Abatie

Opinion by Judge Graber.

Concurrence by Judge Kleinfeld.

Concurrence by Judge Gould.

After Dr. Joseph Abatie died, his widow — Plaintiff Karla H. Abatie — sought life insurance benefits from Alta Health & Life Insurance Company under an employee welfare benefit plan regulated by the Employee Retirement Income Security Act of 1974 (“ERISA”). Alta, which was both the administrator and the funding source of the plan, denied benefits. Plaintiff then brought this action. The district court upheld Alta’s decision. Plaintiffs appeal questioned the standard of review that the district court had used to review her claim.

We took this case en banc 1 to reconsider our approach to ERISA cases in which a plan administrator denies benefits and (1) the wording of the plan confers discretion on the plan administrator and (2) the plan administrator has a conflict of interest. In answering that question, we have returned to first principles, the Supreme Court’s opinion in Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 , 109 S.Ct. 948 , 103 L.Ed.2d 80 (1989). We conclude that our earlier opinion in Atwood v. Newmont Gold Co., 45 F.3d 1317 (9th Cir.1995), misinterpreted Firestone. We now…

with whom RAWLINSON, Circuit Judge, joins, concurring in the judgment.

I concur in the judgment, but not the reasoning.

In my view, the plan does not confer discretion. The district court should have reviewed whether the premium waiver for *975 disability applied to Dr. Abatie de novo. That is the default standard of review under ERISA.

The ERISA plan at issue in this case does not say that the trustee has “discretion” to construe its terms and determine whether a person is entitled to plan benefits. The majority concedes that the plan does not confer discretion in so many words, but says that no “magic words” are necessary. Our en banc decision in Kearney v. Standard Ins. Co. 2 held that we require the administrator be “unambiguous” in retaining discretion. Ingram v. Martin Marietta 3 applies Kearney, explaining that we “examine the text of [the] plan to determine whether it “unambiguously” states that [the administrator] has ‘discretionary authority’ in making benefits decisions.” 4 The majority claims to reaffirm the holdings of Kearney and Ingram that the plan must “unambiguously confer discretion, 5 yet it finds discretion in the face of ambiguity.

This plan says that…

concurring in part and concurring in the judgment:

I concur in all of Judge Graber’s opinion, except Part III.A.2.b., and concur in the judgment. I agree with the crux of the analysis that we should overrule Atwood, and that our review under Firestone should be for abuse of discretion, taking into account any conflict of interest. Rather than adopt yet another approach to this problem, however, I would follow those of our sister circuits that have adopted a “sliding scale” assessment: The degree of deference given an administrator’s decision should be reduced when the administrator *978 has a conflict of interest, and the greater the conflict, the less the deference to be given. See Stup v. Unum Life Ins. Co. of Am., 390 F.3d 301, 307 (4th Cir.2004); Fought v. Unum Life Ins. Co. of Am., 379 F.3d 997, 1004 (10th Cir.2004) (per curiam); Pinto v. Reliance Standard Life Ins. Co., 214 F.3d 377, 390-93 (3d Cir.2000); Vega v. Nat’l Life Ins. Servs., Inc., 188 F.3d 287, 297 (5th Cir.1999) (en banc); Woo v. Deluxe Corp., 144 F.3d 1157 , 1161— 62 (8th Cir.1998).

I. FACTUAL AND PROCEDURAL BACKGROUND

Dr. Abatie worked for the Santa Barbara Medical Founda- tion Clinic from 1971 until November 1992, when he took a medical leave of absence after developing non-Hodgkin’s lymphoma. The Clinic sponsored for its employees an employee welfare benefit plan, which provided for disability benefits, and an unfunded life insurance plan. Only life insur- ance is at issue in this appeal.

Shortly after taking leave from the Clinic, Dr. Abatie applied for and received disability benefits. Dr. Abatie never returned to work and, beginning in 1993, received permanent disability benefits. From September 1998 until April 2000, Dr. Abatie experienced a partial remission but, in June 2000, he died. After his death, Plaintiff filed a claim for life insur- ance benefits.

The life insurance policy under the plan was originally issued by Home Life Financial Assurance Company. Alta is the successor in interest to Home Life’s rights and responsi- bilities. The policy requires that a beneficiary work full-time for the employer in order for insurance coverage to start. The policy also provides that coverage ends when employment ends, unless otherwise provided for by…