# Opposition Brief — Buce v. Allianz Life Insurance > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386014_2528%3A2 ## Record - **Collection:** Supreme Court brief - **Document type:** Opposition Brief - **Published:** January 1, 2001 - **Citation:** 534 U.S. 1065 ## Text 2 The rule that ambiguous provisions in contracts are construed most strongly against the drafter. 20 Prudential involved the interpretation of an ERISA health benefit plan provision that limited benefits for the hospital inpatient treatment of mental disorders to 30 days. Prudential denied the claim for benefits beyond the 30-day limit and Doe appealed on the basis that his -daughter’s illness was not a “mental illness” within the meaning of the limitation clause and therefore the limita- tion should not apply. The district court affirmed Pruden- tial’s denial, apparently under the abuse of discretion standard. The Eighth Circuit declined to decide whether the standard of review should have been abuse of discre- tion or de-novo, finding that the result would be the same under either standard. Prudential, 140 F.3d at 790. Appar- ently, the Plan contained a clause that chose Illinois law as applicable to the Plan, but the decision does not quote the clause. Doe argued that the clause required applica- tion of Illinois’ contra preferendum rule to the 30-day lim- itation. The district court had declined to apply Illinois law “to the issue of benefit denial.” The Eighth Circuit agreed, citing Brewer v. Lincoln Nat. Life Ins. Co., 921°F.2d 150 (8th Cir. 1990), cert. denied, 501 U.S. 1238 (1991), an ERISA case that did not involve a choice of law provision. Brewer declined to apply the Illinois contra preferendum rule because the Eighth Circuit had adopted a different rule for the construction of substantive plan provisions that are ambiguous (in the absence in a choice of law clause): that, under federal common law, plan terms should be interpreted as they would be understood by a layman. Id. at 154. The Prudential court then stated that “[t]he choice of law provision in the contract does not alter the outcome here, for parties may not contract to choose state law as the governing law of the ERISA- 21 governed benefit plan.” Prudential, 140 F.3d at 791. That statement may be correct, but has no application to a choice of law clause that simply chooses state law to “interpret” ambiguous terms, as opposed to “governing” the entire contract, which is a totally different concept. The attempt of the Prudential court to use Brewer to boot- strap itself into a rationale for rejecting a choice of law provision is unavailing — the two cases are entirely differ- ent. Moreover, the Prudential court’s refusal to decide whether the district court correctly applied the abuse of discretion standard is significant and potentially outcome determinative in and of itself, and renders the reference to the choice of law issue a dictum. As the Seventh Circuit discussed in Morton, see supra, if the insurer’s interpreta- tion of ambiguous plan language is reviewed for abuse of discretion, the contra preferendum/“layman’s understand- ing” dispute is irrelevant and the only questions are: (1) what are the available reasonable alternatives for inter- preting the contested ambiguous plan language and (2) did the insurer/review panel choose one of them? The dispute would only be applicable in the de novo review situation, and the Eighth Circuit declined to hold which standard was involved. It is also dictum because of the Court’s specific holding that “Prudential’s limitation of coverage ... is unambiguous,” Prudential, 140 F.3d at 791, with the result that under either state law or federal law no “interpretation” would be required. Both members of the panel majority specifically rejected Morton and Pru- dential. Buce II, 247 F.3d at 1149, n.6 & 1154. Thus, unlike this case, in which the Eleventh Circuit - clearly and unambiguously gave effect to a choice of law _ 22 clause in an ERISA benefit plan that chose state law for the “interpretation” of ambiguous plan language, Morton and Prudential at best contain language, not supported by extensive discussion or persuasive rationale, indicating that they would reject such a clause. However, that lan- guage is dictum in both cases and not sufficient to support review by this Court at this time. 3. Displacement of ERISA Federal Law In Section III of her Petition, Petitioner argues that “state common law cannot displace ERISA federal law.” However, the cases she cites deal largely with benefici- aries seeking remedies or other enforcement measures that directly conflict with specific parts of the ERISA statutory scheme. E.g., Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41 (1987) (ERISA’s comprehensive scheme of remedies preempts state law tort claims, punitive dam- ages claims, etc., based upon benefit denials). None of the cases cited deal at all with the effectiveness of a provision choosing state law to “interpret” ambiguous plan terms. 4. ERISA’s Goals Finally, Petitioner argues that “the Eleventh Circuit’s decision threatens ERISA’s well-established goals” of pro- tection of the interests of employees and uniformity of Plan administration. The truth is, however, that choosing the law of a single state under which to interpret the terms of a particular plan issued by a multi-state 23 employer actually promotes uniformity.® District courts in different circuits may adopt different federal common law constructions of similar plan language, and it may - take years for the conflict to work its way through the circuit courts and on to this Court to produce a final, single interpretation. But, where, as here, a state already has an extensive body of law construing similar policy language, allowing the parties to the plan to chose that state’s law for plan interpretation is simply a “convenient shorthand for what the private contracting parties wish to agree to.” Buce II, 247 F.3d at 1148. The panel majority specifically and correctly rejected the notion that allowing the parties to specify the law of a particular state under which to interpret ambiguous plan provisions contravenes any specific ERISA provision or frustrates its goals and policies. Id. at 1148, 1152. o CONCLUSION The Eleventh Circuit’s reversal of the district court’s judgment in this case is correct under several different theories. Petitioner’s attack on the Plan’s choice of law provision would, even if successful, not change that result. There is no question but that the ERISA statute “governs” ERISA welfare benefit plans, or that, to the 6 Certainly the district court’s application of federal common law to the plan definitions in this case did not promote uniformity. Compare Buce I with the numerous contrary decisions cited in footnote 3, supra, which the district court refused to follow. 24 extent a concept is not specifically contained in ERISA, this Court has directed the development of a body of federal common law to fill in the blanks. But the first stage in dealing with a dispute regarding a plan provision is to interpret it, and that is the first occasion for the application of federal common law. Federal common law recognizes standard canons of construction such as giv- ing effect to the intent of the parties, giving words their ordinary meanings, and requiring that the court in the first instance (1) determine whether a provision is ambig- uous and (2), if so, “interpret” it - that is, give it a definite meaning (again, using canons of construction). It is only after the court has determined the meaning of the plan provision that the question arises whether the provision contravenes ERISA’s specific provisions or frus- trates ERISA’s policies and goals. At this point in the process, it is no longer an exercise in “interpretation,” requiring instead a comparison of the plan provision as already “interpreted” with the ERISA statute. The Elev- enth Circuit panel majority’s two carefully considered opinions correctly analyzed this issue and reached the correct conclusion. This Court has not addressed the issue and no other circuit has directly held to the con- trary, much less given the issue the thoughtful treatment it deserves. If this Court is eventually to address the issue, it should wait to see whether other circuits, after giving the issue the analysis it requires, reach a result contrary to that reached by the Eleventh Circuit. 25 This Court should not issue a Writ of Certiorari. Respectfully submitted, Douctas N. CAMPBELL Counsel of Record Doucias CampseLt & Associates, P.C. 4776 East Conway Drive, N.W. Atlanta, Georgia 30327 404-256-3633; Telecopier 404-256-0423 dougcampbell@mindspring.com App. 1 APPENDIX O.C.G.A. § 40-6-391 (1999) § 40-6-391. Driving under the influence of alcohol, drugs or other intoxicating substances; penalties; publica-- tion of notice of conviction for persons convicted for second time; endangering a child (a)- A person shall not drive or be in actual physical control of any moving vehicle while: (1) Under the influence of alcohol to the extent that it is less safe for the person to drive; * * * (5) The person’s alcohol concentration is 0.10 grams or more at any time within three hours after such driving or being in actual phys- ical control from alcohol consumed before such driving or being in actual physical control ended; or Tenn. Code Ann. § 55-10-401 (1999) 55-10-401. Driving under; the influence of intoxicant, drug or drug producing stimulant prohibited — Alcohol con- centration in blood or breath (a) It is unlawful for any person to drive or to be in physical control of any automobile or other motor driven vehicle on any of the public roads and highways of the state, or on any streets or alleys, or while on the premises of any shopping center, trailer park or any apartment house complex, or any other premises which is generally frequented by the public at large, while: App. 2 (1) Under the influence of any intoxicant, mari- juana, narcotic drug, or drug producing stimulating effects on the central nervous system; or (2) The alcohol concentration in such person’s blood or breath is ten-hundredths of one percent (.10%) or more. (b) For the purpose of this section, “drug producing stimulating effects on the central nervous system” includes the salts of barbituric acid, also known as mal- onyl urea, or any compound, derivatives, or mixtures thereof that may be used for producing hypnotic or som- nifacient effects, and includes amphetamine, desox- yephedrine or compounds or mixtures thereof, including all derivatives of phenolethylamine or any of the salts thereof, except preparations intended for use in the nose and unfit for internal use. : --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386014_2528%3A2. Public record. Not legal advice.