F I L E D
United States Court of Appeals
Tenth Circuit
PUBLISH
NOV 10 1999
UNITED STATES COURT OF APPEALS
PATRICK FISHER
Clerk
TENTH CIRCUIT
IVAN LYNN KIMBER,
Plaintiff - Appellant,
vs.
No. 98-4106
THIOKOL CORPORATION;
THIOKOL CORPORATION
DISABILITY BENEFITS PLAN,
Defendants - Appellees.
EQUAL EMPLOYMENT
OPPORTUNITY COMMISSION,
Amicus Curiae.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH
(D.C. No. 97-CV-41-C)
Brian S. King (Richard R. Burke with him on the briefs), King & Isaacson, P.C.,
Salt Lake City, Utah, for Plaintiff-Appellant.
Mary Anne Q. Wood (Kathryn O. Balmforth with her on the brief), Wood Crapo,
L.L.C., Salt Lake City, Utah, for Defendants-Appellees.
Lisa J. Banks (C. Gregory Stewart, General Counsel, Philip B. Sklover, Associate
General Counsel, Lorraine C. Davis, Assistant General Counsel, on the brief),
Office of General Counsel, Equal Employment Opportunity Commission,
Washington, D.C., for amicus curiae.
Before TACHA and KELLY, Circuit Judges, and WEST *, District Judge.
KELLY, Circuit Judge.
Plaintiff-Appellant Ivan Lynn Kimber appeals from the entry of summary
judgment in favor of Defendants-Appellees Thiokol Corporation (“Thiokol”) and
the Thiokol Corporation Disability Benefits Plan (“Plan”) on a claim for disability
benefits under the Employee Retirement Income Security Act of 1974 (“ERISA”),
29 U.S.C. §§ 1001-1461, and the Americans with Disabilities Act (“ADA”), 42
U.S.C. § 12101-12213. Mr. Kimber first argues that Thiokol acted arbitrarily and
capriciously by limiting his long term disability benefits to two years pursuant to
a plan provision capping benefits for disabilities “due to a mental condition.”
Second, Mr. Kimber argues that the Plan violates the ADA by establishing
different levels of benefits for disabilities caused by physical or mental
conditions. Jurisdiction arises under 28 U.S.C. § 1291 and we affirm.
Background
Thiokol Corp. provides disability benefits for its employees under the
*
Honorable Lee R. West, Senior District Judge, United States District Court
for the Western District of Oklahoma, sitting by designation.
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Thiokol Corporation Disability Benefits Plan. The Plan is managed and self-
funded by Thiokol and is subject to the requirements of ERISA. A Thiokol
employee, Mr. Evan Schelin, functions as the plan administrator. John Hancock
Managed Care Group (“John Hancock”) was retained in 1994 to review disability
claims.
In order to trigger disability benefits, a Plan participant must prove that he
suffers from a “total disability.” Admission to a hospital or confinement by a
physician to medically necessary home confinement for at least five days is proof
of a total disability. Aplt. App. at 11. After this initial burden is met, a plan
participant must prove the continuing nature of the total disability.
[D]uring the first 18 months of the period of disability
there must be satisfactory medical evidence that you
continue to be physically or mentally incapable of either:
* carrying out the normal duties of your own
occupation, or
* performing any part-time or light duty assignment
where your pay would be equal to or greater than your
disability benefits.
Aplt. App. at 12. Benefits continue until the occurrence of one of several events
listed in the Plan, such as overcoming total disability, failure to provide medical
evidence of disability, death, or turning 65 years old. The Plan also contains a
further limitation relating solely to mental health conditions.
Disability Benefits will end after 24 months of benefits if
it is determined that the disability, at that time is due to a
mental condition described in the most current edition of
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the Diagnostic and Statistical Manual of Mental Disorders,
published by the American Psychiatric Association.
Aplt. App. at 17.
Mr. Kimber began employment with Thiokol around 1970 as a heavy
equipment operator. Throughout the course of his employment, Mr. Kimber
suffered from insulin dependent diabetes. In 1981, he developed diabetic
retinopathy and lost complete vision in his right eye. Pursuant to company policy
prohibiting persons with single eye vision from operating heavy equipment, he
was transferred to a different position. In 1991, he was transferred to the position
of senior materials clerk, a desk job.
From 1991 to 1994, Mr. Kimber’s diabetic symptoms worsened. His blood
pressure increased significantly; his kidneys functioned at only thirty percent; and
vascular disease spread to his feet. On several occasions, paramedics were
summoned after Mr. Kimber experienced insulin shock. Finally, on May 9, 1994,
Mr. Kimber’s personal doctor, Dr. N. Brent Williams, recommended a medical
leave of absence to control the diabetes. Upon this advice, Mr. Kimber took
medical leave beginning May 18, 1994 and applied for long term disability
benefits under the Thiokol Plan.
Although Mr. Kimber had not been admitted to a hospital or confined at
home, he was granted temporary disability benefits effective May 18, 1994 as part
of Thiokol’s medical leave program. Aplee. App. at 26. The benefits were
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originally scheduled to terminate on July 3, 1994, but Thiokol extended them
through October 31, 1994. Subsequent payments were to be reviewed by John
Hancock for proof of continuing total disability. In an October 19, 1994 letter,
John Hancock informed Kimber that his disability claim “has been reviewed and
is approved indefinately [sic]. We will continue to update your file and if this
status changes, you will be notified.” Aplt. App. at 70.
Upon further review, John Hancock determined that Mr. Kimber had not
adequately demonstrated “medical evidence of your total disability” as required
by the Plan. John Hancock requested “objective functional impairment
information to support continued total disability” from Dr. Williams on
September 21, 1995. Aplee. App. at 43. When no additional information was
received, John Hancock wrote directly to Mr. Kimber on November 16 informing
him that benefits would be suspended as of December 1, 1995 if further evidence
were not presented. Disability benefits were officially terminated in a December
4, 1995 letter to Mr. Kimber. “The information furnished by Dr. Williams does
not support your total disability from your sedentary job as a Property Clerk.”
Aplee. App. at 46.
Mr. Kimber appealed the termination decision and offered the opinions of
three physicians relating to his disability: Dr. Williams, a psychologist, and an
eye specialist. Aplt. App. at 90, 92-95. In particular, the psychologist opined that
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Mr. Kimber was “suffering from symptoms of depression and perhaps even mild
dementia secondary to his diabetes.” Id. at 94.
Based on these new reports detailing possible mental disorders, John
Hancock decided that further review of the medical evidence was necessary. It
arranged for Mr. Kimber to undergo a psychological evaluation to determine the
extent of his mental conditions. In an April 25, 1996 report entitled “Outpatient
Psychological Evaluation,” psychologist Dr. Walsh reported that Mr. Kimber was
suffering from mild dementia “due to other general medical conditions,” a
recurrent major depressive episode, and anxiety disorder. Aplt. App. at 83. She
recommended that Mr. Kimber be reconsidered for disability benefits “as [his]
current medical condition and related effects of cognitive functioning seem to
impair ability to work productively, efficiently, and safely.” Id. at 84.
John Hancock reviewed the evaluation and concluded:
ASSESSMENT: We now have objective evidence of
significant impairment and progressive disease that is
reasonably disabling, especially in the context of the
multiple medical residuals which were not, by themselves
totally disabling. This is new clinical evidence and
supports [total disability any occupation] on permanent
basis [].
Will RECOMMEND to the Plan Administrator that
the DENIAL BE OVERTURNED AND [employee] be
medically authorized for a year from this date and then
annual reviews after that.
Aplee. App. at 106. Upon this recommendation, the plan administrator found that
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Mr. Kimber was totally disabled “due, at least in significant part to a mental
condition.” In a May 20, 1996 letter reviewed by John Hancock, the administrator
reinstated Mr. Kimber’s benefits, subject to the Plan’s 24 month mental
conditions cap. The effect of this reinstatement was to provide Mr. Kimber with
the past benefits he had lost from December 1, 1995 through May 17, 1996, but
no future benefits. Aplt. App. at 85. After further discussion with Thiokol
proved unsuccessful, Mr. Kimber brought suit in district court claiming that he
should receive full benefits for physical disability based solely on his diabetes.
The district court granted Thiokol’s motion for summary judgment and Mr.
Kimber appeals.
Discussion
Review of a grant of summary judgment is de novo, applying the same legal
standard used by the district court. See Charter Canyon Treatment Ctr. v. Pool
Co. , 153 F.3d 1132, 1135 (10th Cir. 1998). Summary judgment is appropriate “if
the pleadings, depositions, answers to interrogatories, and admissions on file,
together with the affidavits, if any, show that there is no genuine issue of material
fact and that the moving party is entitled to a judgment as a matter of law.” Fed.
R. Civ. P. 56(c); see also Jones v. Kodak Med. Assistance Plan , 169 F.3d 1287,
1291 (10th Cir. 1999).
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“A court reviewing a challenge to a denial of employee benefits under 29
U.S.C. § 1132(a)(1)(B) applies an ‘arbitrary and capricious’ standard to a plan
administrator’s actions if the plan grants the administrator discretionary authority
to determine eligibility for benefits or to construe the plan’s terms.” Charter
Canyon , 153 F.3d at 1135 (citing to Firestone Tire & Rubber Co. v. Bruch , 489
U.S. 101, 115 (1989)). The parties agree that the plan administrator had
discretion to determine eligibility and that an arbitrary and capricious review is
the proper standard. However, Mr. Kimber argues that the plan administrator was
operating under a conflict of interest and, therefore, the court should grant less
deference to his decision. See Chambers v. Family Health Plan Corp. , 100 F.3d
818, 825 (10th Cir. 1996) (noting that a conflict of interest “triggers a less
deferential standard of review.”).
A conflict of interest can arise between a plan administrator’s duty to act
“solely in the interest of the participants and beneficiaries” of the plan, 29 U.S.C.
§ 1104(a)(1), and his self interest or loyalty to his employer. In Firestone , the
Supreme 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.’”
Firestone , 489 U.S. at 115 (citation omitted). The standard always remains
arbitrary and capricious but the amount of deference present may decrease “on a
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sliding scale in proportion to the extent of conflict present, recognizing the
arbitrary and capricious standard is inherently flexible.” McGraw v. Prudential
Ins. Co. , 137 F.3d 1253, 1258 (10th Cir. 1998) (citing Chambers , 100 F.3d at 826-
27).
However, before applying the sliding scale, there must first be evidence of
a conflict of interest, i.e. proof “that the plan administrator’s dual role
jeopardized his impartiality.” Kodak , 169 F.3d at 1291. Mr. Kimber advances
three claims in support of a conflict of interest. First, Thiokol both funds and
administers the Plan, keeping every dollar not paid out in disability benefits.
Second, deference is decreased when a plan administrator fails to gather or
examine relevant evidence. See McGraw , 137 F.3d at 1262-63. Third, a plan’s
inconsistencies in handling an applicant’s claims will also decrease deference.
While the second and third claims are arguably accurate statements of the law,
Mr. Kimber simply has not shown that they apply to the facts before us and there
is no need to address them.
As for the first claim, the mere fact that the plan administrator was a
Thiokol employee is not enough per se to demonstrate a conflict. See Kodak , 169
F.3d at 1291; see also Woolsey v. Marion Laboratories, Inc. , 934 F.2d 1452, 1459
(10th Cir. 1991). Rather, a court should consider various factors including
whether:
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(1) the plan is self-funded; (2) the company funding the
plan appointed and compensated the plan administrator; (3)
the plan administrator’s performance reviews or level of
compensation were linked to the denial of the benefits; and
(4) the provision of benefits had a significant economic
impact on the company administering the plan.
Id. Here the first two factors are present. However, the plan administrator is a
salaried employee, owns no stock in Thiokol and is not a corporate officer.
Aplee. App. at 12. He has absolutely no direct pecuniary interest in the outcome
of benefit claims. Moreover, the Plan does not have a significant economic
impact on Thiokol’s existence. Although there is no per se rule of significant
economic impact, we note that long term disability costs amounted to a mere .3%
of Thiokol’s operating expenses during 1997. Aplee. App. at 96. After
considering these factors, we find that there is insufficient evidence of a conflict
of interest and review with deference is appropriate.
When reviewing under the arbitrary and capricious standard, “[t]he
Administrator[’s] decision need not be the only logical one nor even the best one.
It need only be sufficiently supported by facts within [his] knowledge to counter a
claim that it was arbitrary or capricious.” Woolsey , 934 F.2d at 1460. The
decision will be upheld unless it is “not grounded on any reasonable basis.” Id.
(citation omitted). The reviewing court “need only assure that the administrator's
decision fall[s] somewhere on a continuum of reasonableness--even if on the low
end.” Vega v. National Life Ins. Serv., Inc. , 188 F.3d 287, 297 (5th Cir. 1999).
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Given that standard of review and how the evidentiary support for Mr. Kimber’s
claim developed, we must affirm.
A. Application of the Mental Condition Cap
“[I]n reviewing decisions of plan administrators under the arbitrary and
capricious standard, the reviewing court may consider only the evidence that the
administrators themselves considered” on or before the final decision denying
benefits. Chambers , 100 F.3d at 823, 824. See also Sandoval v. Aetna Life &
Casualty Ins. Co , 967 F.3d 377, 380-81 (10th Cir. 1992); Woolsey , 934 F.2d at
1460. Mr. Kimber appealed from the letter denying his benefits on May 20, 1996
and the plan administrator issued a final decision denying reinstatement for
physical disability on August 13, 1996. Aplee. App. at 80-81. Thus, our review
is limited to evidence presented to Thiokol before August 13, 1996.
Mr. Kimber raises several issues to prove that the plan administrator’s
decision was arbitrary and capricious. First, Mr. Kimber argues that Thiokol has
disavowed its October 1994 approval of his disability claim for an indefinite
period based upon diabetes. Of course, this fact must be considered against a
backdrop of the Plan’s terms and the facts before the plan administrator. A one-
time determination of eligibility for benefits under the Plan does not foreclose
subsequent principled review. The Plan itself contemplated the ongoing review of
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all disability claims, see Aplt. App. at 12, 13 (requiring “satisfactory medical
evidence that you continue to be [disabled]” and terminating benefits on “the date
you are not totally disabled.”) (emphasis added), and John Hancock’s letter in
which Mr. Kimber was granted benefits indefinitely also specifically noted the
possibility of a change in disability status. Aplt. App. at 70. (“We will continue
to update your file and if this status changes, you will be notified.”).
Our decision in Sandoval is instructive on this issue. Sandoval had applied
for and received long-term disability benefits beginning in 1977. Eleven years
later as part of a routine review of claims, the plan administrator decided there
was insufficient evidence to support a claim of total disability. 967 F.2d at 378.
The administrator “requested additional information from [Sandoval], and
scheduled an independent medical evaluation.” Id. Based on the resulting
information, the administrator found that there was no total disability and
terminated benefits. Id. at 380. Given our narrow standard of review, we upheld
the administrator’s decision even though the evidence conflicted on disability.
In arriving at the decision in this case, John Hancock reviewed Mr.
Kimber’s claim as part of a periodic review, determined that there was
insufficient evidence of total disability in the file, and requested additional
medical evidence. Aplee. App. at 43. After reviewing this evidence, John
Hancock determined that Mr. Kimber was not totally disabled from performing
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his job as a Property Clerk and terminated his benefits. Id. at 46. Regardless of
its initial determination, Thiokol had the right to review Mr. Kimber’s file and
request additional evidence of a continuing total disability. To do so was not
arbitrary and capricious.
Second, Mr. Kimber argues that Thiokol acted arbitrarily by finding that
there was a lack of objective evidence of total disability based upon diabetes. He
points to a letter and two reports by Dr. Williams to support his claim. See Aplt.
App. at 67, 69A & 69C. A rational plan administrator could find these documents
insufficient because they do not contain supporting data for the conclusions
reached; for example, the letter from Dr. Williams merely states that Mr. Kimber
is “totally disabled secondary to diabetes, hypertension and the problems
associated with this,” but does not include any reference to clinical data. See id.
at 69.
Mr. Kimber also relies upon John Hancock’s evaluation during the appeals
process that his condition had worsened. See id. at 108. The reviewer, however,
expressly noted that more information was yet to come, including that pertaining
to psychological condition. See id. When the neuropsychological information
was furnished, the overall assessment of permanent disability was based upon a
combination of physical and psychological factors. See id. at 109. Although we
might have come to a different conclusion, the plan administrator acted within his
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discretion in attributing the disability to Mr. Kimber’s mental condition.
Third, Mr. Kimber asserts that the plan administrator failed to look at all
the relevant medical records before terminating benefits. Specifically, he points
to the twelve page neuropsychological evaluation report by Dr. Walsh which the
administrator did not read. Aplt. App. at 73. However, such a description is
misleading. The Plan specifically permits the administrator to “employ one or
more persons to render advice with regard to any responsibility [the
administrator] has under the Plan.” Id. at 5. Mr. Schelin employed John Hancock
to review medical records and provide a professional opinion as to their contents.
Schelin gave the lengthy, detailed neuropsychological report to John Hancock,
had them review it, and relied upon their analysis of the report in making his final
decision. Mr. Schelin was not a medical professional and had no duty to read
every single piece of raw medical data. His reliance upon John Hancock’s
analysis and summary of the report was both reasonable and sufficient.
Fourth, Mr. Kimber argues that the plan administrator rejected John
Hancock’s recommendation to reinstate benefits. A review of the record reveals
however that Mr. Kimber’s benefits were, in fact, reinstated, although not based
upon physical condition. After the John Hancock medical personnel had reviewed
the neuropsychological report detailing Mr. Kimber’s mental conditions, they
recommended that benefits be reinstated since there now was “objective evidence
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of significant impairment and progressive disease that is reasonably disabling,
especially in the context of the multiple medical residuals which were not, by
themselves, totally disabling.” Aplee. App. at 106 (emphasis added). Based on
the new evidence of mental conditions and John Hancock’s recommendation, the
plan administrator drafted a letter reinstating Mr. Kimber’s disability benefits,
subject to the mental condition cap, and sent it back to John Hancock for
comments. The reviewing doctors made some slight grammatical corrections,
sent it back to the administrator, who mailed it to Mr. Kimber. It is overstatement
to claim that the John Hancock medical personnel recommended disability based
upon physical impairment.
Fifth, Mr. Kimber argues that the administrator acted arbitrarily by
interpreting the phrase “due to” to mean “due, at least in significant part, to.”
Mr. Kimber claims that “due to” requires that the mental condition be the sole
cause of the disability before benefits can be limited. We disagree. The phrase
“due to” is ambiguous. “The words do not speak clearly and unambiguously for
themselves. The causal nexus of ‘due to’ has been given a broad variety of
meanings in the law ranging from sole and proximate cause at one end of the
spectrum to contributing cause at the other.” Adams v. Director, OWCP, 886
F.2d 818, 821 (6th Cir. 1989) (interpreting Department of Labor regulations).
When a plan administrator is given authority to interpret the plan language, and
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more than one interpretation is rational, the administrator can choose any rational
alternative. Naugle v. O’Connell, 833 F.2d 1391, 1396 (10th Cir. 1987).
Requiring a “significant” relationship between the condition and the disability is a
rational interpretation.
Sixth, Mr. Kimber argues that given the nature of the plan language the
doctrine of contra proferentem requires this court to resolve all ambiguities
against Thiokol as drafter of the Plan. In Semtner v. Group Health Services, 129
F.3d 1390, 1393 (10th Cir. 1997) and McGee v. Equicor- Equitable HCA Corp.,
953 F.2d 1192, 1200 & n.11 (10th Cir. 1992), we left undecided the issue of
whether contra proferentem applies to the review of an ERISA plan. We now
hold that when a plan administrator has discretion to interpret the plan and the
standard of review is arbitrary and capricious, the doctrine of contra proferentem
is inapplicable. In doing so, we adopt the reasoning of the Seventh Circuit in
Morton v. Smith, 91 F.3d 867 (7th Cir. 1996).
Courts invoke [contra proferentem] when they have the
authority to construe the terms of a plan, but this authority
arises only when the administrators of the plan lack the
discretion to construe it themselves. Therefore, it is only
used when courts undertake a de novo review of plan
interpretations. When the administrators of a plan have
discretionary authority to construe the plan, they have the
discretion to determine the intended meaning of the plan's
terms. In making a deferential review of such
determinations, courts have no occasion to employ the rule
of contra proferentem. Deferential review does not involve
a construction of the terms of the plan; it involves a more
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abstract inquiry--the construction of someone else's
construction. Because this case engages us in this more
abstract exercise, we will not apply the rule.
Id. at 871 n.1 (citations omitted); see also Ross v. Indiana State Teachers Assoc.
Ins. Trust, 159 F.3d 1001, 1011 (7th Cir. 1998) (contra proferentem inapplicable
when judicial review of adminstrator’s interpretation is other than de novo);
Cagle v. Bruner, 112 F.3d 1510, 1519 (11th Cir. 1997) (holding that district court
erred in construing ambiguities against drafter under arbitrary and capricious
review); Pagan v. Nynex Pension Plan, 52 F.3d 438, 443 (2d Cir. 1995) (limiting
the use of contra proferentem to cases in which court reviews ERISA plan de
novo); Winters v. Costco Wholesale, 49 F.3d 550, 554 (9th Cir. 1995) (holding
“that the rule of contra proferentem is not applicable to self-funded ERISA plans
that bestow explicit discretionary authority upon an administrator to determine
eligibility for benefits or to construe the terms of the plan.”).
Other courts have held contra proferentem applicable to review of ERISA
plans but have done so only in the context of de novo review. See Hughes v.
Boston Mutual Life Ins. Co., 26 F.3d 264, 268 (1st Cir. 1994) (applying contra
proferentem to ERISA plan reviewed de novo); Heasley v. Heldon & Blake Corp.,
2 F.3d 1249, 1257-58 (3d Cir. 1993) (holding contra proferentem applicable to
ERISA plan reviewed de novo); Delk v. Durham Life Ins. Co., 959 F.2d 104, 105-
06 (8th Cir. 1992) (applying contra proferentem to ERISA plan reviewed de
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novo). This is a separate question which we do not address here.
The Fifth Circuit is the sole court to apply contra proferentem in cases
involving discretionary plans but has done so only in ERISA cases construing
insurance policies and then as a part of its “unique two-step approach to
apply[ing] the abuse of discretion standard.” Spacek v. Maritime Assoc., 134
F.3d 283, 298 n.14 (5th Cir. 1998) (noting that Fifth Circuit has only applied
contra proferentem to ERISA cases construing insurance policies); Rhorer v.
Raytheon Engineers & Constructers Inc., 181 F.3d 634, 642 (5th Cir. 1999)
(discussing Fifth Circuit two step approach). Since this approach merely melds
contra proferentem into the required discretionary review, we do not view it as
conflicting with our decision today.
Finally, Mr. Kimber argues that the doctrine of reasonable expectations
requires that the plan be interpreted in his favor. It is doubtful whether this
doctrine has any application to ERISA disability benefit plans at all. See
Hightsue v. AIG Life Ins. Co., 135 F.3d 1144, 1150 n.3 (7th Cir. 1998) (noting
that “the reasonable expectation doctrine may not even be applicable in ERISA
cases.”); see also Estate of Shockley v. Alyeska Pipeline Serv. Co., 130 F.3d 403,
407 (9th Cir. 1997) (limiting the application of the doctrine to insurance
contracts). Allowing a beneficiary’s expectations under the plan to dominate an
administrator’s interpretation would obliterate the discretionary review required
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by Firestone. See Estate of Shockley, 130 F.3d at 407 (noting that “extending the
doctrine to ERISA pension plans would be inconsistent with circuit and Supreme
Court precedent requiring abuse of discretion review of a retirement committee's
actions.”). Accordingly, the reasonable expectation doctrine is inapplicable to the
review of an ERISA disability benefits plan under the arbitrary and capricious
standard.
B. Different Levels of Benefits between Physically Disability and Mental
Disablity under the ADA
Mr. Kimber and the EEOC argue Thiokol violated the ADA by employing a
disability plan which distinguished between physical and mental disabilities.
They argue that such a plan discriminates against disabled employees “because of
[their] disability.” 42 U.S.C. §12112(a). This issue has been argued extensively
in the other circuits and we see no need to address it at length here.
While [Thiokol’s disability] plan differentiated between
types of disabilities, this is a far cry from a specified
disabled employee facing differential treatment due to her
disability. Every [Thiokol] employee had the opportunity
to join the same plan with the same schedule of coverage,
meaning that every [Thiokol] employee received equal
treatment. So long as every employee is offered the same
plan regardless of that employee’s contemporary or future
disability status, then no discrimination has occurred even
if the plan offers different coverage for various disabilities.
The ADA does not require equal coverage for every type of
disability; such a requirement, if it existed would
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destabilize the insurance industry in a manner definitely
not intended by Congress when passing the ADA.
Ford v. Schering-Plough Corp., 145 F.3d 601, 608 (3d Cir. 1998), cert. denied,
119 S.Ct. 850 (1999). The Fourth, Sixth and Seventh Circuits have also
addressed the same issue and arrived at the same conclusion. See Lewis v. Kmart
Corp., 180 F.3d 166, 170 (4th Cir. 1999) (holding that “the ADA does not require
a long-term disability plan that is sponsored by a private employer to provide the
same level of benefits for mental and physical disabilities.”); Parker v.
Metropolitan Life Ins. Co., 121 F.3d 1006, 1015 (6th Cir. 1997) (en banc), cert.
denied, 118 S.Ct. 871 (1998) (“The disparity in benefits provided in the policy at
issue is also not prohibited by the ADA because the ADA does not mandate
equality between individuals with different disabilities.”); EEOC v. CNA Ins. Co.,
96 F.3d 1039, 1044 (7th Cir. 1996) (“a plan that promised [employees] long-term
benefits from the onset of disability until age 65 if their problem was physical,
and long-term benefits for two years if the problem was mental or nervous” did
not violate the ADA). See also Krauel v. Iowa Methodist Med. Ctr., 95 F.3d 674,
678 (8th Cir. 1996) (noting that excluding one disability from coverage is not a
disability-based distinction violating the ADA so long as the exclusion applies
equally to all individuals).
The D.C. Circuit also has ruled on this issue in analyzing the Rehabilitation
Act and upheld distinctions in benefits based on physical and mental disabilities.
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Modderno v. King, 82 F.3d 1059, 1061 (D.C. Cir. 1996), cert. denied, 117 S.Ct.
772 (1997). Because the language of disability used in the ADA mirrors that in
the Rehabilitation Act, we look to cases construing the Rehabilitation Act for
guidance when faced with an ADA challenge. See Bragdon v. Abbot, 118 S.Ct.
2196, 2202 (1998); see also Patton v. TIC United Corp., 77 F.3d 1235, 1245 (10th
Cir. 1996).
We adopt the reasoning of these cases and hold that the ADA does not
prohibit an employer from operating a long term disability benefits plan which
distinguishes between physical and mental disabilities.
AFFIRMED.
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