     Case: 10-10394 Document: 00511328080 Page: 1 Date Filed: 12/21/2010




           IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT  United States Court of Appeals
                                                    Fifth Circuit

                                                 FILED
                                                                         November 29, 2010
                                     No. 10-10394
                                   Summary Calendar                         Lyle W. Cayce
                                                                                 Clerk




BRUCE LEIPZIG, M.D.,

                                                          Plaintiff-Appellant
                                                          Cross-Appellee,

versus

PRINCIPAL LIFE INSURANCE COMPANY,

                                                          Defendant-Appellee
                                                          Cross-Appellant,




                   Appeals from the United States District Court
                        for the Northern District of Texas
                                  No. 6:09-CV-36




Before DAVIS, SMITH, and SOUTHWICK, Circuit Judges.
JERRY E. SMITH, Circuit Judge:*




       *
         Pursuant to 5TH CIR . R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR .
R. 47.5.4.
    Case: 10-10394 Document: 00511328080 Page: 2 Date Filed: 12/21/2010



                                   No. 10-10394

      Bruce Leipzig appeals a summary judgment to Principal Life Insurance
Co. (“Principal”), alleging that Principal denied his disability insurance claim in
violation of the Employee Retirement Income Security Act of 1974 (“ERISA”).
Because Leipzig was physically capable of working full-time, and his practice
was limited to two days a week only because of market conditions in his city of
residence, his post-disability earnings were not “solely and directly” caused by
his medical condition, so he was not entitled to disability benefits under his in-
surance plan. Accordingly, we affirm on the ERISA claim. We remand, howev-
er, for the district court to explain its decision to deny attorney’s fees.


                                         I.
      Leipzig is a 62-year old surgical otolaryngologist, also known as an “ear,
nose and throat” specialist, or ENT, who maintains a medical practice in the city
of Brownwood, Texas, which has a population of about 20,000. Because of
Brownwood’s size and the presence of two other surgical ENT’s, patient demand
for a non-surgical ENT is limited.
      In 1993, Leipzig purchased a disability insurance policy (“the Plan”) from
Principal, which both administers and pays claims on the policy. Principal re-
tained full discretion to interpret the Plan. Under the Plan, after the first two
years in which benefits are payable, a policyholder would receive benefits only
if he suffers from a disability, which the Plan defines as follows:
        A Member will be considered Disabled if, solely and directly be-
      cause of sickness, injury, or pregnancy . . . [a]fter completing the
      Elimination Period and the Own Occupation Period, one of the fol-
      lowing applies:

         (a) The Member cannot perform the majority of the Substantial
      and Material Duties of any Gainful Occupation for which he or she
      is or may reasonably become qualified based on education, training,
      or experience.



                                         2
    Case: 10-10394 Document: 00511328080 Page: 3 Date Filed: 12/21/2010



                                   No. 10-10394

        (b) The Member is performing the Substantial and Material Du-
      ties of his or her Own Occupation or any occupation on a Modified
      Basis and is unable to earn more than 66 b% of his or her Indexed
      Predisability Earnings.

(Emphasis added.) The Plan defines the term “Substantial and Material Duties”
to mean “[t]he essential tasks generally required by employers . . . in a particular
occupation that cannot be modified or omitted.” The Plan defines “Own Occupa-
tion” to mean “[t]he occupation the Member is routinely performing . . . as per-
formed in the national economy.” And finally, “Modified Basis” means “working
to his or her full medical and vocational capacity on a part-time basis.”
      In 2005, Leipzig was diagnosed with diplopia (double vision) and extropia
(crossed eyes). By April 2006, he had ceased performing surgery and sold his
practice. Principal approved Leipzig’s disability claim effective June 15, 2006,
and began paying him monthly benefits.
      In February 2007, Leipzig’s counsel notified Principal that Leipzig had un-
dergone eye surgery and would resume a non-surgical ENT office practice in
Brownwood. Although Leipzig was physically capable of working a full schedule,
he worked no more than two days per week. Principal continued to pay reduced
benefits, reflecting the percentage reduction in his income relative to his pre-dis-
ability earnings.
      In September 2007, Dr. David Weakley submitted a report to another in-
surer in which he stated that Leipzig “is seeing patients in his office, so obvi-
ously he is not disabled performing [sic] all duties as a medical doctor.” Leipzig’s
counsel provided the report to Principal in May 2008, and shortly thereafter
Principal informed Leipzig’s counsel that it would no longer pay benefits after
June 14, 2008.
      Principal conducted a telephone interview the following month, in which
Leipzig acknowledged that he was able to perform all his job functions other



                                         3
    Case: 10-10394 Document: 00511328080 Page: 4 Date Filed: 12/21/2010



                                  No. 10-10394

than surgery, that he was working two full days a week, seeing ten to fifteen pa-
tients every four hours, and that he was not working full-time because he could
see all his patients in two days. Principal then informed Leipzig’s counsel by let-
ter that Leipzig did not meet the definition of “totally disabled,” because he was
capable of working full-time, and his income would be 100% of his pre-disability
earnings if he did.
      In January 2009, Leipzig appealed Principal’s denial and submitted a let-
ter from Mark Brown, an otolaryngologist, opining that Leipzig was “acting in
maximal capacity as a non-operative Otolaryngologist in Brownwood, Texas.”
Principal affirmed its denial by letter, in which it stated that Leipzig was “capa-
ble of seeing patients on a full time basis with the capacity to earn at least
66 b% of his Indexed Predisability Earnings . . . [and] [t]he fact that there are
not enough patients in his community does not constitute an ongoing disability.”
      Leipzig sued Principal, alleging that the denial violated ERISA, 29 U.S.C.
§ 1132(a)(1)(B) (2006). Principal counterclaimed for attorney’s fees. The district
court granted summary judgment for Principal on the ERISA claim and sum-
marily denied fees. Leipzig appeals on the ERISA claim, and Principal appeals
the denial of fees.


                                        II.
      We review a summary judgment in an ERISA case de novo. Schexnayder
v. Hartford Life & Accident Ins. Co., 600 F.3d 465, 468 (5th Cir. 2010). We up-
hold a summary judgment “when the pleadings and evidence demonstrate that
no genuine issue of material fact exists and the movant is entitled to judgment as
a matter of law.” Condrey v. SunTrust Bank, 429 F.3d 556, 562 (5th Cir. 2005).
      We review a plan administrator’s denial of benefits de novo unless the plan
provides to the contrary. Metro. Life Ins. Co. v. Glenn, 128 S. Ct. 2343, 2348
(2008). Where, as here, the plan gives the administrator discretionary authority

                                        4
     Case: 10-10394 Document: 00511328080 Page: 5 Date Filed: 12/21/2010



                                        No. 10-10394

to determine eligibility for benefits, we apply an abuse-of-discretion standard to
the denial. Holland v. Int’l Paper Co. Ret. Plan, 576 F.3d 240, 246 (5th Cir.
2009).
       If the administrator’s determination is legally correct, our review ends,
and there is no abuse of discretion. Stone v. UNOCAL Termination Allowance
Plan, 570 F.3d 252, 257 (5th Cir. 2009). We consider three factors in deciding
whether the administrator’s interpretation of the plan is legally correct:
“1) whether the administrator has given the plan a uniform construction,
2) whether the interpretation is consistent with a fair reading of the plan, and
3) any unanticipated costs resulting from different interpretations of the plan.”
Id. at 258 (quoting Crowell v. Shell Oil Co., 541 F.3d 295, 312 (5th Cir. 2008)).


                                               A.
       The first factor is whether the administrator has given the plan a uniform
construction across claims, or whether instead its treatment of the present claim
is inconsistent with its treatment of previous ones. Id. A district court may ex-
amine evidence outside the administrative record for the limited purpose of de-
termining how an administrator has interpreted the plan in other instances.1
       Leipzig claims that a Principal employee, Michael Wallace, admitted that
Principal had never previously denied benefits without considering the claim-
ant’s current or past residence, market conditions or patient populations. Be-
cause this, if true, might suggest that Principal did not construe the plan uni-
formly, the district court erred in refusing to consider this evidence for the lim-




       1
         Gooden v. Provident Life & Accident Ins. Co., 250 F.3d 329, 333 (5th Cir. 2001); Vega
v. Nat’l Life Ins. Servs., Inc., 188 F.3d 287, 299 (5th Cir. 1999) (en banc), abrogated in part on
other grounds by Metro. Life.

                                                5
     Case: 10-10394 Document: 00511328080 Page: 6 Date Filed: 12/21/2010



                                        No. 10-10394

ited purpose of how Principal has interpreted the Plan in previous cases.2
       Nevertheless, Leipzig’s characterization of what Wallace said is highly
misleading and does not suggest Principal inconsistently interpreted the Plan.
Wallace answered affirmatively when Leipzig’s counsel asked whether this was
the first time Principal had denied a claim on the ground that it does not take
residence or market conditions into account. That answer, unlike Leipzig’s char-
acterization of it, does not imply Principal previously took those factors into ac-
count in its definition of a disability; it could merely mean that Principal has
never previously considered a comparable claim.
       Indeed, Principal has received only two other claims under the Plan, and
neither involved this issue. Moreover, Wallace stated that Principal’s policy has
always been to “look at [claimants’] ability to work, not their ability to find em-
ployment given economic conditions,” which directly contradicts Leipzig’s claim
that this is a change of policy. We therefore agree with the district court that
there is no evidence of inconsistency in Principal’s interpretation of the Plan.3


                                               B.
       The second factor, whether the administrator’s interpretation of the plan
is consistent with a fair reading of it, is the most important. Stone, 570 F.3d at
258. We interpret the terms of a benefit plan in their “ordinary and popular
sense as would a person of average intelligence and experience.” Id. at 260 (in-
ternal quotation marks and citation omitted).
       For a claimant to qualify as “Disabled” under prong (b) of the Plan’s defi-



       2
         The district court properly refused to consider evidence outside the administrative rec-
ord for other purposes. Vega, 188 F.3d at 299.
       3
         Because there is no evidence of different interpretations of the Plan, there cannot be
“any unanticipated costs resulting from different interpretations” under the third factor of the
legal-correctness test. See Stone, 50 F.3d at 258.

                                               6
     Case: 10-10394 Document: 00511328080 Page: 7 Date Filed: 12/21/2010



                                         No. 10-10394

nition, three conditions must be met: (1) a claimant must “perform[] the Sub-
stantial and Material Duties of his . . . Own Occupation or any occupation . . . on
a Modified Basis;” (2) he must be “unable to earn more than 66 b% of his . . .
Indexed Predisability Earnings;” and (3) conditions (1) and (2) must occur “solely
and directly because of [the claimant’s] sickness, injury or pregnancy.” Even
assuming Leipzig satisfies the first two conditions, he fails the third: Because
his inability to earn more than 66 b% of his pre-disability earnings did not occur
“solely and directly because of” his medical condition, he does not qualify as
“Disabled,” and Principal’s interpretation is a fair reading of the Plan.4
       The words “solely and directly” imply that a claimant’s “sickness, injury
or pregnancy” must be the sole cause of his inability to earn more than 66 b%
of his pre-disability earnings. Principal does not contest that Leipzig does not
have enough patients to work full time and therefore cannot earn more than
66b% of his pre-disability income in Brownwood. Conversely, Leipzig does not
deny that he is physically capable of working five full days a week as a non-sur-
gical ENT. Moreover, he did not gainsay, in the district court, that, were he to
work full-time, he would be able to earn more than 66b% of his pre-disability in-
come.5


       4
          Leipzig argues that Principal based its denial only on the fact that he was not totally
disabled. That is not a fair characterization of Principal’s denial letter, which stated that
Leipzig was “capable of seeing patients on a full time basis with the capacity to earn at least
66 b% of his Indexed Predisability Earnings . . . . The fact that there are not enough patients
in his community does not constitute an ongoing disability.” Although the letter did not expli-
citly rely on the “solely and directly” language in the Plan, it did explain with sufficient clarity
that the reason for the denial was that Leipzig was physically able to work full-time as an
ENT even though he did not have enough patients to maintain a full-time schedule. That is
precisely the ground on which we affirm.
       5
         Leipzig now claims that even working five days a week, he would not make 66b% of
his pre-disability income. Because he did not make that argument in the district court, we
cannot consider it. See, e.g., Nichols v. Enterasys Networks, Inc., 495 F.3d 185, 189 (5th Cir.
2007) (“As the issue has not been clearly raised in front of the district court, it cannot be con-
sidered on appeal.”); FDIC v. Mijalis, 15 F.3d 1314, 1327 (5th Cir. 1994) (“[I]f a litigant desires
                                                                                      (continued...)

                                                 7
     Case: 10-10394 Document: 00511328080 Page: 8 Date Filed: 12/21/2010



                                       No. 10-10394

       The issue is whether Leipzig’s medical condition can be considered the sole
cause of his reduced income, or whether, instead, his inability to obtain full-time
employment on account of local market conditions is a contributing factor. The
plain meaning of the Plan language implies the latter. But for his inability to
find full-time employment as a non-surgical ENT in Brownwood, Leipzig is cap-
able of working full time and earning more than 66b% of his pre-disability in-
come. His inability to do that is therefore not “solely and directly” caused by his
medical condition.
       Leipzig urges that interpreting the words “solely and directly” to mean
that a claimant’s medical condition must be the sole cause of his reduced income
renders prong (b) of the definition of “Disabled” impossible to satisfy; it does not.
Of course, the words “solely and directly” are not to be interpreted in the philoso-
phical sense that any event, on some level of generality, can be said to have mul-
tiple contributing causes. Principal does not claim the policy terms are an exer-
cise in the theoretically possible, but only that the Plan does not provide a form
of employment insurance to those who are physically capable of working full-
time but are able to find only part-time work. We agree.
       That interpretation of the Plan is supported by our previous holdings in
a similar context. In determining whether a claimant was capable of performing
“any occupation” under a total-disability provision of an insurance plan, we held
that, unless the plan language suggests otherwise, a plan administrator is not
required “to identify or ensure the availability of other suitable employment.” 6


       5
         (...continued)
to preserve an argument for appeal, the litigant must press and not merely intimate the argu-
ment during the proceedings before the district court. If an argument is not raised to such a
degree that the district court has an opportunity to rule on it, we will not address it on ap-
peal.”).
       6
        Holland, 576 F.3d at 251; see also Duhon v. Texaco, Inc., 15 F.3d 1302, 1309 (5th Cir.
1994) (“Texaco’s disability benefits plan is not a form of employment insurance; it was not
                                                                                 (continued...)

                                              8
     Case: 10-10394 Document: 00511328080 Page: 9 Date Filed: 12/21/2010



                                       No. 10-10394

Leipzig argues that Holland and Duhon are distinguishable because they are
“any occupation” cases and did not involve a question of whether relocation to
another city is necessary to maintain a certain level of income.7 But the general
issue in those cases is the same: whether an administrator must examine the
specific employment opportunities available to a claimant, or whether instead
it is sufficient to look at the general income-earning potential of a person with
a particular set of skills. Holland and Duhon imply the latter is true unless the
Plan language suggests otherwise. See Holland, 576 F.3d at 251; Duhon, 15
F.3d at 1309. If anything, the Plan language stating that a loss of income must
be solely because of the claimant’s medical condition is even more plain than was
the meaning of “any occupation” in Holland or Duhon.
       Leipzig’s claim that it would be burdensome to relocate to find full-time
employment as an ENT is thus beside the point. However difficult that may be,
Principal has no duty to inquire into the particular employment opportunities
available in the local labor market, but only into Leipzig’s fitness to work in a


       6
        (...continued)
necessary under this plan that the administrator insure the availability of an alternative job
for Duhon before terminating his benefits.” (internal quotation marks omitted)).
       7
          Leipzig’s position is somewhat self-contradictory. Despite arguing that Holland and
Duhon are distinguishable because they are “any occupation” cases, Leipzig cites, in support
of his interpretation, an “any occupation” case, Caldwell v. Life Insurance Co. of North Ameri-
ca, 287 F.3d 1276 (10th Cir. 2002). There, the court noted, in passing, that determining
whether a claimant is capable of performing “any occupation” requires an analysis of the labor
market in the claimant’s geographic region. Id. at 1289. A casual comment from another cir-
cuit about a policy provision in a different insurance contract is scant support for a position,
but even if Caldwell is on point, it is contradicted by our own circuit precedent.

        In a letter submitted pursuant to Federal Rule of Appellate Procedure 28(j), Leipzig
points to two“any occupation” cases, Scheuermann v. Unum Life Insurance Co. of America, No.
08-51106, 2010 U.S. App. LEXIS 13716 (5th Cir. July 6, 2010) (per curiam) (unpublished), and
Gothard v. Metropolitan Life Insurance Co., 491 F.3d 246 (5th Cir. 2007). In both, the plan ad-
ministrator examined whether jobs were available in the local economy that the claim could
perform. Scheuermann, 2010 U.S. App. LEXIS 13716, at *3; Gothard, 491 F.3d at 250. But
whether the administrator was required to inquire into opportunities available in the local
economy was not at issue in either case, so they are inapposite.

                                               9
    Case: 10-10394 Document: 00511328080 Page: 10 Date Filed: 12/21/2010



                                   No. 10-10394

particular occupation. Local market conditions are no more within Principal’s
predictive capacity than they are within a claimant’s control. Indeed, it is not
unusual for disability insurance plans to base their determinations solely on the
claimant’s health and not on local job availability. Jestings v. New England Tel.
& Tel. Co., 757 F.2d 8, 10 (1st Cir. 1985) (Breyer, J.). The federal Social Security
program is a prominent example. Id.
      Contrary to Leipzig’s claim, the Plan’s definitions of “Substantial and Ma-
terial Duties,” “Own Occupation,” and “Modified Basis” are consistent with Prin-
cipal’s interpretation of the Plan. “Substantial and Material Duties” refers to
those tasks “generally required by employers,” and one’s “Own Occupation” is
“[t]he occupation the Member is routinely performing . . . as performed in the
national economy.” Thus, whether a claimant is performing the “Substantial
and Material Duties of his . . . Own Occupation” refers to whether he is perform-
ing the tasks generally required by employers in the occupation he is routinely
performing, as performed in the national economy. These definitions require an
insurer to determine whether a claimant is performing the sorts of tasks an oc-
cupation generally requires, and the definitions are inconsistent with the notion
that the determination turns on local economic factors.
      As for “Modified Basis,” the term is defined as performing an occupation
up to one’s “full medical and vocational capacity” on a part-time basis. Leipzig
obviously did not perform any occupation to his full medical capacity, because
it is undisputed he physically could have worked full time but did not. In addi-
tion, working to one’s full vocational capacity is best read to mean working to the
fullest extent permitted by one’s vocational abilities, rather than the fullest ex-
tent permitted by one’s local labor market. Principal’s interpretation of the Plan
is thus fully consistent with these definitions.
      Because Principal’s interpretation of the Plan is both a uniform construc-
tion and a fair reading, it is legally correct. Principal has therefore not abused

                                        10
     Case: 10-10394 Document: 00511328080 Page: 11 Date Filed: 12/21/2010



                                        No. 10-10394

its discretion, and it is unnecessary for us to address Leipzig’s argument that
Principal acted arbitrarily or capriciously. Stone, 570 F.3d at 257.8


                                              III.
       The final issue is whether the district court abused its discretion in sum-
marily denying attorneys’ fees to Principal. ERISA permits “the court in its dis-
cretion [to] allow a reasonable attorney’s fee and costs of action to either party.”
29 U.S.C. § 1132(g)(1). We review the denial of attorneys’ fees in an ERISA case
for abuse of discretion. Todd v. AIG Life Ins. Co., 47 F.3d 1448, 1458 (5th Cir.
1994).
       A district court must explain its decision to deny fees, and if, as here, it
fails to give any explanation, we must remand.9 The judgment is therefore
AFFIRMED except as to the denial of fees. We VACATE that portion of the
judgment and REMAND for an explanation regarding fees. This is a limited re-
mand; we retain jurisdiction.




       8
         We also reject Leipzig’s attempt to use a breach-of-fiduciary-duty claim to skirt the
standard of review required for a § 1132(a)(1)(B) denial-of-benefits claim. Because § 1132-
(a)(1)(B) provides an adequate remedy for a denial-of-benefits claim, a plaintiff may not bring
a private action for breach of fiduciary duty to challenge a denial of benefits. Estate of Bratton
v. Nat’l Union Fire Ins. Co., 215 F.3d 516, 526 (5th Cir. 2000).
       9
        E.g., CenterPoint Energy Houston Elec. LLC v. Harris Cnty. Toll Rd. Auth., 436 F.3d
541, 550-51 (5th Cir. 2006); Schwarz v. Folloder, 767 F.2d 125, 133 (5th Cir. 1985).

                                               11
