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

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Amicus Curiae Brief
- **Published:** January 1, 2003
- **Citation:** 538 U.S. 822

## Text

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

HOWARD M. | .

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 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)

(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

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385014_0606%3A09. Public record. Not legal advice.