Lance v. Retirement Plan of International Paper Co. , 331 F. App'x 251 ( 2009 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 08-1295
JOBIE LANCE,
Plaintiff - Appellant,
v.
RETIREMENT PLAN OF INTERNATIONAL PAPER COMPANY,
Defendant - Appellee.
Appeal from the United States District Court for the District of
South Carolina, at Charleston. C. Weston Houck, Senior District
Judge. (2:06-cv-03211-CWH)
Argued: March 25, 2009 Decided: May 29, 2009
Before WILLIAMS, Chief Judge, WILKINSON, Circuit Judge, and
David A. FABER, Senior United States District Judge for the
Southern District of West Virginia, sitting by designation.
Affirmed by unpublished opinion. Senior Judge Faber wrote the
opinion, in which Chief Judge Williams and Judge Wilkinson
joined.
ARGUED: Nathaniel W. Bax, FOSTER LAW FIRM, LLP, Greenville,
South Carolina, for Appellant. Susan P. Dion, MCGUIREWOODS,
LLP, Charlotte, North Carolina, for Appellee. ON BRIEF: Robert
E. Hoskins, FOSTER LAW FIRM, LLP, Greenville, South Carolina,
for Appellant. Bruce M. Steen, MCGUIREWOODS, LLP, Charlotte,
North Carolina, for Appellee.
Unpublished opinions are not binding precedent in this circuit.
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FABER, Senior District Judge:
Jobie Lance appeals the district court’s grant of judgment
in favor of the Retirement Plan of International Paper Company
with regard to the plan administrator’s denial of Lance’s claim
for disability retirement benefits. For the reasons set forth
below, we affirm.
I.
Appellant Jobie Lance (“Lance”) is a former employee of
International Paper Company (“IP”), where he worked for
approximately thirty years as a process specialist. Lance, who
has a vocational associate’s degree in mechanical operation,
previously served in the United States Army as a heavy equipment
operator. Between 1982 and 2005, he also owned and operated two
small businesses, one through which he installed and repaired
home air conditioning units, and the other through which he
repaired automobile air conditioners.
As an IP employee, Lance participated in the company’s
retirement plan (“the plan”), which included the provision of
retirement disability benefits to qualified recipients suffering
from a “disability,” defined as follows:
“Disability” or “Disabled” means a total disability
which 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
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by education, training or experience and which is
likely to be permanent during the remainder of the
Participant’s life, provided that the Plan
Administrator finds, and a physician or physicians
designated by the Plan Administrator certify, that the
Participant is Disabled.
(JA 216.)
Benefits paid pursuant to the plan are provided by a
separate trust. Although IP funds this trust, it has no access
to the assets of the trust for its own purposes. The review and
processing of disability claims under the plan is conducted by
Sedgwick Claims Management Service (“Sedgwick”). Sedgwick, as
plan administrator, is given discretionary power and authority
to interpret the plan and determine benefit eligibility, among
other responsibilities. (JA 195.)
Over the years, Lance developed neck and back problems as a
result of a number of accidents. He suffered falls with
resultant back injuries in 1993 and 1999, and was involved in a
rear-end automobile collision in 2004. From 1993 through 2006,
he underwent no fewer than four cervical fusions, and received
steroid injections to his spine. His treating physician, George
Khoury, M.D., diagnosed him with cervical and lumbar disc
disease. These medical problems caused Lance to end his
employment with IP on February 4, 2005.
In a letter to IP dated June 7, 2005, Dr. Khoury opined
that Lance’s cervical disc disease constituted a “permanent
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partial disability” rendering him unable to return to his former
position as a process specialist. (JA 102.) Dr. Khoury
explained that Lance was, at that time, “undergoing a functional
capacity evaluation to determine his exact level of
functioning,” and that the doctor would be able to make a
statement after receiving the results of the evaluation. (Id.)
Lance completed a disability application form on March 16,
2006, listing the cause of his disability as surgery to his neck
and a degenerating disc in his lower back resulting from a fall.
(JA 26.) On the accompanying functional assessment form, Dr.
Khoury gave Lance’s condition as cervical and lumbar disc
disease, with pain in the neck, arm, and lower back. (JA 33.)
Dr. Khoury specifically concluded, however, that Lance was not
“totally disabled,” but rather only “partially disabled.” (JA
34.) Moreover, the physician did not feel that Lance’s
condition was likely to be permanent. (Id.) Based on his
review, Dr. Khoury determined that Lance had a “severe
limitation of functional capacity,” and was “capable of minimal
(sedentary) activity.” 1 (JA 36.)
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More particularly, Dr. Khoury determined that, during an
eight-hour work day, Lance could stand or walk for three to five
hours and could sit for the same period; that he could lift ten
to twenty pounds, but only five pounds frequently; that he could
grasp, push and pull, perform fine manipulation, and use his
feet to operate foot controls; but that he was incapable of
(Continued)
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Upon receipt of Lance’s medical records, Sedgwick
commissioned Richard A. Silver, M.D., a board-certified
orthopedic surgeon, to perform an independent medical review of
Lance’s claim. (JA 77-80.) Dr. Silver’s review led him to
conclude that Lance’s subjective complaints were not
substantiated by objective clinical findings:
The claimant has a solid fusion of his cervical spine
with no documentation of any loss of functionality of
cervical spine. There is no documentation of any loss
of functionality of right or left upper extremity and
there are no focal neurological deficits in the upper
extremities.
The claimant does have multilevel discogenic disc
disease at L2-3, L3-4, L4-5, and L5-S1. The claimant
has no documentation of any loss of functionality in
the lumbosacral spine. The claimant has no
documentation of any loss of functionality in the
right or left lower extremity. The claimant is
capable of being gainfully employed on a medical
evidence based review of the medical records and being
fit for full duty at medium work to medium-heavy work
as delineated above.
(JA 78-79.)
In the course of Sedgwick’s review of Lance’s claim, his
prior positions, both with IP and in his air conditioning and
HVAC businesses, were evaluated by Zenia Andrews, JAS, to
classify the level of exertion required. She reasoned that the
process specialist position should be classified as “medium to
bending, stooping, climbing, or reaching above shoulder level.
(JA 35.)
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heavy duty to accommodate occasional lifting over 45 pounds.”
(JA 82.) His work in automobile air conditioning and HVAC
repair was classified as “medium duty” work, however, as it
necessitated the occasional exertion of 20 to 50 pounds of
force, the frequent exertion of 10 to 25 pounds of force, or the
constant exertion of up to 10 pounds of force to move objects.
(Id.)
Because the medical evidence failed to indicate that Lance
was unable to perform at the level required by his previous
positions, both the disability specialist and the manager
handling Lance’s claim recommended denial of his request for
benefits. (JA 87-88.) In a letter dated June 29, 2006,
Sedgwick informed Lance of its determination that he did not
meet the eligibility requirements for disability retirement
benefits under the plan. (JA 90-93.) In accordance with
Article XII, Section 12.07(a) of the plan, the letter included
the reasons for denial and references to pertinent provisions of
the plan on which the denial was based, as well as an
explanation of the appeal procedure. (JA 90-93, 198.)
Lance appealed Sedgwick’s decision by letter dated July 6,
2006, and included additional medical documentation in support
of his claim. (JA 97.) Consequently, Sedgwick commissioned
three additional physicians to perform independent medical
reviews of Lance’s claim. Each of these physicians essentially
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opined that, excepting periods of recuperation after his back
surgeries, Lance did not have a disability preventing him from
returning to his prior positions. (JA 108-18.) On this basis,
Sedgwick’s disability retirement committee determined that the
denial of benefits should be upheld. (JA 123.)
This action followed, with Lance filing suit under the
Employee Retirement Income Security Act of 1974 (“ERISA”), 29
U.S.C. § 1132, for a declaration of entitlement to benefits
under the plan. In granting judgment in favor of appellee on
February 28, 2008, the district court found “no evidence in the
record which suggests that the Plan’s denial of Lance’s claim
was unreasonable, contrary to the Plan’s terms, or otherwise an
abuse of discretion.” (JA 421.) It is from this ruling that
Lance appeals.
II.
Where an ERISA plan confers upon its administrator
discretionary authority in the exercise of its power, the
administrator’s denial of benefits is reviewed under an abuse-
of-discretion standard. Booth v. Wal-Mart Stores, Inc. Assocs.
Health & Welfare Plan, 201 F.3d 335, 341 (4th Cir. 2000). Such
a discretionary decision “will not be disturbed if reasonable,
even if the court itself would have reached a different
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conclusion.” Id. (citing Firestone Tire & Rubber Co. v. Bruch,
489 U.S. 101, 111 (1989)).
In weighing the reasonableness of the plan administrator’s
determination, the court considers the following factors, among
others:
(1) the language of the plan; (2) the purposes and
goals of the plan; (3) the adequacy of the materials
considered to make the decision and the degree to
which they support it; (4) whether the fiduciary’s
interpretation was consistent with other provisions in
the plan and with earlier interpretations of the plan;
(5) whether the decisionmaking process was reasoned
and principled; (6) whether the decision was
consistent with the procedural and substantive
requirements of ERISA; (7) any external standard
relevant to the exercise of discretion; and (8) the
fiduciary’s motives and any conflict of interest it
may have.
Booth, 201 F.3d at 342-43; Champion v. Black & Decker (U.S.)
Inc., 550 F.3d 353, 359 (4th Cir. 2008).
With respect to the eighth factor above, appellant argues
that the United States Supreme Court’s decision in Metropolitan
Life Insurance Co. v. Glenn, 128 S. Ct. 2343 (2008), which was
issued subsequent to the district court’s decision below,
altered the standard of review such that remand to the district
court is necessary. The Court in Glenn held that a plan
administrator operates under a conflict of interest where it
serves in the dual role of evaluating claims and also paying
claims. Id. at 2346, 2348. Such a conflict of interest,
however, does not change the standard of review in ERISA cases.
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Rather, “when reviewing an ERISA plan administrator’s
discretionary determination, a court must review the
determination for abuse of discretion and, in doing so, take the
conflict of interest into account only as ‘one factor among
many’ that is relevant in deciding whether the administrator
abused its discretion.” Champion, 550 F.3d at 358 (quoting
Glenn, 128 S. Ct. at 2351).
Appellant’s argument fails, in any case, because the plan
at issue does not operate under a conflict of interest as
contemplated by Glenn. As the district court correctly noted,
“[b]ecause the Plan’s benefits are funded by a separate trust to
which International Paper does not have access for its own
purposes, the Plan does not have significant incentives to
benefit itself by denying benefits. Furthermore, the Plan has a
separate claims administrator, Sedgwick.” (JA 420.) To the
extent this type of plan structure creates any conflict of
interest on the part of its administrator, that conflict may be
deemed of such little importance as to recede “to the vanishing
point.” See Glenn, 128 S. Ct. at 2351. See also De Nobel v.
Vitro Corp., 885 F.2d 1180, 1191-92 (4th Cir. 1989).
It is more than evident that the other Booth factors, which
were properly applied by the district court, weigh in favor of
appellee. Under the plain language of the plan, Lance would
only have been entitled to disability retirement benefits if
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suffering from a medically determinable, permanent, total
disability rendering him incapable of performing any occupation
for which he is qualified. Even under the assessment of Dr.
Khoury, upon whose diagnosis appellant depends, Lance’s
condition could be considered only partially disabling.
Importantly, Dr. Khoury did not believe that Lance’s condition
was likely to be permanent, as required to receive benefits
under the terms of the plan. Considering Dr. Khoury’s opinion
and the opinions of the four physicians it commissioned to
review Lance’s claim, Sedgwick’s denial of benefits was entirely
reasonable. Accordingly, the judgment of the district court is
AFFIRMED.
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