Fifth Circuit Reverses Win for NFL Player Seeking Higher Tier of Disability Benefits under NFL Player Retirement Plan

In Cloud v. Bert Bell/Pete Rozelle NFL Player Ret. Plan, 83 F.4th 423 (5th Cir. 2023), the Fifth Circuit Court of Appeals reversed the district court’s award of additional disability benefits to former NFL running back Michael Cloud, based on the court’s finding that Cloud did not meet the requirements of the NFL Player Retirement Plan for the highest tier of benefits. Though the court acknowledged the district court’s “disturbing” findings about “the NFL Plan’s disregard of players’ rights under ERISA,” it was nonetheless compelled to enforce the Plan’s terms.

Cloud’s NFL career ended in 2006 following a series of concussions. As a participant in the Plan, Cloud applied for and received “line of duty” (LOD) benefits. Cloud also received a disability award from the Social Security Administration effective December 31, 2008, the date he stopped engaging in substantial gainful activity. After the SSA award, in 2014, Cloud sought reclassification to T&P benefits (reserved to those “totally and permanently” disabled). The Plan’s Disability Initial Claims Committee conducts the initial benefits determinations, and the Retirement Board reviews the Committee’s decisions on appeal. The Committee granted T&P benefits but under the “Inactive A” category because Cloud did not become totally and permanently disabled “shortly after” his disability arose. Cloud did not appeal the Committee’s determination to the Board. In 2016, Cloud filed a claim for reclassification to “Active Football” status, which would result in significantly more disability benefits. In support of his claim, he submitted the same documentation as he did in 2014 but included a 2012 doctor report and a personal statement regarding his mental disorders. The Committee denied the request for reclassification for a few reasons, including that there was no evidence of “changed circumstances” since the 2014 award of benefits. Cloud appealed the decision to the Board, arguing among other things, that the Board should waive the “changed circumstances” requirement. The Board denied Cloud’s appeal. As part of its decision, the Board interpreted “changed circumstances” (an undefined Plan term) as “a new or different impairment from the one that originally qualified you for T&P benefits.” Cloud then filed a lawsuit under ERISA.

The district court held a six-day bench trial and then documented in an 84-page memorandum opinion the Committee’s and the Board’s denial of a full and fair review. The district court found that the Board acted arbitrarily and capriciously in denying reclassification and awarded the Active Football maximum of $265,000/year, more than $1 million in back pay, and attorneys’ fees. The Plan appealed.

Though the Plan raised several challenges on appeal, the court discussed only one of them because it is dispositive: “Cloud cannot show that ‘changed circumstances’ entitle him to reclassification to top-level Active Football benefits.” Once a player has been awarded T&P benefits, they are not eligible for another category of benefits unless the Player shows by clear and convincing evidence that “because of changed circumstances,” the Player satisfies the conditions of eligibility for a different category of T&P benefits. The court found that Cloud did not, and cannot, demonstrate changed circumstances. The court found that he forfeited the issue at the administrative appeal level, and in any event, has not identified any clear and convincing evidence supporting his claim. The 2012 doctor’s report was available in 2014 when Cloud first sought reclassification. Even though the Board has applied various meanings to the phrase “changed circumstances,” the court found that the Board’s reading of the phrase as applied to Cloud was reasonable. Even applying the various interpretations of the phrase to Cloud’s case, it would not change the outcome. The court reversed the district court and remanded with instructions to enter judgment in favor of the NFL Plan.