Case: 16-20174       Document: 00514368861          Page: 1     Date Filed: 03/01/2018




         IN THE UNITED STATES COURT OF APPEALS
                  FOR THE FIFTH CIRCUIT

                                                                            United States Court of Appeals
                                       No. 16-20174                                  Fifth Circuit

                                                                                   FILED
                                                                               March 1, 2018
ARIANA M.,                                                                    Lyle W. Cayce
                                                                                   Clerk
                Plaintiff – Appellant

v.

HUMANA HEALTH PLAN OF TEXAS, INCORPORATED,

                Defendant – Appellee



                    Appeal from the United States District Court
                         for the Southern District of Texas


Before STEWART, Chief Judge, and JOLLY, JONES, SMITH, DENNIS,
CLEMENT, PRADO, OWEN, ELROD, SOUTHWICK, HAYNES, GRAVES,
HIGGINSON, and COSTA, Circuit Judges. *

GREGG COSTA, Circuit Judge, joined by STEWART, Chief Judge, DENNIS,
PRADO, SOUTHWICK, HAYNES, GRAVES, and HIGGINSON, Circuit
Judges:

       When an ERISA plan lawfully delegates discretionary authority to the
plan administrator, a court reviewing the denial of a claim is limited to
assessing whether the administrator abused that discretion. Firestone Tire &
Rubber Co. v. Bruch, 

, 115 (1989). For plans that do not have valid
delegation clauses, the Supreme Court has held that “a denial of benefits


       *Judge Jolly, now a Senior Judge of this court, participated in the consideration of this
en banc case. Judges Willett and Ho were not on the court when this case was heard en banc.
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                                      No. 16-20174
challenged under § 1132(a)(1)(B) is to be reviewed under a de novo standard.”

quarter century, we have interpreted that holding to apply only to a
denial of benefits based on an interpretation of plan language. The result is a
bifurcated standard of review for challenges in our circuit to the denial of
ERISA benefits. Courts reviewing challenges to the legal interpretation of a
plan do not, as Firestone says, give any deference to the administrator’s view
of plan language. But challenges to an administrator’s factual determination
that a beneficiary is not eligible are reviewed under the same abuse-of-
discretion standard that applies when plans have delegated discretion. Pierre
v. Conn. Gen. Life Ins. Co., 

, 1562 (5th Cir. 1991). When Pierre
was decided, it created a circuit split with one other court of appeals that had
read Firestone to set a default de novo standard for both legal and factual
determinations. Reinking v. Phila. Am. Life Ins. Co., 

, 1213–14
(4th Cir. 1990), overruled on other grounds by Quesinberry v. Life Ins. Co. of N.
Am., 

(4th Cir. 1993). In the time since, seven other courts of
appeals have chimed in. Every one has taken the view that the standard of
review does not depend on whether the denial is deemed to be based on legal
or factual grounds.
       We thus have long stood alone in limiting Firestone’s de novo review to
denials based on interpretations of plan terms. Our outlier view did not affect
a great number of ERISA cases, however, because delegation clauses that
remove a case from the default standard of Firestone are so prevalent. But the
importance of this issue may be growing. As part of a trend in a number of
states, 1 Texas recently enacted a law banning insurers’ use of delegation



       1 Twenty-six states, including Texas, have moved to prohibit discretionary clauses
either through statute or regulatory action. Nat’l Ass’n of Ins. Comm’rs, Prohibition on the
Use of Discretionary Clauses Model Act ST-42-3–6 (2014), http://www.naic.org/store/
free/MDL-42.pdf. Louisiana and Mississippi have not taken any such action. 

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                                   No. 16-20174
clauses. TEX. INS. CODE § 1701.062(a). Assuming that the antidelegation
statute is not preempted by federal law—something we do not decide today as
that defense has not been asserted—a lot more ERISA cases will be subject to
Firestone’s default standard of review. So we granted en banc review of this
case to reconsider Pierre and determine the default standard of review that
applies when a beneficiary challenges a plan denial based on a factual
determination of ineligibility.
                                          I.
        Ariana M. is a dependent covered by an Eyesys Vision Inc. group health
plan.    Humana Health Plan of Texas, Inc. insures and makes benefits
determinations for that plan. So when Ariana was admitted to Avalon Hills, a
facility that treats eating disorders, Humana determined whether and for how
long to cover her partial hospitalization. According to the plan’s terms, partial
hospitalization includes comprehensive treatment for a minimum of five hours
per day, five days a week. This treatment is more intensive than any form of
outpatient care.
        When she was admitted, Ariana had over 100 self-inflicted cuts on her
body, while her escalating eating disorder interfered with her ability to lead a
normal life. This was no isolated occurrence. By that time, Ariana had a six-
year history of eating disorders, though she claimed that her body-image
dissatisfaction dated back to early childhood.
        A beneficiary is only eligible for partial hospitalization for mental health
services if the treatment is “medically necessary.”          Medically necessary
services are those “that a health care practitioner exercising prudent clinical
judgment would provide to his or her patient for the purpose of preventing,
evaluating, diagnosing or treating an illness or bodily injury, or its symptoms.”
        Ariana’s treatment lasted from April to September 2013.            Though
Humana, at various points, denied certification for continued treatment—
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                                 No. 16-20174
reversing course only on appeal by Avalon Hills—it did eventually authorize
forty-nine days of partial hospitalization.    But Humana declined to allow
partial hospitalization beyond June 5th, claiming it was no longer medically
necessary.
      In reaching this conclusion, Humana had two doctors evaluate Ariana’s
records.     Dr. Manjeshwar Prabhu—a contract physician with Humana’s
behavioral-health vendor—conducted the initial review, finding that Ariana no
longer qualified for treatment under the Mihalik criteria. Mihalik provides a
set of privately licensed guidelines used to evaluate the need for certain
medical services. In Prabhu’s view, Ariana posed no imminent danger to
herself or others and showed no medical instability or functional impairments,
so a lower level of care, such as an intensive outpatient treatment, was
appropriate. Though Avalon Hills—whose physicians participated in a peer-
to-peer review of Ariana’s case with Prabhu—acknowledged she was neither
suicidal nor psychotic, it informed Prabhu that Ariana was not progressing in
her treatment. In the view of a therapist at the facility, Ariana appeared to be
at her “baseline behaviors.”
      Avalon Hills appealed the denial. That prompted Humana to seek an
additional review from Dr. Neil Hartman, a psychiatrist with Advanced
Medical Reviews. He evaluated Ariana’s medical records—including Prabhu’s
determination—and consulted her treating physicians. Hartman concluded
that Ariana’s partial hospitalization was no longer necessary because she was
“medically stable,” “not aggressive,” and “not a danger to [herself or others].”
      Ariana then filed this lawsuit.       The plan has a clause granting to
Humana “full and exclusive discretionary authority to: [i]nterpret plan
provisions; [m]ake decisions regarding eligibility for coverage and benefits; and
[r]esolve factual questions relating to coverage and benefits.” Early in the
lawsuit, Ariana argued that the clause was unenforceable because Texas
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                                  No. 16-20174
prohibits discretionary clauses. TEX. INS. CODE § 1701.062(a). In response,
Humana agreed to not rely on the delegation clause (and thus did not raise a
preemption defense to the Texas statute) and said it would defend its denial
under the default “de novo” standard.       Despite using the “de novo” label,
Humana made clear that it was invoking the “abuse of discretion” standard
Pierre applies to factual determinations even when a plan does not grant the
administrator discretion.    Ariana argued that the Texas law did not just
invalidate delegation clauses but also overrode Pierre’s deferential standard of
review.
        The district court disagreed that Texas law could dictate the ERISA
standard of review.     The court thus applied Pierre and assessed whether
Humana’s decision fell “somewhere on a continuum of reasonableness—even if
on the low end.” Ariana M. v. Humana Health Plan of Tex., Inc., 

432, 439 (S.D. Tex. 2016) (quoting Holland v. Int’l Paper Co. Ret. Plan, 

, 247 (5th Cir. 2009)). It held that Humana did not abuse its discretion
in finding Ariana’s continued partial hospitalization medically unnecessary—
Prabhu and Hartman both conducted peer-to-peer reviews with her treating
physicians, reviewed her medical files, provided reports citing the Mihalik
criteria, and explained why she did not qualify for continued partial
hospitalization under the plan. 

As a result, the district court
granted Humana’s motion for summary judgment and denied Ariana’s. 

        A panel of this court affirmed. Ariana M. v. Humana Health Plan of Tex.,
Inc., 

, 762 (5th Cir. 2017). The panel rejected Ariana’s contention
that the Texas statute mandated a specific standard of review, finding instead
that the “plain text of the statute provides only that a discretionary clause
cannot be written into an insurance policy.” 

Therefore, Texas’s
antidelegation law did not alter “normal Pierre deference.” 

also
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                                  No. 16-20174
recognized that Pierre deference, under this court’s long-held view, dictated
abuse of discretion as the appropriate standard to review an administrator’s
factual determinations, irrespective of whether the ERISA plan contains a
discretionary clause. 

(citing 

and Dutka
ex rel. Estate of T.M. v. AIG Life Ins. Co., 

, 212 (5th Cir. 2009)).
      But the entire panel joined a concurring opinion questioning Pierre’s
continuing vitality given that every other circuit to consider the standard of
review issue has decided otherwise. 

(Costa, J., specially concurring).
A number of amici, including the Department of Labor and the Texas
Department of Insurance, supported Ariana’s request for full court
reconsideration of Pierre. We granted the petition.
                                       II.
      We first consider Ariana’s argument that the Texas statute dictates the
standard of review for ERISA cases.          That is not our reading of the
antidelegation law. It provides that an “insurer may not use a document
described by Section 1701.002”—which includes health insurance policies—“in
this state if the document contains a discretionary clause.” TEX. INS. CODE
§ 1701.062(a). In turn, the law defines discretionary clauses to encompass any
provision that “purports or acts to bind the claimant to, or grant deference in
subsequent proceedings to, adverse eligibility or claim decisions or policy
interpretations by the insurer” or “specifies . . . a standard of review in any
appeal process that gives deference to the original claim decision or provides
standards of interpretation or review that are inconsistent with the laws of this
state, including the common law.” TEX. INS. CODE § 1701.062(b)(1), (2)(D).
      The Texas insurance code provision thus only renders discretionary
clauses unenforceable; it does not attempt to prescribe the standard of review
for federal courts deciding ERISA cases. As to whether federal law preempts


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                                       No. 16-20174
this state action making discretionary clauses unenforceable, we do not
consider that defense because Humana did not assert it. 2
                                             III.
       With the delegation clause out of the picture and federal ERISA law
providing the standard of review, this case presents us with an opportunity to
reconsider Pierre. It held that “for factual determinations under ERISA plans,
the abuse of discretion standard of review is the appropriate standard; that is,
federal courts owe due deference to an administrator’s factual conclusions that
reflect a reasonable and impartial 

. No other
circuit agrees that Firestone’s default de novo standard is limited to the
construing of plan terms. See Shaw v. Conn. Gen. Life Ins. Co., 

,
1285 (11th Cir. 2003); Riedl v. Gen. Am. Life Ins. Co., 

, 756 (8th
Cir. 2001); Kinstler v. First Reliance Standard Life Ins. Co., 

, 250–
51 (2d Cir. 1999); Walker v. Am. Home Shield Long Term Disability Plan, 

, 1070 (9th Cir. 1999); Rowan v. Unum Life Ins. Co. of Am., 

, 435–36 (6th Cir. 1997); Ramsey v. Hercules Inc., 

, 203–05 (7th
Cir. 1996); Luby v. Teamsters Health, Welfare, & Pension Trust Funds, 

, 1183-84 (3d Cir. 1991); 

–14 (all applying
de novo review when the plan does not grant discretion). 3




       2 Each court to decide this issue has concluded that ERISA does not preempt state
antidelegation statutes. See Fontaine v. Metro. Life Ins. Co., 

, 891 (7th Cir.
2015); Standard Ins. Co. v. Morrison, 

, 842–45 (9th Cir. 2009); Am. Council of
Life Insurers v. Ross, 

, 604–09 (6th Cir. 2009); see also Hancock v. Metropolitan
Life Ins. Co., 

, 1149 (10th Cir. 2009) (stating that a full ban on discretionary
clauses would not likely be preempted, even though ERISA preempted a state statute
regulating them).
       3 Gross v. Sun Life Assurance Company of Canada suggests that the First Circuit

takes the same view. 

, 17 (1st Cir. 2013) (noting the court’s task of independently
weighing the facts and opinions in the administrative record and “giv[ing] no deference to the
administrator’s opinions or conclusions”).
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       All but one of those courts of appeals had the opportunity to consider
Pierre, and all that did so rejected its reasoning. They cited a number of
reasons for not following our view. At the most basic level, they disagreed with
Pierre’s reading of Firestone.          That Supreme Court decision addressed a
dispute about plan interpretation rather than one involving a factual
determination that a beneficiary was not entitled to benefits. But every other
circuit has read its holding as applying to both situations. That is because
Firestone holds that “a denial of benefits challenged under § 1132(a)(1)(B) is to
be reviewed under a de novo standard unless the benefit plan gives the
administrator or fiduciary discretionary authority to determine eligibility for
benefits or to construe the terms of the 

. The first part
of this pronouncement—“a denial of benefits”—does not distinguish denials
that rest on contractual interpretation from those based on a factual
assessment of eligibility; any denial is “to be reviewed under a de novo
standard.” 

of the sentence does make that distinction in excepting
from de novo review denials when plans delegate “discretionary authority to
determine eligibility for benefits.” 4 

a discretionary clause be


       4 Judge Jolly’s dissenting opinion contends that “eligibility for benefits” refers only to
whether a person or type of claim is covered under the plan as a legal matter, not to the
factual question at issue here regarding whether the plaintiff’s claim should be paid.
Dissenting Op. at 3 n.1. For starters, this ignores that Firestone says “a denial of benefits,”
without qualification, is reviewed de novo, and that the “eligibility for benefits” language
appears in the clause saying a grant of discretionary authority can change that 

. So the more limited meaning of “eligibility” the dissent urges would only
narrow the effect of discretionary clauses in being able to change the default de novo standard
for “a denial of benefits.”
        More fundamentally, the dissent’s understanding of “eligibility” is at odds with
ERISA’s text. What the dissent describes as the initial coverage determination is a question
of whether a claimant is a “participant” or “beneficiary” (Ariana is the latter as a dependent
of a participant). The statute defines a “participant” as “any employee or former employee of
an employer . . . who is or may become eligible to receive a benefit of any type from an
employee benefit plan.” 29 U.S.C. § 1002(7) (emphasis added). So someone is covered under
the plan even if they are not yet eligible to receive a benefit, such as someone still working
who does not yet receive pension payments or someone covered under a medical policy who
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                                        No. 16-20174
needed for that type of decision to escape de novo review if eligibility
determinations were not subject to that standard of review as a default matter?
See Petrilli v. Drechsel, 

, 1446 (7th Cir. 1990).                     And while
eligibility determinations may of course turn on plan interpretations, in
differentiating between the two types of denials Firestone seemed to view
eligibility determinations as encompassing more than just “constru[ing] the
terms of the 

; see 

(explaining that
Firestone “strongly suggests that the Court intended de novo review to be
mandatory where administrators were not granted discretion, regardless of
whether the denials under review were based on plan interpretations” because
otherwise “the Court could simply have omitted the words ‘to determine
eligibility for benefits’” (quoting 

)); see also 

(noting that benefits eligibility determinations require
administrators to “determine both the facts underlying claims and whether
those facts entitle claimants to benefits under the terms of the plan”).




has not yet been to a doctor. That someone can be covered under the policy who is not yet
“eligible” to receive benefits shows that an “eligibility determination” is not the same question
as whether the person is covered. Our cases have long reflected this understanding in using
“eligibility determination” to describe claims like this one that turn on factual entitlement to
benefits. See, e.g., Atkins v. Bert Bell/Pete Rozelle NFL Player Ret. Plan, 

, 569–
70 (5th Cir. 2012) (evaluating whether plaintiff was “eligible” for disability benefits based on
multiple doctors’ reports); Ellis v. Liberty Life Assurance Co. of Boston, 

, 274 (5th
Cir. 2004) (finding that plan fiduciaries are not required to obtain proof of substantial change
in a plan recipient’s medical condition after the “initial determination of eligibility” if they
receive additional medical information suggesting “a covered employee” is no longer “eligible
for benefits”); Meditrust Fin. Servs. Corp. v. Sterling Chems., Inc., 

, 213–14 (5th
Cir. 1999) (labelling a factual dispute about “medical necessity” as a question of “eligibility
determination”). Finally, both the majority and dissenting opinions in the Supreme Court’s
Rush Prudential decision—a case discussed more below—treated a factual medical necessity
issue as an eligibility determination. Rush Prudential HMO, Inc. v. Moran, 

,
386–87 (2002) (stating that an Illinois law requiring an “independent reviewer’s de novo
examination” of medical necessity “mirrors the general or default rule we have ourselves
recognized” in Firestone); 

(Thomas, J., dissenting) (calling the issue “purely an
eligibility decision with respect to reimbursement”).
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                                   No. 16-20174
      As support for cabining de novo review only to plan interpretation, our
court cited a reference early in Firestone to “actions challenging denials of
benefits based on plan [term] interpretations.”          

(quoting 

). Immediately following this language,
however, the Court said it “express[ed] no view as to the appropriate standard
of review for actions under other remedial provisions of ERISA.” 

.     This suggests Firestone was articulating a general default
standard of review for Section 1132(a)(1)(B) actions—the provision that allows
judicial review of benefit denials—rather than making the fine distinction
Pierre saw between the review of factual determinations and legal
interpretations. See 

.
      In addition to parsing the language used in Firestone, courts rejecting
Pierre have noted the Supreme Court’s observation that reading ERISA to
provide a default standard of deference would undermine congressional intent
as it “would afford less protection to employees and their beneficiaries than
they enjoyed before ERISA was enacted.” 

–14. That
concern, especially as it is imbued with concerns about the conflicts that
administrators sometimes have, would not seem to be greater for legal
interpretation than for factual ones. 

; 

.
      Other courts have also questioned the support Pierre found in trust law
for its factual/legal dichotomy. Pierre reasoned that an administrator’s factual
determinations     are     inherently   discretionary,    in   contrast    to   legal
interpretations. It thus concluded that the Restatement (Second) of Trusts
supports giving deference to an ERISA plan administrator’s resolution of
factual disputes even when the plan does not grant discretion. See Pierre, 932




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                                    No. 16-20174
F.2d at 1558 (citing Restatement (Second) of Trusts §§ 186(b), 187). 5 In a
thorough examination of trust law, the Seventh Circuit disagreed with Pierre’s
assessment. It recognized that Firestone likely flipped the presumption of
trust law, which traditionally assumes deference unless the trust says
otherwise. 6 

–05. But it found no trust law principles
that distinguish between factual and legal determinations, as Pierre does. 

that the critical trust law distinction for the scope of judicial
review is between powers a trust document makes discretionary and those it
makes mandatory. 

see also Rush Prudential HMO, Inc. v. Moran,

, 386 (2002) (noting that nothing in ERISA “requires that these
kinds of decisions be so ‘discretionary’ in the first place” and “whether they are
is simply a matter of plan design or the drafting of an HMO contract”). To
illustrate why factual determinations do not always fall on the discretionary
side of that divide, Ramsey points out that equity courts have long applied
nondeferential review to a “host of factually specific decisions including


      5  Section 186(b) provides that “the trustee can properly exercise such powers
and only such powers as . . . are necessary or appropriate to carry out the purposes of
the trust and are not forbidden by the terms of the trust.” Restatement (Second) of
Trusts § 186(b). Section 187, meanwhile, states that “[w]here discretion is conferred
upon the trustee with respect to the exercise of a power, its exercise is not subject to
control by the court, except to prevent an abuse by the trustee of his discretion.” 

       6 A leading trust scholar left no doubt of what he thought about Firestone’s

reading of trust law. See John H. Langbein, The Supreme Court Flunks Trusts, 1990
SUP. CT. REV. 207. Professor Langbein explained that the Supreme Court reversed
the traditional trust-law presumption that assumed “[t]he trustee ha[d] discretion
unless the instrument or some particular doctrine of trust law denies discretion.” 

Despite his sharp critique of the Supreme Court’s reading of trust law,
Professor Langbein believes the Court correctly adopted de novo review in light of
“the regulatory purposes of ERISA.” John H. Langbein, Trust Law as Regulatory
Law: The UNUM/Provident Scandal and Judicial Review of Benefit Denials Under
ERISA, 101 NW. U. L. REV. 1315, 1323 n.47 (2007). Of course, regardless of whether
Firestone was right or wrong in setting a default de novo standard, we are bound to
apply it.
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                                   No. 16-20174
reviews of accounts and investment 

; see also 

(noting that the Restatement Pierre cited does not distinguish
between factual and legal determinations nor have “courts reviewing the
actions of trustees”).
       Pierre’s analogy to the deference that reviewing courts afford agency
decisions and a district court’s factfinding has also been criticized. One reason
courts have found the comparison inapt is that agencies and trial judges are
required to apply a developed set of constitutional and statutory procedural
protections. 

. They are also impartial whereas a plan
administrator often has an incentive to reach decisions “advantageous to its
own interests.” 

(quoting Perez v. Aetna Life Ins. Co.,

, 824 (6th Cir. 1996)); see also 

(noting that
for both factual and legal determinations made by agencies, the Administrative
Procedure Act requires de novo review when procedural safeguards are
lacking); cf. Langbein, Trust Law as Regulatory Law, at 1326 (explaining that
ERISA law differs from trust law in the “crucial respect” that “[t]rust law
presupposes that the trustee who administers a trust will be disinterested, in
the sense of having no personal stake in the trust assets”). Indeed, an entire
body of case law has arisen to address this concern about conflicts in ERISA
law, as a conflict can influence the degree of deference afforded a plan even
when it is granted discretionary authority. See Metro. Life Ins. Co. v. Glenn,

, 117 (2008) (requiring that district courts “take account” of
conflicts in evaluating benefits denials, giving them more weight when
“circumstances suggest a higher likelihood that [the conflict] affected the
benefits decision”).
      The passage of time has cast doubt on another reason Pierre cited for
giving deference: its prediction that de novo review of factual determinations
would result in a vast number of trials that would burden courts and reduce
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                                       No. 16-20174
the funds available to pay legitimate 

. But we no
longer have to guess about the impact of de novo review as eight circuits have
surpassed, or are nearing, two decades of experience under that regime. There
is no indication that ERISA trials have depleted plan funds or overrun courts
in those circuits, which are still able to grant summary judgment when the
record warrants it. See, e.g., Wilkins v. Baptist Healthcare Sys., Inc., 

, 616 (6th Cir. 1998) (affirming the district court’s grant of summary
judgment after the district court conducted full de novo review of the
administrator’s disability benefits denial).
      And the interest in efficiency is not exclusively on the side of Pierre’s
bifurcated system of review. Abuse-of-discretion cases frequently result in
litigation about the existence and extent of a conflict of interest, 7 which is one
of the rare areas in which a plaintiff can often expand the administrative
record with discovery. See Crosby v. La. Health Serv. & Indem. Co., 

, 263 (5th Cir. 2011) (explaining that our restrictive position on adding to
the administrative record in ERISA cases does not prohibit a discovery request
for information regarding the existence and extent of a conflict). Conditioning
deference on whether a decision is characterized as legal or factual makes
ERISA another victim of the “delusive simplicity of the distinction between
questions of law and questions of fact [that] has been found a will-of-the-wisp
by travelers approaching it from several directions.” Nathan Isaacs, The Law
and the Facts, 22 COLUM. L. REV. 1, 1 (1922); see also 

(recognizing that “[a]s a practical matter, factual findings and plan
interpretations are often intertwined” and predicting that if review were
bifurcated at the district court, there would be an “unnecessary cascade of




      7   See 

–18.
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                                 No. 16-20174
litigation over whether an administrator’s action was a plan interpretation or
a factual determination”).
      There is thus no evidence that joining the eight other circuits that have
long applied de novo review to factual determinations will create an
overwhelming burden on district courts even if that concern can override the
“ready access to the Federal courts” that ERISA provides. 29 U.S.C. § 1001(b);
see 

(concluding that “the threat of increased
litigation is not sufficient to outweigh the reasons for a de novo standard that
we have already explained”). Moreover, as will be discussed, we maintain our
precedent that largely limits judicial review to the record before the
administrator, which mitigates concerns about the time and expense of
litigation under a de novo standard.
      In the years since all these circuits have disagreed with Pierre, the
Supreme Court has decided more ERISA cases. Although none has directly
confronted our issue (and thus they have not served as a basis to reconsider
Pierre absent en banc review), two indicate that there is no fact/law distinction
for applying the default de novo standard. Glenn addresses how to assess
conflicts of interest for plans that give administrators discretion. 

–18. Humana and the dissent emphasize its comment about not wanting
to “overturn Firestone by adopting a rule that in practice could bring about
near universal review by judges de novo—i.e., without deference—of the lion’s
share of ERISA plan claims denials.” 

But that statement discussed
the prospect of de novo review for plans that validly confer discretion on
administrators. 

That is not at issue here. Relevant to our question
about the default standard of review is Glenn’s list of background ERISA
principles in the beginning of the opinion. Number “2” reaffirms Firestone’s
reading of trust law and the default standard of review: “Principles of trust law
require courts to review a denial of plan benefits ‘under a de novo standard’
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                                  No. 16-20174
unless the plan provides to the contrary.” 

(quoting 

). As in Firestone, the language broadly speaks of “a denial of plan
benefits” without differentiating based on the nature of the denial. 

decision in Rush Prudential HMO, Inc. v. Moran also
supports the broader interpretation of Firestone’s de novo review. 

(2002). Rush held that an Illinois law requiring independent medical review
of certain benefit denials was not preempted. 

That state law
required independent evaluations for, among other things, the medical
necessity determinations also made in this case. 

The court rejected
a preemption defense because ERISA does not provide a statutory standard of
review. It then explained—in the context of assessing a statute that applies to
factbound medical necessity determinations—that when Firestone filled in
that statutory gap it “held that a general or default rule of de novo review could
be replaced by deferential review if the ERISA plan itself provided that the
plan’s benefit determinations were matters of high or unfettered discretion.”

(citing 

). Again, the reference is to
“benefit determinations” with no distinction for legal or factual rulings. And
the Court went on to say that nothing in ERISA “requires that these kinds of
decisions be so ‘discretionary’ in the first place” and “whether they are is simply
a matter of plan design or the drafting of an HMO contract.” 

Rush
thus    recognizes   and    analyzes    the   Firestone     dichotomy    only   on
discretionary/nondiscretionary grounds, not factual/legal ones. It also is yet
another Supreme Court rejection of the notion that ERISA administrators are
inherently entitled to discretion (even if that is what trust law provides).
       Considering these cases and without having to endorse all the critiques
other circuits have made of Pierre, on balance we conclude that they warrant
changing course and adopting the majority approach—an approach the federal
and Texas governments also support. We are also influenced by ERISA’s
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                                      No. 16-20174
strong interest in uniformity. See Gobeille v. Liberty Mut. Ins. Co., 

, 943–44 (2016). Being on the lonely side of the lopsided split means that
ERISA denials involving nondiscretionary plans are reviewed with more
deference in Texas, Louisiana, and Mississippi than they are in the rest of the
country. It even means that employees working for the same company with
the same health or retirement plan may suffer different fates in court
depending on the circuit where they reside. 8 Although sometimes there is
virtue in being a lonely voice in the wilderness, in this instance we conclude
that one really is the loneliest number. See Three Dog Night, One, on THREE
DOG NIGHT (Dunhill 1969). We overrule Pierre and now hold that Firestone’s
default de novo standard applies when the denial is based on a factual
determination.
                                            IV.
       Changing the standard of review does not require us to alter our
precedent concerning the scope of the record in ERISA cases. Although other
circuits are unanimous on what the default standard of review is, they take a
variety of positions on whether de novo review allows a party to expand the
record beyond what was before the plan administrator. Some do not limit
reviewing courts to that record. See Abatie v. Alta Health & Life Ins. Co., 

, 970 (9th Cir. 2006) (holding that limiting the judicial record to that
before the plan administrator is not appropriate in de novo cases); 

(finding that limiting a district court to the record before a plan




       8 The dissent argues that application of ERISA will not be uniform if state statutes
can nullify discretionary clauses. Deference would not be available in states with such laws;
it would be available in other states. But that would be a difference rooted in the policy
choices of the states—differences that are expected and honored in our federal system—and
not based on inconsistent court interpretations of the same federal law. The dissent’s
argument might be relevant to a conflict preemption analysis, but as we have mentioned, we
take no position on that question.
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                                    No. 16-20174
administrator “makes little sense” because it is contrary to the ordinary
concept of de novo review). Others take a more restrictive view. See Donatelli
v. Home Ins. Co., 

, 765 (8th Cir. 1993) (admonishing district courts
to avoid admitting additional evidence “absent good cause to do so”);

–27 (permitting district courts to admit
additional evidence only in “necessary” and “[e]xceptional circumstances”).
         Our leading case in this area is Vega v. National Life Insurance Services,
Inc., 

(5th Cir. 1999) (en banc), overruled on other grounds by
Metro. Life Ins. Co. v. Glenn, 

(2008).           Under Vega, a plan
administrator must identify evidence in the administrative record, giving
claimants a chance to contest whether that record is complete. 

Once
the record is finalized, a district court must remain within its bounds in
conducting a review of the administrator’s findings, even in the face of disputed
facts.    

departure from this rule only in very limited
circumstances. One exception allows a district court to admit evidence to
explain how the administrator has interpreted the plan’s terms in previous
instances. 

v. ARCO Chem. Co., 

, 639 n.15 (5th
Cir. 1992)). Another allows a district court to admit evidence, including expert
opinions, to assist in the understanding of medical terminology related to a
benefits claim. 

are not actually expanding the evidence
on which the merits are evaluated but providing context to help the court
evaluate the administrative record.
         Although some of Vega’s reasoning for limiting the district court record
to what was before the administrator depended on the abuse-of-discretion
context, other interests it recognized support the same rule for de novo review.
Among those is the interest in encouraging parties to resolve their dispute at
the administrative stage. 

A different standard of review also does
not undermine Vega’s observation that there is not a “particularly high bar to
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                                       No. 16-20174
a party’s seeking to introduce evidence into the administrative record.” 

limiting the evidence to what was in front of the plan
administrator when a dispute ends up in court allows for speedier resolution.

overruling Pierre while adhering to Vega in the context of de
novo review serves the twin ERISA goals of allowing for efficient yet
meaningful judicial review. See 29 U.S.C. § 1001(b) (stating that ERISA is
intended to provide “ready access to the Federal courts”); 

–14 (explaining that a deferential default standard “would afford less
protection to employees and their beneficiaries than they enjoyed before
ERISA was enacted”). Vega will continue to provide the guiding principles on
the scope of the record for future cases that apply de novo review to fact-based
benefit denials.
                                             V.
        This brings us back to Ariana’s claim. Following Pierre, the district court
concluded only that “Humana did not abuse its discretion in finding that
Ariana M.’s continued treatment at Avalon Hills was not medically necessary
after June 4, 2013.” Ariana M., 

at 442. That determination is
now subject to de novo review. A different standard of review will sometimes
lead to a different outcome, but there will also be many cases in which the
result would be the same with deference or without it. We give no opinion on
which is the case here, but leave application of the de novo standard to the able
district court in the first instance. 9




        9In light of this decision overruling our longstanding precedent and remanding for
application of a de novo standard, the district court may consider whether there is good cause
to allow Humana to amend its answer and assert a preemption defense if it so desires.
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                                No. 16-20174
                                     ***
      The judgment of the district court is VACATED and REMANDED for
further proceedings consistent with this opinion.




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                                 No. 16-20174
E. GRADY JOLLY, Circuit Judge, dissenting, joined by JONES, SMITH,
CLEMENT, and ELROD, Circuit Judges. OWEN, Circuit Judge, joins only
Part I.


      The material question in this en banc appeal is whether Firestone Tire
& Rubber Co. v. Bruch, 

(1989), requires de novo review of an
administrator’s entitlement determinations; that is to say, whether an
administrator’s findings of fact underlying the merit of a participant’s claim
are entitled to any deference by the federal courts. Read holistically—that is,
by considering the context in which Firestone came before the Supreme Court;
the Court’s opinion as a whole, instead of snippet by snippet; and the Supreme
Court’s concerns that it expressed during Firestone’s oral argument—Firestone
speaks to de novo review in relation to eligibility determinations and the
construction of plan terms—both inherently legal questions—not to the daily
grind of winnowing the merit of individual factual claims.
      Moreover, the majority opinion reflects an impractical view of the
administrative process. It is inconsistent with the law of trusts and misreads
subsequent cases decided by the United States Supreme Court. I respectfully
dissent.
                                          I.
                                      A.
      A holistic reading of Firestone makes clear that its de novo standard of
review applies only to legal questions.
      The first step of understanding Firestone requires examining the facts
and law that were asserted in the courts below; that is, determining what sort
of case was actually before the Supreme Court.         Firestone involved the
construction of plan terms under three different ERISA benefits plans
maintained by 

. Firestone was the administrator
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                                 No. 16-20174
and the defendant. 

construed the terms of its ERISA plans
to deny severance benefits to “former employees” who worked at Firestone
plants that had been sold to another company. 

The former
Firestone employees sued, disputing Firestone’s interpretation of the plan as
to whether they were eligible for benefits under the terms of the plan. 

The district court granted Firestone summary judgment, holding that
Firestone’s decision to deny benefits was not arbitrary and capricious. 

   The court of appeals reversed on grounds that Firestone, as
administrator of the plan, had a conflict of interest; as such, de novo—not
“arbitrary and capricious”—was the proper standard of review for Firestone’s
interpretation of the plan. 

Thus, when the case reached the
Supreme Court, the appeal was twofold: First, whether Firestone’s
interpretation of the plan was subject to an arbitrary-and-capricious standard
of review or to a de novo review and, second, whether a proper interpretation
of the plan’s terms covered these “former employees.” The Supreme Court did
not address whether the courts should defer to administrators’ factual
decisions because the court of appeals had reserved comment on that question.
See Bruch v. Firestone Tire & Rubber Co., 

, 144 n.9 (3d Cir. 1987)
(“It should be noted that we also do not deal here with a determination of fact
by a plan administrator. We leave for another day the definition of the context,
if any, in which courts should defer to such a determination.”), cited in Pierre
v. Conn. Gen. Life Ins. Co./Life Ins. Co. of N. Am., 

, 1561–62 (5th
Cir. 1991). Thus, it should be clear that the “denial of benefits” before the
Supreme Court was the denial of benefits to a class of participants based on
Firestone’s interpretation of the plan as to that class, not a denial of the
underlying merit of a participant’s claim.


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                                  No. 16-20174
      The second step of understanding the Firestone opinion requires the
opinion be read as a whole and in context. The Supreme Court sets the tone of
its analysis when it limits its holding to disputes based on interpretation of the
plan; indeed, as noted above, these legal questions were the only issues before
the Court. The Firestone Court said, “The discussion which follows is limited
to the appropriate standard of review in § 1132(a)(1)(B) actions challenging
denials of benefits based on plan interpretations. We express no view as to the
appropriate standard of review for actions under other remedial provisions of

(emphasis added). The Court then said, “ERISA does
not set out the appropriate standard of review for actions under § 1132(a)(1)(B)
challenging benefit eligibility determinations,” 

(emphasis added),
signaling again that it was addressing an inherently legal question. The Court
then rejected the arbitrary-and-capricious standard of review (applied by the
district court), saying “the wholesale importation of the arbitrary and
capricious standard into ERISA [was] unwarranted.” 

so, the
Court plainly did not suggest that a uniform standard of review applied to all
decisions of the administrator.   Further into its opinion, the Supreme Court
clarified what it meant by “plan interpretations,” saying,
      As this case aptly demonstrates, the validity of a claim to benefits
      under an ERISA plan is likely to turn on the interpretation of terms
      in the plan at issue. Consistent with established principles of trust
      law, we hold that a denial of benefits challenged under
      § 1132(a)(1)(B) is to be reviewed under a de novo standard unless
      the benefit plan gives the administrator or fiduciary discretionary
      authority to determine eligibility for benefits or to construe the
      terms of the plan.




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                                       No. 16-20174

(emphasis added). 1               Plan-term construction and eligibility
determinations are both legal concepts that are part of “plan interpretation.”
Neither concept addresses whether, under the undisputed provisions of the
plan, a specific person’s individual claim has merit.
       The third step of understanding the holding of the Firestone Court
involves the transcript of the oral argument before the Supreme Court. The
oral argument confirms that the subject before the Court was plan
interpretation. There, several Justices stated the issue in terms of whether
the Court must give deference to ERISA plan administrators for their
construction of plan terms. See Oral Argument at 3:05, Firestone Tire &


       1   The majority mistakenly relies on this portion of the opinion to say that Firestone
applies de novo review to both factual and legal assessments by plan administrators. See
Maj. Op. at 8, 14. But the majority makes a mistake by conflating eligibility, i.e., coverage
determinations, with entitlement determinations, i.e., claim merits, as do our sister circuits.
See Maj. Op. at 8 (“Why would a discretionary clause be needed . . . to escape de novo review
if eligibility determinations were not subject to that standard of review as a default matter?”
(emphasis added)); Kinstler v. First Reliance Standard Life Ins. Co., 

, 250 (2d
Cir. 1999) (stating that the court of appeals must rely on the Supreme Court’s use of
“eligibility for benefits,” which is a distinct issue from construing the plan’s terms); Luby v.
Teamsters Health, Welfare, & Pension Tr. Funds, 

, 1183 (3d Cir. 1991) (stating
that “the explicit reference to ‘eligibility’” means that the Firestone Court meant to cover
entitlement decisions). This view is misguided. As evidenced by its analogy of ERISA to
contract law and by its statement that ERISA was meant “to protect contractually defined
benefits,” 

(quoting Mass. Mut. Life Ins. Co. v. Russell, 

, 148 (1985)), the Supreme Court’s discussion of eligibility concerns whether the plan
covered the person or claim at issue, not whether the covered person’s factual context entitled
her to benefits under the plan or whether the covered claim had merit.
         We may illustrate this distinction by considering the case at hand. Here, it is clear
that Ariana M is an eligible participant and that her claim is eligible under the terms of the
group health plan covering mental illness. If the administrator argued otherwise, de novo
review would be used, like in any other contract dispute, to determine whether Ariana’s claim
is contractually barred. But that is not the appeal here. Instead, Ariana asks us to
reevaluate the facts upon which the administrator denied the merits of her claim—that is to
say, the factual claim of whether her treatment was medically necessary; such a question
requires, not legal analysis, but credibility determinations, particularly among the parties’
respective experts. The majority would grant the federal courts the authority to relitigate in
federal court that credibility determination, robbing the administrator of all deference to its
decision. Such federal court authority does not have its source anywhere in Firestone.
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                                       No. 16-20174
Rubber      Co.     v.    Bruch,      

     (1989)     (No.     87-1054),
https://www.oyez.org/cases/1988/87-1054 (Justice White saying to Firestone’s
lawyer that “it’s a contractual construction problem. Or it’s a construction of
a written instrument”); 

(Justice Scalia saying to Firestone’s lawyer
that “it’s not my impression of common law trust law that if the trustee makes
a questionable interpretation of the trust agreement, I wouldn’t be able as one
of the beneficiaries to go into court and say that interpretation is wrong. And
the court would look at the trust agreement and say it’s up to us to interpret
this trust agreement”). Further, a Justice expressed that the case might be
different if resolving a question involving a factual judgment, by saying:
       My, my recollection of trust law . . . and it obviously isn’t, isn’t a
       terribly recent one . . . is that if you’re talking about the . . . the
       many things that the trustee is given discretion to do in a trust
       instrument, decide on the medical needs or educational needs of
       various beneficiaries and allocate discretionary funds among
       them, the courts give great deference to a trustee.
       But is . . . in deciding who is a beneficiary, I, I was not aware that
       trust law says the trustee has great discretion there.

And the plaintiffs’ lawyer emphasized that this case involved only
“a pure question of plan interpretation” and involved a different “category of
question” from a fact question. 

36:33. 2 Nothing in the argument
signals that the Court considered that its ruling, i.e., applying de novo review
to who is a beneficiary under the plan, would also apply to fact questions.
       Therefore, based on the procedural history, the proper context, the oral
argument, and the specific language of the opinion, it should be clear to all but


       2The plaintiffs also conceded in their brief that they were “not challenging the exercise
of any authority which is inherently discretionary in nature.” Brief for the Respondents,
Firestone Tire & Rubber Co. v. Bruch, 

(1989) (No. 87-1054), at 24. And they
agreed with Firestone that courts should defer to those who have some amount of decision-
making authority. 

16-20174     Document: 00514368861       Page: 25     Date Filed: 03/01/2018



                                   No. 16-20174
the obstinate that the Firestone Court did not intend that de novo review would
apply to factual questions that went before plan administrators.
                                        B.
      The majority’s argument that Firestone mandates de novo review for
factual issues is further undermined by Firestone’s clarity that principles of
trust law apply to administrator actions. See 

(“In
determining    the   appropriate    standard     of   review   for   actions   under
§ 1132(a)(1)(B), we are guided by principles of trust law.”). The majority seems
to disregard this directive.    But, inasmuch as Firestone clearly does not
mandate a de novo standard of review for factual disputes, trust law controls,
as instructed by Firestone.
      Under trust law, trustees have measured discretion in determinations
that fulfill the underlying purposes of the trust; yet, the majority, with its de
novo review, grants trustees no deference in administering the quotidian
claims arising under the trust document. The Second Restatement provides
that trust administrators have two types of powers: (1) those conferred upon
the administrator “in specific words by the terms of the trust” and (2) those
“necessary or appropriate to carry out the purposes of the trust and are not
forbidden by the terms of the trust.” Restatement (Second) of Trusts § 186
(Am. Law Inst. 1959). The Third Restatement explains further, “When a
trustee has discretion with respect to the exercise of a power, its exercise is
subject to supervision by a court only to prevent abuse of discretion.”
Restatement (Third) of Trusts § 87 (Am. Law Inst. 2007). The general rule is
that trustees have discretion with respect to the exercise of trusteeship powers,
except when directed differently by the terms of the trust or when compelled
by the trustee’s fiduciary duties. 

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                                      No. 16-20174
       And turning to Scott and Ascher on Trusts, we find, “A trustee’s powers
ordinarily are discretionary, unless the terms of the trust or applicable law
makes them mandatory.” 3 A. Scott & M. Ascher, Scott and Ascher on Trusts
§ 18.2, p. 1338 (5th ed. 2007).          Trustees have “considerable discretion in
determining what is necessary for any given beneficiary’s support,” and courts
ensure only that trustees do not exceed the limits of their discretion. 

at 1362. Indeed, “[t]he court will not substitute its own judgment for
that of the trustee” because “[t]he mere fact that the court would have
exercised the power differently is not a sufficient reason for the court to
interfere.” 

at 1340. Instead, the court may check the trustee’s
powers by examining whether the trustee (1) abused its discretion, (2) acted
dishonestly or in bad faith, and (3) exercised its reasonable judgment when
exercising its powers. 

at 1350–67.
       As we have earlier noted, the Firestone Court expressly said that its
decision was guided by principles of trust law.              Here, whether a covered
beneficiary has presented facts to support the benefits she individually claims
is a core discretionary power that is “necessary or appropriate” to the routine
administration of plans. As we said in Pierre, “[i]t is indisputable that an
ERISA trustee, by its very nature, is granted some inherent discretion, i.e.,
‘authority to control and manage the operation and administration of the

(quoting 29 U.S.C. § 1102(a)(1)). 3 The majority would




       3 The majority sees it otherwise, adopting the Seventh Circuit’s view that Firestone
“reversed the presumption” for all plan-administrator decisions unless a plan term gives the
administrator discretion. See Maj. Op. at 10; Ramsey v. Hercules Inc., 

, 204 (7th
Cir. 1996). Under that view, Firestone essentially eliminated all discretionary administrable
powers—defined as those “necessary or appropriate to carry out the purposes of the trust and
are not forbidden by the terms of the trust,” Restatement (Second) of Trusts § 186(b)—and
permitted trustees discretionary powers only when conferred. See 

But this view
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                                     No. 16-20174
not allow a smidgeon of deference to the administrator, a position that is
contrary to the guiding advice of Firestone.
                                           II.
      We leave Firestone proper for a moment and turn our attention to recent
Supreme Court cases also dealing with the administration of ERISA plans. In
particular, two recent Supreme Court opinions strongly support that the
Supreme Court would conclude that Pierre correctly states the law:
Metropolitan Life Insurance Company v. Glenn, 

(2008), and
Conkright v. Frommert, 

(2010). 4 Conkright—not cited by the
majority—reaffirmed that in § 1132(a)(1)(B) cases, we should look to the
principles of trust law. 

(“In determining the proper
standard of review when a plan administrator operates under a conflict of
interest [in Glenn], we again looked to trust law, the terms of the plan at issue,
and the principles of ERISA—plus, of course, our precedent in Firestone.”).
      The Supreme Court’s opinion in Glenn supports Pierre’s understanding
of Firestone. In Glenn, the Court said,
      We do not believe that Firestone’s statement implies a change in
      the standard of review, say, from deferential to de novo review.
      Trust law continues to apply a deferential standard of review to
      the discretionary decisionmaking of a conflicted trustee, while at
      the same time requiring the reviewing judge to take account of the
      conflict when determining whether the trustee, substantively or
      procedurally, has abused his discretion. We see no reason to
      forsake Firestone’s reliance upon trust law in this respect.



is mistaken and departs from Firestone’s command to use traditional trust law principles
when examining § 1132(a)(1)(B). See 

.
       4 And when faced with this precise question—whether Firestone mandates de novo

review for factual entitlement decisions—the Supreme Court has denied certiorari twice in
the past decade. See Truitt v. UNUM Life Ins. Co. of Am., 

(2014); Dutka v.
AIG Life Ins. Co., 

(2010).

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                                 No. 

–16 (internal citations omitted) (citing 

–15; Restatement § 187, cmts. d–j; Scott and Ascher on Trusts § 18.2, at
1342–44). The Court then emphasized that it would not “overturn Firestone
by adopting a rule that in practice could bring about near universal review by
judges de novo—i.e., without deference—of the lion’s share of ERISA plan
claims denials,” because it believed that Congress would have said more about
such a standard of review if it wanted the courts to have wholesale review. 

The Glenn Court quoted Justice Scalia’s pithy and colorful admonition
that “Congress does not ‘hide elephants in mouseholes,’” 

v. Am. Trucking Ass’ns., 

, 468 (2001)), i.e., if Congress had
intended a radical departure from traditional principles of trust law, it most
certainly would have not hidden it in statutory interstices.
      Thus, the majority’s view brushes aside the admonition of Glenn that
Firestone cannot be read to endorse “near universal review” of all plan denials
brought to our district courts. Other circuits may have interpreted Firestone
in their own way fifteen to twenty years ago, but, today, it should be understood
that, in the light of more recent Supreme Court cases, Firestone did not change
ERISA’s application of trust law.
      These Supreme Court cases (each decided after the decisions of the other
circuit courts to the contrary) further undermine the rationale offered by the
majority to strip the administrator of discretionary respect. Other circuits, and
now the majority, have acknowledged that federal courts are required
generally to pay deference to administrative decisions.        But, the majority
argument goes, plan administrators          do not have the expertise of
administrative agencies, and ERISA administrators are not unbiased
factfinders.   See Maj. Op. at 11; Walker v. Am. Home Shield Long Term
Disability Plan, 

, 1070 (9th Cir. 1999); 

;
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                                       No. 16-20174

–84 & n.7. It follows, says the majority, that the usual
deference to administrators is not warranted for ERISA administration. See
Maj. Op. at 11.
       Never mind that this concern, too, was addressed by Glenn.                         The
Supreme Court favorably compared ERISA’s review of benefits decisions to
review of administrative agencies’ decisions by observing,
       This kind of review is no stranger to the judicial system. Not only
       trust law, but also administrative law, can ask judges to determine
       lawfulness by taking account of several different, often case-
       specific, factors, reaching a result by weighing all together.

. For this statement, the Court cited two administrative
law decisions—Citizens to Preserve Overton Park, Inc. v. Volpe, 

(1971) and Universal Camera Corp. v. NLRB, 

(1951)—in which
the Supreme Court reviewed a governmental decision and an agency’s
factfindings for abuse of discretion. 5 And Glenn itself dealt with the biggest
concern arising from plan administrators—conflicts of interest—by instructing
that whenever a district court reviews a plan administrator for abuse of
discretion, that court must consider the extent of any conflict. 

, 117. 6 Conkright, although discussing a plan with a clause that provided


       5  Our precedent, too, has said that review of ERISA benefits determinations is like
review of administrative agency decisions. See Crosby v. La. Health Serv. & Indem. Co., 

, 264 (5th Cir. 2011) (“[O]ur review of an ERISA benefits determination is essentially
analogous to a review of an administrative agency decision . . . .”). And with good reason:
“‘[F]ull review of the motivations behind every plan administrator’s discretionary decisions’
would ‘move toward a costly system in which Article III courts conduct wholesale
reevaluations of ERISA claims’ and would seriously undermine ERISA’s goal of resolving
claims efficiently and inexpensively.” 

v. Life Ins. Co. of N. Am., 

, 814–15 (7th Cir. 2006)).
        6 The majority seems to lean heavily on conflicts of interest to justify de novo review

for all decisions of administrators. See Maj. Op. at 9, 11. But conflicts of interest already
must be considered as a factor in every § 1132(a)(1)(B) case, whether the standard of review
is de novo or abuse of discretion, because of the requirements set out in Glenn. 

.
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                                      No. 16-20174
the administrator with discretionary review, similarly endorsed providing
deference to ERISA plan administrators because the practice “promotes
efficiency by encouraging resolution of benefits disputes through internal
administrative proceedings rather than costly 

.
                                            III.
       The majority’s moving force for overruling Pierre is that we should join
the other circuits because ERISA must be uniformly applied among the federal
circuit and district courts. Indeed, the Supreme Court in Conkright allowed:
“ERISA ‘induc[es] employers to offer benefits by assuring a predictable set of
liabilities, under uniform standards of primary conduct and a uniform regime
of ultimate remedial orders and awards when a violation has occurred.’” 

original) (quoting Rush Prudential HMO, Inc. v. Moran, 

, 379 (2002)).
       But the other circuits, which declined to follow Pierre, and which the
majority would have us reverse our course and follow, are outdated by Glenn
and Conkright. 7      And still further, the uniformity that might result from
reversing Pierre is illusory. First, different circuits have different standards
for reviewing evidence.         Some circuits pay little or no attention to the
administrative record and virtually allow trial de novo by opening discovery in
district court. See Mongeluzo v. Baxter Travenol Long Term Disability Ben.
Plan, 

, 943 (9th Cir. 1995) (“We agree with the Third, Fourth,
Seventh, Eighth, and Eleventh Circuits that new evidence may be considered
under certain circumstances to enable the full exercise of informed and


       7 The last circuit squarely to decide this issue did so 15 years ago in 2003. See Shaw
v. Conn. Gen. Life Ins. Co., 

, 1285–86 (11th Cir. 2003); Riedl v. Gen. Am. Life
Ins. Co., 

, 756 (8th Cir. 2001); 

; 

; Rowan v. Unum Life Ins. Co. of Am., 

, 435 (6th Cir. 1997); 

; 

–84.
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                                        No. 16-20174
independent judgment.”). Other circuits, like ours, are limited to the record
that the administrator considered. See Maj. Op. at 17 (limiting district court
proceedings to the administrative record); 8 Perry v. Simplicity Eng., a Div. of
Lukens Gen. Indus., Inc., 

, 966 (6th Cir. 1990) (preventing district
courts from considering evidence outside the record). Second, some states have
anti-discretionary-clause statutes—like Texas Insurance Code § 1701.062(a)
that the defendants decided not to challenge here—that do not allow plans to
grant discretionary authority to plan administrators, even though the
Supreme Court has relied upon discretionary clauses and approved of them
multiple times. See 

(stating that deference to plan
administrators promotes efficiency, predictability, and uniformity); Heimeshoff
v. Hartford Life & Acc. Ins. Co., 

, 614 (2013) (approving the use
of discretionary clauses because “participants are not likely to value judicial
review of plan determinations over internal review”). Thus, a claimant—in a
case involving an ERISA plan with a discretionary clause—will have a
different standard of review depending on whether she brings an action in a
state in which she resides or a state in which a breach occurred. See 29 U.S.C.
§ 1132(e)(2) (allowing ERISA suits to proceed in any federal district court
“where the plan is administered, where the breach took place, or where a
defendant resides or may be found”). For example, an ERISA plan enforced in
Louisiana, which does not have a state statute prohibiting discretionary
clauses, will have a different standard of review than if it were enforced in
Texas, which prohibits discretionary clauses.



       8I fully agree with the majority’s decision to limit judicial review to the administrative
record as we decided in Vega v. National Life Insurance Services, Inc., 

(5th Cir.
1999) (en banc), overruled on other grounds by Metro. Life Ins. Co. v. Glenn, 

(2008).
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                                       No. 16-20174
       If uniformity were the Holy Grail to be pursued among federal courts
and if the instant opinion accomplished uniformity, the majority opinion would
be more persuasive. But, although I agree that ERISA uniformity is a worthy
consideration, the majority’s opinion hardly establishes greater procedural (or
substantive) uniformity than if we continued to apply Pierre. Instead, we are
left with a strained argument for uniformity and the illusion that reversing
Pierre somehow accomplishes uniformity throughout the federal courts of the
country.
                                              IV.
       To sum up: the misguided majority upsets twenty-six years of precedent
in overruling Pierre, and for no compelling reason. In doing so, it ignores the
practicality of administrative and trust law, misreads Firestone, and is swept
up by outdated cases of other circuits. Respectfully, I dissent. 9



       9  The majority, in reference to the dissent, argues that the dissent is mistaken in its
understanding of what Firestone referred to as “eligibility for benefits.” See Maj. Op. at 8–9
n.4.
        The majority is, of course, quite correct that our precedent has been inconsistent by
using “eligibility” in some circumstances, while using “entitlement” in other circumstances,
to mean determinations of factual questions. Compare Ellis v. Liberty Life Assurance Co. of
Boston, 

, 266 (5th Cir. 2004) (describing that power as discretion to determine
“eligibility”), with Perdue v. Burger King Corp., 

, 1254 (5th Cir. 1993) (stating
that the employee’s claim failed because he did not “allege entitlement to benefits within the
eligibility provision”); Graham v. Metro. Life Ins. Co., 349 F. App’x 957, 961 & n.5 (5th Cir.
2009) (stating that an employee failed to prove her entitlement when examining a plan where
the employer had “discretionary authority . . . to determine eligibility for and entitlement to
Plan benefits”). The relevant question, however, is not the confused use of “eligibility,” but
instead what the Firestone Court meant by eligibility determinations. Given the context in
which the case was decided and the language of the opinion, eligibility means qualification
to claim entitlement to benefits under the plan. One may be eligible for an entitlement while
not being factually entitled to the benefit. In short, eligibility precedes entitlement. One
may be eligible to assert a statutory right, but only entitled to the benefits of the right upon
a factual showing.
        Moreover, ERISA’s text gainsays the majority’s argument that “eligibility” and
“entitlement” are fungible terms in the context of ERISA. Specifically, § 1002(7) provides
that a “participant” is one “who is or may become eligible to receive a benefit.” But § 1002(7)
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                                       No. 16-20174




addresses matters of coverage; that is, eligibility. On the other hand, 29 U.S.C. § 1002(8),
under which Ariana M qualifies as a beneficiary, speaks in terms of entitlement to benefits.
Specifically, § 1002(8) speaks of a “beneficiary” as one “who is or may become entitled to a
benefit thereunder.” Indeed, these juxtaposed provisions demonstrate that eligibility and
entitlement are distinct terms: § 1002(7) defines a “participant” as one “who is or may become
eligible” while § 1002(8) defines a “beneficiary” as one “who is or may become entitled.”
        Finally, the majority criticizes the dissent for not addressing Rush Prudential HMO,
Inc. v. Moran. But Rush Prudential is an inapt case for deciding the specific issue of this
case. First, it predates Glenn and Conkright, both of which reinforce the dissent’s
understanding of Firestone. Second, Rush Prudential is a preemption case that decided
whether a state can “prohibit[] designing an insurance contract so as to accord unfettered
discretion to the insurer to interpret the contract’s 

. It held that this
type of statute was allowed because, like an insurance contract, the focus was on a legal
question—whether a state statute could modify a plan’s form of legal analysis and not
whether the specific person was entitled to money for medical treatment. Third, Rush
Prudential, as a preemption decision, had nothing to do with enforcement of § 1132(a)(1)(B),
the statute at issue here. Consequently, nothing in Rush Prudential’s holding depended on
the language cited by the majority to support its position today. To the point, the case serves
neither the majority nor the dissent.
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                                         No. 16-20174
PRISCILLA R. OWEN, Circuit Judge, dissenting:
       The Supreme Court has not decided whether a de novo or an abuse of
discretion standard of review applies when an ERISA plan administrator
considers conflicting expert opinions and denies coverage for the continued
hospitalization of an ERISA welfare-plan beneficiary.                       However, if the
principles of trust law are applied, as the Supreme Court has repeatedly said
that they should be, then an abuse of discretion standard is applicable in the
present case. I would therefore affirm the judgment of the district court.
       Ariana M. brought the present action under 29 U.S.C. § 1132(a)(1)(B). 1
The Supreme Court explained in Firestone Tire and Rubber Co. v. Bruch 2 that
“[i]n determining the appropriate standard of review for actions under
§ 1132(a)(1)(B), we are guided by principles of trust law.” 3 The only issue
before the Supreme Court in Firestone was the standard of review that should
apply to a plan administrator’s interpretation of the plan. 4 The Court held that
a de novo standard of review applied, explaining, in part, that “[t]he trust law


       1   29 U.S.C. § 1132(a)(1)(B) provides:

       (a) Persons empowered to bring a civil action

                A civil action may be brought--

               (1) by a participant or beneficiary--
               ....
               (B) to recover benefits due to him under the terms of his plan, to enforce
       his rights under the terms of the plan, or to clarify his rights to future benefits
       under the terms of the plan . . . .

       2 

(1989).
       3 

(citing Cent. States, Se. and Sw. Areas Pension Fund v. Cent. Transp., Inc.,

, 570 (1985)).
       4 

(“The discussion which follows is limited to the appropriate standard of

review in § 1132(a)(1)(B) actions challenging denials of benefits based on plan
interpretations. We express no view as to the appropriate standard of review for actions
under other remedial provisions of ERISA.”).
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                                      No. 16-20174
de novo standard of review is consistent with the judicial interpretation of
employee benefit plans prior to the enactment of ERISA.” 5 The Court reasoned
that “[a]ctions challenging an employer’s denial of benefits before the
enactment of ERISA were governed by principles of contract law,” and that “[i]f
the plan did not give the employer or administrator discretionary or final
authority to construe uncertain terms, the court reviewed the employee’s claim
as it would have any other contract claim—by looking to the terms of the plan
and other manifestations of the parties’ intent.” 6               But the Court looked
primarily to the law governing trusts in reaching its decision.
      In Firestone, the Court considered the Restatement (Second) of Trusts
(1959) (hereinafter “the Restatement”), which was the current version of the
Restatement of Trusts at the time of ERISA’s enactment. 7 The actual holding
in Firestone was entirely consistent with Section 201, comment b, of the
Restatement, which provides that “[t]he extent [of a trustee’s] duties and
powers is determined by the trust instrument and the rules of law which are
applicable, and not by his own interpretation of the instrument or his own
belief as to the rules of law.” 8 Accordingly, under the Restatement, unless a


      5 

      6 

(citing cases).
      7 

, 112, 113; see also Metro. Life Ins. Co. v. Glenn, 

, 128 (2008)

      (SCALIA, J., dissenting) (noting that the Firestone decision “[c]it[ed] the Restatement
      of Trusts current at the time of ERISA’s enactment”); Employment Retirement Income
      Security Act of 1974, Pub. L. 93-406, Title I, § 502, 88 Stat. 829 (codified as amended
      at 29 U.S.C. §§ 1001-1461).
      8 Restatement (Second) of Trusts § 201 cmt. b (1959), which provides:



             b. Mistake of law as to existence of duties and powers. A trustee
      commits a breach of trust not only where he violates a duty in bad faith, or
      intentionally although in good faith, or negligently, but also where he violates
      a duty because of a mistake as to the extent of his duties and powers. This is
      true not only where his mistake is in regard to a rule of law, whether a
      statutory or common-law rule, but also where he interprets the trust
      instrument as authorizing him to do acts which the court determines he is not
      authorized by the instrument to do. In such a case, he is not protected from
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                                     No. 16-20174
trust instrument provides to the contrary, a trustee’s interpretation of the
terms of the trust would be subject to de novo review by a court. The Supreme
Court’s holding in Firestone that an abuse of discretion standard should be
applied to an ERISA administrator’s interpretation of the plan only when the
plan grants discretion to the administrator to interpret the plan is in line with
Section 201, comment b. 9
      However, the Restatement makes clear in Section 187, comment a, that
“except to the extent to which its exercise is required by the terms of the trust
or by the principles of law applicable to the duties of trustees,” a trustee’s
“exercise of power is discretionary.” 10 Other comments in Section 187 of the
Restatement support the conclusion that a trustee’s decision as to whether a
beneficiary’s condition entitles her to benefits from the trust is within the
trustee’s discretion. Comment c provides that a trustee has discretion “to
determine the amount necessary for a beneficiary’s support.” 11                          The
Restatement makes clear that when a power is committed to the discretion of
a trustee, his actions or inactions are to be judged by an abuse of discretion


      liability merely because he acts in good faith, nor is he protected merely
      because he relies upon the advice of counsel. Compare § 297, Comment j. If he
      is in doubt as to the interpretation of the instrument, he can protect himself
      by obtaining instructions from the court. The extent of his duties and powers
      is determined by the trust instrument and the rules of law which are
      applicable, and not by his own interpretation of the instrument or his own
      belief as to the rules of law.
      9 See Metro. Life Ins. 

.
      10 Restatement (Second) of Trusts § 187 cmt. c (1959).
      11 

c, which provides in its entirety that:



             c. Kinds of discretionary powers. The rule stated in this Section is
      applicable both to the powers of managing the trust estate conferred upon the
      trustee either in specific words or otherwise, and also to such powers as may
      be conferred upon him to determine the disposition of the beneficial interest.
      Thus, it is applicable not only to powers to lease, sell or mortgage the trust
      property or to invest trust funds, but also to powers to allocate the beneficial
      interest among various beneficiaries, to determine the amount necessary for a
      beneficiary's support, or to terminate the trust.
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                                      No. 16-20174
standard. Comment d sets forth the “[f]actors in determining whether there is
an abuse of discretion.” 12 Comment e explains when there is “[n]o abuse of
discretion.” 13
      Ariana M.’s claim that she was entitled to payment for continued
hospitalization as a beneficiary under an ERISA welfare benefits plan
necessarily involves the exercise of judgment by the ERISA plan administrator
in analyzing conflicting expert opinions. This is the type of decision that would



      12   

d:

              d. Factors in determining whether there is an abuse of discretion. In
      determining the question whether the trustee is guilty of an abuse of discretion
      in exercising or failing to exercise a power, the following circumstances may be
      relevant: (1) the extent of the discretion conferred upon the trustee by the
      terms of the trust; (2) the purposes of the trust; (3) the nature of the power;
      (4) the existence or non-existence, the definiteness or indefiniteness, of an
      external standard by which the reasonableness of the trustee's conduct can be
      judged; (5) the motives of the trustee in exercising or refraining from exercising
      the power; (6) the existence or nonexistence of an interest in the trustee
      conflicting with that of the beneficiaries.

      13   

e:

              e. No abuse of discretion. If discretion is conferred upon the trustee in
      the exercise of a power, the court will not interfere unless the trustee in
      exercising or failing to exercise the power acts dishonestly, or with an improper
      even though not a dishonest motive, or fails to use his judgment, or acts beyond
      the bounds of a reasonable judgment. The mere fact that if the discretion had
      been conferred upon the court, the court would have exercised the power
      differently, is not a sufficient reason for interfering with the exercise of the
      power by the trustee. Thus, if the trustee is empowered to apply so much of the
      trust property as he may deem necessary for the support of the beneficiary, the
      court will not interfere with the discretion of the trustee on the ground that he
      has applied too small an amount, if in the exercise of his judgment honestly
      and with proper motives he applies at least the minimum amount which could
      reasonably be considered necessary, even though if the matter were left to the
      court determine in its discretion it might have applied a larger amount. So
      also, the court will not interfere on the ground that the trustee has applied too
      large an amount, if in the exercise of his judgment honestly and with proper
      motives he applies an amount not greater than a reasonable person might
      deem necessary for the beneficiary's support, although the amount is greater
      than the court would itself have awarded.
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                                      No. 16-20174
be committed to the discretion of a trustee under trust law, as expressed in the
Restatement.
      Though the Supreme Court has spoken in broad terms when it has said
that a de novo standard of review applies to a court’s review of the “denial of
[ERISA] plan benefits” 14 unless the plan grants the plan administrator
“discretionary authority to determine eligibility for [ERISA] benefits,” 15 the
Court’s decisions have involved either a plan administrator’s interpretation of
the plan (not an administrator’s decision as to whether, as a factual matter,
the beneficiary’s condition required a specific course of treatment), 16 or a plan
that expressly granted the plan administrator “discretionary authority to
determine whether an employee’s claim for benefits is valid.” 17 If we are to
accept the Supreme Court’s repeated statements that principles of trust law
apply when a court reviews the denial of ERISA benefits, then the
determination at issue in the present case was committed to the discretion of
the plan administrator, and an abuse of discretion standard should apply.
                                     *        *       *
      Because I would affirm the district court’s judgment, I respectfully
dissent.




      14 Metro. Life Ins. Co. v. Glenn, 

, 111 (2008).
      15 

      16 See 

.
      17 Metropolitan Life Ins. 

.

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                                      No. 16-20174
JENNIFER WALKER ELROD, Circuit Judge, joined by JOLLY and
CLEMENT, Circuit Judges, dissenting:


       I write separately to address the decision to remand this case to the
district court. This is a waste of judicial resources because there is no genuine
issue of material fact and the record establishes that the plan administrator
did not err in declining to cover Ariana’s additional partial hospitalization. I
would affirm the district court’s judgment in favor of Humana, regardless of
whether we apply the de novo standard adopted by the majority opinion today
or the standard we previously adopted in Pierre v. Connecticut General Life
Insurance Co./Life Insurance Co. of North America, 

(5th Cir.
1991).
       In ERISA cases, “[w]e review a ‘district court’s grant of summary
judgment de novo, applying the same standards as the district court.’” Green
v. Life Ins. Co. of N. Am., 

, 329 (5th Cir. 2014) (quoting Cooper v.
Hewlett-Packard Co., 

, 651 (5th Cir. 2009)). Summary judgment
is appropriate when “there is no genuine dispute as to any material fact and
the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a).
       There is no genuine issue of material fact on this record that precludes
summary judgment. At oral argument, Ariana’s counsel could point to only
one possible area of disputed fact. Ariana’s counsel seemed to suggest that
there is a genuine dispute as to whether Dr. Hartman was qualified to make a
decision about the necessity of Ariana’s continued partial hospitalization. 1 See



       1 Later during the argument, however, Ariana’s counsel seemed to concede that there
is no genuine dispute of material fact, stating that “this court could decide whether these
services were primarily for the convenience of Ariana M. or were for her treatment, if this
court wants to decide that . . . .” Oral Argument at 58:43, Ariana M., No. 16-20174 (5th Cir.
argued Sept. 19, 2017) (en banc).
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                                 No. 16-20174
Oral Argument at 7:25, Ariana M. v. Humana Health Plan of Tex., Inc., No.
16-20174 (5th Cir. argued Sept. 19, 2017) (en banc).         When asked what
evidence supported her position that Dr. Hartman was not qualified, Ariana’s
counsel referenced a deposition of Dr. Hartman. 

district court did
not consider this deposition testimony “because depositions taken in earlier
actions may only be used ‘in a later action involving the same subject matter
between the same parties.’” Ariana M. v. Humana Health Plan of Tex., Inc.,

432, 439 n.1 (S.D. Tex. 2016) (quoting Fed. R. Civ. P. 32(a)(8)).
And Ariana did not appeal the district court’s decision on this evidentiary
issue. See Davis v. Maggio, 

, 571 (5th Cir. 1983) (“Claims not
pressed on appeal are deemed abandoned.”).
      Furthermore, in accordance with Vega v. National Life Insurance
Services, Inc., 

(5th Cir. 1999) (en banc), overruled on other
grounds by Metro. Life Ins. Co. v. Glenn, 

(2008), left intact by the
majority opinion, “the district court is constrained to the evidence before the
plan administrator,” even in the face of disputed 

.
Dr. Hartman’s deposition testimony was not part of the administrative record.
See Ariana M., 

at 443 n.2. Thus, Ariana points to no evidence
in the record in support of such a dispute.
      In her initial brief to the panel, Ariana seemed to suggest that the fact
that her doctors disagreed with the assessments of Humana’s reviewing
doctors regarding the proper level of care for Ariana created a fact issue.
However, the Supreme Court has held, in an opinion issued after Firestone Tire
& Rubber Co. v. Bruch, 

(1989), that nothing in ERISA “suggests
that plan administrators must accord special deference to the opinions of
treating physicians.     Nor does the Act impose a heightened burden of
explanation on administrators when they reject a treating physician’s opinion.”
Black & Decker Disability Plan v. Nord, 

, 831 (2003). Thus, this
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                                 No. 16-20174
court need not defer to the opinions of Ariana’s doctors, and the fact that they
conflict with those of Humana’s doctors does not create a fact issue.
      For the reasons discussed in detail in the district court’s opinion, see
Ariana M., 

at 442–43, the plan administrator did not err in
deciding that Ariana M.’s continued partial hospitalization was not medically
necessary. As the district court explained, “Dr. Prabhu and Dr. Hartman—
board-certified psychiatrists—both did peer-to-peer reviews with Ariana M.’s
health-care professionals and reviewed her medical files to apply the plan’s
terms. They set out their decisions in written reports that cited the Mihalik
criteria and explained why Ariana M. failed to meet several prerequisites for
continued treatment under the plan.” Ariana M., 

at 442.
      The district court’s grant of summary judgment should be affirmed.




                                      41