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

No. 04-2741
IRA SHYMAN,
                                            Plaintiff-Appellant,

                               v.


UNUM LIFE INSURANCE CO.,
                                            Defendant-Appellee.
                         ____________
       Appeal from the United States District Court for the
         Northern District of Illinois, Eastern Division.
          No. 01 C 7366—Joan B. Gottschall, Judge.
                         ____________
  ARGUED SEPTEMBER 22, 2005—DECIDED OCTOBER 21, 2005
                         ____________



  Before EASTERBROOK, EVANS, and SYKES, Circuit Judges.
  EASTERBROOK, Circuit Judge. Shatkin, Arbor, Karlov &
Co., a commodities-trading firm, arranged disability
benefits for its employees and affiliated traders. Ira
Shyman trades soybean contracts on the Chicago Board of
Trade and clears his transactions through Shatkin Arbor.
Shyman has suffered from headaches much of his life, and
in 1999 he applied for disability benefits, telling Unum Life
Insurance, the plan’s insurer (and administrator) that the
condition had worsened and prevented him from working as
much as he used to. The plan provides benefits when
2                                                No. 04-2741

trading income falls below 80% of a three-month rolling
average, and Unum concluded that this condition had been
satisfied for some months in 1999 but not others. When
Shyman filed a new application in 2000, however, Unum
denied it outright, stating that Shyman lacked credible
medical evidence of a disabling condition. Invoking Illinois
insurance and tort law, Shyman sued in federal court; the
judge held, however, that ERISA (the Employee Retirement
Income Security Act) preempts state law and that Unum’s
decision with respect to the 2000 application is neither
arbitrary nor capricious. 2004 U.S. Dist. LEXIS 4964 (N.D.
Ill. Mar. 24, 2004).
  Shyman’s principal argument in the district court, and his
lead contention on appeal, had been that ERISA never
applies to independent contractors. According to Shyman it
deals only with employees (“participants” in the statutory
argot) and people whose interests derive from them (“benefi-
ciaries”). While Shyman’s appeal was pending, however, we
held in Ruttenberg v. United States Life Insurance Co., 413
F.3d 652 (7th Cir. 2005), that independent contractors can
be “beneficiaries” of ERISA plans. In Ruttenberg the benefi-
ciary was a floor trader who cleared trades through a
commodities dealer that sponsored a welfare plan, in which
the trader enrolled; Shyman’s situation is indistinguishable.
  This brings to the fore Shyman’s fallback position that the
disability coverage that Shatkin Arbor arranged for its staff
and affiliated traders is not an ERISA welfare-benefit plan
in the first place. Although the statute defines covered
welfare plans to include all employer-sponsored disability-
benefit programs, see 29 U.S.C. §§ 1002(1)(A), 1003(a),
there is a regulatory exception for pure insurance products
from third parties:
    For purposes of title I of the Act and this chapter,
    the terms “employee welfare benefit plan” and
    “welfare plan” shall not include a group or group-
No. 04-2741                                               3

    type insurance program offered by an insurer to
    employees or members of an employee organization,
    under which
        (1) No contributions are made by an em-
        ployer or employee organization;
        (2) Participation the program is completely
        voluntary for employees or members;
        (3) The sole functions of the employer or
        employee organization with respect to the
        program are, without endorsing the pro-
        gram, to permit the insurer to publicize the
        program to employees or members, to col-
        lect premiums through payroll deductions
        or dues checkoffs and to remit them to the
        insurer; and
        (4) The employer or employee organization
        receives no consideration in the form of
        cash or otherwise in connection with the
        program, other than reasonable compensa-
        tion, excluding any profit, for administra-
        tive services actually rendered in connec-
        tion with payroll deductions or dues
        checkoffs.
29 C.F.R. §2510.3-1(j). Shyman maintains that his disabil-
ity coverage fits this exception: he paid all premiums, his
decision to enroll was voluntary, and Shatkin Arbor did no
more than permit Unum to publicize the program, neither
endorsing it nor accepting consideration for its assistance.
  This argument fails at the first step, so we need not
consider the others. Shatkin Arbor paid part of the pro-
gram’s cost for its employees. Shyman concedes this but
observes, yet again, that he was not an employee; he paid
full freight even if those on the firm’s payroll did not. He
maintains, in other words, that a given package of benefits
4                                                No. 04-2741

is in or out of ERISA’s scope person by person, rather than
plan by plan. That’s just a variant of the argument rejected
in Ruttenberg, and it has no footing in either the statute or
the regulation. ERISA speaks of welfare-benefit plans; the
statute imposes duties on plan fiduciaries and plan admin-
istrators. Likewise the regulation speaks of a “plan” or
“program” that is outside the statutory definition of a
welfare-benefit plan. Unum offered and Shatkin Arbor
sponsored a group plan, which would come into force only
if 75% or more of eligible persons enrolled; there was no
individual insurance policy. If a “plan” is covered, then
every participant and beneficiary receives ERISA’S benefits
(or detriments, which is how Shyman sees the absence of
remedies such as punitive damages in tort).
  The district judge concluded that the appropriate stan-
dard of review is deferential: she asked whether Unum’s
decision was arbitrary and capricious given the evidence in
the administrative record. See Perlman v. Swiss Bank
Corp., 195 F.3d 975 (7th Cir. 1999). Unum and Shatkin
Arbor agreed that “[w]hen making a benefit determination
under the Policy, UNUM has discretionary authority to
determine your eligibility for benefits and to interpret the
terms and conditions of this Policy.” No more is needed to
give the plan administrator discretion and limit the scope
of judicial review. See Diaz v. Prudential Insurance Co., No.
04-2342 (7th Cir. Sept. 20, 2005); Herzberger v. Standard
Insurance Co., 205 F.3d 327 (7th Cir. 2000).
   Shyman insists that this language does not count because
it appears only in the certificate of insurance rather than in
the body of the policy. Ruttenberg held that a proviso
missing from the plan, the summary plan description, and
the policy of insurance could not be deemed a grant of
discretion in interpretation or application. But this package
of documents declares that the certificate of insurance is
part of the policy, unless it contradicts some other
clause—and Shyman does not contend that the discretion-
No. 04-2741                                                 5

granting language contradicts either the summary plan
description or any clause of any other document. It is
unimportant that one document is captioned “certificate”
and another bears the legend “policy;” if the discretion-
granting language can be on any page of a multi-page plan
(and it can), then the fact that this page bears its own
caption is irrelevant. Shyman does not contend that a
beneficiary who inquired (or looked for himself) would not
have discovered the discretion-granting language. A clause
that not only represents the plan sponsor’s decision but also
communicates the rules to the participants and beneficia-
ries is enforceable under ERISA.
  Plenary review is necessary, despite the terms of the plan,
Shyman maintains, because Unum has a financial interest
in denying claims. The law of this circuit is otherwise. See
Perlman and, e.g., Hess v. Reg-Ellen Machine Tool Corp.,
No. 04-3408 (7th Cir. Sept. 6, 2005); Leipzig v. AIG Life
Insurance Co., 362 F.3d 406 (7th Cir. 2004). Unum is much
too large to be affected by its resolution of any one benefits
claim. Anyway, actual contractual language supersedes
arguments about what would be “good policy” for employers
and those covered by welfare plans. Shyman might as well
argue that Shatkin Arbor’s plan ought to kick in when
income drops below 85% of the rolling average rather than
the 80% trigger in the plan. More judicial review might or
might not be a boon to participants and beneficiaries, but
how much of this boon to supply is a decision fundamentally
no different from which financial benefits to provide. (This
observation is commonplace in the law of arbitration.
Contracts regularly provide for less-expensive dispute
resolution so that savings can be put to other uses, such as
reducing the cost of products covered by arbitration
clauses.)
 This brings us to the question whether Unum’s decision
was arbitrary or capricious. Shyman supported his claim
with his statement that the headaches (including occasional
6                                               No. 04-2741

migraines) are severe and proof that his earnings had
declined in many months, plus several reports from Law-
rence Robbins, a neurologist specializing in headaches.
Robbins told Unum that Shyman’s headaches are so
frequent and debilitating that he can not “stand and
concentrate and think for more than a few minutes at a
time.” Dr. Robbins concluded that “he could [not] be a
trader at his current capacity” and “can [not] function in
any capacity in this way.” Robbins stated in another report
that Shyman is bedridden with pain from headaches and is
completely unable to work.
  Unum thought this peculiar, because Shyman continued
to trade soybean contracts (both on the floor at the Board of
Trade and electronically from his home). In June and July
1999, after Dr. Robbins had deemed Shyman unable to
work, he earned net profits of $600,000 from floor trading.
Trading in other months was less profitable, but the fact
that Shyman continued to make a substantial income from
an activity that Dr. Robbins had declared impossible raised
doubts about the adequacy (or honesty) of Robbins’s
evaluation. Unum sent the file to another specialist, who
deemed the Robbins assessments overstated and
undersupported. Positron-emission tomography (a PET
scan) often can verify or refute claims of incapacitating
headaches; Robbins either had not performed such a test or
had not reported its results, which Unum’s consultant
thought unusual under the circumstances. Suspicions
raised, Unum hired a private detective, who watched
Shyman coach basketball and baseball, exercise on a
treadmill, drive his children to and from school, shop, tutor
children as a volunteer at school, surf the Internet watching
market activity, and trade commodities—all unexpected
activities for someone supposedly bedridden and unable to
concentrate for more than a few minutes at a time.
  Shyman may well be honest and disabled in the policy’s
sense—that is, suffering a 20% or greater reduction in
No. 04-2741                                              7

income as a result of a medical condition. He loses more
from a reduction in trading profits than he stands to gain
from disability benefits, which are capped at $10,000 a
month. Perhaps the problem lies in Dr. Robbins’s overstate-
ments. But Shyman did not supply Unum with any other
medical evaluation. On the evidence in the administrative
record, Unum did not act arbitrarily or capriciously in
concluding that Shyman is more likely suffering from the
burnout so common to floor traders than from a deteriorat-
ing medical condition.
                                                AFFIRMED
A true Copy:
      Teste:

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




                  USCA-02-C-0072—10-21-05
