787 F.3d 683
2d Cir.2015Background
- Francy Ocampo, a participant in the Building Service 32BJ Pension Plan, stopped working in March 2005 due to herniated discs and later obtained an SSA disability award finding her disabled as of March 22, 2005.
- The SSA Notice stated Ocampo’s continuing eligibility would be reviewed at least once every three years (indicating SSA did not classify the disability as "permanent" under 20 C.F.R. § 404.1590(d)).
- Ocampo applied in 2011 for a disability pension under the Pension Plan; the Plan grants the Trustees sole, discretionary authority to determine benefits eligibility and provides that an SSA certification of a "permanent" award can establish pension entitlement.
- The Funds approved Ocampo for long-term disability benefits but denied the disability pension because the SSA review-interval language indicated the SSA did not consider the condition permanent and because Ocampo filed more than nine months after last working (creating a presumption she did not become permanently disabled while in covered employment).
- Ocampo exhausted internal appeals and sued under ERISA § 502(a)(1)(B). The district court applied the arbitrary-and-capricious standard (because the Plan confers discretionary authority) and granted summary judgment for the Trustees. The Second Circuit affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Proper standard of review | Trustees failed to exercise discretion and merely adopted SSA's view, so de novo review required | Plan confers discretionary authority to Trustees; apply arbitrary-and-capricious review | Arbitrary-and-capricious review applies (Plan gives Trustees sole discretionary authority) |
| Whether Trustees improperly delegated decision to SSA | Trustees "punted" permanence question to SSA and did not independently decide | Trustees actually decided; SSA decision predated Fund application and Trustees had alternative fact-finding role | No improper delegation; Trustees made the decision in their discretion |
| Reasonableness of relying on SSA review-interval language to deny "permanent" status | SSA Notice and treating physician show permanence; denial inconsistent with LTD approval | SSA review-interval (every 3 years) means SSA did not deem condition permanent; Plan permits Trustees to treat SSA classification as dispositive for "permanent" certification | Trustees reasonably relied on SSA's three-year review indication and did not act arbitrarily |
| Sufficiency of medical evidence to rebut presumption (filed >9 months after last work) | Treating physician’s 2011 form stating "permanent" shows permanence from 2005 | Physician’s form is dated 2011 and does not constitute clear and convincing evidence that disability was permanent as of 2005; burden on claimant to prove permanence | Trustees reasonably concluded evidence did not overcome presumption; denial not arbitrary or capricious |
Key Cases Cited
- Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (establishes that plan language granting discretion triggers deferential ERISA review)
- Pagan v. NYNEX Pension Plan, 52 F.3d 438 (2d Cir. 1995) (arbitrary-and-capricious standard applied where plan confers discretionary authority)
- Sharkey v. Ultramar Energy Ltd., 70 F.3d 226 (2d Cir. 1995) (de novo review required where an unauthorized party makes the benefits decision)
- Fuller v. J.P. Morgan Chase & Co., 423 F.3d 104 (2d Cir. 2005) (illustrates application of deferential review to plan administrators with discretionary authority)
- Miles v. Principal Life Insurance Co., 720 F.3d 472 (2d Cir. 2013) (clarifies that denial will be overturned only if without reason or unsupported by substantial evidence)
- Shelby County Health Care Corp. v. Majestic Star Casino, 581 F.3d 355 (6th Cir. 2009) (discusses when decisions by non-authorized parties trigger de novo review)
- Rodriguez-Abreu v. Chase Manhattan Bank, N.A., 986 F.2d 580 (1st Cir. 1993) (same point regarding unauthorized decisionmakers)