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Snefjella, B. & Kuperman, V. (2016) It’s all in the delivery: Effects of context valence, arousal, and concreteness on visual word processing. Cognition, 156. 135-146. doi: http://dx.doi.org/10.1016/j.cognition.2016.07.010.
Snefjella B. (2018, May) Extrapolating Large Dictionaries For The Study Of Psychological Distance. Presented at the Distances in Organization Workshop, Montreal QC.
Snefjella, B. (2017, May). Words in the Wild: Strengthening Psychological Science through Social Media. Presented at the University of Alberta, Edmonton, AB.
Snefjella, B., Kuperman, V. & Connolly, J. F. (2016, October) Mental Representation of Words is informed by the Valence, Arousal, and Concreteness of their Contexts. Presented at the Mental Lexicon 2016, Ottawa, ON.
Snefjella, B. & Kuperman, V. (2015, November). Contextual Valence, Arousal, and Concreteness Affect Word Recognition. Presented at the Pre-P’nomics Word Recognition Conference 2015, Chicago, IL.
Snefjella, B., Schmidke, D. & Kuperman, V. (2017, January) National Character Stereotypes Correspond to a Nation’s Distinctive Words. Poster Presented at the SPSP 2017, San Antonio, TX.
Snefjella, B. & Connolly, J. F. (2016, November). Improving Random Effects Structures For Generalized Additive Mixed Models of ERPs. Poster presented at the 57th annual meeting of the Psychonomic Society, Boston, MA.
Snefjella, B. & Connolly, J. F. (2016, September). Searching for Neurophysiological Evidence for Semantic Prosody: An ERP study using generalized additive mixed models. Poster presented at the 18th World Congress of Psychophysiology, Havana, Cuba.
Snefjella, B. & Kuperman, V. (2015, November). Effects of Contextual Valence, Arousal, and Concreteness on Visual Word Recognition. Poster presented at the 56th annual meeting of the Psychonomic Society, Chicago, IL.
Snefjella, B. & Kuperman, V. (2014, November). A “Big Data” Study of Concreteness and Psychological Distance. Poster presented at the 55th annual meeting of the Psychonomic Society, Long Beach, CA.

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John S. Bishof, Jr. (argued), Chicago, IL, for Plaintiff-Appellant.
Elizabeth G. Doolin (argued), Chittenden, Murday & Novotny, Chicago, IL, for Defendants-Appellees.
Dennis Sperandeo brought this action under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq. He sought an award of disability payments under ERISA, 29 U.S.C. § 1132(a) (1) (B), seeking disability income benefits from Lorillard Tobacco Company, Inc.'s ("Lorillard") Group Disability Income Insurance Policy, underwritten by Continental Casualty Company, also known as CNA ("CNA"). The district court granted summary judgment in favor of the plan administrator CNA. For the reasons set forth in the following opinion, we affirm in part and reverse in part the judgment of the district court and remand the case to the district court for further proceedings consistent with this opinion.
Mr. Sperandeo began working at Lorillard as a sales representative in September 1970. On May 7, 2001, he was involved in an automobile accident while he was delivering boxes of tobacco to one of Lorillard's customers. As a result of this collision, he suffered injuries to his head and shoulder. The hospital records from the day of the accident indicate that Mr. Sperandeo suffered a concussion and a "shoulder sprain." R.14, Ex.B at 204-05. The extent of those injuries, as well as their lasting effects on Mr. Sperandeo, are disputed.
Since the accident, Mr. Sperandeo has been treated by a number of physicians and has undergone physical therapy. On August 29, 2001, he underwent left rotator cuff and acromioplasty surgery performed by Dr. David Zoellick. On October 10, 2002, he underwent a second rotator cuff reconstructive surgery performed by Dr. Jeffery Visotsky. Mr. Sperandeo also was treated by a neurologist, Dr. Glen Glista, and by an otologist-neurologist, Dr. Dennis Moore. Additionally, he was examined by several other neurological specialists. With the exception of two days in January 2002, Mr. Sperandeo has not returned to work at Lorillard.
Disability or Disabled means that You [the Lorillard employee to whom the Certificate was issued] satisfy the Occupation Qualifier or the Earnings Qualifier as defined below.
R.14, Ex.A at 13, 25 (emphasis omitted). "Material and Substantial Duties" of employment are defined to mean "the necessary functions of Your Regular Occupation which cannot be reasonably omitted or altered." Id. at 24 (emphasis omitted).
On July 10, 2002, Mr. Sperandeo filed a claim with Lorillard for long term disability benefits under the plan; Lorillard submitted Mr. Sperandeo's claim to CNA for review. The claim was accompanied by a number of medical records submitted by Mr. Sperandeo and a Physical Demands Analysis ("PDA") completed by Lorillard. The PDA detailed the primary duties of the job of sales representative, which included driving to and from clients' businesses, rotating and checking clients' inventories of cigarettes, assembling display units and data entry. The PDA outlined the physical demands of accomplishing these duties. They included bending, twisting, extending/reaching and lifting products weighing from two pounds for one carton of cigarettes to thirty-eight pounds for a whole case.
CNA employees reviewed Mr. Sperandeo's medical records and interviewed him regarding his symptoms and limitations. On October 4, 2002, CNA denied Mr. Sperandeo's claim for benefits. CNA informed Mr. Sperandeo that the medical evidence did not support "functional impairments from either a physical or mental/nervous standpoint that would continuously preclude [him] from performing the substantial and material duties" of a sales representative. Id., Ex.B at 188.
Mr. Sperandeo appealed this decision and supplied CNA with additional medical records. On January 28, 2003, the appeals committee notified him that it had upheld the denial of benefits. See id. at 5-6. Mr. Sperandeo then brought this action against CNA and Lorillard1 under ERISA, 29 U.S.C. § 1132(a) (1) (B), seeking an award of disability income benefits under the plan.
In ruling on CNA's motion for summary judgment, the district court first decided that the appropriate standard for its review of CNA's determination was de novo. In reaching that conclusion, it articulated the rule set forth by the Supreme Court in Firestone Tire and Rubber Co. v. Bruch, 489 U.S. 101, 115, 109 S. Ct. 948, 103 L. Ed. 2d 80 (1989). Under that rule, a denial of benefits challenged under § 1132(a) (1) (B) is to be reviewed under a de novo standard "unless the benefit plan gives the administrator or fiduciary 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. The district court noted that the language granting discretionary authority to CNA only was found in the Summary Plan Description ("SPD") and the Certificate of Insurance ("Certificate"), not in the policy itself. CNA had contended that the discretionary language in the Certificate should be considered part of the policy or, in the alternative, that it was incorporated into the policy. The district court rejected both submissions. The court noted that the Certificate explicitly states that the Certificate is not part of the policy; similarly, the SPD states that it is not part of the plan. The court further noted that the policy, while discussing the contents of the Certificate, did not incorporate the Certificate into the policy. R.26 at 8. The district court then reasoned that, because the discretionary language was not part of the policy, it was not part of the plan. Accordingly, the court followed the rule announced in Firestone and concluded that de novo review was appropriate.
The district court then turned to the merits of the summary judgment motion. It determined that CNA was correct in denying Mr. Sperandeo disability benefits based on his shoulder injury. In the court's view, the PDA established that "a sales representative's primary material and substantial duties are driving, walking, sitting, and standing," and there was no medical evidence that Mr. Sperandeo's shoulder injury "impair [ed] his ability to perform these tasks." R.26 at 15. The court also noted that the PDA indicated that a sales representative must lift cases of cigarettes from floor to ceiling five times per day. Id. at 16. The court recognized that Mr. Sperandeo had a permanent lifting restriction of thirty-five pounds, and that some of the cases of cigarettes would weigh as much as thirty-eight pounds. Id. However, the court noted that the typical weight of a case was twenty-one pounds and that without any evidence of how often a case is over thirty-five pounds, and thus over Mr. Sperandeo's limit, the activity of lifting over thirty-five pounds "cannot be considered to be a substantial duty." Id.
The court also concluded that CNA's decision to deny benefits based on Mr. Sperandeo's neurological condition was correct. The court observed that Mr. Sperandeo did provide evidence that he suffered from "post concussive syndrome," but, continued the court, the evidence did not support the conclusion that it made him "continuously unable to perform the material and substantial duties of his job." Id. (emphasis in original). The court supported this conclusion by noting that Mr. Sperandeo had completed a driving test that showed he could drive without limitations and that several neurologists and a psychologist believed that Mr. Sperandeo could return to work. The court further noted that Dr. Christopher Randolph, an examining physician, had opined that Mr. Sperandeo was "exaggerating his symptoms and exerting little effort on his diagnostic tests." Id. Although a treating physician, Dr. Gerald Lewis, did opine that Mr. Sperandeo should not return to work, the court stated that this opinion was "contrary to the driving test results and not supported by the other medical opinions and evidence presented." Id. Therefore, the court concluded that Mr. Sperandeo was not entitled to benefits based on his neurological condition.
We review a district court's grant of summary judgment de novo, drawing all reasonable inferences in the light most favorable to the non-moving party. Vallone v. CNA Fin. Corp., 375 F.3d 623, 631 (7th Cir. 2004).
In this appeal, we also must determine whether the district court employed the correct standard of review. CNA submits that the district court erred in applying de novo review rather than the "arbitrary and capricious" standard in reviewing the denial of benefits. As we noted earlier, the Supreme Court has stated that a denial of benefits is to be reviewed de novo "unless the benefit plan gives the administrator or fiduciary 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. CNA has the burden to establish that the language of the plan gives it discretionary authority to award benefits. See Gibbs ex rel. Estate of Gibbs v. CIGNA Corp., 440 F.3d 571, 575 (2d Cir. 2006). We have emphasized that the default standard of review is de novo and that, in order to alter this default standard, the "stipulation [for deferential review] must be clear." Herzberger v. Standard Ins. Co., 205 F.3d 327, 332 (7th Cir. 2000).
As a threshold matter, we must identify the documents that constitute the plan. In other cases, identification of the plan has presented difficult analytical questions. Indeed, we have remarked that confusion as to what constitutes "the plan" for purposes of ERISA is "all too common." Health Cost Controls of Ill., Inc. v. Washington, 187 F.3d 703, 712 (7th Cir. 1999). In this respect, ERISA is not particularly helpful in delineating those documents that constitute the plan.2 We, along with other circuits, however, have held that the underlying insurance policy is a plan document for purposes of determining the standard of review. See Ruiz v. Cont'l Cas. Co., 400 F.3d 986, 991 (7th Cir. 2005) (citing cases); see also Houston v. Provident Life & Accident Ins. Co., 390 F.3d 990, 995 (7th Cir. 2004) (holding that language granting discretion to the plan administrator found in the insurance policy was sufficient to trigger arbitrary and capricious review).
The plan administrator and other plan fiduciaries have discretionary authority to determine Your eligibility for and entitlement to benefits under the Policy. The plan administrator has delegated sole discretionary authority to Continental Casualty Company to determine Your eligibility for benefits and to interpret the terms and provisions of the Policy.
R.14, Ex.A at 26 (emphasis omitted). Notably, however, the Certificate further states that " [t]his certificate, however, is not the Policy. It is merely evidence of insurance provided under the Policy." Id. at 4. Therefore, neither the Certificate nor the policy contains language incorporating the Certificate into the policy. In fact, the opposite is true; the Certificate is explicitly not part of the policy.
The Administrator and other Plan fiduciaries have discretionary authority to interpret the terms of the Plan and to determine Your eligibility for and entitlement to benefits in accordance with the Plan. With respect to making benefit decisions, the Plan Administrator has delegated sole discretionary authority to Continental Casualty Company to determine Your eligibility for and entitlement to benefits under Plan and to interpret the terms and provisions of any insurance policy issued in connection with the Plan.
Id. at 27. However, the SPD also states that it "does not constitute a part of the Plan, nor of any insurance policy issued in connection with it." Id.
On the record before us, then, the basic plan document, the policy, contains no indication that CNA, as the plan administrator, has authority to exercise the sort of discretion that would justify the deferential judicial review discussed in Firestone and Herzberger. Two other documents, the Certificate and the SPD, do contain language conferring discretion on CNA, but these two documents are not incorporated by reference into the policy or plan. Indeed, the terms of both documents make clear that they are not so incorporated.
This situation is not new to this court. Indeed, we recently had occasion to deal with such a situation in Schwartz v. Prudential Insurance Co. of America, 450 F.3d 697 (7th Cir. 2006). There we determined that a plan administrator cannot rely on extra-plan documents to expand its discretion when the plan itself bestows no such discretion.4 Id. at 699-700. In Schwartz, we noted our agreement with the reasoning of our colleagues on the Court of Appeals for the Eleventh Circuit in Shaw v. Connecticut General Life Insurance Co., 353 F.3d 1276 (11th Cir. 2003), and on the Court of Appeals for the Ninth Circuit in Grosz-Salomon v. Paul Revere Life Insurance Co., 237 F.3d 1154 (9th Cir. 2001). Schwartz, 450 F.3d at 699. But see Murphy v. Int'l Bus. Machs. Corp., 23 F.3d 719, 721 (2d Cir. 1994) (assuming without analysis that a grant of discretion in an SPD was sufficient, although the court did not describe the remainder of the documents).
Schwartz controls our decision today. Such a result is also consonant with our oft-repeated concern that any language conferring discretion on plan fiduciaries be clear and unequivocal. See Diaz v. Prudential Ins. Co. of America, 424 F.3d 635, 637 (7th Cir. 2005). The lack of discretionary language in the policy itself, coupled with explicit language of the Certificate and the SPD that they are not part of the policy, presents, at the very least, the sort of opaque situation that bars under our case law the application of the deferential "arbitrary and capricious" standard of review.
As we emphasized in Schwartz, Diaz and Herzberger, a plan easily can provide for the deferential standard by setting forth in the plan a clear statement that the administrator has the plenary discretionary authority that warrants the application of such a standard of review. We have gone so far as to draft model language to include in the plan. See Herzberger, 205 F.3d at 331.5 Although we have cautioned that our proposed language does not constitute "magic words," and that other articulations of discretionary power would be sufficient to allow for the arbitrary and capricious standard of review, we certainly have given plan administrators the tools to set up a plan that "will not be characterized as entitling the applicant for benefits to plenary judicial review of a decision turning him down." Id. This plan does not indicate in a clear way to plan participants that CNA would review benefits determinations using discretion. CNA failed to put such language in the policy, and instead only put such language in documents that were explicitly not part of the policy or the plan. Therefore, the district court was correct in determining that de novo review was the proper standard of review for Mr. Sperandeo's denial of benefits.
We therefore must determine de novo whether CNA's decision to deny benefits to Mr. Sperandeo was correct. See Postma v. Paul Revere Life Ins. Co., 223 F.3d 533, 540 (7th Cir. 2000). In our review of CNA's denial, we shall apply the definition of disability found in the Certificate: Mr. Sperandeo must be "continuously unable to perform the Material and Substantial Duties of [his] Regular Occupation." R.14, Ex.A at 13 (emphasis omitted). "Material and Substantial" is defined as "the necessary functions of [his] Regular Occupation which cannot be reasonably omitted or altered." Id. at 24 (emphasis omitted).
Mr. Sperandeo argues that the district court erred in granting summary judgment to CNA, thus affirming CNA's denial of the benefits he sought due to his shoulder injury. He contends that the denial of benefits was incorrect because he met the definition of disability. Specifically, he claims that the permanent lifting restrictions imposed on him because of his injury rendered him unable to lift cases of cigarettes from the floor to the ceiling as required by the duties of his job.
Mr. Sperandeo underwent rotator cuff repair surgery on his left shoulder on August 19, 2001. Dr. Zoellick, who performed that surgery, stated on July 1, 2002, that Mr. Sperandeo could return to work with the following "permanent restrictions": maximum lifting of thirty-five pounds, maximum overhead lifting of five pounds and overhead work "as tolerated." R.14, Ex.B at 47. On October 10, 2002, Mr. Sperandeo underwent a second reconstructive shoulder surgery performed by Dr. Visotsky. Medical records from both Dr. Zoellick and Dr. Visotsky were reviewed by CNA. Dr. Visotsky placed no permanent restrictions on Mr. Sperandeo.
The PDA completed by Lorillard states that a sales representative must be able to carry a sales bag, weighing between twelve and twenty pounds, for about twenty yards, five times a day, and be able to lift it from the floor and to set it back down. The PDA also states that a sales representative must carry cases of cigarettes, weighing twenty-one to thirty-eight pounds, and lift those cases from " [f]loor to ceiling" five times per day. Id. at 482. Additionally, a sales representative must lift counter displays, weighing seven to eleven pounds, from the floor to the counter once per day; he also must roll a floor display weighing seventy-five pounds across the floor once per day. Id.
The PDA also contains a grid that is labeled with four categories ("not present," "< 33%," "33-66%," "> [sic] 100%") at the top, and has various activities listed vertically down the grid, with one of the four percentile boxes selected for each activity. Id. A number of activities were marked to be "33-66%," including: kneeling, crouching, grasping, reaching below shoulders, reaching above shoulders, reaching across, twisting of head, operating a motor vehicle and bending at the waist. Id.
Mr. Sperandeo notes that the PDA itself states that he will have to lift cases of cigarettes anywhere from the floor to the ceiling five times per day, which necessarily will include lifting the cases above his head if they need to be placed near the ceiling. These cases of cigarettes, weighing up to thirty-eight pounds, greatly exceed the overhead lifting restriction imposed by Dr. Zoellick of five pounds and, on some occasions, will exceed his overall lifting capacity of thirty-five pounds. Mr. Sperandeo contends that lifting such cases is a "material and substantial" duty of his job, Appellant's Br. at 19, and thus he has met CNA's definition of disability because he is unable to complete the task due to his restrictions.
Based on the lifting restrictions placed on Mr. Sperandeo by Dr. Zoellick, we do not believe that this record supports summary judgment for CNA. In our view, Mr. Sperandeo has raised a material issue of fact as to whether the overhead lifting of cigarette cases is a "material and substantial" duty of his job. The district court did not discuss how the overhead lifting restriction would apply to Mr. Sperandeo's tasks as a sales representative, even though the PDA states that Mr. Sperandeo regularly would have to lift cases of cigarettes as high as the ceiling. On this record, Mr. Sperandeo has come forward with evidence that he has met the policy definition of disabled. According to at least one physician, he has a permanent overhead lifting restriction of five pounds and, therefore, he "continuously" will be unable to lift a cigarette case weighing up to thirty-eight pounds over his head. The PDA completed by Lorillard itself indicates that such lifting well may be a "material and substantial" duty; it states that Mr. Sperandeo must lift cases of cigarettes five times a day and indicates that "lifting above shoulders" would comprise a significant part of Mr. Sperandeo's activities. Therefore, we believe a material issue of fact remains, rendering summary judgment inappropriate.
CNA argues that Mr. Sperandeo could alter the required overhead lifting by taking the cigarette cartons out of the case and lifting them overhead one by one. Such lifting would fall within Mr. Sperandeo's overhead lifting restriction because each cigarette carton weighs only two pounds. While CNA believes that such alteration is possible, there is no indication in the record that Lorillard has ever stated that such alteration would be available. We recognize that in the box on the PDA that asks "How can this job be modified and for how long?", Lorillard simply wrote " [o]n a Case by Case Basis." Id. at 481. However, there is no evidence that Lorillard, or Lorillard's customers, would allow Mr. Sperandeo to take cigarette cartons out of the case and lift them one by one. Therefore, we find that CNA's proposed "modification" is not sufficient to resolve the factual issue regarding the scope of Mr. Sperandeo's overhead lifting tasks.
Therefore, we must reverse the district court's grant of summary judgment as to Mr. Sperandeo's shoulder injury. A material issue of fact remains regarding whether or not overhead lifting of cigarette cases constitutes a "material and substantial" duty of Mr. Sperandeo's employment with Lorillard.
Mr. Sperandeo also claims that the district court erred in determining that he is not disabled due to a neurological condition. Mr. Sperandeo points to a number of medical records that he submitted to CNA; he claims that these documents support his claim of neurological disability.
Dr. Steven Wolf, a neurologist, examined Mr. Sperandeo and opined that he was suffering from postconcussion syndrome. Dr. Glista, a neurologist who treated Mr. Sperandeo, opined that Mr. Sperandeo suffered a concussion or closed head injury. However, Dr. Glista noted that Mr. Sperandeo's MRI did not show the "deep white matter" that one would see in someone who had sustained "a severe closed head injury." R.14, Ex.B at 389. Additionally, neither Dr. Wolf nor Dr. Glista placed permanent limitations on Mr. Sperandeo's return to work. In fact, Dr. Glista noted in March 2002 that Mr. Sperandeo's "prolonged symptoms are really a bit out of proportion" to the head injury that he sustained. Id. at 392. In May 2002, Dr. Glista stated that he "really was reluctant to put [Mr. Sperandeo] off work from a neuropsychiatric point of view," and that Mr. Sperandeo "must make an attempt to return to work if they are willing to take him back." Id. at 395. Dr. Glista further noted that Mr. Sperandeo's return to work was "really more of an administrative issue than a direct medical issue." Id. In June 2002, Dr. Glista filled out a CNA form in which he stated that Mr. Sperandeo is " [n]ot unfit to work from primary neuro indication." Id. at 474.
Dr. Lewis, an internist who had been Mr. Sperandeo's physician for eleven years, wrote a letter in which he expressed the view that "it is not appropriate for [Mr. Sperandeo] to be working in his current occupation .... I feel he is unsafe because of dysequilibrium [sic], shoulder and back pain." Id. at 145.
Some physicians also remarked on Mr. Sperandeo's lack of effort during examinations, and his possible exaggeration of symptoms. For example, Dr. Randolph, a neuropsychologist who examined Mr. Sperandeo, stated that Mr. Sperandeo's "effort was felt to be questionable at times." Id. at 441. He noted specific instances of this questionable effort, including Mr. Sperandeo's effort on a memory test during which he "performed at chance levels on this test, which is extremely easy to complete with a high degree of accuracy, even for subjects who have sustained severe traumatic brain injury." Id. at 442. Dr. Randolph stated that " [t]his is very clear evidence of an attempt to feign or exaggerate memory impairment," and that it calls into question the other test results. Id. at 442. Dr. Randolph opined that it is "highly unlikely that there is any significant underlying cognitive impairment." Id. at 444.
Therefore, the vast majority of the medical evidence evaluated by CNA did not indicate that Mr. Sperandeo would be unable to "continuously perform the substantial and material duties" of his job. R.14, Ex.B at 13. Drs. Wolf, Moore, Hain and Randolph each placed no restrictions on Mr. Sperandeo's return to work. Dr. Glista, his treating neurologist, expressed a desire to get Mr. Sperandeo to return to work. This evidence is bolstered by Dr. Hain's and Dr. Randolph's view that Mr. Sperandeo may have been exaggerating his symptoms.
Other evidence supporting the conclusion that Mr. Sperandeo was not disabled due to his neurological condition included a behind-the-wheel evaluation of Mr. Sperandeo on April 24, 2002. The evaluator concluded that Mr. Sperandeo could return to independent driving with no identified restrictions. Additionally, Dr. Denise Fiducia, a psychologist, recommended that Mr. Sperandeo " [c]onsider a vocational counselor to facilitate a successful transition back to work." Id. at 381. She also expressed the view that, although some of his early symptoms were "most likely attributable to direct neurological insult," over time symptoms such as Mr. Sperandeo's "can be maintained or exacerbated by secondary symptoms such as pain or emotional distress."8 Id.
The only physician who opined that Mr. Sperandeo could not return to work based on his neurological condition was Dr. Lewis. However, Dr. Lewis was an internist. By contrast, the various physicians who did not place restrictions on Mr. Sperandeo's return to work were specialists in the field of neurology: neurologists, an otoneurologist and a neuropsychologist.9 Therefore, given the opinions of the various specialists who examined Mr. Sperandeo, CNA's decision to deny benefits on the ground of neurological impairment was correct.
For the foregoing reasons, the judgment of the district court is affirmed in part and reversed in part. We remand for further proceedings consistent with this opinion. The parties shall bear their own costs on appeal.
The district court granted summary judgment to defendant Lorillard, stating that, under ERISA, only the plan is a proper defendant See R.26 at 5-6 (citing 29 U.S.C. § 1132(a) (1) (B)). The district court therefore concluded that Lorillard, Mr. Sperandeo's employer, is not the proper party. Id. Mr. Sperandeo has not appealed the grant of summary judgment to Lorillard, and accordingly, the only remaining defendant for the purposes of this appeal is CNA.
any plan, fund, or program which was heretofore or is hereafter established or maintained by an employer or by an employee organization, or by both, 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). . . benefits in the event of sickness, accident, disability, death or unemployment . . . .
CNA relies on two cases in which discretionary language appearing in a certificate of insurance, but not in a policy, was deemed sufficient to trigger the arbitrary and capricious standard of review See Shyman v. Unum Life Ins. Co., 427 F.3d 452, 455 (7th Cir. 2005); Ruiz v. Cont'l Cas. Co., 400 F.3d 986, 991 (7th Cir. 2005). However, not only were both of these cases decided before Schwartz v. Prudential Insurance Co. of America, 450 F.3d 697 (7th Cir. 2006), but they also both contain factors not present in the case before us. In Shyman, the "package of documents" from the insurer stated that the certificate of insurance was part of the policy unless it contradicted a clause of the policy, and neither party contended that there was such a contradiction. 427 F.3d at 455. Therefore, the certificate was incorporated into the policy. In this case, by contrast, the Certificate explicitly is not incorporated into the policy. In Ruiz, we found that both an insurance policy and a certificate of insurance were "plan documents" for purposes of determining the appropriate standard of review; however, there was no indication that the certificate in Ruiz contained language explicitly stating that the certificate was not part of the policy. See 400 F.3d at 991.
The model language proposed by Herzberger to be included in ERISA plans is: "Benefits under this plan will be paid only if the plan administrator decides in his discretion that the applicant is entitled to them." Herzberger v. Standard Ins. Co., 205 F.3d 327, 331 (7th Cir. 2000).
However, Dr. Moore did opine that Mr. Sperandeo should not work until Dr. Moore's assessment, including testing by Dr. Hain, was complete See R.14, Ex.B at 127.
Mr. Sperandeo invites our attention to Hawkins v. First Union Corp. Long-Term Disability Plan, 326 F.3d 914, 917 (7th Cir. 2003), and submits that the treating physician's diagnosis should be given more weight than the opinion of the insurance plan's medical consultant because the treating physician would have superior information. Specifically, Mr. Sperandeo argues that CNA should not have relied on their nurse's interpretation of "aphysiologic," rather than the opinions of his treating physicians, especially Dr. Lewis.
Mr. Sperandeo's argument is flawed for a number of reasons. First, Hawkins was decided prior to the Supreme Court's decision in Black & Decker Disability Plan v. Nord, 538 U.S. 822, 825, 831, 123 S. Ct. 1965, 155 L. Ed. 2d 1034 (2003), in which the Court rejected the notion that plan administrators are obliged to accord special deference to the opinions of treating physicians. Moreover, CNA did not deny Mr. Sperandeo benefits solely on its nurse's investigation of the meaning of the word "aphysiologic." Rather, it reviewed the records of various specialists who did not place restrictions on Mr. Sperandeo's return to work, as well as physicians who believed that Mr. Sperandeo may have been exaggerating his symptoms. Finally, even if we were to give some kind of deference to Mr. Sperandeo's treating physicians, as Mr. Sperandeo requests, it is Mr. Sperandeo's own treating neurologist who opined that Mr. Sperandeo's return to work was more of an "administrative issue" than a medical issue and that Mr. Sperandeo is " [n]ot unfit to work from primary neuro indication." R.14, Ex.B at 395, 474.
Mr. Sperandeo also argues that CNA should have referred his claim to an independent medical expert for review before denying his claim based on CNA's "perceived inconsistencies among the medical reports." Appellant's Br. at 22-23. However, " [i]nsurers remain free (as do judges) to resolve conflicts in the medical submissions."Wallace v. Reliance Standard Life Ins. Co., 318 F.3d 723, 724 (7th Cir. 2003). Additionally, we have stated that obtaining an independent medical examination is "an option, not an obligation," for plan administrators. Id. In any event, many of Mr. Sperandeo's own physicians did not limit his ability to return to work. See id. ("No case of which we are aware holds that, when a plan participant's own doctors opine that he is again able to work, the insurer ... must refer the participant to additional physicians in quest of one who will find a disabling condition.").


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The Respondent is Mohammed Miah of Dhaka, Bangladesh.
The disputed domain names <michelinman.biz> and <michelinman.info> are registered with Genious Communications SARL/AU. The disputed domain name <michelinman.guru> is registered with PDR Ltd. d/b/a PublicDomainRegistry.com (collectively referred to as the "Registrars").
The Complaint was filed with the WIPO Arbitration and Mediation Center (the "Center") on August 27, 2015. On August 28, 2015, the Center transmitted by email to the Registrars a request for registrar verification in connection with the disputed domain names. On August 29, 2015, PDR Ltd. d/b/a PublicDomainRegistry.com transmitted by email to the Center its verification response confirming that the Respondent is listed as the registrant and providing the contact details. On September 7, 2015, Genious Communications SARL/AU transmitted by email to the Center its verification response confirming that the Respondent is listed as the registrant and providing the contact details. In response to a notification by the Center that the Complaint was administratively deficient, the Complainant filed an amended Complaint on September 10, 2015.
In accordance with the Rules, paragraphs 2 and 4, the Center formally notified the Respondent of the Complaint, and the proceedings commenced on September 11, 2015. In accordance with the Rules, paragraph 5, the due date for Response was October 1, 2015. The Respondent did not submit any response. Accordingly, the Center notified the Respondent's default on October 2, 2015.
The Center appointed Alessandra Ferreri as the sole panelist in this matter on October 21, 2015. The Panel finds that it was properly constituted. The Panel has submitted the Statement of Acceptance and Declaration of Impartiality and Independence, as required by the Center to ensure compliance with the Rules, paragraph 7.
The Complainant is Michelin, the company based in France, worldwide leader in the field of automobile and tire manufacturing industries, as well as in connection with hotel/restaurant guides and maps publications, in the automotive industry and in French and foreign gastronomy. The Complainant has marketing operations in more than 170 countries.
- Bangladeshi trademark MICHELIN, n° 27823 registered September 16, 1991, duly renewed for the goods in International Class 12.
In addition, the Complainant actively promotes its MICHELIN trademarks through its websites linked, among others, to the domain names <michelin.com> registered on December 1, 1993 and <michelin.fr> registered on July 21, 2008.
The disputed domain names were registered on February 9, 2015 and all of them resolve to inactive pages.
The Complainant contends that the disputed domain names are identical or, at least, confusingly similar to the Complainant's trademark MICHELIN. The Complainant says that the fame of its trademark MICHELIN has been noted by numerous previous UDRP panels decisions; for example see Compagnie Générale des Etablissements Michelin, Michelin Recherche et Technique S.A. v. Artemio Garza Hernandez Artemio Garza WIPO Case No. D2015- 0257 and the other decisions under annex 9 tp the UDRP Complaint.
The Complainant asserts that the addition of the generic term "man" is not relevant and is not sufficient to avoid the confusing similarity between the disputed domain names and the Complainant's trademarks. On the contrary, the addition of the word "man" that corresponds to the Complainant's emblem, the "Michelin Man", strengthens the association with the Complainant and enhances the level of Internet user confusion.
Similarly, the Complainant argues that the mere addition of the generic Top-Level Domains ("gTLD") ".info", ".biz" and ".guru" is irrelevant because the gTLD is not a distinctive element and is unimportant to determine the confusing similarity between the trademark and the disputed domain names.
The Complainant contends that the Respondent is not affiliated with the Complainant in any way nor has it been authorized or licensed by the Complainant to use its trademarks, or to seek registration of any domain name incorporating said marks. Furthermore, the Respondent has no prior rights or legitimate interests in the disputed domain names. The registration of the MICHELIN trademark preceded the registration of the disputed domain names for years.
The Complainant contends that the Respondent cannot claim any actual or contemplated bona fide or legitimate use of the disputed domain names. Moreover, the Respondent did not make any use or demonstrable preparation to use the disputed domain names in connection with a bone fide offering of goods or services, considering that the disputed domain names resolve to inactive pages.
The Complainant contends that the Respondent has registered and is using the disputed domain names in bad faith.
The Respondent's bad faith registration is established by the fact that the Respondent was aware of the existence of the Complainant's trademark given its status of a well-known trademark throughout the world, including in Bangladesh, where the Respondent resides.
Moreover, the Respondent's awareness of the Complainant's activity and rights may be inferred by the fact that the Respondent registered the disputed domain names incorporating the MICHELIN trademark in its entirety, with the addition of the generic term "man" that clearly relates to the Complainant's icon.
Furthermore, the Respondent's full knowledge of the Complainant's rights can also be inferred by the fact that a simple trademark search at the time of the registration of the disputed domain names would have revealed the Complainant's trademark registrations. The Complainant states that even a simple search on the Internet would have revealed the Complainant's presence and trademarks.
Concerning the use in bad faith, the Complainant contends that, according to numerous previous UDRP panel decisions, the Respondent's bad faith can be inferred by several elements, and in particular: (1) the absence of any license or permission from the Complainant to use such widely known trademark; (2) no actual or contemplated bona fide or legitimate use of the disputed domain names; and (3) the passive holding of the disputed domain names.
(iii) the disputed domain names registered by the Respondent have been registered and are being used in bad faith.
The Panel finds that the disputed domain names <michelinman.biz>, <michelinman.info> and <michelinman.guru> are confusingly similar to the Complainant's MICHELIN trademark, a clearly distinctive and well-known mark in which the Complainant has established rights through registrations and extensive use all over the world.
The disputed domain names incorporate the Complainant's MICHELIN trademark in its entirety; the only difference is the mere adjunction of the word "man".
Furthermore, the Panel finds that the addition of the generic term "man", which clearly relates to the Complainant's emblem, the "Michelin Man" that has been constantly used by the Complainant for over a century, is likely to enhance confusion and to lead customers to believe that the disputed domain names are effectively linked to, affiliated with or connected to the Complainant (see America Online Inc. v. Yetech Communication Inc. and related cases cited supra).
The Panel finds that Internet users may be led to believe that the disputed domain names are in some way connected and associated with the Complainant; this scenario is known as "initial interest confusion" (see Covance, Inc. and Covance Laboratories Ltd v. The Covance Campaign, WIPO Case No. D2004-0206; CBS Broadcasting Inc., f/k/a CBS Inc. v. Nabil Z. aghloul, WIPO Case No. D2004-0988).
Finally, with regards to the TLD suffixes ".biz", ".info" and ".guru", as was found in many previous UDRP decisions, the gTLD extensions are generally not to be taken into consideration when examining the identity or similarity between a complainant's mark and a domain name, as they are a necessary technical component of the domain name and do not give any distinctiveness; for this reason they do not generally affect the analysis under the first element of the Policy for determining whether the domain name is identical or confusingly similar to the trademark.
In light of all the above circumstances, this Panel finds that the disputed domain names <michelinman.biz>, <michelinman.info> and <michelinman.guru> are confusingly similar to the Complainant's trademark.
Therefore, the Panel finds that the Complainant has satisfied the first element of the Policy.
(iii) making legitimate noncommercial or fair use of the disputed domain names, without intent for commercial gain to misleadingly divert consumers or to tarnish the trademark or service mark at issue.
There is no evidence in the record that the Respondent has any rights or legitimate interests in the disputed domain names.
The Complainant states, and proves by submitting relevant evidence that the MICHELIN trademark has been extensively used worldwide for numerous years and has become a well-known trademark throughout the world. The fame of the Complainant's trademark MICHELIN has been confirmed by numerous previous UDRP panels. In this Panel's view, the Respondent must have been aware of the Complainant's existence when it registered the disputed domain names. Indeed, the Respondent's awareness of the Complainant's activity and rights may be inferred by the fact that the Respondent registered the disputed domain names incorporating the MICHELIN trademark in its entirety, with the mere addition of the generic term "man" that clearly relates to the Complainant's symbol and invokes its trademark.
Moreover, the Complainant states that the Respondent has no connection or affiliation with the Complainant and that no license or authorization of any kind has been given by the Complainant to the Respondent to use and register its trademarks or to seek registration of any domain name incorporating said marks. Since the Respondent has no permission from the Complainant, the Panel finds that based on the available evidence, the Respondent's use of the disputed domain names is without rights or legitimate interests.
Furthermore, the disputed domain names do not currently resolve to any active website; such "passive holding" of the disputed domain names in itself is not capable of creating any rights or legitimate interests on the part of the Respondent (see, e.g., Pepperdine University v. BDC Partners, Inc., WIPO Case No. D2006-1003; Archipelago Holdings LLC v. Creative Genius Domain Sales and Robert Aragon d/b/a/ Creative Genius Domain Name Sales, WIPO Case No. D2001-0729).
Finally, given the circumstance of this case, the Panel finds that the Respondent's lack of rights or legitimate interests in the disputed domain names may also be inferred by the fact that the Respondent never answered to the Complainant's cease-and-desist letters and filed no response; the Respondent has not availed himself of his rights to respond to the Complaint. According to previous UDRP panels "non-response is indicative of a lack of interests inconsistent with an attitude of ownership and a belief in the lawfulness of one's own rights" (see Pomellato S.p.A. v. Richard Tonetti, WIPO Case No. D2000-0493; and GA Modefine S.A. and Giorgio Armani S.p.A. v. Yoon-Min Yang, WIPO Case No. D2005-0090).
Therefore, based on the evidence, the Panel is satisfied that the second element of the Policy is met.
The Panel finds that the disputed domain names were registered and are being used in bad faith.
The Complainant's name, trademarks and activities are well-known throughout the world and considering the widespread use and fame of the Complainant's trademarks, in this Panel's view the Respondent must have been aware of them when it registered the disputed domain names. Indeed, the Respondent's awareness of the Complainant's activity and rights may be inferred by the fact that the Respondent registered the disputed domain names incorporating the MICHELIN trademark in its entirety, with the mere addition of the generic term "man" that clearly refers to the Complainant's icon, the "Michelin Man".
In the light of the above, and in line with other prior decisions (Banca Sella S.p.A. v. Mr. Paolo Parente, WIPO Case No. D2000-1157; Veuve Cliquot Ponsardin Maison Fondée en 1772 v. The Polygenix Group Ltd., WIPO Case No. D2000-0163; Parfums Christian Dior v. Javier Garcia Quintas and Christiandior.net, WIPO Case No. D2000-0226; Ferrero S.p.A. v. Mario Pisano, WIPO Case No. D2000-1794; Ferrero S.p.A. v. Publinord S.r.l., WIPO Case No. D2002-0395), the Panel believes that, in the absence of any rights or legitimate interests and lacking any contrary evidence by the Respondent, the Respondent's registration of the disputed domain names which incorporate the Complainant's worldwide well-known trademark suggests opportunistic bad faith (MasterCard International Incorporated v. North Tustin Dental Associates, WIPO Case No.D2007-1412; Mastercard International Incorporated v. Total Card Inc., WIPO Case No. D2007-1411; see also Lancôme Parfums et Beauté & Cie, L'Oréal v. 10 Selling, WIPO Case No. D2008-0226 and American Express Marketing & Development Corp. v. Gabriyel Akbulut, WIPO Case No. DME2010-0003).
Moreover, as referred to by the Complainant, the Respondent did not reply to Complainant's cease-and-desist letter, nor to the subsequent reminders. The Panel finds that "the failure of the Respondent to respond to the letter of demand from the Complainant further supports an inference of bad faith" (see Bayerische Motoren Werke AG v. This Domain is For Sale/Joshuathan Investments Inc, WIPO Case No. D2002-0787).
Concerning the use of the disputed domain names, the Complainant has proven that the disputed domain names currently display no content. With regard to this issue, the Panel shares the Complainant's view and, according to several precedents originated from the decision Telstra Corporation Limited v. Nuclear Marshmallows, WIPO Case No. D2000-0003, the Panel believes that, in certain circumstances, the inaction in respect of a domain name registration can constitute a domain name being used in bad faith.
(iii) the absence of any reply by the Respondent to the Complainant's contentions.
The Panel concludes that the Respondent's passive holding of the disputed domain names satisfies the requirement of paragraph 4(a)(iii) of the Policy.
In light of all the above circumstances, the Panel is satisfied that the third element is met and that the disputed domain names <michelinman.info>, <michelinman.biz> and <michelinman.guru> were registered and are being used in bad faith.
For the foregoing reasons, in accordance with paragraphs 4(i) of the Policy and 15 of the Rules, the Panel orders that the disputed domain names <michelinman.biz>, <michelinman.info> and <michelinman.guru> be transferred to the Complainant.

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All Crowdfunding Offerings Must Be Through Escrow. Importantly, the CF Act requires that all crowdfunding offerings be funded through an escrow at a depository institution, such as a bank or savings and loan (C.R.S. §§ 11-51-308.5(3)(a)(IV)(D); 11-51-308.5(3)(a)(IV)(F); and 11-51-308.5(3)(a)(IX)). The maximum amount of the offering to be raised can be no more than twice the minimum amount of the offering, and funds cannot be released from escrow until at least the minimum offering is raised.
The CF Act provides that the escrow agent must be “a bank, regulated trust company or corporate fiduciary, savings bank, savings and loan association, or credit union authorized to do business in Colorado” (C.R.S. §§ 11-51-308.5(3)(a)(IV)(D)). This is somewhat different than the definition of “depository institution” found in C.R.S. 11-51-201(5), but hopefully will be interpreted similarly.
When the issuer has raised at least the minimum offering in the escrow and desires the release of the offering proceeds (whether or not the issuer wishes to continue the offering), the issuer must file a Form ES-CF with the Securities Commissioner and wait seven days before having the funds released from escrow. As a condition to the release from escrow, the issuer must also provide for the delivery of the securities and certain notices to the persons participating in the crowdfunding offering as defined in the rules. It is likely that many of the crowdfunded securities will be uncertificated.
Corporate stock may be certificated or uncertificated. If uncertificated, C.R.S. § 7-106-207 sets forth the information that must be included in a written statement that (according to the CF Act and the rules) must be sent to the purchaser at or before the release of the escrow funds. C.R.S. § 7-106-206 sets forth the information that must be included on certificates for corporate stock.
Neither the Colorado LLC Act nor the partnership acts contemplate certificates representing ownership interests. Even an issuer-made certificate would not constitute a “certificate” in the corporate sense unless the election contemplated under § 4-8-202 is made in the operating agreement or partnership agreement.
Where the securities consist of a debt instrument (such as a promissory note), the debt instrument should be in writing and delivered at or before the release of the escrow funds.
In any case, it is important that the issuer maintain records accurately reflecting the ownership of the securities issued in the crowdfunding offering and any other outstanding securities of the issuer. The issuer may choose to do this directly or by retaining a transfer agent to do so.
While the issuer may continue the crowdfunding offering after obtaining the release of funds from escrow, all funds must still go through the escrow account and releases from the escrow must be accomplished in accordance with the rules. Furthermore, any release of funds from the escrow is likely a material event for which the issuer would be obligated to update its disclosure; the expenditure of those funds after release from escrow may also be a material event requiring updated disclosure.
Data Collection, Record-Keeping, and Reporting. The on-line intermediary may provide a method of collecting data from investors who deposit funds into escrow, and may provide a portal to the escrow agent for the transfer of funds by ACH. These are among the records that the issuer must obtain and retain, although the rules provide that the issuer may contract with the on-line portal to maintain the records retention on the issuer’s behalf.
During and following the offering, the issuer has certain reporting obligations to all of its owners, including the new investors. These reports are defined in the CF Act and the rules, and the obligation continues indefinitely. Wise issuers will report more frequently to their owners and investors than the quarterly report required by the CF Act (C.R.S. § 11-51-308.5(3)(a)(XIII)) and the rules (Rule 3.24.D, Notice of Completion of the Transaction and Rule 3.24.H, Quarterly Report Timing). The CF Act does set forth the minimum requirements for these reports, however, including an obligation to report the compensation being paid to the directors and executive officers and to provide a management analysis of the issuer’s business operations and financial condition.
In balancing all relevant factors, granting the waiver is consistent with the objective of the Colorado Securities Act to protect investors and maintain public confidence in securities markets while avoiding unreasonable burdens on participants in capital markets.
Unlike the rewards-based crowdfunding models of Kickstarter, Indiegogo, and other similar sites, crowdfunding under the CF Act involves the offer and sale of securities which is subject to regulation under and compliance with federal law (the Securities Act of 1933 and the Securities Exchange Act of 1934) and, in Colorado, the Colorado Securities Act. Strict compliance with the CF Act and the rules does not exempt the issuer or the other participants in the offering from potential liability; a failure to comply strictly with the CF Act and the rules may lead to potential administrative civil, or even criminal, liability.
Federal Compliance. The first issue under the CF Act, as under the crowdfunding legislation adopted in more than 20 other states, is compliance with SEC Rule 147 which provides an exemption from the registration requirements of § 5 of the 1933 Act. A failure to comply with Rule 147 leads to a violation of the registration requirements of the 1933 Act and the risk of issuer liability for rescission (§ 12(a)(1) of the 1933 Act) and the liability of the persons controlling the issuer (§ 15 of the 1933 Act).
Even strict compliance with the requirements of Rule 147 does not preclude the risk of future liability. Like all exemptions from registration, Rule 147 merely exempts the offering from the registration requirements of the 1933 Act; it does not provide an exemption from the disclosure and anti-fraud requirements.
Where the disclosure in the Colorado Form CF-2 is inadequate, incomplete, or inaccurate in any material respect, the issuer (under 1933 Act § 12(a)(2) and 1934 Act Rule 10b-5) and persons controlling the issuer are potentially liable, as are (potentially) other participants in the offering.
Where the issuer or its controlling persons take actions (such as spending the proceeds raised) contrary to the disclosure, they have significant risk of liability.
When broker-dealers or sales representatives are involved in the offering, they have the risk of liability under both federal law and the rules of their governing organization, the Financial Industry Regulatory Authority (“FINRA”). When an on-line intermediary is involved, the liability of the on-line intermediary is lesser as long as the on-line intermediary does not participate in the offering beyond merely posting the disclosure documents and perhaps gathering information and maintaining certain limited records.
Of course, where the on-line intermediary (or any other participant in the offering) knows, or reasonably should know, that the disclosure is inadequate, incomplete, or inaccurate in any material respect, such persons have significantly increased their risk of liability in an administrative, civil, or even criminal forum.
Colorado Compliance. Strict compliance with the CF Act and the rules also creates an exemption from the registration requirements found in § 11-51-301 of the Colorado Securities Act. Disclosure in the Form CF-2 that is accurate and complete in all material respects also limits the risk of liability for securities fraud. Where there is a failure to comply with the exemption or the disclosure requirements in any material respect, issuers and persons controlling the issuer are potentially liable in a state administrative, civil, or even criminal forum.
In Colorado, § 11-51-501 makes it unlawful for any person (issuer, broker-dealer, sales representative, or investment advisor) or controlling person (§ 11-51-604(5)) to “employ any device, scheme, or artifice to defraud” an investor, to “make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading,” or to “engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person.” Where the Securities Commissioner suspects a violation of the registration requirements, the broker-dealer licensing requirements, or the disclosure requirements, he may initiate an investigation (§ 11-51-601) or seek enforcement by an administrative cease-and-desist proceeding (§ 11-51-606(1.5)), injunction (§ 11-51-602), civil action (§ 11-51-604), or through a criminal proceeding (§ 11-51-603). Under § 11-51-604, investors may also seek civil damages against the issuer and controlling persons for violations of the anti-fraud rules.
Colorado Crowdfunding Act. The CF Act provides certain exemptions from liability which are applicable to the Colorado Securities Act but which would not be applicable under a federal complaint.
There is no provision exempting issuers or the issuer’s controlling persons from liability for disclosure that is inadequate, incomplete, or inaccurate in any material respect, or for post-offering actions that are inconsistent with the disclosure made.
Escrow agents are the key to the success (and even the ability to conduct) an offering under the CF Act. The Act (in § 11-51-308.5(3)(a)(IV)(D)) provides that the escrow agent “does not have any duty or liability, contractual or otherwise, to any purchaser or other person.” Most escrow agreements will provide contractual exoneration of the escrow agent except in the case of bad faith or willful misconduct by the escrow agent.
Broker-dealers and sales representatives participating in any offering under the CF Act remain subject to their regulatory obligations, including due diligence and “know your customer.” Because of these continuing requirements, broker-dealers and sales representatives will want to complete due diligence investigations and hire legal counsel—all of which will make a crowdfunding offering much more expensive to the issuer.
On-line intermediaries (defined in § 11-51-201(11.5)) are more likely participants in crowdfunding offerings in Colorado than are broker-dealers and sales representatives. On-line intermediaries are specifically exempted from the definition of “broker-dealer” under § 11-51-402(1)(c) provided the on-line intermediary limits its activities as contemplated in the CF Act and the rules. Even though originally contemplated to be passive bulletin boards who may provide some services, the rules impose certain additional obligations not specifically contemplated in the CF Act, including the obligations described in Rule 3.28.C to deny access to the on-line intermediary where the on-line intermediary has a “reasonable basis” for believing that the issuer is not acting in compliance with the CF Act, that the issuer does not have adequate record-keeping capabilities, or that the issuer raises investor protection concerns.
The Risk of Fraud. Fraud is one of the principal risks of a crowdfunding offering as it is with any capital raising transaction involving the offer and sale of securities. It is likely that offerings under the CF Act will follow the national trend—where purchasers invest from $100 to $300 in equity or debt securities. In most cases, this will be “pocket change” or “slot machine money.” Where the purchaser loses her investment either through a bad business decision or even fraud, it likely will not be worth the purchaser’s time and expenditure to take legal action. Perhaps the purchaser will file a complaint with the Colorado Division of Securities, but it is unlikely that the purchaser will take any more extensive action to recover her investment.
Thus, purchasers of crowdfund securities seeking to protect themselves should follow the typical mantra of investor advocates—know and trust your management. This again leads to the most-likely-to-be-successful crowdfunding offering—those within affinity groups where the investors know management or have other bases to trust management.


Plaintiff, a prisoner at the State Correctional Institution at Fayette (SCI-Fayette), seeks to bring a civil action in forma pauperis, without prepayment of fees or security therefor, asserting claims pursuant to 42 U.S.C. § 1983. The Prison Litigation Reform Act of 1995, Pub.L. No. 104-134, 110 Stat. 1321 (April 26, 1996) (the "Act"), which amends 28 U.S.C. § 1915, establishes certain financial requirements for prisoners who are attempting to bring a civil action or file an appeal in forma pauperis.
Under the Act, a prisoner bringing a civil action in forma pauperis must pay the full amount of the $150 filing fee. 28 U.S.C. § 1915(b)(1). The prisoner must submit a certified copy of his inmate trust fund account statement for the 6-month period immediately preceding the filing of his complaint so the Court can determine how the $150 filing fee will be paid. 28 U.S.C. § 1915(a)(2). The prisoner must obtain this statement from the appropriate official of each prison at which he was or is confined. Id. The Court must then "assess [the prisoner's financial status] and, when funds exist, collect, as a partial payment of any court fees required by law, an initial partial filing fee of 20 percent of the greater of — (A) the average monthly deposits to the prisoner's account; or (B) the average monthly balance in the prisoner's account for the 6-month period immediately preceding the filing of the complaint. . . ."
Plaintiff's inmate trust fund account statement shows average monthly deposits of $0, average monthly balances of $0, and a current balance of $0. An initial partial filing fee will not be assessed, however, each time that the balance in the plaintiff's inmate trust account exceeds $10, an amount no greater than 20 percent of the money credited to the plaintiff's account during the preceding month will be deducted and forwarded to the Clerk of Court until the filing fee is paid. 28 U.S.C. § 1915(b)(2).
Plaintiff may not have known when he brought this action that he must pay the filing fee, and that even if the full filing fee, or any part of it, has been paid, the Court must dismiss the case if it finds that the action is: (1) frivolous or malicious; (2) fails to state a claim upon which relief may be granted; or (3) seeks monetary relief against a defendant who is immune from such relief. 28 U.S.C. § 1915(e)(2)(B). If the Court dismisses the case for any of these reasons, the prisoner will not get his filing fee back.
We shall give the plaintiff twenty (20) days from the date of this order to decide whether he wants to proceed with this case. If by that time, the plaintiff decides not to proceed with the case, he need not pay the $150 filing fee.
3. The Clerk of Court shall CLOSE this case statistically.