[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________ FILED
U.S. COURT OF APPEALS
No. 07-10348 ELEVENTH CIRCUIT
JAN 07 2008
________________________
THOMAS K. KAHN
CLERK
D.C. Docket No. 05-00133 CV-3-RV-EMT
ROBIN DOYLE,
Plaintiff-Appellant,
versus
LIBERTY LIFE ASSURANCE COMPANY OF BOSTON,
Defendant-Appellee.
________________________
Appeal from the United States District Court
for the Northern District of Florida
________________________
(January 7, 2008)
Before BIRCH, BARKETT and COX, Circuit Judges.
COX, Circuit Judge:
I. INTRODUCTION
The principal issue in this case is whether the district court applied the correct
standard of review in determining that an ERISA adminstrator’s decision denying
benefits to a plan beneficiary was not tainted by its conflict of interest. We reverse
the district court’s grant of summary judgment in favor of the administrator because
the court used the wrong standard of review and because we cannot say that
application of the proper standard would yield the same result.
II. FACTS AND PROCEDURAL HISTORY
The Plaintiff, Robin Doyle, began working for ChoicePoint Services on
February 24, 2003, as a Registered Nurse/Clinical Information Line Specialist.
ChoicePoint sponsored for its eligible employees a long-term disability (“LTD”)
benefit plan governed by the Employee Retirement Income Security Act of 1974, 29
U.S.C. § 1001 et seq. The Defendant, Liberty Life Assurance Company of Boston,
insured the plan pursuant to a group policy, and administered the plan.
On January 30, 2004, Doyle filed a claim with ChoicePoint for disability
benefits under the plan, claiming that an anal fissure, enlarged internal hemorrhoids,
and external anal skin tags prevented her from working. On February 10, 2004, she
underwent a fissurotomy and sphincterotomy in an attempt to alleviate these
problems. Liberty Life granted Doyle short-term disability (“STD”) benefits through
the maximum date available, May 9, 2004.
While Doyle was receiving STD benefits, Liberty Life obtained her medical
records to determine whether she would qualify for LTD benefits, for which she had
2
applied, after her STD benefits expired. After receiving medical records from six of
Doyle’s treating physicians, an independent physician retained by Liberty Life
reviewed her records. Liberty Life notified Doyle that she would not receive LTD
benefits because she did not meet the “own occupation” standard of “disability” under
ChoicePoint’s LTD policy, which provided:
For persons other than pilots, co-pilots, and crewmembers of an aircraft:
a. if the Covered Person is eligible for the 24 Month Own
Occupation benefit, “Disability” or “Disabled” means that during
the Elimination Period and the next 24 months of Disability the
Covered Person, as a result of Injury or Sickness, is unable to
perform the Material and Substantial Duties of his Own
Occupation; and
b. thereafter, the Covered Person is unable to perform, with
reasonable continuity, the Material and Substantial Duties of Any
Occupation.
(R.2-12 at 6.)
After Liberty Life denied her claim for LTD benefits, Doyle visited a
rheumatologist who diagnosed her with fibromyalgia. In light of this new diagnosis,
Doyle appealed denial of her claim. Liberty Life reviewed her additional medical
records and received further peer review from a specialist in internal medicine.
Liberty Life then upheld its decision denying Doyle benefits, stating that she still did
not meet the “own occupation” standard of “disability” under ChoicePoint’s LTD
policy.
3
Invoking ERISA jurisdiction, 29 U.S.C. § 1132(a)(1)(B), (e)(1), Doyle filed
this action against Liberty Life seeking review of its decision. Liberty Life filed a
motion for summary judgment, which the district court granted. Doyle appeals.
III. ERISA FRAMEWORK AND THE DISTRICT COURT PROCEEDING
ERISA does not promulgate standards under which district courts must review
an administrator’s decision denying benefits. Firestone Tire & Rubber Co. v. Bruch,
489 U.S. 101, 109, 109 S. Ct. 948, 953 (1989). To fill this void, the Supreme Court
held in Bruch that district courts should review de novo benefit decisions made by an
administrator who is without discretion to determine eligibility or construe the terms
of an ERISA-governed plan. Id. at 115, 109 S. Ct. at 956. On the other hand, the
Court said that where the administrator exercises discretion, deferential (i.e., arbitrary
and capricious1) review is appropriate according to trust principles, which guide
review of decisions affecting ERISA-governed plans. Id. at 111, 109 S. Ct. at 954.
Finally, the Court observed that when an administrator with discretion operates under
a conflict of interest, that “conflict must be weighed as a ‘factor in determining
whether there is an abuse of discretion.’” Id. at 115, 109 S. Ct. at 957 (quoting
Restatement (Second) of Trusts § 187 cmt. d (1959)).
1
Cases in our circuit equate the arbitrary and capricious standard with the abuse of discretion
standard. See Jett v. Blue Cross & Blue Shield of Ala., Inc., 890 F.2d 1137, 1139 (11th Cir. 1989).
4
Following Bruch, we undertook the “task [of] develop[ing] a coherent method
for integrating factors such as self-interest into the legal standard for reviewing
benefits determinations.” Brown v. Blue Cross & Blue Shield of Ala., Inc., 898 F.2d
1556, 1561 (11th Cir. 1990). In Brown, a plan interpretation case, we reasoned that
trust principles mandated that some deferential level of review applies to benefits
decisions, id. at 1568, but refused to apply “highly deferential” review when the
administrator operated under a conflict of interest, id. at 1562. Thus, we settled on
what came to be known as the “heightened arbitrary and capricious standard”
(hereinafter the “heightened standard”), the hallmark of which is its burden-shifting
requirement. Under this standard, “the burden shifts to the fiduciary to prove that its
interpretation of plan provisions committed to its discretion was not tainted by self-
interest.” Id. at 1566. We said that an administrator’s plan interpretation that
“advances the conflicting interest of the fiduciary at the expense of the affected
beneficiary” was arbitrary and capricious, unless the administrator “justifies the
interpretation on the ground of its benefit to the class of all participants and
beneficiaries.” Id. at 1567.
Our more recent cases condense the holdings of Bruch and Brown into a 6-step
analysis to guide district courts in reviewing an administrator’s decision to deny
benefits:
5
(1) Apply the de novo standard to determine whether the claim
administrator’s benefits-denial decision is “wrong” (i.e., the court
disagrees with the administrator’s decision); if it is not, then end the
inquiry and affirm the decision.
(2) If the administrator’s decision in fact is “de novo wrong,” then
determine whether he was vested with discretion in reviewing claims;
if not, end judicial inquiry and reverse the decision.
(3) If the administrator’s decision is “de novo wrong” and he was vested
with discretion in reviewing claims, then determine whether
“reasonable” grounds supported it (hence, review his decision under the
more deferential arbitrary and capricious standard).
(4) If no reasonable grounds exist, then end the inquiry and reverse the
administrator's decision; if reasonable grounds do exist, then determine
if he operated under a conflict of interest.
(5) If there is no conflict, then end the inquiry and affirm the decision.
(6) If there is a conflict of interest, then apply heightened arbitrary and
capricious review to the decision to affirm or deny it.
Williams v. BellSouth Telecomms., Inc., 373 F.3d 1132, 1138 (11th Cir. 2004)
(summarizing analysis set forth in HCA Health Servs. of Ga., Inc. v. Employers
Health Ins. Co., 240 F.3d 982, 993-95 (11th Cir. 2001)) (footnotes omitted).
The district court began its discussion in this case by noting that ChoicePoint’s
plan vested Liberty Life with discretion in making claims decisions (step 2). The
court next found that genuine issues of material fact precluded a determination of
whether Liberty Life’s decision was right or wrong; so, for purposes of summary
judgment, the court assumed that Liberty Life’s decision was wrong (step 1). Next,
the court recited the measures taken by Liberty Life in reviewing Doyle’s claim for
6
benefits and concluded that Liberty Life’s denial of her claim was reasonable (step
3).
Finally, the court found that Liberty Life operated under a conflict of interest
since it was responsible for both determining eligibility and paying benefits under the
plan (step 4). But, instead of applying the heightened arbitrary and capricious
standard (step 6), it applied a “modified” heightened arbitrary and capricious
standard. The court apparently “modified” the heightened standard in the following
way: instead of requiring Liberty Life to prove that its decision was not influenced
by the conflict—as the heightened standard requires—the court reviewed the record
and concluded that “there does not appear to be any evidence that Liberty in any way
manipulated or improperly influenced Doyle’s LTD benefits process in order to
achieve a financially beneficial result.” The court said that “given the lack of any
indication to the contrary, . . . Liberty would have reached the same conclusion in this
case even if it had not been operating under a conflict of interest.”
The court offered two justifications for not applying the heightened standard.
First, the court thought that the question of whether the heightened standard applied
to an administrator’s factual determinations “remains open in this circuit,” although
it acknowledged that the heightened standard applies in plan interpretation cases.
7
Second, the court reasoned that a modified standard was more in line with Bruch and
principles of trust law than was our heightened standard.
IV. ISSUES ON APPEAL AND STANDARD OF REVIEW
Doyle raises two arguments on appeal. First, she argues that the district court
erred in finding that Liberty Life’s decision was reasonable. Second, she argues that
the district court erred in applying a modified, rather than heightened, standard of
review. This error, she contends, is manifested in the court’s conclusion that Liberty
Life’s decision was not influenced by a conflict of interest, a conclusion that she
argues is not supported by the record.
Liberty Life responds that the court did not err in finding that its decision was
reasonable, even if, as the court assumed, it was wrong. Next, Liberty Life argues
that the district court did not err in applying a modified standard because our cases
have not conclusively determined whether the heightened standard applies in factual
determination cases. But, even if it does apply, Liberty Life argues, the heightened
standard ascribes more importance to the presence of a conflict than the Supreme
Court required in Bruch. Finally, Liberty Life argues that the record contains no
evidence that its decision was influenced by a conflict of interest.
8
We review the district court’s grant of summary judgment de novo and apply
the same legal standards that governed the district court’s decision. Williams, 373
F.3d at 1134.
V. DISCUSSION
A. Reasonableness Finding
Doyle argues that the district court erred in finding that Liberty Life’s denial
of her claim for disability benefits was reasonable. Specifically, she argues that it
was unreasonable for Liberty Life not to consider her subjective claims of pain and
suffering, which she argues are substantiated by her fibromylagia diagnosis. After
reviewing the record, we agree with the district court that Liberty Life’s decision was
reasonable. We express no opinion on whether it was right or wrong.
Liberty Life considered Doyle’s medical records and employed the services of
two independent physicians to review those records. It concluded that she did not
meet the plan’s definition of “disability.” We conclude that it was not unreasonable
for Liberty Life to disregard Doyle’s complaints of intangible pain and suffering.
Under ChoicePoint’s policy, a plan beneficiary must provide proof that she is
disabled in order to obtain LTD benefits. The policy defines “proof” as including
“chart notes, lab findings, test results, x-rays and/or other forms of objective medical
evidence in support of a claim for benefits.” (R.2-12 at 9) (emphasis added).
9
Therefore, it was reasonable for Liberty Life to rely only on objective medical
evidence supporting Doyle’s claim, evidence which Liberty Life’s reviewing
physicians found lacking. See, e.g., R.1-12 at 278 (statement of Liberty Life’s
reviewing physician, Dr. Silver, that Doyle’s complaints “are not substantiated by
objective clinical findings”); R.2-12 at 104 (statement of Liberty Life’s reviewing
physician, Dr. Truchelut, that Doyle’s “subjective reports are disproportionate to the
physical, radiological, laboratory, and neurodiagnostic” records). We find no error
in the district court’s determination that Liberty Life’s decision was reasonable.
B. ERISA’s Heightened Standard of Review
Doyle’s second and primary argument is that the district court erred in applying
a modified, rather than heightened, standard of review. We agree. Our cases hold
that the heightened standard applies to an administrator’s benefits-denial decision
based on factual determinations, as well as decisions based on plan interpretations.
In Torres v. Pittston Co., 346 F.3d 1324 (11th Cir. 2003), a factual determination
case, we stated unequivocally:
[W]e are bound by precedent to apply the heightened arbitrary-and-
capricious standard both to factual determinations and interpretations of
the plan document by an ERISA fiduciary operating with discretionary
authority but operating under a conflict of interest.
....
. . . [W]e conclude that the heightened arbitrary and
capricious standard of review for decisions by a conflicted ERISA
10
fiduciary applies equally to determinations of fact as to
determinations of plan interpretation.
Id. at 1329-32 (emphasis added). We declined to differentiate between denials based
on plan interpretations and denials based on factual determinations, saying that “the
need to protect against the fiduciary’s self-interest applies with equal force to plan
determinations and findings of fact made by a conflicted fiduciary in the course of its
benefits decision.” Id. at 1332; see also Yochum v. Barnett Banks, Inc. Severance
Pay Plan, 234 F.3d 541, 544 (11th Cir. 2000) (applying heightened standard to
conflicted administrator’s factual determinations regarding “comparable
employment” under severance pay plan).
Nevertheless, the district court considered the burden-shifting question open
in light of the following statement in Williams: “In both Shaw and Levinson, two
factual-determination cases, we did not say whether Brown’s ‘heightened arbitrary
and capricious,’ burden-shifting approach should be applied to factual determination
cases like this.” 373 F.3d at 1138-39 (emphasis added).2 Despite this statement, the
Williams court said that the district court “should have applied the heightened, rather
than the ‘regular’ arbitrary and capricious standard,” id. at 1137, even after
acknowledging that the case involved “a plan administrator’s factual determinations,”
2
Shaw v. Conn. Gen. Life Ins. Co., 353 F.3d 1276 (11th Cir. 2003); Levinson v. Reliance
Standard Life Ins. Co., 245 F.3d 1321 (11th Cir. 2001).
11
id. at 1134 n.3. The Williams court recognized that, as in Shaw and Levinson, it did
not have to decide whether the burden-shifting approach under the heightened
standard applied because it concluded that the administrator’s decision was de novo
right. Id. at 1139 (“Because no grounds exist to disturb [the administrator’s]
determination under the de novo review standard, we need not review it under the
more deferential (‘mere’ or ‘heightened’ arbitrary and capricious) standard . . . .”).
Thus, the Williams court’s comment about the burden-shifting approach being an
open question was dictum. Finally, in recapitulating the 6-step analysis for reviewing
an administrator’s benefits decision originally developed in HCA, the Williams court
explicitly said that the analysis applied to “all ERISA-plan benefit denials,” including
denials based on factual determinations. Id. at 1137 & n.6.
We conclude that the district court erred in not reviewing Liberty Life’s factual
determinations under the heightened arbitrary and capricious standard developed in
Brown and applied in Torres. The practical effect of this error was to relieve Liberty
Life of its burden of proving that its decision to deny Doyle LTD benefits was not
tainted by a conflict of interest. Instead, the district court, upon consideration of the
evidence, concluded that Liberty Life was due summary judgment because its
decision was not affected by the conflict.
12
Of course, the district court’s error in applying the incorrect standard warrants
reversal only if the record does not support summary judgment in favor of Liberty
Life, in which case the error would be harmless. Lucas v. W.W. Grainger, Inc., 257
F.3d 1249, 1256 (11th Cir. 2001) (noting that “we may affirm [the] judgment ‘on any
ground that finds support in the record’” (quoting Jaffke v. Dunham, 352 U.S. 280,
281, 77 S. Ct. 307, 308 (1957))). We conclude, however, that summary judgment was
improper.
In order to succeed on its summary judgment motion, Liberty Life, as the
moving party, bore the burden of establishing that there existed no genuine issue of
material fact and that it was entitled to judgment as a matter of law. Livernois v. Med.
Disposables, Inc., 837 F.2d 1018, 1022 (11th Cir. 1988). On the issue of whether its
decision was tainted by a conflict of interest—the pivotal issue upon which the
district court based its grant of summary judgment—Liberty Life advanced only two
arguments in its summary judgment brief. First, Liberty Life argued that its approval
of STD benefits “demonstrates that Liberty Life’s decision making processes were
not biased.” (R.1-11 at 16 n.1.) Second, Liberty Life argued that its decision to
employ an independent physician to review Doyle’s benefits-denial appeal
“demonstrate[s] that its decision-making process was free from bias.” (R.1-11 at 19
n.2.)
13
In her opposition to Liberty Life’s motion for summary judgment, however,
Doyle offered alternative explanations for Liberty Life’s actions. Doyle argued that
Liberty Life’s approval of 90 days of STD benefits—which it characterized as
“charitable”—could be viewed as an arbitrary decision to terminate benefits on the
91st day “without any explanation as to how Ms. Doyle’s condition had changed on
the 90th day.” (R.2-14 at 9.) Further, Doyle explained that Liberty Life’s retention
of an independent physician to review her benefits-denial appeal did not demonstrate
its lack of bias because Liberty Life was required by federal regulations to “obtain a
report from an unrelated physician consultant as part of [her] appeal under 29 C.F.R.
§ 2560.503-1(h)(3)(iii) & (v) and 29 C.F.R. § 2560.503-1(h)(4).” (R.2-14 at 9.)
It was on this evidence that the district court concluded that “there does not
appear to be any evidence that Liberty in any way manipulated or improperly
influenced Doyle’s LTD benefits process in order to achieve a financially beneficial
result.” (R.2-18 at 13.) We conclude that the court erred in so finding. Under our
burden-shifting standard, Liberty Life bore the burden of proving that undisputed
facts supported a decision that it was not influenced by a conflict, a burden that it
failed to carry on the facts it advanced. Therefore, we reverse the grant of Liberty
Life’s motion for summary judgment.
14
While we reach the result we understand our precedent to require, we think it
appropriate to note that we agree with the district court’s observations in this case that
our heightened standard is “flawed,” and that “applying a burden shifting analysis to
a claims administrator’s factual determinations poses unique difficulties.” (R.2-18
at 12.) We think our heightened standard is flawed in at least three ways.
First, our heightened standard is inconsistent with the Supreme Court’s
announcement in Bruch of two standards under which an administrator’s decision
should be reviewed, de novo and abuse of discretion. The agreement among the
circuits that the decision of a conflicted ERISA administrator exercising discretion
should be reviewed under a less deferential standard than the decision of an
administrator not operating under a conflict is premised on the Court’s dictum in
Bruch 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 ‘factor in
determining whether there is an abuse of discretion.’” 489 U.S. at 115, 109 S. Ct. at
957 (quoting Restatement (Second) of Trusts § 187 cmt. d (1959)). As this statement
clearly says, the existence of a conflict should be treated only as “a factor” in
determining whether the administrator abused its discretion; the existence of a
conflict does not require an altogether new standard. Our use of a third standard—the
heightened standard—is not required by, and more importantly is contrary to, the
15
Supreme Court’s treatment of a conflict of interest in Bruch. See Chambers v. Family
Health Plan Corp., 100 F.3d 818, 826 (10th Cir. 1996) (rejecting Brown’s heightened
standard “as inconsistent with . . . the Supreme Court’s dictum in [Bruch].”).
The second flaw in our heightened standard is its burden-shifting feature, under
which the administrator bears the burden of proving that its decision was not
influenced by a conflict. As the Second Circuit noted, our burden-shifting standard
is “contrary to the traditional burden of proof in a civil case.” Whitney v. Empire Blue
Cross & Blue Shield, 106 F.3d 475, 477 (2d Cir. 1997) (quoting Sullivan v. LTV
Aerospace & Def. Co., 82 F.3d 1251, 1259 (2d Cir. 1996)) (internal quotation marks
omitted). The traditional burden of proof requires the plaintiff to prove that the
decision was tainted by self-interest, whereas our standard requires the defendant to
prove that its decision was not tainted.
We stand alone in our application of a standard that shifts to the administrator
the burden of proving that its decision was not influenced by a conflict. Other
circuits apply one of two different approaches, neither of which shifts the burden of
proof to the administrator. The First and Second Circuits, for example, have adopted
a “reduced deference” approach, under which a court will reduce the deference
afforded under arbitrary and capricious review after the claimant shows that the
16
administrator’s decision was tainted by a conflict of interest.3 Conversely, the Third,
Fourth, Fifth, Sixth, Seventh, Eighth, Ninth, and Tenth Circuits apply a “sliding
scale” approach, under which the district court “decrease[s] the level of deference
given to the conflicted administrator’s decision in proportion to the seriousness of the
conflict,” Chambers, 100 F.3d at 825, and then only after the claimant shows the
existence of a conflict, Rud v. Liberty Life Assurance Co. of Boston, 438 F.3d 772,
777 (7th Cir. 2006).4
3
Wright v. R.R. Donnelley & Sons Co. Group Benefits Plan, 402 F.3d 67, 74 & n.4 (1st Cir.
2005) (burden on claimant to show conflict exists and once that showing is made “the court ‘may
cede a diminished degree of deference–or no deference at all–to the administrator’s determinations’”
(quoting Leahy v. Raytheon Co., 315 F.3d 11, 16 (1st Cir. 2002))); Whitney, 106 F.3d at 477 (Second
Circuit holding that claimant must prove that the “conflict of interest affected the administrator’s
decision” and upon such proof, “the deference otherwise accorded the administrator’s decision drops
away and the court interprets the plan de novo” (quoting Sullivan, 82 F.3d at 1256, 1259) (internal
quotation marks omitted)).
4
See also Pinto v. Reliance Standard Life Ins. Co., 214 F.3d 377, 392 (3d Cir. 2000) (“We
adopt the approach of the sliding scale cases.”); Stup v. UNUM Life Ins. Co. of Am., 390 F.3d 301,
307 (4th Cir. 2004) (“Under this sliding-scale standard of review, ‘[t]he more incentive for the
administrator or fiduciary to benefit itself by a certain interpretation of benefit eligibility or other
plan terms, the more objectively reasonable the administrator or fiduciary’s decision must be and the
more substantial the evidence must be to support it.’” (quoting Ellis v. Metro. Life Ins. Co., 126 F.3d
228, 233 (4th Cir.1997))); Vega v. Nat’l Life Ins. Servs., Inc., 188 F.3d 287, 297 (5th Cir. 1999) (en
banc) (“Having polled the other Circuits, we reaffirm today that our approach to this kind of case is
the sliding scale standard articulated in Wildbur. . . . The greater the evidence of conflict on the part
of the administrator, the less deferential our abuse of discretion standard will be.”); Smith v. Cont’l
Cas. Co., 450 F.3d 253, 260 (6th Cir. 2006) (“[T]he possible conflict should be taken into account
when deciding whether the plan administrator’s decision is arbitrary and capricious. However, the
standard of review of not altered to a less deferential standard when the benefits administrator is
operating under a conflict of interest. ‘Instead, . . . the standard remains unchanged and a conflict
of interest is to be considered in applying that standing.’” (citing and quoting Calvert v. Firstar Fin.,
Inc., 409 F.3d 286, 292-93 (6th Cir. 2005)) (internal citations omitted)); Woo v. Deluxe Corp., 144
F.3d 1157, 1161-62 (8th Cir. 1998) (“Based on our review of [Bruch], we adopt the ‘sliding scale’
approach. . . . [A]pplying the ‘sliding scale’ approach, the evidence supporting the plan
17
Finally, the third flaw in our heightened standard is the remarkably difficult
burden it imposes upon the administrator in proving that its decision was not tainted
by a conflict. Perhaps recognizing that proving the positive is easier than proving the
negative, this court said in Brown, a plan interpretation case, that an administrator can
carry this burden by showing that its decision benefitted the “class of all participants
and beneficiaries.” 898 F.2d at 1567. But, in a factual determination case, it is
virtually impossible for an administrator to prove that its factual findings somehow
benefit the “class of all participants and beneficiaries.” Each claim is unique and
requires individual assessment of the facts supporting the claim, so that a benefits
decision with respect to one beneficiary carries no precedential value with respect to
other beneficiaries. So, unable to prove that its decision benefits other beneficiaries,
the administrator is relegated to the unenviable task of proving the negative, a task
administrator’s decision must increase in proportion to the seriousness of the conflict or procedural
irregularity.”); Abatie v. Alta Health & Life Ins. Co., 458 F.3d 955, 968 (9th Cir. 2006) (en banc) (“A
district court, when 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. An egregious
conflict may weigh more heavily (that is, may cause the court to find an abuse of discretion more
readily) than a minor, technical conflict might. But in any given case, all the facts and circumstances
must be considered and nothing ‘slides,’ so we find the metaphor unnecessary and potentially
confusing.”); Fought v. UNUM Life Ins. Co. of Am., 379 F.3d 997, 1004 (10th Cir. 2004) (“In
Chambers, we identified two basic approaches that had emerged in interpreting [Bruch]: the ‘sliding
scale’ approach and the ‘presumptively void’ approach. We explicitly adopted the former. ‘Under
[the sliding scale] approach, the reviewing court will always apply an arbitrary and capricious
standard, but the court must decrease the level of deference given to the conflicted administrator's
decision in proportion to the seriousness of the conflict.’” (quoting Chambers, 100 F.3d at 825)
(internal citations omitted)).
18
which is complicated by the fact that the decision-maker must prove that it was not
even unconsciously influenced by the conflict. See, e.g., id. at 1565 (“A conflicted
fiduciary may favor, consciously or unconsciously, its interests over the interests of
the plan beneficiaries.”). This is an unworkable standard.
The district court recognized this flaw when it said that under our standard “a
fiduciary operating under a conflict of interest is actually subject to greater scrutiny
than under de novo review . . . .” (R.2-18 at 11.) Our standard is tantamount to
invoking a presumption that the administrator has acted wrongly in its self-interest.
This is why courts and commentators have labeled our heightened standard the
“presumptively void” standard. See Vega v. Nat’l Life Ins. Servs., Inc., 188 F.3d 287,
297 (5th Cir. 1999) (en banc) (citing Brown as an example of the “presumptively
void” approach); Woo v. Deluxe Corp., 144 F.3d 1157, 1161 (8th Cir. 1988)
(discussing Brown’s “presumptively void” standard); Chambers, 100 F.3d at 826
(Tenth Circuit rejecting Brown’s “presumptively void” standard); Kathryn J.
Kennedy, Judicial Standard of Review in ERISA Benefit Claim Cases, 50 Am. U. L.
Rev. 1083, 1158-60 (2001) (discussing Brown’s adoption of the “presumptively void”
standard).
The benefits decision of an administrator operating under a conflict of interest
should be subjected to more exacting review in both factual determination and plan
19
interpretation cases. As we have previously noted, in both cases “the same self-
interest operates such that a ‘conflicted fiduciary may favor, consciously or
unconsciously, its interests over the interests of the plan beneficiaries.’” Torres, 346
F.3d at 1330 (quoting Brown, 898 F.2d at 1565). But, our heightened standard
effectively makes the administrator’s conflict of interest the dispositive factor, rather
than merely “a factor,” in determining whether its decision was arbitrary and
capricious. We should adopt the approach used by the Bruch Court and, without
shifting the burden of proof, instruct the district courts to take into account the
existence of a conflict of interest when determining whether an administrator’s
decision to deny benefits was arbitrary and capricious.
We urge our court to review en banc this troublesome heightened standard and
consider adopting a more workable standard to apply in factual determination cases.5
This case illustrates the flaws in our standard. The district court found no evidence
of any influence of conflict, but Doyle argues—correctly we think—that the court has
relieved Liberty Life of the burden it bears under our heightened standard. We have
trouble imagining what evidence Liberty Life could offer to satisfy that standard.
5
We write only on the case before us, a factual determination case, and, without the benefit
of briefing and oral argument, express no opinion on the propriety of applying our heightened
standard in plan interpretation cases.
20
VI. CONCLUSION
Because the district court erred in granting summary judgment in favor of
Liberty Life, we reverse the grant of summary judgement and remand the case to
the district court for further proceedings consistent with this opinion.6
REVERSED AND REMANDED.
6
Liberty Life’s motion for summary judgment, and Doyle’s response, presented no procedural
issues. And, the case for both parties was bottomed on the administrative record. It seems preferable
in a case like this for the district court to determine by conference or stipulation whether either party
desires to present evidence beyond the administrative record, and if not, take the case under
submission and enter findings of fact and conclusions of law. Rule 56 practice seems to be an extra
and unnecessary step—and one that can result in two appeals rather than one.
21