Kelly Foster v. Sedgwick Claims Management Se , 842 F.3d 721 ( 2016 )

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued September 19, 2016 Decided November 29, 2016
No. 15-7150
KELLY FOSTER,
APPELLANT
v.
SEDGWICK CLAIMS MANAGEMENT SERVICES, INC., AND SUN
TRUST BANK SHORT AND LONG TERM DISABILITY PLANS,
APPELLEES
Appeal from the United States District Court
for the District of Columbia
(No. 1:14-cv-01241)
Denise M. Clark argued the cause and filed the briefs for
Appellant.
Gregory L. Arbogast argued the cause for Appellees.
With him on the brief was James T. Heidelbach.
Before: ROGERS and TATEL, Circuit Judges, and
EDWARDS, Senior Circuit Judge.
Opinion for the Court filed by Senior Circuit Judge
EDWARDS.
2
EDWARDS, Senior Circuit Judge: This appeal raises two
issues regarding the reach and application of the Employee
Retirement Income Security Act of 1974 (“ERISA”), 29
U.S.C. § 1001 et seq., with respect to private benefit plans.
The first issue concerns the definition of “payroll practices”
that are exempt from ERISA. The second addresses whether
terms of the ERISA plan at issue in this case grant discretion
to the plan administrator sufficient to warrant deferential
review of the administrator’s benefit determinations.
In July 2014, Appellant, Kelly Foster, sued Sedgwick
Claims Management Services, Inc. (“Sedgwick”) and Sun
Trust Bank Short and Long Term Disability Plans (together
“Appellees”) under ERISA, 29 U.S.C. § 1132(a), to enforce
her rights under short-term and long-term disability benefit
plans that had been adopted by her employer, Sun Trust Bank
(“SunTrust”). The District Court found that the short-term
plan was a “payroll practice” exempted from ERISA’s ambit
by a Department of Labor regulation. Appellant initially
conceded this point. Foster v. Sedgwick Claims Mgmt. Servs.,
Inc., 125 F. Supp. 3d 200, 205 (D.D.C. 2015). Because
Appellant’s sole cause of action with respect to the short-term
plan rested on ERISA, the District Court rejected Appellant’s
claim. The District Court additionally found that the long-
term plan gave Sedgwick, the plan administrator, sole
discretion to “evaluate” an employee’s medical evidence and
“determine” if the employee’s condition meets the plan’s
definition of disability. Id. at 206–07. The District Court
accordingly applied a deferential standard of review to
Sedgwick’s denial of long-term disability benefits sought by
Appellant and concluded that the administrator had neither
abused its discretion nor acted arbitrarily or capriciously in
assessing Appellant’s claim for benefits. Id. at 206–11. The
District Court granted summary judgment to Appellees and
dismissed Appellant’s complaint. Id. at 211.
3
Appellant filed a motion for reconsideration. She
admitted she had conceded that the short-term disability plan
was exempt from ERISA during summary judgment, but
argued that the District Court’s embrace of this position
constituted an error of law. The District Court rejected
Appellant’s attempt to raise a new legal theory in a motion for
reconsideration when the same claim could have been
asserted during summary judgment. The District Court denied
the motion for reconsideration. Foster v. Sedgwick Claims
Mgmt. Servs., Inc., 159 F. Supp. 3d 11, 13–16 (D.D.C. 2015).
We affirm the District Court at each turn. First, we affirm
the District Court’s finding that the short-term disability plan
is an ERISA-exempt “payroll practice” under Department of
Labor regulations. Second, we hold that the District Court
appropriately applied a deferential standard of review to the
administrator’s denial of benefits under the long-term
disability plan because the terms of the plan unambiguously
grant the administrator, and the administrator alone, the power
to construe critical terms of the plan and to decide an
employee’s eligibility for benefits. Finally, we hold that the
District Court did not abuse its discretion in denying
Appellant’s motion for reconsideration.
I. BACKGROUND
A. Statutory and Regulatory Background
Congress enacted ERISA to “promote the interests of
employees and their beneficiaries in employee benefit plans
and to protect contractually defined benefits.” Firestone Tire
& Rubber Co. v. Bruch, 489 U.S. 101, 113 (1989) (citations
and internal quotation marks omitted). It found that employee
benefit plans “affect[] the stability of employment and the
successful development of industrial relations . . . [and are] an
4
important factor in commerce because of the interstate
character of their activities.” 29 U.S.C. § 1001(a). Under
ERISA, a benefit plan participant may sue “to recover
benefits due to him under the terms of his plan, [or] to enforce
his rights under the terms of the plan.” 29 U.S.C. §
1132(a)(1)(B). Overall, ERISA represents a “‘careful
balancing’ between ensuring fair and prompt enforcement of
rights under a plan” and encouraging the creation of such
plans. Conkright v. Frommert, 559 U.S. 506, 517 (2010)
(citation and internal quotation marks omitted).
Under 29 U.S.C. § 1135, the Secretary of Labor is
authorized to prescribe regulations deemed necessary or
appropriate to carry out the provisions of ERISA. Pursuant to
this authority, Department of Labor regulations exempt
certain “payroll practices” from ERISA’s ambit. An exempt
payroll practice includes “[p]ayment of an employee’s normal
compensation, out of the employer’s general assets, on
account of periods of time during which the employee is
physically or mentally unable to perform his or her duties, or
is otherwise absent for medical reasons.” 29 C.F.R. § 2510.3-
1(b)(2).
B. Factual and Procedural Background
We review de novo the District Court’s order granting
summary judgment. See Lopez v. Council on Am.-Islamic
Relations Action Network, Inc., 826 F.3d 492, 496 (D.C. Cir.
2016). In doing so, we view the evidence and draw all
reasonable inferences in favor of the non-moving party. See
id. The material facts in this case, which are undisputed, are
summarized below.
SunTrust provides its employees with both short-term
and long-term disability benefit plans. Appellee Sedgwick
5
administers both plans on behalf of SunTrust. According to
SunTrust’s Health and Welfare Benefits Handbook (“Benefits
Handbook”), Joint Appendix (“JA”) 19–36, 45–59,
SunTrust’s short-term disability plan “provides benefits if an
eligible employee is unable to work because of an approved
disability.” Id. at 25. Benefits are paid from SunTrust’s
“general assets.” Id. “Full-time employees receive a
combination of [short-term] benefits paid at 100% and 60% of
base pay for their first illness/injury occurrence in each
calendar year.” Short-Term Disability Summary, JA 38.
Employees are deemed to have an approved disability if they
are “not able, solely because of disease or injury to perform
the material duties of their own occupation.” Id. at 39.
Employees’ claims for short-term disability must be
supported by “objective medical documentation.” Id. The
claims administrator determines whether employee claimants
meet the definition of “disability” and whether their medical
documentation is sufficient to support a claim for benefits. Id.
at 38.
SunTrust’s long-term disability plan, which is part of a
larger Employee Benefit Plan and funded through a trust,
“provides financial assistance to eligible employees who are
totally unable to work, as determined by the claims
administrator, due to an illness or injury after 180 days.”
Benefits Handbook, JA 46. The long-term plan uses
substantially the same definition of disability as the short-term
plan, but requires an employee to be “totally disabled as
determined by the claims administrator” for 180 days. Id. To
make this determination, the “claims administrator will
evaluate the medical documentation submitted on [the
employee’s] behalf and determine if [his/her] condition meets
the Plan’s definition of Total Disability.” Id. at 48. Sedgwick
approves a claim for long-term disability benefits “[o]nce
satisfactory proof that [the employee] ha[s] been Totally
6
Disabled for 180 calendar days has been provided to the
claims administrator.” Id. at 56. If Sedgwick denies a claim, it
must give the specific reason for denial and the “specific Plan
or policy provisions on which the denial is based.” Id.Employees have a right to appeal Sedgwick’s initial denial of
a claim to a different decision-maker at Sedgwick, who makes
a final decision. See id. at 56–57.
SunTrust employed Appellant Kelly Foster as a Mortgage
Loan Closer until September 2012. In January and August
2012, Appellant submitted claims for short-term disability
benefits for missing work due to a variety of ailments.
Sedgwick denied her claims, citing Appellant’s failure to
provide sufficient “objective medical documentation” in
support of her claims. SunTrust terminated Appellant on
September 25, 2012, because of her absences from work.
Appellant appealed Sedgwick’s denial of her short-term
disability benefits claim. Sedgwick upheld its denial on
March 29, 2013. In October 2013, Appellant submitted a
claim for long-term disability benefits. Sedgwick denied this
claim, as well, and Appellant appealed again. Sedgwick
upheld this denial on January 27, 2014.
In July 2014, Appellant sued Appellees under ERISA, 29
U.S.C. § 1132(a), to enforce her rights under both the short-
term and long-term disability benefit plans. Appellees moved
for summary judgment. Appellees argued, and Appellant
conceded, that the short-term disability plan was an ERISA-
exempt payroll practice and thus Appellant could not seek
review of her denial under ERISA. The District Court
independently found that since the short-term disability plan
was paid from SunTrust’s general assets and was “entirely
separate” from the Employee Benefits Plan, it was “properly
characterized as a payroll practice” and exempt from ERISA.
Foster, 125 F. Supp. 3d at 205. Since Appellant’s “Complaint
7
expressly invoke[d] ERISA alone,” id., the District Court had
no alternative cause of action to adjudicate, and it granted
Appellees summary judgment as to the short-term disability
plan, see id. at 205–06.
As to the long-term disability plan, the District Court
found the plan documents vested Sedgwick with broad
discretionary authority, triggering a deferential standard of
review under Firestone, 489 U.S. at 115. Foster, 125 F. Supp.
3d at 206–07. Applying that standard, the District Court found
Sedgwick had not abused its discretion nor acted arbitrarily or
capriciously in denying Appellant’s claim for long-term
disability given her failure to submit sufficient objective
medical documentation. Id. at 207–10. The District Court
granted Appellees’ motion for summary judgment in full on
August 28, 2015.
Appellant timely moved for reconsideration. Among
other arguments, she asserted that, in spite of her concession,
the District Court committed an error of law in finding that
the short-term disability plan was exempt from ERISA. The
District Court denied her motion for reconsideration on
December 1, 2015.
Appellant appealed to this court on December 3, 2015.
Appellant’s notice of appeal designated only the order
granting Appellees summary judgment and did not
specifically designate the order denying her motion for
reconsideration. However, based on Appellant’s electronic
submissions to the Clerk’s Office, the court’s docket entry on
December 3, 2015, identified Appellant’s notice of appeal “as
to 34 Order on Motion for Reconsideration . . . , [and] 28
Order on Motion for Summary Judgment.” The docket entry
references to “34” and “28” are hyperlinked to each appealed
order in the District Court docket. On January 13, 2016,
8
Appellant submitted her civil docketing statement, Rulings
under Review certificate, statement of issues, and the
Underlying Decision in Case — each of which designated
both the order granting Appellees summary judgment and the
order denying Appellant’s motion for reconsideration. The
parties fully briefed both orders.
II. ANALYSIS
A. Scope of the Appeal
As a threshold matter, we reject Appellees’ claim that we
lack jurisdiction to consider Appellant’s challenge to the order
denying her motion for reconsideration because she failed to
designate it in her notice of appeal. The Court’s records
indicate that Appellant timely and properly gave notice that
she appealed from both orders.
We have jurisdiction to review a mistakenly undesignated
order where “the intent to appeal . . . can be fairly inferred
from appellant’s notice (and subsequent filings) and the
opposing party is not misled by the mistake.” Messina v.
Krakower, 439 F.3d 755, 759 (D.C. Cir. 2006) (internal
quotation marks omitted) (quoting Foretich v. ABC, 198 F.3d
270, 274 n.4 (D.C. Cir. 1999)); see Brookens v. White, 795
F.2d 178, 180–81 (D.C. Cir. 1986) (per curiam). Appellant
timely filed her notice of appeal on December 3, 2015, and
gave sufficient notice in five contemporaneous appellate
filings from December 3, 2015, through January 13, 2016,
that her appeal included a challenge to the District Court’s
denial of her motion for reconsideration, in addition to its
grant of Appellees’ motion for summary judgment. That
provided adequate notice to Appellees. See Messina, 439 F.3d
at 759 (holding that a Rule 28(a)(1) filing provided adequate
notice of the intent to appeal from an undesignated order);
9
Sinclair Broad. Grp., Inc. v. FCC, 284 F.3d 148, 158 (D.C.
Cir. 2002) (deeming statement of issues filed thirty-four days
after the petition for review to be “contemporaneous,” but
motion for stay filed ninety-one days later not
“contemporaneous”). Appellees do not claim to have been
misled as to the scope of the appeal and fully briefed the
issues. Our jurisdiction therefore extends to the order denying
Appellant’s motion for reconsideration.
B. The District Court’s Finding that the Short-Term
Disability Plan is an Exempt “Payroll Practice”
The District Court found that SunTrust’s short-term
disability plan is a “payroll practice” exempt from ERISA.
We agree.
ERISA applies to private “employee benefit plans.” 29
U.S.C. § 1001. The statute defines an employee benefit plan
as “an employee welfare benefit plan” or “an employee
pension benefit plan.” 29 U.S.C. § 1002(3). An “employee
welfare benefit plan” includes:
any plan, fund, or program which was . . . established
or maintained by an employer . . . to the extent that
such plan, fund, or program was established or is
maintained for the purpose of providing for its
participants or their beneficiaries, through the
purchase of insurance or otherwise, (A) medical . . .
care or benefits, or benefits in the event of sickness,
accident, disability . . . .
29 U.S.C. § 1002(1).
There is no dispute that without the Department of
Labor’s regulatory exemption, SunTrust’s short-term
10
disability benefit plan would constitute an “employee welfare
benefit plan” under ERISA. However, the Department of
Labor exempts from ERISA certain “payroll practices,”
including
[p]ayment of an employee’s normal compensation,
out of the employer’s general assets, on account of
periods of time during which the employee is
physically or mentally unable to perform his or her
duties, or is otherwise absent for medical reasons.
29 C.F.R. § 2510.3-1(b)(2). The Supreme Court has upheld
this “payroll practices” exemption, see Massachusetts v.
Morash, 490 U.S. 107, 116–19 (1989), and Appellant does
not contest the legality of the regulation.
In response to Appellees’ motion for summary judgment
in the District Court, Appellant conceded that the short-term
disability benefit plan was a payroll practice. The District
Court nevertheless independently evaluated the plan and
concluded that it was a payroll practice because it was paid
from SunTrust’s general assets and was “entirely separate”
from SunTrust’s ERISA-covered Employee Benefits Plan.
We have no basis to overturn the District Court’s judgment on
this point.
SunTrust’s short-term disability plan clearly fits within
the regulatory definition of “payroll practices.” It is payment
of an employee’s normal compensation; it is paid from the
employer’s general assets; and it is paid on account of time
during which the employee is absent for medical reasons. See
29 C.F.R. § 2510.3-1(b)(2). Indeed, it appears SunTrust
drafted its short-term disability plan to match the regulatory
exemption. Since the parties do not dispute these fundamental
aspects of the short-term disability plan, we might end our
11
inquiry here. Appellant, however, reversed her position after
the District Court granted summary judgment for Appellees.
In her appeal to this court, Appellant now insists that
“[t]he record demonstrates that the relationship between
SunTrust and Sedgwick and the administration of the short-
term disability benefits establishes an on-going administrative
scheme which subjects the Plan to ERISA.” Br. for Appellant
at 5. There are two problems with this argument: First, the
argument comes too late because it was not properly raised
and preserved during the proceedings before the District
Court. See Singleton v. Wulff, 428 U.S. 106, 120–21 (1976)
(noting that appellate courts generally refrain from
considering an issue not passed upon below). Second, the
argument rests on a flawed assumption.
As noted above, before the District Court, Appellant
conceded that the short-term plan was exempt from ERISA.
And it would not matter that Appellant sought to raise the
issue in her motion for reconsideration because the District
Court properly rejected her claim as untimely. See infra Part
II.D. Therefore, the argument that she now raises was never
addressed by the District Court. That resolves the matter. And
in any case, Appellant’s belated claim is misguided. See
Singleton, 228 U.S. at 121 (noting that the “matter of what
questions may be taken up and resolved for the first time on
appeal is one left primarily to the discretion of the courts of
appeals”).
Appellant principally relies on Fort Halifax Packing Co.,
Inc. v. Coyne, 482 U.S. 1 (1987), in support of her contention
that the presence of an ongoing administrative scheme in
SunTrust’s short-term plan compels the conclusion that it is a
non-exempt ERISA plan. Neither Fort Halifax nor any of the
other cases cited by Appellant support this claim. The Court
12
in Fort Halifax merely held that “a Maine statute requiring
employers to provide a one-time severance payment to
employees in the event of a plant closing” was not preempted
by ERISA. Id. at 3; see id. at 3–4. The Court noted that
because the state law at issue only governed a one-time
benefit provision, it did not constitute a “plan” potentially
governed by ERISA nor implicate the need for ERISA
preemption. Id. at 11–12, 14–15. The Court, however, did not
address plans that are exempt from ERISA pursuant to
Department of Labor regulations.
In Fort Halifax the issue was whether the provision of a
certain type of benefit should be construed as a plan that is
within the compass of ERISA. The question here is whether a
benefit program that clearly falls within the compass of
ERISA is nevertheless exempt from ERISA pursuant to
Department of Labor regulations. The answer here is yes.
SunTrust’s short-term disability benefit plan falls squarely
within the exemption under 29 C.F.R. § 2510.3-1(b)(2). See
Stern v. Int’l Bus. Machs. Corp., 326 F.3d 1367, 1373 (11th
Cir. 2003) (applying 29 C.F.R. § 2510.3-1(b) to a benefit
program that would “clearly qualify as an ERISA plan but for
its specific exemption by a reasonably justified regulation”).
Appellant also argues that the fact that a benefit is paid
from general assets does not necessarily exempt a plan from
ERISA. See, e.g., Fort Halifax, 482 U.S. at 7 n.5 (“[ERISA]
has been construed to include severance benefits paid out of
general assets, as well as out of a trust fund”). That may be
true, but it is irrelevant in this case. SunTrust’s short-term
plan presents a tri-fold match to the exemption under 29
C.F.R. § 2510.3-1(b)(2): paying normal wages, from general
assets, on account of work missed due to medical reasons. We
do not need to decide whether one factor is more important
than another, nor how many must be met in order for the
13
exemption to apply. Here, all factors are met, including the
nature of the benefits and the source of the funds. See
Morash, 490 U.S. at 120.
In sum, the short-term disability plan is clearly exempt
from ERISA. Therefore, the District Court properly granted
Sedgwick summary judgment as to that plan.
C. The Deference Due to the Plan Administrator’s
Benefit Determinations Under the Long-Term
Disability Plan
The District Court applied a deferential standard of
review in assessing the plan administrator’s denial of benefits
to Appellant under the long-term disability plan. Appellant
asserts that the District Court should have undertaken de novo
review of her ERISA claim under 29 U.S.C. § 1132(a)(1)(B).
We disagree.
A claim under § 1132(a)(1)(B) is reviewed de novo
except where the plan vests the administrator with
“discretionary authority to determine eligibility for benefits or
to construe the terms of the plan.” Firestone, 489 U.S. at 115(emphasis added). When the terms of a plan confer such
discretion, an administrator’s denial of benefits is reviewed
under an abuse of discretion or arbitrary and capricious
standard, a standard which, in this particular context, we have
referred to as “reasonableness.” Moore v. CapitalCare, Inc.,
461 F.3d 1, 11 (D.C. Cir. 2006). On the record before us, we
conclude that the District Court properly applied a deferential
standard of review because the long-term disability benefit
plan here vests Sedgwick with discretion to construe disputed
terms of the plan and determine eligibility for benefits.
14
In reaching this conclusion, we have looked for guidance
from both Firestone and the Court’s later decisions in Metro.
Life Ins. Co. v. Glenn, 554 U.S. 105 (2008), and Conkright.
The Court’s later cases confirm that, in assessing a claim
under § 1132(a)(1)(B), a court must consider “trust law, the
terms of the plan at issue, and the principles of ERISA.”
Conkright, 559 U.S. at 512; see also Metro Life Ins. Co., 554
U.S. at 110–11. Having done this, we conclude that the
unambiguous grant of discretion to the administrator of the
SunTrust long-term disability plan triggers deferential review
of the administrator’s assessments of benefit claims under the
plan.
1. Principles of Trust Law
In looking to trust law, we “analogize a plan
administrator to the trustee of a common-law trust; and . . .
consider a benefit determination to be a fiduciary act.” Metro.
Life Ins., 554 U.S. at 111. In Firestone, the Supreme Court
concluded that deference was owed to plan administrators,
acting as trustees, “in the exercise of a discretion vested in
them by the instrument under which they act.” 489 U.S. at 111(quoting Nichols v. Eaton, 91 U.S. 716, 724–25 (1875)). In
Conkright, the Supreme Court found trust law “unclear on the
narrow question” before it, whether an administrator’s prior
mistake overrode the necessity of deferential review, but
noted that “if the settlor who creates a trust grants discretion
to the trustee, it seems doubtful that the settlor would want the
trustee divested entirely of that discretion simply because of
one good-faith mistake.” 559 U.S. at 514.
Here, general principles of trust law support our
conclusion that the terms of SunTrust’s long-term disability
plan effectively limit judicial review of administrator
determinations to reasonableness, not de novo. The
15
Restatement (Third) of Trusts recognizes that a trustee’s
powers may be express or implied. RESTATEMENT (THIRD) OF
TRUSTS § 85 reporter’s note cmt. a (2005). And leading
modern treatises “indicat[e] considerable flexibility” in
ascertaining the extent of a trustee’s power as implied by the
terms of a trust instrument. Id. cmt. a. For instance, “[i]f a
settlor has directed the trustee to accomplish a certain
objective, he must be deemed to have intended that the trustee
use the ordinary and natural means of obtaining that result.”
Id. reporter’s note cmt. a (quoting GEORGE G. BOGERT &
GEORGE T. BOGERT, THE LAW OF TRUSTS AND TRUSTEES
§ 551 (rev. 2d ed. 1980)). In other words, a reviewing court
may determine that the settlor intended for “the trustee to
have such power, although he did not in so many words grant
the authority.” Id. (quoting GEORGE T. BOGERT, TRUSTS § 88
(6th ed. 1987)). Likewise, an ERISA plan document may
show that the employer intended for the administrator to have
discretionary powers to construe terms or determine eligibility
if the terms of the plan direct the administrator to obtain
specified objectives of the plan without specifying the means
by which to achieve them.
2. The Terms of SunTrust’s Long-Term Disability
Plan
In assessing the terms of the SunTrust long-term
disability plan, we look first to the Summary Plan
Description. Although the Summary is not itself legally
binding, CIGNA Corp. v. Amara, 563 U.S. 421, 437–38
(2011), it provides important information for beneficiaries
about the plan. In Pettaway v. Teachers Ins. & Annuity Ass’n
of Am., we noted that a Summary Plan Description is an
“ERISA-mandated, plain-language document upon which
plan participants may rely to understand their benefits.” 644
F.3d 427, 433 (D.C. Cir. 2011). We therefore concluded that a
16
Summary may “be examined to determine the appropriate
standard of review.” Id. Pettaway does not take account of the
Court’s decision in CIGNA Corp., but we do not view the
decision issued by this court to be at odds with the direction
given by the Supreme Court. A court may look at a Summary
for guidance, but it must remain mindful that the terms of a
Summary “do not themselves constitute the terms of the
plan.” CIGNA Corp., 563 U.S. at 438.
The Summary Plan Description covering the SunTrust
long-term disability benefit plan references the Health &
Welfare Benefits Handbook, which in turn details the terms of
the plan and explains the administrator’s authority. The
parties do not dispute that the terms of the Benefits Handbook
are binding. See Br. for Appellant at 7; Br. for Appellees at 3.
The Handbook makes it clear that Sedgwick — and
Sedgwick alone — has the power to construe disputed terms
of the plan and determine eligibility for benefits. For instance,
the plan states: “The claims administrator has 45 calendar
days in which to make a determination regarding whether
your medically-documented claim entitles you to a Long-
Term Disability benefit. . . . Once satisfactory proof that you
have been Totally Disabled for 180 calendar days has been
provided to the claims administrator and your application for
LTD benefits has been approved, you will receive a written
notice of the claim approval.” JA 55–56.
The plan elsewhere states:
• “If you are approved for LTD benefits, your
premiums . . . will be waived for as long as you
continue to be totally disabled as determined by the
claims administrator.” JA 46.
17
• “The claims administrator will evaluate the medical
documentation submitted on your behalf and
determine if your condition meets the Plan’s
definition of Total Disability.” JA 48.
• “You are disabled if, due to injury, illness, or
pregnancy supported by objective medical
documentation, you meet the following definition of
disability as determined by the claims administrator:
o You are unable to perform each of the
material duties of the occupation you
regularly perform for SunTrust . . . .” JA 48.
• “[Benefits end on] [t]he date that you fail to provide
satisfactory proof of continuation of total disability.”
JA 52.
• “For purposes of receiving [long-term] benefits,
whether you are disabled will be determined based on
objective medical evidence provided to the claims
administrator about your condition.” JA 57.
Moreover, when the administrator denies a claim, it must
list the specific reason for the denial and the “specific Plan or
policy provisions on which the denial is based.” JA 56. In
exercising this authority, the administrator must of course
interpret and apply the terms of the plan.
Finally, under the long-term plan, any appeal of the
administrator’s denial of benefits is to the administrator. No
one but the administrator determines whether an employee is
eligible for benefits. And there is no detailed rubric by which
the administrator is constrained in determining whether the
definition of disability is met. Instead, the definition is broad,
leaving it to the administrator to construe critical terms and
18
phrases such as “objective medical documentation,” “unable
to perform,” “material duties,” and “satisfactory proof.”
In our view, these unambiguous grants of discretion to
the administrator of the SunTrust long-term disability plan
compel deferential review of the administrator’s assessments
of benefit claims under the plan. Prevailing case law supports
this conclusion.
In Conkright, the plan granted the administrator “broad
discretion in making decisions relative to the Plan.” 559 U.S.
at 512 (internal quotation marks omitted). In Block v. Pitney
Bowes Inc., we surveyed similar “[e]mpowering language”
other courts had found to vest discretion in the administrator.
952 F.2d 1450, 1453 (D.C. Cir. 1992). This language included
statements such as: where “any construction [of the
agreement’s provisions] adopted by the Trustees in good faith
shall be binding,” Cent. States, Se. & Sw. Areas Pension Fund
v. Cent. Transp., Inc., 472 U.S. 559, 568 (1985) (citation and
internal quotation marks omitted); where trustees had “power
to construe [plan] provisions” and “any construction adopted
by the [t]rustees in good faith is binding,” Exbom v. Cent.
States, Se. & Sw. Areas Health & Welfare Fund, 900 F.2d
1138, 1141 (7th Cir. 1990); where administrators had power
“[t]o determine all benefits and resolve all questions
pertaining to the administration, interpretation and application
of Plan provisions,” De Nobel v. Vitro Corp., 885 F.2d 1180,
1186 (4th Cir. 1989); and where the plan charged
administrators to determine “‘which Employees are eligible to
participate in the Plan,’ and [to] ‘provide all parties dealing
with the Plan an interpretation of Plan provisions on
request,’” Curtis v. Noel, 877 F.2d 159, 161 (1st Cir. 1989).
See Block, 952 F.2d at 1453. The long-term disability plan at
issue here, when read as a whole, grants comparable authority
to the plan administrator.
19
In Block itself we considered an explicit grant of
discretion: the administrator had all power “to interpret and
construe the Plan [and] to determine all questions of
eligibility and the status and rights of participants.” Id. at
1452. Nevertheless, we concluded, “[w]hat counts, in sum, is
the character of the authority exercised by the administrators
under the plan.” Id. at 1454 (emphasis added). In interpreting
Firestone we said the Supreme Court “surely did not suggest
that ‘discretionary authority’ hinges on incantation of the
word ‘discretion’ or any other ‘magic word.’” Id. at 1453.
Instead, Firestone “directed lower courts to focus on the
breadth of the administrators’ power,” id., and agreed with the
Fourth Circuit that it “need only appear on the face of the plan
documents that the fiduciary has been ‘given [the] power to
construe disputed or doubtful terms’—or to resolve disputes
over benefits eligibility,” id. (quoting De Nobel, 885 F.2d at
1187).
The grant of discretion to Sedgwick under the SunTrust
long-term disability plan is not as explicit as the language in
Block and the cases cited therein. Nonetheless, we find the
language here is more than sufficient to satisfy the standards
set forth by the Court in Firestone, Metro. Life Ins., and
Conkright. Furthermore, in Block we cited with approval the
First Circuit’s decision in Curtis. See 952 F.2d at 1453. In
Curtis, the court held that provisions stating that the plan
administrator shall determine “which Employees are eligible
to participate in the Plan,” and shall “provide all parties
dealing with the Plan an interpretation of Plan provisions on
request” were sufficient to justify deferential review of the
administrator’s determinations. Curtis, 877 F.2d at 161. Our
decision in Block also states:
Under Firestone, reasonableness review is in order if
the administrator has “discretionary authority to
20
determine eligibility for benefits or to construe the
terms of the plan.” 489 U.S. at 115. . . . Thus, . . .
power to “interpret and construe” the plan or . . .
power to make “final and binding” decisions . . .,
standing alone, would probably meet the Firestone
test for deferential review.
Block, 952 F.2d at 1453 n.4.
Block thus instructs that “discretionary authority” does
not “hinge[] on incantation of the word ‘discretion’ or any
other ‘magic word.’” Id. at 1453. In this case, we find that
SunTrust’s long-term disability plan vested Sedgwick with
discretion through multiple provisions of the plan sufficient to
limit review. We therefore conclude that, according to the
terms of the plan, the District Court correctly applied a
deferential standard of review in assessing the plan
administrator’s denial of benefits to Appellant under the long-
term disability plan.
3. Principles of ERISA
Lastly, we turn to the principles of ERISA to ensure that
the District Court appropriately applied a deferential standard
of review to the long-term disability plan. See Conkright, 559
U.S. at 512. “ERISA represents a careful balancing between
ensuring fair and prompt enforcement of rights under a plan
and the encouragement of the creation of such plans.” Id. at
517 (quoting Aetna Health Inc. v. Davila, 542 U.S. 200, 215
(2004)) (internal quotation marks omitted). Because
administrative and litigation costs can “unduly discourage
employers from offering [ERISA] plans in the first place,”
ERISA encourages the creation of benefit plans and
maintaining high levels of benefits in existing plans by
promoting efficiency and minimizing administrative and
21
litigation costs. Id. (citation and internal quotation marks
omitted). ERISA’s purposes include “assuring a predictable
set of liabilities” through uniform standards and a uniform
remedial scheme. Id. (citation and internal quotation marks
omitted).
“Firestone deference protects these interests and, by
permitting an employer to grant primary interpretive authority
over an ERISA plan to the plan administrator, preserves the
‘careful balancing’ on which ERISA is based.” Id. The
Supreme Court reasoned that Firestone deference promoted
ERISA’s goals of efficiency, predictability, and uniformity
“by encouraging resolution of benefits disputes through
internal administrative proceedings,” allowing the “employer
[to] rely on the expertise of the plan administrator rather than
worry about unexpected and inaccurate plan interpretations
that might result from de novo judicial review,” and “helping
to avoid a patchwork of different interpretations of a plan”
spanning multiple jurisdictions. Id. If employers could not
adopt plans that give administrators discretion, it “might lead
those employers with existing plans to reduce benefits, and
those without such plans to refrain from adopting them.” Id.(quoting Fort Halifax, 482 U.S. at 11).
Firestone instructs us that when discretion is not clearly
granted to the administrator, de novo review is appropriate
because, in that case, deferential review “would afford less
protection to employees and their beneficiaries than they
enjoyed before ERISA was enacted.” 489 U.S. at 113–14.
However, the Court was equally clear in saying that “[n]either
general principles of trust law nor a concern for impartial
decisionmaking . . . forecloses parties from agreeing upon a
narrower standard of review.” Id. at 115.
22
We apply ordinary principles of contractual interpretation
in assessing the terms of an ERISA plan. See M & G
Polymers USA, LLC v. Tackett, 135 S. Ct. 926, 933 (2015);
Heimeshoff v. Hartford Life & Accident Ins. Co., 134 S. Ct.
604, 611–12 (2013); see also Cassidy v. Akzo Nobel Salt, Inc.,
308 F.3d 613, 615 (6th Cir. 2002). As we have already
indicated, the plan documents here evidence an intent on the
behalf of the settlor, SunTrust, to vest the trustee, Sedgwick,
with discretionary power to construe the terms of the plan and
determine eligibility for benefits. SunTrust obviously
intended to grant broad authority to Sedgwick and to rely on
Sedgwick’s expertise in administering the plan. Consequently,
reviewing Sedgwick’s denial of benefits to Appellant with
due deference, as the employer intended, preserves ERISA’s
careful balancing, provides SunTrust with efficiency in
relying on Sedgwick and predictability in uniform liability,
and preserves the incentive to continue providing ERISA
benefits to its employees.
By giving Sedgwick the power to “make a
determination” as to whether a claimant is “entitle[d]” to
benefits, “evaluate” the submitted “objective medical
documentation,” decide whether a claimant’s proof is
“satisfactory,” “determine[]” whether a claimant is “totally
disabled,” selecting which duties are “material” and
determining whether the claimant is “unable to perform
them,” and “approve[]” applications by claimants, SunTrust
unambiguously gave Sedgwick the power to interpret material
terms of the plan and determine eligibility for benefits. JA
46–48, 52. We therefore conclude that the District Court
properly applied a deferential standard of review because,
reading the plan as a whole, it plainly vests Sedgwick with
discretion to construe disputed terms of the plan and
determine eligibility for benefits. The District Court did not
err in reviewing the Sedgwick’s benefit determinations under
23
a deferential standard of review and in concluding that
Sedgwick had not abused its discretion or acted in an arbitrary
or capricious way in denying Appellant’s claim for long-term
disability benefits.
D. Denial of Motion for Reconsideration
We also affirm the District Court’s denial of Appellant’s
motion for reconsideration. A motion for reconsideration “is
discretionary and need not be granted unless the district court
finds that there is an intervening change of controlling law,
the availability of new evidence, or the need to correct a clear
error or prevent manifest injustice.” Firestone v. Firestone, 76
F.3d 1205, 1208 (D.C. Cir. 1996) (per curiam) (citations and
internal quotation marks omitted). None of these factors are
present here.
Appellant acknowledges that she conceded the short-term
disability plan was exempt from ERISA during summary
judgment proceedings. The only ground that Appellant
offered to support her motion for reconsideration was that her
concession was an error. When a party first argues an
unavailing theory of liability, and then attempts to argue an
alternative or contrary position in a motion for
reconsideration, this constitutes neither new evidence nor a
clear error of law sufficient to support a motion for
reconsideration. See Patton Boggs LLP v. Chevron Corp., 683
F.3d 397, 402–03 (D.C. Cir. 2012). Moreover, as discussed
above, the District Court independently and correctly found
that the short-term disability plan was exempt from ERISA.
Appellant argues in the alternative that even if the short-
term plan is not an ERISA plan, it “relates to” the long-term
plan, which is an ERISA plan. See Br. for Appellant at 15. As
a result, she contends ERISA relief must be available to her
24
because a state-law breach of contract claim would not
survive ERISA’s broad preemption. See id. (citing 29 U.S.C.
§ 1144). In other words, Appellant asserts that because
eligibility under the long-term — ERISA — plan is
intertwined with eligibility under the short-term — non-
ERISA — plan, the two are “related,” thereby preempting any
non-ERISA claims for relief. See id. at 16–18. However, as
the District Court noted, “the Supreme Court has been clear
that the ‘relate to’ language in ERISA’s preemption clause
only excludes state-law causes of action in which ‘the
existence of an ERISA plan . . . is a critical factor in
establishing liability.’ Yet that is not the case here, for nothing
in the [long-term plan] would have any bearing on the merits
of a breach-of-contract claim based on the denial of [short-
term] benefits.” 159 F. Supp. 3d at 14 (citation omitted)
(quoting Ingersoll–Rand Co. v. McClendon, 498 U.S. 133,
139–40 (1990)). The District Court correctly ruled that
“because eligibility for [short-term] benefits is not at all
affected by the [long-term plan], no state-law cause of action
based on the [short-term plan] ‘relates’ to the [long-term plan]
in such a way that it would be preempted by ERISA.” Id. at
15. The court thus concluded that, even if not waived,
Appellant’s new theories about the short-term plan provided
no basis for overturning the court’s dismissal.
Therefore, the District Court did not err in denying
Appellant’s motion for reconsideration. We affirm its denial.
III. CONCLUSION
For the foregoing reasons, we affirm the judgment of the
District Court.
So ordered.