Case: 11-30120 Document: 00511625808 Page: 1 Date Filed: 10/06/2011
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
October 6, 2011
No. 11-30120
Lyle W. Cayce
Clerk
DANA D. CAPLES,
Plaintiff-Appellant,
versus
U.S. FOODSERVICE, INC.; HEWITT ASSOCIATES, LLC,
Defendants-Appellees.
Appeal from the United States District Court
for the Eastern District of Louisiana
No. 2:08-CV-4878
Before SMITH, BARKSDALE, and BENAVIDES, Circuit Judges.
JERRY E. SMITH, Circuit Judge:*
Dana Caples (“Caples”) appeals a summary judgment in favor of U.S.
Foodservice, Inc. (“USF”), and Hewitt Associates, LLC (“Hewitt”; collectively,
*
Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.
R. 47.5.4.
1
Case: 11-30120 Document: 00511625808 Page: 2 Date Filed: 10/06/2011
No. 11-30120
“defendants”), alleging that defendants undermined her life insurance claim in
violation of the Employee Retirement Income Security Act of 1974 (“ERISA”).
Because the plan administrator relied on substantial evidence when it deter-
mined that Caples was not the beneficiary of her deceased ex-husband’s policy,
we affirm on the ground that Caples lacks standing to sue under ERISA.
I.
Caples married David Caples (“Mr. Caples”) in 2002. In 2004, Mr. Caples
was hired as a driver for defendant USF. As a USF employee, he was entitled
to various insurance benefits, including group life insurance. When his life
insurance coverage took effect in 2004, he had designated Caples as his primary
beneficiary and, as secondary beneficiary, his son Daniel Caples (“Daniel”), who
is not Caples’s biological child; he also elected spousal life insurance coverage for
Caples and child life insurance for Daniel. In February 2005, the couple
separated.
Later that year, Hewitt assumed responsibility for administering USF’s
benefits management system, taking over from a previous third-party manager.
USF implemented a new management system and required its employees to con-
tact Hewitt to make benefits decisions afresh. The change in systems, coinciding
with the change in system managers, meant that USF employees specifically
had to elect coverage under their employer’s various benefits offerings, including
life insurance; those who failed to contact Hewitt would receive no coverage.
Employees had the option to designate beneficiaries for life insurance but
instead could elect life insurance without designating a beneficiary, in which
case the benefit would be paid to the first of the following: “(a) surviving spouse;
(b) surviving child(ren) in equal shares; (c) surviving parents in equal shares;
(d) surviving siblings in equal shares; (e) estate.” PRUDENTIAL INS. CO. OF AM.,
U.S. FOODSERVICE, INC.: NON-UNION EMPLOYEES 42 (2007).
2
Case: 11-30120 Document: 00511625808 Page: 3 Date Filed: 10/06/2011
No. 11-30120
As of January 2006, Mr. Caples had elected various coverages for himself
and Daniel, including life insurance, under Hewitt’s new benefits management
system. He did not elect life insurance coverage for Caples and did not designate
a beneficiary for his own life insurance.
The couple’s separation ended in divorce in March 2006. The divorce did
not terminate their relationship, however: they lived together from May 2006
through January 2007, they revived their romantic relationship the following
summer, and in August Mr. Caples even proposed re-marriage. Mr. Caples died
in September 2007 of an apparent suicide.
As of his death, Mr. Caples had elected various coverages for himself and
Daniel, including life insurance; he could not elect coverage for Caples, because
she was no longer his wife. Though the couple may have renewed their relation-
ship before Mr. Caples died, he never designated a life insurance beneficiary
after failing to do so in Hewitt’s new system. Prudential Insurance Company of
America (“Prudential”), the life insurance plan administrator,1 was informed by
USF through Hewitt that Mr. Caples had died without a designated beneficiary.
According to its written policy, Prudential paid $56,000 to Daniel as Mr. Caples’s
sole surviving child; because of the divorce, he had no surviving spouse.
Caples sued Prudential in state court, and Prudential removed to federal
court. Caples amended to add USF and Hewitt as defendants and dismissed
Prudential. The district court then had Caples submit her claim to Prudential
for administrative review. Based on the evidence filed by all parties, Prudential
found that it was correct to pay Daniel the $56,000 at issue. Her administrative
remedies under ERISA exhausted, Caples returned to the district court with her
1
Effective January 1, 2007, USF had canceled its life insurance contract with Hartford
Insurance and contracted with Prudential to provide those benefits instead. Unlike USF’s ear-
lier change of benefits managers to Hewitt, this change apparently necessitated no action by
USF employees. The change from Hartford to Prudential does not appear to have affected the
order in which the insurer pays out benefits where no beneficiary was on record at death.
3
Case: 11-30120 Document: 00511625808 Page: 4 Date Filed: 10/06/2011
No. 11-30120
complaint; defendants renewed their motion for summary judgment. The dis-
trict court granted the motion and dismissed Caples’s claims with prejudice.
II.
A summary judgment is reviewed de novo, under the same standard
applied by the district court. McDaniel v. Anheuser-Busch, Inc., 987 F.2d 298,
301 (5th Cir. 1993). Summary judgment is appropriate only “if the movant
shows that there is no genuine dispute as to any material fact and the movant
is entitled to judgment as a matter of law.” FED. R. CIV. P. 56(a). See Anderson
v. Liberty Lobby, Inc., 477 U.S. 242, 249-50 (1986). A dispute about a material
fact is “genuine” if the evidence is such that a reasonable jury could return a
verdict for the non-moving party. Id. at 248. The court must draw all justifiable
inferences in favor of the non-moving party. Id. at 255. Once the moving party
has initially shown “that there is an absence of evidence to support the non-
moving party’s case,” Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986), the non-
movant must come forward with specific facts showing a genuine factual issue
for trial, Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587
(1986). Conclusional allegations and denials, speculation, improbable inferences,
unsubstantiated assertions, and legalistic argumentation do not adequately sub-
stitute for specific facts showing a genuine issue for trial. SEC v. Recile, 10 F.3d
1093, 1097 (5th Cir. 1993).
A.
Caples must first establish her standing to sue under ERISA. “We have
recognized that standing is essential to the exercise of jurisdiction and is a
‘threshold question … [that] determines the power of the court to entertain the
suit.’” Coleman v. Champion Int’l Corp./Champion Forest Prods., 992 F.2d 530,
532 (5th Cir. 1993) (quoting Warth v. Seldin, 422 U.S. 490, 498 (1975)). ERISA
4
Case: 11-30120 Document: 00511625808 Page: 5 Date Filed: 10/06/2011
No. 11-30120
gives a plan beneficiary standing to bring a civil action “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.” 29
U.S.C. § 1132(a)(1)(B).2 The law defines a “beneficiary” as “a person designated
by a participant, or by the terms of an employee benefit plan, who is or may
become entitled to a benefit thereunder.” 29 U.S.C. § 1002(8).
Caples has standing under ERISA if she can establish that she is a benefi-
ciary. We now turn to that question.
B.
The insurance plan in effect at Mr. Caples’s death gives Prudential sole
discretion to interpret the insurance contract, to make factual findings, and to
determine eligibility for benefits. PRUDENTIAL INS. CO. OF AM ., U.S. FOODSER-
VICE, INC.: NON-UNION EMPLOYEES 9 (2007). Under ERISA, if a plan gives dis-
cretionary authority to a plan administrator to determine beneficiaries, that fac-
tual determination is reviewed for abuse of discretion. Dutka v. AIG Life Ins.
Co., 573 F.3d 210, 212 (5th Cir. 2009). “In applying the abuse of discretion
standard to an administrator’s factual determinations we analyze whether the
administrator acted arbitrarily or capriciously.” Id. at 213. “If the determina-
tion is supported by substantial evidence, it is not arbitrary and capricious.” Id.
“Substantial evidence is more than a scintilla, less than a preponderance, and
is such relevant evidence as a reasonable mind might accept as adequate to sup-
port a conclusion.” Id. (internal quotation marks omitted).
2
The same provision also grants standing to plan participants, defined as “any
employee or former employee of an employer, or any member or former member of an
employee organization, who is or may become eligible to receive a benefit of any type from an
employee benefit plan which covers employees of such employer or members of such organiza-
tion, or whose beneficiaries may be eligible to receive any such benefit.” 29 U.S.C. § 1002(7).
Caples does not claim to be a participant.
5
Case: 11-30120 Document: 00511625808 Page: 6 Date Filed: 10/06/2011
No. 11-30120
C.
Applied at the summary judgment stage, ERISA’s substantial-evidence
standard of review for plan administrators’ factual determinations means that
Caples carries a heavy burden: She must not merely show evidence demonstrat-
ing a genuine issue as to who is the rightful beneficiary. Instead, she must show
there was not substantial evidence in the administrative record supporting Pru-
dential’s determination, such that its finding for Daniel was an abuse of discre-
tion.3 Caples has not carried her burden.
The evidence in the administrative record supporting Prudential’s deter-
mination is indeed substantial. In October 2005, Hewitt was retained by USF
to take over USF’s employee benefits management system from the previous
3
Caples’s brief asks this court to modify its evidentiary standard by crafting and apply-
ing a federal common-law doctrine of substantial compliance, under which
an insured substantially complies with the change of beneficiary provisions of
an ERISA life insurance policy when the insured: (1) evidences his or her intent
to make the change and (2) attempts to effectuate the change by undertaking
positive action which is for all practical purposes similar to the action required
by the change of beneficiary provisions of the policy.
Phoenix Mut. Life Ins. Co. v. Adams, 30 F.3d 554, 564 (4th Cir. 1994) (quoting Phoenix Mut.
Life Ins. Co. v. Adams, 828 F. Supp. 379, 388 (D.S.C. 1993). Applying that doctrine, Caples
argues that her ex-husband never substantially complied with the change-of-beneficiary proce-
dure supposedly needed to remove her as a beneficiary. Assuming arguendo that substantial
compliance applies to insured persons’ change-of-beneficiary procedures, however, its applica-
tion does Caples no good. When Hewitt became USF’s new benefits manager, Mr. Caples was
notified that he would need to make insurance elections and beneficiary designations anew
or lose coverage altogether. Against that backdrop, his affirmative selection of coverage for
himself and his son (as before Hewitt’s take-over), his failure to cover his now-separated wife
(unlike before), and his failure to designate any beneficiaries for his life insurance (unlike
before) all suggest his intent to remove Caples as beneficiary, a change he effected by his con-
tact with Hewitt’s benefits management system.
This court indeed evaluates challenges to ERISA procedures under a substantial-com-
pliance standard, see Lacy v. Fulbright & Jaworski, 405 F.3d 254, 257 (5th Cir. 2005) (per cur-
iam), but we have applied the standard only to evaluate whether plan administrators have
substantially complied with the requirements under 29 U.S.C. § 1133, namely, whether they
give reasons for denying claims and whether they offer opportunities for appeal. We have no
need to decide the applicability of the substantial-compliance standard here.
6
Case: 11-30120 Document: 00511625808 Page: 7 Date Filed: 10/06/2011
No. 11-30120
manager. As part of the transition, USF’s employees were required to log into
Hewitt’s new automated benefits election system or call the USF benefits center
administered by Hewitt; employees would no longer receive benefits if they did
not contact Hewitt by a certain time. To preserve coverage, then, a USF
employee had to contact Hewitt’s system, specifically elect health, life, and other
insurance, and choose whether to cover himself alone or to cover family as well.
Most importantly, he also had the option to designate a beneficiary for his life
insurance or to leave the designation blank; Hewitt’s automated system did not
force an employee to designate a beneficiary.
Hewitt’s records, as supplied to Prudential, indicate that between October
2005 and January 1, 2006, Mr. Caples elected various insurance benefits for
himself and his son, including life and health insurance. He did not choose any
benefits for Caples, however, from whom he was separated at the time and
would subsequently divorce. He did not designate any beneficiary for his life
insurance.
The above evidence from the administrative record is manifestly “such rel-
evant evidence as a reasonable mind might accept as adequate to support a con-
clusion.” Dutka, 573 F.3d at 213 (internal quotation marks omitted). Mr. Caples
complied with the requirement to contact Hewitt and elect insurance coverage.
In contacting Hewitt, he had opportunities to choose coverage for Caples and to
designate her as his beneficiary, but he did not, unlike his choices in the benefits
management system operated by Hewitt’s predecessor, in which he had Caples
covered and designated as the primary beneficiary of his life insurance.
The difference is that, apparently, between Mr. Caples’s last contact with
Hewitt’s predecessor’s system and his first contact with Hewitt’s, he and Caples
separated. Although there is no direct evidence of Mr. Caples’s knowingly decid-
ing not to designate Caples, the showing that he made other conscious decisions
in the same benefits system, combined with the showing that Mr. Caples had
7
Case: 11-30120 Document: 00511625808 Page: 8 Date Filed: 10/06/2011
No. 11-30120
reason not to designate Caples (namely, their separation), is indeed evidence
substantial enough to support Prudential’s determination that Daniel Caples
was the proper beneficiary.
Caples’s proffered evidence complicates defendants’ showing slightly but
comes nowhere close to demonstrating that defendants have failed to show that
the plan administrator’s beneficiary determination was supported by substantial
evidence, even when Caples’s evidence is viewed in the most favorable light pos-
sible.4 Caples offers three major attacks on the weight of the evidence: the des-
ignation of Caples in the (discontinued) pre-Hewitt system; the absence of evi-
dence directly demonstrating that Mr. Caples consciously declined to designate
Caples when using Hewitt’s system; and defendants’ failure to corroborate the
sworn affidavits of their records custodians.
At most, these could be read to demonstrate, respectively, that defendants
did not transmit Mr. Caples’s outdated designation of Caples; Mr. Caples did not
deliberately decline to designate Caples; and defendants have not done every-
thing possible to eradicate doubt about Mr. Caples’s responsibility for the rec-
ords. But these putative showings do not impugn the latest electronic records
generated by Mr. Caples’s interaction with Hewitt’s benefits system as doing
something other than genuinely recording his insurance choices and non-choices.
Crucially, Caples has given the court no reason why the electronic records
offered by defendants, included in the administrative record, are not “such rele-
vant evidence as a reasonable mind might accept as adequate to support a con-
clusion.” Dutka, 573 F.3d at 213 (internal quotation marks omitted). The defen-
4
For the first time on appeal, Caples alleges “a clear and apparent conflict of interest
by Prudential serving as claims administrator, and the provider of the group life insurance
policy provided to David Caples’ employer.” This court will not consider evidence or arguments
that were not presented to the district court. Nissho-Iwai Am. Corp. v. Kline, 845 F.2d 1300,
1307 (5th Cir. 1988); Little v. Liquid Air Corp., 37 F.3d 1069, 1071 n.1 (5th Cir. 1994)
(en banc).
8
Case: 11-30120 Document: 00511625808 Page: 9 Date Filed: 10/06/2011
No. 11-30120
dants have shown that there was evidence in the administrative record substan-
tial enough to make Prudential’s ultimate determination reasonable. Caples has
not shown otherwise.
III.
Given Prudential’s decision, supported by substantial evidence, that Dan-
iel is the rightful beneficiary of Mr. Caples’s life insurance benefits, Caples is not
a beneficiary under ERISA. Consequently, she lacks standing to bring a civil
action under § 1132(a)(1)(B), under theories of breach of contract/fiduciary duty,
negligence, or anything else.5
AFFIRMED.
5
Caples appears to have dropped her state law claims entirely, “[h]aving determined
[as her brief states] that ERISA preempts state law with regard to the determination of the
beneficiary of life insurance proceeds.”
9