Recupero v. NE Telephone
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Recupero v. NE Telephone, (1st Cir. 1997).
Opinion
USCA1 Opinion
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
____________________
No. 96-2265
CHERYL T. RECUPERO,
Plaintiff - Appellant,
v.
NEW ENGLAND TELEPHONE AND
TELEGRAPH COMPANY, ET AL.,
Defendants - Appellees.
____________________
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Robert B. Collings, U.S. Magistrate Judge]
____________________
Before
Bownes and Cyr, Senior Circuit Judges,
and Keeton,* District Judge.
_____________________
Lynn Thomas Johnson, with whom Blaine J. DeFreitas and Saab
Law Firm were on brief for appellant.
Lisa M. Birkdale, New England Telephone and Telegraph Company,
for appellees.
____________________
July 7, 1997
____________________
* Of the District of Massachusetts, sitting by designation.
KEETON, District Judge. This appeal presents issues
regarding the scope of jurisdiction of federal courts over claims
for benefits under an employee benefits plan that is subject to
regulation under the Employee Retirement Income Security Act
(ERISA). In particular, we must decide what standards apply to
judicial review of the decisions of the out-of-court decisionmakers
in this case.
Without doubt, in the circumstances of this case, as the
parties agree, the district court had jurisdiction for judicial
review of the out-of-court decisions, under 29 U.S.C.
SS 1132(a)(1)(B) and 1132(c), for at least one purpose: to
determine whether those decisions should be set aside as arbitrary
and capricious. In turn, this court has jurisdiction, under 28
U.S.C. SS 636(c)(3) and 1291, to consider plaintiff-appellant's
appeal from the district court's judgment for defendants.
In cases involving this kind of judicial review,
ordinarily the appropriate judgment for a district court to order
is one or the other of two kinds. If the district court determines
that the out-of-court decisions were arbitrary and capricious, the
appropriate form of order is one remanding to the out-of-court
decisionmaker for further proceedings to decide whether the claim
or claims have merit. Otherwise, the usual form of order is a
final judgment affirming the decisions of the out-of-court
decisionmaker. In this case, however, appellees assert that "[t]he
only salient issue before the court is whether the determination of
the Committee to deny Recupero accident benefits was arbitrary and
-2-
capricious." (Appellee's Br. at 2.) Though acknowledging as a
general matter the possibility of a remand "to the Committee for
further consideration" (id.), in the end appellees request only a
recognition that "the Committee's reasonable decision must be
permitted to stand" and an order that the district court's summary
judgment for defendant "be affirmed." (Id. at 22.) Appellant,
also, seeks a final decision in this court. Thus, no party to the
appeal asks for remand to the out-of-court decisionmaker (or even
to the district court on conclusion of this appeal), except
possibly as an alternative request, not clearly argued in the
briefs and barely mentioned in oral argument apart from responses
to questions from the court. Instead, the parties join in
contending that, if we conclude that the out-of-court decisions
were for some reason arbitrary and capricious, then we should
(1) decide this controversy finally, or order the district court to
do so, making any factual findings necessary to a decision on the
merits, or (2) decide that the claim is finally resolved on grounds
of some procedural bar, estoppel, or harmless error.
In these circumstances, this appeal presents a
fundamental question about the scope of jurisdiction of the
district court and this court. After stating relevant background
matter in Part I, we address this fundamental jurisdictional
question in Part II, concluding that the courts do not have plenary
jurisdiction to decide all questions bearing on the merits. In
Part III we turn to other issues, over which we do have
jurisdiction, and conclude that the judgment of the district court
-3-
against plaintiff-appellant is to be affirmed, though without
approval of all details of the district court's reasoning.
I. Background
The incident that forms the basis for this civil action
and this appeal occurred on January 18, 1990, while the plaintiff-
appellant, Cheryl Recupero, was working for New England Telephone
and Telegraph Company ("NET") as a Service Representative. The
District Court recited, as an undisputed fact, that:
At 9:30 am on January 18, she left her
workstation on the sixth floor for the
purpose of going for coffee at a shop on
the ground floor. She entered an elevator
and was injured in a mishap while in the
elevator.
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USCA1 Opinion
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
____________________
No. 96-2265
CHERYL T. RECUPERO,
Plaintiff - Appellant,
v.
NEW ENGLAND TELEPHONE AND
TELEGRAPH COMPANY, ET AL.,
Defendants - Appellees.
____________________
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Robert B. Collings, U.S. Magistrate Judge]
____________________
Before
Bownes and Cyr, Senior Circuit Judges,
and Keeton,* District Judge.
_____________________
Lynn Thomas Johnson, with whom Blaine J. DeFreitas and Saab
Law Firm were on brief for appellant.
Lisa M. Birkdale, New England Telephone and Telegraph Company,
for appellees.
____________________
July 7, 1997
____________________
* Of the District of Massachusetts, sitting by designation.
KEETON, District Judge. This appeal presents issues
regarding the scope of jurisdiction of federal courts over claims
for benefits under an employee benefits plan that is subject to
regulation under the Employee Retirement Income Security Act
(ERISA). In particular, we must decide what standards apply to
judicial review of the decisions of the out-of-court decisionmakers
in this case.
Without doubt, in the circumstances of this case, as the
parties agree, the district court had jurisdiction for judicial
review of the out-of-court decisions, under 29 U.S.C.
SS 1132(a)(1)(B) and 1132(c), for at least one purpose: to
determine whether those decisions should be set aside as arbitrary
and capricious. In turn, this court has jurisdiction, under 28
U.S.C. SS 636(c)(3) and 1291, to consider plaintiff-appellant's
appeal from the district court's judgment for defendants.
In cases involving this kind of judicial review,
ordinarily the appropriate judgment for a district court to order
is one or the other of two kinds. If the district court determines
that the out-of-court decisions were arbitrary and capricious, the
appropriate form of order is one remanding to the out-of-court
decisionmaker for further proceedings to decide whether the claim
or claims have merit. Otherwise, the usual form of order is a
final judgment affirming the decisions of the out-of-court
decisionmaker. In this case, however, appellees assert that "[t]he
only salient issue before the court is whether the determination of
the Committee to deny Recupero accident benefits was arbitrary and
-2-
capricious." (Appellee's Br. at 2.) Though acknowledging as a
general matter the possibility of a remand "to the Committee for
further consideration" (id.), in the end appellees request only a
recognition that "the Committee's reasonable decision must be
permitted to stand" and an order that the district court's summary
judgment for defendant "be affirmed." (Id. at 22.) Appellant,
also, seeks a final decision in this court. Thus, no party to the
appeal asks for remand to the out-of-court decisionmaker (or even
to the district court on conclusion of this appeal), except
possibly as an alternative request, not clearly argued in the
briefs and barely mentioned in oral argument apart from responses
to questions from the court. Instead, the parties join in
contending that, if we conclude that the out-of-court decisions
were for some reason arbitrary and capricious, then we should
(1) decide this controversy finally, or order the district court to
do so, making any factual findings necessary to a decision on the
merits, or (2) decide that the claim is finally resolved on grounds
of some procedural bar, estoppel, or harmless error.
In these circumstances, this appeal presents a
fundamental question about the scope of jurisdiction of the
district court and this court. After stating relevant background
matter in Part I, we address this fundamental jurisdictional
question in Part II, concluding that the courts do not have plenary
jurisdiction to decide all questions bearing on the merits. In
Part III we turn to other issues, over which we do have
jurisdiction, and conclude that the judgment of the district court
-3-
against plaintiff-appellant is to be affirmed, though without
approval of all details of the district court's reasoning.
I. Background
The incident that forms the basis for this civil action
and this appeal occurred on January 18, 1990, while the plaintiff-
appellant, Cheryl Recupero, was working for New England Telephone
and Telegraph Company ("NET") as a Service Representative. The
District Court recited, as an undisputed fact, that:
At 9:30 am on January 18, she left her
workstation on the sixth floor for the
purpose of going for coffee at a shop on
the ground floor. She entered an elevator
and was injured in a mishap while in the
elevator.
(Recupero v. New England Telephone & Telegraph Co., Civil Action
No. 94-12266-MLW, Memorandum and Order, Sept. 20, 1996 at 2.)
As a result of injuries sustained in this incident,
Recupero applied for benefits under the NET plan. (Id.) She was
granted benefits under the Sickness provision of the plan, but was
denied Accident benefits. (Id. at 3-4.)
The NET plan provides that an employee is:
[Q]ualified to receive [Accident
Disability] payments on account of
physical disability to work by reason of
accidental injury ...arising out of and in
the course of employment by the Company.
(Id. at 3)(emphasis added).
The plan further elaborates that:
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Accidental injuries shall be considered as
arising out of and in the course of
employment only where the injury has
resulted solely from accident during and
in direct connection with the performance
of duties to which the employee is
assigned...
(Id.)(emphasis added). The only limitation on the duration of
payment of Accident Disability Benefits, under the terms of the
plan, is that the employee remains unable to work. (Id. at 4 n.2.)
The plan does not explicitly define what "sickness" is in
the section providing for Sickness Disability Benefits, but does
state that "sickness shall include injury other than accidental
injury arising out of and in the course of employment by the
Company." (Id. at 4)(emphasis added). Sickness Disability
Benefits are subject to a duration limit of 52 weeks, under the
terms of the plan. (Id. at 4, n.2.) NET paid and Recupero accepted
52 weeks of Sickness Disability Benefits. (Id. at 3.)
The Benefits Office determined that Recupero was not
entitled to Accident Disability Benefits because her injuries did
not arise out of or occur in the course of her employment. (Id.)
Recupero appealed this decision to the Employee Benefits Committee
("EBC" or "Committee"), which denied her appeal by letter on
December 15, 1993, stating that "it was determined that there is
evidence that you were not eligible for Accident Benefits for the
incident report on January 18, 1990." (Id.) Recupero then filed
an identical appeal with the Employee Benefits Claim Review
Committee ("EBRC" or "Review Committee"), which also denied her
appeal, stating that "after consideration of all available
-5-
information, including the information you provided, the [EBRC] has
determined that there is no reason to reverse the original decision
of the [EBC]." (Id. at 5.)
Recupero filed a civil action for judicial review in the
United States District Court for the District of Massachusetts.
The district court assigned the case to Magistrate Judge Collings,
under 28 U.S.C. S 636(c)(1) and Local Rules of the district.
In the district court, Recupero contended that: (1) the
EBC and the EBRC acted arbitrarily and capriciously by erroneously
interpreting the provisions of the plan; (2) the Committees' denial
of her claim lacked good faith; and (3) the Committees gave her
inadequate notice of the denial. (Id. at 9.)
The district court decided the case by ruling on cross
motions for summary judgment.
The court initially noted the appropriate standard of
review, stating that the arbitrary and capricious standard applies
where the benefit plan vests the fiduciary with the discretionary
authority to determine benefits eligibility and to construe plan
provisions. (Id.) The court then made the following
determination:
[T]he NET plan enumerates in sufficient
detail the broad discretionary powers of
both the EBC and the EBCRC necessary for
application of the deferential standard of
review. Thus, the rulings of the NET
committees will not be disturbed unless
the denials were arbitrary and capricious.
(Id. at 8.)
-6-
The district court next examined in detail the various
claims and contentions. Recupero, using the word "Committee" to
refer to either or both of the Benefits Committee and the Review
Committee, stated as her first argument that the Committee
improperly categorized her injury as "off-duty" when it should have
been treated as an "on-duty" injury. (Id. at 9.) This argument
concluded with the assertion that it was not "rational" to classify
incidents that occur during breaks, taken at a time required or
directed by the employer, as being "off-duty" incidents. (Id.)
The district court concluded (contrary to Recupero's
contention) that the EBC and EBRC had not been arbitrary and
capricious in interpreting the plan as defining break-time as "off-
duty" time. The court stated:
Recupero does not point to any language in
the plan which indicates that the
committee interpretation is not rational.
Nor does she point to language which
suggests that the scope of the Accident
Benefits Provision should be given a
broader reading and be applied when the
injury occurs as a result of an otherwise
non-job-related activity which is
marginally motivated by a job-related
exigency. On the contrary, and the
defendants point out, the plain language
of the plan militates for a far narrower
reading.
(Id. at 10-11.)
The court below also emphasized that the definition of an
injury that would qualify an employee for accident benefits had
words of limitation, such as "only," "solely," and "in direct
connection." (Id. at 11.) These words, the court reasoned, are
-7-
plain and unambiguous, and require that for an employee "to be
eligible for accident benefits, the activity in which the employee
is engaged at the time of injury must be a duty or responsibility
required by her job." (Id.) Thus, the court concluded:
It is an undisputed fact that Recupero was
taking her break and going to get coffee
at the time she sustained her injuries.
Breaks fall outside the purview of the
plain language of the Accident Benefit
Provisions. Therefore, given that
Recupero was on break at the time, her
injury cannot be said to be a direct and
sole result of her job responsibilities.
(Id.)
Because, as the court below viewed the matter, the
plaintiff had failed to raise an issue of material fact, the court
ruled that the Committees' interpretation was consistent with the
language of the plan, and that the Committees did not act
arbitrarily or capriciously in denying Recupero's claim. (Id. at
12.)
Recupero's second contention below was that the
Committees acted with a lack of good faith toward her because, she
claimed, the EBC and the EBRC either never met to review her claim
or failed to have a quorum present when they did meet. (Id.) The
court below determined that Recupero's claim of lack of good faith
was without evidentiary support in the record. (Id. at 13.)
The final issue decided by the court below was whether
the notices of denial sent to Recupero by the Committees conformed
with the statutory requirements of ERISA. (Id.) Recupero
contended that the failure of the Committees to include specific
-8-
reasons for denying her claim, or to cite to any specific plan
provisions upon which the denial was based, precluded her from
obtaining the information that was necessary for her to pursue her
claim. (Id. at 14.)
On the issue of notice, the court below concluded that:
The denial letters sent to Recupero failed
to conform strictly to the requirements
set forth in ERISA, 29 U.S.C. S 33, and
were insufficient as a matter of law.
Nonetheless, as a practical matter, the
letters were substantially sufficient to
inform Recupero that her claim had been
denied.
(Id.)
Having so concluded, the lower court then considered
whether any remedy was available to Recupero for NET's failure to
conform to the requirements of 29 U.S.C. S 33. (Id.) The court
concluded that a remand to the EBC or the EBRC would be a useless
formality because the evidence taken as a whole indicated that the
denial of benefits was correct. (Id. at 15.)
On this reasoning, the district court granted summary
judgment for NET on all claims. Recupero appealed. No cross
appeal was filed.
II. The Scope of Jurisdiction in a Case
Involving Judicial Review of Out-of-Court Decisions
A. Circumstances of the Present Appeal
As already noted, the district court had, and this court
has, authority for judicial review of the out-of-court decisions
that preceded commencement of this civil action in the district
-9-
court. 29 U.S.C. SS 1132(a)(1)(B) and 1132(c); 28 U.S.C.
SS 636(c)(3) and 1291. Also, Recupero does not dispute that the
judicial review is to be "de novo" and that she has the burden, in
the circumstances of this case, of showing that the denial of her
claim violated the "arbitrary and capricious" standard.
(Appellant's Br. at 9, citing Firestone Tire and Rubber, Inc. v.
Bruch, 489 U.S. 101, 113 (1989); Pagan v. NYNEX, 52 F.3d 438, 442
(2d Cir. 1995) (judicial review of decision by pension plan
administrator to deny long-term disability benefits, where pension
provisions gave the plan administrator broad discretion to
determine eligibility issues and no material fact was genuinely in
dispute; "we are not free to substitute our judgment for that of
the NYNEX Committee as if we were considering the issue of
eligibility anew," and as if free to upset a reasonable
interpretation; court reviews only the decision of the NYNEX
Committee and, even if plan provisions were drafted by NYNEX, which
is an entity different from the NYNEX Committee, and were
ambiguous, the rule contra proferentum is inapplicable); Diaz v.
Seafarers Union, 13 F.3d 454, 456-57 (1st Cir. 1994) (trustees'
decision denying retired seaman's claim for higher monthly pension
benefit under Seafarers International Union's Pension Plan did not
improperly apply the trustee rules about "break in service" that
were promulgated pursuant to powers that the Plan instrument
granted to the trustees); Stuart v. Metropolitan Life Ins. Co., 664
F. Supp. 619, 622-23 (D. Me. 1987) (declining to overturn
recoupment from worker, of sum equal to lump-sum Social Security
-10-
payments, by insurer under Group Insurance Policy taken out by
Plan)).
Though the contentions of the parties about the scope of
the jurisdiction of the district court and this court differ, all
parties to this appeal urge us to take an exceedingly expansive
view of the scope of the courts' jurisdiction in reviewing ERISA
benefit determinations. Each party to this appeal, at least in the
alternative, urges us to hold that the district court had
jurisdiction not only to apply the arbitrary and capricious
standard of review to at least some aspects of the out-of-court
decisions, but also to make findings on material and genuinely
disputed factual issues that allegedly should have been decided and
were not. In essence, we are asked to decide on the merits, or
direct the district court to decide on the merits, every material
factual issue as to which the out-of-court decisions under judicial
review are challenged. We are asked to exercise plenary
jurisdiction of the most expansive form.
We acknowledge that statements made about "de novo
review" in some passages from authoritative sources, standing
alone, may seem to support the parties' expansive jurisdictional
contentions. We conclude, however, that a close examination of the
entire array of relevant authority discloses that contentions of
the parties in this respect flow from a misreading of Firestone,
and a resulting misunderstanding of that case and its sequels.
Such a misreading was anticipated by Justice (then Chief Judge)
Breyer's opinion for the First Circuit in Diaz, 13 F.3d at 458. In
-11-
that case an argument was made that a Plan amendment, granting
broad discretion to trustees, showed that the previous provisions
of the Plan did not grant discretion that broad. The Diaz opinion
responds that the amendment "merely made express a power ...
plainly implied all along," perhaps because the trustees "wanted to
play it safe in light of Firestone and the possibility that lower
courts would later misread it." Id.
The parties' expansive views about jurisdiction derive,
at least to some extent, from their reading of what Firestone said
about "de novo review." In that case, the Court declared:
... Consistent with established principles
of trust law, we hold that a denial of
benefits challenged under S 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 or to construe the terms of the
plan.
489 U.S. at 115 (emphasis added).
In several significant respects, the case before us in
this appeal differs from Firestone. Nevertheless, in this case,
one of the questions we must address may be stated in a generalized
way in exactly the same phrase as that used by Justice O'Connor in
describing the first of two questions before the Court in that
case: "First, we address the appropriate standard of judicial
review of benefit determinations by fiduciaries or plan
administrators under ERISA." 489 U.S. at 105.
The plans involved in Firestone were Firestone's three
"pension and welfare benefit plans for its employees: a
-12-
termination pay plan, a retirement plan, and a stock purchase
plan." Id. "All three of the plans were ... governed (albeit in
different ways) by ERISA." Id. In our case, also, the NET plan is
governed by ERISA, but in some respects by the same ERISA
provisions that applied to the Firestone plans and in other
respects by different ERISA provisions. One difference is that the
Firestone plans were "welfare and pension plans," and the NET plan
is not. Other differences emerge as we apply the reasoning of the
Court in Firestone to the present case.
Firestone determines that:
[f]or purposes of actions under
S 1132(a)(1)(B), the de novo standard of
review applies regardless of whether the
plan at issue is funded or unfunded and
regardless of whether the administrator or
fiduciary is operating under a possible or
actual conflict of interest.
489 U.S. at 115. The role of the district court in applying the
"de novo standard" is affected, however, by the terms of the
particular plan at issue. For example, "if a benefit plan gives
discretion to an administrator or fiduciary who is operating under
a conflict of interest that conflict must be weighed as a 'facto[r]
in determining whether there is an abuse of discretion.'
Restatement (Second) of Trusts S 187, Comment d (1959)." Id.
In this case, no party challenges the proposition that
NET plan documents did give some discretion, subject to judicial
review, to the EBC and EBRC. Nor does any party question that the
Committees were acting on behalf of an entity that was, within the
meaning of the statutory phrase, an "administrator or fiduciary."
-13-
Also, we do not understand the briefs of the parties as challenging
the proposition that the Committees had some responsibility, and
associated authority, with respect to "constru[ing] the terms of
the plan," as that phrase is used in Firestone, 489 U.S. at 115.
In any event, if this proposition is challenged, we conclude that
the challenge is without merit.
As previously discussed, when the benefit plan gives the
administrator or fiduciary discretion to determine benefit
eligibility or construe plan terms, Firestone and its progeny
mandate a deferential "arbitrary and capricious" standard of
judicial review. Id. Thus, a deferential "arbitrary and
capricious" standard of review applies, even though the review is
also to be "de novo review" to assure compliance of the out-of-
court decisionmakers with standards of conduct analogous to those
applied to trustees under judicially developed law (which Firestone
adopts to fill the gap left because "ERISA does not set the
appropriate standard of review for actions under S 1132(a)(1)(B)
challenging benefit eligibility determinations."). 489 U.S. at
109.
Because of the combination of similarities and
differences between the circumstances in Firestone and the
circumstances before us in this case with respect to the array of
different plan provisions and with respect to which among ERISA's
various provisions apply, however, we must be especially observant
of the extent to which the Firestone "de novo standard of judicial
review" requires de novo determinations by the reviewing court and
-14-
the extent to which, instead, it requires deference to an out-of-
court decision that is not "arbitrary and capricious."
An example of the kind of problems we must consider is
the determination of the meaning of provisions of the NET plan
regarding "eligibility for benefits" of various types -- in this
case, "Sickness Disability Benefits" and "Accident Disability
Benefits." Determining the meaning of such plan provisions
ordinarily depends solely on deciding an issue of law with respect
to manifested meaning of relevant provisions of the plan. A
reviewing court, at least in the absence of plan provisions
explicitly declaring otherwise, has authority to decide that a
committee interpretation that varies from an unambiguously
manifested meaning is arbitrary and capricious, and must be
disregarded. If, instead, the reviewing court determines that the
plan provisions are ambiguous or otherwise unclear, in some respect
material to the outcome of the case, this determination of lack of
clarity does not necessarily lead to treating the issue of meaning
as one for decision by findings of fact in the district court
(either by a jury or by the district judge). Instead, interpretive
issues of this kind may be decided by the court as matters of law
are decided, or they may be partly decided in court and partly on
remand to the out-of-court decisionmakers, or applicable law may
require some other allocation of decisionmaking functions. We say
more on this subject in Parts II.B and II.C of this opinion, below.
Summarizing, we conclude that in view of the Supreme
Court's pronouncement in Firestone, it is no longer in dispute that
-15-
federal courts review some ERISA claims de novo. Even when de novo
review is appropriate, however, it is often subject to some
limitations. Thus, the phrase "de novo review," as used in the
context of judicial review of out-of-court decisions of ERISA-
regulated plan administrators or fiduciaries does not mean that a
district court has "plenary" jurisdiction to decide on the merits,
anew, a benefits claim.
We use the term "plenary" to describe jurisdiction of the
court to disregard completely an "out-of-court decision" the court
is reviewing and itself (with or without participation by a jury)
decide anew all questions of fact bearing on the merits of the
benefits claim.
B. Contrasting Court Roles Because of Limits on Jurisdiction
1. Limits Incident to Fiduciary Discretion
Under Terms of a Benefit Plan
With respect specifically to an issue regarding
eligibility of a claimant for benefits, precedents recognize that
district courts do not have expansive plenary jurisdiction to
decide the merits of a claim anew if "the benefit plan gives the
administrator or fiduciary discretionary authority to determine
eligibility for benefits or to construe the terms of the plan."
Bellino v. Schlumberger Technologies, 944 F.2d 26, 29 (1st Cir.
1991) (quoting Firestone, 489 U.S. at 115); see also Martin v.
Bissonette , 1997 WL 280602, *12 (1st Cir. May 29, 1997) (remarking,
in the context of judicial review of state court determinations
bearing upon habeas writs, "we find a myriad of situations in which
-16-
federal courts review others' decisions with a thumb on the scale
....[,] [t]he most conspicuous ... [being] judicial review of
agency adjudications"). Thus, if an ERISA out-of-court
decisionmaker is given some discretion, the court reviews at least
some (if not all) aspects of the out-of-court decision only to
determine whether that decision was arbitrary and capricious. This
key point expressed in Bellino is entirely consistent with many
earlier and later First Circuit decisions that recognize the
authority of the court to be less deferential, or not deferential
at all, of out-of-court decisions by fiduciaries to whom a benefit
plan did not grant discretionary authority to decide the matter at
issue. Smart v. Gillette Co. Long-Term Disability Plan, 70 F.3d
173, 181 (1st Cir. 1995) ("In ERISA cases ... court should
scrutinize an ostensible waiver with care in order to ensure that
it reflects the purposeful relinquishment of an employee's
rights."); Hughes v. Boston Mut. Life Ins. Co., 26 F.3d 264, 267
(1st Cir. 1994) ("Where, as here, the administrator of an ERISA-
regulated plan does not allege that it has discretion under the
plan to interpret the terms of the insurance policy, judicial
review of a denial of benefits entails no deference to the
administrator's explanation of the plan ...."); Diaz, 13 F.3d at
456-58 (arbitrary and capricious standard of review applied to
trustee rules promulgated pursuant to "broad, discretionary
authority" granted to the trustee in the trust instrument);
Rodriguez-Abreu v. Chase Manhattan Bank, N.A., 986 F.2d 580, 583-84
(1st Cir. 1993) (de novo standard properly applied where "the
-17-
relevant plan document did not grant discretionary authority to the
Plan Administrator and the Named Fiduciaries did not expressly
delegate their discretionary authority to the Plan administrator");
Allen v. Adage, Inc., 967 F.2d 695, 697-98 (1st Cir. 1992) (where
nothing in the Plan indicates that another approach is to be used,
it is appropriate for a reviewing court to afford de novo review).
2. Jurisdictional Limits
in Federal Courts Generally
An inquiry that is in essence jurisdictional is an
appropriate early step toward full understanding of the meaning of
the constitutional, statutory, and decisional mandates regarding
the scope of the authority of federal courts in a case involving
judicial review of an out-of-court claims decision.
Article III courts and other federal courts are not
courts of general jurisdiction. See, e.g., Owen Equip. & Erection
Co. v. Kroger , 437 U.S. 365, 374 (1978). Even when some source of
subject-matter jurisdiction appears of record (by reason of
complete diversity of citizenship, for example, or the dependence
of a claim on some federal question), federal courts are not
automatically authorized to adjudicate every kind of related claim
a party wishes to have decided. Rather, except as to instances of
jurisdiction over claims of unconstitutionality of legislation,
limits on the scope of jurisdiction of federal courts (other than
the Supreme Court of the United States) are partly statutory.
E.g. , Kokkone n v. Guardian Life Ins. Co. of America, 511 U.S. 375,
377 (1994).
-18-
A central characteristic of federal jurisdiction is that
it tends to be claim-based, and thus specific to claims, rather
than case-based, and thus general to an entire case if the court
has jurisdiction over any claim. See American Law Institute,
Federal Judicial Code Revision Project, Tentative Draft No. 1, 33-
34 (Apr. 8, 1997) (Commentary). The Reporter for this ALI Project,
Professor John B. Oakley, in an introductory Memorandum to the
Members of the Institute, identifies as an organizing principle
used from an early stage of the history of this ALI Project, the
observation that:
subject-matte r jurisdiction of the federal
district court operates on a 'claim-
specific' basis that is concealed and
confused by the 'action-specific' language
of the basic statutory grants of original
jurisdiction to the district courts.
Id. at xvii. He adds:
.... Although the basic statutes purport
to confer federal jurisdiction over
particular types of 'civil actions,'
'cases,' 'proceedings,' and the like, they
have been administered on a claim-specific
rather than action-specific basis, with
the law of supplemental jurisdiction
functioning in the background as the
mechanism for determining which claims
joined to a particular action that do not
directly involve the kinds of issues or
parties within the scope of Article III
are nonetheless within federal judicial
power because of their relationship to
other claims involving issues or parties
that fall within Article III's criteria.
Id. at xviii. We interpret "action," as used both in this passage
and in a passage of the F irestone opinion, quoted above, as meaning
"civil action," not "cause of action." Professor Oakley adds that
-19-
these background themes are a part of the complex "structure of
federal jurisdiction," commonly recognized as involving
constitutiona l, statutory, and decisional "tiers" of authorization
and limitation. Id. at 36-45.
We conclude that a theme of claim-specific limitations on
the scope of federal judicial power extends also to a distinction
between plena ry jurisdiction, in a broad sense including authority
to decide anew on the merits, and a more confined type of
jurisdiction over a specific type of claim within the court's
jurisdiction. A district court's subject-matter jurisdiction over
a claim may be solely for judicial review of an out-of-court
decision on the merits of the claim. This kind of limitation is
primarily statutory in origin. It may be implicit, for example, in
a statutory authorization for judicial review over out-of-court
substantive decisions (of many different types) made by
governmental agencies, under provisions of the Administrative
Procedure Act, 5 U.S.C. S 706(2)(A). Also, this kind of limitation
may be implicit in statutory provisions for judicial review of
special kinds of out-of-court substantive decisions made by private
decisionmakers such as those acting under employee benefits plan,
making decisions reviewable in this case under ERISA, 29 U.S.C.
SS 1132(a)(1)(B) and 1132(c).
In a regime characterized in large part by limited
jurisdiction, a statutory authorization for judicial review of out-
of-court decisions does not imply authorization for a court to
expand its jurisdiction to a plenary authority to decide, itself,
-20-
all genuinely disputable factual issues decisive of the merits of
claims. This point applies both to a court's acting on its own
initiative and to a court's acting upon a consensual request by the
parties that a court accept an expansion of its jurisdiction. We
say more about consensual requests in Part II.E, below.
Also, to understand fully a source of authority regarding
the scope of a court's jurisdiction when judicially reviewing an
out-of-court claims decision, one must take account of the
distinctive nature of a court's role in judicial review, in
contrast with the role of a court in other civil actions generally.
A civil action for judicial review of an out-of-court
decision is fundamentally different from a paradigm civil action
asserting tort, contract, or property claims, or even alleged
rights to equitable or declaratory relief. In cases of judicial
review, ordinarily no right to jury trial is involved, and no need
or authority exists to make factual findings of the kind regularly
made by a jury, or by the trial judge in a nonjury trial.
If a need exists for deciding disputable factual issues
in the course of judicial review of an out-of-court decision on the
merits of a benefits claim, typically that need is associated with
a dispute about the "record." We turn next to considering disputes
of this kind.
C. Deciding Disputes About the "Record"
1. The Contrast Between Disputes
About the "Record" and Disputes
About the "Merits"
-21-
Deciding disputable factual issues about what is or is
not properly a part of the "record" for judicial review is
fundamentally different from deciding disputable factual issues
going to the merits of a benefits claim.
The out-of-court decision under judicial review in this
case was, or at least in ordinary circumstances should have been,
a decision on the merits. The standard of judicial review of that
decision, in whatever way it may be phrased and described, is to
some extent deferential in the sense that the reviewing court is
not to set aside a factual finding of historical fact for which the
record on which the decision was made contained adequate support.
Ordinarily the deference to a decision on the merits
extends also to deference to an evaluative inference on which the
decision on the merits depends, at least unless the inference is a
mixed-legal-factual inference. Just as appellate courts tend to
give somewhat less deference to a trial court's mixed-legal-factual
inference -- see, e.g., AIDS Action Comm. of Mass., Inc. v.
Massachusetts Bay Transp. Auth., 42 F.3d 1, 7 (1st Cir. 1994)
(appellate court accords significant deference to trial court's
factual determinations and most of its resolutions of mixed
fact/law issues, letting them stand unless they are clearly
erroneous, but engages in de novo review of trial court's
application of a First Amendment standard to the facts of the
particular case); In re Extradition of Howard, 996 F.2d 1320, 1328
(1st Cir. 1993) ("The standard of review applicable to mixed
questions usually depends upon where they fall along the degree-of-
-22-
deference continuum; the more fact-dominated the question, the more
likely it is that the trier's resolution of it will be accepted
unless shown to be clearly erroneous.") -- so likewise a court
engaged in judicial review of an out-of-court decision may tend to
give less deference to an inference-based decision that appears
possibly to have been influenced by a mistake about the existence
or meaning of an applicable legal rule or about how the legal rule
applies in the particular instance. In applying such a less
deferential standard, however, a reviewing court is not authorized
to make, itself, a new decision replacing every factual finding of
the out-of-court decisionmaker that goes to the merits and is
challenged. The judicial review of the decision on the merits
continues to be to some extent deferential.
In contrast, the trial judge's decision of a dispute
about the record is typically not deferential.
A factual dispute about the record of an out-of-court
decision of a claim under an employee benefits plan may involve a
contention, by either party, that the "record" as produced by the
decisionmaking entity contains documents or descriptions of non-
documentary evidence not considered before the challenged decision
was made, or documents or descriptions of evidence not properly
considered (which one party or the other asks the trial court to
"strike" or otherwise treat as irrelevant to judicial review).
Obversely, the dispute may involve a contention that the record for
the out-of-court decision should have included, and did not,
-23-
additional materials (which one party or the other asks the trial
court to rule must be taken into account).
If, after taking such a supplementation of the "record"
into account, the trial judge determines that, by reason of
departures from fair process, the challenged out-of-court decision
cannot be affirmed, one obvious possibility is an order of remand
for reconsideration by the committee or other entity that made the
procedurally flawed out-of-court decision.
That form of remedy fits. Concerning a court's
obligation generally, in framing relief, to fashion a remedy that
fits and does not overburden a party, see, e.g., California v.
Yamasaki , 442 U.S. 682, 702 (1979) (injunctive relief should be no
more burdensome to the defendant than necessary to provide complete
relief to the plaintiffs); E.E.O.C. v. Astra U.S.A., Inc., 94 F.3d
738, 746 (1st Cir. 1996) (same).
First, the remedy for the departure from fair process is
easily framed to fit within the authorized scope of judicial
review. Second, the nature of the remedy matches the nature of the
error. Moreover, if the error was solely an error of the committee
or other deciding entity, any other form of order is likely not to
fit because it tends to place an undeserved burden or disadvantage
on one party or the other.
We leave to be considered in Parts III.C and III.D of
this opinion a defense contention in this case that if the record
failed to contain evidence that would have supported plaintiff's
-24-
claim, plaintiff failed to use her available opportunities to
proffer more evidence.
To complete an explanation of the contrast between
deciding disputes about the merits and deciding disputes about the
record, we must take account of legal authority bearing on who is
to decide a dispute about the record and by what procedures.
2. Who Decides?
As to who is to decide a dispute about the record, we
canvass three possibilities (and variations on each) that are
apparent in this case: (1) the out-of-court decisionmaker on
remand from the district court; (2) the court or courts where
judicial review occurs; and (3) a jury (or trial judge as finder of
fact in a nonjury proceeding), guided on the law by the trial
judge's rulings, those rulings being subject to correction on
appeal.
The first possibility (remand to the out-of-court
decisionmaker) may sometimes be appropriate, but is likely to
result in delay, and perhaps very extended delay and expense if the
dispute is not resolved to the satisfaction of all interested
parties, and promptly. That kind of delay is inconsistent with the
objective of providing workers and their dependents an inexpensive
and expeditious method of resolving disputes over benefits claimed
under an employee benefits plan. This is one of the multiple
objectives underlying ERISA. See, e.g., Quesinberry v. Life Ins.
Co. of North America, 987 F.2d 1017, 1023-1025 (4th Cir. 1993)
-25-
(citing Perry v. Simplicity Eng'g, 900 F.2d 963, 966 (6th Cir.
1990)).
The availability of the third possibility -- jury trial
-- in ERISA cases is a matter on which many courts have spoken but
in ways that may reasonably be understood as creating some
unresolved conflicts. E.g., compare Turner v. Fallon Community
Health Plan, Inc., 953 F. Supp. 419 (D. Mass. 1997), with Padilla
De Higginbotham v. Worth Publishers, Inc., 820 F. Supp. 48 (D.P.R.
1993). We do not speak further to this conflict in this opinion,
for the reason that in any event the record before us fails to show
any disputable issue of fact appropriate for submission to a jury
in this case, as we explain below.
The use of a jury to resolve disputes about the record
for judicial review of out-of-court decisions in this case would be
fundamentally inconsistent with the regime of limited jurisdiction
of federal courts. Jurisdiction for judicial review cannot be
expanded to encompass a jury role inconsistent with limitations on
the court's jurisdiction. The jury is an arm of the court, and an
arm that performs only a designated court function. In a case
before the court solely for judicial review of an out-of-court
decision, the jurisdiction of the court as a whole, including the
jury, is limited to the function of determining whether the out-of-
court decision is to be affirmed, or is to be set aside as
arbitrary or capricious, or is to be reconsidered by the committee
or other entity designated to decide the merits.
-26-
A recent decision of the Supreme Court in a very
different context helps to explain both the rejection of this third
possibility and the distinctive nature of the role of the trial
judge in deciding disputes about the record as distinguished from
disputes about the merits. That context involved a dispute about
who decides an issue of interpretation of a patent claim as to
which reasonable persons familiar with both the intricacies of
patent law and all the relevant circumstances of the particular
case might differ. Justice Souter, in the opinion of the Court,
observed that a trial judge is better positioned than a jury to
decide this kind of factual issue. Markman v. Westview
Instruments, Inc. , 116 S. Ct. 1384, 1387 (1996) ("Since evidence of
common law practice at the time of the Framing does not entail
application of the Seventh Amendment's jury guarantee to the
construction of the [patent] claim document, we must look elsewhere
to characterize this determination of meaning in order to allocate
it as between court or jury. Existing precedent, the relative
interpretive skills of judges and juries, and statutory policy
considerations all favor allocating construction issues to the
court.").
Much of the reasoning of the Court in Westview applies to
the role of a trial judge in deciding disputes about the record for
judicial review. Compared with judges, jurors typically have less
experience and training relevant to competence to review decisions
of others with an appropriate degree of deference while at the same
time assuring no misunderstanding or misapplication of governing
-27-
law. And, historically, juries have had no part in judicial review
of out-of-court decisions.
Concerning factors bearing upon who is better positioned
to decide, in determining whether responsibility for deciding a
factual dispute of a distinctive kind should be allocated to juries
or instead to judges, the Westview opinion cited other Court
decisions made in other contexts, including Miller v. Fenton, 474
U.S. 104, 114 (1985) (when an issue "falls somewhere between a
pristine legal standard and a simple historical fact, the fact/law
distinction at times has turned on a determination that, as a
matter of the sound administration of justice, one judicial actor
is better positioned than another to decide the issue in
question."). Other decisions in the 1980s and 1990s have added
more illustrations that, by analogy, reinforce the conclusion we
reach in this case about the role of the judge in judicial review.
See, e.g ., Thompson v. Keohane, 116 S. Ct. 457 (1995) (habeas
petitioner serving a sentence under a state conviction had
confessed, during a two-hour tape-recorded session at the Alaska
state trooper headquarters, to killing his former wife; federal
district court denied his petition for habeas relief on the ground
that the trooper had obtained his confession without giving Miranda
warnings; the Ninth Circuit affirmed on the ground that the state
court's ruling that the accused was not "in custody" for Miranda
purposes was a "fact" determination as to which S 2254(d)
establishes a presumption of correctness; this "Court has
classified as 'factual issues' within S 2254(d)'s compass questions
-28-
extending beyond the determination of 'what happened'"; "[t]his
category notably includes: competence to stand trial; and juror
impartiality"; "[w]hile these issues encompass more than 'basic,
primary, or historical facts,' their resolution depends heavily on
the trial court's appraisal of witness credibility and demeanor";
"[t]his Court has reasoned that a trial court is better positioned
to make decisions of this genre, and has therefore accorded the
judgment of the jurist-observer 'presumptive weight'"; even so, we
independently review the state "in-custody" determination because
"[c]lassifying 'in custody' as a determination qualifying for
independent review potentially may guide police, unify precedent,
and stabilize the law"); Bose Corp. v. Consumers Union of United
States, Inc., 466 U.S. 485, 501 n.17 (1984) ("A finding of fact in
some cases is inseparable from the principles through which it was
deduced. At some point, the reasoning by which a fact is 'found'
crosses the line between application of those ordinary principles
of logic and common experience which are ordinarily entrusted to
the finder of fact into the realm of a legal rule upon which the
reviewing court must exercise its own independent judgment."). See
also U.S. Term Limits, Inc. v. Thornton, 115 S. Ct. 1842, 1875
(1995) (Thomas, J., dissenting, joined by Rehnquist, C.J.,
O'Connor, J., and Scalia, J.) (citing Bose and declaring: "In
certain areas, indeed, this Court apparently gives quite little
deference to the initial factfinder, but rather 'exercise[s] its
own independent judgment' about the factual conclusions that should
be drawn from the record.").
-29-
3. Methods of Deciding Generally
We turn next to considering how a trial judge may go
about performing the function of deciding disputes about the
record.
(a) Non-jury Trial
Precedents support a district court's holding a non-jury
"trial" for distinctive and limited purposes associated with
judicial review. An example is an opinion of Justice (then Judge)
Breyer for the First Circuit in the context of judicial review of
a decision of a governmental agency. E.g., Valley Citizens for a
Safe Environment v. Aldridge, 886 F.2d 458, 460 (1st Cir. 1989)
(Breyer, J.) ("It could happen that a particular instance of
judicial review of an EIS raises a 'genuine' and 'material' dispute
of facts that requires a trial: Did the agency know, for example,
about some important matter that the EIS ignored? ... However
desirable this kind of evidentiary supplementation as an aid to
understanding highly technical, environmental matters, its use is
discretionary with the reviewing court.") (citations omitted). The
practice seems equally applicable to judicial review of out-of-
court decisions of private actors, such as the Committees whose
decisions are under judicial review in this case.
Even when a district court proceeds with a non-jury trial
of this kind, or a proceeding to take "evidence on motion," and
determines that it is necessary to make some finding with respect
to some historical fact (or to draw some reasoned inference from
evidence) as to which a genuine dispute exists, ordinarily that
-30-
factual finding made by the trial judge concerns matters bearing on
fairness of the process by which the out-of-court decision was made
and not the merits of the claim. A determination by a court that
it has jurisdiction to perform this distinctive function does not
imply that it must also have jurisdiction to find facts relevant to
the merits.
(b) Evidence on Motion
Also, with respect to preparing for ruling on a pending
motion, a trial judge has, under Federal Rules, explicit authority
to convene a kind of evidentiary proceeding that differs from
taking evidence at trial under Federal Rule of Civil Procedure
43(a).
Evidence on Motions. When a motion is
based on facts not appearing of record the
court may hear the matter on affidavits
presented by the respective parties, but
the court may direct that the matter be
heard wholly or partly on oral testimony
or deposition.
Fed. R. Civ. P. 43(d). This procedural authority, however,
regarding the manner of taking evidence, does not expand the trial
court's jurisdiction. Rules of procedure apply to how the court
may go about performing whatever function and role it is assigned
by constitutional, statutory, and decisional law governing the
court's jurisdiction.
Federal Rules of Civil Procedure do not purport to expand
the court's jurisdiction from a role of judicial review to a role
of plenary adjudication. This is a proposition inherent in the
-31-
general aim that a court system's procedural rules be focused on
fair and efficient procedures rather than either jurisdictional or
substantive law. And it is a proposition inherent in the claim-
based rather than case-based theme of federal subject-matter
jurisdiction, explained in Part II.B above.
(c) An Issue on Which Decision is Reserved
We have not decided, and need not decide today, whether
a court, when reviewing a benefits determination, must restrict
itself to the "record" as considered by the decisionmaker who
interpreted the employee benefits plan. See Mongeluzo v. Baxter
Travenol Long Term Disability Ben. Plan, 46 F.3d 938 (9th Cir.
1995); Quesinberry v. Lif e Ins. Co. of North America, 987 F.2d 1017
(4th Cir. 1993); Luby v. Teamsters Health, Welfare, and Pension
Trust Funds, 944 F.2d 1176 (3d Cir. 1991); compare Davidson v.
Prudential Ins. Co. of America, 953 F.2d 1093, 1095 (8th Cir.
1992).
Rather, we simply emphasize for clarity that making
factual findings about what is or is not properly a part of the
"record" for judicial review is fundamentally different from
asserting plenary authority to decide the merits of a benefits
claim.
As stated above, a trial court may take "evidence on
motion" or convene a nonjury "trial" in order to develop a "record"
suitable for judicial review of a challenged out-of-court decision.
Also, a court may convene either of these kinds of proceedings to
-32-
determine whether the "record" on which the out-of-court decision
was made is complete and, if not, what supplementation is
appropriate. That the trial court has some range of discretion in
this respect is reinforced by analogy to precedent. For example,
a Fourth Circuit decision, calling attention to limitations on the
district court's discretion, also declares that the court has some
range of discretion to take evidence.
[W]e continue to believe that the purposes
of ERISA described in our Berry opinion
warrant significant restraints on the
district court's ability to allow evidence
beyond what was presented to the
administrator. In our view, the most
desirable approach to the proper scope of
de novo review under ERISA is one which
balances these multiple purposes of ERISA.
Consequently, we adopt a scope of review
that permits the district court in its
discretion to allow evidence that was not
before the plan administrator. The
district court should exercise its
discretion, however, only when
circumstances clearly establish that
additional evidence is necessary to
conduct an adequate de novo review of the
benefit decision.
Quesinberry, 987 F.2d at 1025.
4. Comparison with Summary Judgment Procedures
Proceeding in the way just suggested may be better, for
very pragmatic reasons, than hearing and deciding a motion or
cross-motions for summary judgment. See, e.g., Charlton Memorial
Hosp. v. Foxboro Co., 818 F. Supp. 456 (D. Mass. 1993). Summary
judgment procedures were designed primarily for prompt and fair
determination of factual issues of the kind that go to the merits
-33-
and would be decided by the jury in a jury trial if genuinely in
dispute. Under summary judgment procedure, the movant has the
opportunity and burden of making a showing that no material factual
issue is genuinely in dispute. The opponent has the opportunity
and burden of proffering admissible evidence sufficient to support
a factual finding favorable to the challenged claim, Fed. R. Civ.
P. 56. Under Rule 56 and local rules implementing its mandates, a
litigant who fails to take advantage of its opportunity by a timely
proffer of evidence may be procedurally precluded from doing so
later on grounds concerned with fair process. E.g., Mas Marques v.
Digital Equip. Corp., 637 F.2d 24, 29-30 (1st Cir. 1980).
Invoking summary judgment procedures for factual issues
of the kind that do not go to the merits and would not be submitted
to a jury in any event is likely to produce misunderstanding and
confusion about when and how the factual dispute is to be resolved.
See Charlton Memorial Hosp., 818 F. Supp. at 53-54. If the trial
judge needs to hear and consider evidence to be prepared to decide
the dispute over a factual issue bearing upon the "record" for
judicial review, Rule 56 constraints do not apply, though the trial
judge has discretion to invoke like procedures. Thus, no formal or
procedural barrier exists to the trial judge's deciding disputed
factual issues about "the record," in proceedings upon a pretrial
motion rather than at trial. Such a pretrial motion need not be
labeled as one for summary judgment. If giving the motion that
label leads trial lawyers or the trial judge to assume that the
judge can never decide before trial if a finding with respect to a
-34-
genuinely disputable fact must be made, this flawed assumption
reflects a misunderstanding that is likely to create confusion and
delay. If, in any event, the decision of a factual dispute about
the record is to be made by the judge, not by a jury, the trial
judge is not required to await trial. Instead, the trial judge may
exercise discretion about the method of proceeding, taking
advantage of the opportunity for flexibility about scheduling
hearings in preparation for the decision about the record.
5. Providing for Discovery
and Proffers of Relevant Evidence
Of course, the trial judge should (and absent some ground
of preclusion, must), before deciding a disputable factual issue
that may be decisive of a dispute about the "record", give parties
a fair opportunity to discover and present relevant evidence
bearing upon the issue. Ordinarily it is a good practice to do
this by an order of record that clearly specifies the time within
which any proffer is to be made, and thus reduces any risk of
misunderstanding.
Once this requirement of fair process has been satisfied,
ordinarily it is in the public interest and the interest of the
parties that factual disputes of the kind that are to be decided by
the trial judge, and in no event by a jury, be decided sooner
rather than later. Exceptional circumstances of a particular case
may make deferral appropriate, however, and this opinion is not to
be interpreted as stating any hard-edged rule of practice in this
respect. We have called attention to these matters in this opinion
-35-
solely for the purpose of clarifying the nature of judicial review
in respects that appear to have generated misunderstandings.
D. Independent Claims and Overlapping Elements
1. Various Types of Independent Claims
For completeness, we take note of another source of
potential misunderstanding, even though it does not apply to this
case. In some instances, an independent claim over which a
district court does have plenary jurisdiction for trial on the
merits may include, among the elements of that claim or a defense
to it, a factual issue that is the same or almost the same as some
factual element of a claim for benefits under an employee benefits
plan, decisions regarding which are subject to judicial review
rather than trial on the merits. In such an instance, the court
has jurisdiction to try the independent claim, even though the
court's role in relation to the plan benefits claim is limited to
judicial review. Some potential illustrations are identified
immediately below.
2. Forbidden Retaliatory Motive
or Other Discriminatory Animus
An independent claim may arise when a party contends that
gender or racial animus was a motive for termination of employment
in retaliation for previous protected conduct of the employee in
asserting that conditions of employment were discriminatory. If
(1) the party making such a contention demands a jury trial and
proffers sufficient evidence to show a genuine dispute of material
-36-
fact, and (2) jury trial of the independent claim is appropriate
under the law governing trial of that claim, the trial judge has
two very distinct and materially different responsibilities. One
is to determine, "as a matter of law," whether the proffered
evidence is sufficient, if credited by the jury, to support the
independent claim of discriminatory termination of employment and,
if so, to submit that claim to the jury by an appropriate charge
and verdict form. The trial judge's other responsibility is to
perform the function of judicial review of the challenged out-of-
court decision of the claim for benefits under the employee
benefits plan. For the reasons explained in Parts II.B and II.C
above, this responsibility continues to be performed without
participation of the jury, even though the independent claim that
is before the court in the same civil action is tried to a jury.
3. Violation of Obligation
to Provide Plan Information
Another kind of claim that, in appropriate circumstances,
might be treated as an independent claim is a claim of violation of
the ERISA requirement of production of plan information, 29 U.S.C.
S 432(c). We do not probe this possibility in this case, because
Recupero has not claimed a violation of this provision; instead, as
explained in Part III.D of this opinion, below, she has claimed a
violation of notice requirements, with respect to her opportunity
to challenge a committee decision, under 29 U.S.C. S 1133.
-37-
4. Overlapping Components of an Independent Claim
and a Claim Under Judicial Review
It is possible that in some circumstances some factual
component of an independent claim, or the measure of recovery if
that claim is proved, will closely coincide with a component
decisive of the merits of the out-of-court decision that is under
judicial review. If this happens, a host of debatable issues may
exist concerning claim or issue preclusion, the right to jury
trial, and procedural rules and practices bearing on case
management in the district court.
No independent claim was alleged in the complaint in this
case, however, and we do not undertake to address any of the added
complexities that arise from joinder of a claim for judicial review
and some independent claim. This case presents only a question as
to scope of jurisdiction in a more typical setting of judicial
review of an out-of-court benefits decision.
E. Consensual Arrangement for Claims Determinations
In this case, the parties assigned to the EBC in the
first instance, and to the EBRC in the second instance, the
function of making decisions about the merits of individual claims
to benefits under the plan. This kind of consensual arrangement is
legally permissible. See Firestone, 489 U.S. at 115.
Here, however, each party is in essence asking this court
to construe plan provisions as consensually overriding
constitutional and statutory limits on the jurisdiction of the
courts, or to hold that an opposing party is estopped or precluded
-38-
from asserting that the plan provisions do not authorize plenary
consideration of plaintiff-appellant's claims on the merits.
Included is the request that the district court make factual
findings on any genuinely disputable issues material to the outcome
on the merits.
When the law authorizes parties to make their own
consensual arrangement for deciding individual claims for benefits,
ordinarily the parties may prescribe their own set of rules about
how decisions are to be made, as long as they do not transgress
prescribed legal limits on the scope and nature of consensual
arrangements. E.g., Mitsubishi Motors Corp. v. Soler Chrysler-
Plymouth, Inc., 473 U.S. 614, 628-39 (1985)(parties' agreement to
arbitrate anti-trust claims is enforceable absent a showing of
circumstances that would warrant setting aside the forum selection
clause). If, however, the parties attempt by their consent to
expand the scope of a district court's jurisdiction beyond that
authorized by law, their attempt is legally unenforceable in this
respect for the reasons explained in Parts II.B and II.C of this
opinion.
F. Summary of Conclusions Regarding Scope of Jurisdiction
The constitutionally and statutorily limited jurisdiction
of federal courts cannot be expanded by a stipulation or joint
request of the parties that the courts become their privately-
appointed alternative to the method of adjudication available to
them under law. Ordinarily, claims benefit determinations of
-39-
consensually designated private decisionmakers on whom plan
provisions confer authority to exercise discretion are subject to
judicial review under an arbitrary and capricious standard, but not
to plenary determinations on the merits.
In contrast, the decision of disputes about the "record"
for judicial review ordinarily are within the scope of the district
court's jurisdiction, and the trial judge's role ordinarily extends
to deciding factual as well as legal components of such a dispute
about the "record."
Independent claims in addition to a claim for judicial
review may present added complexities, but we need not and do not
address these matters because no independent claim is asserted in
this case.
With these fundamental characteristics of the legal
system as background, one may locate the legal and factual issues
of a particular civil action in the larger legal landscape. In the
remainder of this opinion, we consider each of the material
contentions of the parties regarding the precise way in which this
controversy has proceeded both before and after the filing of the
civil action in the United States District Court for the District
of Massachusetts.
III. Particular Contentions in This Case
A. Introduction
The parties to this appeal have acknowledged, and we have
noted, that some aspects of the out-of-court decisions of the NET
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Committees must be judicially reviewed under an "arbitrary and
capricious" standard. Other aspects of the challenged decisions
must be decided either as matters of law are decided or under a
standard less deferential than an "arbitrary and capricious"
standard. Also, as proceedings have developed both before and
after the filing of the civil action, some issues earlier in
controversy have become moot or an opportunity for challenge has
been lost under rules of procedural preclusion.
In this Part III, we discuss separately these different
kinds of issues, beginning with asserted violations of the
applicable "arbitrary and capricious" standard.
B. Alleged Violations of "Arbitrary and Capricious" Standard
Having determined that the role of the courts with
respect to typical claims under an employee benefits plan is
jurisdictionally limited to review, if a plan administrator or
fiduciary was given discretion to decide particular claims, we now
consider whether Recupero has shown that the Committees created to
decide claims of the type at issue in this case acted arbitrarily
and capriciously. Recupero argues:
Ms. Recupero was seriously injured in an
elevator accident at her workplace while
she was on-duty and being paid by the
company. At the time of her accident she
was in the course of her employment and
was under the direction and control of her
employer. The only reasonable meaning of
the Plan language is that Ms. Recupero
sustained an "accident" and not "sickness"
and it was arbitrary and capricious of the
Plan to deny her "accident" disability
claim.
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(Appellant's Br. at 6-7.) Recupero contends that she was:
... en route to obtain coffee in the
building lobby at the direction of her
supervisor on company time at the time of
the accident. She made ... [an]
adjustment [from her usual time for a
break] at the direction of her supervisor
for the sole purpose of furthering, and in
direct connection with, the performance of
her duties to enable her to establish a
conference call with a customer at a time
when she would otherwise have been away
from her usual work station.
(Id. at 13). Thus, she argues, she was "on-duty" at the time that
she sustained her injury, and is entitled to "accident benefits."
(Id. at 14.)
The defendant-appellee counters that "[i]t is undisputed
that Recupero was injured during break time, after leaving her work
station while on an elevator en route to a coffee shop."
(Appellees' Br. at 7.) This fact, NET contends, shows that
Recupero was not "solely" and "directly" engaged in the performance
of duties at the time of the injury. (Id.) Thus, the defense
argument goes, the Committees did not act arbitrarily and
capriciously in determining that Recupero was not entitled to
"accident benefits." (Id.)
As already noted, the district court ruled in favor of
NET on this issue. The district court rejected Recupero's argument
that, because she was taking her break at the request of her
employer, her injuries should entitle her to "Accident Disability
Benefits." The court stated:
Recupero's argument is predicated on the
assertion that she was taking her coffee
-42-
break a half hour early at the request of
her supervisor in order to accommodate a
job-related phone call which she was
expecting. Such a fact is not properly
before the court for two reasons. First,
the court, when applying the arbitrary and
capricious standard of review, may only
review the actions of the fiduciary in
light of the evidence which was before it
at the time it made its decision. It
does not appear that the NET Benefits
Office, the EBC or the EBCRC had the
benefit of considering this fact. (#20,
Exh. 2, Affidavit of Richard Waldron, q7).
Second, this is a "mere allegation"
unsupported "by affidavits or as otherwise
provided" under Fed. R. Civ. P. 56(e)
since Recupero offers no evidence to this
court to support this contention.
(Recupero v. New England Telephone & Telegraph Co., Civil Action
No. 94-12266-MLW, Memorandum and Order, Sept. 20, 1996 at 9 n.5.)
The EBC and the EBRC decided that Recupero qualified for
"Sickness Disability Benefits" only. The district court correctly
concluded that this decision was not arbitrary and capricious.
Three lines of reasoning support this conclusion.
First. The court below correctly determined that
Recupero had not proffered evidence before the EBC or EBRC of any
irregularity in the break from work that she was on when the
incident occurred. (Id.) Nothing in the record before the
Committees, the record before the district court, or the record
before this court suggests otherwise. If Recupero did not proffer,
before the Committees, factual support for a contention that the
circumstances of the incident brought it within the meaning of an
"accident" because she was taking her break at a specific time, at
the behest of her supervisor, in order to allow her to perform her
-43-
duties at a later time, then the record before the EBC and the EBRC
was not sufficient to support a court determination, on judicial
review, that the decisions of the Committees were arbitrary and
capricious.
Second. Despite the difficulties of drawing bright lines
of separation and fitting every conceivable circumstance of injury
into either the category of "accident" or the category of
"sickness," the Committees did not act arbitrarily and capriciously
when interpreting "on-duty" to exclude break time, regardless of
the nature of any reason or reasons for the break. A plan may
prescribe a definition of "on-duty" that takes into account the
myriad of possible ways in which and times at which an employee may
be injured. A plan that does so may require of the out-of-court
decisionmakers, in deciding a particular claim, that they make an
evaluative determination rather than a rigorously logical
application of bright-line rules that leave no choice, even
reasoned choice, in arriving at a decision concerning the merit of
a particular claim.
It is true that in the context of trial of a paradigm
tort or contract claim, "evaluative issues" often go to a jury for
decision. See, e.g., Springer v. Seamen, 821 F.2d 871, 876 (1st
Cir. 1987) (in tort law, not only ordinary fact questions but also
"evaluative applications of legal standards (such as the legal
concept of 'foreseeability') to the facts are properly jury
questions"), cited with approval in Dedham Water v. Cumberland
Farms Dairy, 972 F.2d 453 (1st Cir. 1992).
-44-
In the context of judicial review of out-of-court
decisions, however, if employee benefit plan provisions confer
discretion on an out-of-court decisionmaker, ordinarily the
evaluative determinations of that decisionmaker are judicially
reviewed under a deferential standard, as explained in Parts II.B
and II.C of this opinion.
Section 5(5) of the plan before us in this record is one
of the provisions the interpretation of which was challenged in
this case. It provides:
Relationship of Injury to Employment.
Accidental injuries shall be considered as
arising out of and in the course of
employment only where the injury has
resulted solely from accident during and
in direct connection with the performance
of duties to which the employee is
assigned in the service of the Company, or
was assigned by the Former Affiliate or
Associated or Allied Company from which
the employee was reassigned as of January
1, 1984, or which he is directed to
perform by proper authority, or in
voluntarily protecting the Company's
property or interests. There must be a
clear and well-established history of the
cause and circumstances of injury
accidentally inflicted, which must be
sufficient to produce the alleged injury,
and there must be satisfactory evidence
that such injury renders the employee
unable to perform his duty in the service
of the Company.
(Appellees' Br. at 59-60) (emphasis added). In view of the
emphasized phrase in this passage quoted from the plan, we cannot
say that the district court erred in its interpretation of the plan
as supporting NET's position in this appeal.
-45-
Third. Recupero apparently bases her argument, in part,
on an assumption that because she was eligible for worker's
compensation, her injury should be treated, as a matter of law, as
having occurred "on-duty." This assumed premise is erroneous, as
a matter of law. Neither ERISA nor any other source of authority
declares that the standards of eligibility for workers'
compensation benefits and accident disability benefits under an
ERISA-regulated plan be the same. See Pagan v. NYNEX Pension Plan,
52 F.3d 438 (2d Cir. 1995). Further, the plan provisions in this
case do not explicitly prescribe a test for "on-duty" status that
mirrors the test commonly used in worker compensation systems.
For these reasons, we conclude that the district court
did not err in deciding that the decisions of the EBC and the EBRC
were not arbitrary and capricious.
C. Recupero's Request for Reclassification of Benefits
We take note that plaintiff is not seeking "Sickness
Disability Benefits" beyond those already paid to her. Rather, she
is asking merely that we order, or direct the district court to
order, that the benefits already paid to her as "Sickness
Disability Benefits" be declared to be reclassified as "Accident
Disability Benefits." (Appellant's Br. at 1 n.1.)
Recupero does not argue, nor do we know of any ground on
which she could creditably do so, that she was entitled to such a
reclassificat ion decision by the district court, or is entitled to
have this court declare such a reclassification. Instead, she asks
-46-
this court, as a matter of discretion in the interests of justice,
to declare the reclassification or order the district court to make
a discretionary decision regarding reclassification.
We are not persuaded that we should exercise discretion
in this way at this late stage in the development of proceedings
regarding Recupero's claim for benefits, even if we were to
determine that we have jurisdiction to do so. Recupero has failed
to place before us, or before the district court, a record showing
that she made a request that the Committees make a determination of
this type. Nor has she called to our attention any good cause for
determining that she should be allowed to present this request at
this late point in the face of the apparent unfairness of allowing
a claimant to proceed on one set of contentions to the threshold of
final resolution and only then assert a new theory of claim. In
these circumstances, without undertaking to resolve very
substantial doubts about our jurisdiction to entertain such a late
request for a declaration of "reclassification" of benefits she was
paid and accepted as "Sickness Disability Benefits," we conclude
that her request must be denied as untimely. This conclusion is
amply supported by precedent. See, e.g., United States v.
Bongiorno, 106 F.3d 1027, 1034 (1st Cir. 1997) (constitutional
arguments not raised in the lower court cannot be advanced on
appeal); Armstrong v. Jef ferson Smurfit & Corp., 30 F.3d 11, 13 n.4
(1st Cir. 1994) (argument that reimbursement of taxes paid in
lump-sum payments could be benefits under ERISA waived when made
for the first time on appeal.)
-47-
D. Interpretation of Plan Provisions
As a general rule (independently of the special
characteristics of ERISA claims cases), disputes over
interpretation of a document (or set of documents taken together as
a unit) are decided as matters of law are decided. See, e.g., Den
Norske Bank, A.S. v. Firs t Nat. Bank of Boston, 75 F.3d 49, 52 (1st
Cir. 1996)("Normally, contract interpretation is a question of law
for the court."). And, as a general rule, courts may determine
that an out-of-court decision was arbitrary and capricious if that
decision was explicitly or implicitly founded on an error of law.
E.g. , United States v. Me mbers of Estate of Boothby, 16 F.3d 19, 21
(1st Cir. 1994) ("In scrutinizing administrative actions, a
reviewing court is free to correct errors of law, but, otherwise,
the court is limited to a search for arbitrary or capricious
behavior.").
If a genuine dispute exists regarding existence of a
contract, ordinarily that issue "is a question of fact, for the
jury ... [unless] the evidence consists only of writings, or is
uncontroverted," in which even "the court can decide the issue."
American Private Line Services, Inc. v. Eastern Microwave, Inc.,
980 F.2d 33, 35 (1st Cir. 1992). Even if the core of the dispute
is what interpretation to give to a document or to uncontroverted
oral communications, in exceptional circumstances an issue of
interpretatio n on which reasonable persons may differ is submitted
to a "trier of fact." Bo ston Edison Co. v. F.E.R.C., 856 F.2d 361,
367 n.3 (1st Cir. 1988). But this exception cannot be invoked by
-48-
a party who has failed to make any proffer of documentary or other
evidence sufficient to support a determination of ambiguity in some
respect material to disposition on the merits of the controversy
before the court. See, e.g., Donoghue v. IBC USA (Publications),
Inc., 70 F.3d 206, 215 (1st Cir. 1995) (a hypothetical allegation
of meaning, whether ambiguity is alleged or not, is inadequate to
present a genuine dispute as to a material issue; even if a party
is "claiming to benefit from ambiguity (for example, by being
allowed to proffer extrinsic evidence supporting its
interpretatio n) [that party] must show ambiguity in the meaning of
the agreement with respect to the very issue in dispute"). The
record before us in this case is devoid of any such proffer.
For these reasons, we conclude, without deciding
unsettled issues about jury trial in ERISA cases generally (see
decisions cited in Part II.C.2, supra), that in no event would it
be proper in this case to submit to a jury issues of interpretation
of the NET plan provisions bearing upon "Accident Disability
Benefits" claimed by Recupero. Moreover, such an interpretive
question could go to a jury only if the court, in which the jury
sits, has plenary jurisdiction. For the reasons explained in Parts
II.B and II.C of this opinion, the exceptional allowance of a jury
decision on an interpretive question does not apply when the
court's role is limited to judicial review of an out-of-court
decision.
-49-
E. Futility of Remand
NET argues that the same outcome on issues of
interpretation of NET plan provisions must be reached on another
ground. The argument is that the record before the district court
was sufficient, and the record on appeal is sufficient, for this
court to determine that remand would be futile because, from
undisputed facts that Recupero does not suggest could be challenged
if remand were ordered, it is apparent that Recupero's claim fails
on the merits. We conclude that, though from a limited
perspective, the decision of this matter might have seemed
debatable, closer probing supports this defense position with
respect to issues concerning the meaning and application to this
case of the NET plan provisions regarding "Accident Disability
Benefits."
Recupero has entirely failed, in proceedings before this
civil action was filed, in proceedings in the court below, and on
appeal, to make any proffer of relevant evidence that could be
determined to be sufficient to support her contentions that plan
provisions on eligibility for Accident Disability Benefits should
be interpreted in a way that would present a genuinely disputable
factual issue bearing upon her claim on the merits.
F. Denial of Notice
As an independent basis for rejecting Recupero's claim
for some form of relief because of alleged violation of 29 U.S.C.
S 1133 with respect to notice about how to pursue her rights under
-50-
the plan after denial of her benefits claim, NET contends that
Recupero failed to proffer any admissible evidence, at any stage of
proceedings, to support any finding of prejudice to her.
(Appellees' Br. at 9, 20-21.) The district court determined that
Recupero had not proffered evidence sufficient to support a finding
of prejudice in any relevant sense. (Memorandum and Order,
Sept. 20, 1996 at 14-15.)
In effect, Recupero has attempted to demonstrate
prejudice by arguing that it is inherent in the circumstances of
any claim of the type she has made, rather than by proffering
evidence, either to the Committees or to the district court, to
show that in some special way the circumstances of her case were
unique or at least exceptional. We conclude that allowing a claim
for relief because of inadequacy of formal notice without any
showing that a precisely correct form of notice would have made a
difference would result in benefit claims outcomes inconsistent
with ERISA aims of providing secure funding of employee benefit
plans.
In these circumstances, we conclude that the
determination by the district court that Recupero failed to show
prejudice in a relevant sense is unassailable, regardless of
whether we treat it as a factual finding by the district court or
instead as a determination of insufficiency of proffered evidence
"as a matter of law."
-51-
CONCLUSION
For the reasons stated in this opinion, it is ORDERED:
The judgment of the district court is AFFIRMED. Costs of
the appeal are awarded to Appellees.
-52-
Related
Owen Equipment & Erection Co. v. Kroger
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Califano v. Yamasaki
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Bose Corp. v. Consumers Union of United States, Inc.
466 U.S. 485 (Supreme Court, 1984)
Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc.
473 U.S. 614 (Supreme Court, 1985)
Miller v. Fenton
474 U.S. 104 (Supreme Court, 1985)
Firestone Tire & Rubber Co. v. Bruch
489 U.S. 101 (Supreme Court, 1989)
Kokkonen v. Guardian Life Insurance Co. of America
511 U.S. 375 (Supreme Court, 1994)
U. S. Term Limits, Inc. v. Thornton
514 U.S. 779 (Supreme Court, 1995)
Thompson v. Keohane
516 U.S. 99 (Supreme Court, 1995)
MARKMAN Et Al. v. WESTVIEW INSTRUMENTS, INC., Et Al.
517 U.S. 370 (Supreme Court, 1996)
Diaz v. Seafarers International Union
13 F.3d 454 (First Circuit, 1994)
United States v. Members of the Estate of Boothby
16 F.3d 19 (First Circuit, 1994)
Hughes v. Boston Mutual Life Insurance
26 F.3d 264 (First Circuit, 1994)
Armstrong v. Jefferson Smurfit Corp.
30 F.3d 11 (First Circuit, 1994)
Smart v. Gillette Co. Long-Term Disability Plan
70 F.3d 173 (First Circuit, 1995)
Donoghue v. IBC USA (Publications), Inc.
70 F.3d 206 (First Circuit, 1995)
Den Norske Bank As v. First Nat'L of Bost
75 F.3d 49 (First Circuit, 1996)
EEOC v. ASTRA U.S.A., Inc.
94 F.3d 738 (First Circuit, 1996)
Diego MAS MARQUES, Plaintiff, Appellant, v. DIGITAL EQUIPMENT CORPORATION, and Digital Equipment GmbH, Defendants, Appellees
637 F.2d 24 (First Circuit, 1980)
Beresford N. Springer v. Gretchen Seaman
821 F.2d 871 (First Circuit, 1987)
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