“Good Reason” as an Ambiguity Trigger: Discretionary Review Under Anadarko’s Change-of-Control Severance Plan

1. Introduction

Miller v. Anadarko Petroleum Corporation Change of Control Severance Plan; Anadarko Petroleum Corporation Health and Welfare Benefits Administrative Committee is an ERISA benefits case arising from Anadarko’s acquisition by Occidental Petroleum Corporation (“Oxy”) in August 2019—a “Change of Control” under Anadarko’s Anadarko Petroleum Corporation Change of Control Severance Plan (the “Plan”).

Brad Miller, a long-tenured Anadarko employee, alleged that post-merger changes materially diminished his responsibilities and reduced his compensation, culminating in a “Good Reason” resignation and entitlement to severance benefits. The Plan’s claims administrator (the “Committee”) denied his claim, and the district court granted summary judgment for the Plan and Committee. On appeal, the Fifth Circuit addressed two central issues:

  • Standard of review: whether the Committee’s denial should be reviewed de novo or for abuse of discretion.
  • Merits: whether the Committee abused its discretion in finding no “Good Reason” event (no material diminution of duties; no material salary reduction).

2. Summary of the Opinion

The Fifth Circuit affirmed summary judgment for Anadarko’s Plan and Committee. It held:

  1. Abuse-of-discretion review applies because the Plan grants the Committee interpretive discretion and because “Good Reason,” as applied, is inherently fact-bound and ambiguous (“material and adverse” diminutions; “material” salary reductions).
  2. The Committee did not abuse its discretion. Substantial evidence supported its determination that Miller’s post-merger changes did not amount to “Good Reason.” The Committee reasonably addressed (rather than ignored) Miller’s allegations about retirement pressure, changes to trade-association authority, and changes in governance meetings/leadership access.

3. Analysis

3.1 Precedents Cited

Standards governing ERISA judicial review

  • Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (1989): The controlling framework. Courts apply de novo review unless the plan confers discretionary authority to determine eligibility or construe plan terms; if it does, the administrator’s decision is reviewed for abuse of discretion.
    Influence here: The panel used Firestone as the gateway question—does the Plan grant discretion?—and answered yes based on the Plan’s text.
  • Metro. Life Ins. v. Glenn, 554 U.S. 105 (2008), cited via Atkins v. Bert Bell/Pete Rozelle NFL Player Ret. Plan, 694 F.3d 557 (5th Cir. 2012): Confirms that when discretion exists, courts uphold eligibility determinations unless there is an abuse of discretion; Glenn also is known for conflict-of-interest principles (though the Miller panel did not focus on conflict analysis).
    Influence here: Reinforced that discretionary plans receive deferential review.
  • Green v. Life Ins. Co. of N. Am., 754 F.3d 324 (5th Cir. 2014), quoting Dutka ex rel. Est. of T.M. v. AIG Life Ins., 573 F.3d 210 (5th Cir. 2009): The panel relied on these cases to emphasize deference to administrators’ factual determinations in benefits reviews and to frame standard-of-review analysis as a legal question reviewed de novo on appeal.
    Influence here: Supported the Fifth Circuit’s approach that, even when courts decide the standard of review anew, administrator factfinding is not freely reweighed.
  • Dialysis Newco, Inc. v. Cmty. Health Sys. Grp. Health Plan, 938 F.3d 246 (5th Cir. 2019): Confirms de novo appellate review of summary judgment in ERISA cases while applying the same standards as the district court.
    Influence here: Established the procedural review posture.

Substantial evidence and arbitrariness in abuse-of-discretion review

  • George v. Reliance Standard Life Ins., 776 F.3d 349 (5th Cir. 2015): A plan administrator abuses discretion when its decision is not based on evidence that clearly supports the denial, even if the evidence is disputable.
    Influence here: Provided the “evidence-based” guardrail; the panel used it to validate the Committee’s reliance on witness interviews and HR information.
  • Cloud v. Bert Bell/Pete Rozelle NFL Player Ret. Plan, 95 F.4th 964 (5th Cir. 2024), cert. denied, 145 S.Ct. 271 (2024): Defines “substantial evidence” and articulates the “rational connection” test—decisions are arbitrary only if lacking rational connection to known/found facts and the evidence.
    Influence here: The panel repeatedly invoked Cloud to characterize the Committee’s assessment as within a “continuum of reasonableness.”
  • Fed. R. Civ. P. 56(a): Summary judgment standard (“no genuine dispute as to any material fact”).
    Influence here: Framed disposition at the summary-judgment stage, though the core work was ERISA deference analysis rather than factfinding by the court.

Prior interpretations of the same Anadarko Plan (and cross-circuit tension)

  • Gift v. Anadarko Petroleum Corp. Change of Control Severance Plan, No. 23-50862, 2024 WL 4689051 (5th Cir. Nov. 6, 2024) (per curiam): An unpublished Fifth Circuit decision concluding abuse-of-discretion review was correct under the same Plan.
    Influence here: The panel treated Gift as supportive (though nonbinding), bolstering its reading of the Plan’s discretionary language.
  • Hoff v. Amended & Restated Anadarko Petroleum Corp. Change of Control Severance Plan, No. 23-1361, 2025 WL 400517 (10th Cir. Feb. 4, 2025): An unpublished Tenth Circuit decision applying de novo review because the Plan’s discretion clause was framed as limited to ambiguous/unclear/omitted terms and, there, neither party argued “Good Reason” was ambiguous.
    Influence here: The Fifth Circuit distinguished Hoff on two grounds: (1) in Miller the parties disputed meaning/application of “Good Reason,” and (2) dictionary definitions of “material” and “adverse” do not eliminate the judgment-laden, fact-dependent nature of applying those standards.

Interpretation methodology

  • Antonin Scalia & Bryan A. Garner, Reading Law: The Interpretation of Legal Texts (2012): Cited for the interpretive principle that courts should avoid readings that render plan provisions meaningless.
    Influence here: Helped the panel reject Miller’s attempt to cabin discretion to ambiguity determinations in a way that would nullify the Plan’s anti-invocation clause (i.e., that Section 9.3 “may not be invoked” to compel an interpretation inconsistent with the Committee’s interpretation).

3.2 Legal Reasoning

(A) Why abuse-of-discretion review applied

The core interpretive move was textual: Section 9.3(g) states the Plan “shall be interpreted by the Committee,” and it grants discretion to interpret or construe ambiguous, unclear, or implied (omitted) terms “in any fashion” the Committee deems appropriate “in its sole judgment.” The Plan further instructs that the Committee’s findings/interpretations/decisions “shall not be given de novo review” and “shall be upheld unless clearly arbitrary or capricious.”

Miller attempted to narrow this discretion by arguing that “Good Reason” is unambiguous and thus outside the clause. The panel rejected that argument for two independent reasons:

  1. Avoiding surplusage: The Plan’s statement that Section 9.3 cannot be invoked to require an interpretation inconsistent with the Committee’s interpretation would be undermined if courts could freely substitute their own (de novo) interpretation whenever a participant labels a term “unambiguous.”
  2. “Good Reason” is judgment-laden in application: Even with a definition, deciding whether duties were “materially and adversely diminished” or salary “materially reduced” requires comparative evaluation, context, and the weighing of multiple factors. That is, the Plan uses open-textured standards rather than bright-line rules.

(B) Why the Committee did not abuse its discretion on “Good Reason”

Under the Fifth Circuit’s abuse-of-discretion framework, the question was not whether the court would have reached the same conclusion, but whether the Committee’s conclusion was supported by “substantial evidence” and bore a “rational connection” to the record.

The panel rejected each asserted deficiency:

  • Kershaw retirement/pension conversation: The Committee did not ignore this allegation; it consulted HR information, deemed age-discrimination claims unsubstantiated, and concluded further investigation was not required. The panel characterized this as within the permissible “continuum of reasonableness” under Cloud v. Bert Bell/Pete Rozelle NFL Player Ret. Plan.
  • Trade association authority: The Committee reviewed a letter from prior supervisor Allen Sanders describing the importance of trade organization relationships pre-merger. The Committee also interviewed Miller’s Oxy supervisor Kershaw, who stated those relationships were reassigned because they aligned with Tom Janiszewski’s responsibilities and were immaterial to Miller’s role; additionally, the relationships were discontinued due to the pandemic. The panel treated the Committee’s choice between competing narratives as non-arbitrary because supported by evidence and reasoning.
  • Leadership meetings and “exposure” vs. authority: The Committee interviewed multiple witnesses (including Sanders and Patrick McGrievey) and credited testimony that Miller’s responsibilities were primarily regulatory, and that after Oxy’s reorganization (replacing the Gulf of America Management Committee with the broader Executive Leadership Team), Miller’s participation could be seen as “more expansive.” Because witness testimony supported the Committee’s conclusion, the denial satisfied George v. Reliance Standard Life Ins. and Cloud.

In sum, the panel treated the dispute as a classic ERISA deference case: Miller presented a plausible view of a career diminution, but the Committee assembled enough record support to remain within the bounds of reasoned decision-making.

3.3 Impact

Although the opinion is “not designated for publication,” it still signals several practical and doctrinal consequences within Fifth Circuit ERISA litigation:

  • “Good Reason” standards invite deference: When a plan defines “Good Reason” using evaluative terms (“material,” “adverse”), courts are likely to treat application as inherently discretionary and fact-intensive—supporting abuse-of-discretion review when plan language grants interpretive authority.
  • Plan drafting lessons: The Plan’s additional anti-de-novo language (“shall not be given de novo review”) and its “may not be invoked” clause helped foreclose arguments that discretion is limited to a narrow subset of ambiguities. Employers and plan sponsors may view this as a template to reinforce deferential review.
  • Cross-circuit tension remains: The Fifth Circuit’s treatment contrasts with the Tenth Circuit’s approach in Hoff v. Amended & Restated Anadarko Petroleum Corp. Change of Control Severance Plan, where the absence of an argued ambiguity supported de novo review. Miller suggests that, at least in the Fifth Circuit, “Good Reason” disputes will commonly be framed as involving ambiguous application—pushing cases into abuse-of-discretion posture.
  • Administrative record-building matters: The Committee’s use of interviews (HR, supervisors, relevant managers) was repeatedly cited as “substantial evidence.” Administrators who document comparative role expectations pre/post change of control and explain organizational restructuring rationales are better positioned to withstand review.

4. Complex Concepts Simplified

  • ERISA § 502(a)(1)(B) (29 U.S.C. § 1132(a)(1)(B)): The primary vehicle for a participant to sue to recover benefits allegedly due under the plan’s terms.
  • ERISA § 404(a) (29 U.S.C. § 1104(a)) fiduciary duty: Requires plan fiduciaries to act prudently and loyally. In practice, many “fiduciary duty” claims overlap with benefits-denial disputes but can be limited by remedial doctrines depending on the relief sought.
  • De novo review vs. abuse-of-discretion review:
    • De novo: the court decides eligibility anew, giving no deference to the administrator’s interpretation.
    • Abuse of discretion: the court defers if the administrator’s decision is reasonable and supported by substantial evidence, even if the court might have decided differently.
  • “Substantial evidence”: Not “more likely than not,” but enough relevant evidence that a reasonable person could accept it as adequate to support the decision.
  • “Good Reason” in change-of-control plans: A contractual/plan-defined set of conditions allowing an employee to resign and still receive severance—often requiring a “material” adverse change in role, pay, location, or reporting structure within a specified time window.

5. Conclusion

Miller reinforces a Fifth Circuit-friendly pathway to deferential review in ERISA change-of-control severance disputes: when a plan grants interpretive discretion and uses evaluative standards like “material” and “adverse,” courts will often treat “Good Reason” determinations as ambiguous in application and uphold administrator decisions supported by a minimally robust evidentiary record. The decision also highlights a continuing interpretive divide suggested by Hoff v. Amended & Restated Anadarko Petroleum Corp. Change of Control Severance Plan, underscoring that how parties frame “ambiguity” may be outcome-determinative in standard-of-review battles.