more like some form of intermediate scrutiny, which has no
analogue in this field." 214 F.3d at 392. Plaintiff asks the
Court to confront the possibility that the rule against
considering evidence outside the record is likewise not a matter
of black or white, but should be tempered to serve the level of
scrutiny the Court deems appropriate in the particular case.
The Court is, however, convinced that the record should not be
expanded when employing heightened arbitrary and capricious
review under Pinto. De novo review of ERISA benefits
determinations serves a different set of interests than even the
most intrusive scrutiny under Pinto. The "sliding scale" does
not slide all the way to Luby-style, de novo review. Even at
the far end of the range, heightened arbitrary and capricious
review is different in kind. Therefore, despite the more
penetrating review the determination may receive, expanding the
record by analogy to Luby would be wrong.
In an ERISA benefits case, if de novo review applies, a
priori the plan administrator enjoyed no discretion and made
benefits decisions on pain of error. An erroneous denial
constitutes a direct breach of the benefits provisions of the
plan, and review in this Court under ERISA goes straight to the
question of entitlement. See Bruch, 489 U.S. at 112-13, 109
S.Ct. 948. In contrast, where the plan grants discretion to the
administrator, the beneficiary is entitled only to insist that
the administrator's authority be exercised within the bounds of
the discretion granted. Because the focus is on the
administrator's performance, see 2 Steven A. Childress,
Federal Standards of Review § 15.08 at 15-45 (3d ed., 1999),
review is necessarily confined to the evidence before the
It follows that, where the plan beneficiary's rights are to a
benefits determination untainted by a conflict of interest, then
a review of the same evidentiary record by an unbiased
decision-maker should restore the beneficiary to the status quo
ante. As one court in this Circuit has reasoned, if the
beneficiary had a fair opportunity to put evidence before the
plan administrator, limiting the record on judicial review should
result in no prejudice. O'Sullivan v. Metropolitan Life Ins.
Co., 114 F. Supp.2d 303, 309-10 (D.N.J. 2000). As in conventional
arbitrary and capricious review, the proper focus is on the
performance of the administrator and the record should therefore
be limited to that which was before the administrator when it
made the decision.
Those district courts addressing the issue have reached the
same conclusion, and held that they should not expand the record
"on the historic facts that informed the administrator's
decision" even though a conflict of interest may mandate a more
intrusive review under Pinto. Friess v. Reliance Standard Ins.
Co., 122 F. Supp.2d 566, 573 (E.D.Pa. 2000); O'Sullivan v.
Metropolitan Life Ins. Co., 114 F. Supp.2d 303, 309-10 (D.N.J.
2000); Ernest v. Plan Administrator of the Insured Benefits
Plan, 124 F. Supp.2d 884 (M.D.Pa. 2000). Although Pinto itself
is silent on whether the district court may consider new evidence
on the underlying merits when applying heightened arbitrary and
capricious review, O'Sullivan, 114 F. Supp.2d at 309 n. 6, the
opinion of the Court of Appeals in Pinto may be read to suggest
that the record should not be expanded.
In a footnote, the Court of Appeals stated:
Our focus on process should not be read to require
an additional duty to conduct a good faith reasonable
investigation. That is, we are not holding that [the
administrator] had a duty to gather more information,
merely that the decision might have been arbitrary
and capricious given the information available.
214 F.3d at 394 n. 8 (emphasis added). Plainly heightened
arbitrary and capricious review is still a review of the decision
below. It is not a do-over of the administrative proceeding and
different from the de novo review contemplated by Luby.
Pinto's footnote eight poses another problem, however. If the
administrator has no duty to investigate, it follows that the
administrator has no duty to create a record upon which to rule
and that the burden to do so and must fall solely on the
beneficiary. This suggests that where the record before the
administrator is insufficient to decide one way or the other
regarding an entitlement to benefits, denial cannot have been
arbitrary and capricious regardless of the grounds stated by the
administrator. Of course, where there is sufficient evidence to
permit a reasonable determination of the entitlement to benefits,
there is no need to expand the record. Pinto's footnote eight
suggests that even where the administrative record was inadequate
to make a ruling, the Court still should not go beyond the
evidence before the administrator.
The Court is not sanguine that such an absolutist approach
correctly reflects either the Third Circuit's view or the
underlying purposes of the ERISA statute. This Court is well
aware of the oft-repeated concern to focus the disposition of
benefits disputes in the administrative process established by
the plan, and to avoid judicial second-guessing to the extent
possible. One hopes, of course, that the self-dealing
administrator and the application of Pinto will be the
exception. If so, the concerns of judicial efficiency and/or
entanglement with the ERISA process will be less urgent. More to
the point, if one assumes a biased and self-interested benefits
administrator and an empty record on an important element of the
claim, refusing to consider additional evidence that may shed
light on the merits of the claim raises real questions of
fairness and of whether ERISA's statutory purpose is being
The Court has not yet ruled whether the administrative record
in this matter is adequate or not. The Court has raised this
issue to highlight the potential problem, and to suggest a
solution should one be necessary. The Fourth Circuit permits a
remand to the administrator where the record is inadequate to
decide one way or the other whether the benefits determination
was reasonable. See Bernstein v. CapitalCare, Inc.,
70 F.3d 783, 789 (4th Cir. 1995); Sheppard & Enoch Pratt Hosp., Inc. v.
Travelers Ins. Co., 32 F.3d 120, 125 (4th Cir. 1994). As noted,
a remand would appear to be inconsistent with Pinto's footnote
eight where the evidentiary burden is on the beneficiary.
However, in Bernstein, the Fourth Circuit remanded
notwithstanding the fact that the administrator had the burden of
proof on the evidentiary point at issue. 70 F.3d at 790.
Assuming symmetrical fairness, Bernstein suggests that the
Fourth Circuit would not withhold a remand from either party on
the ground that an insufficient record constitutes a mere failure
of proof on the part of the burdened party. Of course, it would
not offend the logic of Pinto to remand where the
administrator's conflict of interest had led it manipulate the
record to exclude evidence favorable to the beneficiary. The
Third Circuit's refusal to impose upon the administrator a duty
to investigate does not mean the Court of Appeals would protect
an administrator's bad faith truncation of the record.
Likewise, where an administrator's arbitrary and capricious
resolution of an antecedent factual issue has caused error at a
later stage of the analysis, remand to permit a fuller
development of the record might well be appropriate. In fact,
remand is consistent with an established practice in arbitrary
and capricious review of ERISA benefits decisions. See, e.g.,
Peterson v. Continental Cas. Co., 77 F. Supp.2d 420, 429
(S.D.N.Y. 1999); Sova v. Wheaton Franciscan Servs., Inc. v.
Health & Welfare Benefit Trust, 40 F. Supp.2d 1031, 1042
Lastly, remand in the circumstances described above would go
far to resolving the tension between limiting review to the
administrative record and ensuring that
ERISA benefits determinations retain a firm link to the objective
merits of the beneficiary's claim. Therefore, despite Pinto's
footnote eight, and even though the Court agrees with defendant
that the record before the Court on the underlying benefits
determination must be limited to that which was before the
administrator. The parties should be aware that remand is a
procedural step to be considered in the Court's adjudication of
5. The nature of the trial to be held in this matter.
For the foregoing reasons, the Court anticipates holding a
trial on this matter at which it will accept whatever admissible
evidence the parties may offer that is relevant to whether the
benefits administrator acted under a conflict of interest. What
standard of review should be applied to the administrator's
determination as to the merits will be decided based upon the
Court's assessment of the conflict evidence and the documentary
evidence already part of the record of this matter.
Once the correct standard of review has been finally
determined, whether the administrator's decision survives that
review will be determined upon the administrative record. The
Court does not agree with defendant's contention that because
there is no dispute over the contents of this record, that
summary judgment is appropriate. As the Ninth Circuit observed in
Kearney v. Standard Ins. Co., 175 F.3d 1084 (9th Cir. 1999),
cert. denied, 528 U.S. 964, 120 S.Ct. 398, 145 L.Ed.2d 310
(1999), summary judgment on a fixed record and a plenary
determination of fact, even on that same record, are different.
With respect to its review of the administrator's decision, the
Court anticipates adopting the procedure set forth in Kearney
and making plenary findings of fact pursuant to Federal Rule of
Civil Procedure 52, even though no new evidence may be received
on that branch of the case. Whether, as defendant further
suggests, a hearing with oral arguments of counsel need be held
as part of that Rule 52 proceeding, will be decided at a later
For the foregoing reasons, the application for leave to file a
motion out of time to clarify or reconsider the Opinion and Order
of November 8, 2000, will be granted. The Opinion and Order of
November 8, 2000 will be vacated and replaced with this Opinion
and the Order filed herewith.
The defendant's motion for summary judgment and plaintiff's
cross-motion for summary judgment will be denied. Discovery in
this matter shall proceed in a manner consistent with this
Opinion, as follows:
1. The Court will permit discovery of evidence
relevant to the existent or the extent that the
decision regarding plaintiff's entitlement to
benefits was affected by a conflict of interest or
2. No discovery may be had of evidence relevant to
issues underlying plaintiff's entitlement to
benefits, such as for example, evidence relating to
plaintiff's medical condition.
3. Evidence discoverable under the preceding
paragraph 1, shall not be deemed non-discoverable on
the ground that it is also included within the
provisions of the preceding paragraph 2.
An appropriate Order is attached.
In accordance with the Court's Revised Opinion filed herewith,
It is on this 8th day of February, 2001,
ORDERED that the application for leave to file a motion out of
time to clarify or reconsider the Opinion and Order of November
8, 2000, is granted; and it is further
ORDERED that this Court's Opinion and Order of November 8, 2000
are vacated and replaced with the Revised Opinion and this Order;
and it is further
ORDERED that the defendant's motion for summary judgment and
plaintiff's cross-motion for summary judgment are denied; and it
ORDERED that discovery in this matter shall proceed in a manner
consistent with the Revised Opinion, as follows:
1. The Court will permit discovery of evidence relevant to the
existent or the extent that the decision regarding plaintiff's
entitlement to benefits was affected by a conflict of interest or
2. No discovery may be had of evidence relevant to issues
underlying plaintiff's entitlement to benefits, such as for
example, evidence relating to plaintiff's medical condition.
3. Evidence discoverable under the preceding paragraph 1, shall
not be deemed non-discoverable on the ground that it is also
included within the provisions of the preceding paragraph 2.