Jones et al v. Allen, et al

Filing 85

SUPPLEMENT re 84 REPORT AND RECOMMENDATIONS: The Court notes that its report and recommendation is not changed by the reasoning in the Bluhm decision. Signed by Magistrate Judge Terence P Kemp on 2/7/2013. (kk2)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
EASTERN DIVISION
Craig S. Jones, et al.,
Plaintiffs,
v.

Case No. 2:11-cv-380

Kerry A. Allen, Plan
Administrator, et al.,

JUDGE MICHAEL H. WATSON
Magistrate Judge Kemp

Defendants.
SUPPLEMENT TO REPORT AND RECOMMENDATION
Defendants have filed a Notice of Supplemental Authority,
bringing to the Court’s attention a decision by the United States
District Court for the Southern District of California in a case
involving

two

different

defendants as in this case.

plaintiffs

suing

many

of

the

same

The plaintiffs in the California case

brought some of the same claims as Plaintiffs in the present case,
and the claims involved many of the same facts and legal issues.
That decision, Bluhm v. PNC Financial Services Group, Inc., No.
11cv313 (S.D. Cal. Feb. 1, 2013), considered, among other issues,
the question addressed in the Report and Recommendation in the
present case:

whether certain claims should be deemed approved

under the plans at issue.

The Court has reviewed Defendants’

Notice of Supplemental Authority (Docket No. 83), and is not
persuaded by the Bluhm decision regarding the “deemed approved”
issue for the reasons that follow.
The Bluhm court considered the ERISA standard of review and
determined that the administrative record should be reviewed for an
abuse of discretion based on the language in the plans granting the
Committee and Plan Administrator “full power and authority to
interpret,

construe

and

administer

this

interpretations and construction hereof . . . .”

Plan

and

its

(The court also

determined that the Committee’s conflict of interest should be

weighed as a factor in determining whether the Committee members
abused their discretion.)

However, the court did not consider

whether a different standard of review applied to claims that are
deemed approved or denied automatically after a certain amount of
time has passed, nor did the court consider whether the general
grant of discretion in the plans extended to situations in which
the Committee or Plan Administrator failed to deny the claims
within the time set forth in the plans.

Accordingly, the court in

Bluhm recited the reasoning of the Committee and Plan Administrator
for why the claims should not be deemed approved, and determined
that “the Committee reasonably concluded that Defendants did not
fail to comply with Plan procedures.”
In contrast, this Court, after reviewing the relevant case law
regarding the standard of review governing regulations and plan
provisions providing for claims to be “deemed” approved or denied
after a certain amount of time, concluded that the plans did not
allow the Committee and Plan Administrator to exercise discretion
if they failed to deny the claims within the time specified in the
plans, and accordingly determined that the standard of review was
de novo.

As a result, this Court did not merely review the

Committee and Plan Administrator decisions for abuse of discretion,
but rather reviewed the evidence independently.

Based on that

review of the evidence, the Court recommended a finding that
Defendants failed to deny the claims within the time required, and
accordingly the claims would be deemed approved if the plans under
which Plaintiffs filed their motion for partial summary judgment
were in existence.

Therefore, the Court notes that its report and

recommendation (Docket No. 84) is not changed by the reasoning in
the Bluhm decision.
/s/ Terence P. Kemp
United States Magistrate Judge

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