Roganti v. Met. Life Ins. Co., 786 F.3d 201 (2d Cir. 2015), involved a dispute over the effect an arbitral award for improper employment practices had on pension benefits. The opinion is useful for generalizing into the pension context many of the rules underpinning the arbitrary and capricious standard of review as applied to benefit claims. The court’s generalization of those rules, in turn, can be helpful in benefit claims.
Though the facts underlying the different contentions about how the arbitration award was calculated are complex, they are not necessary for our purposes. Plaintiff, a former employee of Met Life, won more than $2 million in an arbitration against the company. He then asserted that Met Life was required to count that award as back pay when calculating his pension benefits. Met Life disagreed. The district court overturned Met Life’s determination, holding that Met Life rejected plaintiff’s “convincing explanation for the Award” without offering its own explanation. The 2d Circuit reversed, finding that Met Life had acted within its discretion.
The court began by noting that, while plan administrators cannot arbitrarily refuse to credit a claimant’s reliable evidence, they may exercise discretion in deciding what evidence is sufficient. Where the administrator has substantial evidence to support its determination, the fact that there is conflicting evidence does not equate to an abuse of discretion. Even where there is no conflicting evidence, the administrator can conclude that the claimant’s evidence is inadequate.
It might be arbitrary and capricious to reject a claimant’s evidence without making a reasonable effort to develop the record further. But this is governed by a rule of reason, and administrators are not required to “scour the countryside” to find evidence to support a claim.
The court faulted the district court for basing its decision on the fact that Met Life did not provide a mathematical breakdown of the arbitral award to counter plaintiff’s calculation, which had purported to show that he had been awarded back pay. The court held that the issue was not whether plaintiff’s evidence was stronger than the plan’s evidence, but whether plaintiff’s evidence, on its own, was strong enough to support his claim. The court held that it was not, finding that the arbitral award did not contain sufficient information to support plaintiff’s interpretation.
The court also emphasized the import of a discretionary claim determination: “a plan administrator’s decision is intended to be final—within the bounds of the highly deferential arbitrary-and-capricious standard—and not merely an input with the potential to assist the Court in making the ultimate determination. [quotation marks omitted].”