Resources Mgmt. Inc. Health and Welfare Plan, 81 F.3d 335, 342 (3d Cir. 1996); Hullett v. Towers, Perrin, Forster & Crosby, Inc., 38 F.3d 107, 114 (3d Cir. 1994); Gillis v. Hoechst, Celanese Corp., 4 F.3d 1137, 1141 (3d Cir. 1993), cert. denied, 511 U.S. 1004, 128 L. Ed. 2d 46, 114 S. Ct. 1369 (1994); Abnathya v. Hoffman-La Roche, Inc., 2 F.3d 40, 41 (3d Cir. 1993); Stoetzner v. United States Steel Corp., 897 F.2d 115, 119 (3d Cir. 1990); Rizzo v. Paul Revere Insurance Group, 925 F. Supp. 302, 306 (D.N.J. 1996). The arbitrary and capricious standard is essentially the same as the abuse of discretion standard. Abnathya, 2 F.3d at 42 (citing Nazay v. Miller, 949 F.2d 1323, 1335 (3d Cir. 1991)).
"In a case involving the interpretation of a provision of a pension plan, ... under the arbitrary and capricious standard, the trustee's interpretation 'should be upheld even if the court disagrees with it, so long as the interpretation is rationally related to a valid plan purpose and not contrary to the plain language of the plan.'" Moats v. United Mine Workers of America Health and Retirement Funds, 981 F.2d 685, 688 (3d Cir. 1992); see also Dewitt v. Penn-Del Dir. Corp. et al., 106 F.3d 514, 1997 WL 61424, at *3 (3d Cir. 1997).
"When the arbitrary and capricious standard applies[,] the decisionmaker's determination to deny benefits must be upheld unless it was 'clear error' or not 'rational'.'" Gillis, 4 F.3d at 1141 (quoting Shiffler v. Equitable Life Assurance Soc'y, 838 F.2d 78, 83 (3d Cir. 1988)); See also Abnathya, 2 F.3d at 45 (quoting Adamo v. Anchor Hocking Corp., 720 F. Supp. 491, 500 (W.D.Pa. 1989) ("district court may overturn a decision of the Plan administrator only if it is 'without reason, unsupported by substantial evidence or erroneous as a matter of law.'")).
Drawing on analogies between a plan administrator and a trustee, the Firestone Court explained that "[a] trustee may be given power to construe disputed or doubtful terms, and in such circumstances the trustee's interpretation will not be disturbed if reasonable." 489 U.S. at 111; see also Davis v. Burlington Indus., 966 F.2d 890, 895 (4th Cir. 1992) ("If the language is unclear, we must defer to a reasonable interpretation of the plan by the [plan administrator]. If the plan language is unambiguous, however, we would not defer to a contrary interpretation by the [plan administrator].").
By contrast, in circumstances where a plan does not contain language granting discretionary authority, a de novo standard of review is applied to a plan administrator's denial of benefits. Id. "Selection of an appropriate judicial standard of review therefore turns on the terms of the plan." Heasley v. Belden & Blake Corp., 2 F.3d 1249, 1254 (3d Cir. 1993) (quoting Firestone, 489 U.S. at 111); see also Rizzo, 925 F. Supp. 302 at 307-08.
Generally, plan language alone will govern whether the plan grants discretionary authority. Nazay, 949 F.2d at 1323. The Third Circuit, however, has concluded that discretion can be implied as well as express. Luby v. Teamsters Health, Welfare & Pension Trust Funds, 944 F.2d 1176 (3d Cir. 1991) (recognizing that a finding of discretion is not conditioned upon a particular verbal formula). Courts have applied the arbitrary and capricious standard where a fiduciary has discretionary authority in making eligibility determinations even where the word "discretion" was not used in the plan. See Nazay, 949 F.2d at 1335 (discretion found based on authority to "interpret and construe provisions ... determine eligibility ... make and enforce rules ... decide questions...."); Stoetzner, 897 F.2d at 119 (discretion found based on authority to "administer, ... decide all questions," interpret and apply rules).
Courts have found discretionary authority conferred on an administrator who is required to determine "whether an applicant is 'disabled,' using medical evidence satisfactory to the [insurance] company." Miller v. Metropolitan Insurance Co., 925 F.2d 979, 983 (6th Cir. 1991) (emphasis supplied); see also Bali v. Blue Cross and Blue Shield Ass'n, 873 F.2d 1043, 1047 (7th Cir. 1989) (same). Discretion has been found to be conferred when the plan permits the administrator to decide "what sort of evidence may be required from the applicant to provide a basis for the subsequent ... determination. " Miller, 925 F.2d at 984; Bali, 873 F.2d at 1047.
C. Appropriate Standard of Review
In the instant matter, the DuPont Plan states:
The administration of this [DuPont Plan] is vested in the Board of Benefits and Pensions appointed by the Company. The Board may adopt such rules, or delegate to one or more persons its authority to make initial determination, as it may deem necessary for the proper administration of the [DuPont Plan]. The Board of Benefits and Pensions retains discretionary authority to determine eligibility for benefits hereunder and to construe the terms and conditions of the [DuPont Plan]. The decision of the Board in all matters involving the interpretation and application of this [DuPont Plan] shall be final.
See DuPont Plan at 8 (emphasis added). The language vests the Board with discretionary authority to make decisions of benefit eligibility as well as to construe the terms of the DuPont Plan. See Burlison v. E.I. du Pont de Nemours & Co., Civ. Action No. 95-2076-D, slip op. at 5 (W.D. Tenn. 14 May 1996)(finding identical language to confer the requisite discretion to employ arbitrary and capricious standard).
Pokol argues in favor of the application of a de novo standard, as opposed to the arbitrary and capricious standard. Opposition Brief at 5-6. Pokol claims a plan must contain the plain language of "arbitrary and capricious" as a prerequisite to the application of the heightened standard. Id. at 6. Pokol's argument lacks merit.
Courts have not required a plan to explicitly identify the applicable standard of review before applying the arbitrary and capricious standard. See Firestone, 489 U.S. 101, 103 L. Ed. 2d 80, 109 S. Ct. 948 (1989) ("Where discretion is conferred upon the trustee with respect to the exercise of a power, its exercise is not subject to control by the court except to prevent an abuse by the trustee of his discretion."); De Nobel v. Vitro Corp., 885 F.2d 1180 (4th Cir. 1989) ("There are obviously no magic words required to trigger the application of one or another standard of judicial review.... It ... need only appear on the face of the plan documents that the fiduciary has been 'given [the] power to construe disputed or doubtful terms'...." Id. at 1187 (quoting Firestone, 489 U.S. at 111) (emphasis in original); Arber v. Equitable Beneficial Life Ins. Co., 848 F. Supp. 1204, 1211 (E.D.Pa. 1994) (same); see also Abnathya, 2 F.3d at 45 (if plan contains language giving administrator discretion to make eligibility determinations, arbitrary and capricious standard applies); Stoetzner, 897 F.2d at 119 (same); Miller, 925 F.2d at 983 (same).
Pokol cites to Gillis for support that the language "arbitrary and capricious" must be included in the DuPont Plan before application of the deferential standard is permissible. Opposition Brief at 5. The Gillis court, as well, examined the plan language in that case for the purpose of determining if the plan administrator was granted discretion. 4 F.3d at 1141. Although the plan in Gillis contained the wording "arbitrary and capricious", the court did state it found that language to be dispositive. After reviewing the plan, the court commented: "Under this provision, the [human resources department] was given discretion to interpret the terms of the ... policy when making eligibility determinations. Consequently, we apply the arbitrary and capricious standard when reviewing the [decision to deny benefits]." Id.
The DuPont Plan expressly grants the Board with discretionary authority to make decisions as to eligibility and to construe the terms of the DuPont Plan. See DuPont Plan at 2. Accordingly, the analysis in the instant matter must start from the premise that review of the Board's decision is guided by the "arbitrary and capricious" standard. Abnathya, 2 F.3d at 42; Rizzo, 925 F. Supp. 302 at 308.
D. Application of the "Arbitrary and Capricious" Standard
A review of the record in this matter demonstrates the decision of the Board to deny Pokol benefits was not "clear error." See Shiffler, 838 F.2d at 83. Rather, it appears the interpretation by the Board of the DuPont Plan language was "rationally related to a valid plan purpose." See Moats, 981 F.2d at 688.
At all relevant times, the DuPont Plan provided:
An individual shall be considered "totally and permanently disabled" if the [Board] finds that he [or she] is totally disabled by injuries or disease and presumably will be totally and permanently disabled from pursuing any gainful occupation....
The determination of whether an employee is totally and permanently disabled shall be made on the basis of his [or her] condition immediately prior to his [or her] termination of service with [DuPont], and an employee who becomes totally and permanently disabled after termination of service with [DuPont] will not qualify for benefits under this [DuPont Plan].