Amicus Curiae Brief — Black & Decker Disability Plan v. Nord

No. 02-469

RT EIS IT TD I A A II IEEE NEES

In the Supreme Court of the United States

KENNETH L. NORD

BRIEF FOR THE UNITED STATES

AS AMICUS CURILAE SUPPORTING PETITIONER

SK

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Act na S J ‘

LELLENH. I

A ciate S

NATHANIEL L. SPI }

Deputy A ‘

MARKS. FLY

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. 7

QUESTION PRESENTED

Whether the administrator of an ERISA-covered dis-

ability plan must follow a “treating physician rule” in deter-

mining a participant’s disability, so that the administrator is

required to accept a treating physician’s opinion on disability

unless the administrator rebuts that opinion in writing based

upon substantial evidence in the record.

(I)

TABLE OF CONTENTS

Page

Interest of the United States ..0.........c.ccccccccssessseseseeseseseseseeenenenes 1

ee : ‘ : 1

Summary of argument 6

Argument:

A “treating physician rule” should not be applied by

courts in reviewing disability determinations under

SEUD GUUSTC CE CUO cccccennenseenssceteseemmetereensemeemneens 7

A. A treating physician nie teleengnedetoent

unnecessary under ERISA ............ccssssseessenereseeeeeseees 8

B. Application of a treating physician rule cater

the Social Security Act does not justify judicial

imposition of a rule under ERISA - 19

C. The case should be remanded for further pro-

ceedings in which special weight need not be

given to the opinions of respondent’s treating

Physicians .............000+ 27

CRIED censerensnsnernsnneneessssszssnssscsnsensssnsnensnssnsnananesesscssnsseeuassnnssensase 29

TABLE OF AUTHORITIES

Cases:

Amos v. Director, OWCP, 153 F.2d 1051 (9th Cir.

1998), cert. denied, 528 U.S. 809 (1999) ..........cccccceceseseeens 24

Anderson v. City of Bessemer, 470 U.S. 564 (1985) ........ 19

Anderson v. Blue Cross/Blue Shield, 907 F.2d 1072

(11th Cir. 1990) - 14

Anderson v. Liberty Lobby, Inc., 477 U.S. 342

(1986) 13

Ashe v. Workmen's Comp. Appeal Bd., 648 A.2d

1305 (Pa. Commw. Ct. 1994) 26

Atwood v. Newmont Gold Co., 45 F.3d 1317 (9th Cir.

1995) - 4

(IIT)

IV

Cases—Continued:

Bernstein v. Capitol Care, Inc., 70 F.3d 783 (4th

Cir. 1995)

Bill Gray Enters., Inc. Employee Health & Welfare

Plan v. Gourley, 248 F.3d 206 (3d Cir. 2001) .............

Block v. Pitney Bowes Inc., 952 F.2d 1450 (D.C.

Cir. 1992)

Bowen v. Yuckert, 482 U.S. 137 (1987)

City of Milwaukee v. Illinois, 451 U.S. 304 (1981) .......

Cleveland v. Policy Mgmt. Sys. Corp., 526 U.S. 795

(1999)

Connors v. Connecticut Gen. Life Ins. Co., 272 F.3d

127 (2d Cir. 2001)

Conradt v. Mt. Carmel Sch., 539 N.W.2d 713 (Wis.

Ct. App. 1995)

Curtis-Wright v. Schoonejongen, 514 U.S. 73

(1995)

Davolt v. Executive Comm. of O'Reilly Auto.,

206 F.3d 806 (8th Cir. 2000)

DeFelice v. American Int'l Life Assurance Co.,

112 F.3d 61 (2d Cir. 1997)

Dickerson v. Zurko, 527 U.S. 150 (1999)

Dillon v. Whirlpool Corp., 19 P.3d 951 (Or. Ct.

App. 2001)

Doe v. Group Hospitalization & Med. Servs.,

3 F.3d 80 (4th Cir. 1993)

Doe v. Travelers Ins. Co., 167 F.3d 53 (ist Cir.

1999)

Doyle v. Public Employee's Ret. Sys., 808 So. 2d

902 (Miss. 2002)

Dray v. Railroad Ret. Bd., 10 F.3d 1306 (7th Cir.

1993)

Firestone Tire & Rubber Co. v. Bruch, 489 US. 101

(1989)

Geier v. American Honda Motor Co., 529 U.S. 861

(2000)

18

19

Cases—Continued:

Gibson v. City of Lincoln, 376 N.W.2d 785 (Neb.

1985)

Grossmuller v. International Union, United Auto

Workers, Local 813, 715 F.2d 853 (3d Cir. 1983) ............

Hackett v. Xerox Corp. Long-Term Disability

Income Plan, 315 F.3d 771 (7th Cir. 2003)

Hall v. Unum Life Ins., 300 F.3d 1197 (10th Cir.

2002)

Halpin v. W.W. Grainger, Inc., 962 F 2d 685 (7th

Cir. 1992)

Heckler v. Campbell, 461 U.S. 458 (1983)

Hughes Aircraft Co. v. Jacobson, 525 U.S. 432

(1999)

Inter-Modal Rail Employees Ass'n v. Atchison,

Topeka & Santa Fe Ry., 520 U.S. 510 (1999) .............00000

Irish v. McCall, 747 N.Y.S.2d 610 (App. Div.

2002)

Jebian v. Hewlett Packard Co. Employee Benefits

Org. Income Protection Plan, 310 F.3d 1173

(9th Cir. 2002)

Kimber v. Thiokol Corp., 196 F.3d 1092 (10th Cir.

1999)

Kinstler v. First Reliance Standard Life Ins. Co.,

181 F.3d 243 (2d Cir. 1999)

Kreiger v. Gold Bond Bldg. Prods., 868 F 2d 1091

(2d Cir. 1988)

Leahy v. Raytheon Co., 315 F.3d 11 (1st Cir. 2002)

Lindemann v. Mobil Oil Corp., 79 F.3d 647 (7th

Cir. 1996)

eeeeeeee

Lockheed Corp. v. Spink, 517 U.S. 882 (1996) ..........

Luby v. Teamsters Healh, Welfare & Pension

Trust Funds, 944 F 2d 1176 (3d Cir: 1991)

McClanahan v. Raleys Inc., 34 P.3d 573 (Nev.

2001)

VI

Cases—Continued: Page

Meditrust Fin. Servs. Corp. v. Sterling Chems.,

Inc., 168 F.3d 211 (5th Cir. 1999) 14

Morgan v. Commissioner of Soc. Sec. Admin.,

169 F.3d 595 (9th Cir. 1999) : 8

National Mining Ass'n v. Department of Labor,

292 F.3d 849 (D.C. Cir. 2002) 24, 25

New York State Conference of Blue Cross & Blue

Shield Plans v. Travelers Ins. Co., 514 U.S. 645

(1995) 8-9

Pagan v. Secretary of Health & Human Servs.,

819 F.2d 1 (1st Cir. 1987) 20

Peruzzi v. Summa Med. Plan, 137 F.3d 431 (6th

Cir. 1998) 28

Pierre v. Connecticut Gen. Life Ins. Co., 932 F.2d 1552

(5th Cir.), cert. denied, 502 U.S. 973 (1991) 18

Pietrunti v. Director, OWCP, 119 F.3d 1035 (2d

Cir. 1997) 24

Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41 (1987) .......... 11

Pinto v. Reliance Standard Life Ins. Co., 214 F.3d

377 (3d Cir. 2000) 28

Quesinberry v. Life Ins. Co. of N. Am., 987 F.2d

1017 (4th Cir. 1993) 18

Ramsey v. Hercules, Inc., 77 F.3d 199 (7th Cir.

1996) 18

Ratliff v. Governor’s Highway Safety Program,

791 F.2d 394 (5th Cir. 1986) 19

Reeves v. Sanderson Plumbing Prods., Inc.,

GBD UL. BEB GIIG ID cececcccecccccescsssnscsesssnessrsccnanscssesssssensnsssenssse 13

Regula v. Delta Family-Care Disability Survivor-

ship Plan, 266 F.3d 1130 (9th Cir. 2001), petition

for cert. pending, No. 01-1840 5, 8, 15, 23

Reinking v. Philadelphia Am. Life Ins. Co.,

910 F.2d 1210 (4th Cir. 1990), overruled on other

grounds by Quesinberry v. Life Ins. Co. of N. Am.,

987 F.2d 1017 (4th Cir. 1993) 19

Richardson v. Perales, 402 U.S. 389 (1971) 18

_

Vil

Cases—Continued: Page

Riedl v. General Am. Life Ins. Co., 248 F.3d 753

(8th Cir. 2001) . 18

Rowan v. Unum Life Ins. Co., 119 F.3d 433 (6th

Cir. 1997) - 18

Schisler v. Sullivan, 3 F.3d 563 (2d Cir. 1993) .......0.0.... 22

Schweiker v. Chilicky, 487 U.S. 412 (1988) 23

Shaw v. Delta Air Lines, Inc., 463 U.S. 85

(1983) 9

Stephens v. Heckler, 766 F.2d 284 (7th Cir. 1985) ........... 20

Tennant v. Peoria & Pekin Union Ry., 321 U.S. 29

(1944) 13

Tremain v. Bell Indus., Inc., 196 F.3d 970 (9th

Cir. 1999) 5

United-Postal Serv. Bd. of Governors v. Aikens,

460 U.S. 711 (1983) 13

United States v. United States Gypsum Co.,

333 U.S. 364 (1948) 19

Varity Corp. v. Howe, 516 U.S. 489 (1996) ...: 12, 13

Walker v. American Home Shield Long Term

Disability Plan, 180 F.3d 1065 (9th Cir. 1999) ............... 18

White v. Principi, 243 F.3d 1378 (Fed. Cir. 2001) ........... 25

Yochum v. Barnett Banks, Inc. Severance Pay

Plan, 234 F.3d 541 (11th Cir. 2000) 28

Zenith Radio Corp. v. Hazeltine Research, Inc.,

ee 19

Statutes, regulations and rule:

Black Lung Benefits Act, 30 U.S.C. 901 et 8€q. ...ccccccccce0n 24

Employee Retirement Income Security Act,

a i Se I crrrtetecenenenencpceccsemecencemnemennninnssens passim

a 1

29 U.S.C. 1002(21)(A) 12

29 U.S.C. 1104(a) 12

29 U.S.C. 1104(a)(1)(D) 13

29 U.S.C. 1132(a)(1)(B) (§ 502(a)(1)(B)) .........eceonveee 3, 15

29 U.S.C. 1133 17

29 U.S.C. 1133(1) 6, 9, 16

Vill 1X

Statutes, regulations and rule—Continued: Page Miscellaneous: Page

29 U.S.C. 1133(2) .... . 6,9, 16 52 Fed. Reg. (1987):

Longshore and Harbor Workers’ Compensation Act, A 21

33 U.S.C. 901 et BOG. -.creccessrerrrereeseneeresssensscssssnsranssserersnsesssenens 24 p. Ls aa ee ce aD 21

Railroad Retirement Act of 1974, 45 U.S.C. 231 et Seq. .... 25 56 Fed. Reg. (1991):

Social Security Act, 42 U.S.C. 301 et seq. .........000++ 5, 20, 23, 24 p. 36,932 -

Tit. II, 42 U.S.C. 401 et seq.: p. 36,934 20, 21

42 U.S.C. 405(a) .....-csssseseeee 23 p. 36,936 al 21

42 U.S.C. 405(g) . we 20 pp. 36,936-36,937 22

Tit. XVI, 42 U.S.C. 1381 et 809. ....sssssssssssssssnnnnnnnnssnsssssssseee 21 61 Fed. Reg. 34,490 (1996) .ecvecvcsscssssscssssssssssssssssssssesessesesesseeee 22

BS UBC. TOG cscccccccosescscscsesssssssossssososnsnnnnssncsscrsssensessssessesesesnnsseee 19 64 Fed. Reg. (1999):

38 U.S.C. 7104(a) ..... 25 <——_—STevee 24

20 C.F.R.: p. 54,969 24

Section 404.1502 21 65 Fed. Reg. (2000):

Section 404.1527 21 <A ee eee 9, 11

Section 404.1527(d)(2) 21,22 | p. 79,920 25

Section 404.1527(d)(2)(i) ve 22 | p. 79,923 25

Section 404.1527(d)(3)-(d)(5) ~ 2 p. 79,934 25

Section 416.927 21 8 Arthur Larson & Lex K. Larson, Larson’s Workers’

Section 718.104(d)(5) . 25 Compensation Law (2002) 26

29 C.F.R.: | James A. Maccaro, The Treating Physician Rule and

Section 2560.503-1 ........ 1,6,7,9 the Adjudication of Claims for Social Security

Section 2560.503-1 (2000) 9 Disability Benefits, 41 Soc. Sec. Rep. Serv. (West)

Section 2560.503-1(f)(1) (2000) - 10 833 (1998) 20

Section 2560.503-1(f)(2) (2000) 10 Pension and Welfare Benefits Admin., Dep't of

Section 2560.503-1(g)(1) (2000) 10 Labor, Benefits Claims Procedure Regulation

Section 2560.503-1(g)(1)(i) .... 10, 16 (Sept. 4, 2002) <http://www.dol.gov/esba/F AQs/faq_

Section 2560.503-1(g)(1)(ii) 10 claims_proc_reg.html> 10, 11

Section 2560.503-1(g)(1)(v)(B) 11 Restatement (Second) of Trusts (1959) 13-14, 28

Section 2560.503-1(h)(1) . 10, 16

Section 2560.503-1(h)(2)(iv) 10, 16

Section 2560.503-1(h)(3) (2000) 10

Section 2560.503-1(h)(3)(iii) 10, 29

Section 2560.503-1(h)(4) 10

Section 2560.503-1(j)(1) 10, 16

Section 2560.503-1(j)(2) ....... 10

Section 2560.503-1(j)(5)(ii) 11, 16

Section 2560.503-1(o) 9

Fed. R. Civ. P. 52(a) 18

In the Supreme Court of the United States

No. 02-469

THE BLACK & DECKER DISABILITY PLAN, PETITIONER

v.

KENNETH L. NORD

ON WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

BRIEF FOR THE UNITED STATES

AS AMICUS CURIAE SUPPORTING PETITIONER

INTEREST OF THE UNITED STATES

This case presents the question whether the administrator

of a disability plan covered by the Employee Retirement

Income Security Act of 1974 (ERISA), 29 U.S.C. 1001 et seq.,

is required, when deciding whether a claimant is disabled, to

give special weight to the opinion of the claimant’s treating

physician. The Secretary of Labor has primary authority for

the enforcement and interpretation of Title | of ERISA, and

in that connection has issued regulations governing the pro-

cedures to be followed by plans in the processing of claims

for benefits. 29 C.F.R. 2560.503-1.

STATEMENT

1. Petitioner Black & Decker Disability Plan (the plan) is

an ERISA-governed employee welfare benefit plan that pro-

vides disability benefits to employees of Black and Decker

Corporation (Black & Decker) and certain of its subsidiaries.

Pet. App. 2-3. Black & Decker is the funding source for the

plan and acts as plan administrator, although it has dele-

2

gated the authority to make initial determinations on claims

to a third-party administrator, Metropolitan Life Insurance

Company (MetLife). Jd. at 3-6, 8-9. The plan provides bene-

fits for eligible employees with a “disability,” which the plan

defines as “the complete inability * * * of a Participant to

engage in his regular occupation with the Employer (during

the first 30 months of Disability).” Jd. at 3 n.2. The plan

thereafter grants benefits if the employee has a “complete

inability * * * to engage in any gainful occupation or

employment * * * for which the Employee is * * * rea-

sonably qualified by education, training, or experience.”

Ibid. The plan provides that a disability determination “shall

be made by the Plan Manager based on suitable medical evi-

dence and a review of the Participant’s employment history

that the Plan Manager deems satisfactory in its sole and

absolute discretion.” /d. at 3 n.1.

Respondent filed a claim in July 1997 for disability bene-

fits under the plan. During the plan’s consideration of his

claim, respondent submitted reports from physicians who

treated him beginning in March 1997, stating that he suf-

fered from degenerative disc disease and was unable to

perform certain functions required in his regular job as a

material planner. Pet. App. 2-4; id. at 19-23 (describing

respondent’s course of treatment). MetLife denied the

claim, and respondent sought review of that ruling. /d. at 5.

During the review process, petitioner referred respondent

to a neurologist, Dr. Mitri, who examined respondent and

concluded that, although he was suffering from disc disease,

he was capable of performing a sedentary job. Pet. App. 5,

23-24. In addition, at the request of respondent’s counsel, a

Black & Decker human resources representative completed

a work capacity evaluation form in which she gave an af-

firmative answer to the question whether, assuming that

respondent faced chronic myofascial pain that would inter-

fere with necessary interpersonal communications and his

3

ability to react appropriately to stress, respondent lacked

the capacity to perform his job. /d. at 5, 34 n.2. MetLife

thereafter made a final recommendation to the plan manager

to deny the claim. /d. at 5.

On October 27, 1998, an employee in Black & Decker’s

Corporate Benefits department wrote respondent’s counsel

informing him that petitioner was upholding the denial of

benefits. Pet. App. 5-6. The letter stated that “(w]e have

thoroughly reviewed all the medical and vocational infor-

mation in our possession.” C.A. Supp. E.R. 166. The letter

summarized the conclusions of respondent’s treating physi-

cians regarding his limitations; the results of x-rays, MRIs,

and other diagnostic tests; and the opinion of Dr. Mitri based

on his review of the tests and his independent examination of

respondent. The letter also recounted that Dr. Mitri’s report

had been forwarded to respondent's counsel with a request

to provide the comments of his treating physicians, but that

respondent had provided no new or different information

that would change the original decision. Finally, the letter

explained that the work capacity evaluation completed by

Black & Decker’s human resource representative was insuf-

ficient to reverse the decision that respondent was not

disabled. The letter concluded: “Based on our review, the

medical evaluation supports [respondent's] ability to return

to work at his own occupation, and therefore, he cannot be

considered disabled as defined by the Black & Decker

Disability Plan.” Jd. at 167.

2. Respondent then filed this action in federal district

court under Section 502(a)(1)(B) of ERISA, 29 U.S.C.

1132(a)(1)(B), seeking to recover benefits under the plan. On

the parties’ cross-motions for summary judgment, the court

granted judgment in favor of the plan. Pet. App. 18-36.

In addressing the applicable standard of judicial review,

the district court noted that the plan gives its administrator

discretion to determine benefits eligibility and that the

4

administrator’s decision to deny benefits therefore would

ordinarily be reviewed for abuse of discretion in accordance

with Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101,

111-112 (1989). In addition, the court concluded that respon-

dent had not adduced sufficient evidence that the conflict of

interest resulting from the fact that Black & Decker both

funds the plan and decides benefits claims under it had

actually led to a breach of fiduciary duty that would warrant

de novo rather than abuse-of-discretion review under Ninth

Circuit precedent. Pet. App. 30-32. Under the latter test,

the court observed, “[iJt is an abuse of discretion for an

ERISA plan administrator to make a decision without any

explanation, or in a way that conflicts with the plain lan-

guage of the plan, or that is based on clearly erroneous find-

ings of fact.” Jd. at 32 (quoting Atwood v. Newmont Gold

Co., 45 F.3d 1317, 1323-1324 (9th Cir. 1995)). The court found

no such error by the plan administrator. /d. at 31-32.

The district court reasoned that the administrator’s find-

ing of no disability was not improper simply because it was

contradicted by some evidence in the record. Pet. App. 33.

Consequently, the court explained, the opinion of Black &

Decker’s human resources representative, who lacked exper-

tise in medicine or vocational evaluation, did not suffice to

overturn the administrator’s conclusion that respondent was

not disabled, given the other evidence in the record before

the administrator. Jd. at 33-34. The court further concluded

that the plan administrator was not required to credit the

opinion of respondent’s treating physicians over the opinion

of an independent medical examiner, especially since peti-

tioner gave respondent’s treating physicians an opportunity

to comment on the independent examiner’s opinion and

respondent apparently never took advantage of that op-

portunity. /d. at 34-35.

3. The court of appeals reversed. Pet. App. 1-16. It first

explained that, where a plan clearly confers discretion on the

5

plan administrator to determine eligibility, an administrator

like Black & Decker, which also acts as funding source for

the plan, has an “inherent conflict of interest” that warrants

review that is “still for abuse of discretion, [but it] is less

deferential.” Jd. at 8 (quoting Tremain v. Bell Indus., Inc.,

196 F.3d 970, 976 (9th Cir. 1999)). The court further ex-

plained, however, that, if the plan beneficiary provides “ma-

terial, probative evidence” that the administrator’s self-

interest actually caused a breach of the administrator’s fidu-

ciary obligations to the beneficiary, then the court applies a

de novo standard of review, unless the plan in rebuttal

produces evidence to show that the conflict did not affect the

decision to deny benefits. Jd. at 9-10.

Applying that framework, the court of appeals concluded

(Pet. App. 10) that its decision was “controlled” by its earlier

decision of Regula v. Delta Family-Care Disability Su-vi-

vorship Plan, 266 F.3d 1130 (9th Cir. 2001), petition for cert.

pending, No. 01-1840. Pet. App. 10-12. In Regula, a divided

panel held that a “treating physician rule” used in making

and reviewing disability determinations under the Social

Security Act, 42 U.S.C. 301 et seq., also applies to disability

determinations under benefit plans governed by ERISA.

266 F.3d at 1138-1144. As described by the court in Regula,

the treating physician rule requires a plan administrator

“who rejects [the treating physician’s] opinions to come for-

ward with specific reasons for his decision, based on substan-

tial evidence in the record.” Jd. at 1139. The court in Regula

also held that where a plan administrator also funds the plan,

the administrator’s deviation from the treating physician

rule may furnish a basis for concluding that the apparent

conflict of interest that results from the administrator’s dual

status had ripened into an “actual, serious conflict,” thereby

triggering de novo review of the benefit denial. /d. at 1147.

In this case, the court of appeals found no reasons in the

record “as to why the treating physicians’ opinions were

6

unreliable and Dr. Mitri’s more reliable.” Pet. App. 13. It

therefore concluded that petitioner’s lack of explanation

sufficed to show that it breached its fiduciary duty due to a

conflict of interest, which in turn warranted the court’s

exercise of de novo review. Id. at 14-15.’

Applying a de novo standard, the court of appeals con-

cluded that the only evidence contradicting respondent's

claim of disability—Dr. Mitri’s opinion—could not rea-

sonably overcome all the other evidence that it regarded as

establishing disability. Pet. App. 15. In the court’s view, “no

reasonable trier of fact could conclude that [respondent) is

not disabled,” and it therefore held that he is entitled to

benefits under the plan for his first 30 months of disability.

Id. at 15-16.

SUMMARY OF ARGUMENT

A. Nothing in ERISA or the Secretary of Labor's regu-

lations mandates that a plan administrator give special

weight to the opinions of a claimant’s treating physician

when rendering a benefits determination. Rather, the Act

and regulations require plans to have procedures that pro-

vide for the “full and fair review” of claims and to provide

participants with the “specific reasons” for any decision

denying benefits. 29 U.S.C. 1133(1) and (2); 29 C.F.R.

2560.503-1. Those provisions do not purport to cabin a plan

administrator’s discretion in weighing conflicting medical

evidence in determining a claimant’s entitlement to benefits

under the terms of a welfare benefits plan.

In the absence of a regulation requiring a treating physi-

cian rule, courts should not impose such a rule under their

authority to fashion a “federal common law” under ERISA.

1 The court of appeals also concluded that the plan administrator's

rejection of the view of Black & Decker’s human resources representative

that claimant could not perform his past work was “some evidence” of a

conflict of interest. Pet. App. 11.

= i i od

— *

7

‘

Firestone, 489 U.S. at 110. Such a rule would unduly inter-

fere with the ability of employers to establish and design

plans that confer on plan administrators the discretion to

weigh conflicting evidence. Moreover, a treating physician

rule is not necessary to guard against arbitrary decision-

making by plan administrators, as courts may review plan

administrators’ decisions to determine whether the admin-

istrator acted unreasonably in disregarding evidence of a

claimant's disability, including the opinions of treating physi-

cians. Courts also may review plan administrators’ actions

to determine whether they comply with the statutory and

regulatory requirements of full and fair review and of

“+ ¢ oo reasons for a denial of benefits.

- Nor does the special treating physician rule i

under the Social Security disability > anes furnish ser

for judicial imposition of a similar rule under ERISA. That

rule was adopted by the Commissioner of Social Security in

regulations issued in 1991, to bring nationwide uniformity to

a vast statutory benefits program and in light of varying

court of appeals decisions addressing the question. ERISA,

by contrast, governs a broad range of private benefit plans

to which both the statute and implementing regulations is-

sued by the Secretary of Labor permit significant flexibility

in the processing of claims. Moreover, the Social Security

eed physician rule has not been uniformly or

generally applied even under sta disabili

other than Social Security. ei a tis

ARGUMENT

A “TREATING PHYSICIAN RULE” SHOULD NOT BE

APPLIED BY COURTS IN REVIEWING DISABILITY

—— UNDER PLANS COVERED BY

The Ninth Circuit, following its earlier decision in Regula,

held that the “treating physician rule” applicable to Social

8

Security disability determinations governs a plan admin-

istrator’s disability determination under employee benefits

plans covered by ERISA. The Ninth Circuit stated in

Regula that “(t)he treating physician rule applied in the

Social Security setting requires that the administrative law

judge (‘ALJ’) determining the claimant’s eligibility for bene-

fits give deference to the opinions of the claimant’s treating

physician, because ‘he is employed to cure and has a greater

opportunity to know and observe the patient as an indivi-

dual.’” 266 F.3d at 1139 (quoting Morgan v. Commissioner

of Soc. Sec. Admin., 169 F.3d 595, 600 (9th Cir. 1999)). “This

grant of deference,” the Ninth Circuit reasoned, “increases

the accuracy of disability determinations by forcing the ALJ

who rejects those opinions to come forward with specific

reasons for his decision, based on substantial evidence in the

record.” Ibid. Based on what it regarded as “common

sense” as well as an interest in “consistency in [judicial]

review of disability determinations where benefits are pro-

tected by federal law,” the Ninth Circuit saw “no reason why

the treating physician rule should not be used under ERISA

in order to test the reasonableness of the administrator’s

positions.” /bid. That analysis was erroneous.

A. A Treating Physician Rule Is Inappropriate And

Unnecessary Under ERISA

1. ERISA is a comprehensive statute designed “to

promote the interests of employees and their beneficiaries in

employee benefit plans,” and “to protect contractually de-

fined benefits.” Firestone, 489 U.S. at 113 (internal quota-

tion marks and citation omitted). The statute “does not go

about protecting plan participants and their beneficiaries by

requiring employers to provide any given set of minimum

benefits,” but rather protects their interests by, among

other things, setting standards of reporting, disclosure, and

fiduciary responsibility for plan administrators, and by

providing a comprehensive civil enforcement scheme. New

9

York State Conference of Blue Cross & Blue Shield Plans v.

Travelers Ins. Co., 514 U.S. 645, 651 (1995); accord Shaw v.

Delta Air Lines, Inc., 463 U.S. 85, 91 (1983).

ERISA also requires certain plan procedures for the

internal resolution of claims. ERISA requires that, “{iJn

accordance with regulations of the Secretary, every em-

ployee benefit plan shall * * * provide adequate notice in

writing to any participant or beneficiary whose claim for

benefits under the plan has been denied, setting forth the

specific reasons for such denial, written in a manner cal-

culated to be understood by the participant.” 29 U.S.C.

1133(1). ERISA further requires that, again “[iJn accor-

dance with regulations of the Secretary,” plans must “afford

a reasonable opportunity to any participant whose claim for

benefits has been denied for a full and fair review by the

appropriate named fiduciary of the decision denying the

claim.” 29 U.S.C. 1133(2). Congress’s purpose in enacting

those provisions was to “promot[e] internal resolution of

claims and encourag{e] informal and non-adversarial pro-

ceedings under ERISA.” Bernstein v. CapitalCare, Inc., 70

F.3d 783, 788-789 (4th Cir. 1995); accord Lindemann v. Mobil

Oil Corp., 79 F.3d 647, 650 (7th Cir. 1996); Grossmuller v.

International Union, United Auto Workers, Local 813, 715

F.2d 853, 857 (3d Cir. 1983).

Consistent with these principles, the Secretary of Labor

has issued regulations that govern the consideration and

determination of a claim for benefits under a plan. 29 C.F.R.

2560.503-1. Revisions to those regulations were issued in

November 2000, 65 Fed. Reg. 70,246, and became effective

for claims filed on or after January 1, 2002. 29 C.F.R. 2560-

503-1(0).? The regulations have at all times required every

2 Because respondent sought benefits under the plan before the effec-

tive date of the new regulations, the Department's prior regulation, 29

C.F.R. 2560.503-1 (2000), applies in this case.

10

benefit plan to establish and maintain a procedure “under

which there will be a full and fair review of the claim.” 29

C.F.R. 2560.503-1(h)(1); accord 29 C.F.R. 2560.503-1(g)(1)

(2000). The new regulations further specify that a plan’s

claims procedures must “(pJrovide for a review that takes

into account all comments, documents, records, and other

information submitted by the claimant relating to the claim.”

29 C.F.R. 2560.503-1(h)(2)(iv). In addition, the new regula-

tions require group health and disability plans to provide

that, “in deciding an appeal of any adverse benefit determi-

nation that is based in whole or in part on a medical judg-

ment,” the administrator “shall consult with a health care

professional who has appropriate training an¢ experience in

the field of medicine involved in the medical }. dgment.” 29

C.F.R. 2560.503-1(h)(3)(iii) and (4); see also Pension and Wel-

fare Benefits Admin. (PWBA), Dep’t of Labor, Benefits

Claims Procedure Regulation, Question D-8 (Sept. 4, 2002)

<http://www.dol.gov/ebsa/F AQs/faq_claims _proc_reg. html>

(reprinted in Pet. App. 77) (“In all cases, a fiduciary must

take appropriate steps to resolve the appeal in a prudent

manner, including acquiring necessary information and

advice, weighing the advice and information so obtained, and

making an independent decision on the appeal.”).

The regulations have at all times required that a plan

administrator’s final decision provide, in a manner calculated

to be understood by the claimant, the “specific reason or

reasons for the adverse determination” as well as specific

references to the plan provisions on which the denial is

based. 29 C.F.R. 2560.503-1(j)(1) and (2); 29 C.F.R. 2560.503-

1(h\3) (2000); accord 29 C.F.R. 2560.503-1(g)(1)(i) and (ii)

(parallel requirements for initial decision on claim), 29 C.F.R.

2560.503-1(f)(1) and (2) (2000) (same). The new regulations

additionally require, for certain determinations by group

health plans and plans providing disability benefits, that the

notice include either an “explanation of the scientific or

1]

clinical judgment for the determination, applying the terms

of the plan to the claimant’s medical circumstances,” or a

statement that such explanation will be provided on request.

29 C.F.R. 2560.503-1(j)(5)(ii); 29 C.F.R. 2560.503-1(g)(1)

(vB).

Nothing in those regulatory provisions suggests that plan

administrators must accord special deference to the opinions

of treating physicians in considering a participant’s entitle-

ment to benefits under the plan or must explain why no such

deference was given. Indeed, “(t]he [Department did not in-

tend to prescribe any particular process or safeguard to en-

sure and verify consistent decision making by plans. To the

contrary, the [Djepartment intended to preserve the great-

est flexibility possible for * * * operating claims processing

systems consistent with the prudent administration of a

plan.” PWBA, Dep’t of Labor, Benefits Claims Procedure

Regulation, Question B-4 (reprinted in Pet. App. 52). The

regulations thus reflect the Department’s considered view

that an informal and flexible system of claims processing

best “reconcile[s] the need for procedural protections with

the purely voluntary nature of the system through which

these vital benefits are delivered.” 65 Fed. Reg. at 70,246.

2. The absence of any requirement in ERISA itself or in

the Secretary’s implementing regulations that plan admini-

strators accord special weight to opinions of treating physi-

cians counsels strongly against courts adopting such a re-

quirement on their own. Although courts have authority “to

develop a ‘federal common law of rights and obligations

under ERISA-regulated plans,” Firestone, 489 U.S. at 110

(quoting Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 56

(1987)), they should be particularly cautious in invoking that

authority to impose special rules governing a particular sub-

ject matter when Congress has committed that subject

matter (here, the review of benefit claims) to the primary

jurisdiction of the Secretary, and the Secretary in turn has

12

in specific requirements but otherwise inten-

ro wth at flexibility for employers and —_

who design these antag pry = —- a

m. Compare City of Mt , .

yyy ef. Geier vy. American Honda Motor Co., 529

-875, 881- 884 (2000).

_— seat “(eJmployers or other plan sponsors -

generally free under ERISA, for any reason at - poo r

adopt, modify, or terminate welfare plans. Hug 8 ret

Co. v. Jacobson, 525 U.S. 432, 443 (1999) (quoting sor

Corp. v. Spink, 517 U.S. 882, 890 (1996)), accord cot -

Rail Employees Ass'n v. Atchison, Topeka & age e ¥

520 U.S. 510, 515 ce ; ag et

hoonzjongen, 514 U.S. 73, > ly,

sah from the Secretary’s claims processing oa ns

apply in this particular context, ERISA generally pm ’-

the employer decisions “regarding the form or stru ~ sin

the Plan such as who is entitled to receive Plan bene eden

in what amounts, or how such benefits are calcu e 4

Hughes Aircraft Co., 525 U.S. at 444. It follows that, i

fashioning federal common law under ERISA, courts may

have to take account of competing congressional pape ,

such as Congress’ desire to offer employees en ee

protection for their benefits, on the one hand, and, on on

other, its desire not to create a system that is so some =

that administrative costs, or litigation expenses, und y -

courage employers from py es = ~ted

” Varity Corp. v. Howe, S. 489, ,

nh be enon a an employer establishes a plan oy

by ERISA, plan administrators are prmigenn bo os

1002(21)(A), and must administer the plan consisten oe

their duties of prudence and loyalty. 29 U.S.C. 1104(a). ae

nothing in the common law of trusts requires plan admini

strators, in making factual determinations, to give —

weight or deferential consideration to particular eviden

13

submitted by a beneficiary who seeks benefits under the

plan. To the contrary, under ERISA the administrator’s

fiduciary duty runs to the plan as a whole, and the fiduciary’s

duty is to follow the terms of the plan and render correct

decisions under it, carefully weighing all of the relevant

evidence. 29 U.S.C. 1104(a)(1)(D); Varity Corp., 516 U.S. at

513-514. Indeed, any rule requiring the fiduciary always to

give special weight to the opinion of a beneficiary’s treating

physician would run counter to the background rule—which

should not be displaced in the absence of strong reasons—

that a finder of fact “should consider all the evidence, giving

it whatever weight and credence it deserves.” United

Postal Serv. Bd. of Governors v. Aikens, 460 U.S. 711, 714

n.3 (1983); accord Reeves v. Sanderson Plumbing Prods.,

Inc., 520 U.S. 133, 150 (2000) (factfinder’s function includes

“(cjredibility determinations, the weighing of the evidence,

and the drawing of legitimate inferences from the facts.”)

(quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255

(1986)); ef. Tennant v. Peoria & Pekin Union Ry., 321 U.S.

29, 35 (1944) (“The very essence of [the jury’s] function is to

select from among conflicting inferences and conclusions that

which it considers most reasonable.”).

It is significant as well that employers are free under

ERISA to design plans that grant discretion to the plan

administrator to interpret plan terms and make eligibility

determinations consistent with the administrator’s fiduciary

duties and the Act. Firestone, 489 U.S. at 111-115. A plan

that confers discretion on the administrator to determine

whether a claimant is disabled necessarily leaves to the

administrator the discretion to resolve factual disputes, such

as the nature and extent of the claimant’s medical condition

and physical limitations. In such instances, the administra-

tor’s determinations are reviewed deferentially by a court,

ibid., and are not subject to reversal “except to prevent an

abuse * * * of * * * discretion.” Restatement (Second) of

14

Trusts § 187 (1959) (cited with approval in Firestone, 489

U.S. at 111). Accordingly, in reviewing a plan ——.

strator’s decision that a participant is not disabled, [t]he

essential inquiry” for a court is whether oe geen

“reasonably construe[d] and appl[ied] the * Plan in . “

claimant’s] case.” Block v. Pitney Bowes Inc., 952 ome ’

1454 (D.C. Cir. 1992) (R.B. Ginsburg, J.); accord Lea y V.

Raytheon Co., 315 F.3d 11, 17 (1st Cir. 2002) (an oe

aud capricious standard “asks only whether a we -_

decision is plausible in light of the record as a whole, ii

or, put another way, whether the decision is suppente : y

substantial evidence in the record” (citations omitted));

statement (Second) of Trusts § 187, cmt. i, illus. 9 (1959)

(trustee’s decision on whether beneficiary is competent —

be upheld “{iJf * * * reasonable men might differ on the

ion” 3 |

ag vocigl employer designs a plan that gives the plan

administrator discretionary authority to weigh conflicting

evidence, “{a] rule that requires plan administrators to con-

sider certain types of evidence and to weigh that evidence in

3 As then-Judge Ginsburg explained in Block: |

The distinction, if any, between “arbitrary and capetcious review” and

review for “abuse of discretion” is subtle. Cf. Ass’n of Data “ant

cessing Service Organizations, Inc. v. Board of Governors of Fe ;

Reserve System, 745 F.2d 677, 684 (D.C. Cir. 1984) (Scalia, J.) ( is-

tinction between substantial evidence test and arbitrary or oe

test is “largely semantic”) (citations omitted). In the matter a . ‘

we are satisfied, there is no need to adopt one phrese and avoid the

other. The reasonableness of the Plan Committee s decision is ee

polestar, as commentary relating to Administrative Procedure Ac

analogs almost uniformly affirms.

952 F.2d at 1454; accord; Leahy v. Raytheon Co., 315 F.2d at 15 n3; a

v. Hewlett Packard Co. Employee Benefits Org. Income gee we n,

310 F.3d 1173, 1177 (9th Cir. 2002); Meditrust Fin. Servs. Corp. v. Pe

Cheme., Inc., 168 F.3d 211, 214 (5th Cir. 1989); Anderson v. Blue

Cross/Blue Shield, 907 F.2d 1072, 1075 n.2 (11th Cir. 1990).

15

a compulsory manner would effectively undermine that

discretion.” Regula, 266 F.3d at 1151 (Brunetti, J., dis-

senting). Likewise, if a review of the administrator’s deci-

sion reveals that the administrator reasonably declined to

defer to the opinion of a treating physician, the decision is

not arbitrary simply because the decision failed to rebut the

opinion with “specific, legitimate reasons.” Pet. App. 13.

For instance, the treating physician’s opinion on its face may

reveal why the administrator reasonably gave it little or no

weight—e.g., the opinion may not be accompanied or sup-

ported by objective or clinical findings, or the physician may

have lacked relevant expertise. Cf. id. at 11 (rejecting re-

spondent’s contention that the administrator should have

provided “specific reasons” for rejecting the opinion of peti-

tioner’s human resource representative, because the admini-

strator “was under no duty to rebut with specificity all

evidence adduced by [respondent] to support his claim”).

Likewise, the reasons that an administrator did not rely on

the treating physician’s opinion may reasonably be apparent

from other medical evidence, laboratory tests, or examina-

tions, as well as non-medical evidence, that rebut the opinion

of the treating physician regarding the claimant’s condition

or limitations.

3. The absence of a rule under ERISA that special

weight be given to the opinion of the beneficiary’s treating

physician does not mean that plan administrators may arbi-

trarily disregard such opinions—or, for that matter, that

they may disregard any other reliable evidence that bears on

an entitlement to benefits under the plan. If a plan denies a

claim for benefits, the beneficiary may challenge that action

under 29 U.S.C. 1132(a)(1)(B). Even under a deferential

standard of review, a court may determine in a particular

case that the decision-maker’s disregard of the opinion of the

claimant’s treating physician (or other material evidence)

constituted an abuse of discretion. Cf. Connors v. Connecti-

16

cut Gen. Life Ins. Co., 272 F.3d 127, 135-136 (2d Cir. 2001)

(district court, on de novo review of administrator's decision,

clearly erred in rejecting treating physician’s 2

because district court erroneously believed that participan

had been referred to physician by his attorney when physi-

cian, in fact, had been participant’s treating physician for

“i epee regulations provide other significant pro-

tections for plan participants and beneficiaries as well. =

discussed above, plan procedures must provide for a fu

and fair review” of a denial of a claim for benefits (29 U.S.C.

1133(2); 29 C.F.R. 2560.503-1(h)(1)), and such a review —

“take[] into account all comments, documents, records, an

other information submitted by the claimant relating to the

claim” (29 C.F.R. 2560.503-1(h)(2)(iv)). The plan administra-

tor’s decision must also provide the “specific reasons m

any adverse determination (29 U.S.C. 1133(1); 29 noi

2560.503-1(g)(1)(i) and (j)(1)), and the beneficiary must ;

furnished, or afforded the right to obtain, an explanation 0

the scientific or clinical judgment” for certain gent

by group health and disability plans (29 C.F.R. 2560.503-

ii)). .

os those provisions, “the persistent core requirements

of review intended to be full and fair include knowing what

evidence the decision-maker relied upon, having an opportu-

nity to address the accuracy and reliability of that evidence,

and having the decision-maker consider the evidence —

sented by both parties prior to reaching and rendering his

decision.” Grossmuller, 715 F.2d at 858 n.b. The purpose of

requiring specific reasons for an administrator’s denial of

benefits is “to afford the beneficiary and the courts a

sufficiently precise understanding of the ground for the

denial to permit a realistic possibility of review, even under a

deferential standard.” Halpin v. W.W. Grainger, Inc., 962

F.2d 685, 694 (7th Cir. 1992). Thus, in an appropriate case, a

——

17

plan administrator’s failure to adequat*ly address the well-

reasoned and documented opinion of a physician may violate

ERISA and the Secretary’s regulations. E.g., Hackett v.

Xerox Corp. Long-Term Disability Income Plan, 315 F.3d

771, 774-775 & n.3 (7th Cir. 2003) (reversing administrator’s

decision for failing to provide adequate reasons for ter-

minating disability benefits that plan had been paying for

twelve years, where termination was based on one physi-

cian’s opinion that failed to provide “{aJny non-arbitrary

explanation” why his opinion differed from that of several

previous doctors).‘ Finally, where, as here, the plan

administrator both funds the plan and renders decisions on

claims for benefits under it, more searching scrutiny of the

administrator’s denial of a claim is warranted. Firestone, 489

U.S. at 115; p. 27, infra. In those circumstances, there may

be special justification for expecting the administrator to

explain his consideration of material evidence submitted by

the claimant.

4. The above principles also counsel against adoption of a

special “treating physician rule” even where a plan, in the

exceptional case after Firestone, does not confer discretion

on the plan administrator to resolve factual questions and

the district court’s review of the administrator’s decision

* Respondent did not argue in his briefs in the court of appeals, or in

his brief in opposition to the certiorari petition, that the plan administra-

tor’s decision in this case failed to comply with 29 U.S.C. 1133 or the

Department’s regulations because of any inadequacies in its explanation

concerning the opinions of treating physicians. Compare Pet. App. 11-12

n.7 (rejecting contention that administrator was required to provide “spe-

cific reasons for rejecting the opinion” of petitioner’s human resource rep-

resentative). Respondent relied only on the judge-made treating physi-

cian rule. For that reason, and because new regulations are now in effect,

this brief does not address whether the administrator’s decision satisfied

29 U.S.C. 1133 and the regulations that applied at the time.

18

therefore is de novo under Firestone, 489 US. at 111-116."

In that situation, the district court is charged with inter-

preting the relevant terms of the plan and determining the

claimant’s entitlement to benefits, typically based on the

record before the administrator. The district court thus

performs essentially the same function as the plan admin-

istrator, weighing the reports of the physicians who have

treated or examined the claimant or reviewed his records, as

well as any other relevant evidence in the record. Compare

Richardson v. Perales, 402 U.S. 389 (1971) (upholding Social

Security hearing examiner’s reliance on written medical re-

ports, without requiring physicians to testify). In the ab-

sence of any plan term that requires deference to the opinion

of a treating physician, the district court would not be

automatically required to give special weight to such an

opinion. RoR

On appeal of a district court’s decision in such a case, any

factual findings by the district court presumably must be

upheld under Federal Rule of Civil Procedure §2(a) unless

they are clearly erroneous, i.e. “the reviewing court on the

5 The courts of appeals generally agree that in such circumstances the

administrator’s factual findings are reviewed de novo. Riedl v. General

Am. Life Ins. Co., 248 F.3d 753, 756 (8th Cir. 2001); Kinstler v. First Re-

liance Standard Life Ins. Co., 181 F.3d 243, 249-251 (2d Cir. 1999); Walker

y. American Home Shield Long Term Disability Plan, 180 F.3d 1065, 1069

(9th Cir. 1999); Rowan v. Unum Life Ins. Co., 119 F.3d 433, 435 (6th Cir.

1997); Ramsey v. Hercules, Inc., 77 F.3d 199, 203-205 (7th Cir. 1996); Luby

v. Teamsters Health, Welfare & Pension Trust Funds, 944 F.2d 1176, 1183

(3d Cir. 1991); Reinking v. Philadelphia Am. Life Ins. Co., 910 F.2d 1210,

1213-1214 (4th Cir. 1990), overruled on other grounds by Quesinberry v.

L i » but see Pierre v.

Life Ins. Co. of N. Am., 987 F.2d 1017 (4th Cir. 1993);

Seecamee Gen. Life Ins. Co., 982 F.2d 1552, 1557-1562 (5th Cir.), cert.

denied, 502 U.S. 973 (1991).

6 Hall v. Unum Life Ins., 300 F.3d 1197, 1202 (10th Cir. 2002); Doe v.

Travelers Ins. Co., 167 F.3d 58, 57-58 (1st Cir. 1999); DeFelice v.

American Int'l Life Assurance Co., 112 F.3d 61, 65 (2d Cir. 1997).

19

entire evidence is left with the definite and firm conviction

that a mistake has been committed.” United States v.

United States Gypsum Co., 333 U.S. 364, 395 (1948); ef. Dick-

inson v. Zurko, 527 U.S. 150, 153, 162-163 (1999) (observing

that the clearly erroneous standard “has been considered

somewhat stricter (i.e. allowing somewhat closer judicial

review)” than the substantial evidence standard under

5 U.S.C. 706, “[bJut the difference is a subtle one”). Any

requirement by the courts of appeals that district courts

categorically give special weight to the opinions of treating

sources, but not other opinion evidence, would interfere with

the traditional discretion of trial courts to weigh conflicting

medical evidence. Anderson v. City of Bessemer, 470 U.S.

564, 573 (1985); Zenith Radio Corp. v. Hazeltine Research,

Inc., 395 U.S. 100, 123 (1969). Similarly, while the district

court’s findings must “permit intelligent appellate review,”

reviewing courts do not require either “‘punctilious detail”

or “‘slavish tracing of the claims issue by issue and witness

by witness.’” Krieger v. Gold Bond Bldg. Prods., 863 F.2d

1091, 1097 (2d Cir. 1988) (quoting Ratliff v. Governor's

Highway Safety Program, 791 F.2d 394, 400 (5th Cir. 1986)).

B. Application Of A Treating Physician Rule Under The

Social Security Act Does Not Justify Judicial

Imposition Of Such A Rule Under ERISA

The court of appeals held that the special treating physi-

cian rule applied under the Social Security disability pro-

gram warranted the fashioning of a parallel rule by the

courts to govern private benefit plans under ERISA. The

court of appeals overlooked the special circumstances that

gave rise to the rule applied in the Social Security program

and critical distinctions between that program and ERISA.

1. The Commissioner of Social Security adopted a treat-

ing physician rule in regulations issued in 1991 in response to

judicial decisions that had developed similar rules in the

course of reviewing disability determinations by ALJs who

20

had considered such opinion evidence. Prior to 1991, most

courts of appeals generally held that the ALJ should give

special weight to the claimant’s treating physician as the

medical expert with best opportunity to familiarize himself

with the claimant’s condition, although “significant variation

exist{ed] * * * with regard to the treatment to be afforded

to the treating physician’s opinion and the evidence required

to refute it.” James A. Maccaro, The Treating Physician

Rule and the Adjudication of Claims for Social Security

Disability Benefits, 41 Soc. Sec. Rep. Serv. (West) 833, 834

(1993).

As the Commissioner explained when the regulations

were promulgated, the appellate precedents requiring that

special weight be given to the opinions of treating physicians

did not hold that such a rule was required by the Social

Security Act. 56 Fed. Reg. 36,932, 36,934 (1991). Rather,

those precedents developed in the course of case-by-case

review of individual ALJ decisions under the substantial

evidence test required by 42 U.S.C. 405(g). Two courts of

appeals, moreover, had specifically rejected the principle

that a treating physician’s opinion was necessarily entitled to

special weight under the Social Security Act. Pagan v.

Secretary of Health & Human Servs., 819 F.2d 1, 3-4 (1st

Cir. 1987) (opinion of treating physician “not entitled to

greater weight” over the opinion of “a consulting physician”;

“(i]t is the [agency’s] province to resolve conflicts in the

medical evidence”); Stephens v. Heckler, 766 F.2d 284, 289

(7th Cir. 1985) (“Experience and knowledge * * * lie on the

side of the treating physician, expertise and knowledge of

similar cases on the side of the consulting specialist. How

these weigh in a particular case is a question for the

[agency], subject only to the rule that the final decision must

be supported by ‘substantial evidence.’”).

In 1991, the Commissioner concluded “that judicial deci-

sions in several circuits pointed to a need for a clear policy

21

statement that would encourage uniformity of adjudication

and provide the public and the courts with a definitive ex-

planation of [the Commissioner’s] policy on weighing treat-

ing source opinions.” 56 Fed. Reg. at 36,934; see also 52 Fed.

Reg. 13,014, 13,016 (1987) (proposing the regulations “in re-

sponse to certain Federal Circuit Court of Appeals deci-

sions”). The Commissioner accordingly promulgated regula-

tions to resolve the controversy and furnish “detailed provi-

sions that would prescribe rules stating how [the Commis-

sioner] would consider and weigh medical opinions,” includ-

ing those from the claimant’s treating source. 56 Fed. Reg.

at 36,934.

The regulations define a “[t}:eating source” as an “accept-

able medical source who * * * has, or has had, an on-

going treatment relationship” with the claimant, 20 C.F.R.

404.1502, and set forth the standards for evaluating opinions

from that source under 20 C.F.R. 404.1527.’ The regulations

provide that, in “[e]valuating opinion evidence,” the Com-

missioner “(gjenerally [will] give more weight to opinions

from * * * treating sources, since these sources are likely

to be the medical professionals most able to provide a

detailed, longitudinal picture of [the claimant’s] medical

impairment(s) and may bring a unique perspective to the

medical evidence that cannot be obtained from the objective

medical findings alone or from reports of individual examina-

tions, such as consultative examinations or brief hospitaliza-

tions.” 20 C.F.R. 404.1527(d)(2). The Commissioner ex-

plained in issuing the regulations that, “{a]l] things being

equal, * * * [the Commissioner] will always give greater

weight to the treating source’s opinion than to the opinions

of nontreating sources.” 56 Fed. Reg. at 36,936.

7 The Commissioner has promulgated a similar regulation, 20 C.F.R.

416.927, to govern disability determinations for indigent persons under the

Supplemental Security Income Program in Title XVI of the Social Secur-

ity Act.

22

The Commissioner will give the treating source’s opinion

on the nature and severity of a claimant’s impairments “con-

trolling weight” if it “is well-supported by medically ac-

cepted clinical and laboratory diagnostic techniques and is

not inconsistent with the other substantial evidence in [the

claimant’s] case record.” 20 C.F.R. 404.1527(d)(2). Where

the opinion is not given controlling weight, the Commis-

sioner will consider other factors, including the “{lJength of

the treatment relationship and the frequency of examina-

tion,” “{sjupportability,” “{cJonsistency,” and “(s)pecializa-

tion” of the treating source, “in determining the weight to

give to the opinion.” 20 C.F.R. 404.1527(d2)i), (d(3)-(d 5).

“(E]ven if the treating source’s opinion is not such that [the

Commissioner] can give it controlling weight, [the Com-

missioner] will still give the opinion more weight than [she]

would have given it if it came from a nontreating source.” 56

Fed. Reg. at 36,936; accord id. at 36,936-36,937. The Com-

missioner’s regulation further informs claimants that “[wle

will always give good reasons in our notice of determination

or decision for the weight we give your treating source’s

opinion.” 20 C.F.R. 404.1527(d)(2); 61 Fed. Reg. 34,490,

34,492 (1996) (Soc. Sec. Ruling 96-2p).

The Commissioner’s regulations are binding upon courts

reviewing the agency’s final decision even where the regu-

lations “differ from [a circuit’s own prior] version of the

treating physician rule in material respects.” Schisler v.

Sullivan, 3 F.3d 563, 566, 567, 568 (2d Cir. 1993) (noting that

Commissioner’s regulations supplanted circuit law by

“accord{ing] less deference to unsupported treating physi-

cian’s opinions,” by considering “the length of the relation-

ship between the treating source and the claimant,” and by

“permit(ting] the opinions of nonexamining sources to over-

ride treating sources’ opinions, provided they are supported

by evidence in the record”).

—— ee

23

2. The Ninth Circuit in Regula imported the Social

Security Act’s treating physician rule into the ERISA

context based on what the court regarded as “common

sense” and on an interest in “consistency in [judicial] review

of disability determinations where benefits are protected by

federal law.” 266 F.3d at 1139. The court of appeals erred in

equating the two situations. The Social Security Act is a

nationwide statutory benefits program paid for by federal

funds and subject to uniform administration by the

Commissioner of Social Security. Moreover, while there is

substantial reason to doubt that the courts of appeals in the

1980s had authority to impose on the Commissioner general

standards concerning what weight must be given to treating

physician opinions, that issue is now beside the point because

the Commissioner in 1991 elected to adopt such a rule in

regulations and those regulations now control the adjudi-

cation of claims under the program.

The Commissioner has often exercised her “exceptionally

broad” authority under 42 U.S.C. 405(a), see Heckler v.

Campbell, 461 U.S. 458, 466 (1983), to establish rules for the

receipt and assessment of proof for benefit eligibility under

the Act in order to achieve efficiency and uniformity to the

processing of over 2.5 million claims for benefits, of which

over 200,000 are considered by ALJs. Cleveland v. Policy

Mgmt. Sys. Corp., 526 U.S. 795, 803, (1999); Schweiker v.

Chilicky, 487 U.S. 412, 424 (1988); Bowen v. Yuckert. 482

U.S. 187, 153 (1987); Heckler v. Campbell, 461 U.S. at 460-

462. In similar fashion, the Commissioner reasonably deter-

mined, in the face of the many but varying court of appeals

decisions on the subject, to adopt a treating physician rule

that could be applied in a uniform way throughout the

N ation. The adoption of regulations by the responsible

Executive agency to bring nationwide uniformity to a

massive statutory benefits program does not support judicial

imposition of a treating physician rule on a broad range of

24

private and voluntary benefit plans where the responsible

Executive agency has not done so and instead has sought to

preserve maximum flexibility for the design of such plans

and their processing of claims.

Indeed, the treating physician rule has not consistently

been applied outside the Social Security context even under

other statutory disability programs. In addition to the Social

Security context, the rule, or some variation of it, has been

adopted by some courts in two federal statutory settings. A

few courts, in reviewing disability determinations by the

Department of Labor’s Benefits Review Board under the

Longshore and Harbor Workers’ Compensation Act

(LHWCA), 33 U.S.C. 901 et seg., have embraced a treating

physician rule similar to the one developed under the Social

Security Act. Amos v. Director, OWCP, 153 F.3d 1051, 1054

(9th Cir. 1998), cert. denied, 528 U.S. 809 (1999); Pietrunti v.

Director, OWCP, 119 F.3d 1035, 1042 (2d Cir. 1997).

Additionally, courts reviewing decisions by the Benefits

Review Board under the Black Lung Benefits Act (BLBA),

30 U.S.C. 901 et seq., have adopted a less deferential version

of a treating physician rule that permits, but does not re-

quire, hearing officers to defer to the opinions of treating

physicians. National Mining Ass'n v. Department of Labor,

292 F.3d 849, 861 (D.C. Cir. 2002) (noting “consensus among

[the] courts * * ** that an agency adjudicator may give

weight to the treating physician’s opinion when doing so

makes sense in light of the evidence and the record, but may

not mechanistically credit the treating physician solely be-

cause of his relationship with the claimant.”). In 2000, the

Department of Labor adopted a regulation on the subject

under the BLBA that “attempted to codify principles em-

bodied in case law.” 64 Fed. Reg. 54,966, 54,969 (1999).

That regulation permits (but does not require) the hearing

officer to give “controlling weight” to a treating physician’s

opinion “in light of its reasoning and documentation, [and]

eee tat AE

ED AO. wr

25

other relevant evidence and the record as a whole.” 20

C.F.R. 718.104(d)(5); National Mining Ass’n, 292 F.3d at

861, 870-871 (upholding regulation and noting that it “codi-

fies judicial precedent and does not work a substantive

change in the law”). In issuing the regulation, the Depart-

ment stated that it “is not an outcome-determinative eviden-

tiary rule,” because it permits the adjudicator to “consider{]

the credibility of the physician’s opinion in light of its

documentation and reasoning and the relative merits of the

other relevant medical evidence of record.” 65 Fed. Reg.

79,920, 79,923 (2000). The Department also distinguished its

regulation from the one governing Social Security claims,

explaining that the Social Security rule “demonstrates an

affirmative preference for reports from treating physicians.”

65 Fed. Reg. at 79,934.

In two other federal statutory disability programs, courts

have rejected a treating physician rule outright and the

responsible federal agency has declined to adopt one. In

White v. Principi, 243 F.3d 1378, 1381 (Fed. Cir. 2001), the

court of appeals held that the Board of Veterans’ Appeals

need not accord special weight to treating physician opinions

in determining entitlement to veterans’ benefits for service-

connected disabilities because nothing in the federal statute

that permits the Board to consider evidence, 38 U.S.C.

7104(a), “suggest[s] that the VA should give more weight to

a piece of evidence based solely on its source.” Similarly, in

Dray v. Railroad Retirement Board, 10 F.3d 1306 (7th Cir.

1993), the court rejected a treating physician rule for dis-

ability determinations under the Railroad Retirement Act of

1974, 45 U.S.C. 231 et seq., reasoning that “{iJn the case of

dueling doctors, it remains the province of the [finder of fact]

to decide whom to believe—a treating doctor whose experi-

ence and knowledge about the case may (or may not) be rele-

vant to understanding the claimant’s condition, or a

26

consulting specialist who may bring expertise and knowl-

edge about similar cases.” Dray, 10 F.3d at 1311.

A majority of state courts likewise have rejected a treat-

ing physician rule under state worker’s compensation stat-

utes. Conradt v. Mt. Carmel Sch., 589 N.W.2d 718, 717 (Wis.

Ct. App. 1995) (noting majority rule and observing that “{a]

handful of states allow trial courts to give greater deference

to the testimony of an attending physician, yet without

creating a presumption that this is so”) (emphasis removed);

see generally 8 Arthur Larson & Lex K. Larson, Larson's

Workers’ Compensation Law § 130.05D{(4)][b] (2002) (dis-

cussing state court decisions). Some courts rejecting a

treating physician rule have reasoned that it would unduly

interfere with discretion accorded the finder of fact to weigh

conflicting medical opinions.” Other courts have questioned

the wisdom of categorically deferring to the opinions of

treating physicians.’ For similar reasons, New York courts

8 Doyle v. Public Employees’ Retirement Sys., 808 So. 2d 902, 907

(ies. 2002) “The law contains no such duty of deference {to the treating

physician], and * * * this Court cannot reweigh the facts.”); Dillon v.

Whirlpool Corp., 19 P.3d 951, 953-954 (Or. Ct. App. 2001) (“{Dlivided

medical opinion leaves the Board in the position of evaluating the evi-

dence.”); Conradt, 539 N.W.2d at 716 (“{I)t is for [the state commission] to

decide if one expert’s testimony is more persuasive than another’s.”), Ashe

v. Workmen's Comp. Appeal Bd., 648 A.2d 1306, 1308 (Pa. Commw. Ct.

1994) (“{T]he weighing of testimony is solely within the province of the

referee, and his decision to accept testimony of one competent witness

over another will not be disturbed on appeal.”); Gibson v. City of Lincoln,

376 N.W.2d 785, 791 (Neb. 1985) (“ ‘trier of fact’ remains the sole judge of a

witness’ credibility and the testimony’s weight”).

9 McClanahan v. Raley's Inc., 34 P.3d 573, 577 (Nev. 2001) (“We do

not agree that because a physician has a duty to cure a patient that the

physician will necessarily be more familiar with an issue.”); Gibson, 376

N.W.2d at 791 (“Generally, an expert witness’ firsthand knowledge is a

factor which may affect such witness’ credibility and weight given to the

testimony from that expert, but presence or absence of firsthand know!-

27

have rejected the treating physician rule for disability

determinations under the State’s employee retirement

system. E\g., Irish v. McCall, 747 N.Y.S. 2d 610, 611 (App.

Div. 2002) (“[W]e have adhered to the view that the

Comptroller is vested with the authority to resolve conflicts

in medical opinion and credit the testimony of one medical

expert over another.”).

These authorities demonstrate the absence of a generally

accepted treating physician rule applicable to statutory

disability determinations. The Ninth Circuit thus erred in

concluding that a treating physician rule under ERISA is

necessary to ensure uniformity of judicial decisions review-

ing disability determinations—even assuming, arguendo,

that it was the proper role of that court to bring uniformity

to disparate statutory programs.

C. The Case Should Be Remanded For Further Pro-

ceedings In Which Special Weight Need Not Be Given

To The Opinions Of Respondent's Treating Physicians

The Ninth Circuit held that Black & Decker’s dual status

as funding source and plan administrator created a conflict of

interest (Pet. App. 8-9) and that the plan administrator's

failure to apply a treating physician rule in those circum-

stances constituted a breach of fiduciary duty (id. at 8-14).

The court of appeals further held that such a breach trig-

gered a de novo standard of judicial review, and under that

standard, no disputed issue of material fact existed as to

whether respondent was disabled. Jd. at 14-15. The United

States agrees that the employer’s dual role in funding the

plan and deciding claims under it created a conflict of inter-

est that triggered a requirement of more searching judicial

review under Firestone, 489 U.S. at 115, and petitioner did

not seek review of the court of appeals’ ruling to that effect.

edge does not, by itself, necessarily establish preference or priority in

evidentiary value.”).

28

See also Pet. App. 31 (district court opinion) (“Defendant

* * * concedes that there is an apparent or technical

conflict of interest due to Black & Decker’s dual role as in-

surer and administrator.”)."° Nor has petitioner challenged

the court of appeals’ further conclusion that, once a claimant

provides material evidence that such a conflict of interest in

turn actually affected the administrator’s decision to deny

benefits and thereby resulted in a breach of fiduciary duty, a

de novo standard of review is appropriate unless the plan

produces evidence that no such breach occurred. [d. at 9-15.

Nonetheless, the Ninth Circuit’s judgment should be set

aside, for two reasons.

First, the court held that a de novo standard of review

was required based in part on its erroneous view that

ERISA plan administrators are required to follow the

treating physician rule as set forth in Regula. Pet. App. 8-

15. In particular, the court of appeals relied on the admin-

istrator’s failure to follow that rule as evidence that peti-

tioner’s conflict of interest actually influenced the admini-

strator’s decision and constituted a breach of fiduciary duty.

Id. at 9, 12, 14.

10 Under Firestone, “if a benefit plan gives discretion to an administra-

tor or fiduciary who is operating under a conflict of interest, that conflict

must be weighed as a ‘facto(r] in determining whether there is an abuse of

discretion.’” 489 U.S. at 115 (quoting Restatement (Second) of Trusts

§ 187, cmt. d (1959)). Courts have differed on whether a conflict of interest

is present where the fiduciary both decides a claim for benefits and is re-

sponsible for paying the claim out of its own assets. Compare Pet. App. 8-

-9; Yochum v. Barnett Banks, Inc. Severance Pay Plan, 234 F.3d 541, 544

(11th Cir. 2000); Pinto v. Reliance Standard Life Ins. Co., 214 F.3d 377,

391-392 (3d Cir. 2000); Peruzzi v. Summa Med. Plan, 137 F.3d 431, 433

(6th Cir. 1998); Doe v. Group Hospitalization & Med. Servs., 3 F.3d 80, 86-

87 (4th Cir. 1993), with Bill Gray Enters., Inc. Employee Health &

Welfare Plan v. Gourley, 248 F.3d 206, 216-217 (3d Cir. 2001); Kimber v.

Thiokol Corp., 196 F.3d 1092, 1098 (10th Cir. 1999); Davolt v. Executive

Comm. of O'Reilly Auto., 206 F.3d 806, 809 (8th Cir. 2000).

29

Second, even if a de novo standard of review was appro-

priate in this case, the court of appeals erred in concluding

that “[tJhe administrative record reveals no genuine dispute

as to whether [respondent] is disabled within the meaning of

the plan.” Pet. App. 15. As the court of appeals acknowl-

edged, Dr. Mitri, a neurologist whom petitioner retained for

an independent medical examination and evaluation, cf. 29

C.F.R. 2560.503-1(h)(3)(iii), opined that respondent “should

be able to perform sedentary work, with no material limita-

tions in his ability to sit, while taking pain reduction medi-

cation.” Pet. App. 5. The judgment below should accord-

ingly be reversed so that the Ninth Circuit, without regard

to a treating physician rule, may reconsider the appropriate

standard of review and determine whether, under that

standard, to affirm the district court’s decision or instead to

reverse and remand for further proceedings.

CONCLUSION

The judgment of the court of appeals should be reversed.

Respectfully submitted.

THEODORE B. OLSON

Solicitor General

HOWARD M. RADZELY

Acting Solicitor of Labor oo Solicitor a

AL ,

a H fn LISA SCHIAVO BLATT

ociate Assistant to the Solicitor

NATHANIEL I. SPILLER General

Deputy Associate Solicitor

Mane S. FLYNN

enior Appellate Attorney

Department of Labor

FEBRUARY 2003