*1 was found petition claim his Rule 91 since and because there

procedurally wanting proce- available state presently

remains a the merits of his determining

dure for

claims, exhausted his state yet he has not

remedies. judgment affirm the

Accordingly, we court. KEARNEY, Jr.,

Rex T. Plaintiff-

Appellant, COMPANY,

STANDARD INSURANCE

Defendant-Appellee. 96-16539, 96-16701.

Nos. Appeals,

United States Court

Ninth Circuit. 12, April

Filed 1998. May

Amended 1998.

Amended June 1998.

Rehearing En Banc Granted and 3,1998.

Opinion Aug. Withdrawn

Argued Sept. and Submitted 1998. April

Filed

Marjorie Manning, Bolling, E. &Walter Sacramento, California, Gawthrop, for the plaintiff-appellant. (briefed Conley argued),

Michael A. and (briefed), Pillsbury, Hanson Madi- Shawn Sutro, Francisco, California, son & San for defendant-appellee. Hauser, Timothy D. De- United States Labor, D.C., partment Washington, for Secretary of amicus Labor. HUG, SNEED, Judge,

Before: Chief FLETCHER, REINHARDT, KOZINSKI, FERNANDEZ, O’SCANNLAIN, TROTT, NELSON, T. KLEINFELD AND G. SILVERMAN, Judges. Circuit KLEINFELD, J., opinion delivered Court, by in full joined which is SNEED, HUG, Judge Judge Judge Chief KOZINSKI, Judge TROTT. Parts additionally joined by Judge and II are and Judge FLETCHER SILVERMAN. joined by Judge additionally Part I is II, III, and REINHARDT. Parts IV joined by Judge additionally O’SCANNLAIN. KLEINFELD;

Opinion by Judge Dissent Partial Concurrence Partial FLETCHER; by by Judge Concurrence REINHARDT; Partial Judge Judge Partial Dissent Concurrence O’SCANNLAIN; Partial Concurrence SILVERMAN; by Judge Partial Dissent by Judge FERNANDEZ. Dissent tion, KLEINFELD, memory prob- and concentration Judge: Circuit lems, prevent practicing him from as a voted to an ERISA case. We This is lawyer. to reconcile our decisions rehear it en banc review, court standard Kearney applied disability bene- discretion, de novo or abuse *3 paid years. two fits. Standard them for a administrator’s decision. We obtaining Then after more medical infor- record that consider what Kearney physi- mation from Mr. and from consider. court should consulted, the insurer took the cians position Kearney longer that Mr. was no Facts. disabled, paying him. quit and Kearney lawyer, was a trial and the Mr. Kearney Mr. asked Standard to review part his law firm. As managing partner of the its denial. It did so and reached same firm a package, bought of its benefits Special- A “Quality conclusion. Assurance policy from group disability insurance in “Group Quality the insurer’s Assur- ist” Company. The law Standard Insurance Unit,” denial, ance which reviewed the policy firm was the owner. Under “Quality wrote him that Assurance per- policy, promised pay to a Standard performed independent “an Unit” centage employee’s predisability of an separately conducted from the individuals employee if disabled. earnings, became original who made the claim determina- attorneys, policy For definition of “dis- thorough tion.” The letter reviews the ability” says “[y]ou only required to be in medical evidence three-and-a-half sin- specialty in your DISABLED It that Mr. gle-spaced pages. concludes practice of law.” Kearney’s heart and brain both test out Kearney in day judge’s One Mr. was measures, satisfactorily objective counsel, opposing chambers with when the lifestyle (playing his several sets of tennis him he “looked like hell.” judge told every racing speeds weekend and cars at gave him exhibits opposing When counsel hour) per upof to 120 miles is inconsistent at, focusing felt to look he had trouble perform inability with his claimed to old, Kearney years faint. Mr. was then 54 lawyer. functions a trial trouble, history with a of heart so he went immediately physician. He had his had Kearney Mr. sued Standard under 29 earlier, years heart attack eleven 1132(a)(1)(B) § U.S.C. benefits. The time, years four earlier. angioplasty This provision statute cited is the of ERISA diagnosed angina he was with unstable civil providing for actions to recover bene- pectoris, basically pain which means chest plan. parties under fits an ERISA The by inadequate oxygen supply caused summary judgment. filed cross motions for serving heart. The arteries heart were his argued The insurer that it entitled to was partially diseased and blocked. He was discretion, deferential review for abuse of hospital coronary by- admitted to the and that review should confined to what pass in surgery performed, grafting was record,” it called the “administrative new vessels. blood is, papers the insurer had when parties disagree

The about how well Mr. denied the claim. The court determined novo, Kearney surgery. recovered after The in- be de review should because the position Kearney policy ambiguous surer takes the that Mr. about whether dis- fully practice in enough has recovered cretion was conferred. The court further specialty again, Kearney’s po- his but Mr. that review determined should be confined it, Kearney sition is that he not. Mr. has to what the insurer had before because while, practice Kearney opportuni- returned to his law for a Mr. had had sufficient posi- ty provide then retired. Mr. takes the evidence to the insurer. On surgery, fatigue, question tion since his exhaus- the substantive of whether Mr. exactly “contains disabled, policy out that dispute boiled Kearney was memory policy and intelli- language” his as the Snow. down to same very hard ability to work rehearing pointed and his out gence, petition for deteriorated, stress, Snow, had so bear disability policy construed effectively as function he could not result, opposite we had reached court concluded The district lawyer. policy from the same insurance involved IQ playing sever- Kearney’s containing language. identical company weekend, his car- every al sets of tennis rehear this case en banc order to We about ten per 120 miles hour racing up to the conflict between these two eliminate that he opinion and medical year, times a policy that construed identical decisions work, left no be able to return ought to language. . fact about wheth- of material genuine issue *4 physical Though er he was disabled. Analysis. reduced, were and mental stamina summary judgment granted parties, panel opinion, and the have The not so reduced they because were insurer assumed that the insurer was an “adminis- law. practicing him from as to disable purposes trator” for of ERISA. Because whether the insurer question The insurer ar Kearney appealed. Mr. disputed in has not been administrator Ins. that v. Standard gued under Snow briefs, (9th Cir.1996), we assume Co., policy district court or in 87 F.3d 327 is, it al- purposes the adminis for of discussion in itself as vested discretion trator, was limited is not without though court review the characterization so district decision, panel The to abuse discretion. doubt.1 said, argument, “[w]e

rejecting ambigu imprecise that so never held I. review. Standard of Kearney’s provision as contained ous a that, as administra- argues The insurer administrator, in the policy vests discretion review, tor, to deferential it is entitled v. Kearney to do now.” and we decline so (9th it abused its discretion limited to whether Co., 597, 605 Ins. 144 F.3d Standard before it. the materials had withdrawn, based on Cir.), Cir. 152 F.3d 1098 that its review 1998). court concluded pointed had The district But brief Standard’s employees by the time Standard had no provides the administrator 1. statute The designated person in the instrument. its final denial. is the so issued 1002(16)(A)(i)-(ii). § The instru- 29 U.S.C. affidavit in the house counsel's A Standard (in policy) says ment this case the insurance rights says the ERISA notice of record policy application” 6 that the "and the in Part error, quoted above contained a scrivener’s application contract. The des- constitute the where it read” "Standard” and "should have firm, Insurance ignates the law not Standard Mr. plan administrator.” said "the Company, "plan This is administrator.” is entitled to the disputes Standard arrangement, the common consistent with say opposed to it meant to benefit of what union, employer, em- whereby the or some reply say, argues in his brief what did trust, of an is the administrator ployer-union brief) (but firm opening that the law not his default, statutory in the plan. ERISA The administrator, argue but does not was the administrator, is designation of an absence of of review on the standard this bears employ- sponsor,” "plan which is that the issue. this, like is the administrator. er in a case decide, do the briefs We need not because 1002(16)(A)(ii), § U.S.C. U.S.C. us, how the case put the issue before 1002(16)(B)(i). plan, according ERISA § The not deemed might proceed were the insurer notice information and ERISA to the "ERISA Compare Moran the administrator. to be your rights” published Standard (9th Cir. 872 F.2d 296 Ins. Aetna they had the employees of the firm said that Life Services, 1989) Vegav. National right the PLAN ADMINISTRATOR to "have Life 1998). Inc., 677 n. your any denial of and consider parties administrator, that the proceed the same basis We designated claim.” The did, firm, the administrator. practice that Standard Kearney’s law had ceased its novo, should be de without deference to ence to Firestone’s determination. Fire- stone, at decision. 489 U.S. S.Ct. Standard’s Noting that “ERISA abounds with the says pay will policy that Standard law,” terminology language trust receipt disability “upon benefits of satisfac- (Second) the Court used the Restatement tory proof you written have become of Trusts and other trust law authorities to argues that the DISABLED.” Standard “[tjrust Firestone, apply principles.” “satisfactory” implies word 110-11, at 109 S.Ct. 948. U.S. Firestone to decide whether the claimant Standard they establishes that do with contrac- “[a]s really policy is disabled within the defini- provisions, tual courts construe terms in proof tion based on the submitted. There- agreements trust without ei- deferring to fore, argues, Standard if the insurer rea- party’s interpretation.” ther Id. at sonably deny exercised discretion to except 109 S.Ct. 948. That means that claim, a court cannot substitute its own plan gives where the the trustee discretion proof, judgment, or consider other trust, interpret the terms of its courts grant the claim. novo, provisions review trust de is to say The statute does not how courts are say they decide for themselves what a supposed to review administrators’ claim term of the trust means instead of decid- *5 begin analysis denials. We therefore our ing plan whether the administrator was with Firestone Tire & Rubber Co. v. reasonable in how it construed the term. “ Bruch, 101, 948, 489 U.S. 109 S.Ct. 103 ‘The powers extent the duties and of a (1989), L.Ed.2d 80 In does. Fire- by trustee is determined the rules of law stone, question employees arose whether situation, that applicable to the and not plants by sold Firestone to Occidental the attorney rules the trustee or his Petroleum, by who were rehired Occiden- applicable, by believes to be the terms tal, entitled pay were to severance under of the trust the may interpret plan. Firestone’s ERISA Firestone inter- them, they may interpreted and not as be ” preted plan they to mean that were by the himself by attorney.’ trustee or not. Firestone, 112, 489 U.S. at 109 S.Ct. 948 Fratcher, (quoting 3 W. on Scott Trusts Supreme granted The Court certiorari 221) § (emphasis by at added Fire- part appropriate to “address the stan- stone). judicial dard of review of benefit determi- by plan nations fiduciaries or administra- Firestone holds that a deferential stan- tors under ERISA.” Id. at 109 S.Ct. dard of review for by actions the trustee is argued Firestone that because “appropriate when the trustee exercises fiduciary ERISA defined a discretionary powers.” as one who Id. at any discretionary “exercises authority,” 29 948. Though S.Ct. the Court cites Re- 1002(21)(A)(i), (Second) § U.S.C. it § could be in- statement of Trusts 187 for that, fiduciary, they ferred as a proposition, had discre- puts slightly Court tion and their decisions gloss could be reviewed different proposition than only for capriciousness. arbitrariness and does the Restatement. The Restatement A adopted number of circuits had says the arbi- power “exercise of a is discre- trary capricious standard. But the tionary except to the extent to which its Supreme rejected Court it. It held that required by exercise is the terms of the because there was “no evidence that by principles applicable under trust or of law Firestone’s pay plan termination the ad- to the duties of trustees.” Restatement (Second) power ministrator § has the to construe un- of Trusts 187 comment a (1959). Restatement, certain or eligibility terms determina- Thus under the deference,” given judicial tions are to be anything contrary, default of proceed review had to without defer- trustee has discretion in the exercise loss is covered. to whether.the opposed But the Court confers. the trust powers traditionally “satisfactory” is The word of benefits that “denial in Firestone holds standard, so that objective limited U.S.C.] [29 under challenged company permitted is not the insurance 1132(a)(1)(B) reviewed under is to be § to a satisfactory reject proof that would plan the benefit unless de novo standard Elliott, R. person. See Charles reasonable fiduciary discre- the administrator gives Insurance 319 the Law of A Treatise on eligibility authority to determine tionary Vance, (1907); Handbook on R. William the terms of toor construe for benefits (Buist M. Law of Insurance Firestone, at U.S. plan.” ed.,1951) ed., (1904); 13A 3d Anderson is that means the default 948. That S.Ct. (2d § ed. rev. Insurance 49A:27 Couch on discretion, and no has the administrator Practice 1982); Law and 3 Insurance to show has the administrator (John Ap- Appleman & Jean § Alan in or- discretionary authority gives ed.1967). pleman, rev. its judicial deference get any der ... pay upon reading “will A second decision. proof that satisfactory written receipt of examine now is to Thus our task applies you have become DISABLED” whether to determine the instrument proof estab- “satisfactory” to whether decide on Standard confers discretion disability as well as lishes a covered lan is disabled. a claimant it, but con- enough of whether there is argument its on for relies guage Standard “satisfactory” objective word strues the confers discretion instrument “satisfactory subjective. Thus rather than requirement “satisfactory” word dis- you have become proof written pro that a claimant insuring in the clause that would be satis- “proof means abled” of disabil “satisfactory proof’ written vide you person that factory to a reasonable *6 ity: Though the Sixth have become disabled.” DISABILITY Part 6. LONG TERM Judge Boggs rejected reading, Circuit Per- persuasively. INSURING CLAUSE See urged in dissent 550, 559 150 F.3d ez v. Aetna of the GROUP Subject to all the terms Life (en Cir.1998) banc) J., dissent- (Boggs, POLICY, pay the will STANDARD with well reading consistent This is ing). Part 8 in LTD BENEFIT described principles for law established common satisfactory written receipt of upon contracts, principles are the reading DISABLED you become proof have Firestone, required, under that we are POLI- the GROUP while insured under law, where matter common apply. As a of CY. a condition a contract contains that the concluded majority A of us have “satisfied,” is interpretation “an obligor be de- pay the LTD BENEFIT phrase “will occurs which the condition preferred under receipt upon of satisfacto- in Part 8 scribed position in the person if ... reasonable you have become proof that ry written Re- be satisfied.” obligor of At least ambiguous. is DISABLED” (Second) § 228 of Contracts statement are reasonable. interpretations three (1981). to this ob- exception There is subject experi- construction, lawyer to a where reading natural jective One subjectively would be litigation only in can enced insurance matter paint (e.g., you of “if proof’ satisfactory is a variant “satisfactory objectively written which am my with “satisfactory proof portrait of very phrase daughter old $5,000 satisfied, you pay in I’ll entirely have been used phrases loss.” Such satisfactory it”), but century. at illustration at least a id. policies for insurance subjec- inherently not- disability is proof discretion traditionally confers phrase apply. This tive, does not exception wheth- so to decide company the insurance obligor to a subjects sufficient, reading objective quantum proof er stringent only more test than that his dissatis- administrator had discretion where genuine faction must be and in accord with “unambiguously retained” faith and fair duty good dealing. by the administrator. This is consistent Even honest dissatisfaction will not avoid principles with the established that ambi- obligation, person if a reasonable in his guities are proferentem, construed contra position would be satisfied. Id. at com- ambiguities and that are construed fa- ments a & b. vor of the Mongeluzo insured. v. Baxter Plan, Travenol Disability A third Benefit reasonable construction is the Cir.1995). We cannot con- dissent, one articulated that “will clude that “unambiguously Standard re- pay upon receipt ... satisfactory writ- tained” by phrase discretion means of the proof you ten have become DIS- “satisfactory proof you written that, subject ABLED” means to its fidu- disabled,” phrase become because the ciary duty,2 if the administrator is not subject to at least two (and reasonable con- satisfied has not abused its discretion contrary. structions to the Thus we con- deciding), then so it does not have to clude that the district court was correct in pay. The position dissent’s is in accord its determination that Kearney’s claim Perez, although should be reviewed de novo. phrasing of the clause slightly there was syntactical different. We concede the rea- II. The Record to be Reviewed.

sonableness reading. of the dissent’s But far, goes the dissent too suggesting that If a court reviews the administrator’s if anything is committed the administra- decision, here, whether de novo as or for discretion, tor’s then everything is. And discretion, abuse of the record that was the dissent’s reading contrary runs before the pri- administrator furnishes the common law construction of conditions of mary basis for review. Should the district reject “satisfaction.” proposition We judge review anything else? Standard only the dissent’s is the reasonable moved for an order that the district court reading. only the materials had submitted to Standard. The

Only by judge excluding alternative readings order, granted following our decision unreasonable could we conclude that the Mongeluzo, 46 F.3d at 943. conferral of unambiguous. discretion is *7 are at There least three fair readings of held, In Mongeluzo, we following the phrase quite with different conse- Fourth in Quesinberry Circuit v. In Life quences. compelled Thus we are to con- surance Company, 987 F.2d that, clude to the extent discretion is con- (4th (en Cir.1993) banc), that the district ferred, scope the conferral and its are at court had discretion to allow evidence that (from best ambiguous, and at worst Stan- plan was not before the administrator viewpoint) phrase dard’s does not con- “only when clearly circumstances establish fer discretion at all because it not say does that additional necessary evidence is to that it does. adequate conduct an de novo review.” In Bogue Ampex v. Corp., Mongeluzo, Ques 46 F.3d at 944 (quoting Cir.1992), 1025) (internal we held that an inberry, 987 F.2d at quota- decision, Kearney urges apply also us to less deferen Standard's we do not reach the potential tial review because of Standard’s question whether he would be entitled to less (it deciding conflict of interest is whether it only deferential review were he entitled to money Kearney). owes its own to See Atwood review for abuse of discretion. Thus we have v. Newmont Gold 45 F.3d 1317 no validity occasion to reconsider the of At 1995); Plan, Lang Long-Term Disability Lang light wood and of Firestone Tire & (9th Cir.1997). 125 F.3d 794 Because we Bruch, Rubber v. 489 U.S. 109 S.Ct. Kearney conclude that is entitled to de novo (1989). 103 L.Ed.2d 80 review, gives which no deference at all to judge A judge. district omitted). experienced trial we allowed Though marks tion know, judge’s remarks likely as this be- would evidence of additional consideration do, did, lawyers trial what to that indicated he peculiar of circumstances cause secondary of a court the assistance that “a district without case, emphasized merely Occupational Outlook such as the source take additional not should up pages are time comes The handbook at a later Handbook. someone because cases” evidence ... most “additional apt example “[i]n new evidence” adequate review necessary that was before only the evidence not Id. decision,” evidence that should be considered. as well as administrator benefits easily have been submitted could as Kearney argues Mr. appeal, On administrator, Mongeluzo under which have taken ought to that the district disfavored. the medical regarding additional evidence not that Standard did Kearney argues cardiac condition his relationship between required and fair review” the “full provide But the brief ability. cognitive his 1133(2) § it did not because evidence, by 29 U.S.C. nor was say what new does re- films Dr. Weinreb proposed to obtain heart specific new evidence report, and did not obtain merely a ferred to his argument court. by Dr. data referred to opened to Dr. Fulton’s test door be suggestion got he Bittle wrote that might be devel But Dr. Bittle. new evidence whatever Kearney’s from Mr. own argue Dr. Fulton’s Kearney But does not data oped. Starting Kearney thought Stan- Mongeluzo. so if lawyer, reexamine Mr. we should it, would be he should from scratch reviewed over dard should have the evidence Dr. contrary Mongeluzo. them. As for Weinreb’s have sent to in- films, Kearney argues Standard’s motion to opposition In his Standard’s they suggested house medical advisor record, Kearney Mr. submitted limit the obtained, sugges- context of the but the Hand- “Occupational Outlook of an pages he could wanted them so tion was that he Department by the U.S. published book” report. criticize Dr. Weinreb’s better lawyers Labor, said that failed that Standard Kearney argues ability quick- to think exceptional “need an of 29 provision the notice comply with particularly “under regularly work ly” 1(f)(3), it did because § C.F.R. 2560.503— being when a case heavy pressure” he additional material him what not tell his dis- judge exercised The district tried. to perfect order to submit needed to the evidence cretion to limit (cid:127) force, be- is without argument claim. The for two rea- before the administrator did not because Kearney’s claim fail cause easily sons, that Mr. could It needed evidence. he failed to submit Standard, this material submitted Standard, considered having because failed con- need it to court did not that the needed evidence, concluded that all the adequate de novo review. duct an *8 Kearney was not Mr. and no more not abuse his judge did The district disabled. reasons he ruling. so Both discretion in was record to what confining the gave for Fact. III. Issue Genuine under good ones before Standard disability Kearney claimed Mr. in the circum- and are sensible Mongeluzo exhaustion, mental and fatigue, based on been No has of this case. reason stances bypass coronary following his disabilities Kearney could why Mr. suggested tennis, “I am He surgery. wrote Occupa- pages of have submitted when, be set after one totally wiped out In- to Standard. Handbook tional Outlook aon fore, of six sets minimum played I a be less likely executives surance as ten or weekend, many do, sometimes and lawyers trial familiar with what discom- caused chest now source, twelve.” Stress than an a of such more need fort and exhaustion. “I am unable to focus exhaustion and lacking sharp- mental before, I my concentrate as did and memory ness and he once had. He was no memory definitely gone.” longer practicing actively, law and had Although farmed out his cases. psy- his Kearney

Mr. submitted medical authori- and battery zations other materials so that Stan- chiatrist had conducted a of tests develop dard could a claims enabling file him memory and told his was normal for a to make a cardiologist, decision. His Ste- person his age, Kearney Mr. felt was not Morrison, M.D., phen L. reported to his up necessary to the standards to conduct internist, Lehman, M.D., David in Decem- Kearney work. Mr. living was then 1992, ber shortly surgery, after the that “I $8,000 Standard, $2,000 a month from a am memory also concerned about his and I month from disability other insurance with am him that I impressed [sic] told am [sic] $3,000 another company, insurance a frequently bypass this occurs after month portfolio from his stock and limited surgery, hopeful and am this will $200,000 partnerships, interest on in sav- significantly improve.” A few months ings, disability state income of a $300 later, April Dr. Morrison wrote week, $500,000 and a fee he had earned as that Mr. Kearney “has a tremendous com- of December 1992. plaint memory relative to loss that he asso- coronary bypass ciates with the surgery.” In the fall of Mr. Kearney submit- says The letter a standpoint “from cardiac ted to Standard a lengthy report appears doing very well,” he to be but “he Weinreb, M.D., Irwin cardiologist a hired very distraught seems depressed” (not by a compensation workers’ insurer tranquilizer. recommended a The next Standard) to Mr. Kearney’s evaluate work- month, Kearney Mr. wrote to Dr. Lehman ers’ claim. compensation Dr. Weinreb’s memory problem that his had grown report focuses on whether Mr. Kearney’s worse. medical condition was “non-industrial.” In February of Mr. Kearney visit- Mr. Kearney told Dr. Weinreb that he had ed neurologist, Heublein, Peter C. M.D. not seen doctor since Dr. seeing Leh- Dr. Heublein Kearney’s noted Mr. com- Morrison, man and Dr. apparently in early plaints memory problems history year and a half before. He told heart surgery and of several concussions Dr. scan, Weinreb that he had had a brain from auto accidents when Mr. normal, had come out as did his teenager. was a Dr. impres- Heublein’s MMPI,3 and psychiatrist his had told him uncertain, sion “my was because mental memory his was normal for age, normal,” status examination now is meta- but he memory felt his was now inade- bolic early disturbance and Alzheimer’s doubtful, quate to do trial work. Dr. disease were Weinreb episode opined ischemia pos- Kearney’s or. embolus to the brain was heart condition sible, as memory precluded disturbance from him from “very heavy work and anxiety depression. He recommended very severe emotional stress” or a “very psychometric brain scan and testing to schedule,” tight time though “certainly he clarify diagnosis. could do legal work outside of trial work.” Mr. Kearney’s

An claimed intellectual deficit investigator interviewed Mr. Kear- ney in January only history gave 1994 for Standard. Mr. mentioned he to Dr. *9 Kearney Weinreb, told him subject that he was finding by not as a Dr. Weinreb. 3. The MMPI is the abbreviation for the important scores on all the personality more multiphasic personality "Minnesota adaptations, disorder including special traits and and inventory,” empirical validating defined as "[a]n scale of scales which measure the individu- an personality mainly individual's test-taking aptitude based degree al's and of frank- yes-or-no responses his own question- to a ness.” Gould Dictionary Blakiston's Medical items; (3d ed.1972). naire designed provide of 550 are common problems” and concentration by a Kearney tested Mr. had Standard Ph.D., surgery, Smith, open-heart in from complications B. Randall psychologist, up, the intellectual usually of clear sometimes they for evidence and while May 1994 Mr. he claimed. “it is memory opined deficits that Bittle and not. Dr. they do in his worked that he reported Kearney Mr. Kear- that medically probable highly raced per day, an hour perhaps half office cognitive and memory/concentration ney’s tennis, and mph, played to 120 cars at his with significantly deficits do interfere examination, “no was there On exercised. complex highly function in ability apha- word-finding pauses, of evidence attorney.” as a trial arena problems.” articulation sia, or paraphasias, Dr. to review that Dr. Smith was asked impression Standard clinical Dr. Smith’s intelli- and “superior” in the Dr. Bittle’s letters Kearney was and Mr. Weinreb’s Kearney Mr. gave he When them. range. light in gence opinion his own reassess tests, intelligence his paper and pencil appropriate did the tests Dr. said he Smith test, one at least average on as scored prob- description of his Kearney’s to Mr. another, his and memo- extremely high on might do lems, those he opposed to as His “unimpaired.” and “superior” ry as doing that injury, and a head after noticed Dr. Smith was normal. MMPI Dr. Bittle suggested tests additional Kearney Mr. that records Dr. Lehman’s leg x-ray on someone doing like at problems memory complained had Kearney leg. Mr. in his symptoms no with 1980’s, he was while early in the least once analytic percentile on in the 98th scored long prior and lawyer as a trial still active memory deficit tasks, minimal and showed claim, in mid-1992 before again and to his fac- psychological from could result which essence,” Dr. “In bypass surgery. his or edema hypothesized well as as tors testing I concluded, “on formal Smith main- He surgery. heart hypoxia during defi- cognitive find no evidence could Kearney could opinion that Mr. tained ciencies.” in a attorney “even work as resume Dr. Smith’s challenged Kearney Mr. however, noted, Dr. Smith setting.” trial wrong nothing there was that conclusion with been furnished he had not that memory with letter intellect with his Dr. Fulton that from Dr. test data” “raw M.D., Bittle, psychiatrist M. by Robert Kearney’s from receiving reported Bittle had examined Dr. Bittle neurologist. and attorney. hours, and had two Kearney for Mr. and at anoth- report at Dr. Smith’s looked record, conclude on'this Based at- Kearney’s report Mr. psychologist’s er fact as issue was a genuine there Fulton, a Dr. him from gave torney disabled Kearney was opined Dr. Bittle in the record. is not evi- policy. Such by the defined sense his conclusions foundation Dr. Smith’s Dr. Heublein’s and Dr. Smith’s dence were some because there inadequate, trier fact reasonable justify could he should tests intelligence additional memory Kearney’s Mr. concluding that the “raw data” says that Dr. Bittle given. car and his unimpaired, were and intellect opin- Bittle’s tests Dr. Dr. Fulton’s from could playing tennis and intense racing memory deficits. cognitive ion showed could he handle justify the conclusion rec- in the are not data Dr. test Fulton’s trial demands of physical the mental exami- mental-status Dr. own ord. Bittle’s hand, such other On the work. “esti- Kearney’s Mr. showed that nation could Kearney’s Mr. Dr. Bittle’s but superior,” overall is intelligence mated Kearney’s Mr. justify the conclusion memo- “some immediate observed he also him disabled and intellect memory Bit- Dr. problems.” concentration ry and report could work, Dr. Weinreb’s cognitive “post-operative tie wrote conclusion justify the memory deficiencies dysfunction *10 longer could no handle the stress of dence entirely by unrestricted what had work. presented been to the administrator. Because the record genu- establishes a adopts The statute policy “to increase ine issue of fact as to whether Mr. Kear- the likelihood” that beneficiaries “will re- ney was disabled under the terms of the ceive their full benefits” and “to maintain policy, we must reverse the summary premium costs of system such at a judgment. reasonable level.” U.S.C. 1001b(c)(3),(5). § argues procedure that the dis- The the stat- trict court not only should have used requires disputed ute claims includes your “unable to perform specialty” “a defini- reasonable opportunity any partici- tion disability, and that it pant should have whose claim for benefits has been also considered the “unable to earn more denied for a full and fair by review than 80%” of predisability earnings defini- appropriate fiduciary named of the deci- tion. Because Mr. Kearney did not chal- sion denying the claim.” 29 U.S.C. lenge 1133(2). Standard’s use the “unable to § Supreme Court has re- perform” subsection district court until minded us of public “the in en- interest his motion to vacate judgment, he can- couraging the formation of employee bene- challenge for the ap- time on first plans” fit and also “the need for prompt peal. and fair claims settlement procedures.” Dedeaux, Pilot Co. v. 481 U.S. Mr. Kearney also challenges the Life attor- (1987). 107 S.Ct. 95 L.Ed.2d 39 neys’ fees award against made him pursu- ant § to 29 1132(g)(1). U.S.C. See Estate A full trial novo in any de ERISA dis- Shockley v. Alyeska Pipeline Serv. pute where there a genuine issue of (9th Cir.1997). 130 F.3d 403 Because the fact as to whether the qualified individual judgment anyway, vacated for a benefit would poli- undermine these on account of genuine issue of fact cies. Trial de novo on new evidence would record, established be inconsistent with reviewing the admin- court will necessarily revisit the issue of istrator’s decision about grant whether to attorneys’ fees after the case is concluded the benefit. The means that suggests it- its exercise discretion in the different self for accomplishing trial of disputed existing. circumstances then We accord- facts, while preserving the value of the ingly need not reach the issue. fiduciary procedure, keeping costs premiums down, and minimizing diver- TV. Remand. sion of benefit money to litigation expense, Because summary judgment is re- is trial record, on the administrative versed because of a genuine fact, issue of cases where the trial court not find it does genuine issue of fact must be resolved necessary under Mongeluzo to consider by trial. But there is a complexity, be- additional evidence. cause this is an ERISA If case. the trial scratch, starts from and any 43(a) evidence is Rule Although requires that admissible whether it was furnished to the “testimony” open court, be taken in not, administrator or then the effect of a record should regarded being in the genuine issue of fact is to change exhibits, nature of in the nature of docu question. Instead of ments, de novo review test- routinely which are a basis for find ing whether the individual was entitled to ings of fact though even no one reads them benefits based on the evidence before the out loud. We have affirmed bench trials administrator and such other evidence as records other cases. See Adair v. might be admissible (In under the Adair), restrictive Sunwest Bank re rule of Mongeluzo, Cir.1992). “review” would be con- 779 A majority of us con verted into a trial de novo that, based on evi- clude in its guided by Mon-

1095 whether, in order to Mongeluzo, the answer may try case geluzo, he should take ad- question, had different the administrator on record that the “[Tjhere no evidence. is such vastly expensive to ditional is less before it.4 This fact, findings summary ... of on a policies thing enact- as accomplishes the parties, all Mahre, statute, v. gives judgment Thompson motion.” of and part ed the as (9th Cir.1997). But in a 110 F.3d largely would otherwise significance, which record, judge on internal bench trial the the will to the administrator’s evaporate, findings the statute. to make of fact under Feder- required by have procedure review 52(a). The pro- al Rule of Civil Procedure for any point remanding there Is finding “specially,” the facts as that cess of trial, considering that the district such a judge a to a requires, rule sometimes leads exactly he has al may read what judge from one he different conclusion the would read, persuade him which did not ready Also, it approach. reach on a more holistic could even a that Mr. establish authority changes our on re- completely as to he was issue of fact genuine view, summary de novo review of of that majority A us concludes disabled? clearly to erroneous review of judgment, asking be judge The will there is.5 district change of fact.6 That could findings be the question as he reads evi different trial on the outcome determinative. Thus dence, genuine there is a issue not whether record, if consists no more than even it of fact, of but instead whether material judge rereading he al- trial what has within the terms of Kearney is disabled read, making findings of ready and fact record, In a trial on the but policy. and of law of sum- conclusions instead judge can summary judgment, not on decision, may have real mary judgment persuasiveness conflicting of evaluate significance. likely and more testimony decide which is he is questions true. difference Conclusion. judge asking may of the material lead differently. judge Though we conclude district to The district read review, decide, subject scope as to its of to court was correct will retain discretion desirability having a trier of opinion writes with some tablishes the of 4. The author of this proved. form of trial. trepidation about this novel This fact decide what evidence important the law it is more on proved But question, of what kind large involving numbers of transac- matter genuine opposed to whether there was a issue settled, that each be and than tions clear fact, ordinarily for is committed decision of sepa- judge's personal be views articulated courts, appellate courts. matter, practical have rately. As a we a ma- section, expressed jority the view in this for argues Judge 6. that this discussion Reinhardt claimants, it is essential to administra- and dicta, suggests of review of standard tors, employers plans, who ERISA fund may de of be novo. that the standard they have judges, some as well district why standard of review is dis The reason they law that authoritative statement among why it is the reasons cussed safely apply. can remanding findings of is more than an fact is, Judge Judge concurrence Silverman’s we empty formality. As for what it suggest a remand is Fernandez’s dissent prior held that when a dis numerous cases time, judge has waste of because the judge a case a written record trict tries already evaluated the evidence testimony findings without live makes empty formality merely engaging in an rule, fact, apply 'clearly erroneous’ "we That is a reason- the same conclusion. reach 52(a) reviewing judge’s Fed.R.Civ.P. currently are divided able concern. But Williams, See, findings.” e.g., Starsky v. judge’s decision whether the district about 1975); (9th Cir. United Wolfe the evidence before him. was correct on States, n. 2 Cir. 798 F.2d of us think that the evidence before Some 1986); Community Maricopa County EEOC v. satisfactory administrator did not amount District, College proof disability. think Some of us 1984). opinion about whether did. This difference satisfactory proof disability es- there was novo, *12 de and within its in limit- matter of law. The exercise is to deter- ing scope of the evidence to what was mine whether there disputes of materi- administrator, before the we nevertheless al fact that necessitate trial. See FED. R. must REVERSE because on de novo re- P. advisory CIV. committee’s note. In view of summary judgment, we con- context, the ERISA where the review is de clude that genuine there is a issue of mate- novo, the issue is not judgment rial fact. Accordingly, we REMAND for a matter of appropriate, law but whether opinion. consistent with this additional required evidence is to enable the district court render an informed

No costs. decision on adequate record. Such evi- FLETCHER, Judge, Circuit concurring dence should be received whatever part in dissenting part and in from Judge (live appropriate means is testimony or plurality opinion, Kleinfeld’s affidavits, example). Once the record concurring full in Judge Silverman’s is sufficiently developed, the district court opinion: should render its decision to grant deny or benefits. The district court makes what- Although I concur Judge Silverman’s ever factual findings are necessary and opinion, in light fragmented views of rules on the claim for benefits. court, I say must more. Apparently the case will be remanded to the district Since the majority insists the case is court. A majority of the agrees court back, going the district court must start the district got it wrong in one re- fresh. It must follow the dictates of Mon- spect or another and must reconsider. geluzo and must see that the record is majority agrees that the district developed fully “to enable full exercise court’s review must be de novo. The dis- of [its] informed independent judg- trict court novo, labeled its de and ment.” Mongeluzo, 46 F.3d at 943. purported only to review for summary

judgment. However it then proceeded to REINHARDT, Judge, Circuit weigh the evidence and reach a decision on concurring in the result: merits, rather than to determine only Judge argument Silverman’s that Kear- whether material issues disputed fact ney is summary entitled to judgment on existed. Now the majority returns the the current record is persuasive, extremely case to the district court do it again. I disagree cannot with his analysis. Let us disabuse the district court that However, although the question is a close its role is to grant deny summary judg- one, I conclude that litigation may court, ment. A district in a case that benefit from a trial on the merits. Given requires de novo review of the denial of the absence of evidence in the record re- benefits, ERISA is performing a different garding the duties of a trial attorney, as First, function. it must determine wheth- well as the uncertain and conflicting na- er the record made before the administra- ture of some evidence, of the medical tor is adequate. Either on the record that genuine issue of material may fact well was before the administrator or after ad- remain as to whether Kearney’s limitations mitting evidence, additional disabled him from his “specialty” in the court then reviews the claim on the merits. practice of law. It should review record sufficient- ly developed “to enable the full exercise I While can concur in the decision to informed independent judgment.” remand for a trial and in I Section of what Mongeluzo v. Baxter Disability Judge Travenol Kleinfeld contends is a majority Plan, Ben. (9th Cir.1995). opinion, I unfortunately concur in cannot Summary judgment, contrast, is a vehi- the remainder of opinion. places, At cle for the timely disposition of cases as a opinion appears to me to be unclear or from the brief definition only a evidence result, is.susceptible of and, as a

uncertain and failed Handbook Outlook Occupational oth- In message. an inaccurate conveying medical any additional specify only to is not dicta it contains places, er already beyond to offer addition, sought he In unnecessary but incorrect. administrator, I do before the record Judge Kleinfeld’s some disagree that, for with the conclusion disagree conclusions, such philosophical legal summary judgment, purposes of be- existed conflict statement *13 evidence the correctly limited court district less a and that Kearney and Snow1 tween that record. to to the solution may be approach “holistic” problem. our at rulings issue cannot Obviously, we the admis- on proceedings the stage of char- Fletcher’s Judge agree with I also to yet presented not sibility of evidence opinion as Kleinfeld’s Judge of acterization in rule court, we cannot just as the district respect to with at least opinion, plurality that of will review on the standard advance votes not think that I do and IV. III Parts on court’s decision if the district applied make be used to can be dissenting judges by subject trial becomes the after Judge the merits one. majority opinion plurality trial, district the appeal. At of a future opin- dissenting the joined has O’Seannlain very and different a new face court will in separately to concur seeks also but ion ques- (even ultimate though the problem not effort does His and III IV. Parts physical his tion, in view of whether Judge Kleinfeld’s of status the change properly Kearney can limitations mental opinion. as a trial specialty practice to continue precise identify the try to than Rather same). Klein- Judge the remains lawyer, opinion Judge in Kleinfeld’s statements we are acknowledges that opinion feld’s try I will disagree, or agree with admissibility the in ruling advance not remand our I believe restate what to parties that the evidence additional of our saying that by begin me Let means. trial; that the at present to may seek the of the discretion not limit does remand to make required now be court will district outside evidence to consider court district a different and answer fact of findings or recommend record administrative the record; and of the in its question accept to decline judge district that the discre- “will retain court district that record. supplements evidence Mongeluzo, decide, subject tion to Mongeluzo rule simply restate We this different whether, to answer in order Disability Long Term Travenol Baxter evi- take additional he should question, Cir.1995), (9th Plan, 46 F.3d 938 Benefit 3890-91. Op. at Kleinfeld dence.” not did court hold that what addi- predict course, we cannot Of at standard under its abuse Kearney will submit evidence pro- tional summary judgment time of Monge- will meet such summary that, in ceeding. Given evi- offer Kearney may standard. ’s in luzo offered Kearney proceeding, judgment Cir.1998), (9th Co., 601 F.3d Ins. fact, Con conflict. no such there was 1. In F.3d opinion withdrawn reh’g granted, between opinions, not between flicts exist arguments Cir.1998) v. Standard Snow parties. There with and briefs 1996). As opinions because the two conflict between no Judge opinion, like Kearney panel opinion makes Judge while the Kleinfeld’s I of Section clear, carefully sets opinion, policy en banc language of the Kleinfeld’s precise language specific and construes analyze forth attempt when is critical is set provision policy no provision, policy coverage. determining legal involved issues Snow, opinion there the Snow forth reason, Kleinfeld's contrary Judge For any identifi no construction contains fore statement, or no of little was Snow earlier regardless of what language, policy able value, indisput precedential underlying about the represent parties' briefs it. ably not conflict Kearney v. Standard of that case. facts Cf. dence regarding the duties of a trial experience, at- the district court should admit torney that the district court appropriate finds more additional evidence of- that is useful than the brief fered question. definition contained on this in the Occupational Outlook Handbook. The factors that courts must consider may He specific offer medical evi- determining whether to allow additional dence that could presented been evidence are set forth in Quesinberry, the administrator. Kearney may case that Mongeluzo followed: also seek to offer other additional evi- require claims that consideration of com- dence that he did not believe necessary at plex questions medical regard- issues the time Standard was considering his ing the credibility experts; of medical claim, pertinent but would be at time availability very limited adminis- of trial. finally, And Judge Kleinfeld’s processes trative review with little or no out, opinion points may record; evidentiary the necessity evi- *14 decide that evidence was previously dence regarding interpretation the of unnecessary is essential now for the dif- terms plan the rather specific than of ferent kind of review that it engage will facts; historical instances where the in on remand. We simply cannot foresee payor and the administrator are the what parties the present will or argue, same entity and the court is concerned and we do not how know the district court about impartiality; ... and circum- will rule on such evidence when it con- stances in which there is additional evi- ducts trial its on the merits. dence that the claimant could not have presented fact,

In it is quite process. clear administrative that additional evidence will be required in order to re- Quesinberry Life question solve the whether Kearney’s 1017, 1026-27 (4th dis- Cir.1993) (en banc) (em ability precludes him from performing added). phasis Kearney’s claim turns on material duties of his specialty as a trial interpretation key provision of a lawyer. Even though the district plan, court the definition of the “material duties” was within authority its to reject Kear- of a trial attorney. The administra ney’s evidentiary offer of the Handbook tor’s erroneous conclusion that the nature definition, there is a serious gap of a attorney’s trial work was “sedentary;” record regarding the duties of a trial attor- the lack of notice to Kearney that Stan ney. experience of judge, one dard adopt would such an defi erroneous led him to conclude that the to nition rely need “avoid on claim; denying his severe emotional very stress or the materiality hard work this dispute to the reso does not warrant claim; lution of Kearney’s conclusion that the lack of any [Kearney] practice cannot as a information in trial the evidentiary attor- on record ney,”2 clearly question; is this not sufficient. and the Those of effect that Stan us who have been lawyers, trial dard’s conflict particular- may interest have had on ly its those familiar decision-making; together with the obligations of necessitate plaintiffs’ trial admission of lawyers, and additional the severe evidence on question stress this involved at a when one holds the on the future See merits. Mongeluzo, injured 944; of an 46 F.3d at client and his family, Quesinberry, or 987 F.2d at indeed 1026-27. hers, a widow hands, one’s know that stress, emotional pressure, time I agree Judge with Kleinfeld’s conclu- hours, long tight schedule, time and ex- sion that a full trial de novo is not neces- tremely hard work are an part unavoidable sary, and that the district court should of trial practice. But rather than relying begin with the record that was before on his own judge’s personal other Standard and then determine what “addi- Judge 2. notes, As opinion Kleinfeld's heavy Dr. very work and severe emotional stress” Weinreb had "very warned to avoid or working "very on a tight lime schedule.”

1099 Ha Cir.1991) Pizza Matter (quoting an to conduct necessary is evidence tional Inc., waii, F.2d Mongeluzo, review.” novo de adequate security disabili 1985)). in social Likewise Quesinberry, See at 944. F.3d the ad review independently make we ty it would cases indeed But at F.2d See decision. judge’s apply to law simply ministrative to remand sense no Callahan, standard— difficult a v. more Sous different Cir.1998). court in standpoint district Were appellant’s —to review If I believed limit its record.3 this instance identical ade- question court was the district not—the it should before record —which record should court factual to its deference afford quate, and whether taking This, without record one. open simply review be findings would agree evidence, I would then question course, from the wholly aside additional there sides on both others admit the refusal to a remand. purpose no absolutely of discre abuse as an would reversible persua- Judge Silverman’s join then proceed stage of the this Because at tion. opinion. sive it is that what know not even we do ings, any dis anything, if reviewing, brief will be also includes Kleinfeld Judge standard of applicable de cussion that, the district after prediction most, is, remand, review at dictum. we will case cides fact under findings of court’s *15 of standard, regardless erroneous clearly Judge, O’SCANNLAIN, Circuit additional judge admits the part in dissenting concurring part in merely con testimony, or evidence, hears joining opinion, and Kleinfeld’s Judge was record the review to his fines dissent: Judge Fernandez’s However, plan administrator. the before I Fernandez’s dissent. Judge join I in in advance course, determine cannot we, of that, but indicate only to separately a for write bewill of review the standard what policy conferred the my conclusion for If the us. district not before that is case administrator, I plan the upon based are and conclusions findings court’s as did remaining issues the resolve before would the record solely on III, II, IV of parts in argu Judge Kleinfeld administrator, strong there is II, parts concur I therefore opinion. defer not be so his need review that our ment opinion to Kleinfeld’s III, Judge agency IV of of review court “District ential. particular no extent. accorded generally action court, limit deference, the district because record, no inis administrative ed Judge, with SILVERMAN, Circuit than agency to review the position better joins, Judge, FLETCHER, Circuit whom Great Western appeals.” of court part: dissenting part concurring Supervision, Bank Thrift of Office II of I and join Parts pleased I am Cir.1990) (9th (quoting 1421, 1426 F.2d However, I fail opinion. majority 1153, 1161 EPA, F.2d

Asarco, Inc. v. case for this remanding of point see the “[bjecause we Cir.1980)). Similarly, (9th ad- will judge the district at which “trial” position good in as evidence, merely re-read new mit no the bank of findings to review in connection read already he evidence court, independently ruptcy judg- summary cross-motions with In re Mar decision.” bankruptcy court’s He’s a “verdict.” ment, render and then 1462, 1465 F.2d Corp., 942 Inv. quam merits, were on judgment party grant that optimistic ruminations Contrary to the but this that record review to he to restrict Kleinfeld, judge who believe Judge I in favor all inferences draw be free time to the defendant summary judgment granted plaintiff. than rather the defendant necessarily us before the record on been there and done that.1 The only ques- whether to supplementary allow tion is whether the information in Stan- is a matter wholly within the discretion of possession dard’s was—in the language of the district judge. Id. at 943-944. the plan “satisfactory.” On cross-mo- — agree with the majority that the district tions for summary judgment, judge did abuse his discretion in de- judge ruled that it is not. And that is a clining to receive new But, evidence. question law, which itself is reviewed de no new consider, evidence to that leaves us novo appeal. where we started: de novo review of all respect, With due majority gets proof whether the of disability in Stan- off the track by latching on to the contra- dard’s possession was “satisfactory.” That dictory evidence of Kearney’s condition in was legal question before the district possession, Standard’s then “a finding gen- court on cross-motions for summary judg- uine question fact as to whether Kear- ment, the question on which it ruled in ney was disabled the sense defined by Standard, favor of and where the district policy.” view, my In the question at judge part and I company. stage is not whether Kearney is dis- abled. question is whether view, the evi- In my Kearney’s motion for sum- dence disability in posses- Standard’s mary judgment should have been granted sion was “satisfactory.” Either was it and Standard’s denied. Rather than re- it wasn’t. There is dispute no over what peat here, I commend the reader information possessed. Standard The only Judge powerful Reinhardt’s description of question is whether was sufficient. That the cogent evidence Kearney submitted to question is the to be reviewed de novo. prove his disability. Kearney v. Standard There are no factual disputes. In their Cir.) 600-603 cross-motions for summary judgment, the rehearing granted, opinion withdrawn, 152 parties recognized this and so did the (1998). F.3d 1098 It is also true *16 judge. Although and Standard Standard was in possession of information disagree over legal conclusions to be that suggested course, otherwise. Of drawn from the written information that insurance company must not be made to received, Standard had there is no dis- pay for losses that are not covered by the agreement over what it had received. It is plan or for claims that prov- have not been “satisfactory” or it isn’t. en. inBut one, cases such as this where plan The administrator doesn’t conduct there is strong loss, evidence of a covered a It pays trial. or plan denies benefits on some evidence to the contrary, and no basis of the information in possession, its way definitive sure, to know for the benefit even if some of it is contradictory. In of the doubt should have been resolved in reviewing novo, Standard’s decision de we favor of the beneficiary. reason, For that in are the same boat. Mongeluzo v. Bax- viewing it on a basis, de novo I would have ter Travenol Long Term Disability Benefit found Kearney’s proof of disability to be Plan, Cir.1995). It is “satisfactory” in light of totality of the true that case, an ERISA additional evidence in possession. Standard’s evidence can be received in the course of judicial review to supplement what Accordingly, I would reverse the district presented to the However, administrator. court with directions grant to Kearney’s Judge Posner wrote in analogous an situa- all bearing on the issue of tion: meaning contractual was before the trier of because, said, But as we fact at stage. In there is no these unusual circum- right ..., stances, to a jury trial in an ERISA case remand case for trial would and here no evidence besides that be empty intro- an formality; ... duced at the summary judgment stage that Plan, Mathews Pension v. Sears parties trial, would be presenting at 1998). a means (1990). That fact 578, 586 Rptr. deny and summary judgment

motion do, to, and expected be can parties Standard’s. length to arms at each other with deal hedge, do doctrines Special extent. some FERNANDEZ, Judge, Circuit of the somewhat erode, impact the full or O’SCANNLAIN, T.G. and whom negotia a assumption of true dissenting. theoretical join, NELSON, Judges, Circuit companies insurance large between tion disput- point particular no I see While Thus, cove ordinary consumers. and that this determination majority’s ing the is im dealing and fair faith good nant remanded must case contracts, it is but all it is in as plied, rationale, with its court,1 concur I do not a context insurance in the heightened be- Hence dissent or result. reasoning liability. See tort lead to it can violation of the it, keystone cause, Ias see 1147-48, 271 at Cal.App.3d Love, 221 e.g., is undue majority favored approach Nonetheless, an in at 252-53. Cal.Rptr. au- administrator treating about caution else, can anyone like company, surance different plan ERISA an thority under it does interests, as long own pursue its authority company insurance (in its contract the terms violate not However, world. insurance non-ERISA faith). aAs of good covenant cluding the defective, the is keystone because trepidation great feel result, might well we collapse. opinion must of the arch whole has party contracting a finding that about that most major fractures two There chary about quite discretion, might be voussoir. important interpretation discretionary bestowing there is because insurance, fracture exists first other of an words upon This case caution. great for such need no normal, contract. contract; in- a mere involve does however, ERISA, comes When it is The difference plan. ERISA volves premises, same simply apply cannot both imposes important exceedingly is in- company an insurance when even entity upon burdens benefits quite is arrangement The whole volved. aof administrator as an acting undertakes company when different other sim- Standard, for all For plan. then, It, administrator. act fiduciary na- companies, ilarly situated it is party; contracting mere anot fidu- double-edged be a can duties ture 1002(16)(A), §§ 29 U.S.C. ciary. See least. say the sword creating effect, entity *17 1002(21)(A). In administering trustor, case, for exam a plan is ordinary contract In an ais trustee, claimant fiduciary is a company a party one ple, Therefore, even trust. special a simply beneficiary of that insurance Even other. benefit, an insur- consenting does insure two though between contract of kind fiduciary must act as Hassard, Bonnington, must company See, ance e.g., parties. duty higher imposes Co., actually 740 That act. v. Huber Home Roger & it in were undertake it would (S.D.Cal.1990); it than upon Luns 789, 791-92 F.Supp. It cannot relationship. Liab. Ins. a mere contractual & Guarantee v. American ford party that self-interested as a (N.D.Cal.1991); simply act 1574, 1583 Co., F.Supp. 775 legal floor violating avoid only Exch., Cal.App.3d need 221 Fire Ins. Love faith and good of covenant by the 246, created 252-54 Cal.Rptr. 1147-50, 1136, 271 higher; much It must reach dealing. Corp., fair Indem. v. Associated (1990); Henry of fair- punctilio very must act 1418-19, Cal. 1405, 266 Cal.App.3d standard, to no need I see discretion abuse of district approaches, our of either 1. Under the facts to that standard applying spill ink standards proper apply the to failed court case the decision that light of this case a bit Although it is this case. it decided when apply to court bewill returned see how difficult novo standard. de stricter even result different to reach inclined 1104(a)(1) (“[A] ness. See 29 § U.S.C. fi- that when there is discretion courts will duciary shall discharge his duties with re- only review the administrator’s actions for spect plan to a solely in the interest of the an abuse of that discretion. See Restate- ” participants ); (Second) beneficiaries.... ment (1959). § Trusts NLRB v. 322, Amax Coal However, 453 U.S. high principles and stan- 2789, 2794, 101 S.Ct. 69 L.Ed.2d 672 dards of protect trust law do the beneficia- (“[A] (1981) trustee bears an unwavering ry. fiduciary, No not even an insurance duty of complete loyalty to the beneficiary company, can draw much comfort from the trust, of the to the exclusion of the inter- fact upon it, is conferred if ests of all parties.”); other Blau v. lax, Del it acts in a conflicted, arbitrary, capri- Corp., Monte (9th 748 F.2d cious, or abusive manner toward the bene- Cir.1984) (“The administrator of an em- ficiary.2 Nevertheless, trust principles law ployee welfare plan benefit ... has no do not cut in only one direction. The discretion ... to flout the ... fiduciary beneficiary is left mercy of the obligations imposed by ERISA, or to deny trustee, as long as the trustee does.not benefits contravention of the plan’s plain violate the duties imposed upon him. That terms.”); (Second) Restatement of Trusts uncovers the second fracture in a timorous 170(1)(1959) (“The § trustee is under a approach treatment of ERISA if it as —the duty to the beneficiary administer the were a one-way statute. trust solely in the interest of the beneficia- ERISA was protect intended to benefi- ry.”); (Second) Restatement of Trusts ciaries, but that is not all it was intended (1959) (“When § 183 there are two or to do. There might not be a beneficiary to more trust, beneficiaries of a the trustee is administra,- protect, if employers under a duty to deal impartially with tors were faced with constant litigation them.”); Howard v. Shay, 100 F.3d cf. expense when they set up plans. their Cir.1996) (The administra- Myriads laws, of state proliferating con- tor’s “duties are the ‘highest known to the cepts (insurance of state tort liability bad ”). law.’ faith cases for example), litigious de- At time, the same it is not at all unusual lays, could conspire all very make the to confer trustee; discretion upon a it is setting up plans of ERISA decidedly unat- rather normal so Thus, to do. while it tractive to many employers. Transaction might seem a jarring bit to interpret costs, ordi- like litigation and judicial constant nary contract language in a way that con- “refinements” over the course of hundreds fers discretion, where one party must de- disputes, will not always enhance the pend on good mere faith other, efficient delivery Thus, benefits. as it is not at all surprising to find said, discretion- “ERISA was enacted to pro- ary language in an plan, ERISA where the mote and protect employer interests beneficiary can insist on fiduciary behav- well employee interests.” Aloha Air- ior. In case, the former the conferral lines, Ahue, Inc. v. *18 discretion may seem downright scary; Cir.1993). in Moreover, ERISA does “set latter, the the principles of trust law act as forth a comprehensive civil enforcement an anodyne for undue fears. It is true represents scheme that a careful balancing course, just Of when a conflict 1995); bewill found see Lang Long-Term v. Disability part is not of the determination of whether Sponsor Tech., Plan Applied Inc., Remote of is there place. discretion in the first 794, Because (9th 125 F.3d Cir.1997). 798 Other disposition the of this case majority.— the courts have also done so in varying ways requires determination that us to use a See, de with varying e.g., results. Mers v. Mar novo issue, standard —turns conferral riott Group Int’l Accidental Death & Dismem point there is no real exploring in Plan, the conflict 1014, berment (7th 144 Cir.) F.3d 1020 juncture. standard at this We spoken have denied,-U.S.-, cert. 372, 119 S.Ct. 142 past. it in the See Atwood v. Newmont (1998); Gold L.Ed.2d 307 Doyle v. Paul RevereLife Co., Inc., 1317, 45 (9lh F.3d Co., 1322-23 181, (1st Ins. 144 Cir.1998). F.3d 184

H03 by its retained unambiguously is ment fair claims prompt for need of Corp., Ampex Bogue v. administrator.” the public against procedures settlement Cir.1992), (9th cert. 1319, 1325 of F.2d 976 formation encouraging in interest 1847, 1031, 113 S.Ct. denied, U.S. Ins. 507 Pilot plans.” benefit employee Life (1993). Bogue that In 471 54, L.Ed.2d 41, 107 S.Ct. 123 Dedeaux, 481 U.S. v.Co. in an language (1987). found was element 39 1549, 1556,95 L.Ed.2d pro which plan severance employment realized, may take is we all of Once make the administrator that vided robust, discover heart, more become employ similar about determinations to assure ourselves strain not we need that Id. company. within positions ment a meticulous give will courts federal that words, plan if the other In at 1324. deci- many ERISA as review novo de authority to deter has administrator think we either because possible, as sions benefits, inher that for eligibility mine much being plans ERISA insured of See upon him. discretion ently confers be- or because we contracts ordinary like Co., 11 Aircraft, Hughes v. Patterson di- single-mindedly ERISA that lieve Cir.1993) (9th (per cu 948, 949-50 F.3d employ- of each to the maximization rected 276, Co., F.2d 945 Boeing riam); Eley v. That plans. available recovery from ee’s Long Cir.1991); v. ITT (9th Madden 278 v. in Snow pointed out we why, as explains Em Salaried Disability Plan Term (9th 327, Co., 330 F.3d 87 Ins. Standard Cir.1990), (9th 1279, 1284-85 F.2d 914 ployees, stingy not been Cir.1996), “[w]e 1087, denied, 111 498 U.S. rt. ce con- that determinations our (1991). 1051 964, 112 L.Ed.2d S.Ct. administrators.” upon plan ferred Id. step aside, first course, timidity Of required case in this plan The to determine still be must analysis in our “satisfactory written supply beneficiary the admin- plan gives “the benefit whether my opinion, In to Standard. proof’ discretionary authori- fiduciary istrator different construction require a does or to for benefits eligibility ty to determine Snow, where reached we the one from plan.” Firestone the terms construe 101, we said: Bruch, 489 U.S. v.Co. Rubber &Tire there provides that 956-57, 80 us plan L.Ed.2d before 948, 103 115, 109 S.Ct. Stan- unless payment novo. is de no benefit not, be review will (1989). If it does it considers instead, with what should, presented does, dard If proof written satisfactory See discretion. to be for abuse decision differ- Atwood, at no relevant F.3d see 330; 45 loss. We Snow, claimed 87 F.3d at de- Co., plans which Tel. v. between 1; General ence McKenzie & n. 1321 will Cir.1994); (9th administrator plan 1310, clare 1314 F.3d Taft apparent isIt Soc’y, eligibility. Assurance determine Equitable Life decide Cir.1994). (9th the administrator We require both n.& eligible become has person principles general outlined satisfactory presentation result that determination as a applied to should v. Met- it, Donato and, See see that effect. proof to Snow, at F.3d Co., 19 F.3d Ins. ropolitan deviate is no reason there Life Cir.1994); v. Metro- Miller said: We 378-80 at this time. outline 983- politan functioning efficient proper and Life [A] & Cir.1991); Cross Bali v. Blue upon depend often does ERISA *19 1043, 1047 Ass’n, F.2d 873 Shield Blue plan fiducia- by the use of discretion Therefore, Cir.1989). out, plan pointed As we ries. review that correctly determined court “includes it when confer discretion does for an must be decision of Standard’s discretionary ele- important one even of discretion. abuse ele- that apply to power ment, 1104 (footnote omitted).

Id. reference I recog- even if it did properly apply, I see no nize that saying “proof which is satisfacto- significant ambiguity in the language at ry” can be distinguished from saying hand. Kunin v. Trust Cf. Benefit Life “proof which is to satisfactory us.” Co., How- Ins. 534, 910 F.2d 538-41 ever, aside debates, from nice scholastic it 1990). It is true that omission of the is a distinction difference, unless, without a phrase “to us” does sophisticated allow upon based some ephemeral of the con- linguists to argue that there is no discre upon cerns which I have already expatiat- tion, if even discretion would otherwise ed, we desire to limit the conferral exist. It is also sophisticated true that discretion as much as we can. can judges sophisticated make alternative

The Sixth put Circuit and competing finger arguments. That, its on the my to mind, issue and the lack of is distinction, a true not enough to create true ambi when it said: guity. Ambiguity has never meant that (cid:127) courts or judges differ. so, Although many Were it con prior of our cases flicting rulings would

finding always grant require clear in- finding of ambiguity, volved which plans definitely ERISA is explicitly See, not the case. provided e.g., that the New Castle evidence be Coun satisfacto- ty v. ry insurer,” Co., Accident “to the and Indem. “to the company” or Hartford (3d 933 us,” Cir.1991) “to 1195-96 not does automatically follow (presence of conflicting judicial the absence of such decisions language discre- does not mandate a finding tion has not granted been ambiguity); to the plan Techs., ACL Inc. v. administrator.... Northbrook agree We Property with Aet- Co., & na Cas. Ins. that 17 “right Cal.App.4th 1773, to require part n. proof Cal.Rptr.2d 206, of claim 214 n. 39 satisfactory evidence” (1993) means, (disagreement semantically, among judges dif jurisdictions ferent must be does not satisfactory Aetna, to establish am the only biguity); named Lower party Paxton with the right v. request Township United States Fidelity Co., such It & Guar. naturally evidence. follows that Pa.Super. 558, Aetna, 4,n. receiver A.2d evidence, (1989) n. 4 (ambiguity would review is not found by evidence to determine process mechanical if it of searching satisfactory proof constitutes for con of total flicting decisions). disability. Thus, It simply implausible do think that we think should bewitched, be Aetna would merely hold both ered or by evidence as a bewildered safe keeper or those levels of so depository phistication. for a In “an party ordinary third unnamed in and popular the con- sense” tract there can be in making little doubt benefits deter- was the minations. administrator to whom the proof had to Perez, be satisfactory. 150 F.3d Perez Aetna Life at 556. Equally, there can be little doubt (6th Cir.1998). 556-57 so. Just Our nor the ERISA fiduciary world the mal generous approach to the finding of satisfaction reaches the whole of the deci discretion should dictate that Standard sion. had discretion here. Moreover, as far as doctrine of con- I recognize that it can argued tra proferentem concerned, I am dubi- the word “satisfactory” does not convey ous about its application to the determi- discretion, hint of whether it is fol- nation of whether discretion has been phrase lowed “to us” not. That conferred upon an plan ERISA adminis- plainly seems wrong. course, Of the idea trator, opposed to its application to the of discretion does not connote limitless construction of coverage and power. exclusion If there are objective limits terms involving discretion, insurance. But as there are in anything but

H05 when surprising then, too is not circumstances, not de- that does strangest rely upon the decides court appellate Discretionary de- existence. from its tract the district proceeding a given to label mean standardless not does cision-making court, the district See, & fairness Gell court. In. e.g., Cooter decision-making. others) (and previously 405, however, have 884, 110 U.S. Corp., 496 v. Hartman (1990) judgment summary a that 359 2461, recognized L.Ed.2d 110 S.Ct. record, stipulated view detailed on a erroneous based (discretion on abused to, can record amounts this ERISA assessment which clearly erroneous law or a trial with referees, game essentially evidence). whose in what Even result for clear act in determinations do not unappealable, of factual calls Music, Inc. v. Jos world. See error. standardless Acuff-Rose (2d 140, 142-43 tens, Inc., F.3d a requirement decide that should We States, F.2d 1998); v. United Wolfe administrator gives satisfactory proof Cir.1986); (9th v. EEOC 1241, 1243 n. to determine discretion College Community County Maricopa should We to benefits. is entitled claimant (9th Cir,.1984); Dist., 512-13 736 F.2d to assure periphery only patrol then Williams, F.2d Starsky v. beneficiaries, there has that ourselves, and Cir.1975). Thus, seen that (9th we have or conflicted capricious, arbitrary, been not by labels. be mesmerized we need not that, we should making. Absent decision I happen, Also, epiphanies do although stand. decision administrator’s let the even cannot discov who judge that doubt case, parsing: In on final A word which from a basis in er it would that court decided the district find favor could of fact trier reasonable review, it would that but de novo conduct party’s that decide in still might party of a before that was record upon the rely let But evidence. the same favor based administrator, than receive rather didactic today’s be; least after at majority I with the agree evidence. new able will be judge a district exercise its abuse did court district please will which phrases canorous incant majority that. it did See when our ears. 1090-1092; Mon see pages at opinion Dis Long Term Travenol v. Baxter geluzo ERISA turning fine, resile from I In Plan, 943-44 ability Benefit logo- an aeonian making into decision Cir.1995). far, At that good. so So instead, would, adminis- allow I machy. should it, court district I see point, dis- satisfactory-proof trators, have who in which proceeding a trial conducted determinations cretion, benefit to make informa consisted trial record battles, than other by court unmolested administrator, before tion themselves upon bring they those argu considered then have should requirement they violate the when record. regarding ments for, than rather fiduciaries act as they what of, mislabeled beneficia- court their adversaries Here contractual proceeding it called when doing it was ries. mislabeling summary judgment, dissent. Thus, respectfully review. novo de full scale induced

has correct used Had the would that we

label, suppose I would determinations its factual

reviewing appeal in an error, just as we

clear River Russian trial. See other City Comm. Protection Watershed 1136, 1140-41 Rosa, 142 F.3d

Santa But, Snow, at 331. Cir.1998);