Virgil Harris v. The Lincoln National Life Insurance Company, et al

[PUBLISH]
In the
United States Court of Appeals
For the Eleventh Circuit
____________________
No. 21-13186
____________________
VIRGIL HARRIS,
Plaintiff-Appellant,
versus
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY,
LINCOLN LIFE ASSURANCE COMPANY OF BOSTON,
Defendants-Appellees.
____________________
Appeal from the United States District Court
for the Northern District of Georgia
D.C. Docket No. 1:19-cv-04257-CC
____________________
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2 Opinion of the Court 21-13186
Before J ORDAN and ROSENBAUM , Circuit Judges, and S TEELE ,* Dis-
trict Judge.
JORDAN, Circuit Judge:
Under the Employment Retirement Income Security Act, 29
U.S.C. § 1132(a)(1)(B), a plan administrator’s benefits decision is
subject to plenary review in federal court unless the administrator
is given discretion to determine eligibility or construe the terms of
the plan.
See Aetna Health, Inc. v. Davila, 542 U.S. 200, 210 (2004);
Gilley v. Monsanto Co., Inc., 490 F.3d 848, 856 (11th Cir. 2007). If
the administrator has discretion, a court determines whether its
benefits decision was arbitrary and capricious (i.e., whether it
lacked a reasonable basis).
See, e.g., Glazer v. Reliance Standard
Life Ins. Co., 524 F.3d 1241, 1246 (11th Cir. 2008).1
In this ERISA case, everyone agrees that Lincoln’s denial of
long-term disability benefits to Virgil Harris triggered de novo re-
view because the plan did not give Lincoln discretion. The district
court, acknowledging that its review of the denial was plenary,
ruled that Mr. Harris could not submit evidence that had not been
* The Honorable John Steele, United States District Judge for the Middle Dis-
trict of Florida, sitting by designation.
1 If the administrator both evaluates claims for benefits and pays benefits out
of its own pocket, it has a conflict of interest, and that conflict is considered as
a factor in determining whether a denial was arbitrary and capricious.
See
Metro. Life Ins. Co. v. Glenn, 554 U.S. 105, 112–19 (2008). There is no such
conflict in this case.
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21-13186 Opinion of the Court 1
presented to Lincoln before it denied benefits in August of 2019.
As a result, when the court granted Lincoln’s motion for judgment
on the administrative record, it did not consider an affidavit and
updated medical records which post-dated the denial of benefits.
The district court’s evidentiary ruling constituted error un-
der Eleventh Circuit precedent. We therefore reverse and remand
for further proceedings.
I
“[A] denial of benefits challenged under [29 U.S.C.] §
1132(a)(1)(B) is to be reviewed under a de novo standard unless the
benefit plan gives the administrator or fiduciary discretionary au-
thority to determine eligibility for benefits or to construe the terms
of the plan.”
Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101,
115 (1989). Relevant to our analysis is whether the de novo stand-
ard—which applies here—forbids, requires, or simply allows a dis-
trict court to consider evidence outside the administrative record.
As far as we can tell, our sister circuits are divided on the issue.
On one end of the spectrum, some circuits have instructed
district courts to remain within the bounds of the administrative
record.
See, e.g., Perry v. Simplicity Eng’g, 900 F.2d 963, 966 (6th
Cir. 1990) (“In the ERISA context, the role of the reviewing federal
court is to determine whether the administrator or fiduciary made
a correct decision, applying a de novo standard. Nothing in the
legislative history suggests that Congress intended that federal dis-
trict courts would function as substitute plan administrators, a role
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2 Opinion of the Court 21-13186
they would inevitably assume if they received and considered evi-
dence not presented to administrators concerning an employee’s
entitlement to benefits.”). These circuits perceive no difference be-
tween de novo review and arbitrary and capricious review with re-
spect to what evidence can be considered.
See e.g., Ariana M. v.
Humana Health Plan of Tex., Inc., 884 F.3d 246, 256 (5th Cir. 2018)
(en banc) (explaining that “limiting the district court record to what
was before the administrator” makes sense in the de novo context
as well as the abuse of discretion context).
In the middle of the spectrum, some circuits generally limit
the scope of the record to what was before the administrator but
allow for the introduction of new evidence under certain circum-
stances.
See, e.g., Quesinberry v. Life Ins. Co. of N. Am., 987 F.2d
1017, 1026–27 (4th Cir. 1993) (en banc) (“[W]e conclude that courts
conducting de novo review of ERISA benefits claims should review
only the evidentiary record that was presented to the plan admin-
istrator or trustee except where the district court finds that addi-
tional evidence is necessary for resolution of the benefit claim.”);
Dorris v. Unum Life Ins. Co. of Am., 949 F.3d 297, 304 (7th Cir.
2020) (“The court can limit itself to deciding the case on the admin-
istrative record but should also freely allow the parties to introduce
relevant extra-record evidence and seek appropriate discovery.”);
Donatelli v. Home Ins. Co., 992 F.2d 763, 765 (8th Cir. 1993) (“[T]o
keep district courts from becoming substitute plan administrators,
the district court should not exercise [its] discretion [to admit extra-
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21-13186 Opinion of the Court 3
record evidence] absent good cause to do so.”);
Mongeluzo v. Bax-
ter Travenol Long Term Disability Ben. Plan, 46 F.3d 938, 944 (9th
Cir. 1995) (“In [certain] circumstances . . . additional evidence is
necessary to conduct an adequate de novo review of the benefit
decision” but “[w]e emphasize that a district court should not take
additional evidence merely because someone at a later time comes
up with new evidence that was not presented to the plan adminis-
trator[.]”);
Jewell v. Life Ins. Co. of N. Am., 508 F.3d 1303, 1308–
09 (10th Cir. 2007) (explaining that new evidence can only be con-
sidered in limited circumstances).
On the other end of the spectrum, some circuits hold that de
novo review requires district courts to consider
all relevant evi-
dence, irrespective of whether it was presented to the administra-
tor.
See, e.g., Luby v. Teamsters Health, Welfare, & Pension Tr.
Funds, 944 F.2d 1176, 1184 (3d Cir. 1991) (“Limiting the review of
an ERISA benefit decision to evidence before the administrator . . .
makes little sense . . . when a plan administrator’s decision is re-
viewed de novo.”);
Doe v. United States, 821 F.2d 694, 697–98
(D.C. Cir. 1987) (“De novo means . . . a fresh, independent deter-
mination of ‘the matter’ at stake; the court’s inquiry is not limited
to or constricted by the administrative record, nor is any deference
due the agency’s conclusion.”). As explained below, we land on
this end of the spectrum.
We have described the ERISA remedies available under 29
U.S.C. § 1132(a)(1)(B)—including a civil action “to recover bene-
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4 Opinion of the Court 21-13186
fits”—as “akin to common law breach of contract causes of ac-
tion[.]”
Jones v. Am. Gen. Life & Accident Ins. Co., 370 F.3d 1065,
1069 (11th Cir. 2004).
See also Klaas v. Allstate Ins. Co., 21 F.4th
759, 766 (11th Cir. 2021) (same). In two ERISA cases involving ple-
nary review, we have held that the parties can present evidence
which was not before the administrator when it denied benefits.
See Moon v. Am. Home Assurance Co., 888 F.2d 86, 89 (11th Cir.
1989) (“American Home’s contention that a court conducting a de
novo review must examine only such facts as were available to the
plan administrator at the time of the benefits denial is contrary to
the concept of a de novo review.”);
Kirwan v. Marriott Corp., 10
F.3d 784, 789 (11th Cir. 1994) (applying plenary review and revers-
ing summary judgment in favor of administrator because the evi-
dence—including some post-denial evidence—created genuine is-
sues of material fact as to the plaintiff’s disability: “In this circuit, a
district court conducting a de novo review of an [a]dministrator’s
benefits determination is not limited to the facts available to the
Administrator at the time of the determination.”). And we have
reaffirmed that principle in other cases.
See, e.g., Shaw v. Conn.
Gen. Life Ins. Co., 353 F.3d 1276, 1284 n.6 (11th Cir. 2003) (“As a
rule, de novo review permits the parties to put before the district
court evidence beyond that which was presented to the adminis-
trator at the time the denial decision was made.”).
Moon and
Kirwan have not been abrogated by the Supreme
Court. Nor have they been overruled by an en banc opinion of this
court. As a result, they remain binding precedent.
See, e.g., United
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21-13186 Opinion of the Court 5
States v. Sneed, 600 F.3d 1326, 1332 (11th Cir. 2010) (“Under [the
prior panel precedent] rule, a prior panel’s holding is binding on all
subsequent panels unless and until it is overruled or undermined
to the point of abrogation by the Supreme Court or by this court
sitting en banc.”).
The district court excluded Mr. Harris’ post-denial evidence
based on
Glazer, 524 F.3d at 1246, and
Blankenship v. Metro. Life
Ins. Co., 644 F.3d 1350, 1354 (11th Cir. 2011).
See D.E. 55 at 2–3
(“[W]hile conducting a de novo review. . . I have determined that
the court is limited to the administrative record.”). Those two
cases do say that review is limited to the administrative record, but
they both involved arbitrary and capricious review, not de novo
review.
See Glazer, 524 F.3d at 1246;
Blankenship, 644 F.3d at 1356.
And that makes all the difference because under ERISA “the stand-
ard of review employed . . . ha[s] an impact on evidentiary issues.”
Ilene H. Ferenczy & Alison J. Cohen, ERISA: A Comprehensive
Guide § 8.03[
l] at 8-26 (7th ed. 2022).
See also Jaime Ruth Ebenstein
& Mark E. Schmidtke, DRI ERISA Litig. Primer, Ch. 4: Standard of
Review (2021) (noting that the ERISA standard of review “dictates
the scope of evidence a court may consider in reviewing a fiduci-
ary’s decision”). 2
2 Another case cited by Lincoln National,
Alexandra H. v. Oxford Health Ins.,
Inc. Freedom Access Plan, 833 F.3d 1299, 1303, 1312 (11th Cir. 2016), also in-
volved a plan which gave the administrator discretion to make decisions as to
benefits. Here the plan does not provide Lincoln with discretion, and that
makes
Alexandra H. distinguishable.
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6 Opinion of the Court 21-13186
We limit review to the administrative record “[w]hen con-
ducting a review of an ERISA benefits denial under an arbitrary and
capricious standard” because “the function of the court [in such a
case] is to determine whether there was a reasonable basis for the
decision, based upon the facts as known to the administrator at the
time the decision was made.”
Jett v. Blue Cross & Blue Shield of
Ala., Inc., 890 F.2d 1137, 1139 (11th Cir. 1989). Indeed, if the plain-
tiff in a case governed by the arbitrary and capricious standard
wants to introduce “additional information that might affect the
determination of eligibility for benefits, the proper course [is] to
remand to [the administrator] for a new determination.”
Id. at
1140.
See also Shannon v. Jack Eckerd Corp., 113 F.3d 208, 210
(11th Cir. 1997) (“The district court remanded the matter to the
[p]lan administrator for a new determination based upon all rele-
vant evidence including subsequently available evidence.”). But
when conducting de novo review, “the district court’s charge [is]
to put itself in the agency’s place, to make anew the same judgment
earlier made by the agency[.]”
Doe, 821 F.2d at 698.3
In sum, though some courts have chosen to limit the scope
of the record when review is plenary, we have not. The district
court’s evidentiary ruling was mistaken under our precedent.
3 As Judge Easterbrook has explained for the Seventh Circuit, “‘de novo re-
view’ is a misleading phrase” because “what
Firestone requires is not ‘review’
of any kind; it is an independent
decision rather than ‘review’ that
Firestone
contemplates.”
Krolnik v. Prudential Ins. Co. of Am., 570 F.3d 841, 843 (7th
Cir. 2009).
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21-13186 Opinion of the Court 7
II
Lincoln makes several arguments as to why the district court
properly excluded Mr. Harris’ post-denial evidence. For the rea-
sons which follow, we do not find them persuasive.
A
Seeking to avoid the holdings of
Moon and
Kirwan, and the
language in
Shaw, Lincoln asserts that these decisions have been
abrogated by later ERISA cases creating a multi-step analytical ap-
proach for resolving challenges to the denial of benefits.
See, e.g.,
Williams v. BellSouth Telecomms., Inc., 373 F.3d 1132, 1137–38
(11th Cir. 2004);
Blankenship, 644 F.3d at 1354–55. There are two
problems with this contention.
First, though cases like
Williams and
Blankenship set out a
sequential process for resolving ERISA cases, they do not speak to
what evidence a district court can consider when review is de novo.
They are therefore not on point and do not undermine
Moon or
Kirwan.
Second, even if
Williams and
Blankenship could be read to
hold that new evidence cannot be considered even when the denial
of benefits is subject to plenary review,
Moon and
Kirwan would
still control. Where there is an intra-circuit conflict on a legal issue
and the cases cannot be reconciled, the earliest case governs.
See
S.E.C. v. Ginsburg, 362 F.3d 1292, 1298 (11th Cir. 2004) (citing
cases). And here those earlier cases are
Moon and
Kirwan.
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8 Opinion of the Court 21-13186
B
Lincoln also argues that even under
Moon and
Kirwan an
ERISA plaintiff does not have the unfettered right to introduce new
evidence when challenging the denial of benefits under plenary re-
view. It points out that other circuits have required a showing akin
to good cause before new evidence can be submitted to a district
court.
See, e.g., Quesinberry, 987 F.2d at 1025–27;
Jewell, 508 F.3d
at 1308–09.
We have never mentioned, much less demanded, a showing
of good cause to present new evidence in ERISA benefit cases gov-
erned by the de novo standard. But even assuming that our cases
allow for that sort of requirement, the district court here did not
make any pronouncements or findings about good cause. It simply
issued a broad ruling, based on
Glazer and
Blankenship, that review
was limited to the record before the administrator at the time of
the benefits denial. And that ruling, as we have explained, was in-
correct under
Moon and
Kirwan. 4
C
Finally, Lincoln maintains that under plenary review the ad-
ministrative record supports the denial of long-term disability ben-
efits to Mr. Harris. We cannot, however, affirm on this basis.
4 We do not suggest that the parties in ERISA benefit cases governed by the
de novo standard are free to disregard a district court’s scheduling order with
respect to when the evidentiary record is deemed closed. De novo review is
not an invitation for unending continuous review.
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21-13186 Opinion of the Court 9
As
Moon and
Kirwan make clear, when review is de novo
the parties can introduce evidence outside of the administrative
record. The district court erred by not considering Mr. Harris’
post-denial evidence, and Lincoln does not assert that this error
was harmless.
See 28 U.S.C. § 2111; F ED. R. CIV. P. 61. In some
contexts, we “have the discretion” to conduct a
sua sponte harm-
less error analysis,
see Horsley v. Alabama, 45 F.3d 1486, 1492 n.10
(11th Cir. 1995), but that discretion is not an obligation and we
choose not to assess the matter of prejudice here without briefing.
III
We reverse the district court’s judgment in favor of Lincoln
and remand for proceedings consistent with our opinion.
REVERSED AND REMANDED.
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