United States Court of Appeals
Fifth Circuit
F I L E D
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT March 14, 2006
______________________
Charles R. Fulbruge III
No. 05-50567 Clerk
______________________
ALTON ROBINSON,
Plaintiff - Appellant,
v.
AETNA LIFE INSURANCE COMPANY,
Defendant - Appellee.
______________________
Appeal from the United States District Court
for the Western District of Texas
_____________________
Before GARWOOD, DAVIS, and BENAVIDES, Circuit Judges.
BENAVIDES, Circuit Judge:
This is an appeal from a district court’s grant of summary
judgment in an ERISA case. Alton Robinson complained below that
Aetna Life Insurance wrongly terminated his disability benefits.
The district court granted summary judgment in favor of Aetna. On
appeal, Robinson claims the following errors: (1) Aetna failed to
provide him with a full and fair review; (2) the district court
considered evidence outside the administrative record; and (3)
Aetna’s decision to terminate his benefits is not supported by
evidence in the administrative record. Agreeing with Robinson on
each point, we vacate and remand with instructions to enter
judgment in favor of Robinson.
I. BACKGROUND
Appellant Robinson worked as a sales representative for
Glazer’s Wholesale Drug Company, Inc. (“Glazer”), a wholesale
distributor of alcoholic beverages. Robinson’s job required him to
drive 800 to 1000 miles per week. In March of 2002, Robinson
suffered a stroke, which permanently impaired the peripheral vision
in his right eye. His doctors advised that it would be dangerous
for him to drive.
Unable to continue at his position with Glazer, Robinson
applied to Appellee Aetna for long-term disability benefits. Aetna
served as the administrator and insurer for Glazer’s employee
welfare benefits plan (“the Plan”). The Plan provides long-term
disability benefits when beneficiaries are “totally disabled.” The
Plan further explains that beneficiaries are totally disabled when
they are unable to perform the “material duties” of their “own
occupation[s].” In August of 2002, Aetna concluded that Robinson
qualified as totally disabled. It determined that Robinson could
not perform the material duties of a “field sales rep” because that
job “required [him] to drive 25%+ of the time.” Consequently,
Aetna approved Robinson’s claim for benefits.
Eighteen months later, Aetna received an attending physician’s
statement from Robinson’s treating physician, Dr. Isaac Loose. A
question on the form asked what restrictions the physician had
placed on the patient. As examples, the form listed: “Activities
of Daily Living, Driving, Lifting, Pulling, Pushing, and Amounts,
2
etc.” In response, Dr. Loose wrote, “None.” He also wrote that
Robinson had “no restrictions due to ocular history.” Construing
this as an indication that Robinson’s condition had improved, Aetna
terminated Robinson’s benefits. Robinson asked Aetna to review
this decision.
Robinson’s appeal included a new letter from Dr. Loose, which
clarified or corrected the attending physician’s statement. The
letter concluded, “Driving is hazardous for this patient especially
in heavy traffic areas. Please review his disability benefits.”
Robinson also included a letter from another treating physician,
Dr. C. Armitage Harper, who similarly wrote, “It is unsafe for
[Robinson] to drive any vehicle with this visual field loss.”
Seeking to resolve the apparent discrepancy between Dr. Loose’s two
statements, Aetna referred Robinson’s file to one of its own
physicians, Dr. Oyebode A. Taiwo. Dr. Taiwo determined that
Robinson’s condition was serious and permanent and that he was
incapacitated from any occupation which required the operation of
a motor vehicle.
Considering this evidence on review, Aetna upheld the
termination but changed its reasons for the decision. It explained
to Robinson by letter that it had spoken to a vocational consultant
and determined that driving was not a material duty of a sales
representative1 in the general economy. The administrative record
1
The parties contest whether Robinson should be classified
as a “field sales representative” or a “sales representative.”
The administrative record uses both labels. Neither party
3
does not reflect that Aetna contacted a vocational consultant. In
its review letter, Aetna told Robinson that he had exhausted his
administrative remedies.
Robinson sued under the Employee Retirement Income Security
Act (“ERISA”) “to recover benefits due to him under the terms” of
the Plan. 29 U.S.C. § 1132(a)(1)(B) (2000). At the close of
discovery, Aetna moved for summary judgment. On March 29, 2005,
the district court granted Aetna’s motion, and this appeal
followed.
II. STANDARD OF REVIEW
This Court reviews summary judgments de novo in ERISA cases,
applying the same standards as a district court. See Baker v.
Metropolitan Life Ins., 364 F.3d 624, 628 (5th Cir. 2004).
III. DISCUSSION
A. PROCEDURAL CHALLENGE TO AETNA’S REVIEW
Robinson complains that Aetna failed to follow ERISA-mandated
procedures. In relevant part, ERISA provides:
In accordance with regulations of the Secretary, every
employee benefit plan shall–
(1) provide adequate notice in writing to any participant
explains the substantive difference, if any, between the two
designations. For brevity and convenience, we will refer to
Robinson as a sales representative. We do not intend this to
have any legal import. The dispute over the proper label for
Robinson’s occupation is really about (1) the definitions of “own
occupation” and “material duties” as a matter of law and (2)
whether, under those definitions, driving is a material duty
required by Robinson’s occupation as a matter of fact. Those
matters are discussed in Part III, infra.
4
or beneficiary whose claim for benefits under the plan
has been denied, setting forth the specific reasons for
such denial, written in a manner calculated to be
understood by the participant, and
(2) afford a reasonable opportunity to any participant
whose claim for benefits has been denied for a full and
fair review by the appropriate named fiduciary of the
decision denying the claim.
29 U.S.C. § 1133 (2000). Challenges to ERISA procedures are
evaluated under the substantial compliance standard. See Lacy v.
Fulbright & Jaworski, 405 F.3d 254, 257 (5th Cir. 2005); Hackett v.
Xerox Corp. Long-Term Disability Income Plan, 315 F.3d 771, 775
(7th Cir. 2003); Marks v. Newcourt Credit Group, Inc., 342 F.3d
444, 460 (6th Cir. 2003). This means that “[t]echnical
noncompliance” with ERISA procedures “will be excused” so long as
the purposes of section 1133 have been fulfilled. White v. Aetna
Life Ins. Co., 210 F.3d 412, 414 (D.C. Cir. 2000).
Robinson argues that he was denied the full and fair review
mandated by section 1133(2) in two ways. First, he points out that
Aetna did not provide review of its specific basis for rejecting
his claim. Second, he highlights Aetna’s failure to identify the
vocational expert upon whom it allegedly relied.
Aetna’s specific reason for terminating Robinson’s benefits
has never been reviewed at the administrative level. Aetna
initially notified Robinson that it terminated his benefits because
it believed he was able to drive. Upon review, Aetna changed its
reasoning. Aetna informed Robinson for the first time in its
5
review letter that it had determined his occupation did not require
driving and told Robinson that he had exhausted his administrative
remedies. Robinson never had an opportunity to contest at the
administrative level this new basis for terminating his benefits.
Aetna points out that it did review the ultimate decision that
Robinson was not totally disabled. It argues that this was
sufficient. We disagree and hold that section 1133 requires an
administrator to provide review of the specific ground for an
adverse benefits decision.
Subsection (1)’s mandate that the claimant be specifically
notified of the reasons for an administrator’s decision suggests
that it is those “specific reasons” rather than the termination of
benefits generally that must be reviewed under subsection (2). See
McCartha v. Nat’l City Corp., 419 F.3d 437, 446 (6th Cir. 2005)
(holding that an administrator failed to substantially comply with
section 1133 where the initial notice of termination failed to
state one of the grounds on which it ultimately relied).
Furthermore, this Court has previously read the two subsections of
section 1133 as complementing each other. In Schadler v. Anthem
Life Insurance, this Court explained that “the requirement that the
administrator disclose the basis for its decision is necessary so
that beneficiaries can adequately prepare for any further
administrative review . . . .” 147 F.3d 388, 394 (5th Cir. 1998)
(internal punctuation omitted). The notice requirements of ERISA
6
help ensure the “meaningful review” contemplated by subsection (2).
Id. (quoting Halpin v. W.W. Grainger, Inc., 962 F.2d 685, 689 (7th
Cir. 1992)); see Hackett, 315 F.3d at 775 (stating that effective
review requires “a clear and precise understanding of the grounds
for the administrator’s position”). Additionally, mandating review
of the specific ground for a termination is consistent with our
policy of encouraging the parties to make a serious effort to
resolve their dispute at the administrator’s level before filing
suit in district court. See Vega v. Nat’l Life Ins. Serv., Inc.,
188 F.3d 287, 300 (5th Cir. 1999) (en banc). Thus, Aetna failed to
comply with section 1133(2) when it terminated Robinson’s benefits
without reviewing the specific ground for that decision.
In his second section 1133(2) argument, Robinson faults Aetna
for not disclosing its vocational consultant. ERISA regulations
require administrators to “[p]rovide for the identification
of . . . vocational experts whose advice was obtained on behalf of
the plan in connection with a claimant’s adverse benefits
determination . . . .” 29 C.F.R. § 2560.503–1(h)(3)(iv).
Furthermore, the procedures governing disability plans “will not
. . . be deemed to provide a claimant with a reasonable opportunity
for a full and fair review of a claim and adverse benefit
determination unless [they] comply with the [regulation requiring
disclosure of vocational experts].” 29 C.F.R. § 2560.503–1(h)(4).
Aetna failed to comply with this regulation.
7
Aetna does not directly dispute Robinson’s claim that it
violated ERISA regulations by failing to disclose the identity of
its vocational consultant. Instead, it maintains that it
substantially complied with ERISA despite the “de minimus
procedural violations alleged by Robinson.” Yet, the two
procedural errors shown by Robinson, taken together, amount to more
than mere technical noncompliance or a de minimus violation.
Aetna’s shifting justification for its decision and failure to
identify its vocational expert meant that Robinson was unable to
challenge Aetna’s information or to obtain meaningful review of the
reason his benefits were terminated. Consequently, Aetna did not
substantially comply with section 1133.
B. SUBSTANTIVE CHALLENGE TO TERMINATION OF BENEFITS
Aetna terminated Robinson’s benefits upon deciding that
driving was not a material duty of Robinson’s own occupation.
Robinson argues that this finding is not supported by concrete
evidence in the administrative record. Before we assess the merits
of this argument, we must address two preliminary issues. First,
we consider what information was properly before the district
court. Second, we discuss the proper standard for evaluating
Aetna’s decision.
1. The Dictionary of Titles Is Evidence Outside the
Administrative Record and May not Be Considered
Aetna attached to its motion for summary judgment an
occupation description from the Department of Labor’s Dictionary of
8
Occupation Titles (“DOT”). The DOT entry states that twenty-eight
activities are more important than operating motor vehicles for a
sales representative in the general economy. Robinson argues that
the district court erred by considering this information, which was
not in the record when Aetna terminated his benefits. Aetna
responds that the DOT is merely regulatory authority supporting
Aetna’s reasonable construction of the Plan.
In Vega, this Court stated, “A long line of Fifth Circuit
cases stands for the proposition that, when assessing factual
questions, the district court is constrained to the evidence before
the plan administrator.” 188 F.3d at 299 (emphasis added). We
believe that the DOT entry is evidence that addresses a “factual
question.” Although it is styled as a dictionary, the DOT actually
represents extensive fact gathering and detailed data analysis.
See Dionida v. Reliance Standard Life Ins., 50 F. Supp. 2d 934, 939
n.3 (N.D. Cal. 1999). Moreover, several of our sister Circuits
have recognized that an administrator makes a finding of fact when
it determines the material duties of a certain occupation.
Kinstler v. First Reliance Life Ins., 181 F.3d 243, 252–53 (2d Cir.
1999) (labeling as a “fact issue” the material duties of a given
occupation); see Lasser v. Reliance Standard Life Ins., 344 F.3d
381, 387–88 (3d Cir. 2003); Gallagher v. Reliance Standard Life
Ins., 305 F.3d 264, 270–73 (4th Cir. 2002).2 Accordingly, the
2
Aetna mistakenly relies on Gallagher to support its
argument that the district court properly considered the DOT.
9
district court erred in considering the DOT entry because that
evidence was not in the administrative record.3
2. Aetna’s Decision Will Be Assessed Under a Modified Abuse of
Discretion Standard
Where a plan grants the administrator discretion to determine
claims for benefits, claimants may recover under ERISA only if the
administrator’s rejection of their claim was an abuse of
discretion. See Atteberry v. Memorial-Hermann Healthcare Sys., 405
F.3d 344, 347 (5th Cir. 2005). The parties agree that the Plan
vests Aetna with such discretion.
In this case, Aetna has an “inherent conflict of interest”
because it serves both as the administrator and insurer under the
Plan. See Lain v. UNUM Life Ins., 279 F.3d 337, 343 (5th Cir.
2002). A conflicted administrator merits less deference. See Vega
v. Nat’l Life Ins. Serv., Inc., 188 F.3d 287, 299 (5th Cir. 1999)
(en banc). This Court applies a “sliding scale” to determine how
much deference to give: “[t]he greater the evidence of conflict on
the part of the administrator, the less deferential our abuse of
discretion standard will be.” Id. at 297. In Lain, we confronted
a case where, as here, the insurer and administrator were the same
Aetna misses the critical distinction between this case and
Gallagher: the DOT information in Gallager was in the
administrative record.
3
There are “certain limited exceptions” to the prohibition
on considering information outside the administrative record.
Estate of Bratton v. Nat’l Union Fire Ins., 215 F.3d 516, 521
(5th Cir. 2000). Aetna does not argue that any of these
exceptions apply.
10
entity. 279 F.3d at 343. As we did in Lain, we will assume
arguendo that an administrator with such a conflict is “entitled to
all but a modicum” of the deference afforded to unconflicted
administrators. Id. Under this standard, the basis for Aetna’s
decision must be supported by “some concrete evidence in the
administrative record.” Vega, 188 F.3d at 302.
3. No Concrete Evidence Supports Aetna’s Decision
Aetna found that “driving is not considered a material duty of
a sales representative in the general economy.” Once the DOT
definition is appropriately removed from consideration, however, we
find a lack of concrete evidence to support this conclusion.
The only dispute is an evidentiary one; the parties do not
disagree over how the Plan should be interpreted. As discussed
above, the Plan provides benefits to claimants who are unable to
perform “the material duties of [their] own occupation[s].” Aetna
has interpreted the term “own occupation” to mean employment of the
same general character as the plaintiff’s job in the general
economy. Aetna has explained that the “material duties” of an
occupation are the “essential tasks” generally required of
employees in the occupation. Additionally, the Plan provides, “If
solely due to disease or injury, you are unable to earn more than
80% of your adjusted predisability earnings, you will not be deemed
to have performed the material duties of your own occupation on
that day.” Robinson does not dispute Aetna’s right to reasonably
11
interpret the terms of the Plan and does not challenge the
reasonableness of its construction.
Under the Plan as interpreted by Aetna, the record would have
to reveal some concrete evidence that driving was not an essential
task required of employees in positions comparable to Robinson’s
job in the general economy.4 The record does not contain such
concrete evidence. The letter rejecting Robinson’s appeal states
that Aetna spoke to a vocational consultant, who advised that
driving was not a material duty of a sales representative in the
general economy. Yet no vocational analysis appears in the record.
Indeed, Aetna does not rely on its alleged conversation with a
vocational consultant in arguing that its termination of benefits
was reasonable. It relies instead on DOT information outside the
administrative record.
The record does reflect that Robinson was required to drive
800 to 1000 miles per week at his job as a sales representative for
4
At oral argument, Aetna contended that Robinson would not
merit benefits even if driving is a material duty of Robinson’s
own occupation. If Robinson were able to perform any one of the
material duties of his own occupation, Aetna argued, he would not
be totally disabled under the Plan. Aetna failed to raise this
issue in its brief, and so the argument is waived. See, e.g.,
Strong v. BellSouth Telecomm. Inc., 137 F.3d 844, 853 n.9 (5th
Cir. 1998). Additionally, this was not the reason Aetna gave for
terminating Robinson’s benefits. Vega requires us to review the
actual “basis for [the administrator’s] denial” of benefits, not
its post-hoc rationalization. 188 F.3d at 299. Accordingly, we
express no opinion on the merits of Aetna’s argument that
claimants are only totally disabled under the Plan if they are
unable to perform each and every material duty of their own
occupation.
12
Glazer. According to Aetna’s own internal analysis, driving took
up “25%+” of Robinson’s work day. Contrary to Aetna’s contention,
its definition of the term “own occupation” does not render the
tasks required by Robinson’s Glazer job irrelevant. In Kinstler,
the Second Circuit explained how particular duties of the
plaintiff’s job were important for determining what duties were
material to her occupation in the general economy:
Though her precise duties do not define her regular
occupation, in this case they well illustrate the duties
of a director of nursing at a small health care facility,
and nothing in the record provides any basis for thinking
that such a position at a facility comparable to hers
requires [different duties].
181 F.3d at 253 (emphasis added); see Lasser, 344 F.3d at 388
(holding that the plaintiff’s particular duties were relevant in
defining the material duties of an orthopedic surgeon).
Robinson’s duties at Glazer serve to illustrate the duties
that a sales representative at a comparable firm might perform. As
in Kinstler, no evidence in the administrative record suggests that
Robinson’s driving duties are atypical of sales representatives.
See Mitchell v. Fortis Benefits Ins., 2005 WL 1793641, *6 (4th Cir.
July 29, 2005) (unpublished) (holding that the administrator abused
its discretion in determining that driving was not a material duty
of a chemical sales representative where the plaintiff’s position
involved driving 1500 to 2000 miles per week). In sum, Aetna’s
finding that driving is not a material duty of Robinson’s own
occupation is not supported by concrete evidence in the
13
administrative record.
IV. CONCLUSION AND DISPOSITION
Although Robinson did not move for summary judgment in the
district court, we have the authority to grant judgment in his
favor. See Black Warrior Elec. Membership Corp. v. Mississippi
Power, 413 F.2d 1221, 1226 (5th Cir. 1969); Matter of Continental
Airlines, 981 F.2d 1450, 1458 (5th Cir. 1993) (“This court has the
power to render summary judgment for a nonmoving party . . . .”)
Awarding judgment to a party that did not move for summary judgment
below is proper where (1) there is no genuine issue of material
fact and (2) the opposing party has had a full opportunity to (a)
brief the legal issues and (b) develop a record. See Monumental
Life Ins. v. Hayes-Jenkins, 403 F.3d 304, 315 n.21 (5th Cir. 2005).
First, there is no genuine issue of material fact here. We
have concluded both that Aetna failed to substantially comply with
ERISA procedures and that Aetna abused its discretion by
terminating Robinson’s benefits. Second, Aetna was required to
develop its factual record at the administrative level. See Vega,
188 F.3d at 302. Lastly, Aetna fully briefed the relevant legal
issues both before this Court and below. Accordingly, we VACATE
and REMAND to the district court with instructions to enter
judgment in favor of Robinson and determine the amount of damages.5
5
We reject Aetna’s suggestion that remand to the administrator is
required. In Vega, as here, no concrete evidence supported the
administrator’s basis for denying benefits. We declined a remand to allow the
administrator “another opportunity to make a record” because “each of the
14
parties” must “make its record before the case comes to federal court.” See
Vega, 188 F.3d at 302 n.13. For the same reason, we believe that remand is
inappropriate here.
15