Huffstutler v. Goodyear Tire & Rubber Company
MEMORANDUM OPINION AND ORDER GRANTING 10 MOTION to Determine Standard of Review-Opposed filed by Randall Huffstutler, DENYING 11 MOTION and Memorandum in Support to Determine Standard of Review and Limit Scope of Review and Discovery-Opposed filed by Goodyear Tire & Rubber Company, GRANTING 14 MOTION to Strike 12 Response in Opposition to Motion filed by Randall Huffstutler. Signed by Judge Virginia Emerson Hopkins on 4/20/12. (SAC )
2012 Apr-20 PM 02:19
U.S. DISTRICT COURT
N.D. OF ALABAMA
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
GOODYEAR TIRE & RUBBER
) Case No.: 4:11-CV-3325-VEH
MEMORANDUM OPINION AND ORDER
This action originated in the Circuit Court of Etowah County, Alabama, when
Plaintiff Randall Huffstutler (“Mr. Huffstutler”) filed his complaint on September 1,
2011, against Defendant Goodyear Tire & Rubber Company (“Goodyear”). (Doc. 1
¶ 1). The lawsuit involves a claim for benefits sought by Mr. Huffstutler under
“Goodyear’s 1950 Pension Plan (the “Plan”), which is a defined benefit pension
plan.” (Doc. 11 at 5). Goodyear removed the lawsuit from state court on September
14, 2011, premising such action upon this court’s federal question jurisdiction
because Mr. Huffstutler’s claims arise under the Employee Retirement Income
Security Act of 1974 (“ERISA”). (Doc. 1 ¶ 4).
Pending before the court are Mr. Huffstutler’s Motion To Determine Standard
of Review (Doc. 10) (“Mr. Huffstutler’s ERISA Standard Motion”), filed on January
5, 2012, Goodyear’s Motion To Determine Standard of Review and Limit Scope of
Review and Discovery (Doc. 11) (“Goodyear’s ERISA Standard Motion”), filed on
January 10, 2012, and Mr. Huffstutler’s Motion To Strike Certification (Doc. 14) (the
“Motion To Strike”), filed on January 24, 2012. These motions are fully briefed and
are now all under submission. (Docs. 12, 13, 16. 17). For the reasons explained
below, Mr. Huffstutler’s ERISA Standard Motion is GRANTED, Goodyear’s ERISA
Standard Motion is DENIED, and Mr. Huffstutler’s Motion to Strike is GRANTED.
ERISA Standard of Review
ERISA does not contain a standard of review for actions brought under §
1132(a)(1)(B) challenging benefit eligibility determinations. Firestone Tire &
Rubber Co. v. Bruch, 489 U.S. 101, 108-09, 109 S. Ct. 948, 953 (1989) (“Although
it is a ‘comprehensive and reticulated statute,’ ERISA does not set out the appropriate
standard of review for actions . . . challenging benefit eligibility determinations.”).1
ERISA provides “a panoply of remedial devices” for participants and
beneficiaries of qualifying benefit plans. Mass. Mutual Life Ins. Co. v. Russell, 473
U.S. 134, 146 (1985). Mr. Huffstutler asserts that he is entitled to certain pension
benefits as a participant under the Plan based on § 1132(a)(1)(B). “That provision
allows a suit to recover benefits due under the plan, to enforce rights under the terms
of the plan, and to obtain a declaratory judgment of future entitlement to benefits
under the provisions of the plan contract.” Firestone Tire, 489 U.S. at 108. The
Moreover, the case law that has developed over time governing such standards has
significantly evolved. A history of the transformation of these principles is useful to
understanding the presently applicable framework for evaluating § 1132(a)(1)(B)
In Firestone, the Supreme Court initially established three distinct standards
for courts to employ when reviewing an ERISA plan administrator’s benefits
decision: “(1) de novo where the plan does not grant the administrator discretion; (2)
arbitrary and capricious where the plan grants the administrator discretion; and (3)
heightened arbitrary and capricious where the plan grants the administrator discretion
and the administrator has a conflict of interest.” Capone v. Aetna Life Ins. Co., 592
F.3d 1189, 1195 (11th Cir. 2010) (citing Buckley v. Metro. Life, 115 F.3d 936, 939
(11th Cir. 1997) (discussing Firestone, 489 U.S. at 115)). In Williams v. Bellsouth
Telecomms., Inc., 373 F.3d 1132, 1137 (11th Cir. 2004), overruled on other grounds
by Doyle v. Liberty Life Assur. Co. of Boston, 542 F.3d 1352 (11th Cir. 2008), the
Eleventh Circuit fleshed out the Firestone test into a six-step framework designed to
guide courts in evaluating a plan administrator’s benefits decision in ERISA actions.
following analysis, therefore, is limited to the appropriate standard of review in §
1132(a)(1)(B) lawsuits challenging benefit denials based on plan interpretations; the
court does not address the appropriate standard of review for actions arising under
any other remedial provisions of ERISA.
When the Eleventh Circuit created the Williams test, the sixth step of the sequential
framework required courts reviewing a plan administrator’s decision to apply a
heightened arbitrary and capricious standard if the plan administrator operated under
a conflict of interest. See id. The Eleventh Circuit later modified this step in
response to the Supreme Court’s ruling in Metropolitan Life Insurance Co. v. Glenn,
554 U.S. 105, 115-17 (2008), which concluded that a conflict of interest should be
weighed merely as “one factor” in determining whether an administrator abused its
discretion. See Doyle v. Liberty Life Assur. Co. of Boston, 542 F.3d 1352, 1359 (11th
Cir. 2008) (“As we now show, Glenn implicitly overrules and conflicts with our
precedent requiring courts to review under the heightened standard a conflicted
administrator's benefits decision.”).
The Eleventh Circuit’s latest iteration of the Firestone standard-of-review
framework is found in Blankenship v. Metro. Life Ins. Co., 644 F.3d 1350 (11th Cir.),
cert. denied, 132 S. Ct. 849 (2011):
(1) Apply the de novo standard to determine whether the claim
administrator's benefits-denial decision is “wrong” (i.e., the court
disagrees with the administrator’s decision); if it is not, then end the
inquiry and affirm the decision.
(2) If the administrator’s decision in fact is “de novo wrong,” then
determine whether he was vested with discretion in reviewing claims;
if not, end judicial inquiry and reverse the decision.
(3) If the administrator’s decision is “de novo wrong” and he was
vested with discretion in reviewing claims, then determine whether
“reasonable” grounds supported it (hence, review his decision under the
more deferential arbitrary and capricious standard).
(4) If no reasonable grounds exist, then end the inquiry and reverse the
administrator’s decision; if reasonable grounds do exist, then determine
if he operated under a conflict of interest.
(5) If there is no conflict, then end the inquiry and affirm the decision.
(6) If there is a conflict, the conflict should merely be a factor for the
court to take into account when determining whether an administrator’s
decision was arbitrary and capricious.
Id. at 1355.2 All steps of the analysis are “potentially at issue” when a plan vests
discretion to the plan administrator to make benefits determinations. See id. at 1356
n.7. Conversely, then, where a plan does not confer discretion, the court simply
applies the de novo review standard established by the Supreme Court in Firestone.
See Firestone, 489 U.S. at 115 (“[W]e hold that a denial of benefits challenged under
§ 1132(a)(1)(B) is to be reviewed under a de novo standard unless the benefit plan
gives the administrator or fiduciary discretionary authority to determine eligibility for
benefits or to construe the terms of the plan.”).
“In ERISA cases, the phrases ‘arbitrary and capricious’ and ‘abuse of
discretion’ are used interchangeably.” Blankenship, 644 F.3d at 1355 n.5.
Motion to Strike
Before reaching the parties’ dispute over the applicable ERISA standard of
review, the court first decides the merits of Mr. Huffstutler’s Motion to Strike. In his
Motion to Strike, Mr. Huffstutler seeks to strike the certification (Doc. 12-1) filed by
Goodyear on January 19, 2012, in support of its ERISA Standard Motion and in
opposition to Mr. Huffstutler’s competing motion. (Doc. 14 at 1).
The certification references three separate ERISA-related resolutions. More
specifically, the certification does not attach any copies of the actual resolutions,3 but
Goodyear does suggest that its resolution dated April 12, 2011, is attached
as Exhibit C to its memorandum in support of its ERISA Standard Motion. (Doc. 16
at 2 n.2). The court has studied Exhibit C (Doc. 11-3) and notes that it also is a
certification document and not an actual resolution. This particular certification
purports to summarize Goodyear’s resolutions reached on April 12, 2011, and
indicates that Ms. Bell signed it on January 9, 2012. Puzzlingly, while the language
of the first provision included in Exhibit C mirrors that contained in the subsequent
certification by Ms. Bell, (i.e., identified as either Doc. 12-1 or Exhibit D), the
contents of the second provision of Ms. Bell’s first certification do not appear in her
later one, which supposedly also covers resolutions from April 12, 2011. (Compare
Doc. 11-3 at 1 (“FURTHER RESOLVED, that such Pension Board and ERISA
Appeals Committee retain the authority and power previously granted by this
Board.”) with Doc. 12-1 at 1 (no comparable language listed in subsequent
certification)). Additionally, the more lengthy second and third provisions set forth
in her second certification (i.e., Doc. 12-1) do not appear anywhere in Exhibit C.
(Compare Doc. 12-1 at 1 with Doc. 11-3 at 1 (“FURTHER RESOLVED, that such
Pension Board and ERISA Appeals Committee retain the authority and power
previously granted by this Board.”)). In light of such unexplained discrepancies and
inconsistencies, the absence of the actual resolutions becomes even more critical to
instead indicates Ms. Bell’s examination of Goodyear’s records has “reveal[ed] . . .
the following [as] . . . true and correct cop[ies] of resolutions . . . .” (Doc. 12-1 at 1).
The first section defines who are the members of Goodyear’s “Pension Board
and the ERISA Appeals Committee[.]” (Doc. 12-1 at 1). The second part indicates
that the Pension Board and ERISA Appeals Committee are bestowed with:
[T]he sole and absolute discretionary authority and power to interpret
plan provisions, determine claims for benefits, determine eligibility and
make factual determinations in order to administer and carry out the
provisions of . . . the 1950 Pension Plan of The Goodyear Tire & Rubber
Company . . . .
(Doc. 12-1 at 1).
The third section states:
FURTHER RESOLVED that such Pension Board and ERISA
Appeals Committee shall have the authority to establish procedures for
the Plans and itself, to appoint Plan administrators of the Plans to whom
they can delegate the right to hire third party administrators, trustees and
other agents as needed, to hear claim appeals, including the power to
appoint delegates to represent them for any claim appeals heard at a
meeting in which they cannot be present, to delegate to any independent
third party the right to decide the final appeal of any claim with the same
authority and rights of the Pension Board and ERISA Appeals
Committee or within any specified limits of their authority and rights if
less than a full delegation is desired by the Pension Board and ERISA
(Doc. 12-1 at 1).
the court’s analysis of the Motion to Strike.
The certification does not clarify when Goodyear adopted each one of these
resolutions. Instead, the document only generally advises that Goodyear adopted
them at a meeting “held on the 23rd day of January, 2004, as last amended on April
12, 2011.” (Doc. 12-1 at 1). The certification further states that said resolutions are
in full force and effect at the date hereof[.]” (Id.). Assistant Secretary of Goodyear,
Bertram Bell (“Ms. Bell”), executed this certification on January 17, 2012. (Id. at 2.).
Mr. Huffstutler raises several grounds in support of his Motion to Strike,
including the timing of the executed certification, which post-dates Goodyear’s final
consideration and denial of Mr. Huffstutler’s claim on July 13, 2011, the absence of
any attached resolutions, and the lack of personal knowledge asserted within the
certification. (Doc. 11-2 at 1). Goodyear responds in part to some of the issues raised
by Mr. Huffstutler. (See generally Doc. 16).
However, noticeably absent from Goodyear’s opposition is any argument that
counters Mr. Huffstutler’s points that the certification lacks copies of the actual
resolutions as well as any reference to Ms. Bell’s personal knowledge of the
resolutions. Additionally, the certification is not filed as a sworn to affidavit or as an
unsworn declaration under penalty of perjury pursuant to 28 U.S.C. § 1746.
Goodyear also has not suggested that the certification, which purportedly summarizes
various resolutions agreed to over a period of time by Goodyear, is admissible under
some other federal statute or rule.
As the United States District Court for the Southern District of Alabama has
“Judges are not like pigs, hunting for truffles buried in briefs.” Smith v.
Secretary, Department of Corrections, 572 F.3d 1327, 1352 (11th Cir.
2009). An issue must be “fairly presented” in order to trigger
consideration, and a glancing reference without discussion or legal
authority does not meet that standard. Id. As the Court has previously
noted, (Doc. 110 at 2), “[t]here is no burden upon the district court to
distill every potential argument that could be made based upon the
materials before it on summary judgment.” Resolution Trust Corp. v.
Dunmar Corp., 43 F.3d 587, 599 (11th Cir. 1995).
Amazing Grace Bed & Breakfast v. Blackmun, No. 09-0298-WS-N, 2011 WL 606126,
at *3 (S.D. Ala. Feb. 11, 2011). Therefore, similar to Amazing Grace, because
Goodyear has not “fairly presented” its opposition to Mr. Huffstutler’s challenge of
the admissibility of the certification, the court will not speculate as to any
undeveloped avenues under which it should or could consider the evidence.
In sum, Goodyear, as the proponent of this proof, has not met its burden in
supporting the court’s consideration of it. Accordingly, the Motion to Strike is
ERISA Standard of Review
In this case, the parties dispute the appropriate standard of review for the court
to apply.4 Mr. Huffstutler asserts that de novo review is called for, while Goodyear
maintains that discretionary or arbitrary and capricious review is required.5
While Mr. Huffstutler bears the burden of proving his entitlement to ERISA
benefits under Goodyear’s Plan, Horton v. Reliance Std. Life Ins. Co., 141 F.3d 1038,
1040 (11th Cir. 1998), Goodyear bears the burden of proving that the arbitrary and
capricious standard of review applies. Anderson v. Unum Life Ins. Co. of Am., 414
F. Supp. 2d 1079, 1095 (M.D. Ala. 2006) (citations omitted). Based upon the terms
The answer to which standard applies carries great significance in relation to
the scope of this court’s evidentiary review. On one hand, if the de novo standard
applies because the plan at issue does not grant the administrator or fiduciary
discretionary authority, then the court is not limited in its review to simply those facts
that were before the administrator at the time of the decision. See Kirwan v. Marriott
Corp., 10 F.3d 784, 789 (11th Cir. 1994) (“In this circuit, a district court conducting
a de novo review of an Administrator’s benefits determination is not limited to the
facts available to the Administrator at the time of the determination.”). On the other
hand, if the arbitrary and capricious standard applies, triggering application of the sixstep analysis discussed above, then the court is limited in its review to the facts
available to the administrator at the time of the determination. See Glazer v. Reliance
Standard Life Ins. Co., 524 F.3d 1241, 1246-47 (11th Cir. 2008) (stating, in a case
where the claims administrator had discretion under the plan, that when evaluating
whether the claims administrator’s decision was wrong, “[w]e are limited to the
record that was before [the claims administrator] when it made its decision”).
As a result of the Supreme Court’s decision in Glenn, as interpreted by the
Eleventh Circuit in Doyle, only two ERISA standards of review now exist in the
context of challenging a plan administrator’s claim decision—either de novo or
modified arbitrary and capricious. Doyle, 542 F.3d at 1359 (“As we now show,
Glenn implicitly overrules and conflicts with our precedent requiring courts to review
under the heightened standard a conflicted administrator’s benefits decision.”).
of the Plan, and the lack of affirmative substantiating proof from Goodyear as
discussed more fully below, the court finds that Goodyear has failed to meet its
burden of demonstrating that arbitrary and capricious review is proper. Accordingly,
the court agrees with Mr. Huffstutler that applying de novo review is appropriate.
As the Eleventh Circuit explained in Jett v. Blue Cross and Blue Shield of Ala.,
Inc., 890 F.2d 1137 (11th Cir. 1989), regarding the de novo versus abuse of discretion
The recent Supreme Court case which holds that a de novo standard of
review is proper under some plans validates the prior law of this Circuit
that the arbitrary and capricious standard of review is appropriate here.
Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 109 S. Ct. 948,
103 L. Ed. 2d 80 (1989). The [C]ourt held that
a denial of benefits challenged under [29 U.S.C.A.] §
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.
Firestone, 109 S. Ct. at 956.
The plan in this case does give the administrator of the plan
“discretionary authority to determine eligibility for benefits [and] to
construe the [plan's] terms.” Id. For example, the plan states,
As a condition precedent to coverage, it is agreed
that whenever the Claims Administrator makes reasonable
determinations in the administration of the [plan]
(including, without limitation, determinations whether
services, care, treatment, or supplies are Medically
Necessary . . .) such determinations shall be final and
Jett, 890 F.2d at 1138-39 (emphasis added). Therefore, in Jett, the court first looked
to the language of the plan in order to evaluate the standard of review issue.6 Accord
Cagle v. Bruner, 112 F.3d 1510, 1517 (11th Cir. 1997) (“Accordingly, we look to all
of the plan documents to determine whether the plan affords the Fund enough
discretion to make the arbitrariness standard applicable.”).
Here, Goodyear’s Plan contains the following relevant language:
The Pension Board shall have all such power and authority as may be
necessary to carry out the provisions of the Plan, including discretionary
power and authority to interpret and construe the Plan and to resolve any
disputes arising thereunder subject to the provisions of Paragraph 8 of
this Article II and the power and authority expressly conferred upon it
herein. The Pension Board shall have authority to grant such pensions
or other benefits as are provided under the Plan and to take such further
action as it shall deem advisable in the administration of the Plan in
accordance with its terms.
(Doc. 10-18 at 6 ¶ 6 (emphasis added)). Thus, the Plan bestows the Pension Board
with discretionary authority when a decision is made by that particular body.
The Plan describes the Pension Board as follows:
The administration of the Plan shall be by a Pension Board of five
officers and/or employees of the Company, at least three of whom shall
In Jett, the parties agreed that the arbitrary and capricious standard of review
applied. Id. at 1138 (“The parties agree that a court reviewing Blue Cross’ denial of
benefits under this plan must apply an arbitrary and capricious standard.”).
be officers. Members of the Pension Board shall be responsible to the
Board of Directors of the Company. The Pension Board shall have the
authority to elects its own chairman and secretary and to appoint an
administrator of the Plan to whom the powers of the Pension Board may
be specifically delegated. The Pension Board may adopt by-laws and
regulations for the administration of the Plan not inconsistent therewith.
Any act or decision of the Pension Board shall require the concurrence
of a majority of its members.
(Doc. 10-18 at 6 ¶ 5) (emphasis added).
Mr. Huffstuttler does not dispute that the Plan unambiguously vests discretion
in the Pension Board to interpret its terms and make pension benefits determinations,
but instead argues that de novo review applies for the following reasons:
The Pension Board was not the decision maker.
Discretionary authority does not apply in this situation where
there is a factual dispute regarding an alleged clerical error.
Goodyear has not delegated discretionary authority to a third
party. Instead, Goodyear has attempted to retain discretionary authority.
The Eleventh Circuit does not allow retention of discretionary authority.
(Doc. 10 at 14).
Regarding Mr. Huffstutler’s first argument, he points out that Gary
Dannemiller (“Mr. Dannemiller”), not the Pension Board, denied relief on January 7,
2002, March 11, 2002, and September 16, 2002. Mr. Huffstutler does not reference
the final denial dated July 13, 2011, which was signed by a representative of
Goodyear’s ERISA Appeals Committee. This correspondence also does not in any
manner suggest that the entity, bestowed with the discretionary authority under the
Plan, i.e., the Pension Board, was the final decision maker. (Doc. 11-2).
The court acknowledges that Goodyear suggests in a footnote that “[t]he
Pension Board is the same as the ERISA Appeals Committee (the “EAC”), the body
that is referenced in the [July 13, 2011] letter setting for[th] the Decision.” (Doc. 11
at 3 n.2). In support of this point, Goodyear indicates that it has attached “[t]he
corporate resolution affirming the relationship between the two bodies–the Pension
Board and the EAC . . . .” (Id.).
The court has studied the referenced Exhibit C (Doc. 11-3) and finds it to be
deficient in support Goodyear’s standard of review position for several reasons. One,
the attached exhibit is not an actual resolution, but rather is a certification signed by
Ms. Bell on January 9, 2012, which attempts to summarize the resolutions
purportedly agreed to by Goodyear on April 12, 2011.7 Two, the certification lacks
The Goodyear’s resolutions summarized in Exhibit C are:
RESOLVED, that effectively immediately the Pension Board and
the ERISA Appeals Committee be comprised of the General Counsel,
the senior Human Resources Officer, the Controller, the head of the
Company’s Off-Highway Business and a Director of HR as selected by
the senior Human Resources Officer; and
FURTHER RESOLVED, that such Pension Board and ERISA
Appeals Committee retain the authority and power previously granted
by this Board.
any indication of personal knowledge or attestation by Ms. Bell.
Three, the court finds the summary of the resolutions by Ms. Bell for April 12,
2011, to be conflicting and unreliable as some of the resolution language contained
in her January 9, 2012, certification is not included in her subsequent January 12,
2012, one (and vice versa) even though she has indicated that both documents reflect
resolutions from April 12, 2011. See discussion supra at 6 n.3. In sum, the court
finds the certification to suffer from the same admissibility and reliability issues as
Ms. Bell’s subsequent January 17, 2011, certification, which the court struck above.
Four, even if the court were to accept the January 9, 2012, certification as
admissible probative evidence of a shared and/or identical relationship between the
Pension Board and the ERISA Appeals Committee, the document still does not
substantiate a delegation of discretionary authority by the Pension Board to the
ERISA Appeals Committee. The certification also does not indicate that Goodyear’s
Plan has been amended to bestow the ERISA Appeals Committee with discretionary
authority. Furthermore, Goodyear does not offer any evidence that otherwise confirms
that the ERISA Appeals Committee has the same discretionary power that Goodyear
expressly afforded to the Pension Board under the Plan (e.g., such as through
(Doc. 11-3 at 1).
administrative by-laws or procedures that establish an in-house delegation of
authority from the Pension Board to the ERISA Appeals Committee).
Fifth, even if the court were to accept the January 9, 2012, certification as
admissible probative evidence of a shared relationship between the Pension Board
and the ERISA Appeals Committee and were to assume that Goodyear had actually
and validly bestowed the ERISA Appeals Committee with discretionary authority to
decide disputed benefit claims, the court still would be unable to verify that the
person who signed the final July 13, 2011, denial was, in fact, a duly authorized
representative of the ERISA Appeals Committee, as set forth in the first summarized
resolution of Exhibit C. (Doc. 11-3 at 1).
More specifically, the court cannot tell from the denial letter or otherwise from
the record if Ginnie Lowers (“Ms. Lowers”), who signed the letter as a
“representative” for the ERISA Appeals Committee is Goodyear’s “General Counsel,
the senior Human Resources Officer, the Controller, the head of the Company’s OffHighway Business [or] a Director of HR . . . ” who comprise that body. (Doc. 11-3
at 1). As a result, the court cannot determine if Ms. Lowers appropriately signed the
denial on behalf of the ERISA Appeals Committee or even properly participated in
the deliberative process as the letter seems to indicate. (Doc. 11-2 at 2 (“The
Committee requested that we follow up with Bette Pierce on several additional items
before making a final determination.”) (emphasis added); id. at 2-3 (“We are required
to inform you of your right to now bring an action under Section 502(a) of the
Employment Retirement Income Security Act, as amended (ERISA).”) (emphasis
As this court has previously discussed in the comparable case of Glover V.
Amcor Pet Packaging, USA, Inc.:
As the Eleventh Circuit explained the fiduciary/non-fiduciary
distinction with respect to determining the ERISA standard of review in
Appellee Grand Union argues that, “[r]egardless of
whether Connecticut General may be classified as a
“fiduciary” under ERISA ... there is no dispute whatsoever
that Grand Union had delegated to Connecticut General the
authority ‘to determine eligibility for benefits.’” Appellee
Grand Union would have us ignore the trust law principles
upon which the Bruch decision is based and import greater
significance to Justice O’Connor's use of the word “or”
than is warranted. True, the Supreme Court held that a de
novo standard applies unless “the benefit plan gives the
administrator or fiduciary discretionary authority,” Id.
(emphasis added), yet it is clear that an administrator with
discretionary authority is a fiduciary. See 489 U.S. at ----,
109 S. Ct. at 955, discussed supra at section I.
Conversely, one who is not a fiduciary is also not
“an administrator with discretionary authority” under 29
U.S.C. § 1002(16)(A) and (21)(A). “Administrators” are
distinguished from “fiduciaries” by the former’s lack of
discretionary authority or discretionary control”; therefore,
any entity or person found not to be an ERISA “fiduciary”
cannot be an “administrator with discretionary authority”
subject to the arbitrary and capricious standard.
Grand Union makes essentially the same argument
that was rejected by the Supreme Court in Bruch. In
Bruch, Firestone “argue[d] that as a matter of trust law the
interpretation of the terms of a plan is an inherently
discretionary function.” 489 U.S. at ----, 109 S. Ct. at 954.
Similarly, Grand Union argues that since Connecticut
General has the power to make initial eligibility
determinations “‘in accordance with the terms and
conditions of the Plan,’” Connecticut General’s role is
“inherently discretionary.” As discussed above, Grand
Union urges a far too facile reading of Bruch than can be
sanctioned by this court. Just as Firestone’s “inherently
discretionary” task of construing its benefits plan terms
was insufficient to support a more deferential standard of
judicial review under trust law principles, Connecticut
General’s “inherently discretionary” task of making initial
eligibility determinations “according to the terms of the
Plan” does not trigger the application of an arbitrary and
capricious standard of review under Bruch. See Moon v.
American Home Assur. Co., 888 F.2d 86 (11th Cir.1989)
(rejecting a similar argument and finding that de novo
standard of review applies). Grand Union, not Connecticut
General, was given the authority to review claim denials;
nor was Connecticut General given the power to formulate
policy or terms of eligibility under the Plan.
Baker, 893 F.2d at 291-92 (emphasis added).
Glover, No. 4:09-CV-65-VEH (Doc. 45 at 14-16) (N.D. Ala. Feb. 4, 2010).
Similar to Baker,8 in this instance, the record only shows that “[Goodyear’s
The full citation is Baker v. Big Star Div. of the Grand Union Co., 893 F.2d
288 (11th Cir. 1989).
Pension Board], and not [Mr. Dannemiller, the ERISA Appeals Committee, or Ms.
Lowers], was given the [fiduciary] authority to review claim denials; nor was [Mr.
Dannemiller, the ERISA Appeals Committee, or Ms. Lowers] given the [fiduciary]
power to formulate policy or terms of eligibility under the Plan.” Further, no
competent evidence of (i) a delegation of fiduciary authority to either
Dannemiller, the ERISA Appeals Committee, or Ms. Lowers; (ii) an amendment of
the Plan; or (iii) an adherence to administrative by-laws or procedures authorized by
the Pension Board exists in the record that might otherwise support the application
of the discretionary standard to this decision.
As the district court similarly explained in Anderson, 414 F. Supp. 2d at 1096:
On the other hand, if an unauthorized party made the benefits
determination, the denial of plan benefits is reviewed under the de novo
standard. See Rodriguez-Abreu v. Chase Manhattan Bank, 986 F.2d
580, 584 (1st Cir. 1993); see also Mazzacoli v. Continental Cas. Co.,
322 F. Supp. 2d 1376, 1381 (M.D. Fla. 2004) (“Eleventh Circuit
precedent is clear that where an unauthorized party denies plan benefits,
that denial is reviewed under the de novo standard.”) (citing Baker v. Big
Star Div. of the Grand Union Co., 893 F.2d 288, 291 (11th Cir. 1989)).
An authorized party is one who has received a proper delegation
of powers. Pursuant to 29 U.S.C. § 1105, a plan administrator may
delegate its fiduciary duties to a third party if the plan provides a clear
process for such delegation. As aptly explained by the First Circuit, 29
U.S.C. § 1105 “allows named fiduciaries to delegate responsibilities ...
through express procedures provided in the plan. To be an effective
delegation of discretionary authority so that the deferential standard of
review will apply, therefore, the fiduciary must properly designate a
delegate for the fiduciary’s discretionary authority.” Rodriguez-Abreu,
986 F.2d at 584.
Anderson, 414 F. Supp. 2d at 1096 (emphasis added) (footnote omitted).
Therefore, consistent with Baker, Glover, and Anderson, Goodyear has not met
its burden of showing that an “authorized party” “with a proper delegation of powers”
determined Mr. Huffstutler’s benefit dispute under the Plan. Accordingly, Mr.
Huffstutler is correct that a de novo standard of review applies to the rejection of his
claim, and the court does not need to reach any of the other issues relating to the
standard of review addressed by the parties. Further, consistent with this de novo
ruling, the court will allow Mr. Huffstutler the right to conduct discovery.
Accordingly, Mr. Huffstutler’s ERISA Standard Motion is GRANTED,
Goodyear’s ERISA Standard Motion is DENIED, and Mr. Huffstutler’s Motion to
Strike is GRANTED.
DONE and ORDERED this the 20th day of April, 2012.
VIRGINIA EMERSON HOPKINS
United States District Judge
The court’s standard of review conclusion reached in this opinion applies
through pre-summary judgment. At the dispositive motion stage, the court will
entertain a request by Goodyear to reevaluate the applicable standard if it adequately
develops the record with acceptable evidence in this regard.
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