Becknell v. Severance Pay Plan of Johnson & Johnson

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_____________
No. 15-2660
_____________
ALAN M. BECKNELL,
individually and on behalf of all others similarly situated,
Appellant
v.
SEVERANCE PAY PLAN OF JOHNSON & JOHNSON AND U.S. AFFILIATED
COMPANIES; PENSION COMMITTEE OF JOHNSON & JOHNSON
_______________
On Appeal from the United States District Court
for the District of New Jersey
(D.C. Civil No. 3-13-cv-04622)
District Judge: Honorable Freda L. Wolfson
_______________
Submitted Pursuant to Third Circuit L.A.R. 34.1(a)
March 18, 2016
Before: CHAGARES, RESTREPO and VAN ANTWERPEN, Circuit Judges.
(Filed: March 21, 2016)
______________
OPINION*
_____________
*
This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7,
does not constitute binding precedent.
VAN ANTWERPEN, Circuit Judge.
Appellant Alan M. Becknell appeals the final decision of the U.S. District Court
for the District of New Jersey granting summary judgment in favor of Appellee
Severance Pay Plan of Johnson & Johnson and Affiliated U.S. Companies (“J & J”). For
the following reasons, we will affirm the decision of the District Court.
I. Background
A. Factual History
Viewing the record in a light most favorable to the nonmovant, Becknell, the facts
are as follows. Becknell was employed as an engineer by Ethicon, Inc., a J & J
subsidiary, beginning in August 1977. (App. 355). On October 16, 2007, Becknell
qualified for and began to receive short-term disability benefits through a J & J sponsored
plan. (Id. at 4). On April 15, 2008, when Becknell exhausted his short-term disability, he
qualified for and began to receive long-term disability benefits through another J & J
sponsored plan. (Id. at 355). Becknell continued to receive these benefits until they ran
out in June 2009.1 (Id. at 488). Becknell never returned to work after going on leave in
October 2007. (Id.).
More than three years after exhausting his long-term disability benefits, on
October 25, 2012, Becknell sent a letter to J & J requesting an application for severance
1
Becknell applied for an extension of his long-term disability benefits, which J &
J denied. (App. at 4). Becknell appealed the denial, which the Fifth Circuit affirmed,
holding that the plan administrator’s denial was not an abuse of discretion. Becknell v.
Long Term Disability Plan for Johnson & Johnson and Affiliated Cos., 510 F. App’x
317, 318 (5th Cir. 2013) (per curiam).
2
benefits. (Id. at 238). When Becknell did not receive a response, his counsel, Gregory
Paul, sent a follow-up letter. (Id. at 381). William Wilkinson, Manager of Global Benefits
for J & J, responded to Becknell’s request in a February 4, 2013 letter which indicated
that Becknell did not qualify for severance benefits. (Id. at 285–87). The letter stated that
Becknell did not qualify because his termination did not result from one of the
“Severance Events” enumerated in the Severance Pay Plan of Johnson & Johnson and
U.S. Affiliated Companies (“Plan”). (Id. at 286). Moreover, the letter indicated that
Becknell ceased to be eligible for benefits on April 15, 2008 when he began receiving
long-term disability benefits because he was unable to work, with or without reasonable
accommodation. (Id.). Through his counsel, Becknell appealed the denial in a letter sent
via certified mail on March 4, 2013. (Id. at 387–93). A return receipt shows that the letter
was received on March 8th. (Id. at 390). J & J maintains that the Benefits Claims
Committee (“BCC”), the group tasked with reviewing appeals, did not learn of
Becknell’s administrative appeal until it received the complaint filed in the instant action
in August 2013. (Id. at 201, 298).2
In a letter sent on December 13, 2013, the BCC upheld “the determination that Mr.
Becknell is not eligible for benefits under the Severance Pay Plan.” 3 (Id. at 298–300).
2
While the return receipt shows that an individual at J & J signed for the letter,
Wilkinson stated that he did not recognize the initials. (App. 201–02). Wilkinson asserts
that he first received Becknell’s March 4th appeal letter from Becknell’s counsel on
August 19, 2013 after the complaint was served. (Id. at 201).
3
J & J sent a letter to Becknell’s counsel on October 16, 2013, indicating that it
required an additional sixty days to issue a decision to Becknell, an extension from the
standard sixty-day timeline the Plan provides. (Id. at 296). J & J began counting from
3
The BCC rejected Becknell’s argument that the Plan language regarding “inability to
meet the requirements of his position” covers termination because an employee moves to
long-term disability, since “the inability has a parenthetical requirement.” (Id. at 300).
The parenthetical states that the inability to meet the requirements of an employee’s
position is “determined by management of the U.S. Affiliated Company employing the
Eligible Employee at the time of termination.” (Id.). Accordingly, the BCC determined
that “employment ending at the end of the short-term disability period is not recognized
by management as meeting this requirement.” (Id.).
B. Procedural History
Becknell commenced this putative class action by filing a complaint seeking
severance benefits under the Employment Retirement Income Security Act of 1974
(“ERISA”), 29 U.S.C. § 1132(a)(1)(B). (App. 1–10). J & J moved to dismiss under
Federal Rule of Civil Procedure 12(b)(6) because Becknell filed his initial claim with J &
J after the Plan deadline of 180-days following the severance event. (Id. at 41–50). The
District Court denied the motion, finding that J & J waived this defense because it did not
raise it in the February 4, 2013 initial denial. (Id. at 75–87). J & J answered Becknell’s
complaint and moved for summary judgment. (Id. at 156–86). The District Court granted
J & J’s motion, rendering moot Becknell’s previously submitted motion for class
certification. (Id. at 485–500). This timely appeal followed. (Id. at 501–02).
when it received Becknell’s appeal letter on August 19, 2013. (Id.). As a result, the
December 11th denial of Becknell’s administrative appeal was within the 120-day
timeline from when J & J stated it received Becknell’s March 4th letter.
4
C. Plan Provisions
The Plan is an ERISA welfare benefit plan. (Id. at 218). The governing documents
state that the “sole purpose for payment of benefits under this Plan is to assist Participants
when they are unemployed during the transition period when they are attempting to
secure a new position.” (Id. at 205). The Plan enumerates four “Severance Events,” upon
the occurrence of which, “[a]n Eligible Employee may be eligible for the benefits
provided in [the Plan].” 4 (Id. at 211). Of relevance to the instant action, one of the
severance events is “an Eligible Employee’s inability to meet the requirements of his or
her position (as determined by management of the U.S. Affiliated Company employing
the Eligible Employee at the time of termination).” (Id.).
The Plan affords the Plan Administrator, the Pension Committee of Johnson &
Johnson, and its designees sole discretion to interpret the Plan and eligibility for
benefits.5 (Id. at 206, 212, 214, 218–19). Article 4.1(b) of the Plan provides that “[a]n
Eligible Employee is not eligible for the benefits provided in [the Plan] if his or her
employment is terminated as a result of any one of [six enumerated] events.” (Id. at 211).
Invoking the discretion of the Plan Administrator, one of the six enumerated events
provides that an eligible employee is not eligible for benefits “for such other reasons as
4
The Plan defines an “Eligible Employee,” in relevant part, as “a regular, full-time
or part-time salaried or hourly employee of a U.S. Affiliated Company.” (App. 206).
5
The Plan allows the Plan Administrator “[t]o delegate its authorities and
discretion hereunder,” which include “the sole and complete discretion to construe and
interpret the Plan, to decide all questions concerning [inter alia], eligibility for
participation and entitlement to benefits.” (Id. at 218–19).
5
the Pension Committee, in its sole discretion, determines to be cause for denying or
discontinuing benefits under this Plan.” (Id. at 212).
D. Administrative Claim and Appeal Process
To assert a claim for Plan benefits, “[a]n Eligible Employee (or his or her duly
authorized representative) . . . may file with the Claims Administrator a signed written
Claim that is timely.” (Id. at 220). A claim is timely if it is filed “no later than one
hundred-eighty (180) days after the date on which payments under the Plan were
discontinued or reduced.” (Id.). If an initial claim is denied, an eligible employee has
sixty days to “submit a written Appeal to the [BCC] for review of the denial.” (Id.). The
BCC then has sixty days from when the appeal is filed to “issue a written decision to the
Eligible Employee,” which may be extended to 120-days under special circumstances.
(Id. at 221). As the duly authorized delegates of the Plan Administrator, the Claims
Administrator and the BCC have discretion to determine eligibility, as well as to interpret
or construe the Plan. (Id. at 206, 214, 218–19).
Prior to Becknell’s claim for severance benefits, the BCC twice addressed whether
severance events, as defined by the Plan, include termination of employment by transition
to long-term disability status. (Id. at 276–80, 282–83). In both instances, the BCC
determined that the individual’s employment was terminated when the employee’s short-
term disability ended, and he or she moved to long-term disability. (Id.). Mr. Wilkinson
stated that he reviewed these prior BCC decisions in addressing Becknell’s initial claim.
(Id. at 200).
6
II. Discussion6
A. Standard of Review
We review a district court’s determination of the appropriate standard to apply to
review an ERISA plan administrator’s decision de novo. Viera v. Life Ins. Co. of N. Am.,
642 F.3d 407, 413 (3d Cir. 2011) (citing Grupo Protexa, S.A. v. All Am. Marine Slip, 20
F.3d 1224, 1231 (3d Cir. 1994)). We review a grant of summary judgment de novo,
applying the same standard as the district court. Id. Accordingly, “[w]e may affirm the
order when the moving party is entitled to judgment as a matter of law, with the facts
reviewed in the light most favorable to the non-moving party.” Miller v. Am. Airlines,
Inc., 632 F.3d 837, 844 (3d Cir. 2011) (alteration in original) (quoting Shook v. Avaya
Inc., 625 F.3d 69, 72 (3d Cir. 2010)) (internal quotation marks omitted).
B. Analysis
Becknell asserts that the District Court erred in reviewing J & J’s denial of his
claim under the deferential abuse of discretion standard. 7 (Appellant’s Br. 11). The
failure of the BCC to issue a written decision within the sixty days the Plan requires
rendered his claim “deemed denied,” Becknell argues, which this Circuit reviews de
6
The District Court had jurisdiction pursuant to 28 U.S.C. § 1331 and 29 U.S.C. §
1132(e)(1). We have jurisdiction to review final orders of a district court pursuant to 28
U.S.C. § 1291.
7
We have stated that “[i]n the ERISA context, the arbitrary and capricious and
abuse of discretion standards of review are essentially identical.” Fleisher v. Standard
Ins. Co., 679 F.3d 116, 120–21 & n.2 (3d Cir. 2012) (alteration in original) (quoting
Miller v. Am. Airlines, Inc., 632 F.3d 837, 844 n.2 (3d Cir. 2011)) (internal quotation
marks omitted). “Accordingly, we use the phrases ‘abuse of discretion’ and ‘arbitrary and
capricious’ interchangeably when referring to the deferential standard of review
applicable in this case.” Fleisher, 679 F.3d at 121 n.2.
7
novo. (Id. at 13–16). Under the de novo standard, Becknell claims he would have
prevailed since ambiguity in an ERISA plan is construed in favor of the insured. (Id. at
20). Because the Plan language underlying the Plan Administrator’s determination is
unambiguous, and the Plan Administrator’s interpretation was within its discretion and
consistent with the purpose of the Plan, Becknell’s claim fails under either standard of
review.
1. Standard of Review of Benefit Decisions Under ERISA
Where an ERISA plan grants the plan administrator discretionary authority to
determine eligibility for benefits, we will uphold the administrator’s decision unless it is
arbitrary and capricious. Fleisher v. Standard Ins. Co., 679 F.3d 116, 120–21 (3d Cir.
2012) (quoting Orvosh v. Program of Grp. Ins. for Salaried Emps. of Vokswagen of Am.,
Inc., 222 F.3d 123, 129 (3d Cir. 2000)). We have held that “[a]n administrator’s decision
is arbitrary and capricious if it is without reason, unsupported by substantial evidence or
erroneous as a matter of law.” Miller, 632 F.3d at 845 (quoting Abnathya v. Hoffman-La
Roche, Inc., 2 F.3d 40, 45 (3d Cir. 1993)) (internal quotation marks omitted). An
interpretation that is “reasonably consistent with unambiguous plan language” is not
arbitrary. Fleisher, 679 F.3d at 121 (quoting Bill Gray Enters., Inc. Emp. Health &
Welfare Plan v. Gourley, 248 F.3d 206, 218 (3d Cir. 2001)) (internal quotation marks
omitted).
The scope of review under the arbitrary and capricious standard is “narrow, and
the court is not free to substitute its own judgment for that of the defendants in
determining eligibility for plan benefits.” Doroshow v. Hartford Life & Accident Ins. Co.,
8
574 F.3d 230, 233–34 (3d Cir. 2009) (quoting Abnathya, 2 F.3d at 45) (internal quotation
marks omitted). This approach, often referred to as Firestone deference, provides that “a
deferential standard of review [is] appropriate when a trustee exercises discretionary
powers.” Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 111 (1989) (citing
Restatement (Second) of Trusts § 187 (1959)). In the absence of the grant of
discretionary authority to a plan administrator, courts are to review a plan administrator’s
decision de novo. Id. at 115.
In subsequent decisions, the U.S. Supreme Court has affirmed Firestone
deference, while articulating how a grant of discretion to plan administrators impacts the
standard of review. Addressing the different contexts and circumstances in which benefit
determinations arise, in Metropolitan Life Insurance v. Glenn, the Court clarified how
lower courts should review claims in which a plan administrator has a potential conflict
of interest. 554 U.S. 105, 115–17 (2008). Glenn held that an administrator’s potential
conflict of interest does not change the standard of review from deferential to de novo.
Rather, trust law requires courts to “take account of several different considerations[,] of
which a conflict of interest is one.” Id. at 117. Interpreting Glenn, we “apply a deferential
abuse of discretion standard of review across the board and consider any conflict of
interest as one of several factors in considering whether the administrator or the fiduciary
abused its discretion.” Estate of Schwing v. Lilly Health Plan, 562 F.3d 522, 525 (3d Cir.
2009) (citing Glenn, 554 U.S. at 115).
The Supreme Court again affirmed deferential review of decisions by
administrators granted discretion to construe and interpret a plan and its terms in
9
Conkright v. Frommert. 559 U.S. 506, 517 (2010). Conkright held that Firestone
deference applies to a plan administrator’s interpretation, despite a previous, related,
unreasonable interpretation. Id. at 521–22. The Court underscored the importance of
deference in ERISA cases, stating that “[i]f, as we held in Glenn, a systemic conflict of
interest does not strip a plan administrator of deference . . . it is difficult to see why a
single honest mistake would require a different result.” Id. at 513 (citations omitted).
Expressing concern that “unexpected and inaccurate plan interpretations . . . might result
from de novo judicial review,” the Court stated that deference is necessary to protect “the
careful balancing on which ERISA is based” and to “serve[] the interest of uniformity.”
Id. at 517 (internal quotation marks omitted).
We have reviewed a denial of benefits de novo where the plan administrator
“never made any effort to analyze appellants’ claims[,] much less to advise them of what
that analysis disclosed until after litigation was filed.” Gritzer v. CBS, Inc., 275 F.3d 291,
295 (3d Cir. 2002). In Gritzer v. CBS, after multiple inquiries regarding eligibility for
pension plan benefits went unanswered, employees filed a claim letter with the plan
administrator. Id. at 294. The administrator failed to issue a decision within the ninety
days the plan required, and the employees filed suit. Id. Reviewing de novo, we upheld
the denial based on unambiguous plan language which conferred discretion to the plan
administrator as to which benefits, if any, to extend to employees. Id. at 298–99. De novo
review is appropriate, when, as in Gritzer, “there simply is no analysis or reasoning to
which the Court may defer.” Id. at 296 (internal quotation marks omitted).
2. Severance Benefits at Issue
10
Reviewing the denial of Becknell’s claim under Firestone deference, the District
Court found the “Claim[s] Administrator’s interpretation and application of the
Severance Plan terms . . . consistent with the goals of the Plan and not arbitrary and
capricious.” (App. 495). The Court rejected Becknell’s contention that Gritzer controls
and mandates de novo review in light of the BCC’s late decision. (Id. at 492–93). The
District Court noted that the instant action and Gritzer are factually distinct; while the
plan administrator failed to respond at all in Gritzer, here, the “untimely decision” “at the
second level of appeal” followed the Claims Administrator’s initial, timely decision, and
“provid[ed] the reasons for denying Plaintiff’s severance request.”8 (Id. at 492–93). The
BCC’s decision, while late, “provided reasons for the denial which mirrored the Claims
Administrator’s determination.” (Id. at 493).
It is undisputed by the parties that the Plan confers discretionary authority to the
Plan Administrator and its delegates to determine eligibility for benefits. The only point
of contention is the standard of review for the BCC’s denial of Becknell’s benefits claim.
See (Appellant’s Br. 10); (Appellee’s Br. 14).
Relying primarily on our decision in Gritzer, Becknell characterizes his claim as
“deemed denied” because of J & J’s failure to issue a timely decision to his
administrative appeal, as required by both ERISA regulations and the Plan. (Appellant’s
8
The Plan provides that “[t]he Claims Administrator shall notify the Eligible
Employee of its decision within ninety (90) days after receipt of a Claim or, if special
circumstances exist, within one hundred-eighty (180) days of receipt of the Claim.” (App.
220). Becknell does not challenge the Claims Administrator’s initial denial as late, and it
was within the 180 days provided for at the upper end of the timeline. (Appellant’s Br. 7–
9). Accordingly, for the purposes of this analysis, we treat the denial as timely.
11
Br. 13) (citing 29 C.F.R. § 2560.503-1); see (App. 221). By issuing a decision outside the
sixty-day timeline, Becknell asserts the Plan Administrator “was not acting within the
discretion provided by the Plan.” (Appellant’s Br. 14) (quoting LaAsmar v. Phelps Dodge
Corp. Life, Accidental Death & Dismemberment & Dependent Life Ins. Plan, 605 F.3d
789, 799 (10th Cir. 2010)) (internal quotation marks omitted). Becknell contends that our
statement in Gritzer, that where a plan administrator “fails to act or to exercise . . .
discretion, de novo review is appropriate,” applies. (Id. at 16) (quoting 275 F.3d at 296).
Becknell maintains that in factually distinguishing the instant action from Gritzer, the
District Court “misread” the latter case, since there is “no meaningful distinction between
the facts.” (Appellant’s Br. 17–18). Under de novo review, Becknell contends his claim
would prevail because contra proferentem requires any ambiguity be construed against
the drafter.9 (Id. at 20–21).
J & J counters that the BCC’s delayed decision alone does not transform the
standard of review from arbitrary and capricious to de novo, yet maintains that even
under de novo review the Plan’s interpretation should be upheld. (Appellee’s Br. 12–14).
J & J contends that Becknell’s reliance on Gritzer is inappropriate for the same factual
distinction the District Court cited, as well as the existence of the Plan Administrator’s
two interpretations prior to Becknell’s claim. (Id. at 25–31). Further, through Glenn and
9
Becknell provides an argument as to why ERISA’s substantial compliance rule,
which “[t]he Trial Court didn’t expressly mention and J & J didn’t urge the Court to
adopt” does not relax timeliness requirements. (Appellant’s Br. 18). Since Becknell did
not raise this argument below, J & J does not mention it on appeal, and there is no
indication that the District Court considered it in rendering its decision, this issue is
waived and we need not discuss it.
12
Conkright, J & J indicates that the Supreme Court has affirmed Firestone deference in the
context of conflicts of interest and honest mistakes on the part of plan administrators. (Id.
at 21–25). J & J also revisits the timeliness argument raised in its motion to dismiss,
asserting that this Court, and many of our sister circuits, have declined to find waiver of
plan defenses under ERISA as a matter of law. (Id. at 45–47).
The Plan Administrator’s actions in the present case do not constitute a failure to
exercise discretion, as warranted de novo review in our decision in Gritzer. 275 F.3d at
296. As the District Court aptly noted, the denial in the instant action is fundamentally
different from that in Gritzer, in that Becknell’s claim was not “deemed denied.”10 See
(App. 492). Rather, Becknell’s initial claim was timely denied, in a letter setting forth a
decision consistent with prior interpretations of the Plan, on which J & J indicated it
relied in the rendering its decision. See (App. 276–79, 282–83, 285–87). Without a failure
to exercise discretion, trust principles and the “careful balanc[e]” on which ERISA is
built, require that we afford deference to a plan administrator’s interpretation of the plan
it is tasked with construing. See Conkright, 559 U.S. at 517.
Consistent with Glenn and Conkright, the BCC’s late decision to Becknell’s
appeal is a factor we consider in determining whether the Plan Administrator abused its
discretion. See id. at 513 (citing Glenn, 554 U.S. at 115–16). It appears, and Becknell
offers no evidence to the contrary, that the BCC’s late decision was a simple clerical
10
Gritzer involved a previous version of the relevant ERISA regulation regarding
the sixty-day deadline, which included the “deemed denied” language. 29 C.F.R. §
2560.503-1(h) (1999). This language is absent from the current version of the regulation.
29 C.F.R. § 2560.503-1(I) (2000).
13
oversight by J & J. See (App. 201–02). While this result is not ideal in terms of
promoting the interests of eligible employees under the Plan, Becknell advances no
reason that the BCC’s delayed response prejudiced or otherwise harmed his appeal.
Unlike the appellants in Gritzer, Becknell received a timely denial in response to his
initial request for severance benefits. Compare Gritzer, 275 F.3d at 294, with (App. 285–
87). Having already received a thorough response from the Claims Administrator, which
detailed the reasons for his ineligibility, Becknell was apprised of the Plan
Administrator’s exercise of its discretion well before he instituted the present litigation.
The BCC’s delay, while inexcusable in its detraction from efficiency and the
“prompt enforcement of rights under a plan,” did not impair the interests Firestone
deference promotes in fairness and uniformity of plan interpretations. See Conkright, 559
U.S. at 517. That the BCC’s decision mirrors the Claims Administrator’s denial, and
relies on the same prior decisions interpreting the issue, underscores the consistency of
the Plan Administrator’s exercise of discretion in this matter. We do not summarily
dismiss the possible impact of the BCC’s tardiness in issuing its decision as both ERISA
and the Plan afford two levels of review by the Plan Administrator. See 29 C.F.R. §
2560.503-1(f), (h); (App. 220–21). Considering this delay as one factor in our abuse of
discretion review, we observe that Becknell has presented no new evidence or arguments
in his appeal to challenge this interpretation, and merely restated that his termination was
a severance event under the Plan. See (App. 387–88). To remove the deference to which
this interpretation is afforded by trust principles, the governing documents, and Supreme
14
Court precedent would undermine the balance on which ERISA is founded. See
Conkright, 559 U.S. at 517–18.
Looking to our sister circuits, we are satisfied that the BCC’s late decision does
not require departure from Firestone deference. Observing how circuit courts have
approached this issue, the D.C. Circuit observed that “[a]lthough the Supreme Court has
never suggested that the standard of review applied to ERISA administrators’ benefits
determinations should change because of procedural irregularities . . . . [s]ome circuits
substitute de novo review for deferential review only when the plan administrator
committed severe procedural violations.” James v. Int’l Painters & Allied Trades Indus.
Pension Plan, 738 F.3d 282, 283 (D.C. Cir. 2013) (per curiam) (citing cases from the
Fifth, Eighth and Ninth Circuits, which apply de novo review in light of severe
procedural violations). The D.C. Circuit noted that the Tenth Circuit’s approach, which
Becknell asks us to adopt, is an outlier in its strictness, “stripping a plan administrator of
deferential review unless the irregularity is ‘inconsequential.’” Id. (quoting LaAsmar, 605
F.3d at 800); see (Appellant’s Reply Br. 2–4). In contrast, the Seventh Circuit has held
that arbitrary and capricious review applies even in light of alleged procedural errors,
which are factors to consider in determining if the plan administrator’s interpretation was
reasonable. Weitzenkamp v. Unum Life Ins. Co. of Am., 661 F.3d 323, 329 n.3 (7th Cir.
2011). Applying Firestone deference here is consistent with the majority of our sister
circuits who have weighed in on this issue, as the BCC’s late decision does not rise to the
level of a severe procedural violation. Becknell does not argue that the BCC’s late
decision was issued in bad faith or as the result of incompetence.
15
Even assuming, arguendo, that de novo review applies, we reach the same
conclusion and affirm the Claims Administrator’s and BCC’s interpretation and
application as consistent with the goals of the Plan. An ERISA plan should be construed
as a contract, “‘looking to the terms of the plan’ as well as to ‘other manifestations of the
parties’ intent.’” US Airways, Inc. v. McCutchen, 133 S. Ct. 1537, 1549 (2013) (quoting
Firestone, 489 U.S. at 113). The critical question is whether Becknell’s termination
satisfied the requirements the Plan sets forth for severance benefits eligibility. See
Gritzer, 275 F.3d at 297. As stated supra, the Plan’s governing documents establish that
its “sole purpose . . . is to assist Participants when they are unemployed during the
transition period when they are attempting to secure a new position.” (App. 205). By the
terms of J & J’s disability plan, under which Becknell received long-term disability
benefits, an employee must meet the definition of “totally disabled,” meaning that he or
she is unable “to perform the Essential Functions of his or her Regular Occupation.” (Id.
at 496). Long-term disability benefits extending beyond one-year require that the
employee “must be unable to perform any job . . . with or without reasonable
accommodation.” (Id.) (alteration in original) (emphasis omitted). By seeking an
extension of these benefits, which J & J denied and Becknell appealed unsuccessfully to
the Fifth Circuit, he asserted that he was “unable to perform any job . . . with or without
reasonable accommodation.” (Id.) (emphasis omitted). Consequently, by the very terms
of the disability benefits he received and sought to continue receiving, Becknell was not
“attempting to secure a new position,” and therefore benefits would not serve the Plan’s
purpose.
16
Becknell’s contention that the result would be different under de novo review
because the doctrine of contra proferentem would apply is unavailing. (Appellant’s Br.
20). Instead of offering an interpretation of the Plan under which he prevails, Becknell
simply states that his claim would succeed since contra proferentem requires that “[a]ny
ambiguity . . . must . . . be construed in favor of the insured.” (Id. at 20) (alteration in
original) (quoting McDermott v. GMAC Mortg. Grp., LLC Comprehensive Welfare
Benefits Plan, 389 F. App’x 153, 156 (3d Cir. 2010)). Gritzer, the case on which
Becknell bases much of his argument for de novo review, demonstrates why invoking
contra proferentem here fails. In the instant action, as in Gritzer, it is undisputed that the
Plan unambiguously provides the Plan Administrator discretion to interpret eligibility
with respect to the provisions at issue. See Gritzer, 275 F.3d at 298; (App. 206, 212, 215,
218–19). Even reviewing de novo, in Gritzer we did not apply contra proferentem to
interpret an unambiguous grant of discretion to interpret a plan in favor of the insured.
See Gritzer, 275 F.3d at 298.11
III. Conclusion
For the foregoing reasons, we will affirm the District Court’s order granting
summary judgment in favor of Appellees.
11
We do not reach J & J’s alternative argument that Becknell’s claim fails because
his initial application for benefits was untimely. We need not address this since the Plan
Administrator’s interpretation succeeds under either standard of review.
17