The opinion of the court was delivered by: LARIMER
Plaintiff, Judith S. Darling, commenced this action in New York State Supreme Court, Monroe County, seeking to recover disability benefits from her former employer, defendant E.I. DuPont de Nemours & Co. ("DuPont"). The complaint alleges, inter alia, that DuPont's denial of plaintiff's claim for benefits constitutes a violation of the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001 et seq. On November 30, 1995, DuPont removed the action to this court pursuant to 28 U.S.C. § 1441, on the ground that that the action is founded on a claim arising under the laws of the United States. Both parties have moved for summary judgment.
Darling began working as a clerk for DuPont in 1976. As an employee, she was also a participant in DuPont's Total and Permanent Disability Income Plan ("the Plan"). The Plan makes benefits available to eligible employees "in the event of total and permanent disability resulting from injury or disease ..." Jerry H. Brenner Aff. Ex. A at 1.
Several parts of the Plan are of particular relevance in this case. Section II(E) states that "an individual shall be considered 'totally and permanently disabled' if the Board of Benefits and Pensions ["the Board"] finds that he is totally disabled by injuries or disease and presumably will be totally and permanently prevented from pursuing any gainful occupation ..." The Plan also provides procedures for processing employees' applications for benefits, and states that "the Board of Benefits and Pensions retains discretionary authority to determine eligibility for benefits hereunder and to construe the terms and conditions of the Plan. The decision of the Board in all matters involving the interpretation and application of this Plan shall be final." Id. § VIII(B).
Plaintiff alleges that in early 1993, she began experiencing severe fatigue, joint pain, weakness, etc. By August 1993, she was completely unable to work, and the last day she worked for DuPont was August 27, 1993, after which she went on short-term disability leave.
Darling was diagnosed as suffering from Chronic Fatigue Immune Dysfunction Syndrome ("CFIDS"), an ailment still not fully understood, but characterized by the debilitating symptoms complained of by Darling. When her short-term benefits were about to run out, she applied to DuPont for benefits under the Plan. On January 12, 1994, plaintiff was advised that her application had been denied. She appealed the decision through DuPont's internal appeals procedures, but the denial was finally upheld in 1995.
Plaintiff commenced the instant action on November 27, 1995. The complaint seeks an order compelling DuPont to pay Darling benefits under the Plan from January 1, 1994 to the present and in the future (offset by plaintiff's Social Security benefits), punitive damages, and declaratory relief.
The first issue that must be addressed is the standard of review to apply in reviewing defendant's decision denying plaintiff's claim for benefits. Although plaintiff's initial memorandum of law did not expressly address this question, it relies entirely on cases involving Social Security benefits. In Social Security cases, however, the courts must decide whether the decision denying benefits is supported by substantial evidence. See 42 U.S.C. § 405(g); Rivera v. Sullivan, 923 F.2d 964, 967 (2d Cir. 1991). That standard is not applicable in the case at bar. Rather, this case is governed by the principles set forth by the Supreme Court in Firestone Tire and Rubber Co. v. Bruch, 489 U.S. 101, 103 L. Ed. 2d 80, 109 S. Ct. 948 (1989). In Bruch, the Court held that "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 ... discretionary authority to determine eligibility for benefits or to construe the terms of the plan," in which case the court is to apply the more deferential arbitrary-and-capricious standard. Id. at 115.
It is clear that under the terms of the Plan at issue here, the arbitrary-and-capricious standard applies. The Plan expressly confers upon the Board "discretionary authority to determine eligibility for benefits hereunder and to construe the terms and conditions of the Plan."
Nonetheless, there appears to be some confusion, or at least dispute, between the parties generated by the decision of the Southern District in Sansevera v. E. I. DuPont de Nemours & Co., 859 F. Supp. 106 (S.D.N.Y. 1994). There, the court, construing the same Plan as the one in the instant case, stated that "the fact that Plan is funded by DuPont raises a potential conflict of interest in the Board's decision to deny Sansevera's application, and therefore will be considered in deciding whether the Board acted arbitrarily or capriciously." Id. at 112. In support of this statement, the court cited the Supreme Court's statement in Bruch, 489 U.S. at 115, 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'" (internal citation omitted).
In her reply brief, plaintiff appears to read Sansevera as holding that the court should review the Board's decision de novo because the Board is made up of DuPont employees. If that is her contention, it is incorrect. The court in Sansevera clearly applied the arbitrary-or-capricious standard; see 859 F. Supp. at 112. In addition, to the extent that plaintiff suggests that I should review defendant's ...