Christopher MURATORE, parent and natural guardian of Kassandra Muratore, and individually, Sharon T. Muratore, parent and natural guardian of Kassandra Muratore, Plaintiffs-Appellees-Cross-Appellants, v. UNITED STATES OFFICE OF PERSONNEL MANAGEMENT, an agency of the United States of America, Defendant-Appellant-Cross-Appellee.
No. 99-2307.
United States Court of Appeals, Eleventh Circuit.
Aug. 15, 2000.
222 F.3d 918
In United States v. Glinton, 154 F.3d 1245, 1259 (11th Cir.1998), cited by the district court, Hatten‘s carrying of a bag in and out of the house of a known drug dealer was at least one of the circumstances considered with reference to the court‘s approval of both the obtaining of the search warrant and a Terry stop of an automobile. We acknowledge that Hatten himself was a known drug dealer. It should be notеd, however, that the officers here did not stop Powell after her first visit to the house, but only after she had left the house, switched seats with the passenger, rode around, returned, and then left the backpack at the house. Glinton also holds that the officer who makes the stop need not be the one who observed the suspicious activities if that information had been relayed to him. See id. at 1257. Compare United States v. Streifel, 781 F.2d 953 (1st Cir.1986) (Terry stop lawful where defendants arrived at chalet suspected of being used for drug trafficking in the middle of the night in a rental car); and United States v. Perdue, 8 F.3d 1455 (10th Cir.1993) (investigatory stop of defendant permissible where car drove down rural lane towards property known for drug activity, and suddenly stopped and turned around upon seeing police activity at the property).
For the reasons stated above, we REVERSE the order of the district court and REMAND for further proceedings consistent with this opinion.
August E. Flentje, Washington, DC, Tamra Phipps, Whitney Schmidt, Susan R. Waldron, Tampa, FL, William Kanter, Dept. of Justice, Civil App. Div., Washington, DC, for Defendant-Appellant-Cross-Appellee.
Gary R. Trombley, Trombley & Associates, P.A., Wayne Lee Thomas, Tampa, FL, for Plaintiffs-Appellees-Cross-Appellants.
Before DUBINA and BLACK, Circuit Judges, and BECHTLE*, District Judge.
Appellees and Cross-Appellants Christopher and Sharon Muratore (Appellees) sued Appellant and Crоss-Appellee United States Office of Personnel Management (OPM), challenging OPM‘s benefits decision regarding Appellees’ daughter and requesting attorneys’ fees. The district court granted Appellees’ motion for summary judgment on the benefits decision but rejected Appellees’ request for fees. We reverse the district court‘s decision to enter summary judgment in favor of Appellees, affirm the denial of attorneys’ fees, and remand the matter to the district court for entry of judgment in favor of OPM.
I. BACKGROUND
Appellee Christopher Muratore, Appellee Sharon Muratore‘s spouse, works for the United States Bankruptcy Court for the Middle District of Florida. Appellees
After PCA terminated payment, Appellees unsuccessfully appealed to the PCA Grievance Committee and then to OPM. After OPM‘s denial, Appellees filed suit under the Federal Employees Health Benefits Act (FEHBA),
II. DISCUSSION
OPM presents a two-part argument on appeal. First, OPM contends this Court should conduct a deferential review of OPM‘s benefits decision and reject the district court‘s application of a de novo review. Second, OPM asks this Court to deem the benefits decision reasonable under either standard of review. We take up each issue in turn. We review de novo both the district court‘s selection of the standard of review, a question of law, and the district court‘s decision to grant summary judgment. See Lipscomb v. United States, 906 F.2d 545, 548 (11th Cir.1990); Tackitt v. Prudential Ins. Co. of America, 758 F.2d 1572, 1574 (11th Cir.1985).
A. Standard of Review
Congress enacted the FEHBA,
We review OPM‘s actions pursuant to the FEHBA under the Administrative Procedure Act (APA),
Appellees argue the district court correctly conducted a de novo review because OPM‘s denial of their claim entailed simple contract interpretation—a classic question of law. Appellees point out that
1. Authority in support of a de novo standard of review.
One line of cases stands for the simple prоposition that courts must conduct de novo reviews of agency determinations of pure questions of law. See Pollgreen v. Morris, 770 F.2d 1536, 1544 (11th Cir.1985) (considering “freely reviewable” the legal question of the existence of duress defense); R&W Technical Servs. Ltd. v. Commodity Futures Trading Comm‘n, 205 F.3d 165, 169 (5th Cir.2000) (explaining the court would defer to a reasonable agency decision within the agency‘s expertise but decide questions of law de novo); Howard v. Fedеral Aviation Admin., 17 F.3d 1213, 1215 (9th Cir.1994) (stating that “[p]urely legal questions are reviewed de novo“).
A number of early cases applied this principle to a de novo review of an agency‘s interpretation of a contract or tariff. In Texas Gas Transmission Corp. v. Shell Oil Co., 363 U.S. 263, 80 S.Ct. 1122, 4 L.Ed.2d 1208 (1960), the Supreme Court held that courts did not need to defer to the Federal Power Commission‘s contract interpretation because the Commission did not rely on its “specialized knowledge gained from experience” but simply applied “ordinary rules of contract construction.” Id. 363 U.S. at 268-69, 80 S.Ct. at 1126. See also Coca-Cola Co. v. Atchison, T. & S.F. Ry. Co., 608 F.2d 213, 218 (5th Cir.1979) (deeming ICC‘s construction of a tariff a freely reviewable question of law).1 The Fifth Circuit has continued to conduct a de novo review in its recent cases. See Davidson v. Glickman, 169 F.3d 996, 1000 (5th Cir.1999) (reviewing de novo agency‘s interpretation of a provision of a lease); Institute for Tech. Dev. v. Brown, 63 F.3d 445, 450 (5th Cir.1995) (cоnducting “effectively de novo” review of an agency‘s interpretation of the regulations of a different agency and contractual agreements).
2. Authority in support of an arbitrary and capricious standard of review.
Most courts have deferred to an agency‘s interpretation by applying the arbitrary and capricious standard of review. The Supreme Court provided the starting point for this аpproach in Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). Chevron stands, in part, for the proposition that courts may not always conduct a de novo review of agencies even on the pure question of law of statutory interpretation. See Chevron, 467 U.S. at 843, 104 S.Ct. at 2782. The Supreme Court explained that if a “court determines Congress has not directly addressed the precise question at issue, the court does not simply impose its own construction on the statute, as would be necessary in the absence of an administrative interpretation.” Id. (footnote omitted). Rather, the “question for the court is whether the agency‘s answer is based on a permissible construction of the statute.” Id. The Court noted that the specialized knowledge and experience of agencies supported this approaсh. Id. at 843, 104 S.Ct. at 2782-83.
Two Circuits have concluded that Chevron superseded the analysis of Texas Gas and its progeny. The D.C. Circuit paved the way for this approach when it reviewed an agency‘s construction of a settlement agreement in National Fuel Gas Supply Corp. v. Federal Energy Regulatory Comm‘n, 811 F.2d 1563 (D.C.Cir.1987). The court began by referencing Chevron‘s rejection of “the view that a court may freely review an agency on pure questions of law.” Id. at 1569. Based on that proposition, the court concluded that courts
The Tenth Circuit adopted this analysis in Northwest Pipeline Corp. v. Federal Energy Regulatory Comm‘n, 61 F.3d 1479 (10th Cir.1995). The court agreed Chevron‘s notion of deference to agency competence modified earlier cases that followed the tradition of conducting a de novo review of an agency‘s interpretation of a contract. Id. at 1486. The court concluded it would defer to an agency‘s contractual interpretation provided the interpretation has ample factual and legal support. Id. The First Circuit, while declining to decide a similar issue, noted its inclination to afford deference to an agency‘s contract interpretation gеrmane to its field and recognized that Chevron supports that conclusion. See Boston Edison Co. v. Federal Energy Regulatory Comm‘n, 856 F.2d 361, 363-64 (1st Cir.1988).4
We agree with the latter line of cases, the majority view, and conclude the appropriate standard of review in this case is arbitrary and capricious. Chevron suggests that “the institutional advantages of agencies apply to a broad range of administrative activities,” and “contract interpretation ... is sufficiently similаr to statutory interpretation [that it] warrants deference—especially when the interpretation involves a policy determination within the agency‘s statutory domain.” Phillip G. Oldham, Comment, Regulatory Consent Decrees: An Argument for Deference to Agency Interpretations, 62 U. Chi. L.Rev. 393, 399-400 (1995).
The decision to apply the arbitrary and capricious standard of review is easiest when the agency‘s expertise clearly informed the decision subject to review. For instance, courts routinely defer to the Federal Energy Regulatory Commission‘s contract interpretation because “the Commission has greater technical expertise than [do the courts] in the often arcane field of natural gas pipeline regulation.” Baltimore Gas & Elec. Co. v. Federal Energy Regulatory Comm‘n, 26 F.3d 1129, 1135 (D.C.Cir.1994).
OPM‘s request for deference presents a hardеr issue. OPM cannot successfully
We conclude OPM‘s expertise justifies deference in this case.5 “Deference, of coursе, does not mean abdication of careful judicial review.” Northwest Pipeline, 61 F.3d at 1486. We will defer to OPM‘s interpretation as long as that interpretation is reasonable and relies on ample factual and legal support. See id.
B. Contractual Interpretation
The insurance policy between Appellees and PCA contains six sections governing benefits: medical and surgical benefits; hospital/extended care benefits; emergency benefits; mеntal conditions/substance abuse benefits; prescription drug benefits; and other benefits. The parties focus on two specific provisions of the policy—one in the medical and surgical benefits section, the other in the mental conditions/substance abuse benefits section.
The medical and surgical benefits section states “[a] comprehensive range of preventive, diagnostic and treatment services is provided by Plan doctors and other Plan providers.” Under the limited benefits subsection, the plan provides:
Short-term rehabilitative therapy (physical, speech, cardiac, and occupational) is provided on an inpatient or outpatient basis for up to two months per condition if significant improvement can be expected within two months; ... Speech therapy is limited to treatment of certain speech impairments of organic origin.
The medical and surgical benefits section concludes by stating that it does not cover long-term rehabilitative therapy.
The mental conditions/substance abuse benefits section, by contrast, provides that “[t]o the extent shown below, this Plan provides the following services necessary for the diagnosis and treatment of acute psychiаtric conditions, including treatment of mental illness or disorders: diagnostic evaluation, psychological testing, psychiatric treatment (including individual and group therapy), [and] hospitalization (including inpatient professional services).”6
The parties agree that autism is a mental health disorder for purposes of the plan. OPM concluded, and contends here, that Appellees sought coverage fоr speech therapy and the plan (in the medical and surgical benefits section) specifically limits coverage for speech therapy to two months. Appellees counter that coverage for autism, a mental disorder, arises from the mental conditions section, specifically the “psychiatric treatment” of “individual therapy.”
While the plan might be susceptible to either reading, we conclude OPM did not act arbitrarily or capriciously. Instead,
III. CONCLUSION
The district court erred by conducting a de novo review and OPM did not reach an arbitrary or capricious intеrpretation of the provisions of the policy. Accordingly, we reverse the district court‘s entry of summary judgment in favor of Appellees and remand for the district court to enter judgment in favor of OPM. Appellees are not entitled to attorneys’ fees because they did not prevail in this action.
AFFIRMED, IN PART, REVERSED, IN PART, AND REMANDED.