[00:00:00] Speaker 01:
Yes.

[00:00:01] Speaker 01:
Good morning, Your Honors.

[00:00:02] Speaker 01:
Good morning.

[00:00:03] Speaker 01:
I will reserve five minutes for rebuttal time.

[00:00:05] Speaker 01:
Keep your eye on the clock.

[00:00:06] Speaker 01:
We'll try to help you.

[00:00:11] Speaker 01:
This case is about the statutory requirement for the plan administrator of an employee benefits plan to furnish specific kinds of documents when requested in writing by a participant or beneficiary.

[00:00:27] Speaker 01:
104B4 states that the plan administrator shall upon written request furnish a copy of a number of documents including as applied in this specific case contracts or other instruments under which the plan is established or operated.

[00:00:44] Speaker 01:
Here appellant Mark Zavaslak made just a request as a beneficiary of the Netflix Incorporated Health and Welfare Benefits Plan.

[00:00:52] Speaker 01:
At the beginning, at the very beginning of 2021,

[00:00:55] Speaker 01:
Zavislaik sent a letter to Netflix requesting documents governing the plan.

[00:01:00] Speaker 01:
Netflix ignored this letter.

[00:01:02] Speaker 01:
Zavislaik followed up with a second letter to the registered agent of Netflix, this time quoting 104 before and reiterating his request.

[00:01:12] Speaker 02:
So we, respectfully, we know what the record says.

[00:01:15] Speaker 02:
Excellent.

[00:01:16] Speaker 02:
And we appreciate you doing that.

[00:01:19] Speaker 02:
You're dealing here with our Hughes Salaried Retirement Action Committee versus Administrator of the Hughes Non-Bargaining Retirement Plan on bank opinion.

[00:01:29] Speaker 02:
That's right.

[00:01:30] Speaker 02:
Which is controlling, obviously, of our three-judge panel.

[00:01:33] Speaker 02:
And that held that Section 104B4 calls for the disclosure only of documents, and I now quote, that provide individual participants with information only of documents that provide individual participants with information about the plan and benefits.

[00:01:49] Speaker 02:
You disagree, I know, but Netflix takes the position that based on that case, they gave you all you're entitled to.

[00:01:57] Speaker 02:
You disagree?

[00:01:58] Speaker 02:
Why?

[00:01:59] Speaker 01:
We disagree, Your Honor, respectfully, because Hughes was evaluating the other instruments clause of Section 104B4.

[00:02:07] Speaker 01:
It was not evaluating the remainder of the clause or the remainder of the statute, which was specifying all the other kinds of documents that are

[00:02:15] Speaker 01:
expressly required form.

[00:02:17] Speaker 02:
But what would your, again, quoting our case, what would your client learn from these other documents, many of which are already public, that is not, if you will, required under the Hughes case?

[00:02:32] Speaker 01:
Sure.

[00:02:32] Speaker 01:
Well, from a pragmatic perspective, when Netflix provided the SPDs, the SPDs themselves, two of them outright disclaim that the reader should rely on them at all.

[00:02:44] Speaker 01:
All four of them point to other contracts that are controlling.

[00:02:48] Speaker 01:
As a matter of benefits, there was a travel cancer benefit that was applied in 2021 that did not exist in 2020.

[00:02:56] Speaker 01:
And the SPD that was provided to Mr. Zavislak that would have contained all of his medical benefits did not.

[00:03:04] Speaker 01:
address that particular benefit, so he would not have known if that had come up in his need for seeking benefits.

[00:03:11] Speaker 02:
So from your perspective, you want us to determine that the documents that were not provided essentially complied with the Hughes case, that they simply didn't provide what was needed for your client to understand his benefits and rights under the plan.

[00:03:28] Speaker 01:
Is that right?

[00:03:28] Speaker 01:
No, Your Honor, respectfully, because the SBDs are a necessary component

[00:03:35] Speaker 01:
of furnishment production, but they're not sufficient.

[00:03:38] Speaker 01:
The statute requires the production of SPDs, both automatically and also upon request.

[00:03:46] Speaker 01:
But when Hughes talks about documents necessary for the beneficiary to understand his rights, it talks about understanding the plan and benefits, not just the benefits.

[00:04:01] Speaker 01:
So here, to the extent that the SPD can, assuming argument that the SPD covers all the benefits, which the SPDs in this case, as provided, didn't, even assuming that, the beneficiary is entitled to

[00:04:18] Speaker 01:
production, furnishment of documents that cover the plan as well.

[00:04:23] Speaker 02:
Even under the Hughes case?

[00:04:25] Speaker 02:
That's not how I read that case.

[00:04:26] Speaker 01:
Well, the reason under the Hughes case that that applies is because it takes for granted that every other element of the statute prior to other instruments is to be provided.

[00:04:37] Speaker 01:
Why do you say that?

[00:04:41] Speaker 01:
because it's well first of all because Hughes is reliant upon the legislative history language of 104 before so all of the statements that Hughes makes as to needed to be provided or really have already been said in the legislative history so in the Senate report

[00:05:01] Speaker 01:
It's drawing from that language.

[00:05:04] Speaker 01:
And ultimately, it's really simply focused on the other instruments.

[00:05:09] Speaker 01:
Because at issue in Hughes was a contact list, a list of names and addresses that the appellants in that case were trying to get provided for whatever reason.

[00:05:19] Speaker 01:
But a list of names and addresses does not establish or operate a plan.

[00:05:25] Speaker 01:
It may be a plan document, but it doesn't actually cause the operation or underlie the establishment of the plan itself.

[00:05:34] Speaker 04:
Can I ask, just to make sure I understand your argument, you're saying that Hughes doesn't govern this case, right?

[00:05:41] Speaker 04:
Are you also making the argument, even if Hughes governs this case, that you should still win?

[00:05:46] Speaker 01:
I wouldn't say that Hughes doesn't govern the case.

[00:05:51] Speaker 01:
I just think that the purpose of Hughes was to evaluate the other instruments clause, and it was taking for granted the fact that all of the other items in the statutory list, trust agreements, bargaining agreements, contracts,

[00:06:04] Speaker 04:
are to be provided, and that's background, that's an assumption that Hughes is making.

[00:06:21] Speaker 04:
And frankly, I think bargaining agreements.

[00:06:23] Speaker 01:
Absolutely.

[00:06:24] Speaker 01:
There's no disagreement there.

[00:06:26] Speaker 04:
So then how come we don't take the gloss that Hughes did on other instruments and apply it to all the other parts of the... You absolutely should.

[00:06:35] Speaker 01:
You should apply under which the plan is established or operated.

[00:06:38] Speaker 01:
And all of the contracts that Mr. Zavislak requested establish or operate the plan.

[00:06:44] Speaker 01:
They are the plan for all intents and purposes.

[00:06:47] Speaker 04:
So I guess I don't understand that.

[00:06:50] Speaker 04:
Then Hughes does govern.

[00:06:51] Speaker 01:
Yes, I don't disagree.

[00:06:53] Speaker 01:
Hughes absolutely governs.

[00:06:55] Speaker 01:
The issue is that Hughes was only really talking about the other instruments clause.

[00:07:01] Speaker 01:
And so when we're talking about other instruments under which the plan is established or operated, it's saying that all of the previous items in the list

[00:07:10] Speaker 01:
But it's assuming it's taking for granted.

[00:07:13] Speaker 01:
And Schaeffer does the same thing as it follows Hughes.

[00:07:16] Speaker 01:
It takes for granted the fact that all of the other kinds of

[00:07:21] Speaker 01:
categories of documents in the statute are going to be provided to the requester.

[00:07:27] Speaker 02:
And why do you say that?

[00:07:29] Speaker 02:
Again, I read our en banc opinion as being a very practical one.

[00:07:33] Speaker 02:
They're saying, okay, the plan beneficiary needs to know what his or her rights are under the plan as a common sense matter.

[00:07:42] Speaker 02:
You seem to be saying that

[00:07:45] Speaker 02:
Everything else in the plan, even though it wasn't specifically there, was subsumed into Hughes' reasoning and whether or not the person would have the slightest understanding of what some of these collateral third-party documents were, they still have to be produced.

[00:08:01] Speaker 02:
I don't understand Hughes to be saying that.

[00:08:03] Speaker 02:
I understand Hughes to be an eminently practical, commonsensical application of 104b2.

[00:08:11] Speaker 02:
What am I missing?

[00:08:13] Speaker 01:
I believe that you are right that it is a practical application of production.

[00:08:21] Speaker 01:
Nonetheless, Hughes is taking for granted the fact that these other documents are to be produced because they are the plan.

[00:08:30] Speaker 01:
In fact, Hughes says

[00:08:31] Speaker 01:
The relevant documents are those that provide individual participant with information about the plan and benefits.

[00:08:37] Speaker 01:
So the SPDs provide essentially a list, an enumeration of benefits that are available to participants and beneficiaries.

[00:08:47] Speaker 01:
But the SPDs are not the plan.

[00:08:50] Speaker 01:
They do not constitute the plan.

[00:08:52] Speaker 01:
They cannot constitute the plan because they don't undertake the requirements of a plan as set forth, for example,

[00:08:59] Speaker 01:
in Section 402 or 29 USC 1102B, actually A and B. A talks about naming a fiduciary, B talks about establishing amendment procedures, talks about funding to and from the plan, talks about allocation of fiduciary duties, and I'm forgetting the fourth one at the moment, but each plan must incorporate these types of

[00:09:27] Speaker 01:
these features in order to be a valid plan under ERISA, and the plan contracts in this case do exactly that.

[00:09:35] Speaker 01:
Without those plan contracts, you don't have a plan, and the beneficiary participant requesting is entitled to the plan, not just the benefits.

[00:09:43] Speaker 02:
As I recall, you agreed with the other side that this would be submitted in the form of a summary judgment.

[00:09:50] Speaker 02:
You presented your documents to district court.

[00:09:53] Speaker 02:
the folks at Netflix presented theirs, right?

[00:09:57] Speaker 02:
And you allowed the judge to make a determination basically as a matter of law and fact, is that right?

[00:10:02] Speaker 02:
That's right.

[00:10:03] Speaker 02:
And in this case, you just think the judge just misinterpreted Hughes?

[00:10:08] Speaker 01:
That's exactly right, Your Honor.

[00:10:10] Speaker 01:
Yeah.

[00:10:11] Speaker 01:
And I have my five minutes remaining.

[00:10:12] Speaker 01:
Oh, sure.

[00:10:13] Speaker 01:
Please save your time.

[00:10:13] Speaker 01:
I'll wait for rebuttal.

[00:10:14] Speaker 01:
Thank you.

[00:10:15] Speaker 01:
Very well.

[00:10:17] Speaker 02:
All right.

[00:10:17] Speaker 02:
So, Mr. Do you say it Rillo or Rio or?

[00:10:23] Speaker 02:
However you say it, let's say it right.

[00:10:26] Speaker 02:
So what?

[00:10:27] Speaker 02:
Rillo, okay.

[00:10:29] Speaker 03:
Rillo it is.

[00:10:30] Speaker 03:
I've had the opportunity to appear for your honor and- I appreciate it.

[00:10:34] Speaker 03:
Rillo it is.

[00:10:36] Speaker 03:
Your honor, good morning and may it please the court.

[00:10:39] Speaker 03:
My name is Christopher Rillo from Baker Botts and I represent Netflix in this appeal and I represent them down below.

[00:10:46] Speaker 03:
I think your honor and it's funny how things go.

[00:10:49] Speaker 03:
I had written already an address and I think it's better to jump to where you're at.

[00:10:54] Speaker 03:
I think your honor has analyzed this issue is precisely right.

[00:10:56] Speaker 03:
Hughes does control and under Hughes the ancillary documents which fall into three categories.

[00:11:04] Speaker 03:
The first are the administrative contracts with each one of the service providers.

[00:11:10] Speaker 03:
There's four of those.

[00:11:11] Speaker 03:
The second are

[00:11:14] Speaker 03:
really getting in the weeds something called the plan matrix which is so council even if so if you agree we all agree that use controls uh... what about the per tentative care guide and the prior authorization list their control by the regulation uh... judge moment a regulation says that if they're so voluminous they can't be attached the s p d all you need to do is reference them in the s p d and provide them for free and that's exactly what happened judge davala made a finding

[00:11:42] Speaker 04:
Is that consistent with 104B, though?

[00:11:45] Speaker 03:
It says you have to furnish it.

[00:11:47] Speaker 03:
It is consistent, because you furnish the SPD, and 104B doesn't.

[00:11:53] Speaker 03:
And under the regulation, I'll give you the regulation so you all can see it in our briefs.

[00:11:59] Speaker 03:
But under the regulation, it allows you to reference it and provide for free.

[00:12:12] Speaker 03:
The one list, the prior approval list, is a computer link.

[00:12:15] Speaker 03:
And so you go to the computer, and you can download it.

[00:12:18] Speaker 03:
It's several hundred pages.

[00:12:20] Speaker 03:
But it's there.

[00:12:21] Speaker 04:
Well, I'm just asking, is that consistent with 104B's command that you have to furnish it?

[00:12:27] Speaker 04:
Are you furnishing something if you say, this is how you go find it yourself?

[00:12:32] Speaker 03:
Yes, you are.

[00:12:33] Speaker 03:
Because the regulation says all you have to do is list it.

[00:12:35] Speaker 04:
Well, I don't care about the regulation.

[00:12:36] Speaker 04:
I'm caring about the text of 104B4.

[00:12:39] Speaker 04:
Is that consistent with furnishing something?

[00:12:42] Speaker 03:
It is, as long as you furnish the SPD that contains information as to how you can access it.

[00:12:47] Speaker 04:
As a textual matter, I'm not so sure.

[00:12:49] Speaker 04:
Well, how do you get there textually?

[00:12:51] Speaker 03:
Oh, you get there textually because it says that you have to produce the SPD and the regulation.

[00:12:55] Speaker 04:
Well, you have to furnish a copy of the SPD.

[00:12:58] Speaker 04:
Yes.

[00:12:59] Speaker 03:
And you furnish the SPD.

[00:13:01] Speaker 03:
And the SPD had in it the reference to computer link to link the prior authorization list.

[00:13:07] Speaker 03:
So you go to a computer.

[00:13:09] Speaker 03:
It also had in it.

[00:13:10] Speaker 04:
But that means you have to go out and get it yourself.

[00:13:12] Speaker 04:
I'm not so sure that's consistent with furnishing it.

[00:13:18] Speaker 03:
The regulation does apply here.

[00:13:20] Speaker 03:
I understand what you're saying about the text.

[00:13:22] Speaker 04:
I mean, the text governs.

[00:13:23] Speaker 04:
I'm sorry.

[00:13:23] Speaker 04:
104B4 governs, not the regulation.

[00:13:28] Speaker 03:
Well, you furnish the SPD, and the SPD has that information in it.

[00:13:33] Speaker 03:
If you didn't do it otherwise, Judge Bumate, you'd have an SPD that was 700 pages.

[00:13:38] Speaker 03:
And that's why the regulation allows you to incorporate that.

[00:13:42] Speaker 03:
And as Judge Davila made a finding, again these are findings of fact and we're applying under clear error, he made a finding that Mr. Zavislak was not prejudiced.

[00:13:52] Speaker 03:
He was able to obtain this information and I asked him that as deposition.

[00:13:55] Speaker 03:
He agreed that he did get both the Preventative Care Guide

[00:13:59] Speaker 03:
and the prior approval list.

[00:14:00] Speaker 00:
And you furnished all of these documents electronically, correct?

[00:14:03] Speaker 00:
We did.

[00:14:04] Speaker 00:
Okay, so either way someone was going into a computer and accessing something electronically.

[00:14:10] Speaker 03:
Correct.

[00:14:10] Speaker 03:
At Mr. Zavislak's request, Judge Barker, we did that electronically.

[00:14:15] Speaker 02:
And in the agreement that you had to

[00:14:19] Speaker 02:
submit this by summary judgment, was reference made to the regulation and how these extensive documents were made available from your perspective pursuant to 104b2?

[00:14:31] Speaker 03:
Well, sure.

[00:14:31] Speaker 03:
It's referenced in the judge's findings.

[00:14:34] Speaker 03:
There's a finding of fact on that, that that's what our obligation was.

[00:14:37] Speaker 03:
And there's also a reference that Mr. Zavalsak was not prejudiced because he easily obtained, for no cost, the information.

[00:14:48] Speaker 02:
In this kind of a situation, you know, of course we've had a lot of changes about Chevron and Our and maybe not Our yet.

[00:14:57] Speaker 02:
Do any of those recent Supreme Court analyses of the deference we give to agencies apply?

[00:15:05] Speaker 02:
Do we even need to consider those?

[00:15:06] Speaker 03:
I don't think so because there's no agency deference here.

[00:15:10] Speaker 03:
Okay.

[00:15:10] Speaker 03:
And Chevron certainly invalidate existing agency regulations such as the one Judge Bumate and I were discussing.

[00:15:19] Speaker 03:
But you turn to the documents that Mr. Zavzlak wants.

[00:15:24] Speaker 03:
First of all, you turn to the documents that were produced.

[00:15:26] Speaker 04:
Can I ask you, do you think Hughes was correctly decided?

[00:15:29] Speaker 04:
Is that a proper interpretation of the text of 104B4?

[00:15:33] Speaker 04:
Yes, I do.

[00:15:34] Speaker 03:
And the reason why is it's a practical approach.

[00:15:39] Speaker 03:
It does reference contracts, but it's a bare reference to contracts.

[00:15:42] Speaker 03:
And Shaver and Hughes applied the

[00:15:47] Speaker 03:
I'm going to botch this, and this is why my nun told me not to become a priest.

[00:15:52] Speaker 02:
Juicium degeneris.

[00:15:53] Speaker 03:
There's a ruler right there on that.

[00:15:58] Speaker 03:
But he applied the Latin statutory interpretation text where you have specific items.

[00:16:03] Speaker 03:
If you read the statute, it's remarkable.

[00:16:06] Speaker 03:
You can read everything you have to provide up until you come to the word contracts.

[00:16:10] Speaker 03:
And Judge Bumate, a plan enters into, as an Orissa lawyer, I know this.

[00:16:16] Speaker 03:
tens if not hundreds of contracts, everything from a lease for the premises to employment agreements to agreements with investment advisors or healthcare advisors in the case of a plan like this.

[00:16:29] Speaker 03:
And so you have to modify that list to see if it has some reference to what's been provided before and also take refuge in Hughes's language that what you need to do, which follows the Firestone Supreme Court case, by the way, as well as legislative history, is give the

[00:16:45] Speaker 03:
participant or beneficiary all the information they need in order to apprise them of their rights under the plan, their obligations.

[00:16:53] Speaker 04:
Can I ask, you know, the end of the statute goes under which the plan is established or operated.

[00:16:59] Speaker 04:
What does that connect to?

[00:17:00] Speaker 04:
What is that referring to?

[00:17:01] Speaker 04:
Is that just to other instruments or is that referring to contracts as well?

[00:17:06] Speaker 03:
I think it refers to contracts as well.

[00:17:08] Speaker 03:
but you also have the gloss from Hughes that you have to give people what they need to know.

[00:17:12] Speaker 04:
I'm just asking textually.

[00:17:13] Speaker 04:
Does it go to trust agreement as well?

[00:17:16] Speaker 03:
I think it does, yes.

[00:17:18] Speaker 04:
And bargaining agreement?

[00:17:19] Speaker 03:
Yes.

[00:17:20] Speaker 04:
And then what about any terminal report?

[00:17:23] Speaker 04:
Is that something different?

[00:17:24] Speaker 03:
It is.

[00:17:25] Speaker 03:
A terminal report would come for a pension plan if you were going to end the pension plan and distribute proceeds or wind it up.

[00:17:38] Speaker 03:
Okay.

[00:17:39] Speaker 02:
Can I change the subject a little bit?

[00:17:41] Speaker 02:
You take Umbridge to the district courts awarding $765 in statutory penalties pursuant to 1132C1B.

[00:17:52] Speaker 02:
Obviously, you won on the huge element of it, the major portion of it.

[00:18:00] Speaker 02:
As you know, the statute,

[00:18:06] Speaker 02:
allows the district court discretionary authority to award such a penalty even though small if it is not in quotes illogical in quotes implausible or without support in the record.

[00:18:17] Speaker 02:
Your opponents say basically what the district judge did was ridiculous here because they ruled against them and then also ask that there be a $765 penalty you disagree with that idea why because there was a

[00:18:35] Speaker 03:
The EBSA, the Department of Labor, pursuant to the statutory authority, issued an order.

[00:18:40] Speaker 03:
You have to remember, this is the middle of the coronavirus pandemic.

[00:18:45] Speaker 03:
And the coronavirus pandemic, as we all remember, we were basically working at our homes for two years.

[00:18:50] Speaker 03:
Netflix was shut down, essentially.

[00:18:52] Speaker 03:
The Santa Clara Department of Health issued an order shutting Netflix down.

[00:18:57] Speaker 03:
It had a very skeleton crew there to respond to mail.

[00:19:05] Speaker 03:
using an email or alerting Netflix, even contacting the Department of the Benefits Department.

[00:19:14] Speaker 03:
And again, the record showed that Mrs. Avazelak's wife was a very highly placed executive at Netflix.

[00:19:19] Speaker 03:
She was making well over a million dollars in compensation.

[00:19:22] Speaker 03:
She was a director of the company, not a corporate director, but the title director.

[00:19:28] Speaker 03:
Instead of using those avenues to get the documents, he sends a snail mail in the middle of the pandemic

[00:19:34] Speaker 03:
to Netflix when the corporations closed.

[00:19:38] Speaker 03:
But more importantly, the Department of Labor notice, which is again statutory, said that all deadlines for Title I, which included 104, were excused.

[00:19:51] Speaker 03:
You just had to act reasonably.

[00:19:53] Speaker 03:
And the court in imposing these sanctions, although the court made several references to it during the case, did not respond and explain how that applied.

[00:20:02] Speaker 03:
Furthermore, the court made a finding that we acted in good faith.

[00:20:06] Speaker 03:
Mrs. Avzalak said repeatedly, we're in bad faith, and the court made a specific finding, which is in the findings, 176, that Netflix acted in good faith in handling this matter.

[00:20:20] Speaker 02:
Under the circumstances, it was illogical for the penalty to be awarded, right?

[00:20:25] Speaker 03:
It was, but more importantly, let's look at what happened when Netflix got attention.

[00:20:29] Speaker 03:
Mr. Zavislak then used the method that was bound to get Netflix attention, which is serving on the corporate designated agent for service, CT Corporation.

[00:20:38] Speaker 03:
That got the in-house legal department involved.

[00:20:41] Speaker 03:
The in-house legal department immediately sent an email to Mr. Zavislak saying, what is your

[00:20:46] Speaker 03:
relationship with the plan, because his name didn't appear.

[00:20:49] Speaker 03:
He's through his wife who has a Chinese surname.

[00:20:52] Speaker 03:
He explained, and they said, fine, we'll get you the documents.

[00:20:55] Speaker 03:
And they did that within eight days.

[00:20:56] Speaker 04:
Can I ask if there are other consequences to that award?

[00:21:00] Speaker 04:
Because it feels like this argument costs more than a lot of penalty.

[00:21:04] Speaker 03:
Well, it's a process fee.

[00:21:05] Speaker 03:
I mean, we were going to pay it and then fight an attorney's fee award down below.

[00:21:09] Speaker 04:
So they would get attorney's fees?

[00:21:11] Speaker 03:
Yeah, they might get attorney's fees.

[00:21:12] Speaker 03:
I'm not going to concede that.

[00:21:13] Speaker 03:
We would argue, of course, that we were really the prevailing party.

[00:21:17] Speaker 03:
But that's why we cross appealed.

[00:21:19] Speaker 03:
We're not, I mean, we can afford $700 for heaven's sakes, but we don't think that should have been awarded.

[00:21:24] Speaker 03:
And we think we were indeed, I mean, that's also stung a little bit, given the findings that we were acting in good faith and how this all came about.

[00:21:33] Speaker 02:
So the whole award is, from your perspective, stunning in light of the good faith finding and the fact that there was a COVID.

[00:21:42] Speaker 02:
Yes, the notice.

[00:21:43] Speaker 02:
And the DO, Department of Labor said, you don't have to

[00:21:46] Speaker 02:
comply with these deadlines.

[00:21:47] Speaker 03:
Right.

[00:21:48] Speaker 02:
You have to act reasonably, and that's what we did.

[00:21:50] Speaker 00:
And under the labor regulation, you have to act in good faith, and then you have to furnish the documents when it's practicable, right?

[00:21:59] Speaker 00:
Right.

[00:21:59] Speaker 00:
And you're essentially saying that, well, the district court never made a finding that you acted later than was practicable, right?

[00:22:08] Speaker 00:
Right, acted in bad faith.

[00:22:08] Speaker 00:
The good faith thing is very clear, but you accept that practicable is a second part of the test, right?

[00:22:13] Speaker 00:
We do.

[00:22:13] Speaker 00:
And it's just, you're saying it wasn't found here.

[00:22:15] Speaker 03:
It was not, but we did act and practical.

[00:22:18] Speaker 03:
I mean, sending a letter when your surname is different on the plan to a corporation that's dead in effect.

[00:22:26] Speaker 03:
I mean, these are the times when I was practicing law of my house and when the upper flat, my wife was working downstairs and the dog would shuttle between the two.

[00:22:33] Speaker 03:
I mean, the coronavirus was something I hope we never see again.

[00:22:37] Speaker 03:
But sending a letter is almost guaranteed not to gain one's attention.

[00:22:41] Speaker 02:
I take it your wife is not registered with CT Corp.

[00:22:44] Speaker 03:
No, no, no.

[00:22:47] Speaker 03:
She has other attributes, but no.

[00:22:51] Speaker 03:
So Judge Barker, you hit the nail on the head.

[00:22:55] Speaker 03:
It's exactly right.

[00:22:56] Speaker 03:
And there went those findings and it stung because we acted in good faith.

[00:23:00] Speaker 03:
And there's collateral consequences here.

[00:23:02] Speaker 00:
I mean, we think- Could I call, unless I'm interrupting, could I circle back to the first issue and ask,

[00:23:10] Speaker 00:
If you could explain the relationship, if any, between the Section 104 disclosure requirement under ERISA and any separate disclosure requirement for claims administration.

[00:23:21] Speaker 00:
Absolutely.

[00:23:22] Speaker 00:
I think that's maybe Section 503.

[00:23:23] Speaker 00:
503.

[00:23:25] Speaker 03:
Under 503, you have to disclose all the documents you relied on in adjudicating a claim.

[00:23:31] Speaker 03:
And there's separate regulations, Your Honors, that implement those regulations.

[00:23:36] Speaker 03:
They're very detailed.

[00:23:37] Speaker 00:
So do you think that the 104

[00:23:40] Speaker 00:
disclosure obligation is potentially less broad in covering documents than 503?

[00:23:46] Speaker 00:
Absolutely.

[00:23:47] Speaker 03:
And I think some of the information that he says that Mr. Zavislak states was available in the claims administration agreements was really 503.

[00:23:56] Speaker 03:
For example, he seizes on a phrase, a single phrase in a four-page statement of the benefits in the VSP, the vision agreement that indicates appeals have to be handled this way.

[00:24:09] Speaker 03:
Well,

[00:24:10] Speaker 03:
If there was a claim, I could understand that, but the VSP booklet that's already given, that was given by Netflix in response to its 104 production.

[00:24:22] Speaker 00:
You have limited time to put a point on it.

[00:24:24] Speaker 00:
I'm wondering if that doesn't hurt your argument at least a little bit, that isn't a purpose of the 104 disclosure that a beneficiary shouldn't have to wait until they're making a claim and haven't incurred a cost?

[00:24:36] Speaker 00:
to know what their coverage is?

[00:24:38] Speaker 00:
No.

[00:24:39] Speaker 00:
No, he knew what his coverage was.

[00:24:41] Speaker 00:
Do you think it's odd in any way that 104 would not require disclosure of the same documents that would later govern once a beneficiary makes a claim, whether they get some claim to benefit?

[00:24:54] Speaker 03:
Not at all.

[00:24:54] Speaker 03:
Let me explain it another way, which is it's undisputed that to interpret the plan and to implement

[00:25:01] Speaker 03:
The Netflix administrator only relied on the seven documents that was given to Mr. Zavislak.

[00:25:06] Speaker 03:
They didn't look outside those documents.

[00:25:09] Speaker 03:
And those documents also are so robust, we present expert testimony on it because expert testimony can show what the fiduciary level of behavior is.

[00:25:19] Speaker 03:
Those documents are so robust that our experts said these are some of the finest documents I've ever seen in my 35 years of practice.

[00:25:26] Speaker 03:
I had the same reaction to them.

[00:25:28] Speaker 03:
Collective Health SPD is 102 pages.

[00:25:32] Speaker 03:
If you read it, and Mr. Zavzalak admitted his deposition, he did not read it.

[00:25:36] Speaker 03:
He read little bits and pieces of it, he said.

[00:25:39] Speaker 03:
That's out of page 30 of his deposition.

[00:25:40] Speaker 03:
If you read it, you will know virtually anything you need to know about this health plan and what your rights are.

[00:25:46] Speaker 03:
I see my time has expired, Your Honors.

[00:25:48] Speaker 02:
Let me ask my colleague whether either has additional questions.

[00:25:51] Speaker 02:
Thank you for your argument.

[00:25:52] Speaker 02:
Thank you, Your Honor.

[00:25:55] Speaker 02:
All right, Mr. Balloon, you have some rebuttal time.

[00:26:01] Speaker 01:
Thank you, Judge Smith.

[00:26:03] Speaker 01:
I'd like to talk very briefly about what Shaver and Becker say about Hughes.

[00:26:11] Speaker 01:
Shaver states that the statute mentions only legal documents that describe the terms of the plan, its financial status, and other documents that restrict or govern the plan's operation.

[00:26:24] Speaker 01:
So Shaver is clear that Hughes was focused on the other instruments clause and that all of the documents that must be provided are the type that govern and restrict the plan's operation, which include contracts.

[00:26:37] Speaker 01:
And then Becker comes along and says, rather the en banc panel limited the other instruments category to those similar in nature to the documents specifically listed in 1024B4.

[00:26:48] Speaker 01:
So Becker is recognizing that Hughes was really talking about the other instruments and trying to, because catch-all phrases can be very broad, and so Hughes was saying, look, the other instruments clause isn't any more broad

[00:27:03] Speaker 01:
than the items previously stated in the statute which includes contracts.

[00:27:08] Speaker 04:
So by definition... I guess that's not how I read the statute.

[00:27:11] Speaker 04:
I read and was discussing with your colleague is that as I read it, it's the bargaining agreement, trust agreement, contract or other instruments under which the plan is established or operated.

[00:27:23] Speaker 04:
So that last modifier goes to everything before it up to the bargaining agreement.

[00:27:28] Speaker 01:
Perhaps I'm not being clear, Judge Bumate, I completely agree with you.

[00:27:32] Speaker 01:
Okay.

[00:27:32] Speaker 01:
Every item in that list is modified by the phrase under which the plan is established or operated.

[00:27:37] Speaker 01:
And so, I mean, my colleague, my friend mentioned the idea of lease agreements and, you know, perhaps janitorial agreements and other things.

[00:27:46] Speaker 01:
None of those are producible under 1024B4, under 104B4.

[00:27:49] Speaker 01:
We're talking about contracts under which the plan itself is established or operated.

[00:27:53] Speaker 01:
And those claims administration agreements,

[00:27:55] Speaker 01:
do establish the plan because they talk about amendment procedures, payment procedures, allocation of fiduciary duties.

[00:28:01] Speaker 04:
Yeah, but then we have to give the gloss that Hughes did, which is they have to be about entitlement to benefits.

[00:28:07] Speaker 01:
No, the gloss on Hughes is that they have to give information about the plan or benefits.

[00:28:13] Speaker 01:
They have to enable a person to... The relevant documents are those documents that provide individual participants with information about the plan

[00:28:23] Speaker 01:
and benefits.

[00:28:24] Speaker 01:
It's not just benefits.

[00:28:25] Speaker 01:
It's not just what's on the SPD.

[00:28:27] Speaker 01:
It's also what constitutes the plan itself.

[00:28:31] Speaker 01:
So if your honors would give me the allowance here, I'd like to talk about the VSPEOC, the evidence of coverage.

[00:28:41] Speaker 01:
The evidence of coverage, this is on SCR 479, states the evidence of coverage constitutes only a summary of the vision plan.

[00:28:49] Speaker 01:
The vision plan document, meaning the group vision care plan,

[00:28:52] Speaker 01:
must be consulted to determine the exact terms and conditions of coverage.

[00:28:57] Speaker 01:
So someone, Mr. Zavislak or someone else looking at their benefits on the SPD necessarily has to go back to the group contract in order to be assured that whatever benefits they have are actually the ones that they're looking at because this document itself disclaims itself as governing.

[00:29:21] Speaker 01:
I'm mature.

[00:29:22] Speaker 02:
With respect, you're a smart lawyer.

[00:29:24] Speaker 02:
Lawyers can read these things and fall asleep every night.

[00:29:29] Speaker 02:
Hughes to me is the quintessential

[00:29:33] Speaker 02:
Hey, this is what the average worker looks at.

[00:29:37] Speaker 02:
They don't have the slightest idea about these collateral documents.

[00:29:41] Speaker 02:
And what you need to give them is what the ordinary person will understand about his or her plan.

[00:29:47] Speaker 02:
That's how I read Hughes.

[00:29:49] Speaker 02:
You've taken off the gloss of it.

[00:29:52] Speaker 02:
And you basically said, no, they really, really, really need to read these complex documents.

[00:29:56] Speaker 02:
I think your friend said that in the aggregate, there were like 700 pages.

[00:30:01] Speaker 02:
Even your client said he didn't read

[00:30:03] Speaker 02:
but pieces of the booklet.

[00:30:05] Speaker 02:
So I'm struggling with how Becker really changes anything in that.

[00:30:10] Speaker 02:
Hughes, you may not like Hughes, but that's what I understand our court did.

[00:30:15] Speaker 02:
It was, if you will, it was the praise of the common man.

[00:30:21] Speaker 02:
I think that's what they were shooting for, and you're doing just the opposite.

[00:30:25] Speaker 02:
What's your response to that?

[00:30:27] Speaker 01:
Well, Your Honor, I don't think I'm doing the opposite.

[00:30:29] Speaker 01:
What I'm saying is that Hughes commanded

[00:30:32] Speaker 01:
administrators to give documents that would enable beneficiaries to understand the plan or benefits.

[00:30:38] Speaker 01:
It's clear.

[00:30:39] Speaker 01:
It's not just saying benefits.

[00:30:40] Speaker 01:
The gloss on Hughes is really about the fact that the plaintiffs or the appellants were asking for a very sort of outer limits document inside the plan that was not plan governing.

[00:30:51] Speaker 01:
And this was a way of cabining the other instruments clause so that there wouldn't be abuse of that clause.

[00:30:57] Speaker 01:
But it wasn't saying that

[00:30:59] Speaker 01:
that just because a common man might not be able to understand a contract, that another common man who requests it isn't entitled to that contract.

[00:31:06] Speaker 01:
And in fact, he is.

[00:31:08] Speaker 02:
Any other questions by my colleagues?

[00:31:10] Speaker 02:
Thanks to both counsel for your arguments.

[00:31:12] Speaker 02:
We appreciate it.

[00:31:13] Speaker 02:
The case just argued, Zavislak versus Netflix is submitted.