Ariana M. v. Humana Health Plan of Tex., Inc.

Case: 16-20174 Document: 00514368861 Page: 1 Date Filed: 03/01/2018

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

United States Court of Appeals

No. 16-20174 Fifth Circuit

FILED

March 1, 2018

ARIANA M., Lyle W. Cayce

Clerk

Plaintiff – Appellant

v.

HUMANA HEALTH PLAN OF TEXAS, INCORPORATED,

Defendant – Appellee

Appeal from the United States District Court

for the Southern District of Texas

Before STEWART, Chief Judge, and JOLLY, JONES, SMITH, DENNIS,

CLEMENT, PRADO, OWEN, ELROD, SOUTHWICK, HAYNES, GRAVES,

HIGGINSON, and COSTA, Circuit Judges. *

GREGG COSTA, Circuit Judge, joined by STEWART, Chief Judge, DENNIS,

PRADO, SOUTHWICK, HAYNES, GRAVES, and HIGGINSON, Circuit

Judges:

When an ERISA plan lawfully delegates discretionary authority to the

plan administrator, a court reviewing the denial of a claim is limited to

assessing whether the administrator abused that discretion. Firestone Tire &

Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989). For plans that do not have valid

delegation clauses, the Supreme Court has held that “a denial of benefits

*Judge Jolly, now a Senior Judge of this court, participated in the consideration of this

en banc case. Judges Willett and Ho were not on the court when this case was heard en banc.

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challenged under § 1132(a)(1)(B) is to be reviewed under a de novo standard.”

Id. For a quarter century, we have interpreted that holding to apply only to a

denial of benefits based on an interpretation of plan language. The result is a

bifurcated standard of review for challenges in our circuit to the denial of

ERISA benefits. Courts reviewing challenges to the legal interpretation of a

plan do not, as Firestone says, give any deference to the administrator’s view

of plan language. But challenges to an administrator’s factual determination

that a beneficiary is not eligible are reviewed under the same abuse-of-

discretion standard that applies when plans have delegated discretion. Pierre

v. Conn. Gen. Life Ins. Co., 932 F.2d 1552, 1562 (5th Cir. 1991). When Pierre

was decided, it created a circuit split with one other court of appeals that had

read Firestone to set a default de novo standard for both legal and factual

determinations. Reinking v. Phila. Am. Life Ins. Co., 910 F.2d 1210, 1213–14

(4th Cir. 1990), overruled on other grounds by Quesinberry v. Life Ins. Co. of N.

Am., 987 F.2d 1017 (4th Cir. 1993). In the time since, seven other courts of

appeals have chimed in. Every one has taken the view that the standard of

review does not depend on whether the denial is deemed to be based on legal

or factual grounds.

We thus have long stood alone in limiting Firestone’s de novo review to

denials based on interpretations of plan terms. Our outlier view did not affect

a great number of ERISA cases, however, because delegation clauses that

remove a case from the default standard of Firestone are so prevalent. But the

importance of this issue may be growing. As part of a trend in a number of

states, 1 Texas recently enacted a law banning insurers’ use of delegation

1 Twenty-six states, including Texas, have moved to prohibit discretionary clauses

either through statute or regulatory action. Nat’l Ass’n of Ins. Comm’rs, Prohibition on the

Use of Discretionary Clauses Model Act ST-42-3–6 (2014), http://www.naic.org/store/

free/MDL-42.pdf. Louisiana and Mississippi have not taken any such action. Id. ST-42-4.

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clauses. TEX. INS. CODE § 1701.062(a). Assuming that the antidelegation

statute is not preempted by federal law—something we do not decide today as

that defense has not been asserted—a lot more ERISA cases will be subject to

Firestone’s default standard of review. So we granted en banc review of this

case to reconsider Pierre and determine the default standard of review that

applies when a beneficiary challenges a plan denial based on a factual

determination of ineligibility.

I.

Ariana M. is a dependent covered by an Eyesys Vision Inc. group health

plan. Humana Health Plan of Texas, Inc. insures and makes benefits

determinations for that plan. So when Ariana was admitted to Avalon Hills, a

facility that treats eating disorders, Humana determined whether and for how

long to cover her partial hospitalization. According to the plan’s terms, partial

hospitalization includes comprehensive treatment for a minimum of five hours

per day, five days a week. This treatment is more intensive than any form of

outpatient care.

When she was admitted, Ariana had over 100 self-inflicted cuts on her

body, while her escalating eating disorder interfered with her ability to lead a

normal life. This was no isolated occurrence. By that time, Ariana had a six-

year history of eating disorders, though she claimed that her body-image

dissatisfaction dated back to early childhood.

A beneficiary is only eligible for partial hospitalization for mental health

services if the treatment is “medically necessary.” Medically necessary

services are those “that a health care practitioner exercising prudent clinical

judgment would provide to his or her patient for the purpose of preventing,

evaluating, diagnosing or treating an illness or bodily injury, or its symptoms.”

Ariana’s treatment lasted from April to September 2013. Though

Humana, at various points, denied certification for continued treatment—

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reversing course only on appeal by Avalon Hills—it did eventually authorize

forty-nine days of partial hospitalization. But Humana declined to allow

partial hospitalization beyond June 5th, claiming it was no longer medically

necessary.

In reaching this conclusion, Humana had two doctors evaluate Ariana’s

records. Dr. Manjeshwar Prabhu—a contract physician with Humana’s

behavioral-health vendor—conducted the initial review, finding that Ariana no

longer qualified for treatment under the Mihalik criteria. Mihalik provides a

set of privately licensed guidelines used to evaluate the need for certain

medical services. In Prabhu’s view, Ariana posed no imminent danger to

herself or others and showed no medical instability or functional impairments,

so a lower level of care, such as an intensive outpatient treatment, was

appropriate. Though Avalon Hills—whose physicians participated in a peer-

to-peer review of Ariana’s case with Prabhu—acknowledged she was neither

suicidal nor psychotic, it informed Prabhu that Ariana was not progressing in

her treatment. In the view of a therapist at the facility, Ariana appeared to be

at her “baseline behaviors.”

Avalon Hills appealed the denial. That prompted Humana to seek an

additional review from Dr. Neil Hartman, a psychiatrist with Advanced

Medical Reviews. He evaluated Ariana’s medical records—including Prabhu’s

determination—and consulted her treating physicians. Hartman concluded

that Ariana’s partial hospitalization was no longer necessary because she was

“medically stable,” “not aggressive,” and “not a danger to [herself or others].”

Ariana then filed this lawsuit. The plan has a clause granting to

Humana “full and exclusive discretionary authority to: [i]nterpret plan

provisions; [m]ake decisions regarding eligibility for coverage and benefits; and

[r]esolve factual questions relating to coverage and benefits.” Early in the

lawsuit, Ariana argued that the clause was unenforceable because Texas

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prohibits discretionary clauses. TEX. INS. CODE § 1701.062(a). In response,

Humana agreed to not rely on the delegation clause (and thus did not raise a

preemption defense to the Texas statute) and said it would defend its denial

under the default “de novo” standard. Despite using the “de novo” label,

Humana made clear that it was invoking the “abuse of discretion” standard

Pierre applies to factual determinations even when a plan does not grant the

administrator discretion. Ariana argued that the Texas law did not just

invalidate delegation clauses but also overrode Pierre’s deferential standard of

review.

The district court disagreed that Texas law could dictate the ERISA

standard of review. The court thus applied Pierre and assessed whether

Humana’s decision fell “somewhere on a continuum of reasonableness—even if

on the low end.” Ariana M. v. Humana Health Plan of Tex., Inc., 163 F. Supp.

3d 432, 439 (S.D. Tex. 2016) (quoting Holland v. Int’l Paper Co. Ret. Plan, 576

F.3d 240, 247 (5th Cir. 2009)). It held that Humana did not abuse its discretion

in finding Ariana’s continued partial hospitalization medically unnecessary—

Prabhu and Hartman both conducted peer-to-peer reviews with her treating

physicians, reviewed her medical files, provided reports citing the Mihalik

criteria, and explained why she did not qualify for continued partial

hospitalization under the plan. Id. at 442. As a result, the district court

granted Humana’s motion for summary judgment and denied Ariana’s. Id. at

443.

A panel of this court affirmed. Ariana M. v. Humana Health Plan of Tex.,

Inc., 854 F.3d 753, 762 (5th Cir. 2017). The panel rejected Ariana’s contention

that the Texas statute mandated a specific standard of review, finding instead

that the “plain text of the statute provides only that a discretionary clause

cannot be written into an insurance policy.” Id. at 757. Therefore, Texas’s

antidelegation law did not alter “normal Pierre deference.” Id. The panel also

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recognized that Pierre deference, under this court’s long-held view, dictated

abuse of discretion as the appropriate standard to review an administrator’s

factual determinations, irrespective of whether the ERISA plan contains a

discretionary clause. Id. at 756–57 (citing Pierre, 932 F.2d at 1562 and Dutka

ex rel. Estate of T.M. v. AIG Life Ins. Co., 573 F.3d 210, 212 (5th Cir. 2009)).

But the entire panel joined a concurring opinion questioning Pierre’s

continuing vitality given that every other circuit to consider the standard of

review issue has decided otherwise. Id. at 762 (Costa, J., specially concurring).

A number of amici, including the Department of Labor and the Texas

Department of Insurance, supported Ariana’s request for full court

reconsideration of Pierre. We granted the petition.

II.

We first consider Ariana’s argument that the Texas statute dictates the

standard of review for ERISA cases. That is not our reading of the

antidelegation law. It provides that an “insurer may not use a document

described by Section 1701.002”—which includes health insurance policies—“in

this state if the document contains a discretionary clause.” TEX. INS. CODE

§ 1701.062(a). In turn, the law defines discretionary clauses to encompass any

provision that “purports or acts to bind the claimant to, or grant deference in

subsequent proceedings to, adverse eligibility or claim decisions or policy

interpretations by the insurer” or “specifies . . . a standard of review in any

appeal process that gives deference to the original claim decision or provides

standards of interpretation or review that are inconsistent with the laws of this

state, including the common law.” TEX. INS. CODE § 1701.062(b)(1), (2)(D).

The Texas insurance code provision thus only renders discretionary

clauses unenforceable; it does not attempt to prescribe the standard of review

for federal courts deciding ERISA cases. As to whether federal law preempts

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this state action making discretionary clauses unenforceable, we do not

consider that defense because Humana did not assert it. 2

III.

With the delegation clause out of the picture and federal ERISA law

providing the standard of review, this case presents us with an opportunity to

reconsider Pierre. It held that “for factual determinations under ERISA plans,

the abuse of discretion standard of review is the appropriate standard; that is,

federal courts owe due deference to an administrator’s factual conclusions that

reflect a reasonable and impartial judgment.” 932 F.2d at 1562. No other

circuit agrees that Firestone’s default de novo standard is limited to the

construing of plan terms. See Shaw v. Conn. Gen. Life Ins. Co., 353 F.3d 1276,

1285 (11th Cir. 2003); Riedl v. Gen. Am. Life Ins. Co., 248 F.3d 753, 756 (8th

Cir. 2001); Kinstler v. First Reliance Standard Life Ins. Co., 181 F.3d 243, 250–

51 (2d Cir. 1999); Walker v. Am. Home Shield Long Term Disability Plan, 180

F.3d 1065, 1070 (9th Cir. 1999); Rowan v. Unum Life Ins. Co. of Am., 119 F.3d

433, 435–36 (6th Cir. 1997); Ramsey v. Hercules Inc., 77 F.3d 199, 203–05 (7th

Cir. 1996); Luby v. Teamsters Health, Welfare, & Pension Trust Funds, 944

F.2d 1176, 1183-84 (3d Cir. 1991); Reinking, 910 F.2d at 1213–14 (all applying

de novo review when the plan does not grant discretion). 3

2 Each court to decide this issue has concluded that ERISA does not preempt state

antidelegation statutes. See Fontaine v. Metro. Life Ins. Co., 800 F.3d 883, 891 (7th Cir.

2015); Standard Ins. Co. v. Morrison, 584 F.3d 837, 842–45 (9th Cir. 2009); Am. Council of

Life Insurers v. Ross, 558 F.3d 600, 604–09 (6th Cir. 2009); see also Hancock v. Metropolitan

Life Ins. Co., 590 F.3d 1141, 1149 (10th Cir. 2009) (stating that a full ban on discretionary

clauses would not likely be preempted, even though ERISA preempted a state statute

regulating them).

3 Gross v. Sun Life Assurance Company of Canada suggests that the First Circuit

takes the same view. 734 F.3d 1, 17 (1st Cir. 2013) (noting the court’s task of independently

weighing the facts and opinions in the administrative record and “giv[ing] no deference to the

administrator’s opinions or conclusions”).

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All but one of those courts of appeals had the opportunity to consider

Pierre, and all that did so rejected its reasoning. They cited a number of

reasons for not following our view. At the most basic level, they disagreed with

Pierre’s reading of Firestone. That Supreme Court decision addressed a

dispute about plan interpretation rather than one involving a factual

determination that a beneficiary was not entitled to benefits. But every other

circuit has read its holding as applying to both situations. That is because

Firestone holds that “a denial of benefits challenged under § 1132(a)(1)(B) is to

be reviewed under a de novo standard unless the benefit plan gives the

administrator or fiduciary discretionary authority to determine eligibility for

benefits or to construe the terms of the plan.” 489 U.S. at 115. The first part

of this pronouncement—“a denial of benefits”—does not distinguish denials

that rest on contractual interpretation from those based on a factual

assessment of eligibility; any denial is “to be reviewed under a de novo

standard.” Id. The end of the sentence does make that distinction in excepting

from de novo review denials when plans delegate “discretionary authority to

determine eligibility for benefits.” 4 Id. Why would a discretionary clause be

4 Judge Jolly’s dissenting opinion contends that “eligibility for benefits” refers only to

whether a person or type of claim is covered under the plan as a legal matter, not to the

factual question at issue here regarding whether the plaintiff’s claim should be paid.

Dissenting Op. at 3 n.1. For starters, this ignores that Firestone says “a denial of benefits,”

without qualification, is reviewed de novo, and that the “eligibility for benefits” language

appears in the clause saying a grant of discretionary authority can change that standard.

489 U.S. at 115. So the more limited meaning of “eligibility” the dissent urges would only

narrow the effect of discretionary clauses in being able to change the default de novo standard

for “a denial of benefits.”

More fundamentally, the dissent’s understanding of “eligibility” is at odds with

ERISA’s text. What the dissent describes as the initial coverage determination is a question

of whether a claimant is a “participant” or “beneficiary” (Ariana is the latter as a dependent

of a participant). The statute defines a “participant” as “any employee or former employee of

an employer . . . who is or may become eligible to receive a benefit of any type from an

employee benefit plan.” 29 U.S.C. § 1002(7) (emphasis added). So someone is covered under

the plan even if they are not yet eligible to receive a benefit, such as someone still working

who does not yet receive pension payments or someone covered under a medical policy who

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needed for that type of decision to escape de novo review if eligibility

determinations were not subject to that standard of review as a default matter?

See Petrilli v. Drechsel, 910 F.2d 1441, 1446 (7th Cir. 1990). And while

eligibility determinations may of course turn on plan interpretations, in

differentiating between the two types of denials Firestone seemed to view

eligibility determinations as encompassing more than just “constru[ing] the

terms of the plan.” 489 U.S. at 115; see Luby, 944 F.2d at 1183 (explaining that

Firestone “strongly suggests that the Court intended de novo review to be

mandatory where administrators were not granted discretion, regardless of

whether the denials under review were based on plan interpretations” because

otherwise “the Court could simply have omitted the words ‘to determine

eligibility for benefits’” (quoting Petrilli, 910 F.2d at 1446)); see also Rowan,

119 F.3d at 436 (noting that benefits eligibility determinations require

administrators to “determine both the facts underlying claims and whether

those facts entitle claimants to benefits under the terms of the plan”).

has not yet been to a doctor. That someone can be covered under the policy who is not yet

“eligible” to receive benefits shows that an “eligibility determination” is not the same question

as whether the person is covered. Our cases have long reflected this understanding in using

“eligibility determination” to describe claims like this one that turn on factual entitlement to

benefits. See, e.g., Atkins v. Bert Bell/Pete Rozelle NFL Player Ret. Plan, 694 F.3d 557, 569–

70 (5th Cir. 2012) (evaluating whether plaintiff was “eligible” for disability benefits based on

multiple doctors’ reports); Ellis v. Liberty Life Assurance Co. of Boston, 394 F.3d 262, 274 (5th

Cir. 2004) (finding that plan fiduciaries are not required to obtain proof of substantial change

in a plan recipient’s medical condition after the “initial determination of eligibility” if they

receive additional medical information suggesting “a covered employee” is no longer “eligible

for benefits”); Meditrust Fin. Servs. Corp. v. Sterling Chems., Inc., 168 F.3d 211, 213–14 (5th

Cir. 1999) (labelling a factual dispute about “medical necessity” as a question of “eligibility

determination”). Finally, both the majority and dissenting opinions in the Supreme Court’s

Rush Prudential decision—a case discussed more below—treated a factual medical necessity

issue as an eligibility determination. Rush Prudential HMO, Inc. v. Moran, 536 U.S. 355,

386–87 (2002) (stating that an Illinois law requiring an “independent reviewer’s de novo

examination” of medical necessity “mirrors the general or default rule we have ourselves

recognized” in Firestone); id. at 398 (Thomas, J., dissenting) (calling the issue “purely an

eligibility decision with respect to reimbursement”).

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As support for cabining de novo review only to plan interpretation, our

court cited a reference early in Firestone to “actions challenging denials of

benefits based on plan [term] interpretations.” Pierre, 932 F.3d at 1556

(quoting Firestone, 489 U.S. at 108). Immediately following this language,

however, the Court said it “express[ed] no view as to the appropriate standard

of review for actions under other remedial provisions of ERISA.” Firestone, 489

U.S. at 108. This suggests Firestone was articulating a general default

standard of review for Section 1132(a)(1)(B) actions—the provision that allows

judicial review of benefit denials—rather than making the fine distinction

Pierre saw between the review of factual determinations and legal

interpretations. See Luby, 944 F.2d at 1183.

In addition to parsing the language used in Firestone, courts rejecting

Pierre have noted the Supreme Court’s observation that reading ERISA to

provide a default standard of deference would undermine congressional intent

as it “would afford less protection to employees and their beneficiaries than

they enjoyed before ERISA was enacted.” Firestone, 489 U.S. at 113–14. That

concern, especially as it is imbued with concerns about the conflicts that

administrators sometimes have, would not seem to be greater for legal

interpretation than for factual ones. Rowan, 119 F.3d at 436; Ramsey, 77 F.3d

at 204.

Other courts have also questioned the support Pierre found in trust law

for its factual/legal dichotomy. Pierre reasoned that an administrator’s factual

determinations are inherently discretionary, in contrast to legal

interpretations. It thus concluded that the Restatement (Second) of Trusts

supports giving deference to an ERISA plan administrator’s resolution of

factual disputes even when the plan does not grant discretion. See Pierre, 932

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F.2d at 1558 (citing Restatement (Second) of Trusts §§ 186(b), 187). 5 In a

thorough examination of trust law, the Seventh Circuit disagreed with Pierre’s

assessment. It recognized that Firestone likely flipped the presumption of

trust law, which traditionally assumes deference unless the trust says

otherwise. 6 Ramsey, 77 F.3d at 203–05. But it found no trust law principles

that distinguish between factual and legal determinations, as Pierre does. Id.

It concluded that the critical trust law distinction for the scope of judicial

review is between powers a trust document makes discretionary and those it

makes mandatory. Id. at 203; see also Rush Prudential HMO, Inc. v. Moran,

536 U.S. 355, 386 (2002) (noting that nothing in ERISA “requires that these

kinds of decisions be so ‘discretionary’ in the first place” and “whether they are

is simply a matter of plan design or the drafting of an HMO contract”). To

illustrate why factual determinations do not always fall on the discretionary

side of that divide, Ramsey points out that equity courts have long applied

nondeferential review to a “host of factually specific decisions including

5 Section 186(b) provides that “the trustee can properly exercise such powers

and only such powers as . . . are necessary or appropriate to carry out the purposes of

the trust and are not forbidden by the terms of the trust.” Restatement (Second) of

Trusts § 186(b). Section 187, meanwhile, states that “[w]here discretion is conferred

upon the trustee with respect to the exercise of a power, its exercise is not subject to

control by the court, except to prevent an abuse by the trustee of his discretion.” Id.

§ 187.

6 A leading trust scholar left no doubt of what he thought about Firestone’s

reading of trust law. See John H. Langbein, The Supreme Court Flunks Trusts, 1990

SUP. CT. REV. 207. Professor Langbein explained that the Supreme Court reversed

the traditional trust-law presumption that assumed “[t]he trustee ha[d] discretion

unless the instrument or some particular doctrine of trust law denies discretion.” Id.

at 219. Despite his sharp critique of the Supreme Court’s reading of trust law,

Professor Langbein believes the Court correctly adopted de novo review in light of

“the regulatory purposes of ERISA.” John H. Langbein, Trust Law as Regulatory

Law: The UNUM/Provident Scandal and Judicial Review of Benefit Denials Under

ERISA, 101 NW. U. L. REV. 1315, 1323 n.47 (2007). Of course, regardless of whether

Firestone was right or wrong in setting a default de novo standard, we are bound to

apply it.

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reviews of accounts and investment decisions.” 77 F.3d at 203; see also Rowan,

119 F.3d at 436 (noting that the Restatement Pierre cited does not distinguish

between factual and legal determinations nor have “courts reviewing the

actions of trustees”).

Pierre’s analogy to the deference that reviewing courts afford agency

decisions and a district court’s factfinding has also been criticized. One reason

courts have found the comparison inapt is that agencies and trial judges are

required to apply a developed set of constitutional and statutory procedural

protections. Ramsey, 77 F.3d at 205. They are also impartial whereas a plan

administrator often has an incentive to reach decisions “advantageous to its

own interests.” Rowan, 119 F.3d at 436 (quoting Perez v. Aetna Life Ins. Co.,

96 F.3d 813, 824 (6th Cir. 1996)); see also Ramsey, 77 F.3d at 205 (noting that

for both factual and legal determinations made by agencies, the Administrative

Procedure Act requires de novo review when procedural safeguards are

lacking); cf. Langbein, Trust Law as Regulatory Law, at 1326 (explaining that

ERISA law differs from trust law in the “crucial respect” that “[t]rust law

presupposes that the trustee who administers a trust will be disinterested, in

the sense of having no personal stake in the trust assets”). Indeed, an entire

body of case law has arisen to address this concern about conflicts in ERISA

law, as a conflict can influence the degree of deference afforded a plan even

when it is granted discretionary authority. See Metro. Life Ins. Co. v. Glenn,

554 U.S. 105, 117 (2008) (requiring that district courts “take account” of

conflicts in evaluating benefits denials, giving them more weight when

“circumstances suggest a higher likelihood that [the conflict] affected the

benefits decision”).

The passage of time has cast doubt on another reason Pierre cited for

giving deference: its prediction that de novo review of factual determinations

would result in a vast number of trials that would burden courts and reduce

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the funds available to pay legitimate claims. 932 F.2d at 1559. But we no

longer have to guess about the impact of de novo review as eight circuits have

surpassed, or are nearing, two decades of experience under that regime. There

is no indication that ERISA trials have depleted plan funds or overrun courts

in those circuits, which are still able to grant summary judgment when the

record warrants it. See, e.g., Wilkins v. Baptist Healthcare Sys., Inc., 150 F.3d

609, 616 (6th Cir. 1998) (affirming the district court’s grant of summary

judgment after the district court conducted full de novo review of the

administrator’s disability benefits denial).

And the interest in efficiency is not exclusively on the side of Pierre’s

bifurcated system of review. Abuse-of-discretion cases frequently result in

litigation about the existence and extent of a conflict of interest, 7 which is one

of the rare areas in which a plaintiff can often expand the administrative

record with discovery. See Crosby v. La. Health Serv. & Indem. Co., 647 F.3d

258, 263 (5th Cir. 2011) (explaining that our restrictive position on adding to

the administrative record in ERISA cases does not prohibit a discovery request

for information regarding the existence and extent of a conflict). Conditioning

deference on whether a decision is characterized as legal or factual makes

ERISA another victim of the “delusive simplicity of the distinction between

questions of law and questions of fact [that] has been found a will-of-the-wisp

by travelers approaching it from several directions.” Nathan Isaacs, The Law

and the Facts, 22 COLUM. L. REV. 1, 1 (1922); see also Walker, 180 F.3d at 1070

(recognizing that “[a]s a practical matter, factual findings and plan

interpretations are often intertwined” and predicting that if review were

bifurcated at the district court, there would be an “unnecessary cascade of

7 See Glenn, 554 U.S. at 112–18.

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litigation over whether an administrator’s action was a plan interpretation or

a factual determination”).

There is thus no evidence that joining the eight other circuits that have

long applied de novo review to factual determinations will create an

overwhelming burden on district courts even if that concern can override the

“ready access to the Federal courts” that ERISA provides. 29 U.S.C. § 1001(b);

see Firestone, 489 U.S. at 115 (concluding that “the threat of increased

litigation is not sufficient to outweigh the reasons for a de novo standard that

we have already explained”). Moreover, as will be discussed, we maintain our

precedent that largely limits judicial review to the record before the

administrator, which mitigates concerns about the time and expense of

litigation under a de novo standard.

In the years since all these circuits have disagreed with Pierre, the

Supreme Court has decided more ERISA cases. Although none has directly

confronted our issue (and thus they have not served as a basis to reconsider

Pierre absent en banc review), two indicate that there is no fact/law distinction

for applying the default de novo standard. Glenn addresses how to assess

conflicts of interest for plans that give administrators discretion. See 554 U.S.

at 111–18. Humana and the dissent emphasize its comment about not wanting

to “overturn Firestone by adopting a rule that in practice could bring about

near universal review by judges de novo—i.e., without deference—of the lion’s

share of ERISA plan claims denials.” Id. at 116. But that statement discussed

the prospect of de novo review for plans that validly confer discretion on

administrators. Id. at 115. That is not at issue here. Relevant to our question

about the default standard of review is Glenn’s list of background ERISA

principles in the beginning of the opinion. Number “2” reaffirms Firestone’s

reading of trust law and the default standard of review: “Principles of trust law

require courts to review a denial of plan benefits ‘under a de novo standard’

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unless the plan provides to the contrary.” Id. at 111 (quoting Firestone, 489

U.S. at 115). As in Firestone, the language broadly speaks of “a denial of plan

benefits” without differentiating based on the nature of the denial. Id.

The preemption decision in Rush Prudential HMO, Inc. v. Moran also

supports the broader interpretation of Firestone’s de novo review. 536 U.S. 355

(2002). Rush held that an Illinois law requiring independent medical review

of certain benefit denials was not preempted. Id. at 384–87. That state law

required independent evaluations for, among other things, the medical

necessity determinations also made in this case. Id. at 383. The court rejected

a preemption defense because ERISA does not provide a statutory standard of

review. It then explained—in the context of assessing a statute that applies to

factbound medical necessity determinations—that when Firestone filled in

that statutory gap it “held that a general or default rule of de novo review could

be replaced by deferential review if the ERISA plan itself provided that the

plan’s benefit determinations were matters of high or unfettered discretion.”

Id. at 385–86 (citing Firestone, 489 U.S. at 115). Again, the reference is to

“benefit determinations” with no distinction for legal or factual rulings. And

the Court went on to say that nothing in ERISA “requires that these kinds of

decisions be so ‘discretionary’ in the first place” and “whether they are is simply

a matter of plan design or the drafting of an HMO contract.” Id. at 386. Rush

thus recognizes and analyzes the Firestone dichotomy only on

discretionary/nondiscretionary grounds, not factual/legal ones. It also is yet

another Supreme Court rejection of the notion that ERISA administrators are

inherently entitled to discretion (even if that is what trust law provides).

Considering these cases and without having to endorse all the critiques

other circuits have made of Pierre, on balance we conclude that they warrant

changing course and adopting the majority approach—an approach the federal

and Texas governments also support. We are also influenced by ERISA’s

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strong interest in uniformity. See Gobeille v. Liberty Mut. Ins. Co., 136 S. Ct.

936, 943–44 (2016). Being on the lonely side of the lopsided split means that

ERISA denials involving nondiscretionary plans are reviewed with more

deference in Texas, Louisiana, and Mississippi than they are in the rest of the

country. It even means that employees working for the same company with

the same health or retirement plan may suffer different fates in court

depending on the circuit where they reside. 8 Although sometimes there is

virtue in being a lonely voice in the wilderness, in this instance we conclude

that one really is the loneliest number. See Three Dog Night, One, on THREE

DOG NIGHT (Dunhill 1969). We overrule Pierre and now hold that Firestone’s

default de novo standard applies when the denial is based on a factual

determination.

IV.

Changing the standard of review does not require us to alter our

precedent concerning the scope of the record in ERISA cases. Although other

circuits are unanimous on what the default standard of review is, they take a

variety of positions on whether de novo review allows a party to expand the

record beyond what was before the plan administrator. Some do not limit

reviewing courts to that record. See Abatie v. Alta Health & Life Ins. Co., 458

F.3d 955, 970 (9th Cir. 2006) (holding that limiting the judicial record to that

before the plan administrator is not appropriate in de novo cases); Luby, 944

F.2d at 1184 (finding that limiting a district court to the record before a plan

8 The dissent argues that application of ERISA will not be uniform if state statutes

can nullify discretionary clauses. Deference would not be available in states with such laws;

it would be available in other states. But that would be a difference rooted in the policy

choices of the states—differences that are expected and honored in our federal system—and

not based on inconsistent court interpretations of the same federal law. The dissent’s

argument might be relevant to a conflict preemption analysis, but as we have mentioned, we

take no position on that question.

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administrator “makes little sense” because it is contrary to the ordinary

concept of de novo review). Others take a more restrictive view. See Donatelli

v. Home Ins. Co., 992 F.2d 763, 765 (8th Cir. 1993) (admonishing district courts

to avoid admitting additional evidence “absent good cause to do so”);

Quesinberry, 987 F.2d at 1025–27 (permitting district courts to admit

additional evidence only in “necessary” and “[e]xceptional circumstances”).

Our leading case in this area is Vega v. National Life Insurance Services,

Inc., 188 F.3d 287 (5th Cir. 1999) (en banc), overruled on other grounds by

Metro. Life Ins. Co. v. Glenn, 554 U.S. 105 (2008). Under Vega, a plan

administrator must identify evidence in the administrative record, giving

claimants a chance to contest whether that record is complete. Id. at 299. Once

the record is finalized, a district court must remain within its bounds in

conducting a review of the administrator’s findings, even in the face of disputed

facts. Id. Vega permits departure from this rule only in very limited

circumstances. One exception allows a district court to admit evidence to

explain how the administrator has interpreted the plan’s terms in previous

instances. Id. (citing Wildbur v. ARCO Chem. Co., 974 F.2d 631, 639 n.15 (5th

Cir. 1992)). Another allows a district court to admit evidence, including expert

opinions, to assist in the understanding of medical terminology related to a

benefits claim. Id. Those situations are not actually expanding the evidence

on which the merits are evaluated but providing context to help the court

evaluate the administrative record.

Although some of Vega’s reasoning for limiting the district court record

to what was before the administrator depended on the abuse-of-discretion

context, other interests it recognized support the same rule for de novo review.

Among those is the interest in encouraging parties to resolve their dispute at

the administrative stage. Id. at 300. A different standard of review also does

not undermine Vega’s observation that there is not a “particularly high bar to

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a party’s seeking to introduce evidence into the administrative record.” Id.

And generally limiting the evidence to what was in front of the plan

administrator when a dispute ends up in court allows for speedier resolution.

Id.

In short, overruling Pierre while adhering to Vega in the context of de

novo review serves the twin ERISA goals of allowing for efficient yet

meaningful judicial review. See 29 U.S.C. § 1001(b) (stating that ERISA is

intended to provide “ready access to the Federal courts”); Firestone, 489 U.S.

at 113–14 (explaining that a deferential default standard “would afford less

protection to employees and their beneficiaries than they enjoyed before

ERISA was enacted”). Vega will continue to provide the guiding principles on

the scope of the record for future cases that apply de novo review to fact-based

benefit denials.

V.

This brings us back to Ariana’s claim. Following Pierre, the district court

concluded only that “Humana did not abuse its discretion in finding that

Ariana M.’s continued treatment at Avalon Hills was not medically necessary

after June 4, 2013.” Ariana M., 163 F. Supp. 3d at 442. That determination is

now subject to de novo review. A different standard of review will sometimes

lead to a different outcome, but there will also be many cases in which the

result would be the same with deference or without it. We give no opinion on

which is the case here, but leave application of the de novo standard to the able

district court in the first instance. 9

9In light of this decision overruling our longstanding precedent and remanding for

application of a de novo standard, the district court may consider whether there is good cause

to allow Humana to amend its answer and assert a preemption defense if it so desires.

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***

The judgment of the district court is VACATED and REMANDED for

further proceedings consistent with this opinion.

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E. GRADY JOLLY, Circuit Judge, dissenting, joined by JONES, SMITH,

CLEMENT, and ELROD, Circuit Judges. OWEN, Circuit Judge, joins only

Part I.

The material question in this en banc appeal is whether Firestone Tire

& Rubber Co. v. Bruch, 489 U.S. 101 (1989), requires de novo review of an

administrator’s entitlement determinations; that is to say, whether an

administrator’s findings of fact underlying the merit of a participant’s claim

are entitled to any deference by the federal courts. Read holistically—that is,

by considering the context in which Firestone came before the Supreme Court;

the Court’s opinion as a whole, instead of snippet by snippet; and the Supreme

Court’s concerns that it expressed during Firestone’s oral argument—Firestone

speaks to de novo review in relation to eligibility determinations and the

construction of plan terms—both inherently legal questions—not to the daily

grind of winnowing the merit of individual factual claims.

Moreover, the majority opinion reflects an impractical view of the

administrative process. It is inconsistent with the law of trusts and misreads

subsequent cases decided by the United States Supreme Court. I respectfully

dissent.

I.

A.

A holistic reading of Firestone makes clear that its de novo standard of

review applies only to legal questions.

The first step of understanding Firestone requires examining the facts

and law that were asserted in the courts below; that is, determining what sort

of case was actually before the Supreme Court. Firestone involved the

construction of plan terms under three different ERISA benefits plans

maintained by Firestone. 489 U.S. at 105. Firestone was the administrator

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and the defendant. Id. Firestone had construed the terms of its ERISA plans

to deny severance benefits to “former employees” who worked at Firestone

plants that had been sold to another company. Id. at 105–07. The former

Firestone employees sued, disputing Firestone’s interpretation of the plan as

to whether they were eligible for benefits under the terms of the plan. Id. at

106. The district court granted Firestone summary judgment, holding that

Firestone’s decision to deny benefits was not arbitrary and capricious. Id. at

106–07. The court of appeals reversed on grounds that Firestone, as

administrator of the plan, had a conflict of interest; as such, de novo—not

“arbitrary and capricious”—was the proper standard of review for Firestone’s

interpretation of the plan. Id. at 107. Thus, when the case reached the

Supreme Court, the appeal was twofold: First, whether Firestone’s

interpretation of the plan was subject to an arbitrary-and-capricious standard

of review or to a de novo review and, second, whether a proper interpretation

of the plan’s terms covered these “former employees.” The Supreme Court did

not address whether the courts should defer to administrators’ factual

decisions because the court of appeals had reserved comment on that question.

See Bruch v. Firestone Tire & Rubber Co., 828 F.2d 134, 144 n.9 (3d Cir. 1987)

(“It should be noted that we also do not deal here with a determination of fact

by a plan administrator. We leave for another day the definition of the context,

if any, in which courts should defer to such a determination.”), cited in Pierre

v. Conn. Gen. Life Ins. Co./Life Ins. Co. of N. Am., 932 F.2d 1552, 1561–62 (5th

Cir. 1991). Thus, it should be clear that the “denial of benefits” before the

Supreme Court was the denial of benefits to a class of participants based on

Firestone’s interpretation of the plan as to that class, not a denial of the

underlying merit of a participant’s claim.

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The second step of understanding the Firestone opinion requires the

opinion be read as a whole and in context. The Supreme Court sets the tone of

its analysis when it limits its holding to disputes based on interpretation of the

plan; indeed, as noted above, these legal questions were the only issues before

the Court. The Firestone Court said, “The discussion which follows is limited

to the appropriate standard of review in § 1132(a)(1)(B) actions challenging

denials of benefits based on plan interpretations. We express no view as to the

appropriate standard of review for actions under other remedial provisions of

ERISA.” 489 U.S. at 108 (emphasis added). The Court then said, “ERISA does

not set out the appropriate standard of review for actions under § 1132(a)(1)(B)

challenging benefit eligibility determinations,” id. at 109 (emphasis added),

signaling again that it was addressing an inherently legal question. The Court

then rejected the arbitrary-and-capricious standard of review (applied by the

district court), saying “the wholesale importation of the arbitrary and

capricious standard into ERISA [was] unwarranted.” Id. In doing so, the

Court plainly did not suggest that a uniform standard of review applied to all

decisions of the administrator. Further into its opinion, the Supreme Court

clarified what it meant by “plan interpretations,” saying,

As this case aptly demonstrates, the validity of a claim to benefits

under an ERISA plan is likely to turn on the interpretation of terms

in the plan at issue. Consistent with established principles of trust

law, we hold that a denial of benefits challenged under

§ 1132(a)(1)(B) is to be reviewed under a de novo standard unless

the benefit plan gives the administrator or fiduciary discretionary

authority to determine eligibility for benefits or to construe the

terms of the plan.

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Id. at 115 (emphasis added). 1 Plan-term construction and eligibility

determinations are both legal concepts that are part of “plan interpretation.”

Neither concept addresses whether, under the undisputed provisions of the

plan, a specific person’s individual claim has merit.

The third step of understanding the holding of the Firestone Court

involves the transcript of the oral argument before the Supreme Court. The

oral argument confirms that the subject before the Court was plan

interpretation. There, several Justices stated the issue in terms of whether

the Court must give deference to ERISA plan administrators for their

construction of plan terms. See Oral Argument at 3:05, Firestone Tire &

1 The majority mistakenly relies on this portion of the opinion to say that Firestone

applies de novo review to both factual and legal assessments by plan administrators. See

Maj. Op. at 8, 14. But the majority makes a mistake by conflating eligibility, i.e., coverage

determinations, with entitlement determinations, i.e., claim merits, as do our sister circuits.

See Maj. Op. at 8 (“Why would a discretionary clause be needed . . . to escape de novo review

if eligibility determinations were not subject to that standard of review as a default matter?”

(emphasis added)); Kinstler v. First Reliance Standard Life Ins. Co., 181 F.3d 243, 250 (2d

Cir. 1999) (stating that the court of appeals must rely on the Supreme Court’s use of

“eligibility for benefits,” which is a distinct issue from construing the plan’s terms); Luby v.

Teamsters Health, Welfare, & Pension Tr. Funds, 944 F.2d 1176, 1183 (3d Cir. 1991) (stating

that “the explicit reference to ‘eligibility’” means that the Firestone Court meant to cover

entitlement decisions). This view is misguided. As evidenced by its analogy of ERISA to

contract law and by its statement that ERISA was meant “to protect contractually defined

benefits,” Firestone, 489 U.S. at 113 (quoting Mass. Mut. Life Ins. Co. v. Russell, 473 U.S.

134, 148 (1985)), the Supreme Court’s discussion of eligibility concerns whether the plan

covered the person or claim at issue, not whether the covered person’s factual context entitled

her to benefits under the plan or whether the covered claim had merit.

We may illustrate this distinction by considering the case at hand. Here, it is clear

that Ariana M is an eligible participant and that her claim is eligible under the terms of the

group health plan covering mental illness. If the administrator argued otherwise, de novo

review would be used, like in any other contract dispute, to determine whether Ariana’s claim

is contractually barred. But that is not the appeal here. Instead, Ariana asks us to

reevaluate the facts upon which the administrator denied the merits of her claim—that is to

say, the factual claim of whether her treatment was medically necessary; such a question

requires, not legal analysis, but credibility determinations, particularly among the parties’

respective experts. The majority would grant the federal courts the authority to relitigate in

federal court that credibility determination, robbing the administrator of all deference to its

decision. Such federal court authority does not have its source anywhere in Firestone.

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Rubber Co. v. Bruch, 489 U.S. 101 (1989) (No. 87-1054),

https://www.oyez.org/cases/1988/87-1054 (Justice White saying to Firestone’s

lawyer that “it’s a contractual construction problem. Or it’s a construction of

a written instrument”); id. at 4:35 (Justice Scalia saying to Firestone’s lawyer

that “it’s not my impression of common law trust law that if the trustee makes

a questionable interpretation of the trust agreement, I wouldn’t be able as one

of the beneficiaries to go into court and say that interpretation is wrong. And

the court would look at the trust agreement and say it’s up to us to interpret

this trust agreement”). Further, a Justice expressed that the case might be

different if resolving a question involving a factual judgment, by saying:

My, my recollection of trust law . . . and it obviously isn’t, isn’t a

terribly recent one . . . is that if you’re talking about the . . . the

many things that the trustee is given discretion to do in a trust

instrument, decide on the medical needs or educational needs of

various beneficiaries and allocate discretionary funds among

them, the courts give great deference to a trustee.

But is . . . in deciding who is a beneficiary, I, I was not aware that

trust law says the trustee has great discretion there.

Id. at 5:23. And the plaintiffs’ lawyer emphasized that this case involved only

“a pure question of plan interpretation” and involved a different “category of

question” from a fact question. Id. at 32:49, 36:33. 2 Nothing in the argument

signals that the Court considered that its ruling, i.e., applying de novo review

to who is a beneficiary under the plan, would also apply to fact questions.

Therefore, based on the procedural history, the proper context, the oral

argument, and the specific language of the opinion, it should be clear to all but

2The plaintiffs also conceded in their brief that they were “not challenging the exercise

of any authority which is inherently discretionary in nature.” Brief for the Respondents,

Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (1989) (No. 87-1054), at 24. And they

agreed with Firestone that courts should defer to those who have some amount of decision-

making authority. Id.

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the obstinate that the Firestone Court did not intend that de novo review would

apply to factual questions that went before plan administrators.

B.

The majority’s argument that Firestone mandates de novo review for

factual issues is further undermined by Firestone’s clarity that principles of

trust law apply to administrator actions. See Firestone, 489 U.S. at 111 (“In

determining the appropriate standard of review for actions under

§ 1132(a)(1)(B), we are guided by principles of trust law.”). The majority seems

to disregard this directive. But, inasmuch as Firestone clearly does not

mandate a de novo standard of review for factual disputes, trust law controls,

as instructed by Firestone.

Under trust law, trustees have measured discretion in determinations

that fulfill the underlying purposes of the trust; yet, the majority, with its de

novo review, grants trustees no deference in administering the quotidian

claims arising under the trust document. The Second Restatement provides

that trust administrators have two types of powers: (1) those conferred upon

the administrator “in specific words by the terms of the trust” and (2) those

“necessary or appropriate to carry out the purposes of the trust and are not

forbidden by the terms of the trust.” Restatement (Second) of Trusts § 186

(Am. Law Inst. 1959). The Third Restatement explains further, “When a

trustee has discretion with respect to the exercise of a power, its exercise is

subject to supervision by a court only to prevent abuse of discretion.”

Restatement (Third) of Trusts § 87 (Am. Law Inst. 2007). The general rule is

that trustees have discretion with respect to the exercise of trusteeship powers,

except when directed differently by the terms of the trust or when compelled

by the trustee’s fiduciary duties. Id. cmt. a.

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And turning to Scott and Ascher on Trusts, we find, “A trustee’s powers

ordinarily are discretionary, unless the terms of the trust or applicable law

makes them mandatory.” 3 A. Scott & M. Ascher, Scott and Ascher on Trusts

§ 18.2, p. 1338 (5th ed. 2007). Trustees have “considerable discretion in

determining what is necessary for any given beneficiary’s support,” and courts

ensure only that trustees do not exceed the limits of their discretion. Id.

§ 18.2.6, at 1362. Indeed, “[t]he court will not substitute its own judgment for

that of the trustee” because “[t]he mere fact that the court would have

exercised the power differently is not a sufficient reason for the court to

interfere.” Id. § 18.2, at 1340. Instead, the court may check the trustee’s

powers by examining whether the trustee (1) abused its discretion, (2) acted

dishonestly or in bad faith, and (3) exercised its reasonable judgment when

exercising its powers. Id. § 18.2.2–18.2.6, at 1350–67.

As we have earlier noted, the Firestone Court expressly said that its

decision was guided by principles of trust law. Here, whether a covered

beneficiary has presented facts to support the benefits she individually claims

is a core discretionary power that is “necessary or appropriate” to the routine

administration of plans. As we said in Pierre, “[i]t is indisputable that an

ERISA trustee, by its very nature, is granted some inherent discretion, i.e.,

‘authority to control and manage the operation and administration of the

plan.’” 932 F.2d at 1558 (quoting 29 U.S.C. § 1102(a)(1)). 3 The majority would

3 The majority sees it otherwise, adopting the Seventh Circuit’s view that Firestone

“reversed the presumption” for all plan-administrator decisions unless a plan term gives the

administrator discretion. See Maj. Op. at 10; Ramsey v. Hercules Inc., 77 F.3d 199, 204 (7th

Cir. 1996). Under that view, Firestone essentially eliminated all discretionary administrable

powers—defined as those “necessary or appropriate to carry out the purposes of the trust and

are not forbidden by the terms of the trust,” Restatement (Second) of Trusts § 186(b)—and

permitted trustees discretionary powers only when conferred. See id. § 186(a). But this view

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not allow a smidgeon of deference to the administrator, a position that is

contrary to the guiding advice of Firestone.

II.

We leave Firestone proper for a moment and turn our attention to recent

Supreme Court cases also dealing with the administration of ERISA plans. In

particular, two recent Supreme Court opinions strongly support that the

Supreme Court would conclude that Pierre correctly states the law:

Metropolitan Life Insurance Company v. Glenn, 554 U.S. 105 (2008), and

Conkright v. Frommert, 559 U.S. 506 (2010). 4 Conkright—not cited by the

majority—reaffirmed that in § 1132(a)(1)(B) cases, we should look to the

principles of trust law. See 559 U.S. at 512 (“In determining the proper

standard of review when a plan administrator operates under a conflict of

interest [in Glenn], we again looked to trust law, the terms of the plan at issue,

and the principles of ERISA—plus, of course, our precedent in Firestone.”).

The Supreme Court’s opinion in Glenn supports Pierre’s understanding

of Firestone. In Glenn, the Court said,

We do not believe that Firestone’s statement implies a change in

the standard of review, say, from deferential to de novo review.

Trust law continues to apply a deferential standard of review to

the discretionary decisionmaking of a conflicted trustee, while at

the same time requiring the reviewing judge to take account of the

conflict when determining whether the trustee, substantively or

procedurally, has abused his discretion. We see no reason to

forsake Firestone’s reliance upon trust law in this respect.

is mistaken and departs from Firestone’s command to use traditional trust law principles

when examining § 1132(a)(1)(B). See Firestone, 489 U.S. at 110.

4 And when faced with this precise question—whether Firestone mandates de novo

review for factual entitlement decisions—the Supreme Court has denied certiorari twice in

the past decade. See Truitt v. UNUM Life Ins. Co. of Am., 134 S. Ct. 1761 (2014); Dutka v.

AIG Life Ins. Co., 559 U.S. 970 (2010).

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554 U.S. at 115–16 (internal citations omitted) (citing Firestone, 489 U.S. at

111–15; Restatement § 187, cmts. d–j; Scott and Ascher on Trusts § 18.2, at

1342–44). The Court then emphasized that it would not “overturn Firestone

by adopting a rule that in practice could bring about near universal review by

judges de novo—i.e., without deference—of the lion’s share of ERISA plan

claims denials,” because it believed that Congress would have said more about

such a standard of review if it wanted the courts to have wholesale review. Id.

at 116. The Glenn Court quoted Justice Scalia’s pithy and colorful admonition

that “Congress does not ‘hide elephants in mouseholes,’” id. (quoting Whitman

v. Am. Trucking Ass’ns., 531 U.S. 457, 468 (2001)), i.e., if Congress had

intended a radical departure from traditional principles of trust law, it most

certainly would have not hidden it in statutory interstices.

Thus, the majority’s view brushes aside the admonition of Glenn that

Firestone cannot be read to endorse “near universal review” of all plan denials

brought to our district courts. Other circuits may have interpreted Firestone

in their own way fifteen to twenty years ago, but, today, it should be understood

that, in the light of more recent Supreme Court cases, Firestone did not change

ERISA’s application of trust law.

These Supreme Court cases (each decided after the decisions of the other

circuit courts to the contrary) further undermine the rationale offered by the

majority to strip the administrator of discretionary respect. Other circuits, and

now the majority, have acknowledged that federal courts are required

generally to pay deference to administrative decisions. But, the majority

argument goes, plan administrators do not have the expertise of

administrative agencies, and ERISA administrators are not unbiased

factfinders. See Maj. Op. at 11; Walker v. Am. Home Shield Long Term

Disability Plan, 180 F.3d 1065, 1070 (9th Cir. 1999); Ramsey, 77 F.3d at 205;

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Luby, 944 F.2d at 1183–84 & n.7. It follows, says the majority, that the usual

deference to administrators is not warranted for ERISA administration. See

Maj. Op. at 11.

Never mind that this concern, too, was addressed by Glenn. The

Supreme Court favorably compared ERISA’s review of benefits decisions to

review of administrative agencies’ decisions by observing,

This kind of review is no stranger to the judicial system. Not only

trust law, but also administrative law, can ask judges to determine

lawfulness by taking account of several different, often case-

specific, factors, reaching a result by weighing all together.

Glenn, 554 U.S. at 117. For this statement, the Court cited two administrative

law decisions—Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402

(1971) and Universal Camera Corp. v. NLRB, 340 U.S. 474 (1951)—in which

the Supreme Court reviewed a governmental decision and an agency’s

factfindings for abuse of discretion. 5 And Glenn itself dealt with the biggest

concern arising from plan administrators—conflicts of interest—by instructing

that whenever a district court reviews a plan administrator for abuse of

discretion, that court must consider the extent of any conflict. Glenn, 554 U.S.

at 112, 117. 6 Conkright, although discussing a plan with a clause that provided

5 Our precedent, too, has said that review of ERISA benefits determinations is like

review of administrative agency decisions. See Crosby v. La. Health Serv. & Indem. Co., 647

F.3d 258, 264 (5th Cir. 2011) (“[O]ur review of an ERISA benefits determination is essentially

analogous to a review of an administrative agency decision . . . .”). And with good reason:

“‘[F]ull review of the motivations behind every plan administrator’s discretionary decisions’

would ‘move toward a costly system in which Article III courts conduct wholesale

reevaluations of ERISA claims’ and would seriously undermine ERISA’s goal of resolving

claims efficiently and inexpensively.” Id. (quoting Semien v. Life Ins. Co. of N. Am., 436 F.3d

805, 814–15 (7th Cir. 2006)).

6 The majority seems to lean heavily on conflicts of interest to justify de novo review

for all decisions of administrators. See Maj. Op. at 9, 11. But conflicts of interest already

must be considered as a factor in every § 1132(a)(1)(B) case, whether the standard of review

is de novo or abuse of discretion, because of the requirements set out in Glenn. See 554 U.S.

at 117.

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the administrator with discretionary review, similarly endorsed providing

deference to ERISA plan administrators because the practice “promotes

efficiency by encouraging resolution of benefits disputes through internal

administrative proceedings rather than costly litigation.” 559 U.S. at 517.

III.

The majority’s moving force for overruling Pierre is that we should join

the other circuits because ERISA must be uniformly applied among the federal

circuit and district courts. Indeed, the Supreme Court in Conkright allowed:

“ERISA ‘induc[es] employers to offer benefits by assuring a predictable set of

liabilities, under uniform standards of primary conduct and a uniform regime

of ultimate remedial orders and awards when a violation has occurred.’” Id.

(alteration in original) (quoting Rush Prudential HMO, Inc. v. Moran, 536 U.S.

355, 379 (2002)).

But the other circuits, which declined to follow Pierre, and which the

majority would have us reverse our course and follow, are outdated by Glenn

and Conkright. 7 And still further, the uniformity that might result from

reversing Pierre is illusory. First, different circuits have different standards

for reviewing evidence. Some circuits pay little or no attention to the

administrative record and virtually allow trial de novo by opening discovery in

district court. See Mongeluzo v. Baxter Travenol Long Term Disability Ben.

Plan, 46 F.3d 938, 943 (9th Cir. 1995) (“We agree with the Third, Fourth,

Seventh, Eighth, and Eleventh Circuits that new evidence may be considered

under certain circumstances to enable the full exercise of informed and

7 The last circuit squarely to decide this issue did so 15 years ago in 2003. See Shaw

v. Conn. Gen. Life Ins. Co., 353 F.3d 1276, 1285–86 (11th Cir. 2003); Riedl v. Gen. Am. Life

Ins. Co., 248 F.3d 753, 756 (8th Cir. 2001); Kinstler, 181 F.3d at 251; Walker, 180 F.3d at

1069; Rowan v. Unum Life Ins. Co. of Am., 119 F.3d 433, 435 (6th Cir. 1997); Ramsey, 77 F.3d

at 204; Luby, 944 F.2d at 1183–84.

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independent judgment.”). Other circuits, like ours, are limited to the record

that the administrator considered. See Maj. Op. at 17 (limiting district court

proceedings to the administrative record); 8 Perry v. Simplicity Eng., a Div. of

Lukens Gen. Indus., Inc., 900 F.2d 963, 966 (6th Cir. 1990) (preventing district

courts from considering evidence outside the record). Second, some states have

anti-discretionary-clause statutes—like Texas Insurance Code § 1701.062(a)

that the defendants decided not to challenge here—that do not allow plans to

grant discretionary authority to plan administrators, even though the

Supreme Court has relied upon discretionary clauses and approved of them

multiple times. See Conkright, 559 U.S. at 517 (stating that deference to plan

administrators promotes efficiency, predictability, and uniformity); Heimeshoff

v. Hartford Life & Acc. Ins. Co., 134 S. Ct. 604, 614 (2013) (approving the use

of discretionary clauses because “participants are not likely to value judicial

review of plan determinations over internal review”). Thus, a claimant—in a

case involving an ERISA plan with a discretionary clause—will have a

different standard of review depending on whether she brings an action in a

state in which she resides or a state in which a breach occurred. See 29 U.S.C.

§ 1132(e)(2) (allowing ERISA suits to proceed in any federal district court

“where the plan is administered, where the breach took place, or where a

defendant resides or may be found”). For example, an ERISA plan enforced in

Louisiana, which does not have a state statute prohibiting discretionary

clauses, will have a different standard of review than if it were enforced in

Texas, which prohibits discretionary clauses.

8I fully agree with the majority’s decision to limit judicial review to the administrative

record as we decided in Vega v. National Life Insurance Services, Inc., 188 F.3d 287 (5th Cir.

1999) (en banc), overruled on other grounds by Metro. Life Ins. Co. v. Glenn, 554 U.S. 105

(2008).

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If uniformity were the Holy Grail to be pursued among federal courts

and if the instant opinion accomplished uniformity, the majority opinion would

be more persuasive. But, although I agree that ERISA uniformity is a worthy

consideration, the majority’s opinion hardly establishes greater procedural (or

substantive) uniformity than if we continued to apply Pierre. Instead, we are

left with a strained argument for uniformity and the illusion that reversing

Pierre somehow accomplishes uniformity throughout the federal courts of the

country.

IV.

To sum up: the misguided majority upsets twenty-six years of precedent

in overruling Pierre, and for no compelling reason. In doing so, it ignores the

practicality of administrative and trust law, misreads Firestone, and is swept

up by outdated cases of other circuits. Respectfully, I dissent. 9

9 The majority, in reference to the dissent, argues that the dissent is mistaken in its

understanding of what Firestone referred to as “eligibility for benefits.” See Maj. Op. at 8–9

n.4.

The majority is, of course, quite correct that our precedent has been inconsistent by

using “eligibility” in some circumstances, while using “entitlement” in other circumstances,

to mean determinations of factual questions. Compare Ellis v. Liberty Life Assurance Co. of

Boston, 394 F.3d 262, 266 (5th Cir. 2004) (describing that power as discretion to determine

“eligibility”), with Perdue v. Burger King Corp., 7 F.3d 1251, 1254 (5th Cir. 1993) (stating

that the employee’s claim failed because he did not “allege entitlement to benefits within the

eligibility provision”); Graham v. Metro. Life Ins. Co., 349 F. App’x 957, 961 & n.5 (5th Cir.

2009) (stating that an employee failed to prove her entitlement when examining a plan where

the employer had “discretionary authority . . . to determine eligibility for and entitlement to

Plan benefits”). The relevant question, however, is not the confused use of “eligibility,” but

instead what the Firestone Court meant by eligibility determinations. Given the context in

which the case was decided and the language of the opinion, eligibility means qualification

to claim entitlement to benefits under the plan. One may be eligible for an entitlement while

not being factually entitled to the benefit. In short, eligibility precedes entitlement. One

may be eligible to assert a statutory right, but only entitled to the benefits of the right upon

a factual showing.

Moreover, ERISA’s text gainsays the majority’s argument that “eligibility” and

“entitlement” are fungible terms in the context of ERISA. Specifically, § 1002(7) provides

that a “participant” is one “who is or may become eligible to receive a benefit.” But § 1002(7)

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addresses matters of coverage; that is, eligibility. On the other hand, 29 U.S.C. § 1002(8),

under which Ariana M qualifies as a beneficiary, speaks in terms of entitlement to benefits.

Specifically, § 1002(8) speaks of a “beneficiary” as one “who is or may become entitled to a

benefit thereunder.” Indeed, these juxtaposed provisions demonstrate that eligibility and

entitlement are distinct terms: § 1002(7) defines a “participant” as one “who is or may become

eligible” while § 1002(8) defines a “beneficiary” as one “who is or may become entitled.”

Finally, the majority criticizes the dissent for not addressing Rush Prudential HMO,

Inc. v. Moran. But Rush Prudential is an inapt case for deciding the specific issue of this

case. First, it predates Glenn and Conkright, both of which reinforce the dissent’s

understanding of Firestone. Second, Rush Prudential is a preemption case that decided

whether a state can “prohibit[] designing an insurance contract so as to accord unfettered

discretion to the insurer to interpret the contract’s terms.” 536 U.S. at 386. It held that this

type of statute was allowed because, like an insurance contract, the focus was on a legal

question—whether a state statute could modify a plan’s form of legal analysis and not

whether the specific person was entitled to money for medical treatment. Third, Rush

Prudential, as a preemption decision, had nothing to do with enforcement of § 1132(a)(1)(B),

the statute at issue here. Consequently, nothing in Rush Prudential’s holding depended on

the language cited by the majority to support its position today. To the point, the case serves

neither the majority nor the dissent.

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PRISCILLA R. OWEN, Circuit Judge, dissenting:

The Supreme Court has not decided whether a de novo or an abuse of

discretion standard of review applies when an ERISA plan administrator

considers conflicting expert opinions and denies coverage for the continued

hospitalization of an ERISA welfare-plan beneficiary. However, if the

principles of trust law are applied, as the Supreme Court has repeatedly said

that they should be, then an abuse of discretion standard is applicable in the

present case. I would therefore affirm the judgment of the district court.

Ariana M. brought the present action under 29 U.S.C. § 1132(a)(1)(B). 1

The Supreme Court explained in Firestone Tire and Rubber Co. v. Bruch 2 that

“[i]n determining the appropriate standard of review for actions under

§ 1132(a)(1)(B), we are guided by principles of trust law.” 3 The only issue

before the Supreme Court in Firestone was the standard of review that should

apply to a plan administrator’s interpretation of the plan. 4 The Court held that

a de novo standard of review applied, explaining, in part, that “[t]he trust law

1 29 U.S.C. § 1132(a)(1)(B) provides:

(a) Persons empowered to bring a civil action

A civil action may be brought--

(1) by a participant or beneficiary--

....

(B) to recover benefits due to him under the terms of his plan, to enforce

his rights under the terms of the plan, or to clarify his rights to future benefits

under the terms of the plan . . . .

2 489 U.S. 101 (1989).

3 Id. at 111 (citing Cent. States, Se. and Sw. Areas Pension Fund v. Cent. Transp., Inc.,

472 U.S. 559, 570 (1985)).

4 Id. at 108 (“The discussion which follows is limited to the appropriate standard of

review in § 1132(a)(1)(B) actions challenging denials of benefits based on plan

interpretations. We express no view as to the appropriate standard of review for actions

under other remedial provisions of ERISA.”).

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de novo standard of review is consistent with the judicial interpretation of

employee benefit plans prior to the enactment of ERISA.” 5 The Court reasoned

that “[a]ctions challenging an employer’s denial of benefits before the

enactment of ERISA were governed by principles of contract law,” and that “[i]f

the plan did not give the employer or administrator discretionary or final

authority to construe uncertain terms, the court reviewed the employee’s claim

as it would have any other contract claim—by looking to the terms of the plan

and other manifestations of the parties’ intent.” 6 But the Court looked

primarily to the law governing trusts in reaching its decision.

In Firestone, the Court considered the Restatement (Second) of Trusts

(1959) (hereinafter “the Restatement”), which was the current version of the

Restatement of Trusts at the time of ERISA’s enactment. 7 The actual holding

in Firestone was entirely consistent with Section 201, comment b, of the

Restatement, which provides that “[t]he extent [of a trustee’s] duties and

powers is determined by the trust instrument and the rules of law which are

applicable, and not by his own interpretation of the instrument or his own

belief as to the rules of law.” 8 Accordingly, under the Restatement, unless a

5 Id. at 112.

6 Id. at 112-113 (citing cases).

7 Id. at 111, 112, 113; see also Metro. Life Ins. Co. v. Glenn, 554 U.S. 105, 128 (2008)

(SCALIA, J., dissenting) (noting that the Firestone decision “[c]it[ed] the Restatement

of Trusts current at the time of ERISA’s enactment”); Employment Retirement Income

Security Act of 1974, Pub. L. 93-406, Title I, § 502, 88 Stat. 829 (codified as amended

at 29 U.S.C. §§ 1001-1461).

8 Restatement (Second) of Trusts § 201 cmt. b (1959), which provides:

b. Mistake of law as to existence of duties and powers. A trustee

commits a breach of trust not only where he violates a duty in bad faith, or

intentionally although in good faith, or negligently, but also where he violates

a duty because of a mistake as to the extent of his duties and powers. This is

true not only where his mistake is in regard to a rule of law, whether a

statutory or common-law rule, but also where he interprets the trust

instrument as authorizing him to do acts which the court determines he is not

authorized by the instrument to do. In such a case, he is not protected from

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trust instrument provides to the contrary, a trustee’s interpretation of the

terms of the trust would be subject to de novo review by a court. The Supreme

Court’s holding in Firestone that an abuse of discretion standard should be

applied to an ERISA administrator’s interpretation of the plan only when the

plan grants discretion to the administrator to interpret the plan is in line with

Section 201, comment b. 9

However, the Restatement makes clear in Section 187, comment a, that

“except to the extent to which its exercise is required by the terms of the trust

or by the principles of law applicable to the duties of trustees,” a trustee’s

“exercise of power is discretionary.” 10 Other comments in Section 187 of the

Restatement support the conclusion that a trustee’s decision as to whether a

beneficiary’s condition entitles her to benefits from the trust is within the

trustee’s discretion. Comment c provides that a trustee has discretion “to

determine the amount necessary for a beneficiary’s support.” 11 The

Restatement makes clear that when a power is committed to the discretion of

a trustee, his actions or inactions are to be judged by an abuse of discretion

liability merely because he acts in good faith, nor is he protected merely

because he relies upon the advice of counsel. Compare § 297, Comment j. If he

is in doubt as to the interpretation of the instrument, he can protect himself

by obtaining instructions from the court. The extent of his duties and powers

is determined by the trust instrument and the rules of law which are

applicable, and not by his own interpretation of the instrument or his own

belief as to the rules of law.

9 See Metro. Life Ins. Co., 554 U.S. at 111.

10 Restatement (Second) of Trusts § 187 cmt. c (1959).

11 Id. at cmt. c, which provides in its entirety that:

c. Kinds of discretionary powers. The rule stated in this Section is

applicable both to the powers of managing the trust estate conferred upon the

trustee either in specific words or otherwise, and also to such powers as may

be conferred upon him to determine the disposition of the beneficial interest.

Thus, it is applicable not only to powers to lease, sell or mortgage the trust

property or to invest trust funds, but also to powers to allocate the beneficial

interest among various beneficiaries, to determine the amount necessary for a

beneficiary's support, or to terminate the trust.

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standard. Comment d sets forth the “[f]actors in determining whether there is

an abuse of discretion.” 12 Comment e explains when there is “[n]o abuse of

discretion.” 13

Ariana M.’s claim that she was entitled to payment for continued

hospitalization as a beneficiary under an ERISA welfare benefits plan

necessarily involves the exercise of judgment by the ERISA plan administrator

in analyzing conflicting expert opinions. This is the type of decision that would

12 Id. at cmt. d:

d. Factors in determining whether there is an abuse of discretion. In

determining the question whether the trustee is guilty of an abuse of discretion

in exercising or failing to exercise a power, the following circumstances may be

relevant: (1) the extent of the discretion conferred upon the trustee by the

terms of the trust; (2) the purposes of the trust; (3) the nature of the power;

(4) the existence or non-existence, the definiteness or indefiniteness, of an

external standard by which the reasonableness of the trustee's conduct can be

judged; (5) the motives of the trustee in exercising or refraining from exercising

the power; (6) the existence or nonexistence of an interest in the trustee

conflicting with that of the beneficiaries.

13 Id. at cmt. e:

e. No abuse of discretion. If discretion is conferred upon the trustee in

the exercise of a power, the court will not interfere unless the trustee in

exercising or failing to exercise the power acts dishonestly, or with an improper

even though not a dishonest motive, or fails to use his judgment, or acts beyond

the bounds of a reasonable judgment. The mere fact that if the discretion had

been conferred upon the court, the court would have exercised the power

differently, is not a sufficient reason for interfering with the exercise of the

power by the trustee. Thus, if the trustee is empowered to apply so much of the

trust property as he may deem necessary for the support of the beneficiary, the

court will not interfere with the discretion of the trustee on the ground that he

has applied too small an amount, if in the exercise of his judgment honestly

and with proper motives he applies at least the minimum amount which could

reasonably be considered necessary, even though if the matter were left to the

court determine in its discretion it might have applied a larger amount. So

also, the court will not interfere on the ground that the trustee has applied too

large an amount, if in the exercise of his judgment honestly and with proper

motives he applies an amount not greater than a reasonable person might

deem necessary for the beneficiary's support, although the amount is greater

than the court would itself have awarded.

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be committed to the discretion of a trustee under trust law, as expressed in the

Restatement.

Though the Supreme Court has spoken in broad terms when it has said

that a de novo standard of review applies to a court’s review of the “denial of

[ERISA] plan benefits” 14 unless the plan grants the plan administrator

“discretionary authority to determine eligibility for [ERISA] benefits,” 15 the

Court’s decisions have involved either a plan administrator’s interpretation of

the plan (not an administrator’s decision as to whether, as a factual matter,

the beneficiary’s condition required a specific course of treatment), 16 or a plan

that expressly granted the plan administrator “discretionary authority to

determine whether an employee’s claim for benefits is valid.” 17 If we are to

accept the Supreme Court’s repeated statements that principles of trust law

apply when a court reviews the denial of ERISA benefits, then the

determination at issue in the present case was committed to the discretion of

the plan administrator, and an abuse of discretion standard should apply.

* * *

Because I would affirm the district court’s judgment, I respectfully

dissent.

14 Metro. Life Ins. Co. v. Glenn, 554 U.S. 105, 111 (2008).

15 Id. (emphasis omitted).

16 See Firestone, 489 U.S. at 570.

17 Metropolitan Life Ins. Co., 554 U.S. at 109.

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JENNIFER WALKER ELROD, Circuit Judge, joined by JOLLY and

CLEMENT, Circuit Judges, dissenting:

I write separately to address the decision to remand this case to the

district court. This is a waste of judicial resources because there is no genuine

issue of material fact and the record establishes that the plan administrator

did not err in declining to cover Ariana’s additional partial hospitalization. I

would affirm the district court’s judgment in favor of Humana, regardless of

whether we apply the de novo standard adopted by the majority opinion today

or the standard we previously adopted in Pierre v. Connecticut General Life

Insurance Co./Life Insurance Co. of North America, 932 F.2d 1552 (5th Cir.

1991).

In ERISA cases, “[w]e review a ‘district court’s grant of summary

judgment de novo, applying the same standards as the district court.’” Green

v. Life Ins. Co. of N. Am., 754 F.3d 324, 329 (5th Cir. 2014) (quoting Cooper v.

Hewlett-Packard Co., 592 F.3d 645, 651 (5th Cir. 2009)). Summary judgment

is appropriate when “there is no genuine dispute as to any material fact and

the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a).

There is no genuine issue of material fact on this record that precludes

summary judgment. At oral argument, Ariana’s counsel could point to only

one possible area of disputed fact. Ariana’s counsel seemed to suggest that

there is a genuine dispute as to whether Dr. Hartman was qualified to make a

decision about the necessity of Ariana’s continued partial hospitalization. 1 See

1 Later during the argument, however, Ariana’s counsel seemed to concede that there

is no genuine dispute of material fact, stating that “this court could decide whether these

services were primarily for the convenience of Ariana M. or were for her treatment, if this

court wants to decide that . . . .” Oral Argument at 58:43, Ariana M., No. 16-20174 (5th Cir.

argued Sept. 19, 2017) (en banc).

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Oral Argument at 7:25, Ariana M. v. Humana Health Plan of Tex., Inc., No.

16-20174 (5th Cir. argued Sept. 19, 2017) (en banc). When asked what

evidence supported her position that Dr. Hartman was not qualified, Ariana’s

counsel referenced a deposition of Dr. Hartman. Id. But the district court did

not consider this deposition testimony “because depositions taken in earlier

actions may only be used ‘in a later action involving the same subject matter

between the same parties.’” Ariana M. v. Humana Health Plan of Tex., Inc.,

163 F. Supp. 3d 432, 439 n.1 (S.D. Tex. 2016) (quoting Fed. R. Civ. P. 32(a)(8)).

And Ariana did not appeal the district court’s decision on this evidentiary

issue. See Davis v. Maggio, 706 F.2d 568, 571 (5th Cir. 1983) (“Claims not

pressed on appeal are deemed abandoned.”).

Furthermore, in accordance with Vega v. National Life Insurance

Services, Inc., 188 F.3d 287 (5th Cir. 1999) (en banc), overruled on other

grounds by Metro. Life Ins. Co. v. Glenn, 554 U.S. 105 (2008), left intact by the

majority opinion, “the district court is constrained to the evidence before the

plan administrator,” even in the face of disputed facts. 188 F.3d at 299.

Dr. Hartman’s deposition testimony was not part of the administrative record.

See Ariana M., 163 F. Supp. 3d at 443 n.2. Thus, Ariana points to no evidence

in the record in support of such a dispute.

In her initial brief to the panel, Ariana seemed to suggest that the fact

that her doctors disagreed with the assessments of Humana’s reviewing

doctors regarding the proper level of care for Ariana created a fact issue.

However, the Supreme Court has held, in an opinion issued after Firestone Tire

& Rubber Co. v. Bruch, 489 U.S. 101 (1989), that nothing in ERISA “suggests

that plan administrators must accord special deference to the opinions of

treating physicians. Nor does the Act impose a heightened burden of

explanation on administrators when they reject a treating physician’s opinion.”

Black & Decker Disability Plan v. Nord, 538 U.S. 822, 831 (2003). Thus, this

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court need not defer to the opinions of Ariana’s doctors, and the fact that they

conflict with those of Humana’s doctors does not create a fact issue.

For the reasons discussed in detail in the district court’s opinion, see

Ariana M., 163 F. Supp. 3d at 442–43, the plan administrator did not err in

deciding that Ariana M.’s continued partial hospitalization was not medically

necessary. As the district court explained, “Dr. Prabhu and Dr. Hartman—

board-certified psychiatrists—both did peer-to-peer reviews with Ariana M.’s

health-care professionals and reviewed her medical files to apply the plan’s

terms. They set out their decisions in written reports that cited the Mihalik

criteria and explained why Ariana M. failed to meet several prerequisites for

continued treatment under the plan.” Ariana M., 163 F. Supp. 3d at 442.

The district court’s grant of summary judgment should be affirmed.

41