313 F.3d 758 (2nd Cir. 2002), 01-9220, Mario v. P & C Food Markets, Inc.
|Citation:||313 F.3d 758|
|Party Name:||Marc Andrew MARIO, Plaintiff-Appellant, v. P & C FOOD MARKETS, INC., Defendant-Appellee.|
|Case Date:||December 20, 2002|
|Court:||United States Courts of Appeals, Court of Appeals for the Second Circuit|
Argued: June 21, 2002.
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Andrea R. Polvino, McGrath & Polvino, Williamsville, NY, for Plaintiff-Appellant.
Thomas J. Grooms, Bond, Schoeneck & King, LLP, Syracuse, NY, for Defendant-Appellee.
Sara Pikofsky, Trial Attorney (Eugene Scalia, Solicitor of Labor, Timothy D. Hauser, Associate Solicitor, Elizabeth Hopkins, Counsel for Special Litigation), Washington, D.C., for United States Department of Labor as amicus curie on behalf of Appellee.
Before: CALABRESI, McLAUGHLIN, and B.D. PARKER, Circuit Judges.
CALABRESI, Circuit Judge.
Plaintiff-appellant Marc Andrew Mario appeals from a judgment of the United States District Court for the Western District of New York (Richard J. Arcara, Judge) dismissing his complaint against his employer, defendant-appellee P & C Food Markets, Inc. ("P & C"). Mario alleged that P & C had unlawfully denied him health insurance coverage for gender reassignment surgeries that he had undergone, and he asserted claims under §§ 502 and 510 of the Employee Retirement Income and Security Act of 1974 ("ERISA"), 29 U.S.C. §§ 1132, 1140, Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e et seq., and Section 296 of the New York Human Rights Law, N.Y. Executive Law §§ 296 et seq.
This case was assigned to Magistrate Judge Edmund F. Maxwell. Following discovery, the parties cross-moved for summary judgment. The magistrate judge issued a report and recommendation that P & C's motion be granted. Applying an "arbitrary and capricious" standard of review to P & C's denial of Mario's requests for reimbursement, the magistrate judge concluded that the denial was supported by substantial evidence. The magistrate also recommended the dismissal of Mario's gender-based discrimination claims on the basis that Mario had failed, inter alia, to demonstrate that P & C's proffered reason for the denial of coveragelack of medical necessitywas pretextual. The district court adopted the report and recommendation and granted summary judgment in favor of P & C. Mario appealed, and we affirm on somewhat different grounds from those given by the district court.
Marc Mario was born in 1955 as Margo Mario, a female, and began working for P
& C in 1992 as a supervising pharmacist. Mario suffers from gender dysphoria and transsexualism, which he describes as "a condition that exists when a physiologically normal person experiences discomfort or discontent about nature's choice of his or her particular sex and prefers to be the other sex." Beginning in the mid-1990s, Mario decided to begin the transformation process from female to male. Mario advised P & C of his decision and, with P & C's permission, began to dress and present himself as a male. P & C acknowledged plaintiffs name change from "Margo" to "Marc." Around the same time, Mario began to receive hormone therapy. In September 1996, he underwent a bilateral mastectomy, and in October 1997, a hysterectomy.
Throughout his employment, Mario was covered by P & C's self-funded health insurance plan (the "Plan"), which is governed by ERISA. In 1996, following his hormone therapy and mastectomy, he sought reimbursement from the Plan. The Plan excludes coverage for services that are deemed not "medically necessary." After reviewing and investigating Mario's submissions, P & C denied the claims for lack of medical necessity, and indicated that any future claims for services or procedures related to Mario's gender reassignment would also be denied.
ERISA requires that participants in an ERISA-covered employee benefit plan be furnished with a Summary Plan Description ("SPD"), 29 U.S.C. § 1022(a) (2000). The purpose of the SPD is to describe, in summary form, the benefits available under the plan, as well as the rights and obligations of plan participants. The SPD, which was distributed to P & C employees, including Mario, provides that "[s]hould there be any questions or conflicts within this booklet, they will be governed by the terms of the contract between P & C Foods[ ] and North American Administrators, Inc." The referenced contract is the Administrative Services Agreement ("ASA") between P & C's parent corporation, The Penn Traffic Company ("Penn Traffic") and North American Administrators ("NAA"), the third-party plan administrator. The ASA outlines the respective responsibilities of NAA and P & C1 as plan administrator and fiduciary as follows:
NAA will determine the entitlement to Plan benefits for any request for benefits . . . provided, however, that [P & C] is the named fiduciary of the Plan and, as such, maintains discretionary authority to review all denied claims for benefits under the Plan. If at any time NAA is in doubt as to the proper interpretation of the Plan with respect to eligibility for benefits or otherwise, it shall promptly notify [P & C], which shall render its judgment on the interpretation to be followed by NAA.
ASA, Section III.2 (emphasis added).2
After Mario received notice from P & C that coverage for his hormone therapy and mastectomy would be denied and that any further claims related to his gender reassignment would also be denied, Mario sued P & C claiming that the denial of benefits violated ERISA, Title VII, and New York
state law. A threshold inquiry was whether P & C's denial of benefits was subject to deferential or de novo judicial review. On the parties' cross-motions for summary judgment, the magistrate found, and the district court agreed, that an "arbitrary and capricious" standard of review applied. Employing that standard, the district court granted P & C's motion for summary judgment. The court concluded that all the information the plan administrator had received from doctors, medical institutions, and insurance carriers sufficiently supported the conclusion that the gender reassignment surgery was not medically necessary and, consequently, was not covered by the Plan. With respect to the Title VII claim, the magistrate judge concluded that, assuming (but not deciding) that the denial of health benefits constituted an adverse employment action, Mario had not demonstrated that he was a member of a protected class. The magistrate also concluded that the circumstances of the denial did not give rise to an inference of discrimination, and that P & C's reasons for the denial were not pretextual. The district court agreed, and entered summary judgment in favor of P & C. This appeal followed.
"On appeal from a grant of summary judgment we review the record de novo to determine whether genuine issues of material fact exist requiring a trial." Morales v. Quintel Entm't, Inc., 249 F.3d 115, 121 (2d Cir. 2001) (citation omitted). Summary judgment is appropriate if there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Where there are no disputed issues of material fact, "our task is to determine whether the district court correctly applied the law." Pagan v. NYNEX Pension Plan, 52 F.3d 438, 441 (2d Cir. 1995) (citation omitted).
A. The ERISA Claim
We first note that there is some uncertainty as to the standard of review applicable to P & C's denial of Mario's medical claims. In Firestone Tire & Rubber Co. v. Bruch, the Supreme Court held that "a denial of benefits challenged under [29 U.S.C] § 1132(a)(1)(B) is to be reviewed under a de novo standard unless the benefit plan gives the administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe the terms of the plan." 489 U.S. 101, 115, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989). But if the plan does grant such discretionary authority to its administrator, a reviewing court should defer to that authority, and evaluate the plan administrator's decisions under an "arbitrary and capricious" standard. Pagan, 52 F.3d at 441.3
The language in the ASA reserving to P & C "discretionary authority to review all denied claims for benefits under the Plan," and providing that questions "as to the proper interpretation of the Plan with respect to eligibility for benefits or otherwise" should be referred to P & C for resolution, is sufficient under our cases to trigger the "arbitrary and capricious" standard of review. See Ganton Techs., Inc. v. Nat'l Indus. Group Pension Plan,
76 F.3d 462, 466 (2d Cir. 1996) (applying the arbitrary and capricious standard of review to trustees' interpretation of the plan where the plan documents gave the trustees authority to "resolve all disputes and ambiguities relating to the interpretation of the Plan, and the application of the terms of the Plan to any circumstances[,] and the decisions of the [trustees] in all such matters will be final"); Jordan v. Ret. Comm. of Rensselaer Polytechnic Inst, 46 F.3d 1264, 1269-71 (2d Cir. 1995) (applying the arbitrary and capricious standard of review to a plan providing that retirement committee "shall pass upon all questions concerning the application or interpretation of the provisions of the Plan" and noting that the committee had the power of "interpretation" and must therefore "evaluate and determine facts," an "inherently . . . judgmental function") (citations and internal quotation marks omitted).
On the other hand, that delegation of discretionary authority is not described, or even mentioned, in the SPD. As we have previously noted, ERISA contemplates...
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