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Ocampo v. Building Service 32B-J Pension Fund

United States Court of Appeals, Second Circuit

June 1, 2015

FRANCY OCAMPO, Plaintiff-Appellant, -
v.
- BUILDING SERVICE 32B-J PENSION FUND, and the BOARD OF TRUSTEES for the BUILDING SERVICE 32B-J PENSION FUND, Defendants-Appellees. [*]

Submitted January 14, 2015.

As Amended August 3, 2015.

Appeal from a judgment of the United States District Court for the Southern District of New York, Katherine B. Forrest, Judge, dismissing action brought under ERISA by pension plan participant seeking a pension on the basis of permanent disability. Plaintiff alleged that the denial of her application was arbitrary and capricious because defendants determined that her disability was not permanent on the sole basis that the Social Security Administration (" SSA" ), in awarding her Social Security disability benefits, had stated that her eligibility for such benefits must be reviewed at least once every three years, rather than once every five years. The district court granted summary judgment dismissing the complaint on the ground that the plan at issue conferred on defendants discretion to determine an applicant's eligibility for benefits and that defendants' reliance on SSA determinations, policies, and procedures in this matter was not arbitrary or capricious.

FUSCO, BRANDENSTEIN & RADA, Woodbury, New York (Aba Heiman, Woodbury, New York, of counsel), for Plaintiff-Appellant.

RAAB, STURM & GANCHROW, New York, New York (Michael Geffner, New York, New York, of counsel), for Defendants-Appellees.

Before: KATZMANN, Chief Judge, KEARSE and RAGGI, Circuit Judges.

OPINION

Page 684

KEARSE, Circuit Judge:

Plaintiff Francy Ocampo, a participant in the Building Service 32BJ Pension Plan (the " Pension Plan" or " Plan" ), appeals from a judgment of the United States District Court for the Southern District of New York, Katherine B. Forrest, Judge, dismissing her complaint against defendants Building Service 32B-J Pension Fund (the " Pension Fund" ) and Board of Trustees for the Building Service 32B-J Pension Fund (the " Trustees" ) brought under the Employment Retirement Income Security Act of 1974 (" ERISA" ), see 29 U.S.C. § 1001 et seq., seeking a pension based on permanent disability. In support of her pension application, Ocampo had submitted proof that she was awarded Social Security disability benefits; the notice of award stated that her eligibility for such benefits was to be reviewed by the Social Security Administration (" SSA" ) at least once every three years. The complaint alleged that defendants, based on the frequency of the SSA's planned review, found Ocampo's disability not to be permanent, but that defendants conceded they would consider her disability permanent if the SSA's reviews were scheduled to occur only every five years. The complaint alleged that categorization of a disability as permanent if SSA review is to occur every five years but as not permanent if such review is to occur every three years is

Page 685

arbitrary and capricious. The district court granted defendants' motion for summary judgment dismissing the complaint on the ground that the Pension Plan gave defendants discretion to determine an applicant's eligibility for pension benefits and that defendants' reliance on SSA determinations, policies, and procedures in this matter was neither arbitrary nor capricious. On appeal, Ocampo contends principally that the district court should have reviewed defendants' denial of her disability pension application de novo rather than under a deferential standard and that defendants' adoption of SSA views as to disability permanence was the antithesis of exercising discretion and was arbitrary and capricious. For the reasons that follow, we affirm.

I. BACKGROUND

The following facts are not in dispute. For more than 20 years, Ocampo worked as an office cleaner and was a member of the Service Employees International Union, Local 32BJ. She was a participant in certain employee benefit plans (collectively the " Benefit Funds" or " Funds" ) including the Pension Plan. She last worked in " Covered Employment" within the meaning of those plans in March 2005. On March 22, 2005, she began suffering from herniated discs in her back and has not worked since.

A. The SSA's Disability Benefits Award

In July 2005, Ocampo applied for disability insurance benefits under the Social Security Act, in which " disability," to the extent pertinent here, is defined as an " inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months," 42 U.S.C. § 423(d)(1)(A). In December 2006, an administrative law judge found that Ocampo had a disability as of March 22, 2005, due to herniated discs at L4-5 and L5-S1, with S1 nerve root compression and L5 radiculopathy and peripheral polyneuropathy; that her impairments were sufficiently severe that she could not sustain full time employment at any exertional level; and that she was unable to perform any past relevant work or any other work existing in significant numbers in the national economy. In March 2007, Ocampo received notice from the SSA stating that she was entitled to receive disability benefits after being disabled for five full consecutive calendar months and that she was awarded disability benefits for the period beginning September 2005 (" SSA Notice of Benefits Award" or " SSA Notice" ).

The duration of a disabling impairment for 12 months does not mean the disability is permanent. Once a claimant is awarded Social Security disability benefits, the SSA conducts periodic reviews to determine whether or not the impairment is such that the claimant continues to be eligible for disability benefits. The relevant regulation provides in part as follows:

Frequency of Review. If your impairment is expected to improve, generally we will review your continuing eligibility for disability benefits at intervals from 6 months to 18 months following our most recent decision. . . . If your disability is not considered permanent but is such that any medical improvement in your impairment(s) cannot be accurately predicted, we will review your continuing eligibility for disability benefits at least once every 3 years. If your disability is considered permanent, we will review your continuing eligibility for benefits no less frequently than once every 7 years

Page 686

but no more frequently than once every 5 years.

20 C.F.R. § 404.1590(d) (emphases added). The SSA Notice to Ocampo stated that " [d]octors and other trained staff decided that you are disabled under our rules. But, this decision must be reviewed at least once every 3 years." (SSA Notice of Benefits Award at 5 (emphasis added).)

B. Ocampo's Application for Benefits from the Benefit Funds

The Pension Plan in which Ocampo was a participant provides that " [t]he Trustees" and any properly designated committee of the Trustees " shall have the exclusive right, power, and authority, in their sole and absolute discretion, to administer, apply and interpret the Plan" (Pension Plan § 7.06). The Trustees " have the sole and absolute discretionary authority to . . . formulate . . . policies necessary to administer the Plan in accordance with its terms" (id. § 7.06(b) (emphases added)) and to " make all decisions with respect ...


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