and capricious. Plaintiffs, on the other hand, want to offer expert medical testimony, to assist the Court in understanding the medical issues involved in this case, as well as evidence that tends to show that the Administrator acted in bad faith when denying Mrs. Zisel's claim. Neither the Supreme Court nor the Second Circuit has spoken on this issue. For the following reasons, this Court will consider both expert medical testimony and evidence of bad faith.
In Masella v. Blue Cross & Blue Shield, 936 F.2d 98, 104 (2d Cir. 1981), an ERISA plan administrator, who had no discretion, denied benefits to the plaintiff. Accordingly, when the plaintiff challenged the decision, the district court reviewed the denial de novo. When reviewing the administrator's decision, the district court considered expert medical evidence regarding the particular treatment at issue, evidence that was not before the administrator at the time of his decision.
On appeal, the Second Circuit was called upon to decide whether this additional testimony was properly considered, inasmuch as there was a conflict in other circuits with respect to the scope of evidence permitted to be considered on de novo review. The Masella court concluded that even if it were to hold that courts exercising de novo review are limited to considering only evidence that was before a plan administrator, it would, in any event, distinguish between evidence intended to establish a particular historical fact and expert evidence regarding the proper interpretation of the terms of the plan. Consequently, the Masella court did not decide the scope of de novo review.
Following the Masella court, this Court will consider expert medical evidence not presented to the Administrator that is intended to show that the intravenous antibiotic treatment is medically necessary within the meaning of the Plan. Thus, like the Masella court, this Court finds it unnecessary to decide whether courts are limited to evidence presented to a plan administrator when reviewing discretionary benefits decisions.
Moreover, in one of the more comprehensive decisions in this area, the fifth circuit, citing the Masella decision with approval, held that district courts are not limited to the administrative record when reviewing a decision under the abuse of discretion standard. Wildbur v. ARCO Chemical Co., 974 F.2d 631, 639 (5th Cir. 1992). But see Abnathya v. Hoffmann-La Roche Inc., 2 F.3d 40, 48 n.8 (3rd Cir. 1993); Miller v. Metropolitan Life Ins. Co., 925 F.2d 979, 986 (6th Cir. 1991) (when reviewing a plan administrator's decision under the arbitrary and capricious standard, only evidence presented to administrator may be considered).
Like the Masella court, the Wildbur court did not allow the district court to consider evidence of historical fact not presented to the administrator. The Wildbur court did, however, allow the district court to hear evidence going to the administrator's bad faith and helpful expert testimony.
Because the Plan at issue is self-funded by Sears and the Administrator is a Sear's employee, there can be no doubt that the Administrator is operating under an inherent conflict of interest. Accordingly, this Court will consider evidence tending to show that the Administrator acted in bad faith when denying medical benefits to Kathleen Zisel. See Firestone Tire and Rubber Co., 489 U.S. at 115-16 ("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.").
For the above-stated reasons, this Court will review the Administrator's decision using the arbitrary and capricious standard of review. Moreover, this Court will consider both expert medical testimony not presented to the Administrator and evidence that tends to show that the Administrator acted in bad faith when he denied Kathleen Zisel her medical benefits. This Court will not, however, consider any evidence of historical fact, that was not presented to the Administrator in the first instance.
LEONARD D. WEXLER
UNITED STATES DISTRICT JUDGE
Dated: Hauppauge, New York
March 9, 1994