NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS DEC 10 2019 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT
OLGA GORBACHEVA, No. 18-15400
Plaintiff-Appellant, D.C. No. 5:14-cv-02524-EJD
v. MEMORANDUM* ABBOTT LABORATORIES EXTENDED DISABILITY PLAN; ABBOTT LABORATORIES ANNUITY RETIREMENT PLAN; ABBOTT LABORATORIES RETIREE HEALTH CARE PLAN; ABBOTT LABORATORIES INC.; JAMES SIPES,
Defendants-Appellees.
OLGA GORBACHEVA, No. 18-16178
Plaintiff-Appellee, D.C. No. 5:14-cv-02524-EJD
v.
ABBOTT LABORATORIES EXTENDED DISABILITY PLAN; ABBOTT LABORATORIES ANNUITY RETIREMENT PLAN; ABBOTT LABORATORIES RETIREE HEALTH CARE PLAN; ABBOTT LABORATORIES INC.; JAMES SIPES,
* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. Defendants-Appellants.
Appeal from the United States District Court for the Northern District of California Edward J. Davila, District Judge, Presiding
Argued and Submitted November 12, 2019 San Francisco, California
Before: W. FLETCHER, BENNETT, and BADE, Circuit Judges.
Olga Gorbacheva appeals the district court’s grant of summary judgment to
the Abbott Laboratories Extended Disability Plan, the Abbott Laboratories Annuity
Retirement Plan, the Abbott Laboratories Retiree Health Care Plan, and Abbott
Laboratories (collectively, the “Plan”) on her claim for long-term disability
benefits under the Employee Retirement Income Security Act of 1974 (“ERISA”),
29 U.S.C. §§ 1001–1461. The Plan cross-appeals the district court’s award of
attorneys’ fees to Gorbacheva and its denial of the Plan’s cross-motion for
attorneys’ fees. We have jurisdiction under 28 U.S.C. § 1291, and we affirm the
district court’s grant of summary judgment but reverse the district court’s fee
award and remand.
I
“We review de novo the district court’s choice and application of the
standard of review” to determinations by ERISA plan administrators. Pannebecker
v. Liberty Life Assurance Co. of Bos., 542 F.3d 1213, 1217 (9th Cir. 2008). We
2 review the district court’s underlying factual determinations for clear error.
Friedrich v. Intel Corp., 181 F.3d 1105, 1109 (9th Cir. 1999).
The district court properly concluded that an abuse of discretion standard
applies to the Plan’s denial of benefits. Because the Plan unambiguously confers
discretion upon the Plan Administrator to construe the terms of the Plan and make
determinations of eligibility, the standard of review shifts “from the default of de
novo to the more lenient abuse of discretion.” Abatie v. Alta Health & Life Ins.
Co., 458 F.3d 955, 963 (9th Cir. 2006) (en banc). Gorbacheva argues that the
district court nevertheless should have applied a de novo standard of review
because of the Plan Administrator’s conduct during the second review of
Gorbacheva’s claim following the district court’s initial remand. Principally,
Gorbacheva contends that the Plan Administrator relied entirely on litigation
counsel to review the evidence in the record, to determine that the Plan should
deny the claim, and to provide the rationale for doing so. We disagree.
Although a court may review a denial of benefits de novo if the plan
administrator fails to exercise discretion or if her “actions fall so far outside the
strictures of ERISA that it cannot be said that [she] exercised the discretion that”
the plan confers, id. at 972, the Plan Administrator’s conduct does not rise to that
level. The Plan Administrator’s extensive consultation with litigation counsel
during the pendency of her review is troubling, but the unrebutted evidence in the
3 record confirms that she reviewed the evidence and the terms of the Plan, and
concluded that she should deny Gorbacheva’s claim, before consulting litigation
counsel. Thus, the Plan Administrator’s conduct was not so irregular as to require
de novo review of the Plan’s denial.
Nor did the district court err in concluding that the Plan did not abuse its
discretion by denying Gorbacheva’s claim. A plan administrator abuses her
discretion if her decision is “(1) illogical, (2) implausible, or (3) without support in
inferences that may be drawn from the facts in the record.” Salomaa v. Honda
Long Term Disability Plan, 642 F.3d 666, 676 (9th Cir. 2011) (quoting United
States v. Hinkson, 585 F.3d 1247, 1262 (9th Cir. 2009) (en banc)). But when an
ERISA plan acts under a structural conflict of interest or introduces procedural
irregularities into its review process, we conduct our abuse of discretion review
with “a higher degree of skepticism.” See id. Additionally, we weigh factors such
as “the quality and quantity of the medical evidence,” whether the plan
administrator relied on an in-person evaluation or conducted a purely paper review
of the records, and “whether the administrator considered a contrary [Social
Security Administration] disability determination.” Montour v. Hartford Life &
Accident Ins. Co., 588 F.3d 623, 630 (9th Cir. 2009).
Here, the Plan’s conclusion that Gorbacheva was capable of performing her
desk job as of July 31, 2012, was neither “illogical,” nor “without support” in the
4 record. As the district court observed, Gorbacheva’s pre-July 31, 2012 medical
record was largely ambiguous. Although those records documented degenerative
conditions in her spine and knee, Gorbacheva’s treatment records differ as to
whether the pain from her condition rendered her permanently unable to work.
And the Plan’s own medical consultants, including a physician that personally
examined Gorbacheva, concluded that she was capable of performing her role.
Moreover, although the Plan acknowledged the results of Gorbacheva’s 2013
functional capacity exam, it rejected its conclusions as unreasonable, in part,
because of the substantial treatment gap in Gorbacheva’s medical records.
Similarly, the Plan considered the Social Security Administration’s (“SSA”) 2014
decision awarding Gorbacheva benefits, but again rejected it as inconsistent with
the remainder of the record. And, in contrast to the SSA, the Plan was not required
to afford the opinions of Gorbacheva’s treating physicians “special weight.” See
Black & Decker Disability Plan v. Nord, 538 U.S. 822, 834 (2003).
Because of the conflicting evidentiary record, the Plan’s conclusion that
Gorbacheva was not disabled within the terms of its plan was not an abuse of
discretion, even when weighed against the conflicts of interest and procedural
irregularities noted by the district court.
II
We review the district court’s award of attorney’s fees for abuse of
Free access — add to your briefcase to read the full text and ask questions with AI
NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS DEC 10 2019 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT
OLGA GORBACHEVA, No. 18-15400
Plaintiff-Appellant, D.C. No. 5:14-cv-02524-EJD
v. MEMORANDUM* ABBOTT LABORATORIES EXTENDED DISABILITY PLAN; ABBOTT LABORATORIES ANNUITY RETIREMENT PLAN; ABBOTT LABORATORIES RETIREE HEALTH CARE PLAN; ABBOTT LABORATORIES INC.; JAMES SIPES,
Defendants-Appellees.
OLGA GORBACHEVA, No. 18-16178
Plaintiff-Appellee, D.C. No. 5:14-cv-02524-EJD
v.
ABBOTT LABORATORIES EXTENDED DISABILITY PLAN; ABBOTT LABORATORIES ANNUITY RETIREMENT PLAN; ABBOTT LABORATORIES RETIREE HEALTH CARE PLAN; ABBOTT LABORATORIES INC.; JAMES SIPES,
* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. Defendants-Appellants.
Appeal from the United States District Court for the Northern District of California Edward J. Davila, District Judge, Presiding
Argued and Submitted November 12, 2019 San Francisco, California
Before: W. FLETCHER, BENNETT, and BADE, Circuit Judges.
Olga Gorbacheva appeals the district court’s grant of summary judgment to
the Abbott Laboratories Extended Disability Plan, the Abbott Laboratories Annuity
Retirement Plan, the Abbott Laboratories Retiree Health Care Plan, and Abbott
Laboratories (collectively, the “Plan”) on her claim for long-term disability
benefits under the Employee Retirement Income Security Act of 1974 (“ERISA”),
29 U.S.C. §§ 1001–1461. The Plan cross-appeals the district court’s award of
attorneys’ fees to Gorbacheva and its denial of the Plan’s cross-motion for
attorneys’ fees. We have jurisdiction under 28 U.S.C. § 1291, and we affirm the
district court’s grant of summary judgment but reverse the district court’s fee
award and remand.
I
“We review de novo the district court’s choice and application of the
standard of review” to determinations by ERISA plan administrators. Pannebecker
v. Liberty Life Assurance Co. of Bos., 542 F.3d 1213, 1217 (9th Cir. 2008). We
2 review the district court’s underlying factual determinations for clear error.
Friedrich v. Intel Corp., 181 F.3d 1105, 1109 (9th Cir. 1999).
The district court properly concluded that an abuse of discretion standard
applies to the Plan’s denial of benefits. Because the Plan unambiguously confers
discretion upon the Plan Administrator to construe the terms of the Plan and make
determinations of eligibility, the standard of review shifts “from the default of de
novo to the more lenient abuse of discretion.” Abatie v. Alta Health & Life Ins.
Co., 458 F.3d 955, 963 (9th Cir. 2006) (en banc). Gorbacheva argues that the
district court nevertheless should have applied a de novo standard of review
because of the Plan Administrator’s conduct during the second review of
Gorbacheva’s claim following the district court’s initial remand. Principally,
Gorbacheva contends that the Plan Administrator relied entirely on litigation
counsel to review the evidence in the record, to determine that the Plan should
deny the claim, and to provide the rationale for doing so. We disagree.
Although a court may review a denial of benefits de novo if the plan
administrator fails to exercise discretion or if her “actions fall so far outside the
strictures of ERISA that it cannot be said that [she] exercised the discretion that”
the plan confers, id. at 972, the Plan Administrator’s conduct does not rise to that
level. The Plan Administrator’s extensive consultation with litigation counsel
during the pendency of her review is troubling, but the unrebutted evidence in the
3 record confirms that she reviewed the evidence and the terms of the Plan, and
concluded that she should deny Gorbacheva’s claim, before consulting litigation
counsel. Thus, the Plan Administrator’s conduct was not so irregular as to require
de novo review of the Plan’s denial.
Nor did the district court err in concluding that the Plan did not abuse its
discretion by denying Gorbacheva’s claim. A plan administrator abuses her
discretion if her decision is “(1) illogical, (2) implausible, or (3) without support in
inferences that may be drawn from the facts in the record.” Salomaa v. Honda
Long Term Disability Plan, 642 F.3d 666, 676 (9th Cir. 2011) (quoting United
States v. Hinkson, 585 F.3d 1247, 1262 (9th Cir. 2009) (en banc)). But when an
ERISA plan acts under a structural conflict of interest or introduces procedural
irregularities into its review process, we conduct our abuse of discretion review
with “a higher degree of skepticism.” See id. Additionally, we weigh factors such
as “the quality and quantity of the medical evidence,” whether the plan
administrator relied on an in-person evaluation or conducted a purely paper review
of the records, and “whether the administrator considered a contrary [Social
Security Administration] disability determination.” Montour v. Hartford Life &
Accident Ins. Co., 588 F.3d 623, 630 (9th Cir. 2009).
Here, the Plan’s conclusion that Gorbacheva was capable of performing her
desk job as of July 31, 2012, was neither “illogical,” nor “without support” in the
4 record. As the district court observed, Gorbacheva’s pre-July 31, 2012 medical
record was largely ambiguous. Although those records documented degenerative
conditions in her spine and knee, Gorbacheva’s treatment records differ as to
whether the pain from her condition rendered her permanently unable to work.
And the Plan’s own medical consultants, including a physician that personally
examined Gorbacheva, concluded that she was capable of performing her role.
Moreover, although the Plan acknowledged the results of Gorbacheva’s 2013
functional capacity exam, it rejected its conclusions as unreasonable, in part,
because of the substantial treatment gap in Gorbacheva’s medical records.
Similarly, the Plan considered the Social Security Administration’s (“SSA”) 2014
decision awarding Gorbacheva benefits, but again rejected it as inconsistent with
the remainder of the record. And, in contrast to the SSA, the Plan was not required
to afford the opinions of Gorbacheva’s treating physicians “special weight.” See
Black & Decker Disability Plan v. Nord, 538 U.S. 822, 834 (2003).
Because of the conflicting evidentiary record, the Plan’s conclusion that
Gorbacheva was not disabled within the terms of its plan was not an abuse of
discretion, even when weighed against the conflicts of interest and procedural
irregularities noted by the district court.
II
We review the district court’s award of attorney’s fees for abuse of
5 discretion. Micha v. Sun Life Assurance of Can., Inc., 874 F.3d 1052, 1057 (9th
Cir. 2017). To award attorneys’ fees under ERISA, a court must find that the
moving party achieved “some degree of success on the merits.” Hardt v. Reliance
Standard Life Ins. Co., 560 U.S. 242, 245 (2010) (quoting Ruckelshaus v. Sierra
Club, 463 U.S. 680, 694 (1983)). By obtaining an initial remand for further
consideration of her ERISA claim, Gorbacheva satisfied this hurdle even if the
district court did not ultimately agree that she was entitled to benefits. See id. at
255.
But even if a party is entitled to recover fees under ERISA, a court must
determine whether those fees are “reasonable.” See Welch v. Metro. Life Ins. Co.,
480 F.3d 942, 945 (9th Cir. 2007). The district court erred in this analysis by
rejecting the Plan’s evidence that Gorbacheva refused an early settlement offer
from the Plan. Specifically, Gorbacheva declined an offer to remand the matter so
that the Plan could consider evidence that it had previously failed to acknowledge.
The district court’s order remanding the matter—which Gorbacheva touts as a
success—was nearly identical to the settlement offer and contained no additional
benefit. Thus, we conclude that the district court abused its discretion in finding
that the hours expended on the litigation after Gorbacheva’s rejection of the Plan’s
offer were reasonable. Accordingly, we reverse the district court’s award of fees to
Gorbacheva and remand so that the district court may re-calculate Gorbacheva’s
6 fees to include only those fees incurred prior to her rejection of the Plan’s offer of
a voluntary remand.
AFFIRMED in part and REVERSED and REMANDED in part.