                             In the

United States Court of Appeals
              For the Seventh Circuit

Nos. 11-1295 & 11-1427

E DWARD R AYBOURNE,
                                                   Plaintiff-Appellee,
                                 v.

C IGNA L IFE INSURANCE
C OMPANY OF N EW Y ORK,
                                              Defendant-Appellant.


           Appeals from the United States District Court
       for the Northern District of Illinois, Eastern Division.
            No. 07 C 3205—Robert W. Gettleman, Judge.



    A RGUED A PRIL 5, 2012—D ECIDED N OVEMBER 21, 2012




 Before R OVNER, W OOD and W ILLIAMS, Circuit Judges.
  R OVNER, Circuit Judge. The Social Security Administra-
tion (“SSA”) found that Edward Raybourne was
disabled under the agency’s standards. The district
court found that Raybourne was disabled under the
terms of the long-term disability insurance policy he
held with the defendant. The defendant insurance com-
pany found that he was not disabled. The district court
2                                     Nos. 11-1295 & 11-1427

concluded that the company’s denial of benefits was
based on a conflict of interest rather than on the facts
and the terms of the policy. We affirm.


                              A.
  This is the second appeal in this case and we refer
readers to our earlier opinion for a more complete
detailing of the facts. Raybourne v. Cigna Life Ins. Co. of
New York, 576 F.3d 444 (7th Cir. 2009) (“Raybourne I”).
Electrodynamics, Inc. employed Edward Raybourne as a
quality engineer for twenty-three years. The company
established an employee welfare benefits plan that pro-
vided, among other things, coverage for long-term dis-
ability.1 Cigna Life Insurance Company of New York
(“Cigna”) both insured and administered the group long-
term disability plan (“Plan”). The Plan paid benefits for
up to twenty-four months if the beneficiary’s disability
prevented him from performing the duties of his
regular job. After twenty-four months, the Plan paid
benefits only if the beneficiary was unable to perform all
of the material duties of any occupation for which he
was reasonably qualified based on his education,
training and experience.


1
   We will ignore certain facts that are not determinative to
the outcome in order to simplify the case. For example, Electro-
dynamics is a wholly-owned subsidiary of L-3 Communica-
tions Corp., Inc., and L-3 established the employee benefits
plan at issue. A different insurer originally administered
the plan, but all parties agree that Cigna is now the relevant
insurer.
Nos. 11-1295 & 11-1427                                      3

  Raybourne suffered from degenerative joint disease
in his right foot, a problem which caused him such
severe pain that he endured four different surgeries in
attempts to alleviate it. In 2003, he stopped working
and underwent the first of the four surgeries. From De-
cember 2003 through February 2006, Cigna paid Ray-
bourne long-term benefits under the Plan. Cigna then
determined that, although Raybourne was not able to
perform the duties of his job as a quality engineer, he
was not disabled under the more stringent standard
that applied after twenty-four months. When Cigna
stopped paying benefits, Raybourne exhausted all ad-
ministrative remedies and then sued the Plan for
benefits under 29 U.S.C. § 1132(a)(1)(B). After the district
court entered judgment in favor of Cigna, Raybourne
appealed.
  Five days before the district court ruled, the Supreme
Court decided Metropolitan Life Ins. Co. v. Glenn, 554 U.S.
105 (2008). In Glenn, the Court addressed the impact
of structural conflicts of interest in reviewing plan deci-
sions for abuse of discretion:
    Often the entity that administers the plan, such as
    an employer or an insurance company, both deter-
    mines whether an employee is eligible for benefits
    and pays benefits out of its own pocket. We here
    decide that this dual role creates a conflict of interest;
    that a reviewing court should consider that conflict
    as a factor in determining whether the plan admin-
    istrator has abused its discretion in denying benefits;
    and that the significance of the factor will depend
    upon the circumstances of the particular case.
4                                  Nos. 11-1295 & 11-1427

Glenn, 554 U.S. at 108. In Raybourne’s case, Cigna was
responsible both for determining eligibility for long-
term disability benefits and for paying the benefits to
eligible participants. Yet the district court said little
about the structural conflict of interest in Raybourne’s
case, commenting only that Glenn did not affect the
court’s analysis. We therefore remanded so that the
district court could consider “how heavily Cigna’s
conflict weighs in the abuse-of-discretion balance.”
Raybourne I, 576 F.3d at 450.
  On remand from this court, the district court first
gave Cigna another opportunity to explain its decision
denying long-term disability benefits. In particular, the
court advised Cigna to address why the Plan disagreed
with the SSA’s finding of disability. The court ultimately
rejected Cigna’s “unconvincing” explanation for how
the company determined that Raybourne was not dis-
abled. First, the court considered Cigna’s claim that
the decision relied on a definition of “disability” in the
policy that is different from the definition used by the
SSA. The court found that the definitions were func-
tionally equivalent, and that any minor difference could
not explain the difference in result between Cigna’s
determination and the SSA’s finding that Raybourne
was in fact disabled.
  The court next considered Cigna’s explanation that its
determination of disability under the policy is not gov-
erned by the “treating physician rule.” That rule
requires the SSA to give greater weight to the opinion of
the claimant’s treating physician’s assessment than to
Nos. 11-1295 & 11-1427                                    5

the opinion of a non-treating physician. Cigna at-
tributed Raybourne’s disability finding by the SSA to
the agency’s application of the treating physician rule.
Cigna explained that plan administrators are under
no similar duty. The district court found that, although
the administrative law judge (“ALJ”) who decided
Raybourne’s claim acknowledged the existence of that
rule, it was not determinative to the disability finding.
Instead, the ALJ based his decision on Raybourne’s wil-
lingness to undergo four surgeries in attempts to
alleviate his pain, his continued need for narcotic pain
medications, his past work history and motivation, and
his credibility. In contrast, the district court found
that Cigna failed to account for any of these factors in
its disability determination, relying instead on the
report of a non-treating physician.2
  Finally, the district court discounted Cigna’s emphasis
on the SSA’s initial rejections of Raybourne’s claim. The
court commented that Cigna had no explanation for
why it rejected the SSA’s final determination of disability,
noting that Cigna admitted the SSA’s decision “has
no impact” on Cigna’s decision. The court took this to
be an indication of the company’s predisposition to


2
   The district court commented that the report failed to
mention two of the four surgeries. The court was mistaken.
Doctor J.S. Player, hired by Cigna to perform an Independent
Medical Evaluation (“IME”) of Raybourne, acknowledged all
four of the recent surgeries and even acknowledged a fifth
surgery Raybourne underwent in 1980 to address degenera-
tive arthritis in his right foot.
6                                  Nos. 11-1295 & 11-1427

reject the claim regardless of the facts. Moreover, Cigna’s
work on behalf of Raybourne during the earliest phases
of his disability claim with the SSA demonstrated the
company’s willingness to reap the benefits of the
SSA’s decision when it benefitted Cigna and then
ignore SSA’s final determination when that decision was
to Cigna’s detriment.
  The court ultimately concluded that Cigna’s refusal
to consider the SSA’s final determination of disability
and the insurer’s determination that Raybourne was not
disabled were founded more on a conflict of interest
than on the facts and the terms of the Plan. The court
also noted that Cigna had done little to implement safe-
guards to protect against the conflict of interest that is
inherent when the same entity that determines eligibility
for benefits is also liable for paying those benefits. The
court found that this was a borderline case and that
the conflict tipped the balance in favor of finding that
the denial of benefits was arbitrary. The court therefore
entered judgment in favor of Raybourne.
  Raybourne subsequently moved for an award of attor-
neys’ fees under 29 U.S.C. § 1132(g). The parties agreed
on the amount of fees sought as well as the hourly rate
to be used if fees were awarded. But Cigna contested
the propriety of an award of fees, arguing that Ray-
bourne was not entitled to fees, or should be awarded,
at most, fees for the final phase of the litigation. The
district court found that Raybourne achieved a com-
plete victory and thus easily met the “some degree
of success on the merits” standard described by the
Nos. 11-1295 & 11-1427                                   7

Supreme Court in Hardt v. Reliance Standard Life Ins.
Co., 130 S. Ct. 2149 (2010). But Cigna contended that
Raybourne must still meet the five-factor test this
court applied prior to Hardt. Cigna also urged the court
to decline to award fees because Cigna’s litigation
position was substantially justified.
  The district court noted that Hardt neither adopted nor
foreclosed the use of the five-factor test, but found that
the substantial justification test had little utility given
the Supreme Court’s “some degree of success on the
merits” test in Hardt. The court reasoned that, if a party
is eligible for fees with only some degree of success,
then the other party’s position was likely substantially
justified. The district court also questioned the con-
tinued validity of the five-factor test because the court
believed it was simply a way to implement the
substantial justification test. The court nonetheless
found that, even if it applied the five-factor test or the
substantial justification test, it would still award fees
to Raybourne. Finally, the court rejected Cigna’s claim
that Raybourne was entitled to fees only for the final
stage of the litigation. Because the case was not litigated
in distinct phases, and because Raybourne had one
claim and one theory throughout the case, the court
determined that Raybourne was entitled to fees for
the entire case. Cigna appeals.


                            II.
  On appeal, Cigna challenges both the merits decision
and the award of fees. Cigna contends that the district
8                                   Nos. 11-1295 & 11-1427

court erred in overturning the Plan administrator’s
benefits decision because the decision was based on
substantial medical evidence. Cigna also contends that
the record does not support a conclusion that its
structural conflict of interest affected its decision. If we
decide nonetheless to uphold that determination, then
Cigna argues in the alternative that the district court
abused its discretion in awarding fees because Cigna’s
litigation position was substantially justified.


                            A.
  The parties first dispute the standard of review. Cigna
contends that our review is de novo because the court
ruled on the parties’ cross-motions for summary judg-
ment. Raybourne would like us to review the decision
of the district court deferentially. According to Ray-
bourne, the court’s ruling was more akin to a judgment
following a bench trial on a stipulated record. The first
appeal came to us from the district court’s ruling on cross-
motions for summary judgment. After we remanded,
the district court ordered supplemental briefing on the
cross-motions for summary judgment. R. 85. After
Raybourne filed his “Plaintiff’s Supplemental Memoran-
dum in Support of Entry of Judgment,” Cigna filed a
“Supplemental Brief in Support of Its Cross-Motion for
Summary Judgment.” R. 89 & 90. The district court
then found that the previous decision of the Plan adminis-
trator lacked adequate reasoning and explanations for
the decision. The court therefore remanded the case to
the Plan administrator for further findings and explana-
Nos. 11-1295 & 11-1427                                   9

tions of the decision denying benefits. The Plan admin-
istrator once again denied benefits, this time offering
additional reasoning for the decision. Raybourne then
moved for “Entry of Judgment” before the district court.
After additional briefing, the district court granted
Raybourne’s motion. Although neither the parties nor
the court specified the rule under which judgment
was granted, the record is clear that the additional
rounds of briefing that occured after our remand
were addressed to the original cross-motions for sum-
mary judgment. We therefore will review the district
court’s judgment de novo. Raybourne I, 576 F.3d at 448;
Norman-Nunnery v. Madison Area Technical Coll., 625
F.3d 422, 428 (7th Cir. 2010). Because the Plan conferred
on the administrator the discretion to interpret the
terms of the Plan, we found in the first appeal that
the district court was obliged to review the decision of
the Plan administrator deferentially, for abuse of discre-
tion only. Raybourne I, 576 F.3d at 449. See also Holmstrom
v. Metropolitan Life Ins. Co., 615 F.3d 758, 766 (7th Cir.
2010) (when a plan administrator has discretion to de-
termine eligibility or to construe plan terms, courts
review those decisions under a deferential standard,
seeking to determine only whether the decision was
arbitrary and capricious). That standard continues
to apply.


                            B.
  In Glenn, the Supreme Court reiterated its holding that
courts should be guided by principles of trust law in
10                                  Nos. 11-1295 & 11-1427

determining the standard of review to apply to the deci-
sions of plan administrators. Glenn, 554 U.S. at 110-11;
Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (1989).
The Court noted that a benefits determination by a
plan administrator is a fiduciary act, one in which the
administrator owes a special duty of loyalty to the plan
beneficiaries. Glenn, 554 U.S. at 111. Citing Firestone, the
Court found that, if a plan gives discretionary authority
to an administrator or fiduciary who is operating
under a conflict of interest, that conflict must be weighed
as a factor in determining whether there is an abuse of
discretion. Id. The Court concluded that a plan admin-
istrator who both evaluates claims for benefits and pays
benefits claims operates under the kind of conflict
of interest to which Firestone referred.
  The Court acknowledged that the conflict question is
less clear when the plan administrator is not an
employer paying the claims out-of-pocket but rather a
large, professional insurance company. Nonetheless the
Court found that, for ERISA purposes, the conflict must
be factored into the analysis for two reasons. First, the
Court found that an employer’s conflict might extend
to the selection of an insurance company, and that the
employer might well be more interested in low rates
than in accurate claims processing. Second, the Court
noted that ERISA imposes higher-than-marketplace
quality standards on insurers, requiring that administra-
tors discharge their duties with respect to discre-
tionary claims processing “solely in the interests of the
participants and beneficiaries.” Glenn, 554 U.S. at 115
(quoting 29 U.S.C. § 1104(a)(1)). Finally, the Court re-
Nos. 11-1295 & 11-1427                                 11

marked that, although courts should treat employers and
insurance companies alike with respect to the existence of
the conflict, the insurer was free to demonstrate circum-
stances diminishing the significance or severity of
the conflict.
  Ultimately, “conflicts are but one factor among many
that a reviewing judge must take into account.” Glenn
554 U.S. at 116. The Court said that any one factor
might act as a tie-breaker when the other factors are
closely balanced. And a conflict may carry more
weight when the “circumstances suggest a higher likeli-
hood that it affected the benefits decision,” as when an
insurer has a history of biased claims administration.
Glenn, 554 U.S. at 117. At the same time, the conflict
would carry less weight when the insurer took active
steps to reduce potential bias and to promote accuracy.
  The specific situation presented in Glenn is remarkably
similar to the facts and circumstances of Raybourne’s
claims experience with Cigna. In Glenn, the Court ulti-
mately found that the insurer’s conflict led to an
arbitrary and capricious denial of benefits. The insurer
initially encouraged Glenn to argue to the SSA that she
was totally disabled, and recommended a lawyer to
assist her in pursuing her claim before the SSA. The
insurer then reaped the benefits of Glenn’s success
before the SSA by receiving the bulk of her back benefits
as reimbursement for amounts the insurer had paid
out, with the remainder of back benefits going to the
lawyer the insurer recommended. Yet the insurer then
ignored the SSA’s finding of total disability when it
12                                  Nos. 11-1295 & 11-1427

concluded that Glenn could perform sedentary work.
The insurer also emphasized a medical report that
favored the denial of benefits, de-emphasized reports to
the contrary, and failed to provide its own vocational
and medical experts with all of the relevant records. The
Court found that, in these circumstances, there was
nothing improper in concluding that the insurer’s
conflict of interest tipped the balance in favor of finding
that the denial of benefits was arbitrary and capricious.
Glenn, 554 U.S. at 117-18.


                             1.
  When Raybourne initially applied for long-term dis-
ability benefits from Cigna, he also filed a disability
claim with the SSA. Cigna hired Advantage 2000 Con-
sultants, Inc. (“Advantage”) to assist Raybourne in pur-
suing his claim with the SSA. Although Raybourne’s
claim was denied by the SSA in the first two rounds
of the administrative process, the SSA found in each
instance that Raybourne could not perform his occupa-
tion as a quality engineer. With the assistance of Advan-
tage, Raybourne sought a hearing before an SSA Admin-
istrative Law Judge (“ALJ”). Under the Social Security
statute, disability is defined as the:
     inability to engage in any substantial gainful activity
     by reason of any medically determinable physical or
     mental impairment which can be expected to result
     in death or which has lasted or can be expected
     to last for a continuous period of not less than
     12 months[.]
Nos. 11-1295 & 11-1427                                 13

42 U.S.C. §423(d)(1)(A). Moreover, under Social Security
disability standards:
   An individual shall be determined to be under
   a disability only if his physical or mental impair-
   ment or impairments are of such severity that he is
   not only unable to do his previous work but cannot,
   considering his age, education, and work experience,
   engage in any other kind of substantial gainful
   work which exists in the national economy, re-
   gardless of whether such work exists in the
   immediate area in which he lives, or whether a
   specific job vacancy exists for him, or whether he
   would be hired if he applied for work. For purposes
   of the preceding sentence (with respect to any in-
   dividual), “work which exists in the national econ-
   omy” means work which exists in significant num-
   bers either in the region where such individual lives
   or in several regions of the country.
42 U.S.C. § 423(d)(2)(A). After his March 21, 2006 hearing
before the ALJ, the SSA found that Raybourne was dis-
abled under the SSA’s stringent standard.
  Unlike the single standard applied by the SSA, the
Plan administered by Cigna had two standards, one
to cover the first twenty-four months of disability and
one to cover any period of disability beyond twenty-
four months:
   An Employee will be considered Disabled if, because
   of Injury or Sickness,
   1.   he or she is unable to perform all the material
        duties of his or her regular occupation, or solely
14                                   Nos. 11-1295 & 11-1427

          due to Injury or Sickness, he or she is unable to
          earn more than 80% of his or her Indexed Covered
          Earnings; and
     2.   after Disability Benefits have been payable for
          24 months, he or she is unable to perform all the
          material duties of any occupation for which he
          or she may reasonably become qualified based
          on education, training or experience.
R. 26, at 1060. For the first twenty-four months of
Raybourne’s disability, Cigna and the SSA agreed that
Raybourne could not perform the duties of a quality
engineer, his regular occupation. Under the Plan, that
finding was sufficient to receive benefits from Cigna,
and Cigna in fact paid benefits to Raybourne during
that time. But under SSA’s standards, no benefits would
be paid unless Raybourne could perform no job in the
national economy, considering his age, education, and
work experience. See 42 U.S.C. § 423(d)(2)(A). And
Raybourne was not able to meet that proof until the
hearing before the ALJ, where, as we noted above, he
was assisted in making his case to the ALJ by Cigna’s
hired consultant, Advantage.
  Cigna had something to gain by providing this
assistance to Raybourne in pressing his claim to the SSA:
once a participant qualified for benefits, the Plan paid
the lesser of 60% of the claimant’s monthly earnings or
$15,000, less any other income benefits received by the
claimant, including Social Security disability benefits. Thus,
in May 2006, when the SSA granted Raybourne disa-
bility benefits retroactive to the start of his disability,
Nos. 11-1295 & 11-1427                                   15

he was obliged to use the award of back benefits to
repay Cigna for amounts the insurer paid to him
during the initial period of his disability.


                             2.
  In January 2006, prior to Raybourne’s hearing before
the ALJ, Cigna decided to order an independent medical
examination (“IME”) of Raybourne, in anticipation of
the new, more stringent standard applied by the Plan
to periods of disability greater than twenty-four months.
Up to that point, all of the available medical evidence
from Raybourne’s physicians favored a finding of dis-
ability. Cigna engaged Dr. J.S. Player to perform the
IME. After examining Raybourne on January 12,
2006 and reviewing his medical records, Dr. Player pro-
duced a report (“Report”) that was sent to Cigna
on January 18, 2006, and was marked received by
Cigna on January 25, 2006.3 Although Raybourne’s
treating physician, Dr. Ronald Sage,4 concluded that
Raybourne was disabled by his ongoing pain, Dr. Player
determined that Raybourne was capable of performing


3
  The twenty-page, single-spaced Report is dated January 12,
2006, the same day that Dr. Player examined Raybourne. The
Report includes an assessment of Raybourne’s prior medical
records and also an analysis of Dr. Player’s own examination
of Raybourne.
4
  Dr. Sage was a professor and Chief of the Podiatry Section
of the Department of Orthopaedic Surgery and Rehabilitation
at Loyola University Medical Center.
16                                    Nos. 11-1295 & 11-1427

sedentary to light duty work with lifting, carrying,
pushing and pulling up to twenty pounds. Dr. Player
acknowledged that Raybourne required the use of a
straight cane to reduce weight-bearing forces and that
he should be restricted from walking or climbing
stairs with the cane to no more than 2.5 hours per day.5
  Two months after Cigna obtained this opinion that
Raybourne was not disabled, Raybourne appeared
before the ALJ with the assistance of Cigna’s consultant,
pressing his claim for disability with the SSA. Four
months after Dr. Player opined that Raybourne was not
disabled, the ALJ, who had not been made aware of
Dr. Player’s Report, found that Raybourne was in fact
disabled. Cigna then recouped from the back benefits
the money the insurer had paid to Raybourne during
the first twenty-four months of his disability.
  In the meantime, Cigna sent Dr. Player’s Report to
Dr. Sage for review. Dr. Sage agreed with the “facts and
examination findings” of the Report but disagreed with
Dr. Player’s conclusion that Raybourne could return
to work as a quality engineer. Dr. Sage stated that



5
  Dr. Player does not explain his seemingly paradoxical opinion
that a person who requires a cane to reduce weight-bearing
forces is capable of lifting and carrying twenty pounds. Presum-
ably, he expected Raybourne to carry the load with the hand
that was not employing the cane and believed that the cane
would adequately reduce the additional load. On summary
judgment, that is the most generous reading we can imagine
for Dr. Player’s opinion.
Nos. 11-1295 & 11-1427                                17

Raybourne suffered from “persisting disabling pain which
has not responded to medical or surgical intervention.”
R. 26, at 799. Nonetheless, on March 1, 2006, three weeks
before Cigna’s consultant appeared with Raybourne
before the ALJ, Cigna concluded that Raybourne was no
longer disabled.


                           3.
  Raybourne administratively appealed Cigna’s March 1,
2006 decision. He submitted further documentation
from Dr. Sage regarding his condition. Dr. Sage reported
that Raybourne continued to suffer from chronic
regional pain syndrome, osteoarthritis of his right foot,
and neuritis of the posterior tibial nerve and its
branches. Dr. Sage opined, “These findings are consistent
with the patient’s inability to work at any occupation
requiring walking or standing or even focusing on seden-
tary activity because of the unremitting nature of his
pain.” R. 26, at 782-83. On May 26, 2006, three days
after the ALJ found that Raybourne was disabled,
Cigna upheld its prior decision to deny the claim. The
letter detailing the reasons for the denial did not
mention the ALJ’s very recent conclusion to the con-
trary. Cigna rejected Raybourne’s claim that he
was unable to concentrate on sedentary work due to
pain because the record contained no cognitive testing
or mental status examination documenting an inability
to concentrate. Cigna based this conclusion in part
on the determination of an in-house non-examining
physician, R. Norton Hall, who stated (in a conclusory,
18                                 Nos. 11-1295 & 11-1427

two-sentence handwritten note) that the medical
record contained no documented clinical evidence to
support the restrictions imposed, presumably referring
to the restrictions set forth by Dr. Sage. R. 26, at 886.
   Raybourne filed another administrative appeal, sub-
mitting the favorable decision from the ALJ, the records
of Advantage (the consultant retained by Cigna to
assist Raybourne in his Social Security disability claim),
and a current functional capacity assessment by
Dr. Sage, who again concluded that Raybourne was
incapable of engaging in any work. Raybourne ex-
tensively explained the significance of the ALJ’s deter-
mination of disability. Cigna again sought the review of
a non-examining, in-house physician, who supplied a
very brief, handwritten note finding that the medical
evidence did not support a cognitive deficit caused by
pain. Cigna then denied Raybourne’s second administra-
tive appeal, again because there was insufficient clinical
evidence supporting his claim that pain prevented
him from performing sedentary jobs. Although Ray-
bourne had focused extensively on the ALJ’s finding
of disability in his appeal, Cigna did not mention the
ALJ’s decision at all in its denial of the second admin-
istrative appeal, and made no attempt to explain why
it was rejecting the contrary findings of the ALJ.


                            4.
  After our remand, as we discussed above, the district
court gave Cigna a second bite at the apple. The
district court found that Cigna’s failure to mention the
Nos. 11-1295 & 11-1427                                 19

favorable decision of the SSA or explain the reasons for
its disagreement with the ALJ’s determination rendered
Cigna’s decision inadequate under ERISA’s requirement
that specific and understandable reasons for a denial
be communicated to a claimant. The court concluded
that the proper remedy for Cigna’s inadequate ex-
planation was a remand to Cigna so that the insurer
could provide an adequate accounting of its reasoning.
   In response to the district court’s order, Cigna gave
four reasons that the court should find that the insurer
was not influenced by the structural conflict of interest
that is present when the same entity makes the benefits
determination and pays the benefits. First, Cigna noted
that the Plan and the Social Security Act contain dif-
ferent definitions of disability. Although the definitions
are not identically worded, we agree with the district
court’s conclusion that the definitions are functionally
equivalent. Under Social Security standards, a person
must have a mental or physical impairment that results
in an “inability to engage in any substantial gainful
activity.” The impairment must have lasted (or will
last) for a year or more, or be expected to result in
death. 42 U.S.C. § 423(d)(1)(A). In defining “substantial
gainful activity,” the Social Security Act considers the
applicant’s age, education, and experience, and includes
any kind of substantial gainful work which exists in the
national economy, regardless of whether any jobs or
vacancies exist in the immediate area in which the ap-
plicant lives. 42 U.S.C. § 423(d)(2)(A). Under the Plan,
after twenty-four months, a person is considered disabled
if he or she is unable to perform all the material duties
20                                Nos. 11-1295 & 11-1427

of any occupation for which he or she may reasonably
become qualified based on education, training or experi-
ence. Cigna fails to draw any meaningful distinction
between the two standards as applied to Raybourne.
The district court rightly rejected this explanation.
   Cigna next contended that the Social Security reg-
ulations that govern disability determinations do not
govern ERISA determinations. Among the differences
Cigna pointed out were SSA regulations that require
ALJs to give more weight to the opinion of a treating
physician than to that of a non-treating physician. Cigna
also cited the five-step sequential evaluation process
used by ALJs to determine whether a claimant is
disabled, and the assumption that claimants over age
fifty who cannot perform their past occupations are
less likely to be able to find alternate work than
claimants under fifty. According to Cigna, the applica-
tion of these rules and regulations led to the difference
in results between the ALJ’s favorable decision and
Cigna’s determination.
  Although the ALJ cited all of the relevant regulations,
none of these regulations played a determinative role
in the ALJ’s decision. For example, the ALJ did not
give more weight to the treating physicians’ opinions
because they were treating physicians. He expressly
gave them more credit because those opinions were
more consistent with the evidence as a whole than the
medical opinion of the state agency, the only party pro-
viding a contrary opinion. And although Social
Security regulations do give an advantage to workers
Nos. 11-1295 & 11-1427                                 21

who are disabled after age fifty, Raybourne was not yet
age fifty on the date his disability was established.
  In evaluating the effect of Raybourne’s pain on his
ability to work, the ALJ did not defer to a regulation
requiring him to give more weight to the treating physi-
cian’s opinion on that matter. Instead, he considered
the treating physician’s opinion as one factor in
evaluating Raybourne’s pain. He relied heavily on the
documented medical evidence of the source of Ray-
bourne’s pain, his credible subjective descriptions of his
pain, his willingness to undergo four surgeries in
attempts to alleviate his pain, his need for strong
narcotic pain medications, his full compliance with all
treatment recommendations, and his past work history,
which demonstrated a strong motivation to work. In
short, the ALJ found Raybourne to be credible on the
issue of limiting pain in light of all of the objective
medical evidence and his past work history.
   We do not suggest that a Social Security disability
   finding, multiple and unsuccessful surgeries for pain
   relief, and a heavy pain medication regimen will
   together always compel an award of benefits. But
   with this evidence in the record, a plan admin-
   istrator must address it and provide a reasonable
   explanation for discounting it. . . . In this case, the
   Social Security award, the surgeries, and the med-
   ication provide strong evidence in support of a
   finding of continuing disability. [The administrator’s]
   explanations for discounting them are not sup-
   ported by the record.
22                                 Nos. 11-1295 & 11-1427

Holmstrom, 615 F.3d at 773. In the instant case, Cigna did
not address any of this analysis by the ALJ, instead simply
pointing to regulations that were acknowledged and
recited, but were not necessary to the ALJ’s determina-
tion. As we noted in Holmstrom, a plan administrator
may not simply ignore this evidence but must address
it and provide a reasonable explanation for discounting
it, especially when the administrator operates under
a structural conflict of interest.
  Cigna next noted that, at the time Cigna terminated
Raybourne’s benefits, the SSA had already twice denied
Raybourne’s claim for Social Security disability. Its deci-
sion was thus consistent with the SSA’s decisions up to
that point. Cigna also argued that it paid benefits to
Raybourne for sixteen months after the SSA first deter-
mined that Raybourne was not disabled, a decision that
departed from the SSA’s analysis to Raybourne’s benefit.
Cigna maintained that SSA’s original denial of Ray-
bourne’s claim does not prove that Cigna was mistaken
when it found initially that Raybourne was disabled
under the Plan. Likewise, Cigna contends that the SSA’s
later approval of Raybourne’s claim does not prove
that Cigna was wrong to deny it.
  This argument makes little sense. At the time that
Cigna initially approved disability benefits for Ray-
bourne, he was in the first twenty-four months of his
disability, a period when the Plan paid benefits to claim-
ants who could not perform their current job. At that
time, Cigna and the SSA both found that Raybourne
was not capable of returning immediately to his former
Nos. 11-1295 & 11-1427                                    23

work. Although that finding was sufficient to qualify
for benefits under the Plan, it was not sufficient to
qualify for Social Security disability payments. There
was thus no inconsistency between the conclusions of
the SSA and Cigna during the first twenty-four months
of Raybourne’s disability.
  Cigna is correct that inconsistency between its final
determination and the ALJ’s final decision does not
prove that Cigna was mistaken. But that is not the issue.
The issue is whether Cigna has a plausible explanation
for the difference in the final determinations of disability,
an explanation that would lead a reviewing court to
conclude that the difference was not based on the struc-
tural conflict of interest that is present here. Nothing
in Cigna’s first three arguments points to any legitimate
distinction, and so we turn to the last explanation
Cigna offered to the district court.
  Cigna points out that the ALJ based his determination
on a different body of evidence than was available to
Cigna. In particular, the ALJ did not have access to
Dr. Player’s IME, which, as we discussed above, con-
cluded that Raybourne was capable of certain light duty
work. Although Cigna contends that this explains the
difference in the results, in this instance, it simply
raises more questions for a reviewing court. Cigna ob-
tained this report before Raybourne appeared before
the ALJ. At the same time that Cigna was deciding
that Raybourne was not disabled, Cigna’s consultant,
Advantage, was representing to the SSA (presumably
without the knowledge of Dr. Player’s Report) that
24                                  Nos. 11-1295 & 11-1427

Raybourne was disabled. Cigna was then able to reap
the benefits of its consultant’s work by recouping pay-
ments it made to Raybourne during his initial period
of disability, while simultaneously denying Raybourne
any future benefits.
  This is the very scenario that the Supreme Court
found indicative of “procedural unreasonableness” in
Glenn. 554 U.S. at 118. See also Marrs v. Motorola, Inc., 577
F.3d 783, 789 (7th Cir. 2009) (noting that the likelihood
that the conflict of interest influenced the decision is the
decisive consideration, as indicated by any procedural
unreasonableness in the plan administrator’s handling
of the claim). The Court also concluded that this
scenario justified the reviewing court in giving more
weight to the conflict because the seemingly inconsistent
positions taken by the insurer were both financially
advantageous to the insurer. Glenn, 554 U. S. at 118. In the
end, Cigna failed to adequately explain why it gave
more weight to Dr. Player’s Report than to all of
the medical evidence to the contrary produced by
Raybourne’s treating physician. Without providing any
rational explanation for doing so, Cigna emphasized the
lack of a report on cognitive deficiencies over well-docu-
mented medical evidence supporting Raybourne’s claim
of disabling pain. Moreover, Cigna highlighted the fact
that the ALJ did not have the benefit of Dr. Player’s
Report. Of course, it was not to Cigna’s benefit for the
ALJ to see the Report before ruling on Raybourne’s
claim. Dr. Player’s Report became the determinative
piece of evidence for Cigna only when it was financially
advantageous to the insurer. In the end, all of the
Nos. 11-1295 & 11-1427                                     25

doctors agreed about the objective medical facts of
Raybourne’s condition. The only question was whether
Raybourne’s pain was sufficient to prevent him from
working any job. Cigna’s expert, Dr. Player, believed
that Raybourne was magnifying his complaints about
pain; Raybourne’s treating physicians and the ALJ
found him credible, concluding that the objective
medical evidence was consistent with his subjective
reports of disabling pain. Cigna has given no rational
explanation for crediting Dr. Player over Raybourne’s
physician or over the credibility finding of the ALJ,
both of which were supported by substantial medical
evidence documenting the source of Raybourne’s pain.
Selecting one opinion over another without a rational
explanation can be described as arbitrary. Arbitrarily
crediting one opinion over all others when a financial
incentive is at stake is the very harm the Glenn Court
sought to avoid from structural conflicts of interest in
ERISA claims determinations.
  Under Glenn, a court may use a structural conflict of
interest to break a tie in a close case “where circum-
stances suggest a higher likelihood that it affected the
benefits decision.” 554 U.S. at 117. See also Jenkins v. Price
Waterhouse Long Term Disability Plan, 564 F.3d 856, 861-62
(7th Cir. 2009) (under Glenn, when the case is borderline,
the inherent conflict of interest can push the analysis
over the edge towards finding that the administrator’s
decision was capricious). Such appears to be the case
here, and like the district court, we conclude that
Cigna’s denial of benefits was not supported by sub-
stantial medical evidence but instead was the result of
26                                    Nos. 11-1295 & 11-1427

a structural conflict of interest. We therefore affirm the
court’s decision on the merits, and turn to the question
of attorneys’ fees.


                              C.
  ERISA provides that courts may award attorneys’ fees
to either party in the court’s discretion:
     (g) Attorney’s fees and costs; awards in actions in-
     volving delinquent contributions (1) In any action
     under this subchapter . . . by a participant, beneficiary,
     or fiduciary, the court in its discretion may allow
     a reasonable attorney’s fee and costs of action to
     either party.
29 U.S.C. § 1132(g)(1). Although many courts initially
interpreted this fee-shifting provision as being limited to
“prevailing parties,” the Supreme Court clarified that
a court may, in its discretion, award fees and costs to
either party, so long as the fee claimant has achieved
“some degree of success on the merits.” Hardt, 130 S. Ct.
at 2152. The Court acknowledged the “American Rule”
for attorneys’ fees as the “bedrock principle” that each
litigant pays his own attorneys’ fees, win or lose, unless a
statute or contract provides otherwise. Hardt, 130 S. Ct.
at 2156-57. Some fee-shifting statutes provide that fees
may be awarded only to a prevailing party, a substantially
prevailing party, or a successful litigant. See Hardt, 130
S. Ct. at 2157 n.3, n.4, & n.5. The ERISA provision, how-
ever, contains no such limitation, instead deferring to
the court’s discretion. The Court noted that a judge’s
Nos. 11-1295 & 11-1427                                      27

discretion is not unlimited, and that a party would be
eligible for an award of attorneys’ fees only if the party
could demonstrate that it achieved some degree of
success on the merits. Hardt, 130 S. Ct. at 2158.
  The Court acknowledged that some courts of appeals
applied a five-factor test in determining whether to
award attorneys’ fees, and the Court expressly declined
to “foreclose the possibility that once a claimant has
satisfied this requirement [of achieving some success on
the merits], and thus becomes eligible for a fees award
under § 1132(g)(1), a court may consider the five factors”
adopted by those courts of appeals. We have long em-
ployed the so-called five-factor test, as well as a
standard that we have labeled the substantial justifica-
tion test. See Bittner v. Sadoff & Rudoy Indus., 728 F.2d
820, 828-30 (7th Cir. 1984), overruled on other grounds,
McCarter v. Ret. Plan for Dist. Managers of Am. Family Ins.
Grp., 540 F.3d 649, 652 (7th Cir. 2008). See also Kolbe & Kolbe
Health & Welfare Benefit Plan v. Med. Coll. of Wis., Inc., 657
F.3d 496, 505-06 (7th Cir. 2011) (setting forth both the five-
factor test and the substantial justification analysis);
Pakovich v. Verizon Ltd. Plan, 653 F.3d 488, 494 (7th Cir.
2011) (noting our continued use of the five-factor test);
Jackman Fin. Corp. v. Humana Ins. Co., 641 F.3d 860, 866 (7th
Cir. 2011) (detailing both the five-factor test and the
substantial justification test). Since Hardt, we have
largely declined to reconsider whether the Bittner five-
factor test remains applicable until we are confronted
with a case where the answer makes a difference to the
outcome. Loomis v. Exelon Corp., 658 F.3d 667, 675 (7th
28                                      Nos. 11-1295 & 11-1427

Cir. 2011) (whether the Bittner test survived Hardt is an
“issue we can avoid until the answer matters”). As we
determine below, this is not a case where the answer
to that question matters. We have noted only one
change in our analysis following Hardt: we have deter-
mined that the language in our prior opinions
declaring that a showing of bad faith is vital to a fees
award under section 1132(g)(1) did not survive Hardt.
Loomis, 658 F.3d at 674.
  Without the benefit of our analysis following Hardt,
the district court remarked that the five-factor test and
the substantial justification test did not have much
utility after the Supreme Court’s decision in Hardt. The
court nevertheless applied the five-factor test (at least
in part) and concluded that an award of fees was appro-
priate. We review the district court’s decision for abuse
of discretion. Hardt, 130 S. Ct. at 2158-59; Holmstrom,
615 F.3d at 779 (we review a district court’s decision to
award or deny attorneys’ fees for abuse of discretion
and will not disturb the district court’s finding if it has
a basis in reason). Cigna does not contest the district
court’s conclusion that Raybourne achieved some
success on the merits and so we turn to the five-factor test.
  Under that test, a district court considers: (1) the degree
of the offending parties’ culpability;6 (2) the degree of the


6
   In many of our cases, we framed this factor as the degree of
the offending parties’ culpability or bad faith. See e.g., Sullivan
v. William A. Randolph, Inc., 504 F.3d 665, 671 (7th Cir. 2007).
                                                    (continued...)
Nos. 11-1295 & 11-1427                                         29

ability of the offending parties to satisfy personally an
award of attorneys’ fees; (3) whether or not an award
of attorneys’ fees against the offending parties would
deter other persons acting under similar circumstances;
(4) the amount of benefit conferred on members of the
pension plan as a whole; and (5) the relative merits of
the parties’ positions. Kolbe, 657 F.3d at 505-06; Pakovich,
653 F.3d at 494 n.2; Bittner, 728 F.2d at 828. We have
noted that these five factors are used to structure or
implement the substantial justification test, and that
the two tests essentially pose the same question: was the
losing party’s position substantially justified and taken
in good faith, or was that party simply out to harass
its opponent? Kolbe, 657 F.3d at 506 (collecting cases).
  The district court found that the first factor had little
bearing on the issue except to the extent that the court
found that Cigna was acting under a conflict of interest
that affected its decision. We concur with the district
court on the first factor; if anything, this factor weighs
in favor of awarding fees because we have concluded
that Cigna was influenced by its structural conflict of
interest when it denied benefits to Raybourne. The
second factor, the court determined, weighed in favor of
an award of fees. Cigna is well-situated to pay the
fees, and the award will not deplete Plan assets. See
Bittner, 728 F.2d at 829 (noting that the second factor



6
  (...continued)
As we noted above, though, after Hardt, we have abandoned
the idea that a finding of bad faith is vital to an award of fees.
30                                 Nos. 11-1295 & 11-1427

addresses in part whether an award of fees to a
plaintiff will deplete Plan assets to the detriment of
other beneficiaries).
  The court found that the third factor also weighed
in favor of an award of fees because other plan admin-
istrators would pay more heed to conflicts of interest
and perhaps have an incentive to put in place procedures
that would lessen the impact of such a conflict. The
court found that the fourth factor, benefits to other mem-
bers of the Plan, was largely irrelevant in an individual
dispute such as this, except to the extent that an award
of fees here would provide plans with an incen-
tive to take into account decisions of the SSA awarding
disability benefits. As with the first factor, we find no
error in the court’s analysis of the second, third and
fourth factors.
  Quoting our opinion in Sullivan v. William A. Randolph,
Inc., 504 F.3d 665, 672 (7th Cir. 2007), the district court
then opined that the fifth factor, relative merit, was “an
oblique way of asking whether the losing party was
substantially justified,” in contesting an opponent’s
claim or defense. Because of this, the district court
believed the fifth factor (together with the substantial
justification test) should be disregarded. This was error.
We have not retracted the substantial justification test.
Nor have we yet disavowed the five-factor test that
courts use to implement the same basic analysis.
  Nevertheless, we believe the error was harmless in the
circumstances presented here. The district court found
that Cigna’s failure to pay was based more on a conflict
Nos. 11-1295 & 11-1427                                   31

of interest than on the facts or the language of the pol-
icy. It is clear from the district court’s discussion of the
first four factors that the court believed that an award
of fees was appropriate and that Cigna’s litigation
position was not substantially justified as we have used
that term. Cigna failed in two opportunities before the
district court to explain why it supported a finding of
disability before the SSA when that finding was to the
company’s financial advantage, and disregarded the
SSA’s finding of disability when it was not to Cigna’s
advantage. Cigna also failed to explain this disparity to
the claimant when it denied the claim, even after
Raybourne took pains to explain the significance of the
ALJ’s decision to Cigna in the administrative appeal
process. Indeed, until forced to discuss the ALJ’s ruling
by the district court, Cigna simply ignored the inconve-
nient finding. Cigna then drew distinctions that failed
adequately to explain why the company’s finding
differed from that of the ALJ. When comparing the
relative merits of Cigna’s position and Raybourne’s,
there is little doubt regarding how the district court
would resolve the issue. Even without considering the
fifth factor, the district court leaned heavily in favor of
awarding fees to Raybourne. An assessment by the
district court of the relative merits of the parties’ posi-
tions would not change that conclusion. In fact, although
the court nominally declined to apply the fifth factor or
the substantial justification test, the court remarked
that “whether or not the substantial justification or five-
factor test remain viable, plaintiff is entitled to fees.”
Raybourne v. Cigna Life Ins. Co., No. 07 C 3205, 2011 WL
32                                  Nos. 11-1295 & 11-1427

528864, at *2 (N.D. Ill. Feb. 8, 2011). A remand would
be futile when the district court has so clearly indicated
how it would rule. See Highway J Citizens Grp. v. Mineta,
349 F.3d 938, 960 (7th Cir. 2003) (appellate court need
not remand a case if doing so would be futile). We find
no meaningful error in the district court’s decision to
grant fees in favor of Raybourne, and so we find no
abuse of discretion.
   The only remaining question is whether the court
abused its discretion when it granted Raybourne his
fees for the entire litigation instead of only the last
phase, where he finally prevailed. It is true that
Raybourne lost a few skirmishes along the way, but in
the end, his victory was complete. As the court noted,
Raybourne had one claim and one theory throughout
the litigation. He sought to reverse the company’s deter-
mination that he was no longer eligible for long-term
disability benefits and he achieved that goal in its en-
tirety. We see no abuse of discretion in the court’s deci-
sion to award him fees for the entirety of the litigation.
                                               A FFIRMED.




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