
Malievskaia’s conclusion that Post was not disabled. The letter
also invited Post to file an appeal within 60 days and to send any
documents that she believed relevant. In March 2002, Hartford
denied Post’s appeal. Hartford, however, recognized the
confusion over scheduling the evaluation and offered to revisit

10
its decision if she agreed to one. In the meantime, Post had sued
Hartford for wrongful denial of benefits, and undergoing an
evaluation became part of a settlement agreement. The
settlement fully resolved that lawsuit.

Because Post’s treating physicians refused to write a
prescription for a full-scale functional capacity evaluation, citing
the damage it might cause given Post’s condition, Hartford
agreed to a less strenuous examination. To perform the exam,
Hartford hired Dr. Christopher Lynch. The record does not
reflect any board certifications or specialties, only that he is a
physician. His examination consisted primarily of testing Post
for the 18 trigger points for fibromyalgia. Finding tenderness
but no definite trigger points, Dr. Lynch concluded that she did
not have fibromyalgia or any other disabling condition. After he
submitted his report, Hartford issued a final denial of Post’s
claim. Hartford specifically directed Dr. Lynch not to submit
his report to Post, so she had no opportunity to respond to it.

Post then filed this suit in the District Court. In it, she
claims that Hartford violated 29 U.S.C. § 1132(a)(1) and (2).
Subparagraph 1132(a)(1)(B) allows an ERISA plan beneficiary
to sue “to recover benefits due to him under the terms of his
plan, to enforce his rights under the terms of the plan, or to
clarify his rights to future benefits under the terms of the plan.”
Paragraph 1132(a)(2) allows a beneficiary to sue for breaches of
fiduciary duties that cause losses to the plan.

11
 The District Court granted summary judgment in
Hartford’s favor on the § 1132(a)(1)(B) claim, ruling that Post
could not establish that Hartford acted arbitrarily and
capriciously in denying her benefits. The Court also granted
Hartford summary judgment on the § 1132(a)(2) claim on the
ground that it was barred by res judicata. Specifically, the
Court noted that it had dismissed that claim with prejudice in
Post’s previous suit, and so she could not revive it in this suit.
Post appeals both rulings.3

II. Deciding § 1132(a)(1)(B) Claims

A. The Sliding Scale Standard of Review

ERISA does not specify the standard of review that a trial
court should apply in an action for wrongful denial of benefits.
In Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 113
(1989), the Supreme Court held that the default standard of
review in all § 1132(a)(1)(B) cases is de novo. The Court noted
in a dictum that when a plan by its terms gives the administrator
discretion, which the plan at issue in Firestone did not, the
administrator’s decisions are upheld unless they abuse that

3
The District Court had jurisdiction under 28 U.S.C. § 1331;
we have jurisdiction under 28 U.S.C. § 1291. Because this is an
appeal from a grant of summary judgment, our review is
plenary. Vitale v. Latrobe Area Hosp., 420 F.3d 278, 281 (3d
Cir. 2005).

12
discretion. Id. at 115. On the issue of conflicts of interest, the
Court noted that “if a benefit plan gives discretion to an
administrator or fiduciary who is operating under a conflict of
interest, that conflict must be weighed as a ‘facto[r] in
determining whether there is an abuse of discretion.’” Id.
(quoting Restatement (Second) of Trusts § 187 cmt. d (1959)).

Addressing conflicts of interest in the post-Firestone era,
most courts of appeals have adopted a “sliding scale” standard
of review. This approach grants the administrator deference in
accordance with the level of conflict. Thus, if the level of
conflict is slight, most of the administrator’s deference remains
intact, and the court applies something similar to traditional
arbitrary and capricious review; conversely, if the level of
conflict is high, then most of its discretion is stripped away.
Doe v. Group Hospitalization & Med. Servs., 3 F.3d 80, 87 (4th
Cir. 1993).

In Judge Becker’s scholarly opinion in Pinto v. Reliance
Standard Life Insurance Co., 214 F.3d 377, 392 (3d Cir. 2000),
we cast our lot with the sliding scale approach. Among the
eleven courts of appeals that have reported decisions in this
area, six have adopted some version of the sliding scale.4 Id.;

4
The Tenth and Eleventh Circuit Courts, rather than
adjusting the level of scrutiny, shift the burden of proof to the
administrator when the employee presents evidence of a conflict
of interest. Fought v. UNUM Life Ins. Co. of Am., 379 F.3d 997,

13
Vega v. Nat’l Life Ins. Servs., Inc., 188 F.3d 287, 296 (5th Cir.
1999) (en banc); Woo v. Deluxe Corp., 144 F.3d 1157, 1161–62
(8th Cir. 1998); Chojnacki v. Georgia-Pacific Corp., 108 F.3d
810, 815 (7th Cir. 1997); Doe, 3 F.3d at 87; Miller v. Metro. Life
Ins. Co., 925 F.2d 979, 984 (6th Cir. 1991). In addition, the
Ninth Circuit Court of Appeals follows a “substantially similar”
approach, though it rejects the sliding-scale metaphor. Abatie
v. Alta Health & Life Ins. Co., 458 F.3d 955, 967 (9th Cir. 2006)
(en banc) (choosing simply to note that “[a] district court, when

1004–07 (10th Cir. 2004); Williams v. BellSouth Telecomms.,
Inc., 373 F.3d 1132, 1138 (11th Cir. 2004). The Second Circuit
Court of Appeals holds that once the claimant has shown the
potential for bias, the court strips away the administrator’s
discretion and reviews its decision de novo. Sullivan v. LTV
Aerospace & Defense Co., 82 F.3d 1251, 1256 (2d Cir. 1996).
The First Circuit Court of Appeals applies unvarnished arbitrary
and capricious review, Doe v. Travelers Ins. Co., 167 F.3d 53,
57 (1st Cir. 1999), though two of the six active judges on that
Court have criticized this approach. Denmark v. Liberty Life
Assur. Co. of Boston, 481 F.3d 16, 31 (1st Cir. 2007) (Opinion
of Lipez, J.) (urging adoption of the sliding scale); id. at 41
(Howard, J., dissenting) (agreeing that the arbitrary and
capricious standard should be reconsidered). But see id. at 40
(Opinion of Selya, J.) (defending arbitrary and capricious
review). The D.C. Circuit Court of Appeals has not yet decided
the issue. See Wagener v. SBC Pension Beneit Plan—Non
Bargained Program, 407 F.3d 395, 402 (D.C. Cir. 2005) (noting
the circuit split).

14
faced with all the facts and circumstances, must decide in each
case how much or how little to credit the plan administrator's
reason for denying insurance coverage”). In Pinto, we held that
the sliding scale approach was most faithful to Firestone’s
command that the level of conflict be considered as a factor in
shaping arbitrary and capricious review. 214 F.3d at 392.

B. Contours of the Sliding Scale

The premise of the sliding scale approach is that courts
should examine benefit denials on their facts to determine
whether the administrator abused its discretion. Id. at 391. To
apply the approach, courts first consider the evidence that the
administrator acted from an improper motive and heighten their
level of scrutiny appropriately. Id. at 392. Second, they review
the merits of the decision and the evidence of impropriety
together to determine whether the administrator properly
exercised the discretion accorded it. Id. at 394. If so, its
decision stands; if not, the court steps into the shoes of the
administrator and rules on the merits itself.

At its best, the sliding scale reduces to making a
common-sense decision based on the evidence whether the
administrator appropriately exercised its discretion. This theme,
rather than getting bogged down in trying to find the perfect
point on the sliding scale, should be district courts’ touchstone.

15
 C. Sorting Individual Cases

Determining how to apply heightened arbitrary and
capricious review requires considering both structural and
procedural factors. Pinto, 214 F.3d at 392–93. The structural
inquiry focuses on the financial incentives created by the way
the plan is organized, whereas the procedural inquiry focuses on
how the administrator treated the particular claimant. While
there is no magic to the order in which these inquiries are
conducted, our previous cases have considered structure first.
We do the same.

1. Structural factors

Our concern with structure derives from the common law
of trusts. As the Supreme Court noted in Firestone, the law of
trusts requires that courts take a trustee’s self-interest into
account. 489 U.S. at 115 (quoting Restatement (Second) of
Trusts § 187 cmt. d (1959)). The Court based this
pronouncement primarily on the Second Restatement. Since
then, the ALI has published the Third Restatement, which
further clarifies that while it is permissible for a trustee to act
under a structural conflict of interest, its discretionary decisions
“will be subject to especially careful scrutiny.” Restatement
(Third) of Trusts § 37 cmt. f(1) (2003). Under ERISA, plan
administrators are, for most purposes, treated like common-law
trustees. Firestone, 489 U.S. at 110. Like common-law
trustees, plan administrators are accorded discretion and judicial

16
deference (if the plan so provides); in return, they assume
fiduciary duties of care and loyalty to their beneficiaries. 29
U.S.C. § 1104(a). So long as we have no reason to doubt the
administrator’s faithfulness to those duties, this model works
well. We, however, are wary of according a fiduciary deference
when the structure of the plan gives it financial incentives to act
against the participants’ interest. See Restatement (Third) of
Trusts § 50 illus. 1.

As an initial note, federal courts of appeals are split on
the issue of what is a structural conflict. We have long held that
a structural conflict arises when the administrator has a non-
trivial financial incentive to act against the interests of the
beneficiaries. Pinto, 214 F.3d at 389. Such a conflict is, by
itself, sufficient to heighten our review.5 Id. at 390. Our
Court’s holdings are in line with black-letter trust law. The
Second Restatement, on which the Supreme Court relied in
Firestone, defines a “conflict” as merely “an interest in the
trustee conflicting with that of the beneficiaries.” Restatement
(Second) of Trusts § 187 cmt. d (1959). This statement is
worded broadly—almost to the point of being tautological—but

5
In this regard, we share the view of the Fourth, Fifth,
Eighth, Tenth, and Eleventh Circuit Courts of Appeals. See
Fought, 379 F.3d at 1006; Vega, 188 F.3d at 295 n.8; Armstrong
v. Aetna Life Ins. Co., 128 F.3d 1263, 1265 (8th Cir. 1997); Doe,
3 F.3d at 86; Brown v. Blue Cross & Blue Shield of Alabama,
Inc., 898 F.2d 1556, 1561 (11th Cir. 1990).

17
it applies by its own terms to a situation in which the
administrator has an interest (e.g., in profit or a better bottom
line) that is adverse to the interests of beneficiaries seeking
payment.

In sharp disagreement, the Court of Appeals for the
Seventh Circuit holds that it is improper to label those situations
“conflicts of interest.” See Rud v. Liberty Life Assur. Co. of
Boston, 438 F.3d 772, 776 (7th Cir 2006) (Posner, J.). The
problem, it argues, is that we generally assume that parties to a
contract are self-interested, and it is inimical to the law of
contracts to confuse self-interest with a conflict of interest. Id.
This is no doubt logical, yet the Supreme Court has held that
ERISA places us in the realm of trust law, not contract law.
Firestone, 489 U.S. at 110–11. Moreover, were we to apply
contract law, we would review plans de novo from the start, for
there is no analog to fiduciary discretion in the common law of
contracts. But we are not, and our position, in strict accordance
with Supreme Court precedent, follows the common law of
trusts.

Pinto listed four non-exclusive structural factors for
courts to consider: (1) the sophistication of the parties, (2) the
information accessible to the beneficiary, (3) the financial
arrangement between the employer and administrator, and (4)
the financial status of the administrator. 214 F.3d at 392. In
subsequent cases, we have also considered the administrator’s
claim evaluation process, according more deference to

18
administrators that use an independent body to evaluate claims
(thus lessening the effect of any conflict). Stratton v. E.I.
DuPont De Nemours & Co., 363 F.3d 250, 255 (3d Cir. 2004).
All of these factors relate to whether the plan is set up so that the
administrator has strong financial incentives routinely to deny
claims in close cases—in short, whether the administrator’s
incentives make treating it as an unbiased fiduciary
counterintuitive. Pinto, 214 F.3d at 388. We emphasize that
courts should focus on this question and not get bogged down in
factors, for this is anything but a mechanistic test. Rather, it is
a broad-based inquiry into whether the structure of the plan
raises concerns about the administrator’s financial incentive to
deny coverage improperly. This makes sense, as ERISA plans
come in many forms.

We have held that two aspects of some plans’ financial
structure raise particular concern: (1) when a plan is funded on
a case-by-case basis, Skretvedt v. E.I. DuPont & De Nemours
Co., 268 F.3d 167, 174 (3d Cir. 2001), and (2) when it is funded
and administered by an outside insurer, Pinto, 214 F.3d at 390.
Case-by-case funding simply means that the administrator pays
claims out of its operating budget, rather than from segregated
monies that the employer sets aside according to an actuarial
formula. This raises concerns because it means that each dollar
paid out is a dollar out of the administrator’s pocket. Stratton,
363 F.3d at 254. Thus, the administrator has a financial
incentive to deny claims.

19
 This concern is compounded when it is an outside
insurer, rather than the employer, that funds and administers the
plan, for we presume that employers have at least some self-
interest in seeing that benefits are paid fairly. After all,
employees’ morale will suffer if they perceive that their benefits
are illusory. When the plan is funded by an outside insurer,
however, the employer is a step removed from the process,
making it less likely to feel the full effects of employee
dissatisfaction with claims handling. Pinto, 214 F.3d at 389.6

We have also noted that when the claimant is a former
employee, any dissatisfaction with the claims handling process
is less likely to translate into a significant financial disincentive
for the employer. Id. at 388. In addition, when the employer is
in financial difficulty, the dissatisfaction of employees is less
likely to be an incentive favoring them because paying off
creditors will probably take priority over keeping up employee
morale. Id. at 392.

Importantly, under Pinto, the structural analysis does not

6
It is worth noting that we have held that when the employer
both funds and administers the plan, but pays benefits out of a
fully funded and segregated ERISA trust fund rather than its
operating budget, no structural conflict of interest is created.
Vitale, 420 F.3d at 282; Bill Gray Enters., Inc. Employee Health
& Welfare Plan v. Gourley, 248 F.3d 206, 217–18 (3d Cir.
2001).

20
ask about the administrator’s behavior. Indeed, as Pinto held,
the structure alone can require heightened review. 214 F.3d at
390. Pinto itself concerned a structure in which the plan
administrator was an outside insurance company that received
an actuarial premium from the employer. Id. Thus, what the
insurer/administrator paid out came directly off its bottom line.
Pinto noted that this structure creates a high level of financial
conflict of interest, as the insurer/administrator has a strong
incentive to construe claims in a light most favorable to it. Id.
at 389. Thus, Pinto held that this structure alone gives rise to
heightened scrutiny. Id. at 390.

When there is a structural conflict of interest mitigated by
independent claim evaluation and no evidence of procedural
bias, we have heightened our review only slightly. Stratton, 363
F.3d at 254–56. The animating logic of that case is that while
there was a conflict of interest, there was also good reason to
believe that it was of little moment, and so we held that we
would defer to the administrator unless its decision was clearly
unreasonable or not a product of an exercise of discretion at all.

When structural bias is not mitigated by independent
claim evaluation, we have heightened our review a bit more.
See Smathers v. Multi-Tool, Inc./Multi-Plastics, Inc. Employee
Health & Welfare Plan, 298 F.3d 191, 199 (3d Cir. 2002).
There, we emphasized that we were not free to substitute our
judgment for that of the fiduciary. Nevertheless, because the
record revealed that the administrator had not adequately

21
supported its decision, we concluded that it had not properly
exercised its discretion. Id. at 200.

It is worth noting that we have not reported a case in
which structural factors alone warranted anything more than
moderately heightening our review. This is not fortuitous.
Structural conflicts of interest warrant more searching review,
but in the absence of evidence that bias infected the particular
decision at issue, we defer to an administrator’s reasonable and
carefully considered conclusions. See Orvosh v. Program of
Group Ins. for Salaried Employees of Volkswagen of Am., Inc.,
222 F.3d 123, 129 (3d Cir. 2000).

2. Procedural Factors

As Pinto held, courts must also examine the process by
which the administrator came to its decision to determine
whether there is evidence of bias. 214 F.3d at 393. This sort of
evidence can come in many forms, and a review of the caselaw
reveals that we have identified numerous procedural
irregularities that can raise suspicion. The following is an
illustrative, not exhaustive, list of the irregularities identified:
(1) reversal of position without additional medical evidence, id.;
(2) self-serving selectivity in the use and interpretation of
physicians’ reports, id.; (3) disregarding staff recommendations
that benefits be awarded, id. at 394; and (4) requesting a medical
examination when all of the evidence indicates disability,
Kosiba v. Merck & Co., 384 F.3d 58, 67 (3d Cir. 2004).

22
 In considering procedural factors, the focus is whether,
in this claimant’s case, the administrator has given the court
reason to doubt its fiduciary neutrality. If it has, then the court
must decide how much to heighten its scrutiny. If the
irregularities are minor, few in number, and not sustained, then
they may not counsel for raising the level much at all, for minor
glitches reasonably can be chalked up to low-level carelessness.
If, however, they are more serious, numerous, or regular, then
they should raise more suspicion. Kosiba, 384 F.3d at 66; Pinto,
214 F.3d at 393. Given the administrator’s familiarity with the
claims process and the duties of a fiduciary, marked deviations
from procedural norms cannot but raise questions about its
neutrality.

In the face of significant evidence of procedural bias, we
have reviewed its decision closely. Pinto, 214 F.3d at 394.
When an ERISA administrator is not acting in accord with its
fiduciary status, we are naturally wary of according it much of
the deference that it would otherwise receive as a result of that
status. Id. Evidence that an administrator’s decision was
incorrect, coupled with evidence it was biased, can add up to a
conclusion that its decision was not the product of reasoned
discretion, but of anti-claimant bias, in which case the decision
should be reversed. Id. at 395.

In the face of non-trivial evidence of procedural bias, the
standard of review should be raised; the more difficult question
is how much. In Kosiba, we discerned non-trivial evidence of

23
procedural bias but, as it was neither egregious nor coupled with
evidence of structural bias, we heightened our scrutiny only a
moderate amount. 384 F.3d at 68. In Pinto, on the other hand,
we found that the evidence of procedural bias was coupled with
evidence of structural bias, and so we heightened our review
substantially. 214 F.3d at 394.

III. Applying the Sliding Scale to This Case

A. Structural Factors

Addressing the structural factors, the District Court
seemed to confuse the structural analyses in Pinto and Stratton.
Pinto held that a non-trivial structural conflict gives rise to
heightened scrutiny—that is, it pushes the standard of review
above the low end of the sliding scale. 214 F.3d at 393.
Stratton added that when the structural conflict is trivial, the low
end of the scale is appropriate. 363 F.3d at 254–55. What made
t h e c o n f l ic t triv ia l in S tr a tto n w a s t h a t t h e
employer/administrator, while conflicted, was a step removed
from the claim evaluation process. Id. Here, on the other hand,
the administrator is an outside insurer that makes claims
decisions itself. This is the very sort of conflict that Pinto
declared to be substantial and worthy of raising the standard of
review. 214 F.3d at 393. In addition, Post is a former
employee, so it is doubtful that her dissatisfaction with the
claims-handling process will filter back to Overlook and
translate into pressure on Hartford to deal more precisely with

24
claims.

The District Court correctly noted that the other factors
mentioned in Pinto—sophistication of the parties, accessibility
of information, and the financial status of the
administrator—seem not to counsel in favor of heightened
scrutiny. Following Pinto, however, the structural factors that
do present a conflict of interest are sufficient to require at least
moderately heightened review. Id. We now proceed to whether
procedural factors counsel us to increase even more our degree
of review.

B. Procedural Factors

On the issue of procedural irregularities, the District
Court wrote that “procedural anomalies appear to form a pattern
of Hartford being overly aggressive in its attempts to reduce or
eliminate Post’s [disability] benefits and then attempting to
rectify the situation when it realized its error.” The Court named
four aspects of the process that appeared irregular, yet it
ultimately concluded that they were too minor to heighten
further its scrutiny. We address each in turn and two additional
matters brought up by Post.

First, Hartford attempted to use Post’s Social Security
benefits to offset her disability benefits, despite the Plan not
allowing such an offset. After Post’s attorney protested,
Hartford relented. This, of course, may have been a good-faith

25
mistake on Hartford’s part, but it is a plan administrator’s
responsibility to know the contents of the plan. Our dissenting
colleague believes that the Plan itself was confusing enough that
Hartford’s mistake was understandable. But Hartford is a large,
sophisticated insurance company, and the Plan is its own design.
Thus, we are less willing to draw such benign inferences
(particularly at the summary judgment stage, where we draw all
reasonable inferences in Post’s favor) from Hartford’s supposed
confusion about the contents of its own contract.

Second, Hartford terminated Post’s benefits in part
because she allegedly refused to undergo a functional capacity
evaluation. The record suggests, however, that Post had not
refused an evaluation and that Hartford was quick to conclude
that she had despite never making a written request. During the
appeals process, however, Hartford relented and agreed to
reconsider Post’s appeal if she would agree to undergo an
evaluation. Of concern is that Hartford did not allow Post to see
Dr. Lynch’s report before making its final decision to terminate.
Thus she had no opportunity to allow her treating physicians to
comment on it.

Third, Hartford’s decision to terminate benefits relied
heavily on Dr. Malievskaia’s report, which was not based on a
physical examination. While the District Court correctly noted
that ERISA does not require that plan administrators give the
opinions of treating physicians special weight, Black & Decker
Disability Plan v. Nord, 538 U.S. 822, 823–24 (2003), courts

26
must still consider the circumstances that surround an
administrator ordering a paper review. On one hand, nothing in
the record specifically suggests that Hartford ordered this review
in bad faith, as, we assume, periodic reviews are typical in the
industry. On the other hand, we note that at the time of the
review the overwhelming weight of evidence in Post’s record
argued in her favor.7

Fourth, Hartford surveilled Post. As the District Court
noted, while surveillance is an aggressive tactic, nothing
prohibits its use. Post argues that the bothersome point is that
Hartford continued to investigate her claim despite its
surveillance revealing that she did not leave her home. We
agree. The fact that Post did not leave her home while she was
under surveillance is perfectly consistent with, and corroborative
of, her claim for disability. Yet Hartford was undeterred in

7
Our dissenting colleague views the record differently on
this point as well. At the time of the paper review, all of Post’s
treating physicians’ reports save one argued in her favor. It is
true that Dr. Fiore in 1994 (before she filed for, and was
granted, disability benefits the first time) labeled her “not
disabled” after a single examination, but every other
doctor—and we include Dr. Harris in this group, see supra note
1—indicated a high level of disability through Hartford’s 2002
denial of benefits. Given the regular reports indicating disability
from her treating physicians, we believe that the record was far
in Post’s favor at the time of Hartford’s paper review.

27
continuing to pursue evidence that Post was not disabled.
Indeed, the very fact that its employees characterized the results
of the surveillance as “unsuccessful” suggests that its motive
was to find evidence to deny Post’s claim.

In addition to these incidents, Post cites Hartford’s
request for her tax returns as evidence of bad faith. As the
District Court pointed out, the Plan did allow Hartford to reduce
Post’s benefits by the amount of any income she was receiving
from working; thus Hartford’s request for proof that she was
receiving none was not beyond the pale. Nonetheless,
Hartford’s pursuit of Post’s tax returns in the face of ambiguous
Plan language is accurately characterized as an aggressive
tactic.8

8
In this context we note that on February 29, 2000, Hartford
demanded that Post submit her 1999 tax return within 30 days.
As any taxpayer knows, that return was not due to the IRS until
April 15, 2000. Perhaps this was an oversight on Hartford’s
part, but it reinforces the impression that Hartford was on the
offense in its demands for information.
We further note that we cannot agree with our dissenting
colleague that the Plan clearly allowed demanding tax returns on
penalty of forfeiture. In the Plan, Hartford specifically reserved
itself “the right to require, as part of Proof of Loss: (1) your
[Post’s] signed statement identifying all Other Income Benefits,
and (2) [s]atisfactory proof to the Hartford that you and your
Dependents have duly applied for all Other Income Benefits
which are available.” Tax returns do not easily fit into either

28
 Post also cites Hartford’s denial of benefits despite a
favorable Social Security decision as evidence of bad faith. Our
Court has not passed on the relevance of Social Security
decisions in determining the appropriate standard of review, but
other courts of appeals and some district courts have held that a
disagreement with the Social Security Administration is a
relevant—though not dispositive—factor. See Glenn v. MetLife,
Inc., 461 F.3d 660, 669 (6th Cir. 2006) (“[A]n ERISA plan
administrator’s failure to address the Social Security
Administration’s finding that the claimant was ‘totally disabled’
is yet another factor that can render the denial of further long-
term disability benefits arbitrary and capricious.”); Lopes v.
Metro. Life Ins. Co., 332 F.3d 1, 6 n.9 (1st Cir. 2003); Whatley
v. CNA Ins. Co., 189 F.3d 1310, 1314 n.8 (11th Cir. 1999) (per
curiam); Edgerton v. CNA Ins. Co., 215 F. Supp. 2d 541, 549
(E.D. Pa. 2002); Dorsey v. Provident Life & Accident Ins. Co.,
167 F. Supp. 2d 846, 856 n.11 (E.D. Pa. 2001). We agree that
a disagreement is relevant though not dispositive, particularly
(as here) when the administrator rejects the very diagnoses on

category. As this was Hartford’s contract, it had every
opportunity expressly to provide for the right to demand tax
returns if it wished to do so. But it did not require this
expressly. Thus, we believe that threatening forfeiture for
refusing to provide information to which the Plan did not give
it a right was, at the least, aggressive.

29
which the Social Security benefits determination is based.9

In sum, we agree with the District Court that, on this
record, each irregularity here may appear minor. But given their
number and regularity, the standard of review should be further
heightened. As in Kosiba, we recognize that Hartford may offer
plausible explanations for those irregularities, but in setting the
standard of review the issue is merely whether the process raises
questions. See 384 F.3d at 68. In this case, the sheer number of
irregularities coupled with Hartford’s aggressive posture raise
concerns, and so the standard of review must be heightened.
This procedural posture suggests that we move toward the high
end of the sliding scale, much as we did in Pinto. 214 F.3d at
394.

9
Hartford argues that its conclusion is not necessarily
inconsistent with the Social Security Administration’s
determination, as Post’s intractable cervical pain, chronic pain
syndrome, and fibromyalgia might have healed between 1998
(when the Social Security Administration awarded her benefits)
and 2002 (when Hartford denied them). Perhaps, but neither Dr.
Malievskaia nor Dr. Lynch directly addressed the Social
Security decision, nor did either of them posit that Post had
these disorders but recovered from them. Rather, both seemed
to conclude that Post was never totally disabled. J.A. 296 (Dr.
Lynch’s conclusions) & 343–44 (Dr. Malievskaia’s
conclusions). As their conclusions appear to be in tension with
those of the Social Security Administration, we believe the
disagreement is relevant.

30
 C. Conclusion

Both structural and procedural factors favor a more
searching standard of review than was used here. In light of
what we believe the standard of review should be, the District
Court erred by applying only slightly heightened review.
Moving toward the high end of the sliding scale, the District
Court must searchingly review both the merits and the process
to determine if Hartford’s decision was not the product of
reasoned, disinterested discretion. No doubt the evidence on the
merits appears close. But a factfinder reviewing the merits
could yet determine that the weight of the medical evidence
supports Post and that it, coupled with the evidence of bias,
yields the conclusion that Hartford did not properly exercise its
discretion.

IV. Other Issues

A. Closure of the Record

Generally, only evidence in the administrative record is
admissible for the purpose of determining whether the plan
administrator’s decision was arbitrary and capricious. Kosiba,
384 F.3d at 67 n.5; Mitchell v. Eastman Kodak Co., 113 F.3d
433, 440 (3d Cir. 1997); Abnathya v. Hoffman-La Roche, Inc.,
2 F.3d 40, 48 n.8 (3d Cir. 1993).

In the wake of Pinto, however, we have modified that

31
holding to allow the consideration of extrinsic evidence when
deciding how much to heighten our review. Kosiba, 384 F.3d
at 67 n.5. That evidence must show “potential biases and
conflicts.” Id. In particular, we have noted that considering
evidence of a plan’s funding mechanism would be appropriate.
Id. Here, however, Post’s supplemental exhibits are all medical
reports. The first five are reports from doctors that Post
consulted between 1993 (just after the accident) and 1996. See
Appellant’s Br. 6–9. The last two are summaries of Post’s
condition prepared by her current doctors at the request of
counsel in May 2005 (nearly two years after Hartford issued its
final denial of benefits). Id. at 18–19, 28. Post has provided no
explanation why the reports produced between 1993 and 1996
were not sent to Hartford for its consideration. Similarly, if she
wanted Hartford to consider her treating physicians’ responses
to Dr. Lynch’s report or their summaries of her medical
condition, she should have submitted them (and thus made them
part of the administrative record) soon after she received
Hartford’s denial of benefits, but she did not. Because all of
these documents are medical reports, they are not relevant to the
issue of bias; rather, they are only relevant to whether Hartford
reached the right decision. Under Mitchell, they cannot be
considered for that purpose because they were not submitted to
Hartford and made part of the record. 113 F.3d at 440. Thus,
the District Court acted properly in not considering them.

32
 B. The Section 1132(a)(2) Claim

The doctrine of res judicata “protect[s] litigants from the
burden of relitigating an identical issue with the same party or
his privy and . . . promot[es] judicial economy by preventing
needless litigation.” Parklane Hoisery Co. v. Shore, 439 U.S.
322, 327 (1979). To apply, the following three prongs must be
met: “(1) a final judgment on the merits in a prior suit involving
(2) the same parties or their privies and (3) a subsequent suit
based on the same cause of action.” Lubrizol Corp. v. Exxon
Corp., 929 F.2d 960, 963 (3d Cir. 2001). Here, the parties agree
that prongs two and three are met; their dispute is over whether
the Court rendered a final judgment on the merits in their
previous suit.

In that suit, the District Court dismissed a cause of action
alleging violation of 29 U.S.C. § 1132(a)(2) for failure to state
a claim. See Post v. Hartford Life & Accident Ins. Co., No.
CIV.A. 02-1917, 2002 WL 31741470, at *2 (E.D. Pa. Dec. 6,
2002). Dismissal for failure to state a claim is a final judgment
on the merits for res judicata purposes. Federated Dep’t Stores
v. Moitie, 452 U.S. 394, 399 n.3 (1981). Moreover, res judicata
bars not only claims that were brought in the previous action,
but also claims that could have been brought. CoreStates Bank,
N.A. v. Huls America, Inc., 176 F.3d 187, 194 (3d Cir. 1999).
Thus, for Post to maintain a § 1132(a)(2) claim, she would have
to explain to the Court why it could not have been brought in
2002. She has made no attempt to do so.

33
 As Hartford notes, Post’s claim has the additional
problem that it, too, fails properly to allege a violation of
§ 1132(a)(2). Post seeks to recover individually for Hartford’s
alleged breach of fiduciary duty. Under § 1132(a)(2) this is
impossible, for that section allows beneficiaries to recover assets
on behalf of the plan only. Mass. Mut. Life Ins. Co. v. Russell,
473 U.S. 134, 140 (1985). In other words, § 1132(a)(2) does not
authorize suits for the recovery of individual benefits. Hozier v.
Midwest Fasteners, Inc., 908 F.2d 1155, 1162 n.7 (3d Cir. 1990)
(“Because plaintiffs here seek to recover benefits allegedly
owed to them in their individual capacities, their action is
plainly not authorized by either § 409 or § 502(a)(2).”).10

V. Conclusion

We conclude that the District Court should have applied
a more searching review to this case because of the non-trivial
evidence of structural and procedural bias. Because that was not
the standard applied here, we vacate the District Court’s grant
of summary judgment in Hartford’s favor on the § 1132(a)(1)(B)
claim and remand for further proceedings.

10
While we have held that individuals can recover in their
own capacity for breaches of fiduciary duties under
§ 1132(a)(3), see Bixler v. Cent. Pa. Teamsters Health &
Welfare Fund, 12 F.3d 1292, 1298 (3d Cir. 1993), Post brought
her claims only under § 1132(a)(1)(B) and (a)(2).

34
 We affirm, however, its grant of summary judgment on
the § 1132(a)(2) claim because principles of res judicata bar that
claim.

35
POST v. HARTFORD INSURANCE COMPANY

No. 05-4927

STAPLETON, Circuit Judge, dissenting:

I agree with the Court that Post’s claim under ERISA §
502(a)(2) is barred by principles of res judicata and that in
determining whether an administrator’s denial of benefits is
arbitrary or capricious—as contrasted with deciding the
appropriate standard of review—a district court is limited to
consideration of the evidence that was before the administrator.
I therefore join Section IV of the Court’s opinion. I disagree,
however, with the Court’s analysis of Post’s claim under ERISA
§ 502(a)(1)(B), and with the Court’s decision to reverse and
remand the summary judgment on that claim. I would affirm the
judgment of the District Court.

I. Merits Evidence

36
 The benefits decision we are asked to review was
communicated to Post in a letter dated October 2, 2003. That
letter explains at length the administrator’s reasons for declining
to continue disability benefits. It describes and principally relies
upon an investigation conducted by Dr. Christopher G. Lynch,
M.D. Dr. Lynch was engaged by Hartford in order to secure
independent evaluation of Post’s claim to “total disability”
benefits. 11 In the course of his investigation, Dr. Lynch
physically examined Post and reviewed all of the medical
records accumulated over the preceding ten years.

The administrator’s letter accurately reflects Dr. Lynch’s
report and, like that report, is reasoned, thorough and makes a
persuasive case for the conclusion that Post, while suffering
from chronic pain syndrome, is not totally disabled. It

11
Under the Plan, to be considered “totally disabled” after
December 6, 1997, Post would have to be “prevented by
Disability from doing any occupation or work for which [she is]
or could become qualified by: (1) training; (2) education; or (3)
experience.” JA 77. When Post was originally granted benefits,
the applicable definition of “totally disabled” was that she was
“prevented by Disability from doing all the material and
substantial duties of [her] own occupation.” Under the terms of
the Plan, the definition changed once Post had been disabled for
24 months plus 180 days. JA 76-77, 83.

37
concludes with the following quotations from Dr. Lynch’s
report:

Dr. Lynch found that “multiple physical exams
have shown nothing more than tender muscles at
times and occasional trigger points.” According
to Dr. Lynch: “An equal number of examinations
have found no tender muscles or trigger points.
Thus, there can be no consistent physical
disability over this period of time.”

With respect to the need to assign physical
restrictions and limitations, Dr. Lynch provided
these remarks: “Given the multiple normal
examinations, including my own of today,12 I feel

12
Dr. Lynch’s report described his observations during his
examination of Post as follows:

On examination today, she is alert, cooperative
and in no distress. Affect is a bit flat. She
appeared to be in no distress although she stated
she had total body pain.

38
 she could perform sedentary to light work as
usually defined – light work, lifting up to 20
pounds maximum with frequent lifting or carrying
of objects weighing up to 10 pounds. She should
have the ability to change posture at fairly

Examination of the upper extremities reveals no
deformities. There is no focal motor, reflex or
sensory loss. She has normal pain free range of
motion in all upper extremity joints including the
shoulders. There was no tenderness over the
forearm or upper arm musculature.

Examination of the head, neck and back reveals
no deformities. Range of motion in the cervical
spine was 15-20 degrees of left and right lateral
rotation with normal flexion and extension.
Range of motion in the low back was 60+ degrees
of flexion with 5-10 degrees of extension.
Palpation over the cervical and thoracic regions
reveals no definite tenderness and no trigger
points were palpated. Palpation over the
lumbosacral spine reveals no tenderness. She was
somewhat tender over the greater trochanters
bilaterally. Motor, reflex and sensory exams were
normal in the lower extremities. She has normal
pain free range of motion in all lower extremity
joints. Gait is normal.

JA 292-93.

39
 frequent intervals.”

Citing the restrictions and limitations identified by
Dr. Lynch, Ms. Post would not be prevented by
disability from doing any occupation or work for
which she is qualified by training, education or
experience.

JA 289-90 (footnote added).

While Post stresses that several treating physicians had
expressed the opinion that she was unable to work and that the
Social Security Administration found her disabled in 1998, she
does not point to any segment of her medical records that
contradicts Dr. Lynch’s characterizations of those records in
these quotations. Nor can Post dispute the fact that Dr. Lynch
is the only physician having no continuing relationship with
Hartford or Post who physically examined her and studied all of
her medical records.

40
 II. Standard of Review Evidence

A. Structural Factors

Under the teachings of Pinto, it is clear that Hartford has
a material conflict of interest. It serves as both payor and
decision maker and there are no other factors that ameliorate the
incentive thus created to deny benefits. This calls for a
“heightening” of the “arbitrary or capricious” standard of review
which is applicable in all cases where an ERISA plan vests
discretion in the administrator.

[A] heightened standard of review would appear
to be appropriate when a plan funder like an
insurance company “incurs a direct expense,” the
consequences to it are direct and contemporary,
and, while it has incentives to maintain good
business relationships, it lacks the incentive to
“avoid the loss of morale and higher wage
demands that result [for an employer] from a
denial of benefits.”

41
 ***

For all the foregoing reasons, we believe
that a higher standard of review is required when
reviewing benefits denials of insurance companies
paying ERISA benefits out of their own funds.

Pinto, 214 F.3d at 389, 390; see also Kosiba v. Merck & Co.,
384 F.3d 58, 65-66 (3d Cir. 2004).

B. Procedural Factors

It is equally clear from Pinto that the “heightened”
review arising from this structural conflict of interest would be
“ratcheted upward” if there were anomalies in the procedure by
which the administrator’s decision was reached that give the
Court reason to doubt its fiduciary neutrality. Pinto, 214 F.3d
at 394; Kosiba, 384 F.3d at 66. I believe a fair reading of the
record in this case fails to suggest anything other than neutrality,
however. To the contrary, the record affirmatively suggests that
Hartford’s search for the answer to the “total disability” issue

42
was conducted in a fair, impartial and cooperative manner.
Each of the anomalies that trouble the Court appear troubling
only if one engages in speculation having no record support.

It is true, as the Court notes, that Hartford requested a
copy of Post’s social security award so that it could offset her
social security benefits against her disability benefits. This
mistake was understandable, however, and promptly corrected
when the error was called to Hartford’s attention. The ERISA
plan of Post’s former employer, which Hartford administers,
appears to be a standard form, but with an attached state-specific
section titled “Statutory Provisions,” which, the Plan states, “are
included to bring your booklet-certificate into conformity with
. . . state law.” JA 78. If one reads Post’s benefits Plan without
paying careful attention to the statutory provisions, the Plan
would appear to allow Hartford to use Post’s Social Security
benefits to offset her disability benefits. In the portion of the
Plan titled “Calculation of Monthly Benefit,” part of step 2 of
the calculation is to “subtract all Other Income Benefits,
including those for which you could collect but did not apply.”
JA 99. In the definitions section of the Plan, “Other Income
Benefits” is defined by a list, of which item (4) of the first
paragraph is “[t]he amount of disability or retirement benefits
under the United States Social Security Act to which you may be
entitled because of disability retirement.” JA 86. The “statutory
provisions” of the Plan – reflecting New Jersey law – state,
however, that “[i]tems (3) and (4) of the first paragraph of the
definition of Other Income Benefits are deleted.” JA 78. After
Hartford requested the award letter, Post’s counsel responded

43
with a letter calling Hartford’s attention to the error:

As promised, here is the Notice of Award,
and the language in the policy deleting Social
Security Benefits from the definition of “Other
Income Benefits,” as well as the deleted language
itself. As you can see, pursuant to New Jersey
law, the situs of this contract, Hartford has no
right to take a credit or deduction for or from its
obligation due to Social Security’s payments.

JA 216. An internal communication at Hartford reflects that
Hartford then researched the issue, agreed with Post’s counsel’s
assessment, and determined to “change case management”
accordingly “so that [it could] correctly administer claims under
this Policy.” JA 231.

It is also true, as the Court notes, that Hartford at one
point stated that benefits were being terminated in part because
Post had declined to undergo a functional capacity evaluation
(“FCE”). While Post had not at that point declined to take an
FCE, Hartford’s error clearly cannot be attributed to a lack of
neutrality on its part. On June 18, 2001, Hartford was advised
in writing by Empire Medical Management (“EMM”), an
independent medical firm that had attempted to arrange an FCE

44
through Post’s counsel, that she had refused such an
examination. In short, Hartford was not a party to the
miscommunication that led to this misunderstanding and
ultimately revised its position. Moreover, when one of Post’s
physicians later expressed concern about whether an FCE would
aggravate her symptoms, Hartford accommodated those
concerns by agreeing to settle for the less strenuous independent
medical evaluation (“IME”) that was conducted by Dr. Lynch.

The Court cites as its second anomaly Hartford’s failure
to afford Post an opportunity to comment on Dr. Lynch’s report
before sending its October 3, 2003, letter. While the Court
correctly notes that no explanation for this appears in the record,
that is not surprising in light of the fact that Post did not
maintain before the District Court or before us that this was a
matter of concern for her. Post was given a full opportunity to
develop a record before the administrator, and neither the
section of the Plan addressing her appeal rights nor
ERISA § 503(2) (addressing internal appeal rights) provides a
right to comment on the report of an independent medical
consultant under the circumstances of this case.

Third, the majority finds evidence of bad faith in the fact
that Hartford’s initial decision to terminate Post’s benefits
“relied heavily on Dr. Malievskaia’s report,” because (1) Dr.
Malievskaia’s report was not based on a physical examination,
and (2) “the overwhelming weight of evidence in Post’s record

45
argued in her favor.” Dr. Malievskaia was an Associate Medical
Director of Medical Advisory Group (“MAG”), a medical
consulting firm that Hartford engaged in the summer of 2001
following EMM’s June 18, 2001, letter advising of Post’s
refusal to submit to an FCE, to “review [Post’s] medical records
and speak to [Post’s] primary care physician in order to identify
[her] functional capabilities and address the claimant’s ability to
perform [a] sedentary to light occupation.” JA 339. Dr.
Malievskaia did interview two treating physicians and submitted
her report on September 20, 2001. That report was not relied
upon in the October 3, 2003, decision letter that we are
reviewing. It was, however, relied upon in Hartford’s original
decision letter of January 4, 2002, the same letter that relied in
part on what Hartford then understood to be Post’s refusal to be
examined. This context, in my view, precludes drawing an
inference against Hartford from its reliance on Dr.
Malievskaia’s report. Given that Hartford believed that Post had
refused to be examined, and that that fact alone was a sufficient
reason to terminate her benefits, it makes little sense to penalize
Hartford for taking additional steps to ascertain Post’s medical
condition. Moreover, as that report and Hartford’s January 4th
letter evidence, the overwhelming weight of evidence in Post’s
record did not argue in her favor.13

13
While the evidence in Post’s record indicated that she
suffered from chronic pain, to be eligible for benefits at that
point, Post had to be “prevented by Disability from doing any
occupation or work for which [she is] or could become qualified
by: (1) training; (2) education; or (3) experience.” JA 77
(emphasis added). In 1994, ten months after her initial injury,

46
Dr. Michael Fiore noted that Post had no lacerations, bruises,
swelling or broken bones, diagnosed her with a “cervical
sprain/strain,” and concluded that she was “not disabled” and
“may participate in full activity as tolerated.” JA 196-98. In
1996, Dr. Joel Harris examined Post and concluded that
although she had severe pain in her head and neck area, she was
capable of doing sedentary work. JA 265. The Court notes that
sedentary work was the “least intensive option available,” but
nothing prevented Dr. Harris from indicating, as Dr. Britton did
on the same form, JA256, that Post was incapable of doing
sedentary work. New Jersey’s medical examiner found that Post
“could perform medium exertional work with limited reaching.”
JA 46.
Although several of Post’s doctors tested her for “trigger
points” and diagnosed her with fibromyalgia, their ultimate
diagnoses were based on self-reported symptoms, and none of
the doctors ever found the requisite eleven of eighteen trigger
points needed to support such a diagnosis. There are several
references in Post’s medical records to “trigger points,” all of
which indicate that she had fewer than eleven. JA 262 (Dr.
Mulford in March 1995, finding “some trigger points in the
sternocleidomastoid and scalenes”); JA 259 (Dr. Mulford in
November 1995, finding “several trigger points in the upper
cervical spine at the occiput and over the cervical facets”); JA
258 (Dr. Mulford in 1996, finding “no palpable muscle spasm
or trigger points at this time”); JA 318-19 (Dr. Kaufman in May
2000, finding “trigger points on the right side . . . [and] Another
trigger point in the infraspinatous region on the left side,” but
none in several other places); JA 317 (Dr. Kaufman in October

47
 Fourth, the Court holds that a Hartford employee’s use of
the term “unsuccessful” in an internal e-mail to describe

2000 finding two trigger points); JA 293-95.0 The “trigger
point” test is recognized in the case law and the medical
literature as a prerequisite to a diagnosis of fibromyalgia. See
Sarchet v. Carter, 78 F.3d 305, 306-07 (7th Cir. 1996)
(discussing the trigger point test); Chronister v. Baptist Health,
442 F.3d 648, 656 (8th Cir. 2006) (same, citing Sarchet); Stup
v. UNUM Life Ins. Co. of Am., 390 F.3d 301, 303 (4th Cir. 2004)
(same); Hawkins v. First Union Corporation Long-Term
Disability, 326 F.3d 914, 919 (7th Cir. 2003) (same); Stedman’s
Concise Medical Dictionary for the Health Profession 361 (4th
ed. 2001) (defining fibromyalgia as “a condition of chronic
diffuse widespread aching and stiffness affecting muscles and
soft tissues; diagnosis requires 11 of 18 specific tender
points . . . .”). Admittedly, Post’s file contained the opinions of
several treating physicians to the effect that she was completely
disabled, but it is not a fair assessment of the record to say that
the evidence in her favor was sufficiently overwhelming as to
raise a legitimate inference of bad faith when Hartford’s
administrator disagreed with those conclusions. This is not,
therefore, a situation like Kosiba, where the claimant’s
“physician’s reports uniformly supported her contentions” of
disability, and there was no comparable evidence supporting the
insurer’s contrary view at the time it ordered an examination.”
384 F.3d at 67.

48
Hartford’s surveillance of Post counsels heightened review. The
only evidence in the record on this point is one line of an
internal e-mail stating “Surveillance was unsuccessful as the
claimant was not observed leaving her home.” JA227. In the
Court’s view, the use of the word “unsuccessful” suggests that
Hartford’s “motive was to find evidence to deny Post’s claim.”
I do not agree.

As the Court recognizes, surveillance by an insurance
company is not per se suspicious. See, e.g., Delta Family-Care
Disability & Survivorship Plan v. Marshall, 258 F.3d 834, 841
(8th Cir. 2001) (“[T]here is nothing procedurally improper about
the use of surveillance.”); Tsoulas v. Liberty Life Assurance Co.
of Boston, 454 F.3d 69, 76-77 (1st Cir. 2006) (district court
properly held that surveillance was for the purpose of objective
documentation of disability rather than to deny benefits).
Hartford’s employee’s description of the surveillance as
“unsuccessful” may support an inference of bias only if one
supposes that Post’s leaving her home could only produce
evidence that would undermine her claim. If Post left her home
to jog or play sports, that would certainly undermine her claim
to disability benefits. On the other hand, if she used a
wheelchair to move from her door to a waiting wheelchair
transport vehicle, or hobbled gingerly on crutches, that would
support her claim to disability benefits. The only reasonable
inference—if any inference may be drawn with confidence—is
that the use of the word “unsuccessful” meant that Hartford’s
surveilleur was unable to observe Post at all due to the fact that
she did not leave her home, and thus could neither confirm nor

49
deny her disability.

Unlike the Court, I am unwilling to characterize
Hartford’s request for tax returns as an “aggressive tactic.” The
Plan entitles Hartford to reduce Post’s benefits by the amount of
income she received from working. Contrary to the majority’s
suggestion, there is nothing “ambiguous” about the Plan in that
respect. In Hartford’s May 12 and June 19, 2000, letters to Post
and her attorneys requesting tax returns, Hartford quoted the
language of the policy pertaining to the calculation of Post’s
benefits, specifically emphasizing the text that directed Hartford
to subtract “all other income from any employer or for any
work.” JA 214, 219. At the time Hartford requested Post’s
returns, Post was collecting “total disability” benefits under the
theory that she was prevented from doing any work by a
disabling condition. In that light, it hardly seems unreasonable
or suggestive of bad faith for Hartford to request tax returns, as
Post’s report to the government of her employment status during
her period of alleged total disability would be probative
evidence of whether Post was in fact “prevented by Disability
from doing any occupation or work for which [she is] or could
become qualified.”

Finally, the Court suggests that a disagreement between
Hartford’s October 3, 2003, decision and the August 11, 1998,
decision of the Social Security Administration “is relevant
though not dispositive” of whether the former was arbitrary and

50
capricious. Op. at 29. Suffice it to say, the administrative law
judge in 1998 did not have the benefit of the record before
Hartford in 2003, and no review of Post’s continued eligibility
for social security benefits has been undertaken since 1998. See
Pari-Fasano v. ITT Hartford Life & Acc. Ins. Co., 230 F.3d 415,
420 (1st Cir. 2000). In Pinto and other cases in which courts
have applied heightened scrutiny to an administrator’s denial of
benefits in the face of a social security award, they have done so
not because of the mere fact of conflict with the SSA’s
determination, but because there is something suspicious about
the manner in which the SSA decision is disregarded or
disagreed with. In Pinto, for example, we were concerned with
the fact that the administrator showed inexplicably greater
deference to the SSA’s determination that the claimant was not
disabled than to the SSA’s subsequent reversal of its initial
determination. Pinto, 214 F.3d 393-94. Similarly, in Harden v.
Am. Express Fin. Corp., 384 F.3d 498, 500 (8th Cir. 2004), the
court applied greater scrutiny where the insurance company led
the claimant to believe that it was considering his SSA records
when it in fact was not. In other instances, where a plan
requires the beneficiary to apply for Social Security benefits and
takes an offset if the Social Security claim succeeds—which
Hartford does not do here because of New Jersey state
law—courts have applied heightened scrutiny to ensure that the
administrator does not make self-servingly selective use of the
SSA’s determinations by giving weight only to those
determinations that go against the claimant. See Calvert v.
Firstar Fin., Inc., 409 F.3d 286, 294-95 (6th Cir. 2005) (finding
that where the plan at issue had such a requirement, an
administrator’s disagreement with the SSA’s determination
“counsel[ed] a certain scepticism” that the court should consider

51
as a factor in determining whether the administrator’s decision
was arbitrary and capricious); Wilkerson v. Reliance Std. Life
Ins. Co., No. 99-4799, 2001 WL 484126 at *1 (E.D. Pa. Mar. 6,
2001) (“[D]efendant is in the seemingly anomalous position of
requiring plaintiff to refund some of the disability benefits
received from the defendant because offset by Social Security
disability benefits, and then failing to give any consideration to
the continuation of Social Security benefits as evidence of
continued total disability.”)

I disagree with the Court’s suggestion that any of these
“anomalies,” either alone or in combination, should alter our
standard of review in this case.

C. Resulting Standard of Review

I thus view this as a case in which the decision maker had
a material, inherent conflict of interest, but in which there is no
significant evidence regarding its processing of the claim to
benefits which suggests anything other than an impartial
exercise of fiduciary discretion. It is clear from Pinto that such
a situation calls for a “heightened” application of the arbitrary
and capricious standard of review.

52
 In Pinto, we adopted a “sliding scale” approach that
“allows each case to be examined on its facts.” It teaches that
district courts “should consider the nature and degree of
apparent conflicts with a view to shaping their arbitrary and
capricious review of benefit determinations of discretionary
decisionmakers.” Pinto, 214 F.3d at 393. As Pinto expressly
acknowledged, however, “the routine legal meaning of an
arbitrary and capricious decision is . . . a decision ‘without
reason, unsupported by substantial evidence or erroneous as a
matter of law,’” and “[o]nce the conflict becomes a ‘factor’ . .
. it is not clear how the process required by the typical arbitrary
and capricious review changes.” Id. at 392. The standard of
review we ultimately adopted in Pinto was of necessity an
imprecise one: the review is to be “more penetrating the greater
the suspicion of partiality, less penetrating the smaller the
suspicion is.” Id. at 392-93 (quoting from Wildbur v. ARCO
Chem. Co., 974 F.2d 631 (5th Cir. 1992)). District courts, we
instructed, must “approximately calibrat[e] the intensity of
[their] review to the intensity of the conflict.” Id. at 393.

It must be kept in mind, however, that the arbitrary and
capricious standard, even when heightened, remains a
deferential one. See Stratton v. E.I. DuPont de Nemours & Co.,
363 F.3d 250, 256 (3d Cir. 2004); Gritzer v. CBS, Inc., 275 F.3d
291, 295 & n.3 (3d Cir. 2002). The sliding scale, throughout its
entire range, measures the deference to be afforded the decision
of an administrator upon whom the plan has conferred discretion
regarding benefits. Even where the conflict and/or procedural
irregularities are most serious, this means only that the Court

53
will “require that the record contain substantial evidence
bordering on a preponderance to uphold [the administrator’s]
decision.” Woo v. Deluxe Corp., 144 F.3d 1157, 1162 (8th Cir.
1998). Stated conversely, if the evidence in the administrative
record renders it more likely than not that the administrator’s
decision is correct, it necessarily follows that the decision must
stand wherever on the arbitrary and capricious sliding scale the
case may fall. In short, if the decision withstands de novo
review, it matters not how little deference is accorded. See
Williams v. BellSouth Telecommunications, Inc., 373 F.3d 1132,
1139 (11th Cir. 2004) (“Because no grounds exist to disturb
Kemper’s determination under the de novo review standard, we
need not review it under the more deferential (‘mere’ or
‘heightened’ arbitrary and capricious) standard.”).

As the Court recognizes, while Hartford’s structural
conflict calls for “heightened” review, in the absence of
evidence of procedural bias it does not place this case at the
upper end of the scale. Under our case law, as the Court
explains, “[s]tructural conflicts of interest warrant more
searching review, but in the absence of evidence that bias
infected the particular decision at issue, we defer to an
administrator’s reasonable and carefully considered
conclusions.” Op. at 21. I agree with this reading of our
jurisprudence, and because I believe no court reviewing the
record before Hartford and affording its decision this kind of
deference, or indeed deference of any significant degree, could
appropriately overturn that decision, I would affirm the
summary judgment in its favor.

54
 III. Disposition

Post’s case presented difficult issues for an administrator
to resolve. She originally suffered a “whiplash injury,” which
Dr. Fiore described as a “cervical [neck] sprain/strain.” JA 196-
98. She had no bruises, lacerations, or broken bones, and
magnetic resonance imagery revealed no tears, nerve damage, or
slipped or herniated discs. Post nevertheless complained, over
the next decade, of total body pain sufficiently severe to prevent
her from any employment. Throughout that period, she was
treated by physicians who prescribed medications and other
therapy which were expected by them to alleviate this pain, but
to no avail. Her condition did not improve. Post’s treating
physicians did not reach a consensus with regard to the cause of
her pain. Several suggested psychiatric or psychological
therapies be undertaken, but Post declined to pursue that course.
Two physicians suggested Post suffered from fibromyalgia, but
their records did not reflect anything approaching the clinical
evidence necessary to support that diagnosis. While several
treating physicians expressed the opinion that Post was unable
to perform any work, those opinions were based solely upon the
patient’s report of her symptoms. No clinical or other personal
observations of Post were reported in support of those opinions.

Given this medical history, Hartford reasonably sought
information to confirm or negate Post’s claims to continued
benefits. It did so by requesting additional information from

55
Post and her treating physicians and by seeking the counsel of
an independent consultant, Dr. Lynch. As I have earlier noted,
his report indicates that his investigation was thorough and
impartial. Dr. Lynch addressed the conclusions of Post’s prior
treating physicians, contrasted those conclusions with the
medical records and with his own findings after a physical
examination, and ultimately concluded that although she was
disabled by some kind of pain disorder, she was not sufficiently
disabled as to meet the plan definition of total disability. Dr.
Lynch’s report is not unassailable, but it is reasoned, consistent
with the rest of Post’s medical records, persuasively establishes
that there is no objective evidence to support Post’s claim of
total disability, and clearly provides a rational basis for
concluding that she is able to perform sedentary work.

In short, the administrative record before Hartford on
October 3, 2003 provides clear and convincing support for the
conclusion that Post had not established entitlement to
continuing benefits. That conclusion of the administrator was
reasonable and carefully considered, and I believe any reviewing
court would be required by our case law to defer to it.
Accordingly, I would affirm the District Court’s summary
judgment in favor of Hartford.14

14
I would not remand for further proceedings. Our review of
the District Court’s summary judgment is plenary and, as the
Court recognizes, the merits decision must be made on the basis
of the administrative record. Given that record, the District

56
Court would have no basis on remand for doing anything other
than accepting Hartford’s decision. While it is not material to
my decision to affirm, rather than remand, I note that Post, of
course, has no right to a jury review of the administrator’s
decision. Turner v. CF&I Steel Corp., 770 F.2d 43 (3d Cir.
1985).

57