Buckley v. Metropolitan Life

• Decision Date: 24 June 1997
• Docket Number: No. 96-6215,96-6215
• Citation: 115 F.3d 936
• Parties: 11 Fla. L. Weekly Fed. C 84 Barbara Johnson BUCKLEY, Plaintiff-Appellant, v. METROPOLITAN LIFE; Hoffman-La Roche, Inc.; Roche Biomedical Laboratories, Inc.; Shyrese Langston, Defendants-Appellees.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 936

115 F.3d 936

11 Fla. L. Weekly Fed. C 84

Barbara Johnson BUCKLEY, Plaintiff-Appellant, v. METROPOLITAN LIFE; Hoffman-La Roche, Inc.; Roche Biomedical Laboratories, Inc.; Shyrese Langston Defendants-Appellees.

No. 96-6215.

United States Court of Appeals Eleventh Circuit.

June 24, 1997.

L. Bratton Rainey, III, Mobile, AL, for Appellant.

William K. Thomas, Douglas B. Kauffman, Cabaniss, Johnston, Gardner, Dumas & O'Neil, Birmingham, AL, for Appellees.

Allan M. Marcus, Metropolitan Life Ins. Co., New York City, for Metro Life.

Appeal from the United States District Court for the Southern District of Alabama.

Before EDMONDSON, Circuit Judge, and KRAVITCH and HENDERSON, Senior Circuit Judges.

PER CURIAM:

Barbara Johnson Buckley initially brought this action in the Circuit Court of Mobile County, Alabama against Metropolitan Life Insurance Company, Hoffmann-La Roche Inc., Roche Biomedical Laboratories, Inc. and Shyrese Langston alleging in three counts violations of Alabama law for wrongfully terminating her long term disability benefits arising out of her employment with Roche Biomedical Laboratories, Inc., then a subsidiary of Hoffmann-La Roche, Inc. The defendants removed the action to the United States District Court for the Southern District of Alabama, claiming that Buckley's causes of action were preempted by the Employee Retirement Income Security Act ("ERISA"), and the defendants, Hoffmann-La Roche Inc. and Roche Biomedical Laboratories, Inc., also asserted a counterclaim for an overpayment of benefits. Buckley filed an amended complaint which added Counts Four and Five seeking relief under ERISA. The district court eventually granted the defendants' motion for summary judgment and Buckley filed this appeal from the final judgment. For the reasons set forth below, we affirm the judgment of the district court.

I. FACTS

In 1986, Buckley was hired as a service representative by Roche Biomedical Laboratories, Inc. Beginning in late 1987, Buckley was forced to miss substantial time from work due to chronic sarcoidosis, a pulmonary disease. Her disease worsened to the point that she was unable to carry out her assigned duties. On November 1, 1988, the Hoffmann-La Roche Welfare Benefits Committee ("Committee") approved Buckley's claim for disability benefits under the Hoffmann-La Roche Long Term Disability ("LTD") Plan, which provides partial replacement of earnings for employees who become totally disabled and which is administered for Hoffmann-La Roche, Inc. by the defendant, Metropolitan Life Insurance Co. ("Metlife").

Section 4.4(b) of the Plan provided that a recipient of disability income might "be required not more often than semi-annually to undergo a medical examination by a physician or physicians appointed by the Committee and/or submit evidence of continued Total Disability satisfactory to the Committee." The Plan further stipulated that "if the Member refuses to submit to a medical examination or to submit evidence of Total Disability as required by the Committee, his disability income under the Plan shall cease as of the date of such determination or refusal."

Buckley complied with all the defendants' requests under this provision until the summer of 1992. In February of that year, Dr. William C. Gewin examined Buckley and executed a Certified Consultant's Evaluation Summary Form. Responding to a followup request from Metlife, Dr. Gewin wrote a letter to defendants on May 13, 1992 stating his opinion that Buckley was permanently and totally disabled. On June 23 and July 21, 1992, Metlife issued computer-generated letters to Buckley requesting that she submit a current statement of her functional capacity from her attending physician. ¹ On August 24 of that year, Metlife claims reviewer Anderson advised Buckley that her benefits would be terminated effective September 1, 1992 if she did not return a Functional Capacity form executed by her physician within 30 days. Buckley claims that Dr. Marc S. Gottlieb executed the required form on September 21, 1992 and that she immediately forwarded it to the defendants. Buckley also contends that she spoke with Shyrese Langston, a Roche representative, in late September about the form. She maintains Langston promised to contact her if the form was not received. Langston denies that any such conversation ever took place. In any event, the defendants did not receive the form until late January 1993.

In the interim, on December 8, 1992, the Committee met and determined that Buckley's LTD benefits were due to be terminated for her failure to submit evidence of continuing total disability. On January 7, 1993, Roche notified Buckley that her benefits had been discontinued effective August 31, 1992 for her violation of § 4.4(b) of the Plan. Buckley requested an appeal of that decision pursuant to § 8.7(b) of the Plan, which permits a rehearing of a beneficiary's claim by the Committee. The Committee affirmed its decision to terminate the benefits on March 10, 1993.

Several years earlier, on June 5, 1990, the Social Security ("SS") Administration found that Buckley was entitled to monthly disability benefits, retroactive to February 1988. Shortly thereafter, Buckley received a lump-sum payment from SS of $10,890.70, which did not include $3,496.30 withheld to cover her attorney's fees. Under § 5.3 of the Plan, a member who receives retroactive SS benefits must repay the Plan. Anderson wrote Buckley seeking reimbursement of the overpayment in the amount of $14,158.98. Buckley agreed to reimburse the Plan in monthly installments and, between August 1990 and October 1991, made payments totalling $335.00, leaving a balance due of $13,823.98.

As stated earlier, Buckley filed this action in Alabama state court against Metlife, the Roche defendants and Langston. The defendants removed the case to federal court and filed a counterclaim for the unpaid balance of the overpayment resulting from the lump-sum payment from SS. Buckley eventually stipulated to the entry of summary judgment in favor of Metlife and Langston on all claims and in favor of the Roche defendants on all but Count IV of the amended complaint, which charged the Roche defendants with wrongful termination of the LTD benefits. The district court granted the defendants' motion for summary judgment on that count and on their counterclaim seeking reimbursement of the overpayment. In the same order, the district court denied the plaintiff's cross motion for summary judgment. Buckley appeals from that final judgment.

The district court's grant of summary judgment is subject to plenary review. We therefore apply the same legal standards that bound the district court. See Brown v. Blue Cross & Blue Shield of Alabama, Inc., 898 F.2d 1556, 1559 (11th Cir.1990).

II. DISCUSSION

A. Standard of Review for Fiduciary's Decisions.

The district court applied the arbitrary and capricious standard to reviewing both the defendants' plan interpretations and their factual findings in affirming their decisions to terminate Buckley's benefits and to reject her appeal of that determination. The court concluded that there was no conflict of interest which would warrant the application of the heightened arbitrary and capricious standard to this case.

On appeal, Buckley urges that the district court erred by failing to follow the heightened arbitrary and capricious standard of review applicable when there exists a conflict of interest. According to Buckley, there is a conflict of interest here because Hoffmann-La Roche ("HLR") funds the LTD Plan and, thus, has a financial stake in minimizing benefits paid under the Plan, and because the HLR Board of Directors appoints and controls the Committee which administers the LTD Plan. She also contends that a conflict exists because the Committee which makes the initial determination concerning payment of benefits also hears the appeal from that assessment.

In response, HLR asserts that the district court correctly applied the arbitrary and capricious standard because the Plan administrator is granted discretion in making benefits' determinations and because no conflict of interest exists in this case. HLR points out that its fixed, nonreversionary contributions to the Plan are held by a separate trustee and that benefits are paid from assets of the trust rather than the assets of HLR. Further, it maintains that the fact that HLR controls the Committee which makes benefit decisions is immaterial because, under ERISA, a corporation's officers may also serve as fiduciaries of its benefits plan. Finally, it alleges that the Committee may also hear the appeal so long as the applicant has a full and fair opportunity for review of the initial decision.

ERISA does not provide a standard to review decisions of a plan administrator or fiduciary. The Supreme Court has held that a range of standards may apply to benefits determinations under the statute. See Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 109, 109 S.Ct. 948, 953, 103 L.Ed.2d 80 (1989). Accordingly, this court has adopted the following standards for reviewing administrators' plan interpretations: (1) de novo where the plan does not grant the administrator discretion, (2) arbitrary and capricious when the plan grants the administrator discretion; and (3) heightened arbitrary and capricious where there is a conflict of interest. Marecek v. BellSouth Telecommunications, Inc., 49 F.3d 702, 705 (11th Cir.1995).

In this case, the parties agree that the Plan vests the Committee with discretion in making benefits determinations. The Third Circuit has also reached that conclusion with respect to HLR's LTD Plan. See Abnathya v. Hoffmann-La Roche, Inc., 2 F.3d 40, 45 (3d Cir.1993). Therefore, unless there is a conflict of interest, the arbitrary and capricious standard should be applied at least to the Committee's interpretations of the Plan provisions. Buckley argues that this court's holding in Brown v. Blue...