Recupero v. New England Tel. and Tel. Co.
| Decision Date | 06 May 1997 |
| Docket Number | No. 96-2265,96-2265 |
| Citation | 118 F.3d 820 |
| Parties | Cheryl T. RECUPERO, Plaintiff--Appellant, v. NEW ENGLAND TELEPHONE AND TELEGRAPH COMPANY, et al., Defendants--Appellees. . Heard |
| Court | U.S. Court of Appeals — First Circuit |
Lynn Thomas Johnson, with whom Blaine J. DeFreitas, Lowell, MA, and Saab Law Firm were on brief, for appellant.
Lisa M. Birkdale, New England Telephone and Telegraph Company, Boston, MA, for appellees.
Before BOWNES and CYR, Senior Circuit Judges, and KEETON, * District Judge.
This appeal presents issues regarding the scope of jurisdiction of federal courts over claims for benefits under an employee benefits plan that is subject to regulation under the Employee Retirement Income Security Act (ERISA). In particular, we must decide what standards apply to judicial review of the decisions of the out-of-court decisionmakers in this case.
Without doubt, in the circumstances of this case, as the parties agree, the district court had jurisdiction for judicial review of the out-of-court decisions, under 29 U.S.C. §§ 1132(a)(1)(B) and 1132(c), for at least one purpose: to determine whether those decisions should be set aside as arbitrary and capricious. In turn, this court has jurisdiction, under 28 U.S.C. §§ 636(c)(3) and 1291, to consider plaintiff-appellant's appeal from the district court's judgment for defendants.
In cases involving this kind of judicial review, ordinarily the appropriate judgment for a district court to order is one or the other of two kinds. If the district court determines that the out-of-court decisions were arbitrary and capricious, the appropriate form of order is one remanding to the out-of-court decisionmaker for further proceedings to decide whether the claim or claims have merit. Otherwise, the usual form of order is a final judgment affirming the decisions of the out-of-court decisionmaker. In this case, however, appellees assert In these circumstances, this appeal presents a fundamental question about the scope of jurisdiction of the district court and this court. After stating relevant background matter in Part I, we address this fundamental jurisdictional question in Part II, concluding that the courts do not have plenary jurisdiction to decide all questions bearing on the merits. In Part III we turn to other issues, over which we do have jurisdiction, and conclude that the judgment of the district court against plaintiff-appellant is to be affirmed, though without approval of all details of the district court's reasoning.
that "[t]he only salient issue before the court is whether the determination of the Committee to deny Recupero accident benefits was arbitrary and capricious." (Appellee's Br. at 2.) Though acknowledging as a general matter the possibility of a remand "to the Committee for further consideration" (id.), in the end appellees request only a recognition that "the Committee's reasonable decision must be permitted to stand" and an order that the district court's summary judgment for defendant "be affirmed." (Id. at 22.) Appellant, also, seeks a final decision in this court. Thus, no party to the appeal asks for remand to the out-of-court decisionmaker (or even to the district court on conclusion of this appeal), except possibly as an alternative request, not clearly argued in the briefs and barely mentioned in oral argument apart from responses to questions from the court. Instead, the parties join in contending that, if we conclude that the out-of-court decisions were for some reason arbitrary and capricious, then we should (1) decide this controversy finally, or order the district court to do so, making any factual findings necessary to a decision on the merits, or (2) decide that the claim is finally resolved on grounds of some procedural bar, estoppel, or harmless error
The incident that forms the basis for this civil action and this appeal occurred on January 18, 1990, while the plaintiff-appellant, Cheryl Recupero, was working for New England Telephone and Telegraph Company ("NET") as a Service Representative. The District Court recited, as an undisputed fact, that:
At 9:30 am on January 18, she left her workstation on the sixth floor for the purpose of going for coffee at a shop on the ground floor. She entered an elevator and was injured in a mishap while in the elevator.
(Recupero v. New England Telephone & Telegraph Co., Civil Action No. 94-12266-MLW, Memorandum and Order, Sept. 20, 1996 at 2.)
As a result of injuries sustained in this incident, Recupero applied for benefits under the NET plan. (Id.) She was granted benefits under the Sickness provision of the plan, but was denied Accident benefits. (Id. at 3-4.)
The NET plan provides that an employee is:
[Q]ualified to receive [Accident Disability] payments on account of physical disability to work by reason of accidental injury ... arising out of and in the course of employment by the Company.
(Id. at 3)(emphasis added).
The plan further elaborates that:
Accidental injuries shall be considered as arising out of and in the course of employment only where the injury has resulted solely from accident during and in direct connection with the performance of duties to which the employee is assigned ...
(Id.) (emphasis added). The only limitation on the duration of payment of Accident Disability Benefits, under the terms of the plan, is that the employee remains unable to work. (Id. at 4 n. 2.)
The plan does not explicitly define what "sickness" is in the section providing for Sickness Disability Benefits, but does state that "sickness shall include injury other than accidental injury arising out of and in the course of employment by the Company." (Id. at 4)(emphasis added). Sickness Disability Benefits are subject to a duration limit of 52 weeks, under the terms of the plan. (Id. at 4, n. 2.) NET paid and Recupero accepted 52 weeks of Sickness Disability Benefits. (Id. at 3.)
The Benefits Office determined that Recupero was not entitled to Accident Disability Benefits because her injuries did not arise out of or occur in the course of her employment. (Id.) Recupero appealed this decision to the Employee Benefits Committee ("EBC" or "Committee"), which denied her appeal by letter on December 15, 1993, stating that "it was determined that there is evidence that you were not eligible for Accident Benefits for the incident report on January 18, 1990." (Id.) Recupero then filed an identical appeal with the Employee Benefits Claim Review Committee ("EBRC" or "Review Committee"), which also denied her appeal, stating that "after consideration of all available information, including the information you provided, the [EBRC] has determined that there is no reason to reverse the original decision of the [EBC]." (Id. at 5.)
Recupero filed a civil action for judicial review in the United States District Court for the District of Massachusetts. The district court assigned the case to Magistrate Judge Collings, under 28 U.S.C. § 636(c)(1) and Local Rules of the district.
In the district court, Recupero contended that: (1) the EBC and the EBRC acted arbitrarily and capriciously by erroneously interpreting the provisions of the plan; (2) the Committees' denial of her claim lacked good faith; and (3) the Committees gave her inadequate notice of the denial. (Id. at 9.)
The district court decided the case by ruling on cross motions for summary judgment.
The court initially noted the appropriate standard of review, stating that the arbitrary and capricious standard applies where the benefit plan vests the fiduciary with the discretionary authority to determine benefits eligibility and to construe plan provisions. (Id.) The court then made the following determination:
[T]he NET plan enumerates in sufficient detail the broad discretionary powers of both the EBC and the EBCRC necessary for application of the deferential standard of review. Thus, the rulings of the NET committees will not be disturbed unless the denials were arbitrary and capricious.
(Id. at 8.)
The district court next examined in detail the various claims and contentions. Recupero, using the word "Committee" to refer to either or both of the Benefits Committee and the Review Committee, stated as her first argument that the Committee improperly categorized her injury as "off-duty" when it should have been treated as an "on-duty" injury. (Id. at 9.) This argument concluded with the assertion that it was not "rational" to classify incidents that occur during breaks, taken at a time required or directed by the employer, as being "off-duty" incidents. (Id.)
The district court concluded (contrary to Recupero's contention) that the EBC and EBRC had not been arbitrary and capricious in interpreting the plan as defining break-time as "off-duty" time. The court stated:
Recupero does not point to any language in the plan which indicates that the committee interpretation is not rational. Nor does she point to language which suggests that the scope of the Accident Benefits Provision should be given a broader reading and be applied when the injury occurs as a result of an otherwise non-job-related activity which is marginally motivated by a job-related exigency. On the contrary, and the defendants point out, the plain language of the plan militates for a far narrower reading.
(Id. at 10-11.)
The court below also emphasized that the definition of an injury that would qualify an employee for accident benefits had words of limitation, such as "only," "solely," and "in direct connection." (Id. at 11.) These words, the court reasoned, are plain and unambiguous, and require that for an employee "to be eligible for accident benefits, the activity in which the employee is engaged at the time of injury must be a duty or responsibility required by her job." (Id.) Thus, the court concluded:
It is an undisputed fact that Recupero was taking her break and going to get coffee at...
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