United States District Court, W.D. Pennsylvania
Bissoon, United States District Judge
Complaint, Plaintiff James Neal challenges Life Insurance
Company of North America (“LINA”)'s denial of
his claim for long term disability benefits under a Group
Policy (the “Plan”) administered by LINA on
behalf of Defendant Diebold Inc. (Compl. (Doc. 1)). At the
initial case management conference held on January 4, 2017,
the parties reported two disputes to the Court. First,
counsel expressed disagreement as to the appropriate standard
of review in this case. Plaintiff's counsel argued that
the Court should review LINA's denial of benefits to
Plaintiff under a de novo standard of review,
whereas defense counsel argued that an abuse of discretion
standard should apply. Second, the parties disagreed as to
whether discovery beyond the administrative record is
the initial case management conference, on January 4, 2017,
the Court ordered the parties to file cross-briefing
addressing the appropriate standard of review and scope of
discovery in this case. (Doc. 18). The parties filed their
respective briefs on January 18, 2017. (Docs. 21 and 22).
After reviewing the parties' briefing, for the reasons
discussed in further detail below, the Court agrees with
Defendants that the abuse of discretion standard is the
appropriate standard of review in this case, and that no
additional discovery beyond the administrative record is
The Standard of Review
Court turns first to the parties' arguments as to the
proper standard of review in this case. The parties seem to
agree that, if the Plan grants discretionary authority to
LINA to determine eligibility for benefits, the standard of
review is one of abuse of discretion. (See
Defendants' Brief (Doc. 21) at 3 (“Where a plan
grants discretionary authority to the administrator to
determine eligibility for benefits, a deferential arbitrary
and capricious review, also known as the abuse of discretion
standard, is appropriate ‘across the
board.'”) (citing Estate of Schwing v. The
Lilly Health Plan, 562 F.3d 522, 525 (3d Cir. 2009));
Plaintiff's Brief (Doc. 22) (“The denial of
benefits under 1132(a)(1)(B) is to be reviewed under a de
novo standard unless the benefit plan gives the
administrator or fiduciary discretionary authority to
determine eligibility for benefits.”) (citing
Firestone Tire & Rubber Co. v. Bruch, 489 U.S.
101, 115 (1989)). The parties disagree, however, as to
whether the Plan in this case grants LINA such discretionary
authority. (Contrast Doc 21 at 3 (“Here, the Plan
grants such discretion to LINA in a number of governing Plan
documents.”) with Doc. 22 at 1 (“[T]he Group Plan
does not contain any grant of discretionary
reviewing the Plan documents, the Court agrees with
Defendants that the Plan in this case unambiguously provides
that LINA has discretionary authority to determine a
claimant's eligibility for benefits. As Defendants note
in their briefing, the policy itself states that LINA has
been “appointed . . . as the named fiduciary for
deciding claims for benefits under the Plan, and for deciding
any appeals of denied claims.” (Doc. 21, Ex. C at 19).
Although this language alone may be insufficient to confer
the requisite discretion to LINA, other Plan documents
consistently and unambiguously provide for such discretion.
Specifically, the Group Long-Term Disability Insurance
Certificate states, in relevant part:
The Plan Administrator [Diebold] has appointed the Insurance
Company [LINA] as the named fiduciary for adjudicating claims
for benefits under the Plan, and for deciding any appeals of
denied claims. The Insurance Company shall have the
authority, in its discretion, to interpret the terms of the
Plan, decide questions of eligibility for coverage or
benefits under the Plan, and to make any related findings of
fact. All decisions made by the Insurance Company shall be
final and binding on Participants and Beneficiaries to the
full extent permitted by law.
(Doc. 21, Ex. B at 17) (emphasis added).
the Plan documents include an “Appointment of Claim
Fiduciary” form (“ACF”), which reiterates
the grant of discretionary authority to LINA as follows:
Claim Fiduciary shall have the authority, in its discretion,
to interpret the terms of the Plan, including the Policies;
to decide questions of eligibility for coverage or benefits
under the Plan; and to make any related findings of fact.
(Doc. 21, Ex. D).
argues that the Court should not consider the ACF in
determining whether the Plan provides discretionary authority
to LINA, citing to a decision from the district court for the
Middle District of Pennsylvania, Moran v. Life Ins. Co.
of N. Am. Misericordia Univ., 2014 WL 4251604, at *4
(M.D. Pa. Aug. 27, 2014). However, the Moran
decision is not binding on this Court, and the Court finds
more persuasive those decisions reaching the opposite
conclusion, i.e., that language in an ACF granting
discretionary authority to an insurer should be considered
for purposes of determining the proper standard of review in
an ERISA case. See, e.g., Gailey v.
Life Ins. Co. of N. Am., 2016 WL 6082112, at *4 (M.D.
Pa. Oct. 17, 2016) (finding that language in an ACF stating
that the insurer has “authority, in its discretion, to
interpret the terms of the Plan, including the Policies; to
decide questions of eligibility for coverage or benefits
under the Plan; and to make any related findings of fact . .
. is exactly [the type of delegation of discretionary power
that] the Supreme Court contemplated in
Firestone.”); accord Raybourne v. CIGNA
Life Ins. Co. of N.Y., 576 F.3d 444 (7th Cir. 2009);
Lawrence v. Life Ins. Co. of N. Am., 2007 WL
2410180, at *5 (N.D. Ill. Aug. 20, 2007)
(“[U]nambiguous discretionary language in the . . .
[ACF] form renders the arbitrary and capricious standard of
short, the Court finds that the Plan documents, including the
policy itself, the Group Long-Term Disability Insurance
Certificate and the ACF, plainly grant LINA discretionary
authority to determine plan eligibility. Accordingly, the
Court will review LINA's benefits decision in ...