NOT FOR PUBLICATION

UNITED STATES COURT OF APPEALS FILED

FOR THE NINTH CIRCUIT FEB 04 2014

MOLLY C. DWYER, CLERK

U.S. COURT OF APPEALS

JOEL SALZ, No. 12-55728

Plaintiff - Appellant, D.C. No. 2:06-cv-01821-GW-E

v.

MEMORANDUM*

STANDARD INSURANCE COMPANY

and MTC MANUFACTURING LONG

TERM DISABILITY PLAN,

Defendants - Appellees.

Appeal from the United States District Court for the Central District of California George H. Wu, District Judge, Presiding

Argued and Submitted December 3, 2013 Pasadena, California

Before: SCHROEDER, NOONAN, and CLIFTON, Circuit Judges.

In 2004, Joel Salz (“Salz”) was injured on the job. Salz applied for, and was

granted, Social Security benefits. Salz also applied for, and was denied, long-term

* This disposition is not appropriate for publication and is not precedent except as provided by 9th Cir. R. 36-3. disability benefits. In 2006, Salz sued Standard Insurance Company (“Standard”)

and MTC Manufacturing Long Term Disability Plan (“MTC”) claiming improper

denial of his claim for long-term disability benefits pursuant to the Employee

Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001 et seq. The

district court ruled, in 2009, that Standard’s denial was proper. Salz appealed.

In a June 1, 2010, memorandum disposition, we reversed and remanded with

instructions to “apply the structural conflicts framework as elucidated in Montour

[v. Hartford Life & Accident Insurance Co., 588 F.3d 623 (9th Cir. 2009)],”

specifying four “nonexhaustive facts and circumstances the [district] court should

consider on remand.” These were: Standard’s failure to meaningfully discuss

Salz’s award of Social Security benefits; Standard’s failure to account for Salz’s

“Own Occupation”; Standard’s “unreasonable” reliance on the Dictionary of

Occupational Titles (“DOT”); and Standard’s “conclusory statement” that Salz’s

managerial occupation “would typically allow for maximum self regulated

flexibility in position change.” On remand, the district court, in a 2012 opinion,

again held that Standard did not abuse its discretion in denying Salz long-term

disability benefits. Salz appeals.

Social Security Benefits. We instructed the district court to consider

Standard’s failure to address substantively the contrary Social Security

2 Administration (“SSA”) determination. The district court agreed that Standard had

not meaningfully discussed Salz’s award of Social Security benefits. The district

court held, however, that Standard’s failure to address substantively the contrary

SSA determination was not grounds for reversal because, “in Montour, . . . failure

to provide a full explanation for the difference between the SSA’s finding of

disability and an ERISA plan administrator’s finding of non-disability . . . was

[not] reversible error per se.” Even if the failure to meaningfully evaluate a social

security disability award is not reversible error per se, it is still a significant error

that the district court must appropriately weigh in determining whether a plan

administrator abused its discretion. See Salomaa v. Honda Long Term Disability

Plan, 642 F.3d 666, 679 (9th Cir. 2011) (“Evidence of a Social Security award of

disability benefits is of sufficient significance that failure to address it offers

support that the plan administrator’s denial was arbitrary, an abuse of discretion”).

We tasked the district court with determining (which it did) whether Standard had

properly accounted for a contrary SSA determination (which Standard had not).

Nothing more. The district court erred.

Own Occupation. The district court determined that Standard need not

consider “the manner in which a claimant ha[d] historically performed his or her

job requirements”—need not, in other words, consider Salz’s Own Occupation.

3 This determination contravenes our instruction and the language of the long-term

disability policy. Pursuant to the policy, Standard is “not limited to looking at the

way [a claimant] perform[s] [his or her] job for [his or her] Employer, but

[Standard] may also look at the way the occupation is generally performed in the

national economy.” The inference, as this court noted previously, is that Standard

must look at the way a claimant performs his job for his employer. It may not look

solely at how the job is generally performed in the national economy. The district

court erred.

Unreasonable Reliance on the DOT. The district court failed to consider

Standard’s “unreasonable” reliance on the DOT. We previously found, quoting the

DOT, that “[s]edentary work involves sitting most of the time,” which is precisely

what Salz cannot do painlessly. The district court concluded that “sedentary” as

used in the DOT is a measure of strength and that, therefore, “[b]y being labeled

‘Sedentary,’ [i]t does not mean that the employee is required to sit in order to

perform his or her duties.” Perhaps; but even if Salz is not required to do so—and

this fact is itself far from settled—it is clear from Salz’s job analysis that sitting is

exactly what Salz does for most of the workday. The district court erred.

Maximum Flexibility. Finding no record evidence supporting Standard’s

claim that Salz’s occupation “would allow for maximum flexibility,” we instructed

4 the district court to consider this conclusory claim when applying Montour’s

structural conflicts framework. Upon doing so, the district court determined that

“it would seem to be common sense, if nothing else, that an individual acting in a

managerial capacity would be able to change his positioning as needed in order to

avoid discomfort.” But this “common sense” is very much in dispute and,

therefore, is not judicially noticeable. See United States v. Chapel, 41 F.3d 1338,

1342 (9th Cir. 1994) (court may only take judicial notice of adjudicative facts “not

subject to reasonable dispute” (quoting Fed. R. Evid. 201)). The district court

claims to have found record evidence supporting Standard’s statement, but then

cites to a report by Selvi Springer, a Standard consultant. This citation does little

to assuage our concern that Standard—which, as both funding source and

administrator, operates under a conflict of interest—was improperly motivated

when it denied Salz’s benefits. See Montour, 588 F.3d at 630, 637. The district

court erred.

The district court has not adequately explained how the structural conflicts

framework can result in a denial of benefits. We therefore REVERSE and

REMAND to the district court to order the award of benefits.

5

FILED

No. 12-55728, Salz v. Standard Insurance Company, et al. FEB 04 2014

MOLLY C. DWYER, CLERK

CLIFTON, Circuit Judge, dissenting: U.S. COURT OF APPEALS

I respectfully dissent. Our court’s previous memorandum disposition

remanded the case to the district court for further proceedings. It did not order

benefits or command that the district court reach a specified result. If it had

intended to dictate the result, it would have done so, saving the parties and the

court substantial time and effort. It did not.

I would affirm the judgment of the district court.