APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA (D.C. Civil No. 03-cv-04848) District Judge: The Honorable James Knoll Gardner.
The opinion of the court was delivered by: Barry, Circuit Judge
(AMENDED AS PER THE CLERK'S 6/19/08 ORDER)
Before: BARRY, GREENBERG, Circuit Judges, and ACKERMAN,*fn1 District Judge.
The Lilly Health Plan appeals the order of the District Court entering judgment on behalf of a claimant who sought severance benefits pursuant to an ERISA-governed plan. Applying the recent decision of the Supreme Court in Metropolitan Life Insurance Co. v. Glenn , 128 S.Ct. 2343 (2008), we conclude that the plan administrator's decision to deny benefits was not an abuse of discretion. We will, therefore, reverse the order of the District Court.
Kevin Schwing, an employee of Eli Lilly and Company ("Lilly"), was terminated from his sales position on August 22, 2001 for falsifying call data. Schwing sought payment of severance benefits pursuant to the Lilly Severance Plan*fn2 , but his claim for benefits was denied by Lilly's Employee Benefits Committee ("EBC"), the plan administrator. The EBC determined that Schwing was ineligible for severance benefits because he was terminated for misconduct, misconduct to which both Schwing's supervisor and a representative from Lilly's human resources department stated to the EBC that Schwing had admitted. Schwing challenged the EBC's determination, denying that he had admitted any wrongdoing and arguing that he had been terminated not for the alleged misconduct, but either as a result of mistakes or in retaliation for a grievance he filed in 1997. The EBC considered Schwing's arguments, and again denied his claim.
Following a bench trial, the District Court entered judgment for Schwing, finding that the EBC's decision was tainted by a conflict of interest and that the EBC failed to adequately investigate Schwing's claim. Lilly now appeals.
Our review of the District Court's legal conclusions is plenary, and we apply the same standard of review that the Court should have applied. Smathers v. Multi-Tool, Inc./Multi-Plastics, Inc., Employee Health and Welfare Plan , 298 F.3d 191, 194 (3d Cir. 2002). Because determining the correct standard of review is a question of law, our review is plenary. We review the Court's findings of fact for clear error. Kosiba v. Merck & Co., 384 F.3d 58, 64 (3d Cir. 2004). The District Court had jurisdiction pursuant to 29 U.S.C. § 1132(e)(1), and we have jurisdiction pursuant to 28 U.S.C. § 1291.
In Firestone Tire & Rubber Co. v. Bruch , 489 U.S. 101 (1989), the Supreme Court held that, when evaluating challenges to denials of benefits in actions brought under 29 U.S.C. § 1132(a)(1)(B), district courts are to review the plan administrator's decision under a de novo standard of review, unless the plan grants discretionary authority to the administrator or fiduciary to determine eligibility for benefits or interpret the terms of the plan. The Court recognized that "if a benefit plan gives discretion to an administrator or fiduciary who is operating under a conflict of interest, that conflict must be weighed as a factor in determining whether there is an abuse of discretion." Firestone , 489 U.S. at 115 (internal quotation omitted).
Prior to the Supreme Court's recent decision in Glenn , we interpreted this language in Firestone to mean that courts should consider conflicts of interest affecting plan administration when formulating the standard of review. See Pinto v. Reliance Standard Life Ins. Co. , 214 F.3d 377, 392 (3d Cir. 2000). Accordingly, we adjusted the standard of review using a "sliding scale" in which the level of deference we accorded to a plan ...