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Carpenter v. Proctor & Gamble Disability Benefit Plan & Benefit Plans Trust

March 31, 2006


The opinion of the court was delivered by: Chief Judge Vanaskie


Plaintiff Gary Carpenter commenced this action under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et. seq., to recover long-term disability benefits he claims were due to him under the Procter & Gamble Long-Term Disability Allowance ("LTDA") Plan. The Trustees of the plan terminated Mr. Carpenter's disability benefits after determining he was not totally disabled as required by the plan. Mr. Carpenter asks this Court to overturn the Trustees' decision. Before this Court are the parties' cross-motions for summary judgment. (Dkt. Entries 50, 52.)

Because the LTDA Plan accords the Trustees discretionary authority to determine eligibility for Plan benefits, this Court reviews the Trustees' determination that Mr. Carpenter is not eligible for benefits under an arbitrary and capricious standard of review. Slightly heightened scrutiny of the benefits decision is warranted in this case, however, because the Procter and Gamble Company ("P&G") both funds and administers the LTDA Plan. Nonetheless, the record contains sufficient evidence to sustain the Trustees' decision.


On March 5, 2003, Mr. Carpenter this action. (Dkt. Entry 1-1.) The case was referred to Magistrate Judge Mannion for pretrial management. (See Dkt. Entry 3.)

On November 14, 2003, the parties' filed cross-motions for summary judgment. (Dkt. Entries 10-1, 11-1.) In a Report and Recommendation dated July 14, 2004, Magistrate Judge Mannion proposed that the Court sustain the Trustees' decision to terminate Mr. Carpenter's benefits. (Dkt. Entry 20.)

Mr. Carpenter filed objections to Magistrate Judge Mannion's Report and Recommendation on July 27, 2004. (Dkt. Entry 21-1.) Before this Court addressed Mr. Carpenter's objection, Defendant moved to supplement the record with additional information regarding the structure and funding of the LTDA Plan. (Dkt. Entry 22-1.) This Court granted Defendant's motion and determined that a decision on the parties' cross-motions for summary judgment was inappropriate given that the record was still developing. (Dkt. Entry 30.)

On April 29, 2005, the parties renewed their cross-motions for summary judgment. (Dkt. Entries 50, 52-1.) The motions have been fully briefed and are now ripe for resolution.


Plaintiff John Carpenter began working for the P&G at its Mehoopany Plant on September 12, 1977. (Plaintiff's Statement of Material Facts ("SMF") (Dkt. Entry 51-2) ¶ 1.) In 1990, Mr. Carpenter underwent a total hip replacement. (Id. ¶ 2.) In 1997, a Rheumatologist, Marianne J. Santioni, D.O., diagnosed Mr. Carpenter as suffering from Rheumatoid Arthritis and Osteoporosis.*fn1 (Id. ¶ 3.) Mr. Carpenter's condition prohibited him from working at P&G beginning on June 8, 1998. (Id. ¶ 4.) At that time, Mr. Carpenter was a participant in an ERISA-covered disability plan sponsored by P&G. (Def.'s SMF (Dkt. Entry 52-2) ¶ 4.)

A. P&G's Disability Plan

P&G's disability plan includes both a short-term benefits plan, the P&G Disability Benefit Plan ("Short-Term Plan"), and a long-term benefits plan, the LTDA Plan. (See The P&G Disability Benefit Plan ("Plan Document") (Dkt. Entry 12-1, Ex. A) at 17.) Plan participants initially receive benefits for the first fifty-two (52) weeks of disability under the Short-Term Plan. (See id.) After fifty-two (52) weeks of total disability, benefits are governed by the LTDA Plan. (See id.)

A participant must be totally disabled to receive benefits under the LTDA Plan. (Id.) "Total disability" is defined as "a mental or physical condition resulting from illness or injury which is generally considered totally disabling by the medical profession. Usually, total disability involves a condition of such severity as to require care in a hospital or restriction to the immediate confines of the home." (Id. art. II, § 16.)*fn2 The plan defines "partial disability" as "a mental or physical condition resulting from an illness or injury because of which the Participant cannot perform regular duties but can perform other useful duties." (Id. art. II, § 11.)

The LTDA Plan is administered by two company-appointed Trustees. The Trustees are vested with discretionary authority to interpret the plan and to make disability benefit determinations. (Id. art. VII, § 1(h).) The Trustees are volunteers who work in other jobs with P&G and receive no additional pay for their Trustee-related duties. (Id. art. VII, § 1(f); Tr. of Hoffman's Dec. 7, 2004 Dep. ("Hoffman Dep. I") (Dkt. Entry 54) at 14-15.)

The Trustees may establish three-person review board to conduct an initial investigation and recommendation concerning a participant's entitlement to benefits. (Plan Document, art. VIII, §§ 2-4.) Members of the review board work in other positions at P&G and receive no additional pay for their review board-related activities. (Hoffman Dep. I at 28.) P&G also employs medical case managers to provide medical reviews for the reviewing boards and the Trustees. (Id. at 23-24.)

The Trustees may require participants receiving benefits under the plan to undergo an examination by a physician of its choice. (Id. art. VI, § 6(d).) If the examination shows that the participant is no longer totally disabled, benefits may be discontinued. (Id.)

Benefits under the LTDA plan are paid out of a trust fund. (Hoffman Dep. I at 16-17.) P&G makes contributions to the trust fund based upon estimates of the current year's claim liability, the estimated future long-term disability benefits, and the investment return of the fund. (Id.) An actuarial determination of unrevealed claims and future liabilities is used to estimate future long-term benefits. (Id. at 35-36.) If the trust fund lacks sufficient money to pay benefits, P&G must make up the deficiency. (Id. at 16.)

B. Mr. Carpenter's Disability Claim

On June 10, 1998, Mr. Carpenter applied for benefits under the Short-Term Plan. (Administrative File ("AF") (Dkt. Entry 12-1, Ex. C) at 188-89.)*fn3 The application was supported by a physician's certificate stating that Mr. Carpenter was totally disabled. (Id. at 189.) Mr. Carpenter received total disability benefits under the Short-Term Plan from June 1998 until June 1999. (Pl.'s S.M.F. (Dkt. Entry 51-2) ¶ 6.)

On June 21, 1999, Mr. Carpenter began receiving disability benefits under the LTDA Plan. (AF (Dkt. Entry 12-1, Ex. C) at 208.) Mr. Carpenter's eligibility for total disability benefits was supported by his treating physician, Dr. Santioni, who submitted numerous status reports and certificates stating that Mr. Carpenter was totally and permanently incapacitated.*fn4 (See, e.g., id. at 18, 20, 75, 77, 85, 87, 89, 92, 99, 101, 105, 113, 115, 117, 119, 149, 197.) Dr. Santioni also submitted functional capacity statements indicating Mr. Carpenter's ability to perform specific activities, such as ...

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