FILED
                                                        United States Court of Appeals
                                    PUBLISH                     Tenth Circuit

                                                                 June 1, 2012
                  UNITED STATES COURT OF APPEALS
                                                            Elisabeth A. Shumaker
                              TENTH CIRCUIT                     Clerk of Court



 TOMMY E. SPRADLEY, an
 individual resident of Wagoner
 County, Oklahoma,
             Plaintiff–Appellee,                     No. 10-7100
 v.
 THE OWENS-ILLINOIS HOURLY
 EMPLOYEES WELFARE BENEFIT
 PLAN, an entity amenable to suit
 pursuant to 29 U.S.C. 1132(d)(1),
             Defendant–Appellant.


        APPEAL FROM THE UNITED STATES DISTRICT COURT
           FOR THE EASTERN DISTRICT OF OKLAHOMA
                  (D.C. No. 6:09-CV-00460-RAW)


Brian T. Ortelere of Morgan, Lewis and Bockius LLP, Philadelphia, Pennsylvania
(Kevin D. Gordon and Alison M. Howard of Crowe & Dunlevy, P.C., Oklahoma
City, Oklahoma; Joseph B.G. Fay and Erica E. Flores of Morgan, Lewis and
Bockius LLP, Philadelphia, Pennslyvania, with him on the briefs) for
Defendant–Appellant.

James W. Dunham, Jr., Tulsa, Oklahoma, for Plaintiff–Appellee.


Before LUCERO, McKAY, and TYMKOVICH, Circuit Judges.


McKAY, Circuit Judge.


      This is an ERISA case in which the district court overturned an employee
benefit plan’s denial of a former employee’s claim for permanent and total

disability life insurance benefits. On appeal, Defendant Owens-Illinois Hourly

Employees Welfare Benefit Plan contends the district court erred in rejecting

Defendant’s argument that the employee was not eligible for this benefit under

the Plan’s life insurance coverage provisions because his PTD life insurance

claim was not filed until after he retired.

                                    B ACKGROUND

      Plaintiff Tommy Spradley worked for Owens-Illinois, Inc., for nearly

thirty-seven years before a disability caused him to take an early retirement in

May 2008 at the age of fifty-five. Approximately nine months after he retired,

Plaintiff submitted a written claim to the Plan administrator, the Owens-Illinois,

Inc. Employee Benefit Committee. Plaintiff informed the Committee that the

Social Security Administration had found him to be permanently and totally

disabled as of March 1, 2008, and he accordingly asserted a claim for the Plan’s

permanent and total disability life insurance benefit. The Committee denied his

claim both initially and on administrative appeal.

      At this point, we must pause to describe the salient features of the Plan,

particularly the PTD life insurance benefit. The Summary Plan Description

contains five sections delineated by headings of equal size and prominence:

“Healthcare Benefits,” “Life and Accident Insurance Benefits,” “Disability

Benefits,” “Retirement Benefits,” and “Other Important Information.” (See

                                          -2-
Appellant’s App. at 23-28.) A subsection within the “Disability Benefits” section

provides for PTD life insurance benefits. This subsection states in part:

      Permanent and total disability (PTD) life insurance benefits are paid

      if:

      •      You become permanently and totally disabled before you reach
             age 65, and

      •      File a claim within 12 months after you stop active work with
             the Company, and

      •      You are unable to work for the rest of your life at any gainful
             occupation for which you are fitted by your education,
             training, or experience or for which you could reasonably
             become fitted.

      Alternatively, you can qualify for PTD benefits if, on or after April
      1, 1999, you are under age 65 and receive an award for Social
      Security Disability benefits. That award must be submitted to the
      insurance company responsible for making the PTD award decisions.
      Claim filing must meet the requirements described in PTD Benefit
      Claims and Appeals on [the following page].

(Id. at 121.) The next page contains more information about the PTD life

insurance benefit, including the following information about claim-filing

requirements:

      PTD Benefit Claims and Appeals

      Claims for PTD benefits must be filed within 12 months from the last
      day worked. If you are receiving Worker’s Compensation or if you
      have a disabling condition that may change dramatically, you will be
      required to document your medical condition with the Company
      before the expiration of one year from your last day worked, but you
      could then apply for PTD within five years from your last day
      worked.

                                         -3-
      The Company sends a notice by registered mail on or about 90 days
      before the end of the one-year application period. The notice advises
      you to file a PTD claim or provide evidence of your medical
      condition before the 12-month anniversary of your last day worked.

(Id. at 122.) This subsection of the Plan contains no cross-references to any other

Plan provisions.

      In his claim for benefits, Plaintiff argued he qualified for this benefit

because he was under age sixty-five, he had received and submitted to Defendant

his award of Social Security Disability benefits, and he had submitted his claim

for PTD benefits within twelve months after his last day worked. The

Committee’s initial denial letter said nothing about any of the PTD provisions.

Instead, the letter simply stated that Plaintiff’s benefit coverage ended on the last

day of the month in which his employment ended. For support, the letter cited

only to the third page of the Summary Plan Description. This page, which is part

of the “Healthcare Benefits” portion of the Plan, describes when “coverage under

the medical and dental plans” begins, then states that “[c]overage for you and

your dependents ends at the end of the month in which [y]our employment with

the Company ends.” (Id. at 32.) In context, it is clear these provisions refer only

to coverage for Owens-Illinois’s healthcare program. Nothing on page three of

the Summary Plan Description has any relevance to the PTD life insurance benefit

sought by Plaintiff.

      Plaintiff appealed the denial of benefits, citing again the pertinent language

                                          -4-
of the PTD life insurance provision and arguing he had fulfilled all of the

requirements to qualify for this benefit. On appeal, the Committee reviewed its

earlier decision, then sent Plaintiff a one-page letter reiterating that Plaintiff’s

benefit coverage ended on the last day of the month in which his employment

ended. This time, the Committee cited for support to the first page of the

Summary Plan Description. Page one of the Summary Plan Description states,

“You are eligible to participate in the Company’s healthcare program if you are a

full-time active hourly employee of this Company.” (Id. at 30.) Again, this

provision is part of the “Healthcare Benefits” section of the Plan and clearly has

no relevance to the PTD life insurance benefit Plaintiff sought. The Committee

cited to no other Plan provisions or sections to support its decision.

      After his administrative appeal was denied, Plaintiff filed suit under the

Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq

(ERISA). He again asserted he was entitled to benefits under the Plan’s PTD life

insurance provision. 1 In response, Defendant filed a motion for judgment on the

administrative record. In this motion, Defendant did not rely on either of the

provisions the Committee had relied on in the administrative proceedings; rather,



      1
        Plaintiff also raised a second claim regarding Defendant’s alleged failure
to timely comply with his request for copies of the plan documents. The district
court denied this claim, concluding that Plaintiff had suffered no prejudice from
any failure to respond on Defendant’s part. This ruling is not challenged on
appeal.

                                           -5-
Defendant now argued Plaintiff’s coverage had ended based on provisions located

within the “Life and Accident Insurance Benefits” section of the Summary Plan

Description. Specifically, Defendant argued the PTD life insurance benefit was

part of the Plan’s life insurance coverage and was thus governed by a coverage

provision found in the earlier “Life and Accident Insurance Benefits” section of

the Summary Plan Description. This provision states that “life insurance

coverage ends at the end of the month in which” an employee retires. (Id. at

107.) In its motion for judgment on the administrative record, Defendant finally

addressed the specific PTD provisions Plaintiff had urged throughout the

administrative proceedings. According to Defendant, these provisions only

created a twelve-month application window for PTD life insurance claims to be

filed by disabled employees who had stopped active work but had not retired or

otherwise terminated their employment.

      The district court rejected Defendant’s arguments, concluding that Plaintiff

was entitled to benefits under the unambiguous language of the Plan or,

alternatively, that Defendant’s interpretation of ambiguous Plan terms was

arbitrary and capricious. The district court accordingly remanded the case for the

Committee to reconsider Plaintiff’s claim in accordance with this conclusion.

This appeal followed.

                                   D ISCUSSION

      As an initial matter, we must consider the question of our appellate

                                         -6-
jurisdiction. “Aside from a few well-settled exceptions, federal appellate courts

have jurisdiction only over appeals from ‘final decisions of the district courts of

the United States.’” Rekstad v. First Bank Sys., Inc., 

, 1261 (10th

Cir. 2001) (quoting 28 U.S.C. § 1291) (emphasis in original). “We analyze the

finality of an ERISA remand order . . . on a case-by-case basis applying well-

settled principles governing final decisions.” Metzger v. UNUM Life Ins. Co.,

, 1164 (10th Cir. 2007) (quotation marks omitted). Analogizing to

remand orders in the administrative agency context, we have held that ERISA

remand orders will not be considered final where there are still issues to be

resolved on remand and the parties’ legal arguments can be considered in a future

appeal after these issues are resolved. See Rekstad, 238 F.3d at 1262 (holding

that an ERISA remand order was not final where “the appropriate award, if any

[was not] self-evident” and the district court expressly stated that either party

could obtain court review of the administrator’s determination); Graham v.

Hartford Life & Accident Ins. Co., 

, 1158-59 (10th Cir. 2007)

(holding that a remand order was not final where the district court did not decide

whether the claimant was eligible for benefits and where the claimant could seek

judicial review of an unfavorable administrative decision on remand). However,

we have noted that a remand order in the administrative agency context may be

considered final when the district court “essentially instructs the agency to rule in

favor of the plaintiff.” Rekstad, 238 F.3d at 1262. Analogously, a remand order

                                          -7-
in the bankruptcy context will be considered final where the bankruptcy court on

remand “ha[s] only to effectuate a ministerial task[] or conduct additional

proceedings involving little judicial discretion.” In re Jones, 

, 879

(10th Cir. 1993) (quotation marks omitted). In such cases, the policies behind the

finality doctrine—“controlling piecemeal adjudication and eliminating delays

caused by interlocutory appeals”—are not implicated. In re Magic Circle Energy

Corp., 

, 953 (10th Cir. 1989).

      In this case, the district court held that Plaintiff was eligible for benefits

under the plain language of the Plan, and the court’s order left no room for the

Plan administrator to question this holding on remand. Further, the terms of the

Plan clearly define how much of a benefit an eligible employee in Plaintiff’s

position should receive. Thus, the district court’s order essentially left the Plan

administrator with nothing to do on remand but award the requested benefits, a

ministerial task involving no discretion on the Plan administrator’s part. In

accordance with our treatment of the finality requirement in other contexts, we

conclude that the court’s remand order in this case was a final decision for

purposes of our appellate jurisdiction.

      Exercising jurisdiction over this appeal pursuant to 28 U.S.C. § 1291, we

review the district court’s decision de novo. As for the Plan administrator’s

underlying denial of benefits, we apply a deferential standard of review to the

extent the administrator actually exercised a discretionary power vested in it by

                                          -8-
the terms of the Plan. See Rasenack ex rel. Tribolet v. AIG Life Ins. Co., 

, 1315 (10th Cir. 2009). However, “when reviewing a plan administrator’s

decision to deny benefits, we consider only the rationale asserted by the plan

administrator in the administrative record and determine whether the decision,

based on the asserted rationale, was arbitrary and capricious.” Flinders v.

Workforce Stabilization Plan of Phillips Petroleum Co., 

, 1190

(10th Cir. 2007), abrogated on other grounds by Metro. Life Ins. Co. v. Glenn,

 (2008).

      A plan administrator is required by statute to provide a claimant with the

specific reasons for a claim denial. 29 U.S.C. § 1133. The Department of

Labor’s implementing regulations further explain that the notice of a claim denial

must contain, inter alia, “[t]he specific reason or reasons for the adverse

determination” and “[r]eference to the specific plan provisions on which the

determination is based.” 29 C.F.R. § 2560.503-1(g). These regulations “further

the overall purpose of the internal review process: ‘to minimize the number of

frivolous lawsuits; promote consistent treatment of claims; provide a

nonadversarial dispute resolution process; and decrease the cost and time of

claims settlement.’” Glista v. Unum Life Ins. Co., 

, 129 (1st Cir.

2004) (quoting Powell v. AT&T Comm., Inc., 

, 826 (7th Cir. 1991)).

“Those goals are undermined where plan administrators have available sufficient

information to assert a basis for denial of benefits, but choose to hold that basis in

                                          -9-
reserve rather than communicate it to the beneficiary. Such conduct prevents

ERISA plan administrators and beneficiaries from having a full and meaningful

dialogue regarding the denial of benefits.” Id. Thus, the federal courts will

consider only “those rationales that were specifically articulated in the

administrative record as the basis for denying a claim.” Flinders, 491 F.3d at

1190. “The reason for this rule is apparent[:] we will not permit ERISA claimants

denied the timely and specific explanation to which the law entitles them to be

sandbagged by after-the-fact plan interpretations devised for purposes of

litigation.” Id. at 1191 (quotation marks and brackets omitted). A plan

administrator may not “treat the administrative process as a trial run and offer a

post hoc rationale in district court.” Id. at 1192.

      Defendant argues we should overturn the district court’s decision in this

case because the district court failed to apply the appropriate deference to the

Committee’s interpretation of the Plan’s life insurance coverage provisions. This

argument is premised on a fundamental misrepresentation of the record. As

discussed in the recitation of facts above, the Committee’s denial of benefits was

based only on provisions located within the “Healthcare Benefits” section of the

Plan. The Committee’s denial letters never even suggested the PTD benefit

sought by Plaintiff and described in the “Disability Benefits” section of the Plan

might be governed by the coverage provisions located within yet another section




                                         -10-
of the Plan, the “Life and Accident Insurance Benefits” section. 2 Framing the

Committee’s administrative denial and Defendant’s litigation position in very

broad terms, Defendant asserts it has relied on the same rationale throughout the

process—the rationale that Plaintiff’s coverage for the PTD life insurance benefit

terminated when he retired. However, viewing the denial in such broad terms is

contrary to the specificity required by 29 U.S.C. § 1133 and 29 C.F.R. §

2560.503-1(g). The specific reasons and specific provisions supporting

Defendant’s broad coverage argument have changed, and we will not permit

Defendant to sandbag Plaintiff with its after-the-fact interpretation of an entirely

different section of the Plan. Cf. Glista, 378 F.3d at 128 (refusing to consider a

second rationale for applying a plan’s pre-existing condition exclusion where the


      2
        We note the administrative record includes an unidentified, undated
document beginning with the phrase “Thomas Spradley – Talking points.”
(Appellant’s App. at 477.) This document states: “It should be noted, when Mr.
Spradley retired from O-I, he was no longer covered under the O-I group
insurance program. Accordingly he was not eligible for a PTD benefit under the
O-I group insurance program at a later date when he was awarded Social Security
Disability Benefits.” (Id.) To the extent this document can be taken as evidence
of the Committee’s interpretation of the Plan’s life insurance provisions at the
administrative level, this document still fails to preserve this interpretation for
review in federal court, since there is no evidence it was ever provided to
Plaintiff. If anything, this document cuts against Defendant, since it suggests that
the Plan administrator may have been aware of this potential basis for denying
coverage but chose to hold it in reserve until after the federal litigation
commenced, contrary to ERISA’s requirements. See Glista, 378 F.3d at 130
(“[I]nternal documents cannot satisfy ERISA’s requirement that the specific
reasons for the denial be articulated to the claimant. Indeed [the plan
administrator] violated ERISA and its regulations by relying on a reason in court
that had not been articulated to the claimant during its internal review.”).

                                        -11-
plan administrator relied on a different portion of this exclusion in the

administrative process). The Committee’s denial letters cannot reasonably be

interpreted as denying coverage on the basis that the PTD life insurance benefit is

governed by the Plan’s separate life insurance coverage provisions, which is the

specific argument Defendant relies on in this litigation. Thus, not only was the

district court not required to defer to Defendant’s post hoc interpretation of these

newly asserted provisions, but the district court should not even have considered

this interpretation in the first place.

       Consistent with our precedent, we will consider only the specific basis

upon which the Plan administrator relied in its administrative denial of benefits.

We note that the PTD life insurance provisions appear on their face to cover

claimants who, like Plaintiff, are under the age of sixty-five, provide proof that

they were awarded Social Security Disability benefits, and submit their claims for

PTD benefits within twelve months after they stop working. In the face of

Plaintiff’s plausible claim for relief pursuant to these provisions, the Committee

asserted that Plaintiff’s coverage for PTD life insurance benefits terminated after

his retirement based on two Plan provisions regarding healthcare coverage. After

reviewing the pertinent provisions, we conclude that the Committee’s asserted

basis for denying Plaintiff’s claim was arbitrary and capricious under the terms of

the Plan.

       Having so held, we must now consider the question of the appropriate

                                          -12-
remedy. The dissent cites to our statement in Flinders that remand to the

administrator will be appropriate if the administrator “failed to make adequate

factual findings or failed to adequately explain the grounds for the decision.” 491

F.3d at 1194. However, we conclude that the case before us does not involve

inadequate findings or an inadequate explanation of the grounds for the decision;

rather, the Plan administrator gave a reason for denying benefits that was simply

incorrect under the terms of the Plan, then later tried to come up with a more

plausible reason for the denial of benefits. We do not read Flinders to mandate

that a Plan administrator be given interminable opportunities to search for

alternative grounds to deny benefits.

      We faced the same type of after-the-fact rationale in our recent case of

Kellogg v. Metropolitan Life Insurance Co., 

 (10th Cir. 2008). In

Kellogg, the claimant’s husband was a participant in an accidental death and

dismemberment policy that included an exclusion for losses caused or contributed

to by physical illness. The claimant filed a claim for benefits after her husband

crashed his car into a tree while having a seizure, then died from injuries

sustained in the crash. In litigation, the claims administrator relied both on the

physical illness exclusion and on the plan’s definition of an “accident” as being

“independent of other causes.” Id. at 828 (internal quotation marks omitted).

However, we rejected the administrator’s argument that it had raised both grounds

for denial below, concluding that the administrator’s denial letter “c[ould] not

                                         -13-
reasonably be interpreted as denying AD & D coverage on the basis that [the

decedent] was not involved in, or injured as a result of, an ‘accident.’” Id. at 829.

Reviewing the ground the claims administrator had relied on in its denial letter,

we concluded that the physical illness exclusion was inapplicable because the

proximate cause of the loss was the car crash, not the decedent’s seizure. We

held that the physical illness exclusion applied only to losses caused by an illness,

not to losses caused by an accident that resulted from an illness. As for the

claims administrator’s argument that the crash was not an accident because it was

not “independent of other causes,” we refused to consider this ground for denial

because the claims administrator had not relied on this ground below. We then

stated, “Having rejected the sole basis upon which Met-Life grounded its denial

of AD & D benefits, we must reverse the judgment of the district court and

remand with directions to enter judgment in favor of Kellogg on the

administrative record.” Id. at 833.

      We conclude the same remedy is appropriate in this case. As in Kellogg,

we have rejected the sole basis upon which the administrator grounded its denial

of Plaintiff’s plausible claim for benefits, and we will not permit the

administrator to rely on new grounds for denial in this litigation or in further

administrative proceedings.

                                      C ONCLUSION

      For the foregoing reasons, we conclude that the district court should have

                                         -14-
entered judgment in favor of Plaintiff on the administrative record rather than

remanding for further administrative proceedings. We therefore REMAND with

directions for the district court to modify its order and enter judgment in favor of

Plaintiff. The district court should also consider on remand whether Plaintiff is

entitled to attorney fees and prejudgment interest.




                                        -15-
10-7100, Spradley v. Owens-Illinois

Tymkovich, J., dissenting.

      I disagree with the majority because I believe this case should be remanded

to the plan administrator.

      “When a plan administrator’s decision is overturned as arbitrary and

capricious, we may either remand the case to the plan administrator for a renewed

evaluation of the claimant’s case or we may order an award of benefits.” Flinders

v. Workforce Stabilization Plan of Phillips Petroleum Co., 

, 1194

(10th Cir. 2007). “Which of these two remedies is proper in a given case,

however, depends upon the specific flaws in the plan administrator’s decision. If

the plan administrator failed to make adequate factual findings or failed to

adequately explain the grounds for the decision, then the proper remedy is to

remand the case for further findings or additional explanation.” Id. (citations and

quotations omitted). “In contrast, a retroactive reinstatement of benefits is proper

where, but for the plan administrator’s arbitrary and capricious conduct, the

claimant would have continued to receive the benefits or where there was no

evidence in the record to support a termination or denial of benefits.” DeGrado v.

Jefferson Pilot Fin. Ins. Co., 

, 1176 (10th Cir. 2006) (quotation

omitted).

      Here, it appears to me that at least one of the denial letters referred to a

portion of the benefits plan addressing life insurance coverage as well as citing to

the provisions addressing health benefits. According to that denial letter, the plan
administrator explained:

      I have been asked to respond to your letter dated December 12, 2008
      in which you claim your client, Tommy Spradley, is entitled to a
      Permanent and Total Disability (PTD) life insurance benefit from the
      Owens-Illinois Hourly Employees Welfare Benefit Plan. . . . Please
      note that Mr. Spradley’s benefit coverage under the Owens-Illinois,
      Inc. Hourly Employees Welfare Benefit Plan ended as of the last day
      of the month (April 30, 2008) in which his employment with Owens-
      Illinois ended . . . (page 3) . . . Once he retired and terminated his
      employment with Owens-Illinois, he was no longer eligible to apply
      for and receive a PTD life insurance benefit . . . .

App. 464. The denial letter went on to explain that had Mr. Spradley applied for

and qualified for this benefit at the proper time, he would have been required to

elect the mix of benefits offered for disability rather than the mix of benefits

offered for early retirement. He would not have been eligible for the “level-

income” option that equalizes payments before and after the retiree becomes

eligible for social security. App. 465.

      Thus, even with the incorrect page references mentioned by the majority,

Mr. Spradley and his lawyer had sufficient information to understand the gist of

Owen-Illinois’s decision to include the life insurance provisions of the benefits

package. Since I do not think the record mandates an award of benefits, and the

record does not support a finding of bad faith on the part of the plan administrator

in denying the benefits, a remand to the plan administrator is the proper course of

action.




                                          -2-