`
`No. 20-378
`
`In the Supreme Court of the United States
`
`
`
`
`
`
`NORTH CYPRESS MEDICAL CENTER
`OPERATING COMPANY, LTD., et al.,
`Petitioners,
`
`v.
`
`CIGNA HEALTHCARE, et al.,
`
`Respondents.
`
`
`
`
`
`
`
`
`
`
`
`On Petition for a Writ of Certiorari to
`the United States Court of Appeals
`for the Fifth Circuit
`
`
`BRIEF IN OPPOSITION
`
`
`
`
`MICHAEL B. KIMBERLY
`Counsel of Record
`PAUL W. HUGHES
`MATTHEW A. WARING
`McDermott Will
`& Emery LLP
`500 North Capitol St. NW
`Washington, DC 20001
`(202) 756-8000
`mkimberly@mwe.com
`
`
`JOSHUA B. SIMON
`WARREN HASKEL
`DMITRIY TISHYEVICH
`McDermott Will
`& Emery LLP
`340 Madison Ave.
`New York, NY 10173
`(212) 547-5500
`
`Counsel for Respondents
`
`
`
`
`
`
`
`
`
`
`
`
`
`i
`QUESTION PRESENTED
`Whether the Fifth Circuit correctly held that Cigna
`acted reasonably in adopting a particular interpreta-
`tion of plan language under the totality of the circum-
`stances, including the fact that Cigna’s interpretation
`was supported by longstanding and directly on-point
`judicial precedent.
`
`
`
`
`
`
`
`ii
`RULE 29.6 STATEMENT
` Cigna Healthcare of Texas, Inc. is a wholly-owned
`subsidiary of HealthSource, Inc., which is a wholly-
`owned subsidiary of Cigna Health Corporation.
`Cigna Health Corporation is a wholly-owned sub-
`sidiary of Connecticut General Corporation.
`Connecticut General Corporation is a wholly owned
`subsidiary of Cigna Holdings Inc., which is a wholly
`owned subsidiary of Cigna Holding Company, which is
`a wholly owned subsidiary of Cigna Corporation, which
`is publicly traded.
`No parent company and no publicly-traded compa-
`ny owns more than 10 percent of Cigna Corporation’s
`stock.
`
`
`
`
`
`
`
`
`iii
`TABLE OF CONTENTS
`Question Presented ..................................................... i
`Rule 29.6 Statement ................................................... ii
`Table of Authorities .................................................... iv
`Introduction ................................................................. 1
`Statement .................................................................... 2
`A. Factual background ........................................... 2
`B. Procedural background ...................................... 5
`Reasons for Denying the Petition ............................... 8
`A. There is no conflict among the circuits ............. 8
`1. The decision below does not establish
`a categorical rule .......................................... 9
`2. No other case cited in the petition
`involved an administrator’s reliance
`on directly relevant judicial precedent ...... 11
`B. The district court’s alternative holding
`makes this a poor vehicle ................................ 14
`C. The decision below is plainly correct ............... 16
`Conclusion ................................................................. 19
`
`
`
`
`
`
`
`
`iv
`
`TABLE OF AUTHORITIES
`
`Cases
`Colby v. Union Security Insurance,
`705 F.3d 58 (1st Cir. 2013) ............................ 11, 12
`Conkright v. Frommert,
`559 U.S. 506 (2010) .............................................. 18
`Connecticut General Life Insurance v.
`Humble Surgical Hospital,
`878 F.3d 478 (5th Cir. 2017) ........................ passim
`Darvell v. Life Insurance,
`597 F.3d 929 (8th Cir. 2010) ................................ 12
`Davis v. United States,
`564 U.S. 229 (2011) .............................................. 17
`Ehrensaft v. Dimension Works,
`33 F. App’x 908 (9th Cir. 2002) ........................... 13
`Firestone Tire & Rubber Co. v. Bruch,
`489 U.S. 101 (1989) .............................................. 17
`Fort Halifax Packing Co. v. Coyne,
`482 U.S. 1 (1987) .................................................. 18
`Friends for Am. Free Enter. Ass’n v.
`Wal-Mart Stores, Inc.,
`284 F.3d 575 (5th Cir. 2002) ................................ 17
`Gallo v. Madera,
`136 F.3d 326 (2d Cir. 1998) ................................. 13
`Higgins v. Apfel,
`222 F.3d 504 (8th Cir. 2000) ................................ 17
`Hinkle v. Assurant, Inc.,
`390 F. App’x 105 (3d Cir. 2010) ........................... 13
`Jenkins v. Chrysler Motors Corp.,
`316 F.3d 663 (7th Cir. 2002) ................................ 17
`Kennedy v. Connecticut General Life Ins.,
`924 F.2d 698 (7th Cir. 1991) ........................ passim
`
`
`
`
`
`
`
`v
`
`Cases—continued
`Metropolitan Life Insurance v. Glenn,
`554 U.S. 105 (2008) .................................. 15, 16, 17
`Osborne v. Hartford Life,
`465 F.3d 296 (6th Cir. 2006) ................................ 13
`Rush Prudential HMO, Inc. v. Moran,
`536 U.S. 355 (2002) .............................................. 18
`Valdes v. Wal-Mart Stores, Inc.,
`199 F.3d 290 (5th Cir. 2000) ................................ 17
`
`Statutes
`28 U.S.C. § 1447(c) .................................................... 18
`Employee Retirement Income Security Act
`§ 502(a)(1)(B) .......................................................... 6
`§ 502(a)(3) ............................................................... 6
`§ 502(c)(1)(B) .......................................................... 6
`§ 503 ....................................................................... 6
`
`
`
`
`
`
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`
`
`INTRODUCTION
`If North Cypress’s petition looks familiar, that is
`because it is a slightly modified version of the same pe-
`tition that North Cypress’s counsel filed, and this
`Court denied, in Connecticut General Life Insurance v.
`Humble Surgical Hospital, 878 F.3d 478 (5th Cir.
`2017). The crux of the petition here is the same as it
`was there: North Cypress asserts that the Fifth Circuit
`has adopted an impermissible “per se” rule for abuse-
`of-discretion review in ERISA cases. Under this sup-
`posedly “categorical” approach, courts need not engage
`in a full abuse-of-discretion review if the plan adminis-
`trator’s interpretation of the relevant plan documents
`is directly supported by judicial precedents.
`But that is not a tenable reading of either Humble
`or the decision below. To be sure, in reaching its con-
`clusion that Cigna did not abuse its discretion both
`here and in Humble, the Fifth Circuit placed signifi-
`cant emphasis on the fact that Cigna’s interpretation of
`its plan was based upon “relevant and longstanding”
`precedent from the Seventh Circuit. Pet. App. 12a. But
`the court stressed in Humble that it was not adopting
`“a bright-line rule” on that point. 878 F.3d at 485. On
`the contrary, even when an administrator’s “interpre-
`tation is supported by prior case law,” application of
`that interpretation can still amount to an “abuse [of]
`discretion.” Ibid.
`The court’s application of Humble in this case does
`not signal a break from Humble’s express rejection of a
`categorical rule. Rather, it reflects an unremarkable
`application of stare decisis—the facts here involve the
`same plan administrator, interpreting nearly identical
`plan language, in the same way, based on the same
`longstanding precedents. Humble therefore rightly con-
`trols the outcome in these unusually similar circum-
`stances.
`
`
`
`
`
`
`
`2
`
`Equally untenable is North Cypress’s contention
`that the decision below conflicts with holdings of other
`circuits. As North Cypress recognizes, the abuse-of-
`discretion inquiry is fact-intensive, multifactorial, and
`context-dependent. None of the cases cited in the peti-
`tion involve plan administrators basing decisions con-
`cerning plan language on longstanding judicial prece-
`dents. Any differences in outcomes between this case
`and the cases cited in the petition are thus attributable
`to differences in case-specific facts, not differences in
`the legal rules applied to those facts.
`Even under North Cypress’s misguided view that
`courts must consider every abuse-of-discretion factor
`equally in every case, moreover, the outcome here
`would be the same. The district court held an eight-day
`bench trial and expressly applied the full range of “tra-
`ditional abuse of discretion factors” that North Cypress
`says is required, entirely apart from Humble. Pet. App.
`98a. It ruled alternatively for Cigna on that basis.
`Stripped of its cert-stage catchphrases, the petition
`is nothing more than a bid for error correction. It does
`not warrant the Court’s attention.
`STATEMENT
`A. Factual background
`1. Respondent Cigna offers health, pharmacy, den-
`tal, supplemental insurance and Medicare plans to in-
`dividuals, families, and businesses. Under most health-
`care insurance plans—Cigna’s included—members typ-
`ically must pay more when they see out-of-network
`providers compared to in-network providers. Pet. App.
`67a. The point of this arrangement is to “sensitize em-
`ployees to the costs of health care,” which “makes med-
`ical insurance less expensive and enables employers to
`furnish broader coverage.” Kennedy v. Connecticut
`General Life Ins., 924 F.2d 698, 699 (7th Cir. 1991).
`
`
`
`
`
`
`
`3
`
`Sometimes out-of-network providers attempt to
`eliminate the difference between the in-network and
`out-of-network costs to patients by engaging in what is
`called “fee forgiving.” Fee forgiving happens when out-
`of-network providers decline to collect the correct out-
`of-pocket costs (co-pays or co-insurance) for medical
`services from insured patients, as required under the
`terms of the relevant benefit plans. Fee forgiving tam-
`pers with plan incentives, and it undercuts Cigna’s
`ability to encourage members to use less-expensive,
`more efficient providers. To safeguard against this
`practice, Cigna plans have long included provisions
`that exclude coverage for “charges which [you, the
`member are] not obligated to pay.” Pet. App. 67a.
`Under the plan documents at issue here, Cigna has
`discretionary authority to interpret plan provisions.
`Pet. App. 3a. For years, Cigna has used that discretion
`to interpret its plans “to require an out-of-network
`healthcare provider to collect the full portion of coin-
`surance from a patient.” Pet. App. 95a. If the out-of-
`network provider fails to do so and “the member has no
`obligation to pay, then Cigna has no obligation to pay.”
`Humble, 878 F.33d at 484; Pet. App. 12a (noting that
`the Seventh Circuit ruled in 1991 “that Cigna’s inter-
`pretation of a ‘nearly-identical’ provision as imposing a
`fee forgiveness restriction was legally correct”).
`2. Petitioner North Cypress Medical Center oper-
`ated an out-of-network general acute care hospital.
`Pet. App. 2a. There is no dispute that it engaged in im-
`permissible fee forgiving. In particular, North Cypress
`“offered to limit the patient’s co-insurance obligation if
`the patient paid a certain amount of what he owed
`within 120 days.” Ibid. This prompt payment discount
`“was based on an entirely different fee schedule,” as-
`sumed “an in-network coinsurance rate,” and effective-
`ly granted a “waiver of Cigna’s usual [co-insurance] re-
`
`
`
`
`
`
`
`4
`
`quirements.” Pet. App. 5a. At bottom, the discount
`“significantly reduced out-of-network patients’ coinsur-
`ance obligations” and “generated substantial revenue
`for North Cypress without incurring collection expens-
`es.” Pet. App. 3a.
`Compounding its misconduct, North Cypress was
`using one set of charges to lower members’ cost-share
`and a far higher set of charges to bill Cigna. North Cy-
`press used “125 percent of Medicare” to bill patients
`and calculate coinsurance, but it then submitted bills
`to Cigna based on rates that “exceeded 600% or even
`1,000% of the analogous Medicare rates.” Pet. App.
`74a-76a. Thus, for example, North Cypress billed one
`Cigna member just $823.84 for gallbladder surgery,
`but then sought $30,968.70 in reimbursement from
`Cigna for the service. Pet. App. 76a.
`3. Most of Cigna’s business is providing adminis-
`trative services to “self-funded” employer plans. Pet.
`App. 66a. For those plans, “Cigna administers claims,
`but an employer, such as a school district, is responsi-
`ble for paying all of the claims.” Ibid. Not surprisingly,
`North Cypress’s shady billing practices and inflated
`charges began to raise red flags. Cigna began investi-
`gating after one of Cigna’s self-funded clients (a public
`school district) complained “about increasing out-of-
`network costs” driven by North Cypress, as a result of
`which the school district had to “rais[e] premiums on
`employees.” Pet. App. 77a-78a.
`To investigate North Cypress’s suspicious billing
`practices, Cigna’s Special Investigations Unit sent sur-
`vey letters to members who had received treatment at
`North Cypress. Pet. App. 78a. The survey responses
`confirmed Cigna’s suspicions: “[North Cypress] did not
`bill any of the members the amounts they were re-
`quired to pay under their plans.” Pet. App. 79a.
`
`
`
`
`
`
`
`5
`
`Cigna informed North Cypress by letter that “only
`expenses which patients are legally obligated to pay
`are reimbursable” under Cigna’s plans, and therefore,
`“[a]ny portion of a charge which is in any way waived
`or for which a patient is not personally responsible
`should not be reflected on a claim.” Pet. App. 72a-73a.
`In that same letter, Cigna cited a Seventh Circuit deci-
`sion, Kennedy v. Connecticut General Life Insurance
`Co., 924 F.2d 698 (7th Cir. 1991), for the proposition
`that Cigna plans cover only a provider’s actual charges
`and not charges that are waived or later discounted
`from the patient’s bill.
`North Cypress continued its fee forgiving despite
`these warnings. After Cigna completed its investiga-
`tion, it therefore began applying a fee-forgiving proto-
`col to North Cypress’s claims. Pet. App. 5a. Under the
`protocol, Cigna reimbursed North Cypress based on an
`assumption that it was charging members $100 per
`claim, based on evidence Cigna had gathered concern-
`ing North Cypress’s billing practices. Ibid. Cigna would
`adjust the reimbursement if North Cypress gave proof
`that “the amount submitted [to Cigna] was actually the
`amount charged” to the patient. Ibid. On the handful of
`occasions where North Cypress did show that it
`charged more, “Cigna would ‘adjust’ a claim” and “re-
`assess its benefits determination.” Pet. App. 90a.
`B. Procedural background
`1. North Cypress sued Cigna, asserting that Cigna
`had abused its discretion because its actions reflected a
`conflict of interest, its plan interpretation was incor-
`rect, and it adopted its plan interpretation in bad faith.
`Pet. App. 6a. Alleging more than 10,000 improper de-
`nials of plan benefits on behalf of plan beneficiaries,
`North Cypress asserted causes of action under state
`law, RICO, and ERISA. Ibid.
`
`
`
`
`
`
`
`6
`
` Following an initial appeal and extensive fact dis-
`covery, the district court dismissed North Cypress’s
`ERISA § 502(a)(3) claims for breach of fiduciary duty,
`its ERISA § 503 claims for failure to provide adequate
`review of initial benefit decisions, its ERISA § 502-
`(c)(1)(B) claims for refusal to provide plan documents,
`and its state contract law claims. Pet. App. 6a. It also
`“narrowed North Cypress’s remaining claims for pa-
`tient benefits under ERISA § 502(a)(1)(B) to those for
`which it had exhausted administrative remedies.” Pet.
`App. 6a-7a. What remained for trial after the district
`court’s ruling was North Cypress’s ERISA § 502-
`(a)(1)(B) claim for improper withholding of benefits
`with respect to 575 claims. Pet. App. 7a, 88a.
`2. Following an eight-day bench trial, the district
`court rejected North Cypress’s remaining claims and
`entered judgment for Cigna. Pet. App. 63a-103a.
`For 395 of the 575 claims at issue, the district court
`concluded that Cigna’s $100 default reimbursement
`protocol had not been applied and there accordingly
`was “no longer [any] dispute” with respect to those
`claims. Pet. App. 93a-94a.
`“Th[at] [left] 180 remaining claims.” Pet. App. 94a.
`As to those claims, the court “conclude[d] that Cigna
`did not abuse its discretion.” Pet. App. 98a.
`In reaching that conclusion, the court relied princi-
`pally on Humble, in which “Cigna had interpreted”
`“nearly identical” plan language in “the same way.”
`Pet. App. 95a-96a. There, “[t]he Fifth Circuit held that
`Cigna’s interpretation falls within its ‘broad discre-
`tion.’” Pet. App. 95a. The decision in Humble itself had
`turned on, among other things, Cigna’s reliance on the
`Seventh Circuit’s decision in Kennedy. The court of ap-
`peals held that Cigna’s “interpretation does not consti-
`tute an abuse of discretion” when “courts have found
`
`
`
`
`
`
`
`7
`
`Cigna’s interpretation of the policy language reasona-
`ble.” Humble, 878 F.3 at 485 (brackets omitted).
`Applying that same rational here, the district court
`held that “where a plan administrator’s interpretation
`[of a plan document] is supported by prior case law, it
`cannot be an abuse of discretion—even if the interpre-
`tation is legally incorrect.” Pet. App. 96a (quoting
`Humble, 878 F.3d at 484). Here, “Cigna explicitly re-
`lied on Kennedy by citing it in letters that Cigna sent”
`to North Cypress. Pet. App. 97a. “In the interest of uni-
`formity of decisions, and adhering to the prior case law
`of Kennedy” and Humble, the court concluded “that
`Cigna did not abuse its discretion.” Pet. App. 98a (cita-
`tion omitted).
`The district court did not stop there, however. It
`went on to hold that “[a] review of the traditional abuse
`of discretion factors supports this conclusion.” Pet.
`App. 98a. Reviewing the good-faith bases for Cigna’s
`conduct and its actions to limit conflicts of interest, the
`court concluded that Cigna had not abused its discre-
`tion independent of Humble. Pet. App. 98a-101a.
`3. The Fifth Circuit unanimously affirmed. Pet.
`App. 1a-16a. North Cypress challenged virtually every
`element of the district court’s findings and conclusions
`on appeal: It asserted that the district court had violat-
`ed the law of the case (Pet. App. 9a-11a); erred in hold-
`ing that Cigna did not have a conflict of interest and
`did not act in bad faith (Pet. App. 11a-13a); misapplied
`Humble on the question of Cigna’s interpretation of
`plan documents (Pet. App. 13a-15a); unreasonably held
`North Cypress to ERISA’s exhaustion requirement
`(Pet. App. 15a-16a); and erred in declining to award
`damages and attorneys’ fees (Pet. App. 16a).
`The Fifth Circuit rejected each argument, holding
`that North Cypress had shown “zero” ground for suc-
`
`
`
`
`
`
`
`8
`
`cess of the merits of its claims. Pet. App. 16a. As it con-
`cerns the issues presented in the petition, the court of
`appeals reasoned that because this case and Humble
`involved indistinguishable circumstances, the “court
`must adhere to the same reasoning and result concern-
`ing the same policy language” that it had reached in
`Humble. Pet. App. 12a-13a. “As North Cypress ad-
`mits,” the court explained, “the relevant interpretation
`in this case is the same as the interpretation in Hum-
`ble.” Pet. App. 14a. Because “Kennedy was reasonably
`invoked in Humble,” it “is reasonably applicable here”
`as a ground for holding that Cigna’s interpretation fell
`within the range of permissible interpretations. Ibid.
`North Cypress petitioned for rehearing en banc,
`which was summarily denied. Pet. App. 106a-107a.
`REASONS FOR DENYING THE PETITION
`The petition mischaracterizes the decision below.
`Correctly understood, the Fifth Circuit’s unanimous
`opinion is consistent with both common sense and this
`Court’s holdings. It does not conflict with the decision
`of any other court of appeals. And regardless, this case
`would be a manifestly unsuitable vehicle for review be-
`cause the district court engaged in precisely the analy-
`sis that North Cypress says is required, and it still
`ruled for Cigna. The petition should be denied.
`A. There is no conflict among the circuits
`The crux of the petition is North Cypress’s view
`that “the traditional abuse-of-discretion inquiry” has
`been categorically “obviated” by the Fifth Circuit when
`there is “prior legal authority supporting the adminis-
`trator’s interpretation.” Pet. 20 (cleaned up). On that
`basis, North Cypress asserts (Pet. 13) that the decision
`below “directly conflicts with the decisions of this Court
`and multiple courts of appeals.” But that is simply
`wrong: The Fifth Circuit has expressly disclaimed the
`
`
`
`
`
`
`
`9
`
`creation of a categorical rule, and there is no split
`among the circuits. Rather, the decision below simply
`followed the Fifth Circuit’s own precedent in Humble,
`which involved effectively identical facts. This Court
`denied review in Humble, and it should do so here.
`1. The decision below does not establish a
`categorical rule
`a. North Cypress repeatedly asserts that the Fifth
`Circuit has created an “inflexible” (Pet. 16, 21), “wood-
`en” (Pet. 7, 14, 22), “categorical” (Pet. 8, 14, 20, 21) and
`“per se” (Pet. 5, 15, 19, 21, 24) rule, according to which
`relevant legal precedents supporting a plan adminis-
`trator’s decision must be treated as “automatic proxies
`for reasonableness” (Pet. 5, 22) under the abuse-of-
`discretion framework. But no amount of repetition al-
`ters the fact that the Fifth Circuit has expressly disa-
`vowed any such bright-line rule.
`The starting point is Humble. There, the Fifth Cir-
`cuit held that “where an administrator’s interpretation
`is supported by prior case law, it cannot be an abuse of
`discretion—even if the interpretation is legally incor-
`rect.” 878 F.3d at 484. Although that language is
`broad, the court clarified in the very next sentence that
`it was “not adopt[ing] this reasoning as a bright-line
`rule” and that, “even if a legally incorrect interpreta-
`tion is supported by prior case law, employing the in-
`terpretation could cause a plan administrator to abuse
`its discretion.” Id. at 485. The court therefore explicitly
`limited its “conclu[sion that] Cigna did not abuse its
`discretion” to the unique “circumstances” of that case,
`including its observation that the prior cases relied up-
`on by Cigna involved a “nearly-identical exclusionary
`provision.” Ibid.
`This case and Humble are of a piece: They involve
`the same plan administrator, applying the same inter-
`
`
`
`
`
`
`
`10
`
`pretation, of the same plan language, in light of the
`same judicial precedents, to the same basic conduct. As
`the Fifth Circuit succinctly put it, “the circumstances
`of this case match those in Humble.” Pet. App. 11a. Ac-
`cord Pet. 10 (Humble “involved effectively the same
`administrator’s construction of the same plan language
`based on similar activity”).
`The court of appeals thus understandably applied
`its earlier holding in Humble to resolve this case. See
`Pet. App. 12a-13a (“[T]his court must adhere to the
`same reasoning and result concerning the same policy
`language” that it had reached in Humble); Pet App.
`13a (“Humble [is] binding.”). And in doing so, the court
`continued with the same qualification that it expressed
`in Humble itself: “Cigna’s interpretation, having rele-
`vant legal support, could not in these circumstances be
`an abuse of discretion.” Pet. App. 13a (emphasis add-
`ed). This is not a sub silencio overruling of Humble’s
`disavowal of a per se rule. It is, instead, a simple appli-
`cation of stare decisis.
`In a footnote buried late in the petition (at 20 n.3),
`North Cypress admits that the Fifth Circuit expressly
`disclaimed a per se rule in Humble. But it insists that
`“the panel below has now confirmed the [true] categor-
`ical nature of Humble’s holding” by applying it in this
`case. Ibid. That ignores that the facts here and the
`facts in Humble are identical in every relevant respect,
`and that to have ruled differently here would have re-
`quired overruling Humble and subjecting Cigna to in-
`consistent legal duties in analytically identical cases.
`North Cypress does not (and cannot) seriously say that
`the decision in this case overruled Humble.
`b. Considered in this broader context, the petition
`unravels. As North Cypress rightly admits (Pet. 8),
`“not every factor” in the abuse-of-discretion inquiry
`“will prove ‘important’ in every case,” and the relative
`
`
`
`
`
`
`
`11
`
`“weight” that each factor receives depends upon “‘case-
`specific’ circumstances.”
`That explains the decision below. Because Cigna
`reasonably based its interpretation on two longstand-
`ing judicial decisions, and because the Fifth Circuit,
`just two years earlier, held that Cigna’s interpretation
`of the same plan terms in the same way for the same
`reasons was not an abuse of discretion, Humble con-
`trolled the outcome. Pet. App. 12a-14a. Fulsome recon-
`sideration of each individual abuse-of-discretion factor
`was not necessary under these unique “‘case-specific’
`circumstances” (Pet. 8). And it would not be a worth-
`while use of this Court’s resources to review such a
`fact-bound decision.
`2. No other case cited in the petition
`involved an administrator’s reliance on
`directly relevant judicial precedent
`a. North Cypress asserts (Pet. 15-17) that the deci-
`sion below conflicts with binding decisions of the First
`and Eighth Circuits, among others. That is wrong first
`and foremost because, as we have just shown, the court
`below did not hold that an administrator’s reliance on
`judicial precedent is, in every case, “automatically dis-
`positive” of the abuse-of-discretion inquiry. Pet. i. But
`beyond that, none of the cited cases appears to have
`considered the question presented in the petition,
`much less concluded that reliance on precedent can
`never alone support a finding of reasonableness.
`Take first Colby v. Union Security Insurance, 705
`F.3d 58 (1st Cir. 2013), cited at page 15 of the petition.
`There, the First Circuit held that the plan adminis-
`trator’s interpretation of certain plan language was
`“unreasonable” “in this case.” 705 F.3d at 65. It
`reached that conclusion despite that there was recent
`case law supporting the “viability” of the adminis-
`
`
`
`
`
`
`
`12
`
`trator’s position. Ibid. But the administrator’s decision
`predated the relevant case law, and thus the adminis-
`trator could not have relied upon it to support the
`denial of benefits. Colby accordingly did not present
`the question whether it is reasonable for a plan ad-
`ministrator to rely on longstanding, on-point case law
`as a basis for interpreting plan language in a particu-
`lar way, nor how any such reliance factors into sub-
`sequent abuse-of-discretion review.
`North Cypress’s citation to Darvell v. Life Insur-
`ance, 597 F.3d 929 (8th Cir. 2010), is equally off base.
`That case involved a plan administrator’s interpre-
`tation of plan documents concerning disability. At the
`time that the administrator denied benefits in that
`case, the circuits were “split” on whether the
`administrator’s interpretation was a reasonable one.
`597 F.3d at 935. Without opining on whether it would
`have been reasonable for the plan administrator to rely
`on supportive case law, the Eighth Circuit held simply
`that it would “defer[]” to the administrator’s “interpre-
`tation of the disputed phrase,” because “it is reasonable
`* * * in this case.” Id. at 936. In addition, the Eighth
`Circuit acknowledged that “the administrator [was]
`also the insurer,” introducing the possibility of a
`“conflict,” which the court considered and rejected. Id.
`at 934. That confirms only that cases of this sort
`typically involve unique combinations of factors calling
`for appropriately tailored, case-specific analyses. No-
`thing in Darvell indicates that the Eighth Circuit
`would have decided this case differently.
`b. In addition to Colby and Darvell, the petition
`cites (at 17) a string of cases for the bare proposition
`that “multiple courts of appeals * * * examined the
`traditional ‘factors’” despite the presence of judicial
`precedent supporting the administrator’s decision. But,
`like Colby and Darvell, none of those cases involved the
`
`
`
`
`
`
`
`13
`
`question whether it is reasonable for a plan adminis-
`trator itself to rely on directly relevant case law to
`reach a decision about the meaning of plan language.
`The Sixth Circuit’s decision in Osborne v. Hartford
`Life, 465 F.3d 296 (6th Cir. 2006), merely upheld an
`unpublished decision that post-dated the adminis-
`trator’s denial of benefits. Id. at 299-300. And the
`Second Circuit’s decision in Gallo v. Madera, 136 F.3d
`326 (2d Cir. 1998), merely resolved a conflict between
`two district courts on a question of plan interpretation.
`Neither of those cases says a word about how either of
`those courts would treat an administrator’s reliance on
`prior case law in a case like this one.
`North Cypress asserts a further split with unpub-
`lished decisions of the Third and Ninth Circuits. Pet.
`17-19. Setting aside that neither decision is preceden-
`tial, each supports Cigna, not North Cypress.
`In Hinkle v. Assurant, Inc., 390 F. App’x 105 (3d
`Cir. 2010), the Third Circuit concluded that when there
`is
`judicial precedent pointing
`in two different
`directions on a particular question of interpretation,
`generally “a decision one way or another cannot be re-
`garded as arbitrary or capricious.” Id. at 108. And in
`Ehrensaft v. Dimension Works, 33 F. App’x 908 (9th
`Cir. 2002), the Ninth Circuit held similarly that “be-
`cause the circuit-level law in this circuit appears to
`favor” the administrator’s reading, its “interpretation
`does not constitute an abuse of descretion.” Id. at 910.
`Those conclusions, which are generally consistent with
`Humble and the decision below, make good sense: The
`abuse-of-discretion standard asks only whether the
`administrator acted reasonably (Humble, 878 F.3d at
`483)—and it will ordinarily be reasonable to interpret
`plan documents in a manner consistent with relevant
`judicial decisions. Nothing in these unpublished de-
`
`
`
`
`
`
`
`14
`
`cisions conflict with the Fifth Circuit’s approach in this
`case or in Humble.1
`B. The district court’s alternative holding
`makes this a poor vehicle
`Even if all that we had said were mistaken—even
`supposing that the Fifth Circuit had established a
`bright-line rule (it did not) and that other courts of ap-
`peals had considered and rejected that rule (they have
`not)—review still would be unwarranted. That is be-
`cause, after holding an eight-day bench trial, the dis-
`trict court conducted precisely the kind of abuse-of-
`discretion review that North Cypress says it was re-
`quired to undertake, independent of its application of
`Humble. See Pet. App. 98a-101a. Under that analysis,
`it still ruled in Cigna’s favor. Ibid.
`The court began by laying out the full framework
`for abuse-of-discretion review in ERISA cases, explain-
`ing the relevance of “whether the administrator had a
`conflict of interest,” whether the administrator’s inter-
`pretation is “internal[ly] consisten[t],” and wheth-
`erthere are “any inferences of lack of good faith.” Pet.
`App. 87a (brackets omitted). It concluded that, under a
`“review of the[se] traditional abuse of discretion fac-
`tors,” the outcome would be the same wholly apart
`from Humble. Pet. App. 98a.
`First, the court held that Cigna’s decision was not
`tainted by a conflict of interest. A conflict of interest
`exists when the same entity, typically the employer,
`
`
`1 The petition asserts (Pet. 19-20) a further conflict with un-
`published decisions of the U.S. District Courts for the District of
`Maryland and the Southern District of Mississippi. Those cases
`are entirely consistent with the decision below. See Humble, 878
`F.3d at 485. In any event, conflicts among district courts do not
`warrant the Court’s attention.
`
`
`
`
`
`
`
`15
`
`“both funds the plan and evaluates the claims,” be-
`cause in that case “every dollar saved” on claims “is a
`dollar in [the employer’s] pocket.” Metropolitan Life In-
`surance v. Glenn, 554 U.S. 105, 112 (2008) (quotation
`marks omitted). Here, the district court concluded that
`Cigna did have a potential conflict of interest because
`it stood to collect contingency fees when it reduced
`payments to North Cypress. But, the court found,
`“Cigna took steps to reduce its conflict [of interest],” by
`“‘turn[ing] off’ the cost-containment programs that
`could result in Cigna collecting savings in some cir-
`cumstances.” Pet. App. 98a. As a result, the court con-
`cluded, Cigna in fact made less money under the fee-
`forgiving protocol than it otherwise would have made.
`Ibid. In such circumstances, the court reasoned, “con-
`flicts of interest are afforded less weight in the abuse of
`discretion analysis.” Pet. App. 99a.
`The district court next found that Cigna’s interpre-
`tation of the fee-forgiveness provisions of the plan doc-
`uments was consistent with its interpretation of other
`plan provisions. Pet. App. 99a. Those other provisions
`include the p
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