Estate of Bruce Barton v. Adt Security Services Pension

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
ESTATE OF BRUCE H. BARTON,* No. 13-56379
Plaintiff-Appellant,
D.C. No.
v. 2:12-cv-06971-
BRO-CW
ADT SECURITY SERVICES PENSION
PLAN, a pension plan; TYCO
INTERNATIONAL MANAGEMENT ORDER
COMPANY, as plan sponsor; TYCO
INTERNATIONAL MANAGEMENT
COMPANY, LLC, Administrative
Committee,
Defendants-Appellees.
Filed September 20, 2016
Before: Alex Kozinski, Sandra S. Ikuta,
and John B. Owens, Circuit Judges.
Order;
Dissent by Judge N.R. Smith
*
The Estate of Bruce H. Barton is substituted as Plaintiff-Appellant
pursuant to Fed. R. App. P. 43(a).
2 ESTATE OF BARTON V. ADT
SUMMARY**
Employee Retirement Income Security Act
The panel denied a petition for panel rehearing and, on
behalf of the court, denied a petition for rehearing en banc in
an ERISA case.
Dissenting from the denial of rehearing en banc, Judge
N.R. Smith, joined by Judges O’Scannlain, Gould, Tallman,
Bybee, Callahan, Bea and Ikuta, wrote that the panel’s
opinion ignored Supreme Court and Ninth Circuit precedent
in placing on the ERISA plan administrator the burden of
proof regarding the plaintiff’s eligibility for pension benefits.
COUNSEL
Morris S. Getzels (argued), Morris S. Getzels Law Office,
Tarzana, California, for Plaintiff-Appellant.
Stuart D. Tochner (argued), Ogletree, Deakins, Nash, Smoak
& Stewart, P.C., Los Angeles, California, for Defendants-
Appellees.
**
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
ESTATE OF BARTON V. ADT 3
ORDER
Judges Kozinski and Owens have voted to deny the
petition for panel rehearing and rehearing en banc. Judge
Ikuta has voted to grant the petition for panel rehearing and
rehearing en banc.
The full court was advised of the petition for rehearing en
banc. A judge requested a vote on whether to rehear the
matter en banc. The matter failed to receive a majority of the
votes of the nonrecused active judges in favor of en banc
consideration. Fed. R. App. P. 35.
The petition for panel rehearing and the petition for
rehearing en banc are DENIED.
N. R. SMITH, Circuit Judge, with whom O’SCANNLAIN,
GOULD, TALLMAN, BYBEE, CALLAHAN, BEA, and
IKUTA, Circuit Judges, join, dissenting from the denial of
rehearing en banc:
A party may petition for rehearing en banc when “the
panel decision conflicts with a decision of the United States
Supreme Court or of the court to which the petition is
addressed . . . and consideration by the full court is therefore
necessary to secure and maintain uniformity of the court’s
decisions.” Fed. R. App. P. 35(b)(1)(A).
In this case, the majority ignores United States Supreme
Court precedent and our own Employee Retirement Income
Security Act (“ERISA”) precedent and thus fails to maintain
4 ESTATE OF BARTON V. ADT
the uniformity of the courts’ decisions. Therefore, I must
dissent from our court’s refusal to rehear this case en banc.
The United States Supreme Court mandated the standard
for reviewing the decisions of ERISA plan administrators in
Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 111,
115–16 (1989). It stated that courts should apply an abuse of
discretion standard where, as here, the plan administrator had
discretionary authority to determine the claimant’s eligibility
for benefits. See id. at 115 (citing Restatement (Second) of
Trusts § 187 cmt. d (1959)). In Metropolitan Life Insurance
Co. v. Glenn, the Supreme Court applied Firestone’s
deferential standard, even where the plan administrator had
a conflict of interest arising from her dual role of both
evaluating and paying benefits claims. 554 U.S. 105, 108
(2008). The Court refused to create special burden-of-proof
rules, or other special procedural or evidentiary rules, as an
exception to Firestone deference. Id. at 116. In Conkright v.
Frommert, the Court reaffirmed the “broad standard of
deference” accorded to plan administrators under Firestone
and concluded this deference was not “susceptible to ad hoc
exceptions.” 559 U.S. 506, 513 (2010).
Under the Firestone abuse of discretion standard, the “test
for abuse of discretion . . . is whether ‘we are left with a
definite and firm conviction that a mistake has been
committed.’” Salomaa v. Honda Long Term Disability Plan,
642 F.3d 666, 676 (9th Cir. 2011) (quoting United States v.
Hinkson, 585 F.3d 1247, 1262) (9th Cir. 2009) (en banc)).
Thus, we should only overrule the plan administrator’s
decision if it is “(1) illogical, (2) implausible, or (3) without
support in inferences that may be drawn from the facts in the
record.” Salomaa, 642 F.3d at 676 (quoting Hinkson,
585 F.3d at 1262). This standard of review applies to the plan
ESTATE OF BARTON V. ADT 5
administrator’s factual determinations as well as to her
ultimate decision. Walker v. Am. Home Shield Long Term
Disability Plan, 180 F.3d 1065, 1069–70 (9th Cir. 1999).
Here, the majority agrees the plan gave discretion to the
plan administrator to determine Barton’s eligibility for
benefits. The majority does not fault the district court in
reviewing the administrator’s decision with a low degree of
skepticism. The majority agrees that the review in this case is
limited to the administrative record. Judge Ikuta’s dissent
outlines the evidence in the record, demonstrating that the
evidence therein is more than adequate to support the plan
administrator’s decision. Thus, the decision is not illogical,
implausible, or without support in the record. See Hinkson,
585 F.3d at 1262. No one argues that the plan administrator
was aware of additional evidence that would change the
decision. The recordkeeping and disclosure requirements
imposed on the plan administrator by 29 U.S.C. § 1024(b)(4)
were met, and the plan administrator provided all the required
information to Barton. The majority provides no authority for
the proposition that ADT had a legal duty to maintain the
other information sought here. Under this deferential abuse of
discretion standard of review, there exists no clearer case to
affirm the district court.
The majority even admits that, “[t]he district court
faithfully applied our precedent in reviewing the Committee’s
denial of benefits for abuse of discretion.” Estate of Barton v.
ADT Sec. Servs. Pension Plan, 820 F.3d 1060, 1065 (9th Cir.
2016). However, the majority then abandons the abuse of
discretion standard. It invents an unprecedented burden-of-
proof standard that only it seems to have had the foresight to
impose on plan administrators. Never mind that (1) Supreme
Court precedent doesn’t permit for ad hoc exceptions to this
6 ESTATE OF BARTON V. ADT
standard of review; (2) our precedent requires that Barton
show the administrator’s decision was illogical, implausible,
or without any support of inferences in the record; (3) even
reviewing a plan administrator’s decision de novo, the burden
of proof remains on the claimant; (4) there is no precedent for
shifting the burden of proof to the administrator; and
(5) circuit precedent clearly bars this burden shifting. See
Muniz v. Amec Constr. Mgmt., Inc., 623 F.3d 1290, 1294–95
(9th Cir. 2010).
Why have the Supreme Court and our circuit mandate
standards of review if judges can ignore them at any time
they are so inclined? Our circuit has inexplicably turned its
back on the principle of stare decisis in this case. From this
time forward, can each panel decide the law on its own,
provided enough active judges are willing to live with it?