On Appeal From the United States District Court For the Middle District of Pennsylvania
(D.C. Civil Action No. 93-cv-00840)
Before: STAPLETON and NYGAARD, Circuit Judges, MAZZONE, *fn1 District Judge
In this case, we are asked to decide whether the denial of a claim for benefits under a Long-Term Disability Plan governed by the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. Section(s) 1001 et seq., by a Plan participant suffering from Chronic Fatigue Syndrome ("CFS") was arbitrary and capricious. We hold that, in the circumstances present here, it was. We will therefore affirm the district court's grant of summary judgment in favor of the Plan participant.
George Mitchell ("Mitchell"), then an employee of Eastman Kodak Company ("Kodak"), first began suffering from persistent coughs, sore throats, fever, and extreme fatigue in the fall of 1988. He consulted a family physician and an infectious disease specialist, but neither could find any medical explanation for his persistent fatigue and other symptoms. On January 30, 1989, Dr. Gerald Gordon of the Geisinger Medical Center diagnosed Mitchell with "chronic fatiguing illness," not explained by any "clear infectious cause." The intermittent flu-like symptoms and chronic overwhelming fatigue persisted.
As a result of his chronic fatigue, Mitchell stopped working in January 1989. He received short-term disability benefits from Kodak until June 26, 1989, when his eligibility for short-term benefits expired. Mitchell then applied for long-term disability benefits under Kodak's Long-Term Disability Plan (the "Plan"), an "employee welfare benefit plan" governed by ERISA. According to the terms of the Plan, a participant is eligible to receive long-term disability ("LTD") benefits if he, inter alia, suffers from a disability that renders him "totally and continuously unable to engage in any substantial Gainful Work *fn2 for which he is, or becomes, reasonably qualified by education, training, or experience." Plan Section(s) 2.06, App. at 12. *fn3
Metropolitan Life Insurance ("MLI"), the claims administrator under the Plan, reviewed Mitchell's medical records and denied his claim for LTD benefits in September 1989. Mitchell sought reconsideration, and MLI affirmed the denial of benefits. In accordance with the terms of the Plan, Mitchell appealed MLI's decision to the Plan Administrator at Kodak. After reviewing Mitchell's claim file, the Administrator affirmed the denial of benefits on the ground that Mitchell had failed to provide "objective medical evidence that [his] condition made [him] totally and continuously unable to engage in any substantial gainful work for which [he was] qualified as of June 26, 1989." Letter of January 17, 1992, App. at 24.
Mitchell then brought this ERISA action to challenge the Administrator's decision under 29 U.S.C. Section(s) 1132(a)(1)(B), which allows an ERISA plan participant to bring a civil action to recover benefits due him under the terms of the plan. Mitchell alleged that he suffered from a disability as defined in the Plan as of June 26, 1989, and thus was and is entitled to LTD benefits under the Plan.
Mitchell and Kodak filed cross-motions for summary judgment. Although both parties had assumed that the district court would review the Administrator's denial of Mitchell's claim under an "arbitrary and capricious" standard, the court instead conducted a de novo review because the copy of the Plan submitted by the parties *fn4 contained no language granting the Administrator discretion to determine a Plan participant's eligibility for benefits. See Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (1989); Luby v. Teamsters Health, Welfare and Pension Trust Funds, 944 F.2d 1176 (3d Cir. 1991). The court found that the evidence clearly showed that Mitchell was suffering from CFS in June 1989, but was insufficient to demonstrate that his CFS rendered Mitchell totally unable to engage in any substantial gainful work at that time. The court also concluded, however, that there was insufficient evidence to find that Mitchell was not totally disabled by his CFS. To resolve the issue, the court remanded the matter to the Administrator for reconsideration after supplementation of the record with additional information on Mitchell's ability to engage in gainful work on June 26, 1989.
On remand, Mitchell submitted to the Administrator a letter from his physician, Dr. Nelson Gantz, dated August 18, 1994, which explained how Mitchell's persistent CFS symptoms rendered him unable to engage in any substantial gainful work. After reviewing this supplemental information "and again reviewing the entirety of the claims administrator's file," the Administrator reaffirmed his denial of Mitchell's claim for LTD benefits. Letter of Apr. 12, 1995, App. at 192-93. The Administrator insisted that Dr. Gantz's letter, which was written in the present tense, "failed to shed any new light on Mr. Mitchell's condition as of June 26, 1989." Id. at 193. The Administrator concluded, once again, that Mitchell "ha[d] failed to provide any objective medical evidence that his condition made him totally and continuously unable to engage in any substantial gainful work for which he was qualified as of June 26, 1989." Id.
Mitchell then filed with the district court a Petition to Re-Open Motion for Summary Judgment. Kodak, in opposition to the Petition, submitted 1991 Plan Amendments that granted the Administrator "discretionary authority to determine all questions arising in the administration, interpretation and application of the plan" and argued that the Amendments, which had been in effect when the Administrator finally denied Mitchell's claim in January 1992, precluded the district court from reviewing the Administrator's decision de novo. The district court, although recognizing that the Plan Amendments indeed granted the Administrator discretionary authority to administer the Plan, again conducted a de novo review. The court interpreted this court's decision in Luby v. Teamsters Health, Welfare and Pension Trust Funds, 944 F.2d 1176 (3d Cir. 1991), to require de novo review of all fact-based decisions by ERISA plan administrators. Dec. 14, 1995 Op. at 9-11. Pursuant to its de novo review, the court granted summary judgment for Mitchell on the ground that the undisputed evidence demonstrated that Mitchell suffered from CFS that rendered him totally unable to engage in any substantial gainful work as of June 26, 1989 and that he was therefore entitled to LTD benefits under the Plan. Kodak appeals the grant of summary judgment, challenging both the district court's de novo review of the Administrator's decision and its conclusion that Mitchell was totally disabled as of June 26, 1989.
The district court had jurisdiction over this action under 29 U.S.C. Section(s) 1132(e)(1) and 28 U.S.C. Section(s) 1331. We have jurisdiction over the appeal from the district court's grant of summary judgment pursuant to 28 U.S.C. Section(s) 1291. Our review of the district court's grant of summary judgment is plenary, and we apply the same test that the district court should have applied in the first instance. Bixler v. Central Pa. Teamsters Health & Welfare Fund, 12 F.3d 1292, 1297 (3d Cir. 1993).
Kodak challenges the district court's de novo review of the Plan Administrator's decision and argues that the court should have affirmed the Administrator's decision under the "arbitrary and capricious" standard. Alternatively, Kodak asserts that even under de novo review, the district court should have affirmed the Administrator's decision. Mitchell, on the other hand, argues that de novo review was appropriate, and, alternatively, that even under the "arbitrary and capricious" standard of review he is entitled to summary judgment. We agree with Kodak that the "arbitrary and ...