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August 31, 1999


The opinion of the court was delivered by: Urbina, District Judge.

Granting Summary Judgment to the Defendants on Count 3 [Nos. 48,
  53, 55-1]; Declining Supplemental Jurisdiction over Count 6;
  Dismissing without Prejudice Motions for Summary Judgment on
  Count 6 [Nos. 55-2, 60]


This matter comes before the court on the parties' cross-motions for summary judgment on the plaintiff's two remaining claims: count 3, which asserts a claim against both defendants under the Employment Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001-1461; and count 6, which asserts a claim for misrepresentation under District of Columbia law against defendant Federal National Mortgage Association ("Fannie Mae") alone. In the course of the plaintiff Jane Fitts's motion for summary judgment on count 3, Ms. Fitts effectively asks the court to reconsider certain rulings from its March 29, 1999 Memorandum Opinion. For the reasons which follow, the court adheres to its prior rulings, and it will grant the defendants summary judgment on count 3.*fn1 In addition, the court will decline to exercise supplemental jurisdiction over count 6. Therefore, the court will dismiss the cross-motions for summary judgment on count 6 without prejudice to the plaintiff's right to file in D.C. Superior Court.


The plaintiff worked as an attorney for Fannie Mae, a federal corporation, until 1995, when her bi-polar disorder caused her to become disabled. See Compl. ¶¶ 4, 17. Under Fannie Mae's long-term disability plan, physically disabled persons receive benefits until age 65, whereas mentally disabled persons receive benefits for up to 24 months. See Compl. ¶¶ 15, 20.

When the plaintiff became disabled she applied for and received short-term benefits. See Compl. ¶ 18. Upon the termination of short-term benefits she applied for and received long-term benefits. See id. ¶ 19. Shortly thereafter, Unum notified the plaintiff that her benefits would end after 24 months, because bi-polar disorder is a mental disorder subject to the 24-month limitation on benefits for such disorders. See id. ¶ 20. The plaintiff protested the termination of benefits to both defendants, but they declined to re-classify her disorder as a "physical" disability. See id. ¶¶ 21, 22. Ms. Fitts's benefits terminated after 24 months. Subsequently, she filed the instant action. See id. ¶ 1.

By Memorandum Opinion and Order issued March 29, 1999, this court granted the defendants' motions to dismiss Counts 1, 2, 4 and 5 with prejudice: Counts 1 and 2 asserted claims under the Americans with Disabilities Act; Count 4 asserted a claim under the D.C. Human Rights Act; and Count 5 claimed breach of contractual and common-law duties. The court also denied the plaintiff's motion for partial summary judgment on count 3, her ERISA claim. Lastly, as to count 3 the court struck the plaintiff's request for a jury trial and damages.

By order dated May 7, 1999 this court stayed all discovery pending resolution of the cross-motions for summary judgment on count 3.


A. Legal Standard: Motion for Summary Judgment

The district court may enter summary judgment where the moving party demonstrates that there is no genuine issue of material fact in dispute and that the movant is entitled to judgment as a matter of law. See Fed.R.Civ.P. 56(c). Once the moving party has presented a properly supported motion, the nonmoving party must go beyond the pleadings to identify evidence that would allow a reasonable jury to find in the nonmovant's favor. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Drawing from affidavits, depositions and answers to interrogatories, the nonmovant must identify specific facts indicating that a genuine issue exists for trial. See Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Moreover, at the summary-judgment stage it is not the court's function to weigh the evidence; rather, the court must determine whether sufficient evidence exists for a reasonable fact finder to return a verdict in the nonmovant's favor and warrant a trial. See Anderson, 477 U.S. at 249, 106 S.Ct. 2505.

B. Analysis

1. Count Three — ERISA

In Count 3, Ms. Fitts alleges that Unum and Fannie Mae improperly classified her disability as "mental" rather than "physical." See Compl. ¶¶ 1, 20. This classification terminated Ms. Fitts's long-term disability benefits after twenty-four months, rather than at age 65. See id.

  a. The Standard of Review for ERISA Determinations: "Arbitrary
     and Capricious" or De Novo?

In the March 29, 1999 Memorandum Opinion, this court held that the defendants' classification of Ms. Fitts's disability is properly reviewed under the deferential "arbitrary and capricious" standard of review. See Fitts v. Federal Nat. Mortg. Ass'n, 44 F. Supp.2d 317 (D.D.C. 1999). Ms. Fitts urges the court to reconsider and adopt a de novo standard of review. See Pl.'s Mot. for Summ.J. on Count 3 at 1-6. For the reasons which follow, the court adheres to its prior ruling that the defendants' classification of Ms. Fitts's disability is properly reviewed under the "arbitrary and capricious" standard.

  i. Reviewing and Elaborating on Prior Holding that Unum had
     Discretion under Plan and Policy

The Supreme Court has held that when a plan participant challenges the denial of benefits under ERISA, the court must review the denial de novo unless the benefit plan gives the plan administrator or fiduciary some discretion to determine eligibility for benefits or to construe the terms of the plan. See Firestone Tire and Rubber Co. v. Bruch, 489 U.S. 101, 115, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989).

To determine whether an ERISA benefit plan confers discretion, the court first reviews the plan documents themselves. See Block v. Pitney Bowes, Inc., 952 F.2d 1450, 1453-54 (D.C.Cir. 1992). "(I)t . . . need only appear on the face of the plan documents that the fiduciary has been given (the) power to construe disputed or doubtful terms — or to resolve disputes over benefits eligibility — in which case the trustee's interpretation will not be disturbed if reasonable." Pitney Bowes, 952 F.2d at 1453-54 (citation omitted). In determining whether the decisionmaker had discretion, this court considers "the provisions of the [plan] as interpreted in light of all the circumstances and such other evidence of the intention of the [plan's creator] with respect to the [plan] as is not inadmissible." Heasley v. Belden & Blake Corp., 2 F.3d 1249, 1256 (3d Cir. 1993) (quoting Firestone, 489 U.S. at 112, 109 S.Ct. 948).

In Firestone the defendant, Firestone Tire Company ("Firestone"), sold five of its plants. See Firestone, 489 U.S. at 105, 109 S.Ct. 948. The plaintiffs, Firestone employees, applied for severance benefits under Firestone's termination pay plan. See id. at 105, 109 S.Ct. 948. Firestone denied termination benefits on the ground that the sale of the plants did not constitute a "reduction in work force" within the meaning of the plan. See id. The Court ruled that Firestone did not exercise discretionary authority because the plan did not indicate that Firestone had the power to construe uncertain terms or that eligibility determinations were to be given deference. See id. at 111, 109 S.Ct. 948.

This court previously concluded that, unlike the plan in Firestone, the plan in the instant case grants discretionary authority to the party administering claims under the plan. The court began by noting that Section 7.01 provides that the Fannie Mae Benefit Plans Committee ("Committee") shall have general responsibility for the administration and interpretation of the Plan. See Esposito Dec. dated May 6, 1999, Ex. 1 ("General Rules and Regulations Governing the Federal National Mortgage Association Flexible Benefits Plan") ("the Plan"); see Plan § 2.01(o). One of those responsibilities is determining employees' eligibility for the Plan. See § 7.02, Plan at 15; Block, 952 F.2d at 1452 (administrator had discretion where plan gave it power "to determine all questions of eligibility and the rights and status of Participants"); Eley v. Boeing Co., 945 F.2d 276, 278 n. 2 (9th Cir. 1991) (administrator had discretion where plan provided that "The Company shall determine the eligibility of a person for benefits under the plan"); Curtis v. Noel, 877 F.2d 159, 161 (1st Cir. 1989) (discretion conferred by language letting administrators determine "which Employees are eligible to participate in the Plan").

Moreover, the Plan gives the Committee the right to review the disposition of claims for benefits. See Plan at 15; cf. Westover v. Metropolitan Life Ins. Co., 771 F. Supp. 1172, 1174 (M.D.Fla. 1991) (administrator had discretion where plan authorized it to "make the decision as to whether such service is medically necessary and [whether the employee] is qualified for benefits under this Plan").

In addition, this court continues to find it significant that section 7.01 of the Plan provides that "[a]ll decisions, interpretations, determinations and other actions of the Committee shall be final, binding, and conclusive and shall be afforded the maximum deference allowed by law." See Plan at 15; see also Block, 952 F.2d at 1452-53 (Plan Committee had discretion where plan provided that its decisions "shall, to the extent not inconsistent with the provisions of the Plan, be final and conclusive and binding upon all persons having an interest in the Plan"). Finding discretion in such plan language is consistent with the law of trusts, which the Supreme Court consulted in its seminal ERISA decision, Firestone. For example, a decision cited by Firestone found discretionary authority in a trust agreement providing that "any construction [of the agreement's provisions] adopted by the Trustees in good faith shall be binding. . . ." See Central States, Southeast and Southwest Areas Pension Fund v. Central Transport, Inc., 472 U.S. 559, 568, 105 S.Ct. 2833, 86 L.Ed.2d 447 (1985), quoted ...

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