                             In the
 United States Court of Appeals
               For the Seventh Circuit
                          ____________

No. 03-3911
ALFREDO RUIZ,
                                                 Plaintiff-Appellant,
                                 v.


CONTINENTAL CASUALTY COMPANY
and STERLING, INCORPORATED, LONG
TERM DISABILITY PLAN,
                                             Defendants-Appellees.

                          ____________
         Appeal from the United States District Court for the
          Northern District of Indiana, Hammond Division.
                 No. 02 C 73—Rudy Lozano, Judge.
                          ____________
     ARGUED OCTOBER 27, 2004—DECIDED MARCH 11, 2005
                          ____________



  Before FLAUM, Chief Judge, and MANION and WILLIAMS,
Circuit Judges.
  MANION, Circuit Judge. Alfredo Ruiz worked as a produc-
tion supervisor for Application Engineering Corp. (“AEC”),
a subsidiary of Sterling, Inc. (“Sterling”), where he partici-
pated in Sterling’s long-term disability plan. When he was
denied long-term disability benefits he sued the insurance
company, Continental Casualty Co. (“Continental”) and
2                                                No. 03-3911

Sterling’s disability plan. The district court granted summary
judgment for the defendants, holding that Continental’s
decision to not extend long-term disability benefits to Ruiz
was neither arbitrary nor capricious. We affirm.


                              I.
A. Ruiz’s Injury, Medical Examinations, and Continental’s
   Decisions Regarding Benefits
  In late 1998, Ruiz aggravated a prior back injury when he
fell down a flight of stairs. This was not Ruiz’s first back
problem. Ruiz had apparently experienced problems with
his back since 1981 and underwent surgery that year, and
again in 1987, for the problems. On July 14, 1999, Ruiz
submitted a claim to Continental for disability benefits. Ruiz
was forty-one years old when he submitted his claim and
had not worked since February 9, 1999.
  Ruiz’s claim form he submitted to Continental stated that
he was totally disabled and could not perform his job
because he was unable to walk, stand, or sit. Ruiz also sub-
mitted a “Physician’s Statement” completed by Dr. Ronald
Pavelka. Dr. Pavelka diagnosed Ruiz with “marked gener-
alized bulging” of a spinal disc. Dr. Pavelka included with
his statement an MRI of Ruiz’s spine. Dr. Pavelka’s state-
ment also included a comment that because of physical
limitations Ruiz “may not work” and suggested that Ruiz’s
prognosis was indefinite.
  During the second half of 1999, Continental received more
medical records from doctors who had evaluated Ruiz
(Dr. Pavelka and a second doctor, Dr. Marc Levin), as well
as assessments from these doctors concerning Ruiz’s phys-
ical and occupational limitations. Dr. Pavelka continued to
assert that Ruiz could not work and that he could not sit,
No. 03-3911                                                   3

stand, or walk for any time during an eight-hour workday.
Dr. Levin initially concluded that Ruiz had some limited
ability to sit, walk, and stand during an eight-hour work-
day. Dr. Levin later reconsidered his evaluation, however,
and suggested that Ruiz could sit up to three hours at one
time and could stand and walk for up to two hours at one
time. On January 21, 2000, Continental approved Ruiz’s
claim, retroactive to August 9, 1999 (six months after Ruiz’s
last day at work). Under the terms of the insurance policy
issued by Continental, this approval entitled Ruiz to up to
twenty-four months of disability benefits.
   Continental’s policy has two phases of disability benefits.
During the first phase, an employee is considered disabled
if he is unable to perform the duties of his job at Sterling (or
in Ruiz’s case, the subsidiary, AEC). The second phase
begins if an employee has been disabled, as defined by the
first phase, for twenty-four months. In the second phase,
however, an employee is disabled only if he is unable to
engage in any job for which he is qualified, as measured by
his education, training, or experience.
   Continental’s January 2000 approval, therefore, was a rec-
ognition that Ruiz was unable to return to his job at AEC.
Continental continued, however, to monitor Ruiz’s progress.
In July 2000, Continental wrote to Ruiz to inform him that
it believed he was capable of performing alternate work
(thus disqualifying Ruiz for the longer-term benefits under
the second phase of the policy) and that Ruiz’s benefits
would be terminated on August 8, 2001 (twenty-four
months after his benefits began).
  In November 2000, Ruiz submitted a supplemental claim
form. As part of that form, a new physician, Dr. Kathryn
Hanlon, diagnosed Ruiz with an “intervertebral disc dis-
order” and “postlaminectomy syndrome.” Dr. Hanlon also
4                                                No. 03-3911

indicated that Ruiz was totally disabled but that he would
“recover sufficiently to perform duties” as of December 1,
2000.
  On August 31, 2001, after his entitlement to benefits had
ended, Continental received an appeal letter from Ruiz. The
letter included medical records from a new doctor, Dr.
Ramesh Kanuru. The records indicated that Dr. Kanuru
performed surgery to implant a spinal cord stimulator in
Ruiz. The records also noted that Ruiz was using a “spine
patch.” Continental reviewed these records but decided that
they did not change its decision to terminate Ruiz’ benefits.


B. Sterling’s Plan for Disability Benefits and Continental’s
   Insurance Policy
  The Summary Plan Description (“SPD”) for Sterling’s long-
term disability plan (the “Plan”) lists the Plan Administrator
as Sterling and named subsidiaries (including AEC). The
SPD also states that “[t]he Plan is administered by the Plan
Administrator through an insurance contract purchased
from [Continental].” In addition, the SPD provided that
“[t]he Administrator and other Plan fiduciaries have dis-
cretionary authority to interpret the terms of the Plan and to
determine eligibility for and entitlement to benefits in
accordance with the Plan.”
  Continental issued to each eligible employee of Sterling a
policy certificate (the “Certificate”). The Certificate states
that “[w]hen making a benefit determination under the policy,
We [defined in the policy as Continental] have discretionary
authority to determine Your [defined in the policy as the
employee] eligibility for benefits and to interpret the terms
and provisions of the policy.” (Emphasis in the original.)
The Certificate also notes that “[t]he policy is delivered in
and governed by the laws of the governing jurisdiction and
No. 03-3911                                                  5

to the extent applicable by the Employee Retirement Income
Security Act of 1974 (ERISA) and any amendments.” There
are no other documents relevant to the Plan.


C. The Present Action
   On February 27, 2002, Ruiz filed the present action in
the district court seeking damages for wrongful denial of
benefits under the Employment and Retirement Income
Security Act of 1974, 29 U.S.C. § 1132(a)(1)(B) (“ERISA”).
Continental moved for summary judgment which the dis-
trict court granted. The district court held that under ERISA,
Continental was a fiduciary. The district court also held that
Continental’s decision to deny Ruiz benefits was subject to
an arbitrary and capricious standard of review. Finally, the
district court concluded that the decision was neither arbi-
trary nor capricious and granted summary judgment in
favor of Continental. This appeal followed.


                              II.
  We review a grant of summary judgment de novo. Vallone
v. CNA Fin. Corp., 375 F.3d 623, 631 (7th Cir.), cert. denied,
125 S. Ct. 670 (2004). A party is entitled to summary judg-
ment in its favor when “there is no genuine issue of material
fact and that he or she is entitled to judgment as a matter of
law.” Id.; Fed. R. Civ. P. 56(c); Celotex Corp. v. Catrett, 477
U.S. 317, 322 (1986).


A. The Standard of Review of Continental’s Decision
  As a preliminary matter, the standard of review we utilize
with respect to the underlying decision of Continental to
deny benefits to Ruiz is vigorously disputed by the parties.
6                                                   No. 03-3911

This court recently explained the possible standards of
review in cases asserting a wrongful denial of benefits:
    Ordinarily, “[a] denial of benefits will be reviewed
    de novo ‘unless the benefit plan gives the administrator
    or fiduciary discretionary authority to determine eligibil-
    ity for benefits or to construe the terms of the plan.’ ”
    Militello v. Cent. States, Southeast & Southwest Areas Pension
    Fund, 360 F.3d 681, 685 (7th Cir. 2004) (quoting Firestone
    Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115, 109 S.Ct.
    948, 103 L.Ed.2d 80 (1989)). If the plan’s language
    “indicates with the requisite if minimum clarity that a
    discretionary determination is envisaged,” Herzberger v.
    Standard Ins. Co., 205 F.3d 327, 331 (7th Cir. 2000), “then
    a denial of benefits will be reviewed under an arbitrary
    and capricious standard.” Militello, 360 F.3d at 685
    (citing Hess v. Hartford Life & Accident Ins. Co., 274 F.3d
    456, 461 (7th Cir. 2001)).
Vallone, 375 F.3d at 631.
  Our analysis has two parts. First, is Continental a fiduciary?
Second, assuming Continental is a fiduciary, are fiduciaries
granted sufficient discretionary authority under the terms
of Sterling’s Plan? If the answer to either of these questions
is no, we will review Continental’s decision to deny Ruiz
benefits de novo. If, on the other hand, the answer to both
questions is yes, we will review Continental’s decision un-
der the highly deferential arbitrary and capricious standard.
  Continental argues, and the district court held, that it is a
fiduciary for the Plan and that the Plan vests fiduciaries
with discretionary authority with respect to claims for
benefits. Therefore, its decision to deny benefits should be
reviewed under the arbitrary and capricious standard. Ruiz
instead argues that Continental is not a fiduciary and, there-
fore, we should review Continental’s decision to deny Ruiz
benefits de novo.
No. 03-3911                                                       7

  1.     Is Continental a Fiduciary?
  Section 3(21)(A) of ERISA defines a fiduciary as any
person who:
       exercises any discretionary authority or discretionary
       control respecting management of such plan or exercises
       any authority or control respecting management or
       disposition of its assets, (ii) . . . renders investment
       advice for a fee or other compensation, direct or indi-
       rect, with respect to any moneys or other property of
       such plan, or has any authority or responsibility to do
       so, or (iii) . . . has any discretionary authority or discre-
       tionary responsibility in the administration of such plan.
29 U.S.C. § 1002(21)(A). The measure of whether a person is
a fiduciary is not whether that person is formally designated
as such. Instead, a fiduciary should be viewed “in functional
terms of control and authority over the plan.” Mertens v.
Hewitt Assocs., 508 U.S. 248, 262 (1993); see also ABA Section
of Labor and Employment Law, Employment Benefits Law
626 (2d ed. 2000) (“A fiduciary with respect to a plan is any
person that in fact performs any of the functions described
in the statutory definition, regardless of the formal relation-
ship, if any, that person has with the plan.”). A court should
thus look to whether a proposed fiduciary exercises control
or authority over a particular benefit in an ERISA plan.
   In this case we are concerned with whether Continental
fits the third criterion. That is, whether it “has any discretion-
ary authority or discretionary responsibility in the adminis-
tration of [the] plan.” 29 U.S.C. § 1002(21)(A)(iii).
  In Aetna Health Inc. v. Davila, 124 S. Ct. 2488 (2004), the
Supreme Court held that “[w]hen administering employee
benefit plans, HMOs must make discretionary decisions
regarding eligibility for plan benefits, and, in this regard,
must be treated as plan fiduciaries.” Id. at 2502. The Court
8                                                    No. 03-3911

concluded that “[c]lassifying any entity with discretionary
authority over benefits determinations as anything but a
plan fiduciary would . . . conflict with ERISA’s statutory and
regulatory scheme.” Id.
  In light of Davila, we conclude that Continental was acting
as a fiduciary when it determined that Ruiz was not eligible
for disability benefits. As the Supreme Court noted, “[a]
benefit determination under ERISA . . . is generally a
fiduciary act.” Id. at 2501.


    2.   Does the Plan grant Continental the authority to construe
         its terms or determine eligibility for benefits?
  Having determined that Continental is indeed a fiduciary,
we must determine whether the Plan grants it the authority
to construe the terms of the Plan or determine eligibility for
benefits. Donato v. Metro. Life Ins. Co., 19 F.3d 375, 379 (7th
Cir. 1994).
  Continental argues that the Plan does, pointing to the
Certificate issued to Ruiz that states that “[w]hen making a
benefit determination under the policy, [Continental has]
the discretionary authority to determine Your eligibility for
benefits and to interpret the terms and provisions of the
policy.” (Emphasis in the original.) While this court has held
that no “magic words” are necessary for a grant of discre-
tionary authority, id. (quoting Sisters of the Third Order of St.
Francis v. SwedishAmerican Group Health Benefit Trust, 901 F.2d
1369, 1379 (7th Cir. 1990)), the language in the Certificate is
surely sufficient.
  Ruiz, however, argues that the Certificate and the insur-
ance policy issued by Continental are not plan documents
and, therefore, there is no language in a plan document that
vested Continental with the authority to construe the terms
No. 03-3911                                                      9

of the Plan or determine eligibility for benefits. In support
of his argument, Ruiz quotes from this court’s decision in
Wallace v. Reliance Standard Life Ins., 318 F.3d 723 (7th Cir.
2003). In Wallace, this court noted that “Pegram [v. Hedrich,
530 U.S. U.S. 211 (2000)] concluded that a contract of
insurance sold to a plan is not itself ‘the plan’ . . . .” Wallace,
318 F.3d at 724. Ruiz takes this to mean that an insurance
policy issued pursuant to a contract for insurance does not
constitute a plan document.
  Pegram, however, does not hold that an insurance policy
is not a plan document. Pegram holds only that “the pro-
visions of documents that set up [an] HMO are not as such,
a plan.” Pegram, 530 U.S. at 223. In fact, the Court went on
to suggest that provisions of a contract between an HMO
(and, by extension, an insurer such as Continental) and an
employer can be part of a plan. Id. (“[T]he agreement be-
tween an HMO and an employer who pays the premiums
may provide . . . elements of a plan by setting out rules under
which beneficiaries will be entitled to care.”) (emphasis
added).
  Moreover, we have considered an insurance policy a plan
document before. In Postma v. Paul Revere Life Insurance Co.,
223 F.3d 533, 537-40 (7th Cir. 2000), this court considered
whether an insurance policy issued by Paul Revere gave the
company the necessary discretion to entitle it to the arbi-
trary and capricious standard of review of its decision to
deny a plaintiff disability benefits. See also Houston v.
Provident Life and Accident Ins. Co., 390 F.3d 990, 994 (7th Cir.
2004) (in concluding that a defendant was entitled to the
arbitrary and capricious standard noted that “the policy
grants Provident ‘full, exclusive, and discretionary authority
to control, manage, and administer claims.’ ”) (emphasis
added). Other circuits have also held that insurance policies
are plan documents. Ross v. Rail Car Am. Group Disability
10                                                    No. 03-3911

Income Plan, 285 F.3d 735, 739 n.5 (8th Cir. 2002); Cinelli v.
Sec. Pac. Corp., 61 F.3d 1437, 1441 (9th Cir. 1995); Gable v.
Sweetheart Cup Co., 35 F.3d 851, 856 (4th Cir. 1994); Musto v.
Am. Gen. Corp., 861 F.2d 897, 900-01 (6th Cir. 1988); see also
Shaw v. Conn. Gen. Life Ins. Co., 353 F.3d 1276, 1282-83 (11th
Cir. 2003) (treating an insurance policy as plan document).
  In this case, the insurance policy and the Certificate are
plan documents. The plan documents granted Continental
the requisite discretionary authority. Continental is entitled,
therefore, to have its decision to deny Ruiz benefits re-
viewed under an arbitrary and capricious standard.


B. Continental’s Decision
   A fiduciary’s decision to deny a claim for benefits is enti-
tled to “great deference” under the arbitrary and capricious
standard of review. Blickenstaff v. R.R. Donnelley & Sons Co.
Short Term Disability Plan, 378 F.3d 669, 677 (7th Cir. 2004).
It is not enough that we might disagree with a fiduciary’s
decision concerning benefits; we cannot overturn a decision
to deny benefits unless the decision was “downright
                   1
unreasonable.” Id.
 Continental’s decision was not “downright unreasonable.”
The Plan required Ruiz to submit objective medical findings


1
   Ruiz has not presented specific evidence that Continental
suffered from a conflict of interest that would require this court
to apply the sliding scale of deference described in Manny v. Cent.
States, S.E. & S.W. Areas Pension & Health & Welfare Funds, 388
F.3d 241, 242-43 (7th Cir. 2004). See Mers v. Marriott Int’l Group
Accidental Death & Dismemberment Plan, 144 F.3d 1014, 1020 (7th
Cir. 1998) (requiring “specific evidence of actual bias that there is
a significant conflict”). We apply, therefore, a “simple” arbitrary
and capricious standard of review. Manny, 388 F.3d at 243.
No. 03-3911                                                 11

to support his claim for disability. The reports of the doctors
who opined that Ruiz could not perform even sedentary
work (the level of exertion a vocational consultant em-
ployed by Continental concluded Ruiz could perform) are
not supported by objective evidence. Instead, the primary
evidence supporting Ruiz’s claim that he cannot perform
any work for which he is trained was his own subjective
complaints of pain.
  Further, the physicians’ opinions about Ruiz’s ability
to work are somewhat inconsistent. At roughly the same
time (the fall of 1999), Drs. Pavelka and Levin offered con-
tradictory assessments of Ruiz’s capacities. As noted above,
Dr. Pavelka suggested Ruiz could perform no work while
Dr. Levin suggested that Ruiz could perform jobs that al-
lowed Ruiz to sit, stand, or walk such that he was standing
for no more than two hours at one time, sitting for no more
than three hours at one time, and walking for no more than
three hours at a time. In conflict with both these earlier de-
terminations is Dr. Hanlon’s conclusion, a year later, that,
although Ruiz was disabled at the time of the report, he would
able to return to work duties only a short time thereafter.
  Finally, Dr. Kanuru’s opinion, the most recent of the four,
was not supported by objective medical evidence and, in-
stead, relied solely on Ruiz’s complaints regarding his pain;
evidence, as noted above, that was not sufficient under the
Plan to support a claim for disability benefits.
  In light of the lack of objective medical evidence support-
ing Ruiz’s claim that he can perform no work he is trained
to do, and the inconsistent conclusions of physicians re-
viewing Ruiz’s medical records, it was not “downright un-
reasonable” for Continental to conclude that Ruiz was not
entitled to long-term disability benefits. Blickenstaff , 378
F.3d at 677.
12                                               No. 03-3911

                             III.
  The district court properly granted summary judgment in
favor of Continental. Continental served as a fiduciary to the
Plan and its decision to deny Ruiz long-term disability
benefits was neither arbitrary nor capricious. The decision
of the district court is
                                                  AFFIRMED.

A true Copy:
        Teste:

                          _____________________________
                           Clerk of the United States Court of
                             Appeals for the Seventh Circuit




                    USCA-02-C-0072—3-11-05
