Donnell v. Metropolitan Life Insurance

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 04-2340
SUSAN B. DONNELL,
Plaintiff - Appellant,
versus
METROPOLITAN LIFE INSURANCE COMPANY, a New
York corporation,
Defendant - Appellee.
Appeal from the United States District Court for the Eastern
District of Virginia, at Richmond. James R. Spencer, District
Judge. (CA-03-180-3)
Argued: December 1, 2005 Decided: February 8, 2006
Before MOTZ and DUNCAN, Circuit Judges, and James C. DEVER III,
United States District Judge for the Eastern District of North
Carolina, sitting by designation.
Affirmed by unpublished opinion. Judge Duncan wrote the opinion,
in which Judge Motz and Judge Dever joined.
ARGUED: John Bertram Mann, LEVIT & MANN, P.C., Richmond, Virginia,
for Appellant. Eric Wagner Schwartz, TROUTMAN SANDERS, L.L.P.,
Virginia Beach, Virginia, for Appellee. ON BRIEF: John C. Lynch,
TROUTMAN SANDERS, L.L.P., Virginia Beach, Virginia, for Appellee.
Unpublished opinions are not binding precedent in this circuit.
See Local Rule 36(c).
DUNCAN, Circuit Judge:
Plaintiff-Appellant Susan Donnell appeals the district court’s
grant of summary judgment to Defendant-Appellee Metropolitan Life
Insurance Company (“MetLife”) on her action under the Employee
Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1132(a)(1)(B)
(2000), to recover long-term disability benefits in the amount of
$552,922.56. For the reasons that follow, we affirm.
I.
Donnell worked as a bank credit analyst for Nations Bank until
she left work in April 1995 due to the symptoms of fibromyalgia,
chronic fatigue syndrome, vasodepressor syncope, and psychiatric
disorders.1 Soon after leaving her job, Donnell submitted a claim
for long-term disability benefits to MetLife, the administrator of
1
Fibromyalgia is “a common condition characterized by
widespread pain in joints, muscles, tendons, and other soft tissues
. . . [and by] fatigue, morning stiffness, sleep problems,
headaches, numbness in hands and feet, depression, and anxiety.”
U.S. Nat’l Library of Med., MedlinePlus: Fibromyalgia, at
http://www.nlm.nih.gov/medlineplus/ency/article/000427.htm (Apr.
26, 2004). Chronic fatigue syndrome is “a condition of prolonged
and severe tiredness or weariness . . . that is not relieved by
rest and is not directly caused by other conditions.” U.S. Nat’l
Library of Med., MedlinePlus: Chronic Fatigue Syndrome, at
http://www.nlm.nih.gov/medlineplus/ency/article/001244.htm (June
22, 2004). Vasodepressor syncope is the “temporary loss of
consciousness and posture, described as ‘fainting’ or ‘passing
out.’” Am. Heart Ass’n, Syncope, at
http://www.americanheart.org/presenter.jhtml?identifier=4749 (last
visited Jan. 18, 2006).
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the Nations Bank Long-Term Disability Benefits Plan (“Plan”).
MetLife approved Donnell’s claim on November 2, 1995.
MetLife opened a routine review of Donnell’s file on September
24, 1997. In support of her claim, Donnell forwarded to MetLife
medical records from her physicians. In 1998, she participated in
a vocational assessment and a functional capacity evaluation
conducted at MetLife’s request.
On September 24, 1998, MetLife informed Donnell that it would
terminate her benefits because it had determined that she did not
qualify as disabled under the Plan. Donnell appealed the decision.
MetLife then commissioned Dr. Moyer, a physician not affiliated
with MetLife, to review the medical evidence in Donnell’s file.
Dr. Moyer concluded that Donnell’s medical evidence did not
establish that she was disabled from full-time sedentary work.
MetLife denied Donnell’s appeal on April 16, 1999. Donnell
submitted to MetLife additional medical records between April and
August 1999, but the insurer informed Donnell that these new
submissions did not alter its decision. In February 2001, Donnell
sent MetLife additional medical evidence and documentation that she
had been awarded Social Security Disability Insurance (“SSDI”) four
years earlier in March 1997. In February 2002, Donnell submitted
to MetLife a functional capacity evaluation that had been conducted
in October 2001. After each of these submissions, MetLife informed
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Donnell that further review of her claim was not possible because
her appeal had been closed since 1999.
Donnell filed suit under ERISA, 29 U.S.C. § 1132(a)(1)(B)
(2000), seeking recovery of $552,922.56 in long-term disability
benefits. The district court refused Donnell discovery to
determine the extent of MetLife’s conflict of interest in the
adjudication of her claim and granted summary judgment in favor of
MetLife. Donnell noted this timely appeal.
II.
This court has developed a well-settled framework for
reviewing the denial of benefits under ERISA plans. We review the
district court’s grant of summary judgment de novo, employing the
same standards applied by the district court in reviewing the
administrator’s decision. Sheppard & Enoch Pratt Hosp., Inc. v.
Travelers Ins. Co., 32 F.3d 120, 123 (4th Cir. 1994). Because the
Plan gives the administrator discretion to determine eligibility
for and entitlement to benefits, we review the administrator’s
decision for an abuse of that discretion, Bernstein v. CapitalCare,
Inc., 70 F.3d 783, 787 (4th Cir. 1995), “based on the facts known
to [the administrator] at the time.” Sheppard & Enoch Pratt Hosp.,
32 F.3d at 125. The administrator’s decision is reasonable “if it
is the result of a deliberate, principled reasoning process and if
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it is supported by substantial evidence.” Bernstein, 70 F.3d at
788 (internal quotation marks and citation omitted).
However, our standard of review is adjusted to accommodate the
presence of a conflict of interest. In exercising its discretion,
MetLife operated under such a conflict because it stood to benefit
financially from a finding that Donnell was not disabled under the
Plan’s terms.2 Because we must weigh this conflict when reviewing
MetLife’s termination of Donnell’s benefits, we modify the abuse of
discretion standard of review by lessening it “to the degree
necessary to neutralize any untoward influence resulting from the
conflict.” Doe v. Group Hospitalization & Med. Servs., 3 F.3d 80,
87 (4th Cir. 1993) (citation omitted); see also Firestone Tire &
Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989); Stup v. UNUM Life
Ins. Co., 390 F.3d 301, 307 (4th Cir. 2004).
III.
We begin our review by determining the circumstances under
which the Plan would entitle Donnell to benefits. The Plan pays a
monthly cash stipend whenever an insured is “disabled”; claimants
2
MetLife is compensated by a fixed premium from Nations Bank,
from which it pays its claims. MetLife will therefore be the
recipient of the savings resulting from a decision not to pay
Donnell further benefits. See Doe v. Group Hospitalization & Med.
Servs., 3 F.3d 80, 87 (4th Cir. 1993) (noting that a conflict of
interest exists when “one interpretation [of the plan] will further
the financial interest of the [insurer]”).
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may so qualify under any one of the Plan’s three definitions.3 New
claimants may qualify for benefits under the first definition if
they are unable to perform their regular job. For those who, like
Donnell, have already received twenty-four months of benefits, a
second, more rigorous definition of “disabled” applies. Such
claimants must “be unable to perform each of the material duties of
[their] regular job . . . [and of] any gainful work or service for
which [they] are reasonably qualified taking into consideration
[their] training, education, experience and past earnings.” J.A.
361.
3
The Plan defines “disability” or “disabled” as follows:
[D]ue to an Injury or Sickness, you require the regular
care and attendance of a Doctor (unless, in the opinion
of a Doctor, future or continued treatment would be of no
benefit) and:
1. you are unable to perform each of the material
duties of your regular job; and
2. after the first 24 months of benefit payments, you
must also be unable to perform each of the material
duties of any gainful work or service for which you
are reasonably qualified taking into consideration
your training, education, experience and past
earnings; or
3. you, while unable to perform all of the material
duties of your regular job on a full-time basis,
are:
a. performing at least one of the material duties
of your regular job or any other gainful work
or service on a part-time or full-time basis;
and
b. earning currently at least 20% less per month
than your Basic Monthly Earnings due to that
same Injury or Sickness.
J.A. 361.
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Donnell argues that the second definition of “disabled”
entitles her to benefits if she is able to work on a part-time
basis, but unable to work full-time.4 She claims that the second
definition’s term “gainful work or service” means only full-time
work or, in the alternative, that its meaning is ambiguous. While
recognizing that ambiguities in ERISA plan language are construed
in favor of beneficiaries, see Bailey v. Blue Cross & Blue Shield,
67 F.3d 53, 57 (4th Cir. 1995), we agree with the district court
that the term “gainful work or service” does not exclude part-time
work and that this meaning is plain from the Plan’s text.
When determining the meaning of ERISA plan language, we are
guided by the familiar axiom that contract terms should not be
construed so as to render superfluous other provisions of the
agreement. See, e.g., Tester v. Reliance Std. Life Ins. Co., 228
F.3d 372, 375 (4th Cir. 2000) (courts construing ERISA plan terms
should refer to and apply basic principles of contract law).
Donnell’s contention that “gainful work or service” refers only to
4
Although Donnell’s primary argument asserts that she
qualifies as “disabled” under the Plan’s second definition, she
claims in the alternative that her eligibility for benefits should
be measured under the Plan’s third definition of “disabled.” We do
not agree. A key element of the third definition requires
claimants to be “performing at least one of the material duties of
[their] regular job or any other gainful work or service on a part-
time or full-time basis.” J.A. 361. Under this definition, the
Plan’s clear language classifies as “disabled” only those who in
fact are working in some capacity. Because Donnell was not working
at any time relevant to her claim, this third definition of
disability by its terms does not apply to her.
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full-time work renders unnecessary a major portion of the Plan’s
third definition of “disabled.” That definition provides benefits
to narrow the gap between a claimant’s pre-disability and post-
disability earnings when she cannot perform her regular job on a
full-time basis but is “performing at least one of the material
duties of [her] regular job or any other gainful work or service on
a part-time or full-time basis.” J.A. 361. Under Donnell’s
interpretation of the second definition, the third definition’s
reference to part-time work is unnecessary. Any claimant unable to
work full-time in a suitable job would qualify for disability
benefits under the second definition, without regard to whether she
was able to work part-time or in fact working part-time. We could
adopt Donnell’s interpretation and avoid finding this portion of
the third definition superfluous only if we interpret it to define
as “disabled” those claimants who are unable to perform their
regular job full-time, who are capable of working full-time in
another suitable position, and yet who choose to work only part-
time. We will not distort the Plan’s language to create such
absurd results when the text is at least equally susceptible to the
more reasonable conclusion that the term “gainful work or service”
does not exclude part-time work. See F.D.I.C. v. Prince George
Corp., 58 F.3d 1041, 1046 (4th Cir. 1995) (“[W]here one
construction [of a contract term] makes the provisions unusual or
extraordinary and another construction [that] is equally consistent
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with the language employed, would make it reasonable, fair and
just, the latter construction must prevail.” (citation omitted)).
Furthermore, Donnell’s version of the Plan’s second definition
of “disabled” requires us to ascribe two mutually exclusive
meanings to the term “gainful work or service.” A key factor in
the Plan’s third definition of “disabled” focuses on whether the
claimant is “performing at least one of the material duties of
[her] regular job or any other gainful work or service on a part-
time or full-time basis.” J.A. 361 (emphasis added). The use of
“gainful work or service” in this context demonstrates that the
term, as used in the third definition, encompasses all work
performed for income, without regard to whether it is performed
full- or part-time. We will not assign a different meaning to the
second definition’s use of the same term.
For the reasons outlined above, we conclude that the Plan’s
second definition of “disabled” applies only to claimants who are
unable to perform any full-time or part-time work for which they
are reasonably qualified based on their training, education,
experience, and past earnings. Donnell’s claim for benefits must
demonstrate that she meets these criteria.
IV.
We turn now to our review of MetLife’s determination that
Donnell was not disabled under the Plan’s second definition, which
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requires in relevant part that a claimant be “unable to perform
each of the material duties of any gainful work or service for
which [she is] reasonably qualified taking into consideration [her]
training, education, experience and past earnings.”5 J.A. 361. To
survive abuse of discretion review, MetLife’s termination of
Donnell’s benefits must have been reasonable. See Stup, 390 F.3d
at 307. A reasonable decision is “the result of a deliberate,
principled reasoning process” and is “supported by substantial
evidence.”6 See id. (citations omitted). As we have noted,
5
The second definition also requires claimants to be “unable
to perform each of the material duties of [their] regular job,”
J.A. 361, but the parties on appeal have focused their arguments on
whether Donnell satisfies the second definition’s companion
requirement that she be unable to perform any job for which she is
reasonably qualified.
6
This court has alternatively framed reasonableness as an
open-ended inquiry that may, in addition to other relevant issues,
consider the following eight factors: “(1) the language of the
plan; (2) the purposes and goals of the plan; (3) the adequacy of
the materials considered to make the decision and the degree to
which they support it; (4) whether the fiduciary’s interpretation
was consistent with other provisions in the plan and with earlier
interpretations of the plan; (5) whether the decisionmaking process
was reasoned and principled; (6) whether the decision was
consistent with the procedural and substantive requirements of
ERISA; (7) any external standard relevant to the exercise of
discretion; and (8) the fiduciary’s motives and any conflict of
interest it may have.” Booth v. Wal-Mart Stores, Inc. Assocs.
Health & Welfare Plan, 201 F.3d 335, 342-43 (4th Cir. 2000). We
have never explicitly overruled Booth’s facially more expansive
test of reasonableness. Recent decisions have embraced both
standards. Compare Stup, 390 F.3d at 307 (defining reasonable
decisions as those that are “the result of a deliberate, principled
reasoning process” and that are “supported by substantial evidence”
(citations omitted)), with McCoy v. Holland, 364 F.3d 166, 170 (4th
Cir. 2004) (holding that courts “may consider many factors in
determining the reasonableness of a fiduciary’s discretionary
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judicial review of the reasonableness of MetLife’s decision is
limited to the body of evidence before the administrator at the
time it rejected Donnell’s claim. See, e.g., Elliot v. Sara Lee
Corp., 190 F.3d 601, 608-09 (4th Cir. 1999).
A.
MetLife’s decision to terminate Donnell’s disability benefits
resulted from a process that was deliberate and principled. The
company’s decisionmaking process included a genuine and thorough
consideration of all the evidence before it. It reviewed all
medical evidence that Donnell submitted, measured Donnell’s
vocational abilities, procured an independent evaluation of the
medical evidence,7 and considered all of the conditions that
Donnell claimed contributed to her disability. Furthermore,
MetLife kept Donnell informed of the status of her claim throughout
the review, notifying her of its decision on initial review to
terminate her benefits, of its decision on appeal to uphold the
decision” (citing Booth, 201 F.3d at 342-43)). We reconcile the
two lines of cases by viewing the Booth factors as more
particularized statements of the elements that constitute a
“deliberate, principled reasoning process” and “substantial
evidence” and of the reasons for applying a modified abuse of
discretion standard of review.
7
Donnell claims that Dr. Moyer’s evaluation of her medical
evidence was biased due to his affiliation with a firm that markets
its medical review services to disability insurers, but she has
pointed to no evidence suggesting that this affiliation unduly
influenced either Dr. Moyer’s or MetLife’s review of the medical
evidence.
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termination, of its decisions not to reverse its denial of her
appeal in light of additional evidence that she submitted in 1999,
and of its refusals to re-open her appeal in 2001 and 2002.
These procedures comport with those we have previously found
to be deliberate and principled. See, e.g., Booth v. Wal-Mart
Stores, Inc. Assocs. Health & Welfare Plan, 201 F.3d 335, 344-45
(4th Cir. 2000) (decision based on “numerous” evaluations by
independent doctors and claimant-submitted evidence was the result
of a principled and reasonable process); Ellis v. Metro. Life Ins.
Co., 126 F.3d 228, 233-34 (4th Cir. 1997) (decision based on
independent and claimant-submitted medical evidence and resulting
from a “lengthy and thorough” evaluation was the product of a
deliberate, principled reasoning process). Likewise, these
procedures do not suffer from the infirmities that we have
identified as fatal on abuse of discretion review. See, e.g.,
Johannssen v. Dist. No. 1 — Pac. Coast Dist. MEBA Pension Plan, 292
F.3d 159, 177-78 (4th Cir. 2002) (benefits decision based on
interpretations of plan terms that render text superfluous, or
disregard plain meaning was not the product of a deliberate or
principled decisionmaking process).
Having concluded that MetLife’s decision was the result of a
deliberate and principled decisionmaking process, we now proceed to
consider whether that decision was supported by substantial
evidence.
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B.
Substantial evidence is the quantum and quality of relevant
evidence that is more than a scintilla but less than a
preponderance and that “a reasoning mind would accept as sufficient
to support a particular conclusion.” LeFebre v. Westinghouse Elec.
Corp., 747 F.2d 197, 208 (4th Cir. 1984), overruled by implication
on other grounds by Black & Decker Disability Plan v. Nord, 538
U.S. 822 (2003); see also United Seniors Ass’n v. Social Sec.
Admin., 423 F.3d 397, 404 (4th Cir. 2005).
Substantial evidence supports MetLife’s conclusion that
Donnell’s vasodepressor syncope was not disabling under the Plan’s
terms. In 1997, one of Donnell’s treating physicians for the
syndrome opined that the syncope, by itself, would not prevent her
from sitting for eight hours or walking one mile. In 1999, another
of Donnell’s treating physicians for the syncope noted that
Donnell’s condition had stabilized and would not prevent her from
working. Dr. Moyer, the independent physician retained by MetLife
to review Donnell’s file, agreed that the vasodepressor syncope was
not disabling.
Substantial evidence likewise supports MetLife’s finding that
Donnell’s fibromyalgia and chronic fatigue syndrome were not
disabling under the Plan’s second definition.8 The 1998 functional
8
We do not consider the findings of the 2001 functional
capacity evaluation or Donnell’s award of SSDI benefits because
that evidence was not before MetLife when it rendered its decision.
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capacity evaluation concluded that Donnell could perform up to five
hours per day of light work or six hours per day of sedentary work.
MetLife also identified four job categories that were suitable to
Donnell’s professional skills, earnings history, and physical
abilities.9
In light of the above, MetLife was not unreasonable in finding
that Donnell was not “unable to perform each of the material duties
of any gainful work or service for which [she is] reasonably
qualified taking into consideration [her] training, education,
experience and past earnings.” J.A. 361. We therefore find that
MetLife did not abuse its discretion when it terminated Donnell’s
long-term disability benefits.
As we have noted, MetLife’s decision must stand or fall based on
the evidence that was before it at the time. See, e.g., Elliot,
190 F.3d at 608-09.
9
No evidence in the record suggests that the occupations that
MetLife identified were unsuitable for Donnell because she is able
to work only six hours per day. Donnell has the burden to prove
that she is entitled to receive disability benefits under the Plan.
See Ruttenberg v. U.S. Life Ins. Co., 413 F.3d 652, 663 (7th Cir.
2005) (ERISA plaintiffs must prove that their insurance contract
entitles them to benefits); Band v. Paul Revere Life Ins. Co., 14
Fed. Appx. 210, 212 (4th Cir. 2001) (per curiam) (unpublished)
(ERISA plaintiffs must prove that they are entitled to benefits
under their insurance plan); cf. Gable v. Sweetheart Cup Co., 35
F.3d 851, 855 (4th Cir. 1994) (ERISA plaintiffs have the burden to
prove that their plan promised to provide vested benefits).
Because Donnell failed to offer evidence that the identified
occupations were unsuitable for part-time workers, MetLife did not
act unreasonably in relying upon its vocational assessment to
conclude that Donnell was not disabled from those occupations.
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V.
Donnell also charges that MetLife violated procedural
regulations governing benefits claims under ERISA plans and that
these violations constituted an abuse of discretion. She claims
that MetLife’s initial termination letter violated 29 C.F.R. §
2560.503-1 by failing to outline the evidence necessary to perfect
her appeal or to inform her of her right to review the
administrative record. She claims that MetLife further violated
Section 2560.503-1 by deciding her appeal outside the regulation’s
120-day timeline.
None of these arguments persuades us to find that MetLife
abused its discretion in terminating Donnell’s benefits. First, as
we have previously held in the very case that Donnell cites to
support her arguments, Section 2560.503-1 does not direct ERISA
plan administrators to provide claimants with a formula for
obtaining benefits. Ellis, 126 F.3d at 235-36. Second, MetLife’s
initial denial letter10 substantially complied with Section
2560.503-1’s requirement that such letters outline the steps that
10
MetLife’s initial denial letter of September 24, 1998, states
in relevant part: “You may file a written request for review of
your claim within 60 days of receipt of this letter. This request
should be directed [to MetLife at a given address]. When
requesting this review, you should state the reason you believe the
claim was improperly denied and submit any additional medical
information or facts, data, questions or comments which you deem
appropriate and important for us to give your appeal proper
consideration. Metropolitan Life will re-evaluate all the data and
you will be informed in a timely manner of our decision.” J.A.
891.
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a claimant must take to obtain review. See 29 C.F.R. § 2560.503-
1(g)(1)(iv) (2005); Ellis, 126 F.3d at 235 & n.5 (holding that
language nearly identical to that in MetLife’s initial denial
letter to Donnell satisfied the regulation’s requirements).
Finally, Donnell is correct that MetLife’s initial denial letter
does not comply with this circuit’s interpretation of Section
2560.503-1 to require that initial denial letters advise claimants
of their right to review the evidence upon which the denial of
benefits was based. See Ellis, 126 F.3d at 237. She is also
correct that MetLife took more than the 120 days that Section
2560.503-1 allows to decide her appeal. See 29 C.F.R. § 2560.503-
1(i)(1)(I) (2005). However, we have made clear that we will not
find an abuse of discretion based on ERISA procedural violations
absent “a causal connection between [procedural defects] and the
final denial of a claim.” Ellis, 126 F.3d at 238. Donnell has
asserted no such link between MetLife’s noncompliance with Section
2560.503-1 and the denial of her claim, and we accordingly do not
disturb our finding that MetLife did not abuse its discretion.
VI.
Finally, Donnell argues that the district court erred in
refusing to allow her to conduct discovery to determine the extent
to which MetLife’s conflict of interest impacted its decision. We
cannot agree.
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First, our precedent has established modification of the abuse
of discretion standard of review as the method by which courts may
take account of any conflict of interest that may have tainted the
administrator’s decision. See, e.g., Stup, 390 F.3d at 307;
Bernstein, 70 F.3d at 788; Doe, 3 F.3d at 87; see also Firestone,
489 U.S. at 115. We concur with the district court’s assessment
that MetLife’s decision would survive judicial review even under
the least deferential version of our modified abuse of discretion
standard of review. As we have explained, Donnell has shown no
deficiencies, in either MetLife’s decisionmaking process or the
evidence supporting its actions, that might make us reluctant to
uphold the company’s decision under a less deferential abuse of
discretion standard of review. Thus, even assuming that discovery
would uncover a bias that would warrant modifying our abuse of
discretion standard of review to the fullest extent that our
jurisprudence allows, such evidence would not affect our conclusion
that MetLife’s decision was reasonable. We therefore see no error
in refusing Donnell the opportunity to conduct discovery on an
issue that is irrelevant to the ultimate outcome of her claim.
Second, even in ERISA actions in which courts review the
administrator’s decision de novo, introduction of evidence outside
the administrative record is permitted only in exceptional
circumstances. Quesinberry v. Life Ins. Co. of N. Am., 987 F.2d
1017, 1026-27 (4th Cir. 1993). Where, as here, a court reviews an
- 17 -
administrator’s decision under a deferential standard, discovery
and introduction of extrinsic evidence pertaining to the “mental
processes of the plan’s administrator” are generally, if not
uniformly, disallowed. See Perlman v. Swiss Bank Corp.
Comprehensive Disability Prot. Plan, 195 F.3d 975, 981-82 (7th Cir.
1999). Donnell has presented no reason to warrant our deviation
from these principles.
VII.
Because MetLife’s decision was reasonable, we find that it did
not abuse its discretion when it terminated Donnell’s long-term
disability benefits. Accordingly, the judgment of the district
court is
AFFIRMED.
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