The opinion of the court was delivered by: Simandle, District Judge:
This matter is before the Court on the motion for summary judgment by Defendants Mattel, Inc.; Mattel, Inc. Administrative Committee; and Administrative Committee of the Board of Directors of Mattel, Inc. Pension Committee ("Mattel"). Mattel seeks a decision as a matter of law affirming its denial of pension, health and welfare benefits to Plaintiff and dismissing Plaintiff's ERISA and contract claims against it. On November 9, 2007 the Court heard oral argument on the motion and reserved decision. For the reasons explained below, the Court finds that Mattel is entitled to summary judgment.
Plaintiff Lisa Sturgis ("Plaintiff") worked for Mattel at its Mount Laurel, New Jersey facility from 1997 to 2004. That facility closed permanently in the summer of 2004 and Plaintiff stopped working for Mattel at that time. Plaintiff alleges that she was an employee of Mattel's from 1997-2004, working as a Samples Coordinator in the Package Design Group where she designed packaging for Mattel's toys. Mattel denies that Plaintiff's status was that of an employee; it classified her as an independent contractor during her time working for Mattel.
On February 10, 2005, Plaintiff's attorney wrote to Mattel claiming that it wrongfully denied her participation in its pension and welfare benefit plans while employed by Mattel. (Hagerty Ltr., Feb. 10, 2005, in Ex. B to Elkin Decl.). Counsel requested that the letter be considered an application for benefits and that Mattel inform him of its decision "within the time frame and in the manner required under the Employee Retirement Income Security Act ("ERISA")." (Id.) Counsel also requested that Mattel provide him with "all summary plan descriptions, master plan documents and annual reports for all Mattel pension plans in effect from 1996 through July 2004" within thirty days. (Id.) In addition, he requested that Mattel inform him "of the various welfare benefit plans or insurance plans offered by Mattel during the same time period and costs associated with producing" those documents.
On March 9, 2005, Mattel's counsel responded that Mattel was unable to provide any relevant documents because the request was "overly broad." (Huibonhoa Ltr., Mar. 9, 2005, in Ex. C to Elkin Decl.). Plaintiff's counsel responded that the request was not overly broad and reiterated its request. (Hagerty Ltr. Mar. 18, 2005, in Ex. D to Elkin Decl.). Defendants then produced information on its benefit plans. (See Huibonhoa Ltr., Apr. 18, 2005, in Ex. E to Elkin Decl.).
On February 17, 2006, Plaintiff applied for benefits under Mattel's Personal Investment Plan ("PIP"), Health & Welfare Plan, and for benefits related to vacation, holiday, and severance pay. (ML 5-6 in Ex. A to Elkin Decl.). Plaintiff submitted her address, Social Security number, and the dates she allegedly worked for Mattel. (Id.) It is unclear whether Plaintiff provided any additional documentation with her initial application. On May 12, 2006, Mattel informed Plaintiff that she was not entitled to PIP benefits. (Whitman Ltr., May 12, 2006, attached to Elkin Decl.). The Administrative Committee of the Board of Directors of Mattel, Inc. Pension Committee ("the Committee") had determined that (1) Plaintiff was not an eligible employee under the PIP, but rather, was an independent contractor and (2) Plaintiff's claims for benefits were not timely because she knew when she started providing services for Mattel in August of 1996 that she was not a PIP participant, and, therefore, her claims expired in August 2002, nearly four years earlier. (Id.). Mattel informed Plaintiff that she could appeal her denial with the Committee within sixty days of receiving the denial letter. (Id.). Three days later, Plaintiff appealed the denials and submitted several additional items: her own certification, dated May 10, 2006; a phone list of the Package Design Group in which she had allegedly been employed, which listed her name and phone extension; and a printout apparently showing that Plaintiff's address was in Mattel's email database for the Mount Laurel facility employees. (ML 996-1004 in Ex. A to Elkin Decl.). By letter dated July 14, 2006, the Committee upheld the denial. (Charmello Ltr., July 14, 2006, ML 983-88 in Ex. A to Elkin Decl.). That letter also indicated that Plaintiff had exhausted her appeal rights under Mattel's benefits policies and that she, therefore, had the right to file suit in federal court. (Id.)
Plaintiff filed the Complaint in this action on October 18, 2006, claiming that Mattel wrongfully denied Plaintiff employee benefits, in violation of ERISA; breached its fiduciary duty under ERISA; failed to comply with ERISA's document disclosure requirements; and breached its contract with Plaintiff by failing to provide benefits. Mattel filed this motion for summary judgment on all counts in June 2007.
A. Motion for Summary Judgment
Summary judgment is appropriate when the materials of record "show that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). A dispute is "genuine" if "the evidence is such that a reasonable jury could return a verdict for the non-moving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A fact is "material" only if it might affect the outcome of the suit under the applicable rule of law. Id. Disputes over irrelevant or unnecessary facts will not preclude a grant of summary judgment. Id.*fn1
B. Standards of Review for Benefit Determinations
The parties agree that the plans at issue are covered by ERISA. Insofar as the Court must review the benefit determination made by Mattel, a particular standard of review applies. When an ERISA benefit plan gives the administrator discretionary authority to make decisions under the plan, as in this case, courts reviewing those decisions use an "arbitrary and capricious" standard, and overturn them only if they are "'clearly not supported by the evidence in the record[,] or [if] the administrator has failed to comply with the procedures required by the plan.'" Orvosh v. Program of Group Ins. for Salaried Employees of Volkswagen of Am., Inc., 222 F.3d 123, 129 (3d Cir. 2000) (quoting Abnathya v. Hoffmann-La Roche, Inc., 2 F.3d 40, 41 (3d Cir. 1993)).
In three circumstances, however, the Third Circuit requires a heightened standard of review. See Pinto v. Reliance Standard Life Insurance Co., 214 F.3d 377 (3d Cir. 2000). The first occurs when the plan administrator is operating under a structural conflict of interest. See Pinto, 214 F.3d at 383. According to the Pinto court, only one of the three ways in which companies typically structure the relationship between the ERISA plan administration, interpretation and funding presents a structural conflict of interest. In explaining the three typical structures, the Court explained:
First, the employer may fund a plan and pay an independent third party to interpret the plan and make plan benefits determinations. Second, the employer may establish a plan, ensure its liquidity, and create an internal benefits committee vested with the discretion to interpret the plan's terms and administer benefits. Third, the employer may pay an independent insurance company to fund, interpret and administer the plan.
Id. According to the Pinto court, the third scenario outlined above "generally presents a conflict and thus invites a heightened standard of review." Id. The court reiterated that the Third Circuit "previously held that the first two arrangements do not, in themselves, typically constitute the kind of conflict of interest mentioned in Firestone." Id.
Second, the heightened arbitrary and capricious standard of review may be appropriate if the plaintiff shows "demonstrated procedural irregularities, bias or unfairness in the review [by the plan administrator] of the claimant's application for benefits." Kosiba, 384 F.3d at 66; Vitale, 402 F.3d at 283. This occurs when the plan administrator (a) relies, self-servingly, on one doctor's expertise; (b) treats the same facts inconsistently; or (c) disfavors the claimant when at a "crossroads." Pinto, 214 F.3d at 393-94; see also Kosiba, 384 F.3d at 66. However, the claimant bears the burden of proving procedural bias or bad faith by presenting the court with specific evidence of bias. See Bill Gray Enters., Inc. Employee Health & Welfare Plan v. Gourley, 248 F.3d 206, 216 (3d Cir. 2001)("Unless specific evidence of bias or bad-faith has been submitted, plans...are reviewed under the traditional arbitrary and capricious standard); see also Goldstein v. Johnson & Johnson, 251 F.3d 433, 435-36 (3d Cir. 2001)(heightened arbitrary and capricious review is required when "the beneficiary has put fourth specific evidence of bias or bad faith in his or her particular case.")
Finally, the third reason the Court might use a heightened standard of review is if a claimant's "status as a former employee" seems to require it. Kosiba, 384 F.3d at 65. Specifically, in Stratton v. E.I. DuPont de Nemours & Co., 363 F.3d 250, 255 (3d Cir. 2004), the Third Circuit recognized that an employer administering an unfunded plan risks "the loss of morale and higher wage demands that could result" from the employer denying benefits to a current employee. On the other hand, "when a former employee seeks benefits, this conflict-mitigating consideration is not present." Kosiba, 384 F.3d at 65 (emphasis in original) (citing Smathers v. Multi-Tool, Inc./Multi-Plastics, Inc. Employee Health & Welfare Plan, 298 F.3d 191, 198 (3d Cir. 2002).
In this case, Plaintiffs argue that the heightened standard should apply because Defendants "mistreated" many of its employees by denying benefits, not just Plaintiff. In reality, that argument cuts the other way. Inconsistent treatment would be one procedural irregularity that would heighten this Court's suspicions under Kosiba. The Court finds that no heightened standard should apply to Defendants' PIP eligibility determinations. Defendants have shown that Mattel created a trust fund for paying employee benefits. Thus, it did not pay benefits out of its own funds and the heightened scrutiny required when an employer both determines eligibility for benefits and pays those benefits out of its own funds does not apply. (Mattel Reply Br. at 4)(citing Smathers v. Multi-Tool, Inc./Multi-Plastics,Inc. Employee Health & Welf.
Further, although sometimes a claimant's status as a former employee might reduce the Administrator's incentive to treat a claimant as fairly as it should, in this case Plaintiff was never provided with benefits, during or after her time working for Mattel. This is not a situation in which the Plaintiff was treated differently when her employment ended and, therefore, her status as a former employee should not raise the Court's level of review. Indeed, Plaintiffs make no sound argument for why the Court should apply a heightened standard of review; therefore, the normal arbitrary and capricious standard should apply to the determination denying eligibility in Mattel's Personal Investment Plan.
However, the non-PIP plans in which Plaintiff is also alleging she should have been able to participate, the Health and Welfare plans, are funded by a combination of contributions from Mattel and the covered employee. (ML 575-578). According to plan documents, it appears that benefit determinations are made by outside insurance companies for insurance claims (id.), but by Mattel itself for vacation, sick pay, severance and similar benefits. (ML 597-98). Defendants claim that Mattel itself Administers all of these plans, in its discretion. (Mattel Br. at 6) (citing ML 565). This arrangement may have caused a conflict because permitting more workers to access these plans would directly impact Mattel's costs. Therefore, a heightened arbitrary and capricious standard shall apply to the eligibility determinations related to the Health and Welfare plans.
In performing both reviews, the Court must look only at the evidence before the Administrator when it made its decision. "'[W]hether a claim decision is arbitrary and capricious requires a determination whether there was a reasonable basis for [the administrator's] decision, based upon the facts as known to the administrator at the time the decision was made.'" Smathers v. Multi-Tool, Inc., 298 F.3d at 199-200 (quoting Levinson v. Reliance Std. Life Ins. Co., 245 F.3d 1321, 1326 (11th Cir. 2001)). See also Abnathya v. Hoffman-La Roche, Inc., 2 F.3d 40, 48 n.8 (3d Cir. 1993) (barring consideration of medical evidence that was not presented to plan administrator before final decision rendered on plaintiff's benefits claim).
Finally, it is noted that the arbitrary and capricious standard of review applies to all discretionary decisions by a plan administrator, whether the administrator's decision was based on the interpretation of the plan or on factual determinations, so long as the plan authorizes the administrator to make such determinations. Mitchell v. Eastman Kodak Co., 113 F.3d 433 (3d Cir. 1997).