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Parties Involved:
General Re Corporation
Appellee
ING Employee Benefits Disability Management Services
Appellee
ING Groep, N.V.
Appellee
ING Investment Management, LLC
Appellee
ING North America Insurance Corporation
Appellee
Curtis F. Lee
Appellant
Reliastar Life Insurance Company
Appellee
Kimberly Shattuck
Appellee

Document Text:

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

CURTIS F. LEE,

Plaintiff-Appellant,

v.

ING GROEP, N.V., a Dutch

entity; RELIASTAR LIFE

INSURANCE COMPANY, a

Minnesota corporation; ING

EMPLOYEE BENEFITS DISABILITY

MANAGEMENT SERVICES, a

Minnesota corporation; ING

NORTH AMERICA INSURANCE

CORPORATION, a Delaware

corporation; ING INVESTMENT

MANAGEMENT, LLC, a Delaware

limited liability company;

KIMBERLY SHATTUCK; GENERAL

RE CORPORATION, a Delaware

corporation,

Defendants-Appellees.

No. 14-15848

D.C. No.

2:12-cv-00042-ROS

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2 LEE V. ING GROEP

CURTIS F. LEE,

Plaintiff-Appellee,

v.

ING NORTH AMERICA

INSURANCE CORPORATION, a

Delaware corporation,

Defendant-Appellant,

and

GENERAL RE CORPORATION, a

Delaware corporation; ING

GROEP, N.V., a Dutch entity;

RELIASTAR LIFE INSURANCE

COMPANY, a Minnesota

corporation; ING EMPLOYEE

BENEFITS DISABILITY

MANAGEMENT SERVICES, a

Minnesota corporation; ING

INVESTMENT MANAGEMENT,

LLC, a Delaware limited liability

company; KIMBERLY SHATTUCK,

Defendants.

No. 14-15936

D.C. No.

2:12-cv-00042-ROS

OPINION

Appeal from the United States District Court

for the District of Arizona

Roslyn O. Silver, Senior District Judge, Presiding

Argued and Submitted May 9, 2016

San Francisco, California

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LEE V. ING GROEP 3

Filed July 25, 2016

Before: Jerome Farris, Diarmuid F. O’Scannlain,

and Morgan Christen, Circuit Judges.

Opinion by Judge Farris

SUMMARY*

Employee Retirement Income Security Act

The panel affirmed in part and reversed in part the district

court’s summary judgment in favor of the defendants in an

action under the Employee Retirement Income Security Act,

vacated an award of statutory penalties in favor of the

plaintiff, and remanded.

Affirming in part, the panel held that the district court

properly imposed a penalty under 29 US.C. § 1132(c)(1) on

the ERISA plan administrator for failing to produce the Plan

Document within 30 days of the plaintiff’s request. 

The panel reversed the district court’s decision to impose

a penalty based on the plan administrator’s failure to timely

produce emails. Following other circuits, the panel held that

29 C.F.R. § 2560.503-1(h)(2)(iii) imposes requirements on

benefits plans, not plan administrators. Accordingly, a failure

to comply with this regulation cannot give rise to a penalty

under § 1132(c)(1), which applies only to documents that

* This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.

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4 LEE V. ING GROEP

plan administrators are required to produce. The panel

concluded that it was not bound by dicta in Sgro v. Danone

Waters of N. Am., Inc., 532 F.3d 940 (9th Cir. 2008). The

panel remanded for the district court to assess a penalty based

solely on the failure to timely produce the Plan Document.

COUNSEL

Thomas A. Connelly (argued) and Leo R. Beus, Beus Gilbert

PLLC, Phoenix, Arizona, for Plaintiff-Appellant/CrossAppellee.

Gregory A. Bromen (argued) and William D. Hittler, Nilan

Johnson Lewis PA, Minneapolis, Minnesota; Ann-Martha

Andrews and Lawrence A. Kasten, Lewis & Roca LLP,

Phoenix, Arizona; for Defendant-Appellees ReliaStar Life

Insurance Company, ING Investment Management, LLC,

and Kimberley Shattuck, and Defendant-Appellee/CrossAppellant ING North America Insurance Corporation.

Larry P. Schiffer (argued), Squire Patton Boggs (US) LLP,

New York, New York; Aaron A. Boschee, Squire Patton

Boggs (US) LLP, Denver, Colorado; for Defendant-Appellee

General Re Life Corporation.

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LEE V. ING GROEP 5

OPINION

FARRIS, Senior Circuit Judge:

Curtis Lee is a former employee of ING Investment

Management, LLC. Through his employment, Lee

participated in a long term disability plan that is governed by

the Employee Retirement Income Security Act of 1974. See

29 U.S.C. § 1001 et seq. ING North America Insurance

Corporation was the plan administrator for this long term

disability plan. Lee applied for long term disability benefits

under the plan, which he received for a while, but then his

benefits were terminated. Lee filed a lawsuit against ING

Investment Management, ING North America, and others,

seeking inter alia, statutory penalties against ING North

America for failing to timely produce documents he had

requested. See 29 U.S.C. § 1132(c)(1). The district court

granted summary judgment to Lee on this claim and imposed

a penalty of $27,475. Lee appealed other aspects of the

district court’s decision, and ING North America crossappealed on this issue.1 We have jurisdiction under 28 U.S.C.

§ 1291. We affirm in part, reverse in part, vacate the penalty

award, and remand.

I.

On January 20, 2010, ReliaStar Life Insurance Company,

the claims administrator for Lee’s long term disability plan,

indicated that ReliaStar had insufficient evidence of Lee’s

continuing disability to approve further disability benefits. In

1 We address the other issues in this case in a memorandum disposition

filed concurrently with this opinion.

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6 LEE V. ING GROEP

response, on February 5, 2010, Lee’s attorney wrote two

letters requesting documents.

The first letter was sent to Yoon Kim, counsel for ING

North America. This letter stated that Lee was entitled to a

broad range of documents and requested “copies of all

relevant communications . . . concerning Curtis Lee and his

claims for disability benefits” and specifically referenced

email communications. Kim interpreted this letter as a

request for “all documents relevant to Curtis’ claim for

benefits.”

The second letter was sent to James Kochinski, counsel

for ReliaStar, the claims administrator. This letter explicitly

requested all documents relevant to Lee’s claim. Kochinski

informed Kim about this letter.

On November 9, 2011, ING North America produced the

requested emails. On March 11, 2013, ING North America

produced a copy of the Plan Document.

II.

We review a district court’s grant of summary judgment

de novo, to determine whether, viewing the evidence in the

light most favorable to the non-moving party, any genuine

issue of material fact exists, and whether the district court

correctly applied the relevant law. Ashton v. Cory, 780 F.2d

816, 818 (9th Cir. 1986).

III.

Under 29 U.S.C. § 1132(c)(1), a plan administrator who

“fails or refuses to comply with a request for any information

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LEE V. ING GROEP 7

which such administrator is required by this subchapter to

furnish . . . within 30 days after such request may in the

court’s discretion be personally liable to such participant or

beneficiary in the amount of up to $100 a day from the date

of such failure or refusal.” The district court found that ING

North America was liable under this statute for failing to

timely produce both the Plan Document and the emails.

ING North America does not dispute that this statute

authorizes penaltiesfor failing to produce the Plan Document. 

However, ING North America argues that Lee never actually

requested the Plan Document in his February 5, 2010 letter to

Kim. Instead, the letter only asked for copies of email

communications, and ING North America argues that failing

to produce emails cannot give rise to penalties under

29 U.S.C. § 1132(c)(1).

A. Plan Document

The district court correctly found that no genuine issue of

material fact exists as to whether Lee requested the Plan

Document from ING North America. Lee sent a document

request to ING North America’s counsel on February 5, 2010. 

Regardless of the exact wording of this letter, ING North

America’s counsel interpreted it as a request for all

documents relevant to Lee’s claim. In addition, ING North

America was aware of the letter sent to ReliaStar that

explicitly requested all relevant documents.

ING North America did not dispute that the Plan

Document was a relevant document, or that it did not produce

the Plan Document within 30 days of February 5, 2010. No

genuine issue of material fact remained. We therefore affirm

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8 LEE V. ING GROEP

the district court’s decision to impose a penalty on ING North

America for its failure to timely produce the Plan Document.

B. Emails

Lee argued to the district court that a statutory penalty for

failing to timely produce the requested emails was

appropriate because 29 C.F.R. § 2560.503-1(h)(2)(iii)

requires employee benefits plans to “[p]rovide that a claimant

shall be provided, upon request and free of charge, reasonable

access to, and copies of, all documents, records, and other

information relevant to the claimant’s claim for benefits.” 

Lee argued that the emails were relevant to his claim for

benefits and so the failure to timely produce them warranted

a penalty under 29 U.S.C. § 1132(c)(1).

ING North America admitted that Lee requested the

emails, and ING North America did not produce them within

30 days. However, ING North America argued that failure to

produce documents required to be produced under 29 C.F.R.

§ 2560.503-1(h)(2)(iii) cannot give rise to a penalty under

29 U.S.C. § 1132(c)(1) because 29 C.F.R. § 2560.503-1(h)

imposes requirements on benefits plans not on plan

administrators and 29 U.S.C. § 1132(c)(1) only applies to

documents that plan administrators are required to produce.

The First, Second, Third, Sixth, Seventh, Eighth, and

Tenth Circuits, as well as several district courts in the Ninth

Circuit, have all agreed with ING North America’s position,

and found that a failure to follow claims procedures imposed

on benefits plans, as outlined in 29 U.S.C. § 1133 and

29 C.F.R. § 2560.503-1, cannot give rise to a penalty under

29 U.S.C. § 1132(c)(1). See Halo v. Yale Health Plan, Dir.

of Benefits &Records Yale Univ., 819 F.3d 42, 58, 60–61 (2d.

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LEE V. ING GROEP 9

Cir. 2016); Medina v. Metro. Life Ins. Co., 588 F.3d 41, 48

(1st Cir. 2009); Brown v. J.B. Hunt Transport Servs., Inc.,

586 F.3d 1079, 1089 (8th Cir. 2009); Wilczynski v.

Lumbermens Mut. Cas. Co., 93 F.3d 397, 405–07 (7th Cir.

1996); VanderKlok v. Provident Life and Accident Ins. Co.,

956 F.2d 610, 618 (6th Cir. 1992); Walter v. Int’l Ass’n of

Machinists Pension Fund, 949 F.2d 310, 315–16 (10th Cir.

1991); Groves v. Modified Ret. Plan for Hourly Paid Emps.

of the Johns Manville Corp. and Subsidiaries, 803 F.2d 109,

116 (3d Cir. 1986); Care First Surgical Ctr. v. ILWU-PMA

Welfare Plan, No. CV14-01480 MMM (AGRx), 2014 WL

6603761, at *20–23 (C.D. Cal. July 28, 2014); Streit v.

Matrix Absence Mgmt., Inc., No. 3:12-CV-01797-AC, 2014

WL 667535, at *3–7 (D. Or. Feb 18, 2014); Bielenberg v.

ODS Health Plan, Inc., 744 F. Supp. 2d 1130, 1143–44 (D.

Or. 2010).

The district court agreed with our sister circuits that ING

North America’s reading of the penalty statute was the better

reading, but found that it was bound by this Court’s precedent

in Sgro v. Danone Waters of North America, Inc., 532 F.3d

940 (9th Cir. 2008), to side with Lee.

In Sgro, this Court was confronted with a claim for

statutory penalties based on a failure to produce notes kept by

claims personnel. See id. at 942. The plaintiff had alleged

that a penalty under 29 U.S.C. § 1132(c)(1) was appropriate

because the notes were relevant to his claim for benefits, and

so had to be produced under 29 C.F.R. § 2560.503-

1(h)(2)(iii). See id. at 945. The district court dismissed this

claim without prejudice. Id. at 942.

This Court affirmed that decision, based on the plaintiff’s

failure to sufficiently plead that he had requested the notes

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10 LEE V. ING GROEP

from the plan administrator, as opposed to the claims

administrator. See id. at 945. In so doing, we appeared to

assume that, if properly plead, a penalty could be imposed

under 29 U.S.C. § 1132(c)(1) for failing to produce

documents required to be produced under 29 C.F.R.

§ 2560.503-1(h)(2)(iii). See id. However, we did not

explicitly so hold, and we did not address the distinction

between requirements imposed on plans and requirements

imposed on plan administrators. See id. Nor did we cite any

of the holdings of our sister circuits on the issue. See id.

The language in Sgro is non-binding dicta. We now join

our sister circuits and hold that a failure to follow claims

procedures imposed on benefits plans, such as outlined in

29 C.F.R. § 2560.503-1(h)(2)(iii) does not give rise to

penalties under 29 U.S.C. § 1132(c)(1). “Plans” and “plan

administrators” are separate entities with separate definitions

under ERISA. See 29 U.S.C. § 1002(1), (2)(A), (3), (16)(A). 

Penalties under 29 U.S.C. § 1132(c)(1) can only be assessed

against “plan administrators” for failing to produce

documents that they are required to produce as plan

administrators. 29 C.F.R. § 2560.503-1(h)(2)(iii) does not

impose any requirements on plan administrators, and so

cannot form the basis for a penalty under 29 U.S.C.

§ 1132(c)(1). We therefore reverse the district court’s

decision to impose a penalty based on ING North America’s

failure to timely produce the emails.

IV.

ING North America is not liable for statutory penalties

based on its failure to produce the requested emails. It is,

however, liable for its failure to produce the Plan Document. 

The district court stated that its penalty of $25 per day for

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LEE V. ING GROEP 11

both failures would be the same even if it was only

considering the failure to produce the Plan Document. But

this statement is in tension with the district court’s finding

that, while the failure to produce the Plan Document was

inadvertent, the failure to produce the emails was intentional

and “[t]he fact that ING North America knowingly ignored

the regulation counsels in favor of a larger penalty.” We

therefore vacate the penalty award and remand to the district

court to assess a penalty based solely on the failure to timely

produce the Plan Document.

AFFIRMED in part; REVERSED in part; VACATED;

and REMANDED.

Each party shall bear their own costs on this appeal.

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