source: Caselaw Access Project

author: ' WILKINS, Circuit Judge:

license: Public Domain

text:
    AMERICAN POSTAL WORKERS UNION, AFL-CIO, Petitioner v. POSTAL REGULATORY COMMISSION, Respondent United States Postal Service, Intervenor
    No. 15-1156
    United States Court of Appeals, District of Columbia Circuit.
    Argued October 20, 2016
    Decided November 29, 2016

      Michael T. Anderson, Boston, MA, argued the cause for petitioner. With him on the brief were Lorrie E. Bradley Washington, DC, and Jeremiah Fugit.
    Jeffrey E. Sandberg, Attorney, U.S. Department of Justice, argued the cause for respondent. With him on the brief were Benjamin C. Mizer, Principal Deputy Assistant Attorney General, Michael S, Raab, Attorney, David A. Trissell, General Counsel, Postal Regulatory Commission, and Christopher Laver, Deputy General Counsel. ■
    Before: WILKINS, Circuit Judge, and EDWARDS and WILLIAMS, Senior Circuit Judges.
   ' WILKINS, Circuit Judge:

The American Postal Workers Union (the “Union”) petitions this Court for review of the Postal Regulatory Commission’s (“PRC”) denial of its December 13, 2013 amended complaint. In its amended complaint, the Union alleged thát the United States Postal Service failed to comply with First-Class Mail service standards. See Am. Compl. ¶20. Upon review, the PRC dismissed the Union’s amended complaint for three reasons. First, the PRC explained that the service standards set forth in 39 C.F.R. § 121.1 are service “expectations” and not service “requirements.” U.S. Postal Regulatory Comm’n, Order No. 2512, Order Granting Motion for Reconsideration and Granting Motion to Dismiss 9 (May 27, 2015) [hereinafter PRC Order No. 2512]; see id. at 14. Second, the PRC ruled it remedied the Postal Service’s noncompliance when it instructed the Postal Service to improve service compliance in the Annual Compliance’Determination. Id. at 17-20. Third, the PRC noted that the Union’s amended complaint failed to raise new or material issues of fact or law. Id. at 13-17. For the following reasons, we deny the Union’s petition.

I.

In 2006, Congress enacted the Postal Accountability and Enhancement Act (“PAEA”) to reform postal operations and mitigate the U.S. Postal Service’s financial difficulties. See Postal Accountability & Enhancement Act, Pub. L. No. 109-435, 120 Stat. 3198 (2006). Congress concluded that the Postal Service maintained more facilities than economically necessary, and instructed the Postal Service to devise a strategy for eliminating excess processing capacity. Id. § 302(c)(1)(B), 120 Stat. at 3219. As part of this mandate, Congress created the PRC to ensure postal accountability and oversee postal functions and facility reductions. See 39 U.S.C. § 501.

The PAEA required the Postal Service to establish a set of service standards for market-dominant products, including First-Class Mail. Id. § 3691(a). These standards must be devised in conjunction with the PRC, and serve as enforceable benchmarks published in the Code, of Federal Regulations. Id.-, see also U.S. Postal Regulatory Comm’n, Order No. 465, Order Establishing Final Rules Concerning Periodic Reporting of Service Performance Measurements and Customer Satisfaction 5 (May 25, 2010). The service standards are designed to achieve the general policy goals of mail reliability and speed, and specify the amount of time within which a customer may ordinarily expect his mail to be delivered. 39 U.S.C. § 3691(b)(1). The Postal Service promulgated its initial service standards in 2007, and has revised those standards periodically. Id. § 3691(a).

As relevant to this case, the Postal Service issued a final rule on May 25, 2012, altering its existing service standards in conjunction with the Mail Processing Network Rationalization (“MPNR”) initiative. The MPNR initiative proposed Nosing more than 229 mail processing facilities in two phases for a forecasted net savings of $2.1 billion. See U.S. Postal Regulatory Comm’n, No. N2012-1, Advisory Opinion on Mail Processing Network Rationalization Changes 1, 28, 46 (Sept. 28, 2012) [hereinafter MPNR Advisory Opinion]; see generally Revised Service Standards . for Market-Dominant Mail Products, 77 Fed. Reg. 31,190, 81,191-92 (May 25, 2012). During Phase 1,, which was scheduled to last from July 1, 2012 through February 2013, the Postal Service proposed closing approximately 140 plants. 77 Fed. Reg. at 31,192; MPNR Advisory Opinion, supra, at 46. Phase 2, which would result in the closure of the remaining plants, was scheduled to begin in February 2014. 77 Fed. Reg. at 31,192; MPNR Advisory Opinion, supra, at 46. The post-February -2014 service standards for First-Class Mail are summarized as follows:

• Overnight Mail: An overnight service standard will be applied-to intra-Sec-tional Center Facility (“SCF”) domestic Presort First Class Mail pieces properly accepted at the SCF before the day-zero Critical Entry Time (“CET”). 77 Fed. Reg. at 31,194. The overnight standard will.no longer apply to mail sent by retail customers, regardless of location. Id.
• Two-Day Mail: A two-day service standard will be applied to all inter-SCF domestic First-Class Mail pieces that are properly accepted before the day-zero CET if the drive time between the origin Processing and Distribution Center or Facility and destination SCF is six hours or less. Id.
• Three-, Four-, and Five-Day Mail: The three-, four-, and five-day service standards remain unchanged. A three-day service standard will be applied to all domestic First-Class Mail pieces properly accepted before the day-zero CET if the overnight and two-day service standards do not apply and additional origin/destination criteria are satisfied. Id. at 31,194-95. A four-day service standard will apply to domestic First-Class Mail pieces properly accepted before the day-zero CET if the overnight, two-day, and three-day service standards do not apply and additional origin/destination criteria are satisfied. 39 C.F.R. § 121.1(d) (2014). A five-day service standard will apply to “all remaining domestic First-Class Mail pieces properly accepted before the day-zero CET.” Id. § 121.1(e).

These new service standards shifted a substantial portion of mail previously subject to the overnight standard to either the two-, three-, four-, or five-day service standards, and further transferred a large volume of the two-day mail to the three-, .four-, and five-day service standards. PRC Order No. 2512, supra, at 18; MPNR Advisory Opinion, supra, at 7; U.S. Postal Regulatory Comm’n, Annual Compliance Determination Report Fiscal Year 2013 105 (Mar, 27, 2014) [hereinafter ACD FY 2013],

The PAEA further directs the Postal Service to develop a “plan” for meeting its service standards, including the establishment of “performance goals” for mail delivery. PAEA § 302(a), (b)(1), 120 Stat. at 3219; see also U.S. Postal Serv., Postal Accountability and Enhancement Act § 302 Network Plan (June 2008), available at https://about.usps.com/postal-act-2006/ postal-service-networkplan.pdf [hereinafter Network „ Plan]. In accordance with this directive, the Postal Service created a set of “performance targets” to track its success in meeting its service standards. See Network Plan, supra, at 7. For fiscal year 2013, the target on-time delivery rates were 96.7%, 95.1%, and 95.0% for mail subject to overnight, two-day, and three-to five-day service standards, respectively. U.S. Postal Regulatory Comm’n, Annual Compliance Determination Report Fiscal Year 2014 96 tbl. V-4 (Mar. 27, 2015) [hereinafter ACD FY 2014]. The targets increased for fiscal year 2014 to 96.8%, 96.5%, and 95.25% for mail subject to overnight, two-day, and three- to five-day service standards, respectively. Id.

To evaluate the Postal Service’s compliance with its service standards, the PRC must issue an Annual Compliance Determination (“ACD”) report for each fiscal year. See 39 U.S.C. § 3653(b). If the PRC finds noncompliance, it must take appropriate action to remedy the noncompliance. Id. § 3653(c). During Phase 1 of the MPNR initiative, the PRC concluded that First-Class Mail presorted letters and postcards met or exceeded all annual service performance targets for fiscal year 2013. ACD FY 2013, supra, at 99, 105. Comparably, First-Class Mail single-piece letters and postcards met or exceeded service performance goals for the overnight and two-day service targets, but did not reach the service performance targets for the three- to five-day mail category. Id. at 105. First-Class Mail flats and parcels, however, underperformed and failed to reach any of their on-time delivery performance goals for the third year in a row. Id. at 99,104,106-07.

The ACD results for fiscal year 2014 showed a continual decline in Postal Service performance. While First-Class Mail presorted letters and postcards subject to overnight or two-day service standards continued to meet their applicable service goals, all remaining First-Class Mail products failed to satisfy them service requirements,' including: (1) single-piece letters and postcards subject to overnight, two-day, and three- to five-day delivery; (2) pre-sorted letters and postcards subject to three- and five-day delivery; (3) flats; (4) parcels; (5) inbound letter post; and (6) outbound single-piece international letters. ACD FY- 2014, supra, at 87-88 tbls. V-1, V-2. Although the decreased service performance occurred during Phase 2 of the MPNR initiative, the Postal Service linked its noncompliance to severe winter storms that plagued the first and second quarters of fiscal year 2014. Id. at 88. After reviewing the data, the PRC concluded that winter storms likely impacted service delivery times, but nonetheless cautioned that “weather cannot consistently be employed as a catchall excuse for failing to meet performance standards.” Id. at 104. The PRC further instructed that it “expects service performance to improve in FY 2015.” Id. Regarding First-Class Mail flats specifically, the PRC directed the Postal Service to “improve service for First-Class Mail Flats in FY 2015 or to provide an explanation in the FY 2015 [Annual Compliance Report] for why efforts to improve service performance results ... have been ineffective and detail what changes it plans to make to improve service performance.” Id.

Notwithstanding the PRC’s responsibility to publish ACD reports, any interested person who believes the Postal Service is not operating in compliance with its regulatory or statutory requirements may file a complaint with the PRC. 39 U.S.C. § 3662(a). Within 90 days after receiving a complaint, the PRC must either issue an order -dismissing the complaint, id. § 3662(b)(1)(A)(ii), or begin proceedings on any complaint that “raises material issues of fact or law,” id. § 3662(b)(1)(A)(i). If the PRC finds a complaint to be justified after discovery and appropriate hearings, it shall order the Postal Service to “take such action as the Commission considers appropriate in order to achieve compliance with the applicable requirements and to remedy the effects of any noncompliance.” Id. § 3662(c). In cases of deliberate noncompliance by the Postal Service, the PRC may additionally require the Postal Service to pay a fine. Id. § 3662(d).

Given the dual remedies available through the ACD and complaint process, the Newspaper Association of America expressed concern several years ago that a finding of compliance or noncompliance in an ACD could moot a pending complaint on the same issue. U.S. Postal Regulatory Comm’n, Order No. 196, Order Establishing Rules for Complaints and Rate or Service Inquiries 21 (Mar. 24, 2009) [hereinafter Rules for Complaints]. The PRC responded by noting that Congress contemplated this exact issue and addressed it in the statute. Id.' at 22. Specifically, section 3653(e) creates a rebuttable presumption of compliance by the Postal Service if the PRC issues a timely written determination of compliance in an ACD. 39 U.S.C. § 3663(e); see Rules for Complaints, supra, at 22-23. If Congress had wished for an ACD to render a complaint moot, it would have created a non-rebutta-ble presumption in section 3663(e). Rules for Complaints, supra, at 23. The dual enforcement scheme of ACD reports and complaints is necessary because ACD proceedings are completed in short, fixed timeframes and are not subject to the same opportunities for contesting evidence in adversarial proceedings. Id. Thus, “Commission findings in an annual compliance determination are relevant to a pending complaint proceeding, but are not necessarily dispositive of those issues.” Id.

II.

On September 5, 2013, the Union submitted a complaint to the PRC alleging that the Postal Service violated the requirements of 39 U.S.C. §§ 3661 and 3691. See generally Compl. ¶¶ 6-8, 21, 28. The Union amended its complaint on December 13, 2013. See generally Am. Compl. In particular, the Union alleged that the Postal Service regularly failed to comply with its First-Class Mail service standards. Id. ¶20. This failure to comply with service standards was allegedly the direct result of the Postal Service’s MPNR initiative. Id. ¶ 21. As a result, the Postal Service violated service standards on a nationwide, basis and deprived individuals and business mailers of the service to which they are entitled under law. See id. ¶¶ 25-97. To support this theory, the Union provided a list of representative locations affected by the MPNR initiative where service standards were .consistently violated. See id. ¶¶ 25-77. The Union further conducted a test mailing of forty letters from its office in Washington, D.C. to various Union members across the country. Id. ¶¶ 78-91. Twenty-five percent of these letters were not delivered in accordance with the service standards set forth in 39 C.F.R. § 121.1. Id. ¶ 79.

Upon review, the PRC initially dismissed the Union’s amended complaint for lack of standing on February 27, 2014. See U.S. Postal Regulatory Comm’n, Order No. 2000, Order Dismissing Complaint (Feb. 27, 2014). Subsequently, on May 27, 2015, the PRC granted the Union’s motion for reconsideration and-vacated its earlier dismissal. See PRC Order No. 2512, supra, at 1, 5-8. Nonetheless, the PRC again dismissed the amended complaint, this time on the merits. Splitting 2-1, the PRC offered three primary bases for its decision. First, the PRC explained that the service standards set forth in 39 C.F.R. § 121.1 are service “expectations” not service “requirements.” Id. at 9. While service standards play an impoi-tant role in postal regulation, they “do not act as legal requirements” unless measured by reference to external performance goals. Id. at 10. Service standards themselves provide no guarantee of actual service, but rather only offer a description of expected mail delivery time. Id. Therefore, “the premise that a complaint lies based on failing to provide service in conformance with an expectation is misplaced.” Id.

' Second, the PRC noted that the Union’s complaint failed to raise new or material issues of fact or law. Id. at 13. White the Union performed a limited mailing test to support its allegations, its results did not add any new information that was not already publicly known or addressed by the PRC. Id. at 16-17. The PRC was aware of the Postal Service’s noncompliance with service standards and should not be required to expend limited resources reestablishing a known fact. See id. at 17; see also id. at 19-20 (“[A]fter an issue has been considered under [either an ACD or a complaint], in most instances reconsidering the same issue using the alternative approach is not a necessary or efficient use of resources.”). Unlike the situation contemplated by Congress in which the PRC’s finding of compliance serves only as a re-buttable presumption, the Union presented allegations entirely consistent with the PRC’s findings. Id. at 20. Such consistency does not present a new issue of material fact.

Finally, the PRC noted that it already directed the Postal Service to take remedial action to ensure future compliance. Id. at 17. Given the unusual impact caused by winter storms, the PRC determined that the appropriate action was to “reiterate the Postal Service’s responsibility to meet service performance goals.” Id. at 19. Because the PRC may direct the same remedies for a finding of noncompliance under either an ACD or a complaint, the PRC ruled it is unlikely to award further relief for this instance of noncompliance. See id. at 19-20. Thus, the PRC dismissed the Union’s amended complaint.

Commissioner Goldway, however, dissented from the majority opinion and argued that the Union’s amended complaint was prematurely dismissed. See U.S. Postal Regulatory Comm’n, Order No. 2512, Dissenting Opinion of Commissioner Gold-way 1-3 (May 27, 2015). The dissent argued that the PRC previously observed that full effect would not be given to the statutory scheme if complaints could be rendered moot by issuance of an ACD report. Id. at 2. Accordingly, the Union should be afforded the opportunity to prove its case, and the majority’s dismissal denies the Union a fair opportunity to engage in discovery and create a full record. Id. at 3. Because the PAEA “anticipate[d] a robust Complaint mechanism,” Commissioner Goldway argued, the PRC’s remedial authority is much broader than the majority described. Id. The PAEA intended for the ACD and complaint processes to work in tandem, not in a manner that is mutually exclusive. Id. Thus, the mere fact that the PRC has previously recognized service quality problems in its ACD reports should not bar a legitimate complaint. Id. at 1. The Union timely filed a petition for review in this Court on May 29, 2015.

III.

This case presents two primary questions. First, did the PRC reasonably determine that .the Postal Service’s compliance with regulatory standards is evaluated by reference to separately published service performance goals? We answer this question in the affirmative. Second, did the PRC act arbitrarily or capriciously, by dismissing the Union’s amended complaint for failure to raise a material issue of fact or law? We answer this question in the negative.

A.

This Court has jurisdiction to review the PRC’s dismissal of a complaint pursuant to 39 U.S.C. § 3663. According to section 3663, any person adversely affected by a final order of the PRC may institute proceedings for judicial review of that order. 39 U.S.C. § 3663. The Court “shall review the order or decision in accordance with section 706 of title 5” based on the record before the PRC. Id. Section 706 of the Administrative Procedure Act permits the Court to set aside agency action, findings, and conclusions if they are “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” 5 U.S.C. § 706(2)(A); see GameFly, Inc. v. Postal Regulatory Comm’n, 704 F.3d 146, 148 (D.C. Cir. 2013). The scope of review under the arbitrary and capricious standard “is narrow” and the Court “is not to substitute its judgment for that of the agency.” Motor Vehicle Mfrs. Ass’n of U.S. Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43, 103 S.Ct. 2856, 77 L.Ed.2d 443 (1983). That said, the Court must be satisfied that the agency examined all relé-vant data and articulated a logical explanation for its decision, including a rational connection between the facts and ultimate outcome. Id. An agency rule may be'considered arbitrary and capricious if the agency relied on factors which Congress did not intend it to consider or “offered an explanation for its decision that runs counter to the evidence before the agency.” Id. With regards to statutory interpretation, the Court follows the framework set forth in Chevron U.S.A. Inc. v. Natural Resources Defense Council, 467 U.S. 837, 842-44, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). See U.S. Postal Serv. v. Postal Regulatory Comm’n, 640 F.3d 1263, 1266 (D.C. Cir. 2011) (noting that because Congress expressly delegated to the PRC responsibility to implement the PAEA, the PRC’s interpretation is reviewable under Chevron). Chevron review involves a two-step analysis. First, if a statute is clear, the Court must give effect to Congress’s unambiguous intent. Chevron, 467 U.S. at 842-43, 104 S.Ct. 2778. Where ambiguity plagues a statute, the Court must turn to the second Chevron principle and give deference to the agency’s reasonable interpretation . of the statute. Id. at 843, 104 S.Ct. 2778.

B.

The first issue we address is the PRC’s interpretation of “service standards.” The Union argues that the PRC erroneously interprets service standards as aspirational goals that lack the force of law. See Pet’r Br, 23-32. According to the Union, the PRC has conflated service standards with operational performance goals and implicitly authorized the Postal Service to underperform. See id. at 30-35. The Union, however, misconstrues the PRC’s order. The PRC does not contend that service standards are legally , unenforceable. Resp’t Br, 33; see generally PRC Order No. 2512, supra, at 8-12 (highlighting that service standards are enforceable when assessed in conjunction with performance goals). Rather, the PRC maintains that whether the Postal Service has complied with its statutory requirements is evaluated by separately published service performance goals. Resp’t Br. 33; see PRC Order No. 2512, supra, at 8-12 (explaining the interaction between service standards and performance goals). The PRC acknowledges that the service standards contained in 39 C.F.R. § 121.1 possess legal force. Resp’t Br. 34. Thus, the issue before this Court is not whether service standards are legally enforceable—all parties agree they are—but whether the PRC’s method for evaluating when those service standards have been violated (i.e., by examining external performance goals) is reasonable. We find that it is.

First, Congress has not directly addressed the issue of how Postal Service noncompliance should be calculated. Pursuant to the PAEA, the Postal Service must promulgate regulations that establish service standards for market-dominant products. 39 U.S.C. § 3691(a). In addition, the Postal Service is tasked with developing a plan for complying with service standards, which includes establishing “performance goals.” PAEA § 302(a), (b)(1), 120 Stat. at 3219. The PAEA does not, however, contain any governing principle by which to distinguish compliance from noncompliance. Rather, by its silence, the PAEA commits to the PRC’s discretion the development of legal benchmarks necessary for determining whether the Postal Service violated its service standards. Thus, given congressional silence on this issue, we proceed to Chevron step two.

Second, we find the PRC’s interpretation that “service standards” should be measured in conjunction with separately defined performance goals reasonable and entitled to deference. The PAEA requires the Postal Service to establish a set of service standards, not service guarantees. See 39 U.S.C. § 3691(a). These standards must be designed to “reasonably assure Postal Service customers delivery reliability, speed and frequency.” Id. § 3691(b)(1)(C). Such “reasonable] assurance]” simply creates an “expectation” of on-time delivery without developing an enforceable right to sue over each-and-every piece of mail that arrives outside that delivery window. Therefore, when examining whether the Postal Service has complied with its service obligations, the PRC regularly analyzes the Postal Service’s rate of on-time delivery performance in reference to separately published service performance goals.

This interpretation is reasonable given that nothing in the PAEA suggests that the Postal Service violates the law every time a piece of mail arrives outside the applicable time window set forth in 39 C.F.R. § 121.1. A small amount of mail will always fail to be delivered within its specified service standard. See Modern Service Standards for Market-Dominant Products, 72 Fed. Reg. 72,216, 72,220 (Dec. 19, 2007). This reality is the result of unpredictable weather conditions, high mail volume, unanticipated labor disputes, human error, and other workplace or regional events. The PRC is aware of the logistical impossibility of ensuring timely delivery of each piece of mail and, therefore, determined that Postal Service compliance must be analyzed with reference to an external target. The Union’s contentions to the contrary would subject the Postal Service to a flood of litigation each time a birthday card or letter was delivered late. Given the financial woes already plaguing the Postal Service, we cannot conclude that Congress intended such a result.

Further, if service standards could be violated on an envelope-by-envelope basis’, it would be a foregone conclusion in every ACD that the Postal Service is in noncompliance with the statute. This result would eliminate any meaningful distinction between compliance and noncompliance. Rather than being subject to remedial directives only in years of noncompliance, the Postal Service would be forced to undertake remedial measures yearly. See 39 U.S.C. § 3653(c) (“If, for a year, a timely written determination of noncompliance is made under subsection (b), the Postal Regulatory Commission shall take appropriate action.... ”). This contravenes the statutory structure, which clearly contemplates that the Postal Service can be found in compliance with its service standards. See, e.g., id. § 3653(b) (“If, with respect to a year, no instance of noncompliance is found under this subsection to have occurred in such year, the written determination shall be to that effect.”). A contrary result would frustrate congressional intent.

Similarly, nothing in the PAEA requires the Postal Service to disclose information to the PRC regarding the delivery outcome of every single piece of mail. The PAEA only mandates that the Postal Service provide the PRC with a report analyzing the “quality of service” in enough detail “to demonstrate that all products during such year complied with all applicable requirements” in Title 39. Id. § 3652(a)(1). The information provided by the Postal Service must describe the level of service (i.e., speed of delivery and reliability) provided, but need not identify whether each individual item of mail achieved its on-time service performance standard. This supports the PRC’s determination that compliance evaluations should occur in the aggregate.

Finally, the legislative history bolsters the PRC’s interpretation. In 2004, Congress considered a legislative proposal in which the language corresponding to section 3691(b)(1)(C) would have required service standards to “guarantee Postal Service customers delivery reliability, speed and frequency consistent with reasonable rates and best business practices.” S. 2468, 108th Cong. § 301 (2Ó04) (emphasis added). A later version of the legislation, which was enacted, replaced the word “guarantee” with the phrase “reasonably assure,” S. 662, 109th Cong. § 301 (2005), thus clarifying that service standards do not create binding on-time delivery requirements for each piece of mail. See 39 U.S.C. § 3691(b)(1)(C); Chickasaw Nation v. United-States, 534 U.S. 84, 93, 122 S.Ct. 528, 151 L.Ed.2d 474 (2001) (“We ordinarily will not assume that Congress intended ‘to enact statutory language that it has earlier discarded in favor of other language.’ ” (quoting INS v. Cardoza-Fonseca, 480 U.S. 421, 443, 107 S.Ct. 1207, 94 L.Ed.2d 434 (1987))). In light of these factors, we hold that the PRC’s interpretation of service standards is reasonable and entitled to deference.

C.

The second question we must answer is whether the PRC acted arbitrarily or capriciously by dismissing the Union’s amended complaint. As a preliminary matter, we- find that the PRC reasonably construed the Union’s amended complaint as alleging that the Postal Service’s aggregate rate of compliance fell below its established goals. See PRC Order No. 2512, supra, at 13. As previously discussed, a complaint alleging violations of service standards on an envelope-by-envelope basis does not state a cognizable claim. Rather, service standards may only be violated in the aggregate when, measured against external performance goals. Thus, PRC’s construction of the Union’s amended complaint conforms with its interpretation of service standards discussed in Section III.B. For the reasons discussed below, we hold that the PRC’s decision to dismiss the Union’s amended complaint was not arbitrary or capricious. .

The strongest support for upholding the PRC’s dismissal is the fact that the PRC already recognized the Postal Service’s failure to consistently meet its service standards, and instructed the Postal Service to take remedial action on this front. See id. at 13, 17, 19-20. Section 3662 allows any interested person who believes that the Postal Service is not operating in compliance with its service obligations to file a complaint. 39 U.S.C. § 3662(a). The PRC, however, may dismiss any complaint that does not raise “material issues of fact or law.” Id. § 3662(b)(1)(A). While this phrase is not statutorily-defined, it is not unreasonable to require the issue of fact or law to be one that the PRC has not already addressed. Black’s Law Dictionary defines “material” as being “[o]f such a nature that knowledge of the item would affect a person’s decision-making; significant; essential.” Material, Black’s Law Dictionary (10th ed. 2014). In this case, the PRC was already aware of the Postal Service’s noncompliance with service standards, and acknowledged that this noncompliance was likely attributable to severe and uncharacteristic winter weather. ACD FY 2014, swpra, at 88, 104. Nonetheless, the PRC instructed the Postal Service to take appropriate remedial action to ensure service compliance in fiscal year 2016. See id. at 104. In dismissing the Union’s amended complaint, the PRC concluded that none of the allegations brought any new facts to the PRC’s attention that would cause it to modify the relief previously imposed. See PRC Order No. 2512, supra, at 13, 16-20. Because the PRC already addressed the Postal Service’s noncompliance, there was nothing “material” about the Union’s allegations.

In essence, the Union’s amended complaint requested that the PRC issue a different remedial order that required the Postal Service “to cease and desist from making changes in its mail processing network that will cause it to violate service standards.” Am. Compl. at 22. By articulating an alternative rationale for the Postal Service’s noncompliance, the Union contends that the PRC’s remedial order was ineffective to redress violations of service standards caused by post office closures. The Union, however, did not challenge the adequacy of the PRC’s remedy before this Court and, accordingly, has forfeited this claim. See Nat’l Oilseed Processors Ass’n v. OSHA, 769 F.3d 1173, 1182 (D.C. Cir. 2014) (holding that petitioners forfeited a claim by mentioning it “only in a cursory manner”); Pet’r Br. 46 (arguing that if the PRC’s statements urging the Postal Service to improve “were enforceable through agency order and court injunction, they might satisfy the Commission’s duty”).

Finally, the Union argues that the PRC cannot rely, on its finding of noncompliance in the ACD to avoid processing a meritorious complaint on the same or similar issues. Pet’r Br. 36, 41-42. The PRC addressed a comparable concern in its March 24, 2009 Order Establishing Rules for Complaints and Rate or Service Inquiries. Specifically, the PRC agreed that “it would not give full effect to the statutory scheme if complaints could be rendered moot by the issuance of an annual compliance determination.” Rules for Complaints, swpra, at 22. The PRC does not take a contrary position in the present case. Nothing in the PRC’s order states that an individual is estopped from contesting findings in the ACD report by objecting or filing- a complaint. The right to object remains intact. As shown above, the PRC’s denial of the Union’s amended complaint in this case was based on the fact that the complaint failed to raise a material issue of fact or law. Thus, the Union’s argument on this ground is unpersuasive.

Accordingly, we hold that the PRC’s dismissal of the Union’s amended complaint was not arbitrary or capricious.

For the reasons discussed.- above, we deny the Union’s petition. The PRC reasonably determined that whether service standards are violated must be evaluated in reference to external performance goals. Based on this interpretation, the PRC logically construed the Union’s amended complaint as asserting a claim for violation of service standards in the aggregate, in accordance with the relevant performance goals. The PRC’s subsequent dismissal of this amended complaint was not arbitrary or capricious because the amended complaint failed to allege new issues of material fact or law. Accordingly, the petition'is denied.

So ordered.

      . The current service standards contained in 39 C.F.R. § 121.1 reference an effective date of January 2015. For purposes of this appeal, we are concerned with the service standards in effect during the MPNR initiative. An interim version of .the service standards applied during Phase 1 of the MPNR initiative (from July 1, 2012 through January 31, 2014), and a final version of the service standards took effect on February 1, 2014. For simplicity, only the final service standards are detailed in this opinion.


author: EDWARDS, Senior Circuit Judge:

text:
    Kelly FOSTER, Appellant v. SEDGWICK CLAIMS MANAGEMENT SERVICES, INC., and Sun Trust Bank Short And Long Term Disability Plans, Appellees
    No. 15-7150
    United States Court of Appeals, District of Columbia Circuit.
    Argued September 19, 2016
    Decided November 29, 2016

      Denise M. Clark argued the cause and filed the briefs for Appellant.
    Gregory L. Arbogast argued the cause for Appellees. With him on the brief was James T. Heidelbach, Baltimore, MD.
    Before: ROGERS and TATEL, Circuit Judges, and EDWARDS, Senior Circuit Judge.
   EDWARDS, Senior Circuit Judge:

This appeal raises, two issues regarding the reach and application of the Employee Retirement Income Security Act of. 1974 (“ERISA”), 29 U.S.C. § 1001 et seq., with respect to private benefit plans. The first issue concerns the definition of “payroll practices” that are exempt from ERISA. The second addresses whether terms of the ERISA plan at issue in this case grant discretion to the plan administrator sufficient to warrant deferential review of the administrator’s benefit determinations.

In July 2014, Appellant, Kelly Foster, sued Sedgwick Claims Management Services, Inc. (“Sedgwick”) and Sun Trust Bank Short and Long Term Disability Plans (together “Appellees”) under ERISA, 29 U.S.C. § 1132(a), to enforce her rights under short-term and long-term disability benefit plans that had been adopted by her employer, Sun Trust Bank (“SunTrust”). The District Court found that the short-term plan was a “payroll practice” exempted from ERISA’s ambit by a Department of Labor regulation. Appellant initially conceded this point. Foster v. Sedgwick Claims Mgmt. Servs., Inc., 125 F.Supp.3d 200, 205 (D.D.C. 2015). Because Appellant’s sole cause of action with respect to the short-term plan rested on ERISA, the District Court rejected Appellant’s claim. The District Court additionally found that the long-term plan gave Sedgwick, the plan administrator, sole discretion to “evaluate” an employee’s medical evidence and “determine” if the employee’s condition meets the plan’s definition of disability. Id. at 206-07. The District Court accordingly applied a deferential standard of review to Sedgwick’s denial of long-term disability benefits sought by Appellant and concluded that the administrator had neither abused its discretion nor acted arbitrarily or capriciously in assessing Appellant’s claim for benefits. Id. at 206-11. The District Court granted summary judgment to Appellees and dismissed Appellant’s complaint. Id. at 211.

Appellant filed a motion for reconsideration. She admitted she-had conceded that the short-term disability plan was exempt from ERISA during summary judgment, but argued :that the District Court’s embrace of this -position constituted an error of law. The District Court rejected Appellant’s attempt to raise a new legal theory-in a motion for reconsideration when the same claim could have been asserted during summary judgment. The District Court denied the motion for reconsideration. Foster v. Sedgwick Claims Mgmt. Servs., Inc., 159 F.Supp.3d 11, 13-16 (D.D.C. 2015).

■ We affirm the District Court at each turn. First, we affirm the District Court’s finding that the short-term disability plan is an ERISA-exempt “payroll practice” under Department of Labor regulations. Second, we hold that the District Court appropriately applied a deferential standard of review to the administrator’s denial of benefits under the long-term disability plan because the terms of the plan unambiguously grant the administrator, and the administrator alone, the power to construe critical terms of the plan and to decide an employee’s eligibility for benefits. Finally, we hold that the District Court did not abuse its discretion in denying Appellant’s motion for reconsideration,

I. Background

A. Statutory and Regulatory Background

Congress enacted ERISA to “promote the interests of employees and their beneficiaries in employee benefit plans and to protect contractually defined benefits.” Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 113, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989) (citations and internal quotation marks omitted). It found that employee benefit plans “affeet[ ] the stability of employment and the successful development of industrial .relations ... [and are] an important factor in commerce because of the interstate character of their activities.” 29 U.S.C. § 1001(a). Under ERISA, a benefit plan participant may sue “to recover benefits'due to him under .the terms of his plan, [or] to enforce his. rights under the terms of the plan.” 29 U.S.C. § 1132(a)(1)(B). Overall, ERISA represents a “ ‘careful balancing’ between ensuring fair and prompt enforcement of rights under a plan” and encouraging the creation of such plans. Conkright v. Frommert, 559 U.S. 506, 517, 130 S.Ct. 1640, 176 L.Ed.2d 469, (2010) (citation and internal quotation marks omitted).

Under 29 U.S.C. § 1135, the Secretary of Labor is authorized to prescribe regulations deemed necessary or appropriate to carry out the provisions of ERISA. Pursuant to this authority, Department of Labor regulations exempt certain “payroll practices” from ERISA’s ambit. .An exempt payroll practice includes “[p]ayment of an employee’s normal compensation, but of the employer’s general assets, on account of periods of time during which the employee is physically or mentally unable to perform his or her duties, or is otherwise absent for medical reasons.” 29 C.F.R. § 25l0.3-l(b)(2).

B. Factual and Procedural Background

We review de novo the District Court’s order granting summary judgment. See Lopez v. Council on Am.-Islamic Relations Action Network, Inc., 826 F.3d 492, 496 (D.C. Cir. 2016). In doing so, we view the evidence and draw all reasonable inferences in favor of the non-moving party. See id. The material facts in this case, which are undisputed, are summarized below.

SunTrust provides its employees with both short-term and long-term disability benefit plans. Appellee Sedgwick administers both plans on behalf of SunTrust. According to SunTrust’s Health and Welfare Benefits Handbook (“Benefits Handbook”), Joint Appendix (“JA”) 19-36, 45-59, SunTrust’s short-term disability plan “provides benefits if an eligible employee is unable to work because of an approved disability.” Id. at 25. Benefits are paid from SunTrust’s “general assets.” Id. “Full-time employees receive a combination of [short-term] benefits paid at 100% and 60% of base pay for their first illness/injury occurrence in each calendar year.” Short-Term Disability Summary, JA 38. Employees are deemed to have an approved disability if they are “not able, solely because of disease or injury to perform the material duties of their own occupation.” Id. at 39. Employees’ claims for short-term disability must be supported by “objective medical documentation.” Id. The claims administrator determines whether employee claimants meet the definition of “disability” and whether their medical documentation is sufficient to support a claim for benefits. Id. at 38.

SunTrust’s long-term disability plan, which is part of a larger Employee Benefit Plan and funded through a trust, “provides financial assistance to eligible employees who are totally unable to work, as determined by the claims administrator, due to an illness or injury after 180 days.” Benefits Handbook, JA 46. The long-term plan uses substantially the same definition of disability as the short-term plan, but requires an employee to be “totally disabled as determined by the claims administrator” for 180 days. Id. To make this determination, the “claims administrator will evaluate the medical documentation submitted on [the employee’s] behalf and determine if [his/her] condition meets the Plan’s definition of Total Disability.” Id. at 48. Sedgwick approves a claim for long-term disability benefits “[o]nce satisfactory proof that [the employee] ha[s] been Totally Disabled for 180 calendar days has been provided to the claims administrator.” Id. at 56. If Sedgwick denies a claim, it must give the specific reason for denial and the “specific Plan or policy provisions on which the denial is based.” Id. Employees have a right to appeal Sedgwick’s initial denial of a claim to a different decision-maker at Sedgwick, who makes a final decision. See id. at 56-57.

SunTrust employed Appellant Kelly Foster as a Mortgage' Loan Closer until September 2012. In January and August 2012, Appellant submitted claims for short-term disability benefits for missing work due to a variety of ailments. Sedgwick denied her claims, citing Appellant’s failure to provide sufficient “objective medical documentation” in support of her claims. SunTrust terminated Appellant on September 25, 2012, because of her absences from work. Appellant appealed Sedgwick’s denial of her short-term disability benefits claim. Sedgwick upheld its denial on March 29, 2013. In October 2013, Appellant submitted a claim for long-term disability benefits. Sedgwick denied this claim, as well, and Appellant appealed again. Sedgwick upheld this denial on January 27, 2014.

In July 2014, Appellant sued Appellees under ERISA, 29 U.S.C. § 1132(a), to enforce her rights under both the short-term and long-term disability benefit plans. Ap-pellees moved for summary judgment. Ap-pellees argued, and Appellant conceded, that the short-term disability plan was an ERISA-exempt payroll practice and thus Appellant could not seek review of her denial under ERISA. The District Court independently found that since the short-term disability plan was paid from Sun-Trust’s general assets and was “entirely separate” from the Employee Benefits Plan, it was “properly characterized as a payroll practice” and exempt from’ ERISA. Foster, 125 F.Supp.3d at 205. Since Appellant’s “Complaint expressly invoke[d] ERISA alone,” id. the District Court had no alternative cause of action to adjudicate, and it granted Appellees summary judgment as to the short-term disability plan, see id. at 205-06,

As to the long-term disability plan, the District Court found the plan documents vested Sedgwick with broad discretionary authority, triggering a deferential standard of review under Firestone, 489 U.S. at 115, 109 S.Ct. 948. Foster, 125 F.Supp.3d at 206-07. Applying that standard, the District Court found Sedgwick had not abused its discretion nor acted arbitrarily or capriciously in denying Appellant’s claim for long-term disability given her failure to submit sufficient objective medical documentation. Id. at 207-10. The District Court granted Appellees’ motion for summary judgment in full on August 28, 2015.

Appellant timely moved for reconsideration. Among other arguments, she asserted that, in spite of her concession, the District Court committed an error of law in finding that the short-term disability plan was exempt from ERISA. The District Court denied her motion for reconsideration on December 1, 2015.

Appellant appealed to this court on December 3, 2015. Appellant’s notice of appeal designated only the order granting Appellees summary judgment and did not specifically designate the order denying her motion for reconsideration. However, based on Appellant’s electronic submissions to the Clerk’s Office, the court’s docket entry on December 3, 2015, identified Appellant’s notice of appeal “as to 34 Order on Motion for Reconsideration ..., [and] 28 Order on Motion for Summary Judgment.” The docket entry references to “34” and “28” are hyperlinked to each appealed order in the District Court docket. On January 13, 2016, Appellant submitted her civil docketing statement, Rulings under Review certificate, statement of issues, and the Underlying Decision in Case—each of which designated both the order granting Appellees summary judgment and the order denying Appellant’s motion for reconsideration. The parties fully briefed both orders.

II. Analysis

A. Scope of the Appeal

As a threshold matter, we reject Appellees’ claim that we lack jurisdiction to consider Appellant’s challenge to the order denying her motion for reconsideration because she failed to designate it in her notice of appeal. The Court’s records indicate that Appellant timely and properly gave notice that she appealed from both orders.

We have jurisdiction to review a mistakenly undesignated order where “the intent to appeal ... can be fairly inferred from appellant’s notice (and subsequent filings) and the opposing party is not misled by the mistake.” Messina v. Krakower, 439 F.3d 755, 759 (D.C. Cir. 2006) (internal quotation marks omitted) (quoting Foretich v. ABC, 198 F.3d 270, 274 n.4 (D.C. Cir. 1999)); see Brookens v. White, 795 F.2d 178, 180-81 (D.C. Cir. 1986) (per curiam). Appellant timely filed her notice of appeal on December 3, 2015, and gave sufficient notice in five contemporaneous appellate filings from December 3, 2015, through January 13, 2016, that her appeal included a challenge to the District Court’s denial of her motion for reconsideration, in addition to its grant of Appellees’ motion for summary judgment. That provided adequate notice to' Appellees. See Messina, 439 F.3d at 759 (holding that a Rule 28(a)(1) filing provided adequate notice of the intent to appeal from an undesignated order); Sinclair Broad. Grp., Inc. v. FCC, 284 F.3d 148, 158 (D.C. Cir. 2002) (deeming statement of issues filed thirty-four days after the petition for review to be “contemporaneous,” but motion for stay filed ninety-one days later not “contemporaneous”). Appellees do not claim to have been misled as to the scope of the appeal and fully briefed the issues. Our jurisdiction therefore extends to the order denying Appellant’s motion for reconsideration.

B. The District Court’s Finding that the Short-Term Disability Plan is an Exempt “Payroll Practice”

The District Court found that Sun-Trust’s short-term disability plan is a “payroll practice” exempt from ERISA. We agree.

ERISA applies to private “employee benefit plans.” 29 U.S.C. § 1001. The statute defines an employee benefit plan as “an employee welfare benefit plan” or “an employee pension benefit plan.” 29 U.S.C. § 1002(3). An “employee welfare benefit plan” includes:

any plan, fund, or program which was ... established or maintained by an employer ... to the extent that such plan, fund, or program was established or is maintained for the purpose of providing for its participants or their beneficiaries, through the purchase of insurance or otherwise, (A) medical ... care or benefits, or benefits in the event of sickness, accident, disability....

29 U.S.C. § 1002(1).

There is no dispute that without the Department of Labor’s regulatory exemption, SunTrust’s short-term disability benefit plan would constitute an “employee welfare benefit plan” under ERISA. However, the Department of Labor exempts from ERISA certain “payroll practices,” including

[pjayment of an employee’s normal compensation, out of the employer’s general assets, on account of periods • of time during which the employee is physically or mentally unable to perform his or her duties, or is otherwise absent for medical reasons.

29 C.F.R. § 2510.3-l(b)(2). The Supreme Court has upheld this “payroll practices” exemption, see Massachusetts v. Morash, 490 U.S. 107, 116-19, 109 S.Ct. 1668, 104 L.Ed.2d 98 (1989), and Appellant does not contest the legality of the regulation.

In response to Appellees’ motion for summary judgment in the District Court, Appellant conceded that the short-term disability benefit plan was a payroll practice. The District Court nevertheless independently evaluated the plan and concluded that it was a payroll practice because'it was paid from SunTrust’s general assets and was “entirely separate” from Sun-Trust’s ERISA-covered Employee Benefits Plan. We have no basis to overturn the District Court’s judgment on this point.

SunTrust’s short-term disability plan clearly fits within the regulatory definition of “payroll practices.” It is payment of an employee’s normal compensation; it is paid from the employer’s general assets; and it is paid on account of time during which the employee is absent for medical reasons. See 29 C.F.R. § 2510.3-1(b)(2). Indeed, it appears SunTrust drafted its short-term disability plan to match the regulatory exemption. Since the parties do not dispute these fundamental aspects of the short-term disability plan, we might end our inquiry here. Appellant, however, reversed her position after the District Court granted summary judgment for Appellees.

In her appeal to this court, Appellant now insists that “[t]he record demonstrates that the relationship between Sun-Trust and Sedgwick and the administration of the short-term disability benefits establishes an on-going administrative scheme which subjects the Plan to ERISA.” Br. for Appellant at 5. There are two problems with this argument: First, the argument comes too late because it was not properly raised and preserved during the proceedings before the District Court. See Singleton v. Wulff, 428 U.S. 106, 120-21, 96 S.Ct. 2868, 49 L.Ed.2d 826 (1976) (noting that appellate courts generally refrain from considering an issue not passed upon below). Second, the argument rests on a flawed assumption.

As noted above, before the District Court, Appellant conceded that the short-term plan was exempt from ERISA. And it would not matter that Appellant sought to raise the issue in her motion for reconsideration because the District Court properly rejected her claim as untimely. See infra Part II.D. Therefore, the argument that she now raises was never addressed by the District Court. That resolves the matter. And in any case, Appellant’s belated claim is misguided. See Singleton, 228 U.S. at 121, 38 S.Ct. 431 (noting that the “matter of what questions may be taken up and resolved for the first time on appeal is one left primarily to the discretion of the courts of appeals”).

Appellant principally relies on Fort Halifax Packing Co., Inc. v. Coyne, 482 U.S. 1, 107 S.Ct. 2211, 96 L.Ed.2d 1 (1987), in support of her contention that the presence of an ongoing administrative scheme in SunTrust’s short-term plan compels the conclusion that it is a non-exempt ERISA plan. Neither Fort Halifax nor any of the other cases cited by Appellant support this claim. The Court in Fort Halifax merely held that “a Maine statute requiring employers to provide a one-time severance payment to employees in the event of a plant closing” was not preempted by ERISA. Id. at 3, 107 .S.Ct. 2211; see id. at 3—4, 107 S.Ct. 2211, The Court noted that because the state law at issue only governed a one-time benefit- provision, it did not constitute a “plan” potentially governed by ERISA nor implicate the need for ERISA preemption. Id. at 11-12, 14-16,107 S.Ct. 2211. The Court, however, did not address plans that are exempt from ERISA pursuant to Department of Labor regulations.

In Fort Halifax the issue was whether the provision of a certain type of benefit should be construed as a plan that is within the compass of ERISA. The question here is whether a benefit program that clearly falls within the compass of ERISA is nevertheless exempt from ERISA pursuant to Department of Labor regulations. The answer here is yes. SunTrust’s short-term disability benefit plan falls squarely within the exemption under 29 C.F.R. § 2510.3-1(b)(2). See Stern v. Int’l Bus. Machs. Corp., 326 F.3d 1367, 1373 (11th Cir. 2003) (applying 29 C.F.R. § 2510.3-1(b) to a benefit program that would “clearly qualify as an ERISA plan but for its specific exemption by a reasonably justified regulation”).

Appellant also argues that the fact that a benefit is paid from general assets does not necessarily exempt a plan from ERISA. See, e.g., Fort Halifax, 482 U.S. at 7 n.5, 107 S.Ct. 2211 (“[ERISA] has been construed to include severance benefits paid out of general assets, as well as out of a trust fund”). That may be true, but it is irrelevant in this case. SunTrust’s short-term plan presents a tri-fold match to the exemption under 29 C.F.R. § 2510.3-1(b)(2): paying normal wages, from general assets, on account of work missed due to medical reasons. We do not need to decide whether one factor is more important than another, nor how many must be met in order for the exemption to apply. Here, all factors are met, including the nature of the benefits and the source of the funds. See Morash, 490 U.S. at 120, 109 S.Ct. 1668.

In sum, the short-term disability plan is clearly exempt from ERISA.- Therefore, the District Court properly granted Sedg-wick summary judgment as to that plan.

C. The Deference Due to the Plan Administrator’s Benefit Determinations Under the Long-Term Disability Plan

The District Court applied a deferential standard of review in assessing the plan administrator’s denial of benefits to Appellant under the long-term disability plan. Appellant asserts that the District Court should have' undertaken de novo review of her ERISA claim under 29 U.S.C. § 1132(a)(1)(B). We disagree.

A claim under § 1132(a)(1)(B) is reviewed de novo except where the plan vests the administrator with “discretionary authority to determine eligibility for benefits or to construe the terms of the plan.” Firestone, 489 U.S. at 115, 109 S.Ct. 948 (emphasis added). When the terms of a plan confer such discretion, an administrator’s denial of benefits is reviewed under an abuse of discretion or arbitrary and capricious standard, a standard which, in this particular context, we have referred to as “reasonableness.” Moore v. Capital-Care, Inc., 461 F.3d 1, 11 (D.C. Cir. 2006). On the record before us, we conclude that the District Court properly applied a deferential standard of review because the long-term disability benefit plan here vests Sedgwick with discretion to construe disputed terms of the plan and determine eligibility for benefits.

In reaching this conclusion, we have looked for guidance from both Firestone and the Court’s later decisions in Metro. Life Ins. Co. v. Glenn, 554 U.S. 105, 128 S.Ct. 2343, 171 L.Ed.2d 299 (2008), and Conkright. The Court’s later cases confirm that, in assessing a claim under § 1132(a)(1)(B), a court must consider “trust law, the terms of the plan at issue, and the principles of ERISA.” Conkright, 559 U.S. at 512, 130 S.Ct. 1640; see also Metro. Life Ins. Co., 554 U.S. at 110-11, 128 S.Ct. 2343. Having done this, we conclude that the unambiguous grant of discretion to the administrator of the Sun-Trust long-term disability plan triggers deferential review of the administrator’s assessments of benefit claims under the plan.

1. Principles of Trust Law

In looking to trust law, we “analogize a plan administrator to the trustee of a common-law trust; and ... consider a benefit determination to be a fiduciary act.” Metro. Life Ins., 554 U.S. at 111, 128 S.Ct. 2343. In Firestone, the Supreme Court concluded that deference was owed to plan administrators, acting as trustees, “in the exercise of a discretion vested in them by the instrument under which they act.” 489 U.S. at 111, 109 S.Ct. 948 (quoting Nichols v. Eaton, 91 U.S. 716, 724-25, 1 Otto 716, 23 L.Ed. 254 (1875)). In Conk-right, the Supreme Court found trust law “unclear on the narrow question” before it, whether an administrator’s prior mistake overrode the necessity of deferential review, but noted that “if the settlor who creates a trust grants discretion to the trustee, it seems doubtful that the settlor would want the trustee divested entirely of that discretion simply because of one good-faith mistake.” 559 U.S. at 514, 130 S.Ct. 1640.

Here, general principles of trust law support our conclusion that the terms of SunTrust’s long-term disability plan effectively limit judicial review, of administrator determinations to reasonableness, not de novo. The Restatement (Third) of Trusts recognizes that a trustee’s powers may be express or implied. Restatement (ThiRd) of Tkusts § 85 reporter’s note cmt. a (2005). And leading modern treatises “indicate] considerable flexibility” in ascertaining the extent of a trustee’s power as implied by the terms of a trust instrument. Id. cmt. a. For instance, “[i]f a settlor has directed'the trustee to accomplish a certain objective, he must- be deemed to have intended that the trustee use the ordinary and natural means of obtaining that result.” Id. reporter’s note cmt. -a (quoting George G. Bogert & George T. Bogert, The Law of Trusts and Trustees § 551 (rev. 2d ed. 1980)). In other - words, a reviewing court may determine that the settlor intended for “the trustee to have such power, although he did not in so many words grant the authority.” Id. (quoting George T. Bogert, Trusts § 88 (6th ed. 1987)). Likewise, an ERISA plan document may show that the employer intended for the administrator to have discretionary powers to construe terms or determine eligibility if the terms of the plan direct the administrator to obtain -specified objectives of the plan without specifying the means by which to achieve them.

2. The Terms of SunTrust’s Long-Term Disability Plan

In assessing the terms of the SunTrust long-term disability plan, we look first to the Summary Plan Description. Although the Summary is not itself legally binding; CIGNA Corp. v. Amara, 568 U.S. 421, 437-38, 131 S.Ct. 1866, 179 L.Ed.2d 843 (2011), it provides important information for beneficiaries about the plan. In Pettaway v. Teachers Ins. & Annuity Ass’n of Am., -we noted that a Summary Plan Description is an “ERISA-man-dated, plain-language document upon which plan participants may rely to understand their benefits.” 644 F.3d 427, 433 (D.C. Cir. 2011). We therefore concluded that a Summary may “be examined to determine the- appropriate standard of review.” Id. Pettaway does not take account of the Court’s decision in CIGNA Corp., but we do not view the decision issued by this court to be at odds with the direction given by the Supreme Court. A court may look at a Summary for guidance, but it must remain mindful that the terms of a Summary “do not themselves constitute the terms of the plan.” CIGNA Corp., 563 U.S. at 438, 131 S.Ct. 1866.

The Summary Plan Description covering the SunTrust long-term disability benefit plan references the Health & Welfare Benefits Handbook, which in turn details the terms of the plan and explains the administrator’s authority. The parties do not dispute that the terms of the Benefits Handbook are binding. See Br. for Appellant at 7; Br. for Appellees at 3.

The Handbook makes it clear that Sedg-wick—and Sedgwick alone—has the power to construe disputed terms of the plan and determine eligibility for benefits. For instance, the plan states: “The claims administrator has 45 calendar days in which to make a determination regarding whether your medically-documented claim entitles you to a Long-Term Disability benefit.... Once satisfactory proof that you have been Totally Disabled for 180 calendar days has been provided to the claims administrator and your application for LTD benefits has been approved, you will receive a written notice.of the claim approval.” JA 55-56.

The plan elsewhere states:
• “If you are approved for LTD benefits, your premiums ... will be waived for as long as you continue to be totally disabled as determined by the claims administrator.” JA 46.
• “The claims administrator will evaluate the medical documentation submitted on your behalf and determine if your condition meets the Plan’s definition of Total Disability.” JA 48.
• “You are disabled if, due to injury, illness, or pregnancy supported by objective medical documentation, you meet the following definition of disability as determined by the claims administrator:
• You are unable to perform each of the material duties of the occupation you regularly perform for Sun-TrustJA 48. ■ ■
• “[Benefits end on] [t]he date that you fail to provide satisfactory proof of continuation of total disability.” JA 52.
• “For purposes of receiving [long-term] benefits, whether you are disabled will be determined based on objective medical evidence provided to the claims administrator about your condition.” JA 57.

Moreover, when the administrator denies a claim, it must list the specific reason for the denial and the “specific Plan or policy provisions on which the denial is based.” JA 56. In exercising this authority, the administrator must of course interpret and apply the terms of the plan.

Finally, under the long-term plan, any appeal of the administrator’s denial of benefits is to the administrator. No one but the administrator determines whether an employee is eligible for benefits. And there is no detailed rubric by which the administrator is constrained in deterhiining whether the definition of disability is met. Instead, the definition is broad, leaving it to the administrator to construe critical terms and phrases such as “objective medical documentation,” “unable to perform,” “material duties,” and “satisfactory proof.”

In our view, these unambiguous grants of discretion to the administrator of the SunTrust long-term disability plan compel deferential review of the administrator’s assessments of benefit claims under the plan. Prevailing case law supports this conclusion. . .

In Conkright, the plan granted the administrator “broad discretion in making decisions relative to the Plan.” 559 U.S. at 512, 130 S.Ct. 1640 (internal quotation marks omitted). In Block v. Pitney Bowes Inc., we surveyed' similar “[e]mpowering language” other courts had found to vest discretion in the administrator, 952 F.2d 1450, 1453 (D.C. Cir. 1992). This language included statements such as: where “any construction [of the agreement’s provisions] adopted by the Trustees in good faith shall be binding,” Cent. States, Se. & Sw. Areas Pension Fund v. Cent. Transp., Inc., 472 U.S. 559, 568, 105 S.Ct. 2833, 86 L.Ed.2d 447 (1985) (citation and internal quotation marks omitted); where trustees had “power to construe [plan] provisions” and “any construction adopted by the [trustees in good faith is binding,” Exbom v. Cent. States, Se. & Sw. Areas Health & Welfare Fund, 900 F.2d 1138, 1141 (7th Cir. 1990); where administrators had power “[t]o determine all benefits and resolve all questions pertaining to the administration, interpretation and application of Plan provisions,” De Nobel v. Vitro Corp., 885 F.2d 1180, 1186 (4th Cir. 1989); and where the plan charged administrators to determine ‘“which Employees are eligible to participate in the Plan,’ and [to] ‘provide all parties dealing with the Plan an interpretation of Plan provisions on request,’ ” Curtis v. Noel, 877 F.2d 159, 161 (1st Cir. 1989). See Block, 952 F.2d at 1453. The long-term disability plan at issue here, when read as a whole, grants comparable authority to the plan administrator.

In Block itself we considered an explicit grant of discretion: the administrator had all power “to interpret and construe the Plan [and] to determine all questions of eligibility and the status and rights of participants.” Id. at 1452. Nevertheless, we concluded, “[w]hat counts, in sum, is the character of the authority exercised by the administrators under the plan.” Id. at 1454 (emphasis added). In interpreting Firestone we said the Supreme Court “surely did not suggest that ‘discretionary authority’ hinges on incantation of the word ‘discretion’ or any other ‘magic word.’ ” Id. at 1453, Instead, Firestone “directed lower courts to focus on the breadth of the administrators’ power,” id. and agreed with the Fourth Circuit that it “need only appear on the face of the plan documents that the fiduciary has been ‘given [the] power to construe disputed or doubtful terms’—or to resolve disputes over benefits eligibility,” id. (quoting De Nobel, 885 F.2d at 1187).

The grant of discretion to Sedgwick under the SunTrust long-term disability plan is not as explicit as the language in Block and the cases cited therein. Nonetheless, we find' the language here is more than sufficient to satisfy the standards set forth by the Court in Firestone, Metro. Life Ins., and Conkright. Furthermore, in Block we cited with approval the First Circuit’s decision in Curtis. See 952 F.2d at 1453. In Curtis, the court held that provisions stating that the plan administrator shall determine “which Employees are eligible to participate in the Plan,” and shall “provide all parties dealing with the Plan an interpretation of Plan provisions on request” were- sufficient to justify deferential review of the administrator’s determinations. Curtis, 877 F.2d at 161. Our decision in Block also states:

Under Firestone, reasonableness review is in order if the administrator' has “discretionary authority to determine eligibility for benefits or to construe the terms of the plan.” 489 U.S. at 115, 109 S.Ct. 948_Thus, ... power to “interpret and construe” the plan or ... power to make “final and binding” decisions ..., standing alone, would probably meet the Firestone test for deferential review.

Block, 952 F.2d at 1453 n.4.

Block thus instructs that “discretionary authority” does not “hinge[ ] on incantation of the word ‘discretion’ or any other ‘magic word.’ ” Id. at 1453. In this case, we find that SunTrust’s long-term disability plan vested Sedgwick with discretion through multiple provisions of the plan sufficient to limit review. We therefore conclude that, according to the terms of the plan, the District Court correctly applied a deferential standard- of review in assessing the plan administrator’s denial of benefits to Appellant under the long-term disability plan.

3. Principles of ERISA

Lastly, we turn to the principles of ERISA to ensure that the District Court appropriately applied a deferential standard of review to the long-term disability plan. See Conkright, 559 U.S. at 512, 130 S.Ct. 1640. “ERISA represents a careful balancing between ensuring fair and prompt enforcement of rights under a plan and the encouragement of the creation of such plans.” Id. at 517, 130 S.Ct. 1640 (quoting Aetna Health Inc. v. Davila, 542 U.S. 200, 215, 124 S.Ct. 2488, 159 L.Ed.2d 312 (2004)) (internal quotation marks omitted). Because administrative and litigation costs can “unduly discourage employers from offering [ERISA] plans in the first place,” ERISA encourages the creation of benefit plans and maintaining high levels of benefits in existing plans by promoting efficiency and minimizing administrative and litigation costs. Id. (citation and internal quotation marks omitted). ERISA’s purposes include “assuring a predictable set of liabilities” through uniform standards and a uniform remedial scheme. Id. (citation and internal quotation marks omitted).

“Firestone deference protects these interests and, by permitting an employer to grant primary interpretive authority over an ERISA plan to the plan administrator, preserves the ‘careful balancing’ on which ERISA is based.” Id. The Supreme Court reasoned that Firestone deference promoted ERISA’s goals of efficiency, predictability, and uniformity “by encouraging resolution of benefits disputes through internal administrative proceedings,” allowing the “employer [to] rely on the expertise of the plan administrator rather than worry about unexpected and inaccurate plan interpretations that might result from de novo judicial review,” and “helping to avoid a patchwork of different interpretations of a plan” spanning multiple jurisdictions. Id. If employers could not adopt plans that give administrators discretion, it “might lead those employers with existing plans to reduce benefits, and those without such plans to refrain from adopting them.” Id. (quoting Fort Halifax, 482 U.S. at 11, 107 S.Ct. 2211).

Firestone instructs us that when discretion is not clearly granted to the administrator, de novo review is appropriate because, in that case, deferential review “would afford less protection to employees and their beneficiaries than they enjoyed before ERISA was enacted.” 489 U.S. at 113-14, 109 S.Ct. 948. However, the Court was equally clear in saying that “[n]either general principles of trust law nor a concern for impartial decisionmaking ... forecloses parties from agreeing upon a narrower standard of review.” Id. at 115, 109 S.Ct. 948.

We apply ordinary principles of contractual interpretation in assessing the terms of an ERISA plan. See M & G Polymers USA, LLC v. Tackett, — U.S. -, 135 S.Ct. 926, 933, 190 L.Ed.2d 809 (2015); Heimeshoff v. Hartford Life & Accident Ins. Co., — U.S. -, 134 S.Ct. 604, 611-12, 187 L.Ed.2d 529 (2013); see also Cassidy v. Akzo Nobel Salt, Inc., 308 F.3d 613, 615 (6th Cir. 2002). As we have already indicated, the plan documents here evidence an intent on the behalf of the settlor, SunTrust, to vest the trustee, Sedgwick, with discretionary power to construe the terms of the plan and determine eligibility for benefits. SunTrust obviously intended to grant broad authority to Sedgwick and to rely on Sedgwick’s expertise in administering the plan. Consequently, reviewing Sedgwick’s denial of benefits to Appellant with due deference, as the employer intended, preserves ERISA’s careful balancing, provides Sun-Trust with efficiency in relying on Sedg-wick and predictability in uniform liability, and preserves the incentive to continue providing ERISA benefits to its employees.

By giving Sedgwick the power to “make a determination” as to whether a claimant is “entitle[d]” to benefits, “evaluate” the submitted “objective medical documentation,” decide whether a claimant’s proof is “satisfactory,” “determine[ ]” whether a claimant is “totally disabled,” selecting which duties are “material” and determining whether the claimant is “unable to perform them,” and “approve[]” applications by claimants, SunTrust unambiguously gave Sedgwick the power to interpret material terms of the plan and determine eligibility for benefits. JA 46-48, 52. We therefore conclude that the District Court properly applied a deferential standard of review because, reading the plan as a whole, it plainly vests Sedgwick with discretion to construe disputed terms of the plan and determine eligibility for benefits. The District Court did not err in reviewing the Sedgwick’s benefit determinations under a deferential standard of review and in concluding that Sedgwick had not abused its discretion or acted in an arbitrary or capricious way in denying Appellant’s claim for long-term disability benefits.

D. Denial of Motion for Reconsideration

We also affirm the District Court’s denial of Appellant’s motion for reconsideration. A motion for reconsideration .“is discretionary and need not be granted unless the district court finds that there is an intervening change of controlling law, the availability of new evidence, or the need to correct a clear error or prevent manifest injustice.” Firestone v. Firestone, 76 F.3d 1206, 1208 (D.C. Cir. 1996) (per curiam) (citations and internal quotation marks omitted). None of these factors are present here.

Appellant acknowledges that she conceded the short-term disability plan was exempt from ERISA during summary judgment proceedings. The only ground that Appellant offered to support her motion for reconsideration was that her concession was an error. When a party first argues an unavailing theory of liability, and then attempts to argue an alternative or contrary position in a motion for reconsideration, this constitutes neither new evidence nor a clear error of law sufficient to support a motion for reconsideration. See Patton Boggs LLP v. Chevron Corp., 683 F.3d 397, 402-03 (D.C. Cir. 2012). Moreover, as discussed above, the District Court independently and correctly found that the short-term disability plan was exempt from ERISA.

Appellant argues in the alternative that even if the short-term plan is not an ERISA plan, it “relates to” the long-term plan, which is an ERISA plan. See Br. for Appellant at 15. As a result, she contends ERISA relief must be available to her because a state-law breach of contract claim would not survive ERISA’s broad preemption. See id. (citing 29 U.S.C. § 1144). In other words, Appellant asserts that because eligibility under the long-term—ERISA—plan is intertwined with eligibility under the short-term—non-ERISA—plan, the two are “related,” thereby preempting any non-ERISA claims for relief. See id. at 16-18. However, as the District Court noted, “the Supreme Court has been clear that the ‘relate to’ language in ERISA’s preemption clause only excludes state-law causes of action in which ‘the existence of an ERISA plan ... is a critical factor in establishing liability.’ Yet that is not the case here, for nothing in the [long-term plan] would have any bearing on the merits of a breach-of-contract claim based on the denial of [short-term] benefits.” 159 F.Supp.3d at 14 (citation omitted) (quoting Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 139-40, 111 S.Ct. 478, 112 L.Ed.2d 474 (1990)). The District Court correctly ruled that “because eligibility for [short-term] benefits is not at all affected by the [long-term plan], no state-law cause of action based on the [short-term plan] ‘relates’ to the [long-term plan] in such a way that it would be preempted by ERISÁ.” Id. at 15. The court thus concluded that, even if not waived, Appellant’s new theories about the short-term plan provided no basis for overturning the court’s dismissal.

Therefore, the District Court did not err in denying Appellant’s motion for reconsideration. We affirm its denial.

III. Conclusion

For the foregoing reasons, we affirm the judgment of the District Court.

So ordered.


author: LYNCH, Circuit Judge.

text:
    Dawn E. IRISH, Plaintiff, Appellee, v. Craig S. IRISH, Defendant, Appellant, Pebble Nuclear, Inc., f/k/a Nuclear Logistics, Inc.; Aron Seiken, Defendants.
    No. 16-1053
    United States Court of Appeals, First Circuit.
    November 14, 2016

      Robert J. O’Regan, with whom Laura R. Studen, Elizabeth G. Crowley, Andrea L. Martin, and Burns & Levinson LLP were on brief, for appellant.
    Sean T. Carnathan, with whom O’Con-nor, Carnathan and Mack LLC, Michael Gottfried, and Duane Morris LLP were on brief, for appellee.
    Before TORRUELLA, LYNCH, and LIPEZ, Circuit Judges.
   LYNCH, Circuit Judge.

This appeal comes to us from the district court’s award of damages to Dawn Irish arising out of her 2010 divorce in Massachusetts from Craig Irish and the Separation Agreement filed in their divorce proceeding. After the divorce, Dawn brought suit in federal court, rather than state court, arguing that Craig did not fully disclose his assets or deal in good faith during the negotiation of their Separation Agreement. The federal court exercised jurisdiction over those claims.

We do not reach Craig’s challenges to the merits of the district court’s decision because we hold that the district court lacked subject matter jurisdiction pursuant to the domestic relations exception to federal diversity jurisdiction. Accordingly, we vacate the judgment and remand for dismissal of the action, with prejudice as to federal jurisdiction and without prejudice as to any state court action Dawn might bring.

I.

We derive the following facts from Dawn’s allegations in federal court. Dawn and Craig Irish wed on October 3, 1992. During their marriage, Craig worked at Nuclear Logistics, Inc. (“NLI”), eventually serving as an officer and acquiring a minority ownership stake in the company, while Dawn primarily maintained the marital home. On February 4,2009, Craig filed for divorce.

Craig and Dawn, each represented by counsel,- thereafter negotiated the terms of a Separation Agreement, which, inter alia, provided for alimony and divided their marital assets. The agreement divided all marital assets equally, with the exception of Craig’s ownership stake in NLI. At the parties’ final pre-divorce conference, Dawn produced a draft agreement under which she would receive 20% of Craig’s total interest in the company. But .at Craig’s urging, Dawn agreed to amend the relevant provision to give Dawn 24 shares of NLI instead, which was 20% of the 120 shares Craig represented he owned. Dawn later attested that she consented to this revision because Craig “had represented many times that he would not get any more from a sale [of NLI] than his 6% equity entitled him to.”

In the same provision dividing the shares, Craig promised that he would do “nothing to deprive [Dawn] of the benefits intended by this agreement, including ... entering into any agreement intended to diminish [her] share of any compensation paid for [his] interest in [NLI].” In addition, three different provisions referenced Craig’s “Financial Statement,” which was submitted to the Middlesex Probate and Family Court along with the Separation Agreement, and contained the following clause: “I certify under the penalties of perjury that the information stated on this Financial Statement ... is complete, true, and accurate.”

On January 21, 2010—the same day that the Irishes filed their Separation Agreement—the probate court entered a judgment of divorce nisi. Under Massachusetts law, when parties asserting an irretrievable breakdown in them marriage file a separation agreement in their divorce proceeding, the state probate court must determine whether it approves of that agreement, and that “agreement either shall be incorporated and merged into [the divorce] judgment or by agreement of the parties, it shall be incorporated and not merged, but shall survive and remain as an independent contract.” Mass. Gen. Laws ch. 208, § 1A; see also id. § IB. In its judgment, the probate court found that the Irishes’ agreement was “fair and reasonable,” and “ordered that the parties shall comply with [its] terms.” Additionally, and in line with parallel language in the agreement itself, the probate court declared that the agreement was “incorporated and not merged in” the divorce judgment and that it would “survive and have independent legal significance.”

Roughly two years after the divorce became final, NLI was acquired for $80,000,000, plus $20,000,000 in potential earn-out compensation. Despite having disclosed only a 6% ownership stake during negotiations about the Separation Agreement with Dawn, Craig received a payment of $21,600,000 from the sale of NLI.

On November 15, 2012, Dawn chose to file a complaint in federal district court in Massachusetts based on diversity jurisdiction, alleging various contract, tort, and fraud claims against Craig and two other parties not relevant to this appeal. The primary basis for Dawn’s suit against Craig was her claimed entitlement to 20% of the $21,600,000 payment. Pointing to emails between Craig and his accountant that support her contention, Dawn insisted that Craig concealed a pre-divorce “side deal,” which granted him “phantom equity” well beyond the 6% interest he purported to hold in shares. Accordingly, she sought compensation equal to 20% of his actual profits from the sale, rather than 20% of his 120 shares. Craig, through his pleadings, denied the existence of a side deal. He characterized the $21,600,000 payment as a “bonus” unrelated to any “interest or expectancy due ... at the time of the divorce.” Dawn also claimed entitlement to 50% of $53,719.47 in uncashed checks that she alleged Craig had failed to disclose during negotiations, pursuant to the equal division of non-NLI assets in the Separation Agreement.

On January 22, 2014, the court entertained Craig’s motion to dismiss for lack of subject matter jurisdiction based on the domestic relations exception to federal diversity jurisdiction. From the bench, the court granted Craig’s motion as to the claims sounding in tort and fraud, reasoning that they dealt with “the formation of the divorce decree,” and that to decide them would therefore “necessarily involve[ ] a revision of that decree.” However, the court denied Craig’s motion as to the contract claims, reasoning that they dealt with the Separation Agreement, which was “to be performed over time, [separate from] the [divorce] decree' [that] can stand as it is.”

Thus, even though Dawn and Craig agreed that the probate court would have jurisdiction to try all of the claims, the federal court dismissed the tort and fraud claims but not the contract claims. Instead, the court entered an order “remand[ing]” the contract claims to the probate court so that the entire case could be tried together, despite the fact that the case had not come from the probate court. The court explained that if the claims were “not in fact adjudicated” in the probate court, either party could move to reopen the federal case “upon the conclusion of such proceedings-as there may be in the” probate court.

On May 30, 2014, Dawn moved to have the contract claims set for trial in the federal district court. In her motion, she stated that the probate court had been “unwilling to recognize the remand order as valid, [as] the matter did not originate” there, but she attached no document or order from that court. She also alleged that if she wished to proceed in a state probate court, she would need to “file a new action and start over.” At oral argument for this appeal, Dawn’s counsel conceded that Dawn never attempted to file a complaint or other paper in the probate court. Dawn’s counsel further stated that Dawn preferred to have the contract claims promptly resolved, even at the expense of her tort and fraud claims, and that was why she had returned to federal court.

The district court granted Dawn’s motion to reopen the case on June 2, 2014, and two days later, Craig filed a motion for reconsideration. Craig noted that “it [was] not clear what exactly, if anything, [Dawn had] been doing in the Probate Court in [the preceding] five months,” but she had not initiated a “new action,” and the district court should not sanction her “whimsical forum shopping.” The district court denied Craig’s motion the following day. In light of the court’s decision to exercise jurisdiction, the parties agreed to a case-stated hearing on the issue of liability.

Following that hearing on the merits, the court determined that Craig had in fact concealed equity in NLI from Dawn during the divorce. From this the court concluded that Craig was in breach of two terms of the Separation Agreement, as well as the implied covenant of good faith and' fair dealing. Specifically, the court found that Craig had (1) breached the promise in his Financial Statement—which the court deemed a part of the agreement—to fully disclose his assets; (2) breached the promise in the agreement itself to do nothing to diminish Dawn’s share of his interest in NLI; and (3) acted in bad faith by structuring and representing his interest in NLI as he did. The court also declared Craig liable in contract for concealing uncashed checks.

In a footnote to its June 2015 merits opinion, the court explained its rationale for asserting jurisdiction over the contract claims. According to the court, because the assets at issue were not disclosed “and thus [were] not litigated in the original divorce proceeding,” “no judgment the Court could make with regard to these assets would ‘alter a divorce decree’ in such a way that would bring the matter within the domestic relations exception.”

After a bench trial on the issue of damages, the court awarded Dawn . (1) $3,840,000, representing 20% of the $21,600,000 that Craig had earned from the NLI sale, minus the share that Dawn had already received; (2) $26,859.74, representing 50% of the $53,719.47 that Craig had concealed in uncashed checks; and (3) pre-judgment interest on both sums.

Craig appeals, raising several challenges to the district court’s findings and jurisdiction. Because we agree that the domestic relations exception precluded federal jurisdiction, we reach only that issue.

II.

A district court’s “conclusion regarding the existence vel non of subject matter jurisdiction is a question of law subject to de novo review.” Skwira v. United States, 344 F.3d 64, 72 (1st Cir. 2003). Because the domestic relations exception pertains to -subject matter jurisdiction, parties cannot waive challenges based on it. Dunn v. Cometa, 238 F.3d 38, 41 (1st Cir. 2001).

The domestic relations exception divests federal courts of jurisdiction over “a narrow range of [cases implicating] domestic relations issues” that would otherwise meet the requirements for federal diversity jurisdiction under 28 U.S.C. § 1332(a). Marshall v. Marshall, 547 U.S. 293, 307, 126 S.CT. 1735, 164 L.Ed.2d 480 (2006) (quoting Ankenbrandt v. Richards, 504 U.S. 689, 701, 112 S.Ct. 2206, 119 L.Ed.2d 468 (1992)). Formally, it is the product of judicial construction of Congress’s intent in enacting the diversity jurisdiction statute. Ankenbrandt, 504 U.S. at 700-01, 112 S.Ct. 2206. One commentator suggests that the Supreme Court has anchored the exception in congressional acquiescence to federal court decisions and the policy considerations underlying them. See Richard H. Fallon et al., Hart and Wechsler’s The Federal Courts and The Federal System 1331 (4th ed. 1996). Chief among those policy considerations is the desire “to keep federal courts from meddling in a realm that is peculiarly delicate, that is governed by state law and institutions (e.g., family courts), and in which inter-court conflicts in policy or decrees should be kept to an absolute minimum.” Dunn, 238 F.3d at 41. This desire is in line with the traditional reluctance of federal courts to sanction federal interference with matters thought to be distinctively local. See Andrews v. Andrews, 188 U.S. 14, 32, 23 S.Ct. 237, 47 L.Ed. 366 (1903) (“[I]t is certain that the Constitution ... confers no power whatever upon the government of the United States to regulate marriage in the States or its dissolution .... ”), abrogated on other grounds by Sherrer v. Sherrer, 334 U.S. 343, 353, 68 S.Ct. 1087, 92 L.Ed. 1429 (1948).

That said, we have explained that, “[i]n general, lawsuits affecting domestic relations, however substantially, are not within the exception unless the claim at issue is one to obtain, alter or end a divorce, alimony or child custody decree.” Dunn, 238 F.3d at 41 (emphasis added). This is so because both Ankenbrandt and Marshall stress that the exception’s circumscribed reach extends “not to the subject of domestic relations, but to particular [familial] status-related functions that fall within state power and competence.” 13E Wright & Miller, Federal Practice and Procedure § 3609.1 (3d ed.) (emphasis added).

In that vein, this circuit has been clear that “the allocation of property incident to a divorce [is a] longstanding local funetion[]” of the type best reserved for “state resolution.” DeMauro v. DeMauro, 115 F.3d 94, 99 (1st Cir. 1997) (citing Ankenbrandt, 504 U.S. at 704, 706, 112 S.Ct. 2206); see also Gonzalez Canevero v. Rexach, 793 F.2d 417, 417 (1st Cir. 1986) (per curiam) (construing a former wife’s suit, seeking damages equal to her alleged half interest in a corporation controlled by her former husband, as “a request to obtain a distribution of [marital] property” and affirming its dismissal as “a domestic relations dispute, not properly encompassed within [federal] diversity jurisdiction”), abrogated on other grounds by Mooney v. Mooney, 471 F.3d 246, 248 (1st Cir. 2006).

Indeed, cognizant of the fact that property-distribution and alimony arrangements necessarily accompany a divorce, exist in inextricable relation to each other, and jointly declare rights and obligations arising from marital status under state law, other circuits have also recognized that the domestic relations exception covers attempts to determine or modify not only alimony awards but also the division of marital property pursuant to a divorce. See, e.g., McCavey v. Barnett, 629 Fed.Appx. 865, 867 (11th Cir. 2015) (per curiam) (unpublished opinion); Wallace v. Wallace, 736 F.3d 764, 766 (8th Cir. 2013); McLaughlin v. Cotner, 193 F.3d 410, 413 (6th Cir. 1999), cert. denied, 529 U.S. 1008, 120 S.Ct. 1278, 146 L.Ed.2d 226 (2000). In our view, there is not more published law on this subject because few claims to divide marital property’are ever.filed in federal court. This reflects an understanding that the federal forum is inappropriate and reinforces the exception’s policy rationale: state courts are experts at dividing marital property, entering the necessary decrees, and handling the sensitive conflicts that follow. See Ankenbrandt, 504 U.S. at 704, 112 S.Ct. 2206. This logic extends to the subject matter of the case before us—a dispute over property arising from a separation agreement that ordered alimony, divided marital assets, and was incorporated into a probate court’s divorce decree.

III.

The district court based its assertion of jurisdiction on the notion that, because the assets at issue had never been divided by the state probate court, no federal adjudication as to them could alter an existing domestic relations decree. Our contrary view is that in effectively classifying the assets as marital and allocating them in the first instance, the district court altered an existing domestic relations decree pertaining to divorce and alimony, by amending it and adding new terms to it, as well as by determining the meaning of that decree, which had been entered by the state probate court. Thus, the district court committed error by not dismissing Dawn’s particular contract claims, which she had improperly brought in federal court, and then compounded that error by provisionally “remanding” the claims to a state probate court in which they did not originate instead of dismissing them for lack of jurisdiction. The court then erred once more by granting Dawn’s motion to reopen the adjudication of those claims in federal court. State courts are perfectly competent to address the issues raised by Dawn’s claims, and federal courts have no business “allocating property that [should be] in the custody of a state court, or interfering with” a distribution already made by a state court. See 13E Wright & Miller, supra, § 3609.1 (3d ed.).

Dawn contends that the district court did not perform a domestic relations function, and she relies heavily, but mistakenly, on Dunn, 238 F.3d 38, and Mooney, 471 F.3d 246. In the former case, this court considered tort claims, brought by a father against the ex-wife of his incapacitated son, alleging that she had mismanaged the son’s care and finances. Dunn, 238 F.3d at 39-40. This court held the domestic relations exception inapplicable although, in theory, the conduct giving rise to those claims for damages could have also formed the basis of a charge in the ex-spouses’ earlier divorce proceeding, which would have affected the level of alimony awarded to the son. Id. at 41. Notwithstanding the possible connection to a divorce decree, this court recognized that the plaintiff was not asking the court to grant him alimony or to disturb his earlier award, but rather to independently compensate him for a discrete injury. Id. Here, in contrast, the claims are not so independent, as the plaintiff is asking the federal court to disturb the earlier award by granting her a larger share of the marital assets.

Ultimately, Dunn held that the circumstances counseled the federal court to abstain under Burford v. Sun Oil Co., 319 U.S. 315, 63 S.Ct. 1098, 87 L.Ed. 1424 (1943), and stay the federal case as to the tort claims. 238 F.3d at 42-43. We thus see no conflict between Dunn and our conclusion.

We reject Dawn’s' argument that her action is permissible in federal court not as one to obtain a division of marital property, but as one merely to enforce the division envisioned in her existing agreement with Craig. First, Dawn’s self-serving characterization of her action does not resolve the jurisdictional issue. We look to the reality of what is going on. The domestic relations exception “governs claims over [domestic relations decrees] even where they are cloaked in the ‘trappings’ of another type of claim.” Mandel v. Town of Orleans, 326 F.3d 267, 271 (1st Cir. 2003) (citation omitted); see also Sutter v. Pitts, 639 F.2d 842, 844 (1st Cir. 1981) (“Although [plaintiff] clothed her complaint in the garb of a civil rights action, ... her claim boil[ed] down to a demand for [child] custody ... ‘best left to the states.’-” (citation omitted)). It is an “uncontroversial proposition that a plaintiff may not artfully cast a suit seeking to [create or] modify ... a [domestic relations] decree as a state-law contract or tort claim in order to access the federal courts.” Chevalier v. Estate of Barnhart, 803 F.3d 789, 795-96 (6th Cir. 2015). And “[i]t is incumbent upon the ... court to sift through the claims ... to determine the true character of the dispute to be adjudicated.” Firestone v. Cleveland Tr. Co., 654 F.2d 1212, 1216 (6th Cir. 1981).

Second, while it is true—as we noted in Mooney—that state law, depending on the nature of the claims in the post-divorce suit, may provide for a further action in the probate court, see, e.g., Carpenter v. Carpenter, 901 N.E.2d 694, 699-700 (Mass. App. Ct. 2009), or an independent action in superior court, see, e.g., Reed v. Luther, No. MICV201101210, 2011 WL 6975979, at *3 (Mass. Super. Ct. Nov. 28, 2011), that fact does not decide the question of whether there is federal jurisdiction, which is a matter of federal law, see Dunn, 238 F.3d at 42.

In any event, Dawn’s action is clearly distinct from the model independent “enforcement” action conceived of in Mooney—a suit to enforce compliance with a separation agreement’s terms ordering alimony—and the converse action actually before the Mooney court—a suit to have the agreement deemed unenforceable due to defects at contract formation. See 471 F.3d at 247.

Dawn does not seek to compel a payment actually due under her agreement. And she claims she does not seek rescission, even though the basis of her charge is also a defect at contract formation. Disjointedly, she alleges she was induced to enter a deal for which she would not have bargained, but styles her requested remedy as the benefit of what she bargained for. Yet, since the agreement is silent as to the proper division of the assets at issue, rather than effectuate the parties’ manifest intent, the federal court is asked to decide upon an equitable distribution of marital property in the first instance.

As this court explained in Dunn, a single series of acts, such as fraud, can give rise to many different kinds of suits, including one for “civil tort [damages], [one for] divorce[,] and surely [one for] the allocation of property incident to a divorce.” 238 F.3d at 41. While certain types of contract disputes would not fall under the domestic relations exception, the claims on appeal in this case do. Unlike the tort suit in Dunn, which had domestic relations overtones but asked the court merely to adjudicate “breach of fiduciary duty[,] negligence and waste” claims well within a federal court’s competence, id. Dawn’s suit actually asks the court to perform a domestic relations function reserved for state courts. Specifically, though her complaint is drafted to sound in contract law (a request for damages for breached disclosure and good-faith obligations), Dawn’s suit calls upon the federal court to determine whether certain assets were acquired and held by Craig during the marriage and then to decide what share of them should have been apportioned to' Dawn upon the parties’ separation. The resulting “damages” award operates as a sub silentio assignment of part of the Irishes’ marital estate, on top of the preexisting arrangement approved by the probate court. See Mass. Gen, Laws ch. 208, § 1A.

rv.

In concluding that the district court lacked subject matter jurisdiction pursuant to the domestic relations exception—without considering any of Craig’s other grounds for appeal—we make no appraisal of the merits of Dawn’s claims. We simply hold that a federal court was an improper forum for them.

The judgment of the district court is vacated, and the case is remanded with instructions to dismiss the federal suit with prejudice for want of jurisdiction. The dismissal is without prejudice as to the assertion of similar claims in an appropriate state court.

So ordered. Each party to bear its own costs.

      . Dawn does not appeal the district court’s dismissal of her tort and fraud claims, and we need not address the propriety of that decision.

      . Mooney also pointed out a 1985 opinion of the Massachusetts Supreme Judicial Court, Saltmarsh v. Saltmarsh, 395 Mass. 405, 480 N.E.2d 618 (1985), which stressed that a party seeking rescission of a separation agreement, on the grounds that her “husband had made various misstatements to her on which she had relied in agreeing to” it, should do so in the original divorce court rather than assert that claim by way of an independent post-divorce action. See id. at 620. Dawn’s claims are strikingly similar to those described in Saltmarsh, which further reinforces our conclusion. She does not brief whether Saltmarsh would preclude her independent action as a matter of state law.

      . While not the basis of our jurisdictional holding, the structure of the award that the district 'court ultimately granted to Dawn confirms our concerns, In splitting assets 80-20 and 50-50, the court did not calculate the sum of Dawn’s damages from breached disclosure and good-faith obligations so much as declare what it believed to be an equitable division of those assets.