                                                                      F I L E D
                                                                United States Court of Appeals
                                                                        Tenth Circuit
                     UNITED STATES CO URT O F APPEALS
                                                                      October 4, 2006
                            FO R TH E TENTH CIRCUIT                 Elisabeth A. Shumaker
                                                                        Clerk of Court

    DORI ATK INS,

                Plaintiff-Appellant,

    v.                                                   No. 05-5081
                                                (D.C. No. 03-CV-00839-K(M ))
    SBC COM M UNICATIO NS, IN C.;                        (N.D. Okla.)
    SB C D ISA BILITY IN CO M E PLAN;
    SEDGW ICK CLAIM
    M ANAGEM ENT SERVICES, IN C.,

                Defendants-Appellees.



                             OR D ER AND JUDGM ENT *


Before T YM KOV IC H, M cKA Y, and BALDOCK , Circuit Judges.




         Plaintiff Dori Atkins worked as a pay telephone technician for defendant

SBC Communications, Inc. (SBC) and participated in the defendant SBC

Disability Income Plan (Plan). SBC self-insures the Plan and is the plan




*
       After examining the briefs and appellate record, this panel has determined
unanimously to grant the parties’ request for a decision on the briefs without oral
argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore
ordered submitted without oral argument. This order and judgment is not binding
precedent, except under the doctrines of law of the case, res judicata, and
collateral estoppel. The court generally disfavors the citation of orders and
judgments; nevertheless, an order and judgment may be cited under the terms and
conditions of 10th Cir. R. 36.3.
administrator and fiduciary. Pursuant to its power to delegate, SBC designated

defendant Sedgwick Claim M anagement Services, Inc. (Sedgwick) as the claims

administrator for the disability Plan with the authority to determine eligibility for

benefits. 1

       M s. Atkins suffered from mental health concerns. Although Sedgwick

approved periods of short-term disability benefits for her condition, it later denied

her request for continued benefits. M s. Atkins challenged that decision in the

district court, relying on the Employee Retirement Income Security Act (ERISA),

29 U.S.C. §§ 1001-1461. Adopting the magistrate judge’s report and

recommendation, the district court decided that Sedgwick’s denial of short-term

disability benefits was not arbitrary and capricious. The court therefore granted

defendants’ motion for summary judgment.

       M s. Atkins appeals, arguing that (1) the district court should have applied

a sliding scale arbitrary and capricious standard of review and (2) even under

a pure arbitrary and capricious standard of review, the denial of benefits was not

supported by substantial evidence in the administrative record and there were

other indicia that the denial of benefits was arbitrary and capricious. W e affirm.




1
       Sedgwick administers the SBC M edical Absence and Accommodations
Resource Team (SM AART), which is the administrator for SBC’s short-term
disability plan. Aplt. A pp., Vol. 3 at 854.

                                          -2-
                                   BACKGROUND

      From M ay 7 to 11, 2003, M s. Atkins received inpatient treatment for major

depression and severe anxiety. On M ay 13, she submitted a claim for short-term

disability benefits, which Sedgwick approved for the time period of M ay 14

through M ay 27. On M ay 30, M s. Atkins underwent foot surgery and sought

permission to remain on short-term disability related to this surgery. Sedgwick

approved a continuation of short-term disability benefits through June 22 and,

later, through July 13. On July 14, M s. Atkins returned to work.

      On September 10, 2003, she again requested short-term disability benefits

based on a relapse of her major depression and severe anxiety. She had received

inpatient mental health treatment from September 5 to 9. Sedgwick approved the

relapse claim and granted short-term disability benefits through October 19.

      On October 22, 2003, Sedgwick denied continued short-term disability

benefits effective October 20, because M s. Atkins’ medical evidence was

insufficient to support her claim for continued benefits. M s. Atkins appealed,

submitting additional evidence. Sedgwick denied the appeal because neither

M s. Atkins’ psychiatrist, Dr. David L. Shadid, nor her counselor, Trinna Burrow s,

had conducted a formal mental status examination and instead had based their

findings on M s. Atkins’ self-reports. Aplt. App., Vol. 1 at 130. Sedgwick

determined that the lack of objective findings failed to substantiate M s. Atkins’

inability to perform job duties.

                                         -3-
      After receiving notice of the denial of short-term disability benefits from

Sedgwick, M s. Atkins filed this ERISA action in district court alleging wrongful

denial of benefits. See 29 U.S.C. § 1132(a)(1)(B) (permitting plan participants to

bring civil action to recover benefits under plan). Both parties filed motions for

summary judgment. Adopting the magistrate judge’s report and recommendation,

the district court granted defendants’ motion and denied M s. Atkins’ motion.

Finding no conflict of interest requiring that it apply a heightened arbitrary and

capricious standard of review, the district court concluded that under a pure

arbitrary and capricious standard of review , it must uphold the denial of disability

benefits. The court found that Sedgwick’s decision was supported by the

opinions of three physicians who had reviewed the medical record. This appeal

followed.

                                   DISCUSSION

                                          I.

      W hen the district court grants a motion for summary judgment, we review

de novo, applying the same standards the district court applied. Adamson v.

U num Life Ins. C o. of Am ., 455 F.3d 1209, 1212 (10th Cir. 2006). “Summary

judgment is appropriate where no genuine issue of material fact exists, and

the moving party is entitled to judgment as a matter of law.” Id. (citing

Fed. R. Civ. P. 56(c)).




                                         -4-
      In addition to applying summary judgment standards, we must apply the

standards of review applicable to ERISA actions. In doing so, we review de novo

the district court’s legal conclusion that the pure arbitrary and capricious standard

was the proper standard to apply when reviewing Sedgwick’s decision. See

DeGrado v. Jefferson Pilot Fin. Ins. Co., 451 F.3d 1161, 1167 (10th Cir. 2006).

Also, we review the district court’s application of that standard de novo. Id.

      “W hen an ERISA plan grants a plan administrator (or its delegate)

discretion in administering the plan, we w ill uphold its decisions unless they are

arbitrary or capricious.” Gaither v. Aetna Life Ins. Co., 388 F.3d 759, 767

(10th Cir. 2004) (citing Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115

(1989)). The parties agree that under the circumstances presented here the

arbitrary and capricious standard of review applies. See Fought v. Unum Life Ins.

C o. of Am ., 379 F.3d 997, 1003 (10th Cir. 2004) (per curiam). They, however, do

not agree how much deference should be given to Sedgwick’s decision to deny

M s. Atkins short-term disability benefits.

      M s. Atkins argues that the district erred in applying a pure arbitrary and

capricious standard of review. Instead, she contends that a sliding scale arbitrary

and capricious standard should apply because SBC was the plan administrator

over its self-insured plan; it retained sole discretion and absolute power over the

plan, including the power to decide her and other claimant’s entitlement to

benefits; and it therefore had a conflict of interest. Defendants counter that there

                                          -5-
is no conflict of interest requiring application of a sliding scale arbitrary and

capricious standard of review.

      W hen there is a conflict of interest, the review ing court must conduct a

sliding scale analysis. Finley v. Hewlett-Packard Co. Employee Benefits Org.

Income Prot. Plan, 379 F.3d 1168, 1175 (10th Cir. 2004). “Under [the sliding

scale] approach, the reviewing court will always apply an arbitrary and capricious

standard, but the court must decrease the level of deference given to the

conflicted administrator’s decision in proportion to the seriousness of the

conflict.” Fought, 379 F.3d at 1004 (quotation omitted).

      In deciding whether to apply a pure or sliding scale arbitrary and capricious

standard of review, we consider the plan documents and the contractual

agreement between SBC and Sedgwick to ascertain their powers. The Summary

Plan Description for the Plan seemingly gives unlimited power to SBC in all

respects:

      The Plan Administrator is the named fiduciary of the Plan and has
      the power and duty to do all things necessary to carry out the terms
      of the Plan. The Plan Administrator has the sole and absolute
      discretion to interpret the provisions of the Plan, to make findings of
      fact, determine the rights and status of participants and others under
      the Plan, and decide disputes under the Plan. To the extent permitted
      by law, such interpretations, findings, determinations, and decisions
      shall be final and conclusive on all persons for all purposes of the
      Plan.

Aplt. A pp., Vol. 3 at 735.




                                          -6-
      But the contract between SBC and Sedgwick specifically recognizes that

SBC has delegated some of its functions as plan administrator to Sedgwick. The

contract provides that “except as delegated to” Sedgwick, SBC retains ultimate

responsibility with respect to the Plan. Id. at 767. And Sedgwick is specifically

delegated authority to review and process all short-term disability claims. Id.

at 769, 774. Indeed, under the Plan, the

      Claims Administrator[, Sedgwick,] . . . to whom claim determination
      or review authority has been delegated shall have full and exclusive
      authority and discretion to grant and deny claims under the Plan,
      including the power to interpret the Plan and determine the eligibility
      of any individual to participate in and receive benefits under the
      Plan. The decision of . . . a Claims A dministrator . . . on any claim
      . . . shall be final and conclusive . . . .

Id., Vol. 2 at 368.

      Construed together, the plan documents and the contract between SBC and

Sedgwick establish that Sedgwick has the power to make final and conclusive

short-term disability decisions. Thus, the plan documents and contract do not

support M s. Atkins’ argument that the sliding scale arbitrary and capricious

standard of review should apply.

      M s. Atkins cites Williams v. BellSouth Telecommunications, Inc., 373 F.3d

1132 (11th Cir. 2004), as authority for applying a sliding scale arbitrary and

capricious standard of review . W e agree with the district court that William s is

distinguishable. In William s, BellSouth Telecommunications, Inc. (BellSouth),

the plan administrator, employed Kemper Risk M anagement Services, Inc.

                                           -7-
(K emper) as its claim administrator. Id. at 1135. In its contract with Kemper,

BellSouth expressly retained the power to provide Kemper with specific

instructions regarding specific claims, and Kemper was required to follow those

instructions. Id. at 1136. Thus, BellSouth in effect retained the power to control

the disposition of any claims. Id. Based on this retained power, the Williams

court applied a heightened standard of review. Id.

      Unlike in William s, in this case there was no contractual agreement

between SBC and Sedgwick requiring that Sedgwick strictly comply with any

instructions given by SBC. Rather, as indicated above, SBC gave Sedgwick the

“exclusive” authority to approve or deny short-term disability claims. Aplt. A pp.,

Vol. 2 at 368; see also id., Vol. 3 at 769-70 (stating under agreement Sedgwick

was to “Review all Disability Claims” and make final determination of all

appeals). Furthermore, the information SBC provided to employees, such as

M s. Atkins, stated that only Sedgwick had the authority to determine whether an

employee qualified for short-term disability benefits. See id., Vol. 3 at 857.

At most, there is only the possibility that SBC could retain administration of some

claims. See id. at 751 (suggesting in contract between SBC and Sedgwick that

SBC can retain administration of claims). Nothing, however, indicates it did so

with respect to M s. Atkins’ claim or any other claim, or that once a claim was

assigned to Sedgwick, SBC could regain control of the claim. Thus, the district




                                         -8-
court correctly concluded that M s. Atkins failed to prove a conflict of interest and

therefore there w as no basis for applying a heightened standard of review. 2

                                          II.

      Next, M s. Atkins argues that even under the pure arbitrary and capricious

standard, the district court erred in finding that the denial of her short-term

disability claim was supported by substantial evidence in the record. She

contends “the district court engaged in a rubber-stamp review of the adverse

claim decision and wholly failed to evaluate the reasonableness of the adverse

claim decision in light of the totality of the record.” Aplt. Br. at 25. Also, she

argues that the district court’s finding that Dr. Shadid’s mental status examination

was unreliable or lacked specificity overlooked the fact that Dr. Shadid provided

his mental status examination results on the very form provided by Sedgwick.



2
       M s. Atkins argues for the first time on appeal that a less deferential
arbitrary and capricious standard of review should apply based on the serious
procedural irregularity of Sedgwick’s selectively reviewing the record by failing
to mention her September 2003 hospitalization in its final decision. Generally,
we will not consider an issue not raised before the district court. See Ray v.
U num Life Ins. C o. of Am ., 314 F.3d 482, 487 (10th Cir. 2002). Even if we w ere
to consider the argument, we would not apply the sliding scale arbitrary and
capricious standard. Sedgwick’s failure to note the September hospitalization did
not have significance for two reasons: Sedgwick had granted benefits
immediately after the hospitalization and it denied benefits only after concluding
the objective medical evidence failed to substantiate M s. Atkins’ inability to
perform job duties after October 19, 2003. Thus, this is not a case where a
conflict of interest, dishonesty, or an improper motive can be attributed to the
decision to deny benefits. See Johnson v. M etro. Life Ins. Co., 437 F.3d 809, 813
(8th Cir. 2006). Nor can it be said that Sedgwick failed to consider the relevant
circumstances at issue. Id.

                                          -9-
      “In applying the arbitrary and capricious standard, the decision [denying

short-term disability benefits] will be upheld so long as it is predicated on a

reasoned basis.” Adamson, 455 F.3d at 1212. The decision need not be the only

logical decision or the best decision, so long as it is reasonable. See Kimber v.

Thiokol Corp., 196 F.3d 1092, 1098 (10th Cir. 1999).

             Indicia of an arbitrary and capricious decision include,
      inter alia, lack of substantial evidence. Substantial evidence is such
      evidence that a reasonable mind might accept as adequate to support
      the conclusion reached by the decision maker. It requires more than
      a scintilla but less than a preponderance. In determining whether the
      evidence in support of the administrator’s decision is substantial, we
      must take into account whatever in the record fairly detracts from its
      weight. M oreover, substantiality of the evidence is based upon the
      record as a whole.

Rekstad v. U.S. Bancorp, 451 F.3d 1114, 1119-20 (10th Cir. 2006) (quotations

and citations omitted).

      Applying these standards and upon consideration of the entire

administrative record, we conclude that Sedgwick’s denial of short-term disability

benefits was supported by substantial evidence and was reasonable. W hen

Sedgwick denied a continuation of benefits and informed M s. Atkins of her right

to appeal, it provided her with its appeals procedures information. That

information directed that upon filing an appeal she should ask her treatment

providers to submit a clear outline of her level of functionality, a description of

how that level of functionality impacts her ability to w ork and her daily activities,

a detailed description of the rationale for her level of functionality, clinical

                                          -10-
documentation supporting the treatment provider’s rationale for the disability

determination, findings from a formal mental status examination including

clinical presentation and interaction, observations made by the treatment provider

during office visits and therapy sessions, and dosage of and responses to

medication. Aplt. App., Vol. 1 at 243. In addition, the SM AART Guide, which

was provided to employees, states that an employee must provide objective

evidence of disability. Id., Vol. 3 at 857 (“Some treatment providers . . . believe

that just providing a diagnosis is sufficient in order to determine disability. It is

not. Objective medical examination findings are also necessary to support the

diagnosis.”). Also, the Guide states that if an employee does not return to work at

the end of the approved period for absence, additional objective medical evidence

is required to support the treatment provider’s recommendation that disability

benefits continue. Id.

      Despite these clear requests for detailed information concerning her ability

to work, including a mental status examination, M s. Atkins never provided the

needed information or indicated that a formal mental status examination could not

be obtained or that her level of functionality could not be ascertained. Instead,

she provided only brief and conclusory medical information. Cf. Kimber,

196 F.3d at 1099 (holding medical documents provided insufficient evidence of

disability because they did not contain supporting clinical data for conclusion

reached). Dr. Shadid’s responses to the questions on the form provided by

                                          -11-
Sedgwick provided no detailed information establishing M s. Atkins’ inability to

function at work, nor did it show the results of a formal mental status

examination. M s. Burrows admitted that she did not perform a mental status

examination, because she believed her role was therapeutic and supportive.

As Sedgwick found, there was no objective evidence of M s. Atkins’ disability and

Dr. Shadid’s and M s. Burrows’ reports primarily consisted of a listing of

M s. Atkins’ self-reports concerning her alleged disability. Thus, it was not

unreasonable for Sedgwick to deny benefits based on the lack of objective

evidence. See Johnson v. M etro. Life Ins. Co., 437 F.3d 809, 813 (8th Cir. 2006).

      In addition to generally arguing that the denial of her short-term disability

benefits claim was not supported by substantial evidence in the record,

M s. Atkins also argues that the district court erred in failing to find that

Sedgwick’s review was riddled w ith the follow ing procedural irregularities,

selectivity, and inconsistencies: (1) Sedgwick gave too much credit to the

opinions of the physicians employed by Sedgwick, who reviewed the record, but

did not examine her, and not enough credit to her healthcare providers’ opinions;

(2) Sedgwick previously determined that similar medical evidence was sufficient

to approve her short-term disability claims on M ay 19, 2003 and October 3, 2003;

(3) Sedgwick selectively reviewed the records she presented to support her

relapse claim, including failing to mention her September 2003 hospitalization in

its final decision denying benefits; and (4) Sedgwick failed to note that SBC had

                                          -12-
prohibited her from the workplace until she underwent an Employee Assistance

Program (EA P) examination. W e discuss each of these five assertions in turn,

keeping in mind, however, that we do not consider whether discrete acts by the

claims administrator are arbitrary and capricious, but only whether the ultimate

decision denying benefits is arbitrary and capricious, see Evans v. Unumprovident

Corp., 434 F.3d 866, 876 (6th Cir. 2006).

      W e disagree with M s. Atkins’ assertion that Sedgwick gave too much

weight to the opinions of Sedgwick’s review ing doctors and not enough weight to

the opinions of Dr. Shadid and M s. Burrows. Although Sedgwick was not

permitted to arbitrarily refuse to credit M s. Atkins’ reliable medical evidence,

including the opinions of Dr. Shadid and M s. Burrows, it was not required to

accord special deference to those opinions. See Black & Decker Disability Plan

v. Nord, 538 U.S. 822, 825 (2003). Nor was it required to credit their opinions

over other evidence that was relevant to her medical condition. See id. Because,

as the district court decided, M s. Atkins’ “evidence was not thorough enough to

be considered reliable,” Aplt. App., Vol. 3 at 890, and the additional medical

evidence she submitted “did not meet the degree of specificity [she] had been

advised was required,” id. at 891, Sedgwick gave proper w eight to Dr. Shadid’s

and M s. Burrows’ opinions. Sedgwick’s reliance on its consulting doctors’ paper

review of the medical records of Dr. Shadid and M s. Burrows was not, under the

circumstances presented here, arbitrary and capricious. See Hufford v. Harris

                                         -13-
Corp., 322 F. Supp. 2d 1345, 1359 (M .D. Fla. 2004); see also Davis v. Unum Life

Ins. C o. of Am ., 444 F.3d 569, 577 (7th Cir. 2006) (recognizing it is common and

reasonable for doctors to examine medical records and arrive at professional

opinions), cert. denied, No. 06-70, 2006 W L 2007574 (U.S. Oct. 2, 2006); Voight

v. M etro. Life Ins. Co., 28 F. Supp. 2d 569, 580 (C.D. Cal. 1998) (accepting

opinion of independent medical review ers rather than opinion of treating doctor is

not proof of arbitrary or capricious conduct).

      Sedgwick properly treated the more recent documentation from her

healthcare providers differently in the denial of her request for a continuation of

short-term disability benefits than it treated similar documentation in its prior

approvals of benefits. The prior approvals occurred immediately after her

hospitalizations. W e agree with the district court that it was not unreasonable for

Sedgwick to require more specific information regarding M s. Atkins’ ability to

work when considering a continuance of benefits claim, since her most recent

hospitalization had occurred forty days earlier. See Kimber, 196 F.3d at 1099

(holding it is not arbitrary and capricious to request additional evidence of

continuing disability).

      Nothing beyond M s. Atkins’ assertion suggests that Sedgwick selectively

reviewed the medical records. It is curious that Sedgwick did not mention

M s. Atkins’ September 2003 hospitalization in its final decision. But it did

approve short-term disability benefits after that hospitalization and correctly

                                         -14-
requested additional, objective evidence showing that disability continued.

Considering the totality of the record in this case, we cannot conclude that

Sedgwick’s denial of benefits was unreasonable simply because it failed to

mention M s. Atkins’ September 2003 hospitalization.

      It is true that Sedgwick did not mention SBC’s requirement that M s. Atkins

go through its EAP program and obtain a fitness for duty certification before she

would be allowed to return to work. Aplt. App., Vol. 1 at 259. SBC required

this after M s. Burrows told M s. Atkins’ former attorney in September 2003 that

M s. Atkins had mentioned blowing up the SBC building and targeting a

co-worker due to anger. At that time, M s. Burrows believed that M s. Atkins was

homicidal and presented a danger to herself and others. These threats were made

during the time M s. Atkins was receiving in-patient treatment and during the time

when she was receiving short-term disability benefits. W hile Sedgwick perhaps

should have mentioned this, we cannot say that its failure to do so caused the

denial of short-term disability benefits to be arbitrary and capricious.

      W e agree with the district court that although the record contains evidence

supporting a disability claim, the question on review concerns the reasonableness

of Sedgwick’s decision to deny M s. Atkins short-term disability benefits.

Sedgwick provided a reasonable basis for its decision. Because the decision to

deny M s. Atkins continued short-term disability benefits was not arbitrary and




                                         -15-
capricious, the district court properly granted summary judgment in favor of

defendants.

      The district court’s judgment is AFFIRMED.

                                                   Entered for the Court



                                                   M onroe G. M cKay
                                                   Circuit Judge




                                       -16-
