Holland v. International Paper Co. Retirement Plan

• Decision Date: 16 July 2009
• Docket Number: No. 08-30967.,08-30967.
• Citation: 576 F.3d 240
• Parties: Derrell HOLLAND, Plaintiff-Appellee, v. INTERNATIONAL PAPER COMPANY RETIREMENT PLAN, Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

576 F.3d 240

Derrell HOLLAND, Plaintiff-Appellee, v. INTERNATIONAL PAPER COMPANY RETIREMENT PLAN, Defendant-Appellant.

No. 08-30967.

United States Court of Appeals, Fifth Circuit.

July 16, 2009.

John Clay Hamilton (argued), Hamilton & Hamilton, Oak Grove, LA, for Holland.

Bruce M. Steen (argued), McGuire Woods, Charlotte, NC, Trevor S. Fry, Gold, Weems, Bruser, Sues & Rundell, Alexandria, LA, for Defendant-Appellant.

Appeal from the United States District Court for the Western District of Louisiana.

Before KING, GARWOOD and DAVIS, Circuit Judges.

KING, Circuit Judge:

Plaintiff Derrell Holland brings this suit against Defendant Retirement Plan of International Paper Co. alleging that he was denied disability retirement benefits in violation of provisions of the Employee Retirement Income Security Act. The Plan Administrator denied Holland's application for disability retirement benefits. The district court granted Holland relief from that denial, on the ground that the Plan Administrator abused its discretion, and awarded retirement benefits to Holland. The Retirement Plan now appeals. We reverse and remand for entry of judgment in favor of the Retirement Plan because the Plan Administrator did not abuse its discretion.

I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY

Derrell Holland worked at International Paper Co.'s mill in Bastrop, Louisiana, for over thirty-six years. During that time, he held positions of paper machine specialist, equipment operator, dispatcher, and, most recently, fire protection specialist. With the exception of the dispatcher position,¹ which he performed for about two years, Holland's positions required heavy physical exertion. On April 28, 2003, Holland suffered a myocardial infarction (heart attack), had a pacemaker inserted, and was unable to return to his position as a fire protection specialist due to the physical demands of the position. He applied for and received thirty-nine weeks of sickness and accident benefits.

He also applied for disability retirement benefits under the Retirement Plan of International Paper Co. (the "Plan"). The Plan is an employee welfare benefit plan governed by the Employee Retirement Income Security Act ("ERISA"). International Paper funds the Plan by making irrevocable, non-reversionary, periodic payments into a separate trust, from which all benefits are paid. Under the terms of the Plan, International Paper's Senior Vice President-Human Resources is the Plan Administrator. The Plan grants the Plan Administrator the discretionary power and authority "to interpret the Plan, and to resolve ambiguities, inconsistencies and omissions, which determination shall be conclusive and binding upon all persons having any interest in or under the Plan"; "to decide questions concerning the Plan and the eligibility of any Employee to participate in the plan, in accordance with the provisions of the Plan"; and "to determine the amount of benefits which shall be payable to any person in accordance with the provisions of the Plan."

The Plan states that an employee "may be entitled to a disability retirement benefit under the Plan provided you meet the Plan's definition of `totally and permanently disabled' as determined by the [P]lan [A]dministrator." The Plan defines "totally and permanently disabled":

[A] total disability ... is a medically determinable physical or mental impairment or diagnosed terminal illness which renders the Participant incapable of performing any occupation or employment for which the Participant is qualified by education, training or experience and which is likely to be permanent for the remainder of the Participant's life, provided the Plan Administrator finds, and a physician or physicians designated by the Plan Administrator certify, that the Participant is Disabled.

In his application for benefits, Holland stated his disability as "heart attack, pacemaker, [emphysema], leaking heart valve[,] nerve damage in back, [and] high blood pressure." He submitted medical records from several doctors, most significantly Dr. Keith Calhoun and Dr. Robert Sarama. International Paper submitted reports from two reviewing doctors, Dr. Richard Fraser and Dr. Leonard Sonne, and the report of its independent medical examiner, Dr. Godfrey Achilihu. Dr. Calhoun, Holland's primary care physician, treated Holland in the aftermath of his heart attack. In order to facilitate Holland's application for disability retirement benefits, Dr. Calhoun completed several versions of a Functional Assessment Form, in which he noted that Holland suffered a "50-60% decrease in endurance"; could stand or walk for one to three hours and sit for three to five hours in an eight-hour day; could lift ten to twenty pounds, but could lift twenty-five pounds only rarely; could use his hands for repetitive simple grasping and fine manipulation; could reach above shoulder level; could bend frequently and twist, stand, sit, stoop or climb occasionally; could walk an eighth to a half mile; but could not engage in repetitive lifting, pushing, or pulling. Dr. Calhoun specified that Holland's pulmonary function was "[n]ot less than 85% of predicted." Furthermore, Holland was restricted from working near mechanical and electrical hazards. Dr. Calhoun therefore assigned Holland a Class III Impairment rating, which the form describes as a "[s]light limitation of functional capacity, capable of light work (35-55%)." Somewhat contradictorily, however, Dr. Calhoun also concluded that Holland was "totally disabled, so as to prevent him ... from engaging in any occupation and performing any work for compensation or profit."

Holland also submitted reports from Dr. Sarama, a pulmonologist, who examined Holland on two occasions. Dr. Sarama initially noted that Holland was under no acute distress and diagnosed Holland with a significant degree of reversible airway damage. After treatment, Holland advised Dr. Sarama that he felt better, was short of breath less frequently, and was capable of increased physical exertion. Dr. Sarama also documented that Holland was "actually rebuilding his shop" due to these improvements.

After Holland submitted his application for disability retirement benefits, the Plan sent his reports to Dr. Fraser, an internist. Dr. Fraser reviewed Holland's medical records and concluded that Holland "is not capable of performing his previous work as a Fire Protection Specialist" but is "capable of performing a sedentary job with the restrictions [discussed by Dr. Calhoun]." Thus, Dr. Fraser determined that Holland was not totally disabled. Dr. Fraser did not recommend vocational rehabilitation counseling.

Based on Holland's submissions and Dr. Fraser's review, the Plan Administrator denied Holland's application on the ground that he did not meet the definition of "totally and permanently disabled." Holland appealed for another review. The Plan Administrator then hired Dr. Sonne and Dr. Achilihu to review Holland's application. Dr. Sonne, an internist with board certification for treating pulmonary disease, reviewed Holland's medical records and concluded that "there was insufficient documentation to substantiate total disability as defined by the Plan language."

Dr. Achilihu, a cardiologist, examined Holland and determined that "from a cardiac standpoint [he did] not feel that Holland meets the definition of total disability. [He did] not feel that he is totally disabled from `performing any occupation or employment.'" Dr. Achilihu also reported that Holland was relatively healthy, confirmed that his myocardial infarction studies were normal, and noted that his chest pain was atypical for angina. Dr. Achilihu concluded that Holland was "best suitable for work within the sedentary and/or light duty capacity with restrictions of no excessive physical exertion." Unlike Dr. Fraser, Dr. Achilihu recommended vocational rehabilitation counseling to assist Holland in seeking a new job.

The Plan Administrator then reconsidered Holland's appeal and reaffirmed its denial of benefits. It notified Holland that he had the right to file a civil action under ERISA § 502(a), 29 U.S.C. § 1132(a)(1)(B).

Holland did just that on June 22, 2005, instituting this lawsuit in the United States District Court for the Western District of Louisiana. The court referred the case to a Magistrate Judge, who issued a Report and Recommendation concluding that the Plan Administrator abused its discretion in denying Holland disability retirement benefits because the denial was not supported by substantial evidence. In particular, the Magistrate Judge concluded that the Plan Administrator lacked sufficient evidence and improperly failed to consult a vocational expert in determining that Holland possessed the education, training, or experience required to perform sedentary or light work. The Magistrate Judge doubted whether Holland's prior job as a dispatcher "fits the true meaning of light work" and, in any case, determined that it was "unlikely that Holland would be able to perform the job of dispatcher, or any other job within [International Paper], due to the environmental restriction that he not work around mechanical or electrical hazards." Because the record did not contain evidence of other light or sedentary jobs, the Magistrate Judge recommended the conclusion that the Plan Administrator should have consulted a vocational rehabilitation expert.

The district court adopted the Report and Recommendation after considering the parties' objections and responses and their briefed arguments about the effect of the Supreme Court's intervening decision in Metropolitan Life Insurance Co. v. Glenn, ___ U.S. ___, 128 S.Ct. 2343, 171 L.Ed.2d 299 (2008). See Holland v. Ret. Plan of Int'l Paper Co., No. 05-1095, 2008 WL 4163089, *6 (W.D.La. Sept. 4, 2008). The district court paid the Plan Administrator's decision a modicum less deference because of the apparent conflict that arose from International...