Leslie Hoffman v. Screen Actors Guild Producers ( 2019 )

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS JAN 4 2019
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
LESLIE HOFFMAN, No. 16-56663
Plaintiff-Appellant, D.C. No.
2:16-cv-01530-R-AJW
v.
SCREEN ACTORS GUILD PRODUCERS MEMORANDUM *
PENSION PLAN; BOARD OF TRUSTEES
SCREEN ACTORS GUILD PENSION
PLAN; DOES, 1 through 10,
Defendants-Appellees.
Appeal from the United States District Court
for the Central District of California
Manuel L. Real, District Judge, Presiding
Argued and Submitted April 12, 2018
Pasadena, California
Before: BEA and MURGUIA, Circuit Judges, and BASTIAN,** District
Judge.
Plaintiff-Appellant Leslie Hoffman appeals the decision of the district court,
affirming the retroactive termination of her disability benefits by the Screen Actors
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The Honorable Stanley Allen Bastian, United States District Judge for
the Eastern District of Washington, sitting by designation.
Guild-Producers Pension Plan, a defined benefit plan subject to the Employee
Retirement Income Security Act (“ERISA”), 29 U.S.C. §§ 1001–1461, and the
Board of Trustees Screen Actors Guild Pension Plan, the plan’s administrator
(collectively, “the Plans”). We have jurisdiction under 28 U.S.C. § 1291. Because
we conclude that the district court erred in granting the Plans’ motion for summary
judgment, we reverse and remand.
The Plans manage a defined benefit plan subject to ERISA. In order to
receive benefits pursuant to the terms of the plan, an individual must be “totally
disabled”: (1) receiving Social Security Disability Benefits; and (2) “unable to
engage in any substantial gainful activity by reason of any medically determinable
physical or mental impairment which can be expected to result in death or to
continue for the individual=s lifetime.” Hoffman is a retired stunt actor who ceased
work in May 2000 due to numerous physical injuries and severe depression. On
February 20, 2004, Administrative Law Judge Robin Wright found Hoffman to be
totally disabled by way of severe major depression since February 25, 2002, and
awarded her Social Security Disability Benefits. In 2004, Plaintiff likewise applied
for disability benefits under the plan. Based on reports of Plaintiff’s treating
physicians Richard Handler, M.D., Hal Rubin, M.D., Ruth Cassin, M.D., and the
Plans’ own medical director, Robert Shakman, M.D., who all found Plaintiff
2
totally disabled as a result of various physical and psychological injuries, Plaintiff
received disability benefits.
In 2008, Plaintiff elected to convert her disability pension into an
occupational disability pension. In 2010, the Plans wrote that Dr. Shakman had
reviewed all of the medical documentation and determined Plaintiff’s disability to
be a result of severe major depression and not occupational in nature. The decision
was affirmed on administrative appeal, and Plaintiff filed suit. Hoffman v. Screen
Actors Guild-Producers Pension Plan, et al., No. CV 10-0613 GAF (AJWx), 2012
WL 12887076 (C.D. Cal. May 3, 2012). The district court affirmed the denial of
benefits on summary judgment and rejected Plaintiff’s contention that her
disability was due, in part, to physical impairments. Id. Plaintiff appealed, and this
Court reversed the district court’s grant of summary judgment in favor of the Plans
for violations of ERISA claims procedures and remanded to the Plans for further
proceedings. Hoffman v. Screen Actors Guild Producers Pension Plan, et al., 571
Fed. Appx. 588 (9th Cir. 2014). We directed the Plans that Plaintiff was entitled to
a second medical opinion on administrative appeal and a fully developed record
resulting therefrom. Id. at 591.
On remand, the Plans again denied Hoffman’s application for occupational
disability benefits. This prompted a review of Hoffman’s initial application for
3
disability benefits for which she had been receiving benefits since 2002. The Plans
concluded that Hoffman had not been under a disability pursuant to the terms of
the plan and terminated her regular disability pension retroactively from January 1,
2005. The Plans consequently notified Hoffman that her disability pension
payments would cease effective August 1, 2015, and sought to recoup alleged
overpayment of benefits in the amount of $123,827.50 plus $8,457.72 interest. The
decision was upheld on administrative appeal, and Hoffman filed a second
complaint under ERISA challenging the retroactive termination of her disability
benefits. The district court granted the Plans’ motion for summary judgment and
entered judgment in their favor. Hoffman v. Screen Actors Guild Producers
Pension Plan et al., No. 2:16-cv-01530-R-AJW, ECF Nos. 45, 49.
Reviewing de novo, Nolan v. Heald Coll., 551 F.3d 1148, 1150 (9th Cir.
2009), we conclude that the district court erred in failing to address all of
Hoffman’s alleged procedural defects, which should have been considered as
factors that tempered the court’s abuse of discretion review. See Abatie v. Alta
Health & Life Ins. Co., 458 F.3d 955, 968 (9th Cir. 2006) (en banc).
Here, the Plans had discretionary authority to determine Hoffman’s
eligibility for benefits, and it is undisputed that the Plans’ denial of benefits is
therefore reviewed by the district court for abuse of discretion. See id. at 963.
4
Where there are “procedural irregularities” in the claim review process, the abuse
of discretion standard that is applied by the district court will be “tempered” by
heightened skepticism. Id. at 959, 971. The district court must consider all the
circumstances in determining how much weight to assign to a conflict or
procedural irregularity. Id. at 968, 972 (“A procedural irregularity, like a conflict
of interest, is a matter to be weighed in deciding whether an administrator’s
decision was an abuse of discretion.” (citations omitted)). The nature and scope of
the alleged violations will significantly affect the standard of review applied by the
district court. See id. “[W]hen a plan administrator’s actions fall so far outside the
strictures of ERISA that it cannot be said that the administrator exercised the
discretion that ERISA and the ERISA plan grant, no deference is warranted.” Id.Alternatively, “[w]hen an administrator can show that it has engaged in an
ongoing, good faith exchange of information between the administrator and the
claimant, the court should give the administrator’s decision broad deference
notwithstanding a minor irregularity.” Id. (internal quotation marks and citations
omitted).
Hoffman advanced new evidence of multiple procedural irregularities in the
Plans’ review of her application for benefits, including the Plans’ failure to
consider all relevant evidence, such as tax records, and to make available evidence
5
relevant to the Plans’ decision, such as the administrative record from prior
proceedings, audio recordings of meetings, and a medical report by the Plans’
medical director. Although the district court concluded that there was sufficient
evidence of a procedural conflict to merit a heightened abuse of discretion review,
it only referenced, without explanation, one of these alleged irregularities—the
Plans’ failure to disclose the administrative record to Plaintiff during the course of
the appeal. The district court went on to conclude, again without explanation, that
there was no evidence of malice, self-dealing, or a parsimonious claims-granting
history on the part of the Plans, and that its level of skepticism was, accordingly,
not extremely high. The findings of fact entered by the district court, which were
adopted verbatim from the Plans’ proposed findings and conclusions, similarly do
not include findings about any of the alleged procedural defects.1 The district
court’s failure to consider all of the alleged procedural defects before determining
the level of skepticism was error. See Abatie, 458 F.3d at 969.
Moreover, because the alleged procedural defects involved disputed issues
of material fact, the district court’s grant of summary judgment was improper.
1
Although it is not error for the district court to state the undisputed facts in
the form of findings of fact and conclusions of law, see Fromberg, Inc. v. Gross
Mfg. Co., 328 F.2d 803, 806 (9th Cir. 1964), in reality, “there is no such thing
as . . . findings of fact, on a summary judgment motion.” Kearney v. Standard Ins.
Co., 175 F.3d 1084, 1095 (9th Cir. 1999) (quoting Thompson v. Mahre, 110 F.3d
716, 719 (9th Cir. 1997)).
6
Ordinarily, where abuse of discretion review is appropriate, the district court’s
review is limited to the administrative record and the traditional rules of summary
judgment do not apply. Nolan, 551 F.3d at 1154. In such cases “a motion for
summary judgment is merely the conduit to bring the legal question before the
district court . . . .” Id. (citing Bendixen v. Standard Ins. Co., 185 F.3d 939, 942
(9th Cir. 1999), abrogated on other grounds by Abatie, 458 F.3d at 963). Where, as
here, however, the claimant seeks to admit extrinsic evidence in order to prove the
existence of procedural irregularities, then the court may review the additional
evidence under the traditional summary judgment standards. Id. at 1150; see Fed.
R. Civ. P. 56(c). The new evidence is reviewed de novo in the light most favorable
to plaintiff. Nolan, 551 F.3d at 1150.
The record here reveals numerous factual disputes not addressed by the
district court in either the summary judgment order or the court’s findings of fact.2
For example, although the Plans repeatedly requested that Hoffman provide all of
her tax records to the Board of Trustees, the Plans later claimed that they only
reviewed a “summary” of these records, and retroactively denied Hoffman’s
benefits in part on the basis that Hoffman was holding herself out to be available to
2
The adoption of the proposed findings of facts on summary judgment, in
and of itself, may be suggestive of factual disputes. See U. S. for Use & Benefit of
Austin v. W. Elec. Co., 337 F.2d 568, 572 (9th Cir. 1964); Trowler v. Phillips, 260
F.2d 924, 926 (9th Cir. 1958).
7
work. Similarly, the Plans relied on a report from the Plans’ new medical director,
who reviewed the record and determined that Hoffman was not disabled. That
report was inadvertently omitted from the Rule 26, Fed. R. Civ. P., disclosure of
the Administrative Record, though it was later supplemented at an unspecified
date. Yet, there is nothing in the record showing that Hoffman received that report
prior to the decision. In contrast, Hoffman provided voluminous tax records to the
Plans to show she had not been paid for work since her disability began. The Plans
acknowledged receiving these, but did not include them in the administrative
record, suggesting that the Plans did not review them. Similarly, the Plans claimed
they did not record Hoffman’s hearing on appeal and denied Hoffman’s request to
provide any such recordings. However, the Plans later filed a motion for attorneys’
fees for 3.8 hours for drafting memorandum regarding duty to disclose recording at
trustees’ meetings. Finally, we note that the court’s findings of fact do not explain
the basis for the district court’s conclusion that there was no evidence of malice,
self-dealing, or a parsimonious claims-granting history on the part of the Plans.
On remand, the district court must address these outstanding factual
questions, which will bear upon the degree of skepticism with which the district
judge reviews the Plans’ decision to deny Hoffman’s claim for benefits. Abatie,
458 F.3d at 959. To the extent there are factual disputes, the district court must
8
resolve those through a bench trial under Rule 52(a), Fed. R. Civ. P., before
granting judgment on Hoffman’s claim for wrongful termination of benefits under
ERISA section 502, 29 U.S.C. § 1132(a)(l)(B). Nolan, 551 F.3d at 1154. Viewing
new evidence through the lens of a bench trial is not merely a matter of form; it
may lead the judge to a wholly different conclusion about the merits of the case.
See Kearney, 175 F.3d at 1095 (“The process of finding the facts ‘specially,’ as
that rule requires, sometimes leads a judge to a different conclusion from the one
he would reach on a more holistic approach.”).
Because the district court erred in its denial of summary judgment on
Hoffman’s section 502 claim, the district court also erred in summarily denying
Hoffman’s claims that the Plans failed to provide full and fair review under ERISA
section 503, 29 U.S.C. § 1133(2). See Johnson v. Buckley, 356 F.3d 1067, 1077
(9th Cir. 2004) (“In order to challenge a benefit plan’s failure to comply with
ERISA’s disclosure requirements, the employees must ‘have a colorable claim that
(1) [they] will prevail in a suit for benefits, or that (2) eligibility requirements will
be fulfilled in the future.’”). We accordingly remand to the district court for further
proceedings consistent with this disposition.
REVERSED and REMANDED.
9
FILED
Hoffman v. Screen Actors Guild Producers Pension Plan; et al.; No. 16-56663
JAN 4 2019
BEA, Circuit Judge, dissenting: MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
This case requires us to determine whether the district court erred in granting
summary judgment to the Screen Actors Guild Producers Pension Plan (the “Plan”)
because it found the Plan did not abuse its discretion in denying Appellant Leslie
Hoffman’s disability benefits application. Because I think the district court properly
considered the evidence and correctly decided that the Plan did not abuse its
discretion, I respectfully dissent.
I
The Plan is a defined benefits plan governed by the Employee Retirement
Income Security Act (“ERISA”). ERISA seeks to protect employees by establishing
minimum standards for private pension and health plans, including requiring plans
to establish a grievance and appeals process for plan participants who apply to
receive benefits. ERISA also encourages private employers to fund employee
benefits plans by allowing employers to deduct their contributions from taxable
income and to interpret the terms of the benefits plans. Accordingly, ERISA cases
generate a peculiar situation, particularly with respect to how courts review plan
administrators’ decisions.
Here, the Plan’s Board of Trustees (the “Board”) administers the Plan, which
gives the Board discretion to interpret the terms of the plan. Hoffman is a retired
1
stunt actor and coordinator. Hoffman initially ceased working as a stunt actor and
coordinator in 2000. In 2003 and 2004, Hoffman was repeatedly hospitalized for
depression and, in 2004, Dr. Ruth Cassin opined that Hoffman was disabled due to
her depression.
On February 20, 2004, Hoffman was awarded Social Security Disability
Benefits based on her depression. Hoffman then applied for a disability pension
from the Plan. The Plan’s in-house doctor, Dr. Shakman, approved her application
and she was granted a disability pension.
In 2008, Hoffman sought to convert her disability pension into an
occupational disability pension, which would entitle her to health benefits not
available under the regular disability pension. To obtain an occupational pension,
Hoffman was required to show that her disability—that is, her depression—occurred
during the course of her employment. The Plan denied Hoffman’s request to convert
her disability pension into an occupational disability pension. Hoffman appealed the
Plan’s decision to the Benefits Committee, which affirmed the Plan’s denial of
benefits, again relying on Dr. Shakman.
Hoffman sued the Plan, claiming it had violated ERISA by wrongfully
denying her benefits. The district court granted the Plan’s motion for summary
judgment, and Hoffman appealed to this Court (the “First Appeal”). On the First
Appeal, we reversed the district court’s grant of summary judgment and remanded
2
with instructions to the district court to require the Plan to obtain a second medical
opinion to provide Hoffman with a full and fair review of her claim. Hoffman v.
Screen Actors Guild-Producers Pension Plan, 571 F. App’x 588, 591 (9th Cir.
2014). At that point, the case was remanded to the Plan for further proceedings.
In 2015, during the remand, the Plan discovered what it believed to be
evidence that Hoffman was not actually disabled and had been working as a
stuntwoman and stunt coordinator after 2004. This evidence included the fact that
Hoffman received credits in a number of productions after 2004 and held herself out
as a working stuntwoman and coordinator on various websites and social media
platforms.
The Plan’s Benefits Committee sent Hoffman’s file, which contained her
medical records, to three independent medical consultants—a board certified
psychologist, a board certified orthopedic surgeon, and a board certified neurologist.
The orthopedic surgeon and neurologist opined that Hoffman had never been
disabled and the psychologist opined that Hoffman was not currently disabled and
likely had not been disabled since late 2004.
The Benefits Committee then conducted a review of Hoffman’s disability
pension and determined, based on the opinion of the medical consultants and
evidence that Hoffman had been holding herself out to work as a stunt coordinator
after 2004, that Hoffman was not totally disabled within the meaning of the plan and
3
had not been totally disabled after 2004. The Benefits Committee terminated
Hoffman’s disability pension, retroactive to January 1, 2005.
Hoffman filed an administrative appeal with the Plan. New members of the
Benefits Committee who were not involved in Hoffman’s original application heard
Hoffman’s appeal. Additionally, the Benefits Committee forwarded Hoffman’s file
to a new board certified psychologist, a new board certified orthopedic surgeon, and
a new board certified neurologist. The orthopedic surgeon and psychologist
concluded that Hoffman was not disabled. The neurologist concluded that Hoffman
was totally disabled beginning in September 2012, but went on to state that she had
“no physical neurological restrictions or deficits” and “would be able to work in any
position that did not require [Hoffman] to engage in rapid word reading or other
speed processing.”
Hoffman submitted medical evidence from a number of doctors to support her
claim of disability, including her treating physician. Additionally, Hoffman
submitted a declaration stating that she had not been paid for work on the films she
received credits for; submitted evidence from former co-workers that working on
amateur films did not necessarily indicate an ability to work as a stunt coordinator
4
on paid productions; and submitted her tax returns for the relevant time period,
which showed no income from the film industry other than residuals. 1
The Benefits Committee reviewed the evidence in the administrative record,
including the new medical opinions regarding Hoffman’s status. In a three-page
decision, the Benefits Committee upheld the termination of Hoffman’s disability
pension, retroactive to January 1, 2005, based exclusively on the opinion of the
medical experts the Plan had retained. Hoffman filed a complaint against the Plan
in the Central District of California alleging that she had been wrongfully denied
benefits and asserting a claim under section 502(c) of ERISA, alleging that the Plan
had failed to provide her with documents she had requested. The district court
granted summary judgment to the Plan, and Hoffman appealed.
II
We review a district court’s decision to grant summary judgment and the
district court’s “application of the standard of review to decisions by fiduciaries in
ERISA cases” de novo. Abatie v. Alta Health & Life Ins. Co., 458 F.3d 955, 962
(9th Cir. 2006) (en banc); Farr v. U.S. W. Commc’ns Inc., 151 F.3d 908, 913 (9th
Cir. 1998).
1
We cannot confirm whether Hoffman’s tax returns demonstrate that she did
not receive income from her work on various film projects because the tax returns
are not included in the administrative record, but the Plan does not dispute
Hoffman’s account of the content of the tax returns.
5
As a default, the district court reviews decisions to deny benefits under an
ERISA plan de novo. Abatie, 458 F.3d at 963. 2 However, when an ERISA plan
contains a provision that gives the trustees discretion to interpret the terms of the
plan, district courts review decisions to deny disability benefits applications for an
abuse of discretion. Id. Here, the parties and the district court agree that the Plan’s
organizing documents give the Board discretion to interpret the terms of the Plan,
and thus the district court was correct to apply an abuse of discretion standard.
As in other contexts, an abuse of discretion with respect to a factual matter
occurs when the court is “‘left with a definite and firm conviction that a mistake has
been committed,’ and [the court] may not merely substitute [its] view for that of the
fact finder. . . . [The court] consider[s] whether application of a correct legal
standard was ‘(1) illogical, (2) implausible, or (3) without support in inferences that
2
In Abatie, this court, sitting en banc, reconsidered its approach to ERISA
cases when a plan administrator with discretion to interpret the terms of a benefits
plan denies benefits and conflicts of interest or procedural irregularities are
involved. 458 F.3d at 959. There, the plaintiff filed suit in district court under
ERISA, arguing that the plan administrator wrongfully denied her life insurance
benefits. Id. Following a bench trial, the district court upheld the plan
administrator’s decision. Id. at 959, 961. On appeal, the plaintiff questioned the
standard of review the district court applied. Id. at 959. This court held, in
relevant part, that procedural irregularities that occur during a plan administrator’s
review must “be weighed in deciding whether an administrator’s decision was an
abuse of discretion,” and the court may consider “additional evidence when the
irregularities have prevented full development of the administrative record.” Id. at
972-73. Finding that the district court did not consider new evidence outside the
administrative record, the court reversed and remanded for further proceedings. Id.
at 974.
6
may be drawn from the facts in the record.’” Salomaa v. Honda Long Term
Disability Plan, 642 F.3d 666, 676 (9th Cir. 2011) (quoting United States v. Hinkson,
585 F.3d 1247, 1263 (9th Cir. 2009) (en banc) and applying the Hinkson standard to
an ERISA case). But this court has clarified that the district court’s abuse of
discretion review in an ERISA case should be informed by consideration of any
conflicts of interest or procedural irregularities present in the case. Abatie, 458 F.3d
at 967 (9th Cir. 2006). Specifically, the district court should consider any of the plan
administrator’s procedural errors or irregularities as a factor in determining whether
it abused its discretion. Id. at 972.
This court has repeatedly held “that where the abuse of discretion standard
applies in an ERISA benefits denial case, ‘a motion for summary judgment is merely
the conduit to bring the legal question before the district court and the usual tests of
summary judgment, such as whether a genuine dispute of material fact exists, do not
apply.’” Nolan v. Heald Coll., 551 F.3d 1148, 1154 (9th Cir. 2009)
(quoting Bendixen v. Standard Ins. Co., 185 F.3d 939, 942 (9th Cir.1999)). 3 But the
3
In Nolan, Jeanne Nolan filed an ERISA action in the district court after her
disability benefits plan denied her application for benefits. 551 F.3d at 1150. The
district court granted summary judgment to the benefits plan, and held that
although the benefits plan operated with a conflict of interest, Abatie required the
court to consider new evidence presented to the district court under an abuse of
discretion standard. Id. at 1152. But this court reversed and remanded the case to
the district court, holding, in relevant part, that the traditional summary judgment
rules do apply to evidence presented outside the record in ERISA cases. Id. at
1155.
7
traditional summary judgment standard does apply when the district court is
considering evidence outside the administrative record to determine whether the plan
administrators had conflicts of interest or committed procedural irregularities.
Nolan, 551 F.3d at 1154-55. This abuse of discretion standard that considers
conflicts of interest and procedural irregularities creates a complicated two-stage
inquiry at summary judgment. 4
First, we must determine, viewing the evidence in the light most favorable to
Hoffman, whether there was a genuine issue of material fact as to whether the abuse
of discretion standard should factor in procedural irregularities committed during the
Plan’s review. Nolan, 551 F.3d at 1154. Next, without viewing the evidence in the
light most favorable to Hoffman, we must determine if the Plan abused its discretion
(under a potentially more skeptical lens) when it denied Hoffman benefits. Id.III
The district court correctly applied this complex inquiry at every stage. The
majority disagrees, and this is where our analyses diverge.
A. The district court correctly tempered the abuse of discretion standard to
account for the Plan’s procedural irregularities
4
The parties agree that there is no structural conflict of interest in this case.
Hoffman asserts that there is a conflict of interest because the Plan’s lawyers, from
Fox Rothschild, represented the Plan in prior litigation and have continued to
advise the Plan regarding litigation with Hoffman ever since. But Hoffman
provides no evidence that the lawyers from Fox Rothschild were involved in the
decision to deny her benefits or to deny her appeal. As a result, her argument in
favor of finding a conflict of interest lacks support from the record.
8
Under Nolan, we must first determine whether Hoffman created a genuine
issue of material fact as to whether irregularities during the proceedings before the
plan should be factored into the abuse of discretion standard. As noted above, we
have held that “procedural irregularities” in the ERISA proceedings at the plan level
should be weighed as part of the abuse of discretion standard. Abatie, 458 F.3d at
972. If an “administrator engages in wholesale and flagrant violations of the
procedural requirements of ERISA,” and the administrator’s actions “fall so far
outside the strictures of ERISA that it cannot be said that the administrator exercised
the discretion that ERISA and the ERISA plan grant, no deference is warranted.” Id.
at 971-72. However, “[w]hen an administrator can show that it has engaged in an
ongoing, good faith exchange of information between the administrator and the
claimant, the court should give the administrator's decision broad deference
notwithstanding a minor irregularity.” Id. at 972 (quoting Jebian v. Hewlett-Packard
Co. Employee Benefits Org. Income Prot. Plan, 349 F.3d 1098, 1107 (9th Cir.
2003)).
Here, as the district court noted, Hoffman adduced evidence that, when
viewed favorably to her, established a triable issue of fact that the Plan failed to
provide her with complete copies of the administrative record in a timely fashion
during the appeals process, most notably the opinion of its new in-house doctor. On
that basis, the district court determined that there was a genuine issue of material
9
fact as to whether there were procedural irregularities and proceeded to apply a
“more skeptical” version of the abuse of discretion test to the Plan’s motion for
summary judgment.
The majority recognizes that the district court correctly held that there was a
genuine issue of material fact as to whether there were procedural irregularities
during the proceedings before the Plan that should be weighed in determining
whether the Plan abused its discretion. The majority holds, however, that because
the district court did not specifically mention each piece of evidence Hoffman
presented to prove the claimed procedural irregularities in its decision granting
summary judgment to the Plan, it must not have considered that evidence. In so
doing, the majority imposes a peculiar and unnecessary burden on the district court
to name specifically each claimed procedural irregularity. Our court has never
required this. 5
The majority also neglects to mention that the district court went on to find
that, viewing all evidence in the light most favorable to Hoffman: (1) the
irregularities in the Plan proceedings were relatively minor, (2) the Plan
5
The majority cites to Abatie, 458 F.3d at 959, to support its holding that
“[t]he district court’s failure to consider all of the alleged procedural defects before
determining the level of skepticism was error.” However, the court in Abatie
reversed and remanded to the district court to consider the plaintiff’s outside
evidence because it did not consider any of the outside evidence the plaintiff
presented to the district court. Id.10
demonstrated it had engaged in a good-faith exchange of information, and (3) the
Plan’s decision was still entitled to substantial deference under Abatie. 6 The district
court’s decision in this respect was correct.
Many of the irregularities identified by the majority and by Hoffman concern
documents that were not produced by the Plan in a timely manner or evidence that
the Benefits Committee allegedly failed to consider. To begin with, most of
Hoffman’s complaints regarding the production of documents and other procedural
6
The majority compounds its error by incorrectly stating that the district court
adopted the Plan’s proposed findings of facts and conclusions of law “verbatim.”
To the contrary, the district court granted the Plan’s motion for summary judgment
on October 12, 2016 in a detailed, well-reasoned order that explained its decision in
the court’s own words.
The district court then ordered the prevailing party, the Plan, to submit
formalized findings of fact and conclusions of law that echoed the district court’s
own order to be filed in conjunction with the judgment. Thus, the findings of fact
and conclusions of law were superfluous to the district court’s decision, which it had
already articulated in its order granting summary judgment. The Plan submitted the
requested findings of fact and conclusions of law on October 26, 2016. Hoffman
did not object to the findings of fact and conclusions of law submitted by the Plan.
The district court adopted the findings of fact and conclusions of law submitted by
the Plan on November 2, 2016 at the same time that it entered judgment in favor of
the Plan.
Nothing about the district court’s process indicates it was improperly
influenced by the views of a party. The district court articulated the basis of its
decision independently, then merely requested that the prevailing party ease the
district court’s workload by formalizing the decision into findings of fact and
conclusions of law that could be filed concurrently with the judgment. If Hoffman
thought this procedure was improper, she had nearly a month to object. She did
not. The majority fails to explain why the district court’s conduct in this case
should subject its decision to any additional scrutiny or why Hoffman did not
waive the issue by failing to object below.
11
irregularities concern the failure of the Plan to produce documents during the
discovery process in the district court. For instance, Hoffman asserts that various
draft medical reports should have been produced in response to her document
requests and points to discrepancies in the Plan’s interrogatory responses and
requests for attorneys’ fees. Of course, the proceedings in the district court took
place after the Plan proceedings. These arguments are not relevant to the
determination of whether there were procedural irregularities during the proceedings
before the Plan. Additionally, if Hoffman felt that the Plan had violated the
discovery rules, she had a remedy: seek relief from the district court. But Hoffman
fails even to argue that the Plan failed to comply with any order of the district court
regarding discovery in this matter. 7
When Hoffman’s contentions regarding discovery are put aside, two main
issues remain. First, Hoffman contends that the Plan did not produce the opinion of
its new medical director before the administrative appeal hearing. The Plan appears
to concede that the medical report became detached from the rest of the
administrative record and was not produced to Hoffman. This is a procedural
irregularity, but an inadvertent nondisclosure does not implicate the Plan’s attempt
7
Hoffman goes so far as to characterize the district court’s decision to rule on
the Plan’s summary judgment motion, rather than conduct a full bench trial, as a
“procedural irregularity.” Clearly, the district court’s decisions regarding the
management of its docket cannot demonstrate that the proceedings before the Plan
deserve additional scrutiny.
12
to engage in a good-faith exchange of information. Further, Hoffman does not
explain how this non-disclosure prejudiced her in any way on her administrative
appeal. Remember: the new doctor’s report found her not to be disabled.
Second, Hoffman contends that the Plan never considered her tax returns,
which she submitted for the Plan’s consideration during the administrative appeal
process, but were not part of the administrative record. These tax returns
demonstrate that Hoffman did not receive income from her work on various film
projects during the time she alleges she was disabled. Again, this irregularity
appears to have merit, but does not implicate the Plan’s good-faith exchange of
information. This is particularly true because the Benefits Committee’s decision
regarding Hoffman’s administrative appeal did not rely, in any way, on Hoffman’s
alleged employment during the time she claimed to be disabled. Instead, the Benefits
Committee confined its decision to medical opinions as to Hoffman’s physical
condition, which have nothing to do with Hoffman’s tax returns.
Simply put, the inadvertent failure to produce one document that hurts
Hoffman’s case and the failure to consider documents that had no bearing on the
Plan’s ultimate decision are procedural irregularities, but do not support applying a
high level of scrutiny to the Plan’s decision. As a result, even were I to apply a
slightly more skeptical form of the abuse of discretion test to the Plan’s decision,
13
bearing the procedural irregularities in mind, I would still afford the Plan broad
deference. See Abatie, 458 F.3d at 972.
B. The Plan did not abuse its discretion by relying on the medical opinions it
had solicited
When the Plan’s decision is viewed with the proper level of deference, it
becomes clear that the Plan did not abuse its discretion when it terminated Hoffman’s
benefits. A detailed review of the medical evidence before the Plan demonstrates
that the Plan chose between conflicting evidence and its decision was not “illogical,
implausible, or without support in inferences that may be drawn from the record.”
Hinkson, 585 F.3d at 1263.
As discussed above, during the review process, the Plan sent Hoffman’s
medical records to a medical consulting company. The consulting company
obtained the opinion of a board certified orthopedic surgeon, who concluded that
Hoffman was not disabled at any point from an orthopedic perspective. 8 The
consulting company also obtained the opinion of a board certified psychologist, who
concluded that Hoffman was not presently disabled and likely had not been disabled
since late 2004. Finally, the consulting company obtained the opinion of a board
8
Hoffman argues insistently that the Plan abused its discretion in relying on
these opinions because they were reproduced in reports generated by the consulting
companies and, thus, were hearsay. Hoffman cites no authority for the proposition
that the rules of evidence apply to ERISA proceedings at the plan level. Hoffman
also cites no authority for the proposition that a plan abuses its discretion when it
relies on hearsay. As a result, these arguments are meritless.
14
certified neurologist (the “First Plan Neurologist”), who concluded that Hoffman
was not disabled at any time from a neurological perspective.
After Hoffman appealed, the Plan sent her medical records, including new
documentation that Hoffman provided, to a new consulting company for an
additional review. The new consulting company obtained the opinion of a board
certified orthopedic surgeon, who opined that Hoffman was not disabled from an
orthopedic perspective. The new consulting company also obtained the opinion of
a board certified psychologist, who concluded that Hoffman was not disabled from
a psychological perspective.
Finally, the new consulting company obtained the opinion of a board licensed
neurologist (the “Second Plan Neurologist”). The Second Plan Neurologist opined
that Hoffman was disabled. However, the Second Plan Neurologist went on to opine
that Hoffman had “no physical neurological restrictions or deficits” and “would be
able to work in any position that did not require [Hoffman] to engage in rapid word
reading or other speed processing” and that “there are no mentation restrictions as it
pertains to [Hoffman’s] capacity to work.”
Because the Second Plan Neurologist’s opinion was inconsistent with the First
Plan Neurologist’s opinion, and because the Second Plan Neurologist’s opinion was
arguably internally inconsistent, the Plan sent Hoffman’s updated medical records
to the First Plan Neurologist to see if the new information changed his opinion. The
15
First Plan Neurologist reiterated his opinion that Hoffman was not disabled from a
neurological perspective.9
Hoffman was also permitted to submit medical evidence to the Plan. Hoffman
submitted letters and reports generated during the relevant time period from no less
than eleven medical professionals.10 Of those letters and reports, only four opine
that Hoffman was disabled.11 Two of those letters were from psychologists, who
opined that Hoffman was disabled in 2015. Another set of letters came from
Hoffman’s treating physician, who opined that Hoffman had been disabled for the
entire relevant period of time. Finally, Hoffman directs the Court to the opinion of
the Plan’s former in-house doctor, who opined, in conjunction with Hoffman’s 2008
application to convert her disability pension into an occupational disability pension,
9
Hoffman contends that asking the First Plan Neurologist to opine again
violated ERISA because, as we held in the First Appeal, the Plan was required to
obtain a new medical opinion during the administrative appeal. But Hoffman’s
argument contorts ERISA’s requirements and this Court’s ruling. Although the Plan
was required to obtain a second medical opinion from an unrelated doctor on appeal,
nothing in ERISA prohibits the Plan from also relying on the previous doctor’s
opinion, provided that the Plan also considers the opinion of a new, qualified medical
professional. See 29 C.F.R. § 2560.503–1(h)(3)(ii); Lafleur v. Louisiana Health
Serv. & Indem. Co., 563 F.3d 148, 157 (5th Cir. 2009).
10
Hoffman also directs the Court to medical opinions from 2002-2004.
Although these opinions relate to whether Hoffman was disabled at some point in
time, they are not as helpful when determining whether the plan abused its discretion
in terminating her pension as of January 1, 2005.
11
The balance of the reports and letters submitted by Hoffman describe her
symptoms, test results, and medical history, but provide no opinion as to whether
Hoffman is disabled or able to work.
16
that Hoffman was disabled under the Plan but had not demonstrated that her
disability was a result of her work. 12
Thus, there was conflicting medical evidence before the Plan when it made its
final determination regarding Hoffman’s benefits. The Plan based its decision
regarding Hoffman’s appeal exclusively on the medical evidence and did not
reference her film work. The Plan’s choice to credit the opinions of the doctors the
Plan retained to evaluate Hoffman’s claim was plainly not an abuse of discretion. In
fact, “[i]n the ERISA context, even decisions directly contrary to evidence in the
record do not necessarily amount to an abuse of discretion.” Taft v. Equitable Life
Assur. Soc., 9 F.3d 1469, 1473 (9th Cir. 1993), abrogated on other grounds by
Abatie, 458 F.3d at 973.13
Ultimately, the plan was faced with conflicting medical evidence. It had to
choose between two competing views, both supported by evidence in the record.
Under such circumstances, the Plan’s decision to credit the findings of the experts it
retained was, almost by definition, not “illogical, implausible, or without support in
12
This determination was the subject of the First Appeal.
13
Hoffman’s suggestion that the Plan should have credited the opinions of her
treating physician over the opinions of non-treating physicians is contrary to
Supreme Court precedent. The Supreme Court has clearly held that “courts have
no warrant to require administrators automatically to accord special weight to the
opinions of a claimant’s physician; nor may courts impose on plan administrators a
discrete burden of explanation when they credit reliable evidence that conflicts
with a treating physician’s evaluation.” Black & Decker Disability Plan v. Nord,
538 U.S. 822, 834 (2003).
17
inferences that may be drawn from the record.” Hinkson, 585 F.3d at 1263. As a
result, the district court was correct to grant the Plan summary judgment. 14
IV
Because our precedent requires us to defer to the Plan’s judgment with respect
to its benefits decisions, and because the Plan plainly did not abuse its discretion in
relying on medical evidence in the record, I would AFFIRM the district court in full.
14
The district court also granted the Plan summary judgment on Hoffman’s
section 502(c) claim, which alleged that the Plan failed to provide her with records
from her case in a timely fashion. To sustain a claim under section 502(c), the
plaintiff must have a colorable underlying claim for wrongful denial of benefits.
Johnson v. Buckley, 356 F.3d 1067, 1077 (9th Cir. 2004). Here, as discussed above,
Hoffman does not have a colorable claim for wrongful denial of benefits because the
Plan did not abuse its discretion. Consequently, Hoffman’s section 502(c) claim
also fails.
18