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December 14, 1995


The opinion of the court was delivered by: MCCLURE

 December 14, 1995


 Plaintiff George w. Mitchell filed this ERISA action *fn1" to recover long-term disability benefits which he alleges are owed to him under the Kodak Long Term Disability Plan (the plan) provided by his former employer, defendant Eastman Kodak Company (Kodak). Metropolitan Life Insurance Company (Metropolitan Life) is the claims administrator responsible for making eligibility determinations in the first instance. Its decisions are reviewed by Kodak, the plan administrator.

 Mitchell was employed by Kodak from June 4, 1972 through January 12, 1989 as a field engineer. Plaintiff alleges that he became unable to work following a flu-like illness which he suffered in the late summer/fall of 1988. He alleges that he suffers from chronic fatigue syndrome (CFS), which renders him unable to work and that on that basis, he is qualified for long-term disability payments under the plan. Plaintiff applied for, and began receiving, short-term disability benefits from Kodak in January, 1989, shortly after the onset of his illness. No determination of eligibility was necessary to qualify for the receipt of such benefits. Short-term disability benefits are paid out automatically upon notification of an employee's sickness, injury or disability. Approval from the claims administrator is not necessary.

 Plaintiff's eligibility for short-term disability benefits ended on June 26, 1989. His application for long-term disability benefits was denied by the claims administrator on June 9, 1990. On appeal to the plan administrator, the denial was affirmed.

 Plaintiff brought this action to challenge Kodak's denial of long-term disability benefits. He contends that he has proven all elements necessary to establish that he is entitled to long-term disability benefits under the terms of the plan.

 The parties filed cross motions for summary judgment. *fn2" After considering the parties' motions, this court remanded the case to the plan administrator for further factual findings after the parties were given an opportunity to supplement the record. See generally: Quesinberry v. Life Insurance Company of North America, 987 F.2d 1017, 1025 n. 6 (4th Cir.1993) (recognizing availability of remand where appropriate).

 While the case was on remand: 1) plaintiff supplemented the record with a report from his treating physician dated August 19, 1994; 2) no additional medical evidence was submitted by defendant; 3) in a letter to plaintiff's counsel, Timothy J. O'connell, Esq., dated April 12, 1995, the plan administrator denied plaintiff's claim for benefits (record document no. 23, exhibit "B").

 The case is now again before us on the parties' cross-motions for summary judgment pursuant to plaintiff's petition to re-open his motion for summary judgment. That petition was granted by the court in an order dated August 23, 1995. For the reasons which follow, we conclude that plaintiff is entitled to summary judgment in his favor.


 Summary judgment standard

 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 as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c)

...The plain language of Rule 56(c) mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial. In such a situation, there can be 'no genuine issue as to any material fact,' since a complete failure of proof concerning an essential element of the nonmoving party's case necessarily renders all other facts immaterial. The moving party is 'entitled to judgment as a matter of law' because the nonmoving party has failed to make a sufficient showing on an essential element of her case with respect to which she has the burden of proof.

 Celotex v. Catrett, 477 U.S. 317, 323-24, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986).

 The moving party bears the initial responsibility of stating the basis for its motions and identifying those portions of the record which demonstrate the absence of a genuine issue of material fact. He or she can discharge that burden by "showing...that there is an absence of evidence to support the nonmoving party's case." Celotex, supra, 477 U.S. at 323 and 325.

 Issues of fact are "'genuine' only if a reasonable jury, considering the evidence presented, could find for the non-moving party." Childers v. Joseph, 842 F.2d 689, 693-94 (3d Cir. 1988), citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986). Material facts are those which will affect the outcome of the trial under governing law. Anderson, supra, 477 U.S. at 248. In determining whether an issue of material fact exists, the court must consider all evidence in the light most favorable to the non-moving party. White v. Westinghouse Electric Company, 862 F.2d 56, 59 (3d Cir. 1988).

 Standard of review

 In our prior memorandum, *fn3" we determined, based on the plan provisions in the documents then before us, and on the nature of the issue before us, that our review was de novo. Eastman Kodak has now supplemented the record with a copy of the amendments to the plan which became effective on April 14, 1991. Defendant states that it did not file the amendments earlier because it was under the impression that the standard of review was not in dispute. Defendant's request to supplement the record is reasonable, and we will consider the 1991 amendments attached to its response to the motion to reopen summary judgment as part of the record currently before the court.

 The standard of review applied by this court turns on the nature of the authority held by the plan administrator to determine benefit eligibility. Luby v. Teamsters Health, Welfare & Pension Trust Funds, 944 F.2d 1176, 1180 (3d Cir. 1991) and 29 U.S.C. § 1132(a)(1)(B). "Where an ERISA plan grants it's administrator the power to interpret and construe the plan and decide questions as to eligibility, the arbitrary and capricious standard applies." Scarinci v. Ciccia, 880 F. Supp. 359, 364 (E.D.Pa. 1995).

 The "arbitrary and capricious" standard is essentially the same as an "abuse of discretion" standard: the court can overturn the decision of the plan administrator only if it was made "without reason" and is "unsupported by substantial evidence or erroneous as a matter of law." The court's scope of review is narrow, and it is not at liberty to substitute its own judgment for that of the administrator. Abnathya v. Hoffman-La, Inc., 2 F.3d 40, 45 (3d Cir. 1993).

 A modified arbitrary and capricious standard applies if there is evidence that the plan administrator had a conflict of interest. Scarinci, 880 F. Supp. at 364, citing Kotrosits v. GATX Corp. Non-Contributory Pension Plan for Salaried Employees, 970 F.2d 1165, 1173 (3d Cir.), cert. denied, 506 U.S. 1021, 121 L. Ed. 2d 583, 113 S. Ct. 657 (1992). See also: DiMichelle v. Travelers Insurance Company, 1993 U.S. Dist. LEXIS 16370, 1993 WL 481713 at *5 (E.D.Pa. Nov. 17, 1993). A conflict of interest may exist if the employer is self-insured and acts as the plan administrator or if the insurance company acting as a fiduciary with discretionary power to determine the eligibility of claimants for plan benefits pays claims out of its own assets. See, e.g., Miller v. Metropolitan Life Ins. Co., 925 F.2d 979, 984 (6th Cir. 1991). However, "the mere fact that an employer acts as the administrator of its own ERISA plan is not significant enough to warrant a heightened standard of review." Scarinci, 880 F. Supp. at 364, citing Abnathya, 2 F.3d at 45 n. 5 and Jordan v. Retirement Committee of Rensselaer Polytechnic Institute, 46 F.3d 1264, 1274 (2d Cir. 1995). See also: Phillips v. Amoco Oil Co., 799 F.2d 1464, 1471 (11th Cir. 1986), cert. denied, 481 U.S. 1016, 95 L. Ed. 2d 500, 107 S. Ct. 1893 (1987) ("the ERISA scheme envisions that employers will act in a dual capacity as both fiduciary to the plan and employer") and 29 U.S.C. § 1003(a).

 In determining whether such a conflict existed, the Third Circuit, in Abnathya, looked to how the plan was funded and benefit monies paid out. In that case, the employer, Hoffmann-La Roche, Inc. (Hoffman) made fixed contributions to the plan fund, which was held by a separate trustee. Monies in the fund could be used only "for the exclusive benefit of Members under this Plan or for the payment of expenses of the Plan and the Fund." Abnathya, 2 F.3d at 45 n. 5. "Hoffman therefore incurs no direct expense as a result of the allowance of benefits, nor does it benefit directly from the denial or discontinuation of benefits." Id., citing Woolsey v. Marion Laboratories, Inc., 934 F.2d 1452, 1459 (10th Cir. 1991) (no conflict of interest existed where the employer/plan administrator did not have the right to obtain any reversion from the fund). The Third Circuit also noted that there was "no evidence of bad faith on the part of Hoffman." Id., citing Nazay v. Miller, 949 F.2d 1323, 1335 (3d Cir. 1991) (no conflict exists where there was no demonstration of bad faith on the part of the employer coupled with an incentive to avoid unjustified denials of benefits to maintain employee morale). After weighing these factors, the Third Circuit concluded: "Although some degree of conflict inevitably exists where an employ acts as the administrator of its own employee benefits plan, the conflict here is not significant enough to require special attention or a more stringent standard of review under" Firestone Tire and Rubber Co. v. Bruch, 489 U.S. 101, 115, 103 L. Ed. 2d 80, 109 S. Ct. 948 (1989). Abnathya, 2 F.3d at 45 n. 5.

 Eastman Kodak plan

 Our prior conclusion that the standard of review is de novo was based on two considerations: 1) the absence of a plan provision vesting discretionary authority in the plan administrator; and 2) the existence of purely factual issues.

 Eastman Kodak's supplementation to the record after the remand includes plan amendments which define the authority conferred on the plan administrator to make eligibility determinations. Section 8.03 of the Eastman Kodak plan, as amended, provides:

In reviewing the claim of any participant, the Plan Administrator shall have full discretionary authority to determine all questions arising in the administration, interpretation and application of the plan. In all such cases, the Plan ...

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