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12-613-cv

Quigley v. Citigroup Supplemental Plan

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. 

CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS 

PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE 

PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A 

SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST 

CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH 

THE NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER 

MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.

At a stated term of the United States Court of Appeals for the Second Circuit, held at the 

Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the 

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rd day of April, two thousand thirteen.

Present:

ROBERT D. SACK,

PETER W. HALL,

DEBRA ANN LIVINGSTON,

Circuit Judges.

____________________________________________________

DANIEL C. QUIGLEY, WILLIAM HIDEN, JOSEPH F. DURSO, 

DAVID A. STEWART, LARRY L. STAUFFER, RICHARD T. 

LAWRENCE, STEVEN P. HIRSCHBERG, ANTHONY D. 

PAOLO, GEORGE S. FLEESON, JOHN F. HABIG, WILLIAM 

A. WAGNER, SCOTT RANDALL, STEPHEN D. 

DAUGHDRILL, SANDRA J. SMITH, DAVID A. JENNINGS, 

LARRY B. DUNCAN, MICHAEL E. DOWELL, DAVID L. 

SACK, JEFFREY WINIK, DAVID P. WILSON, TIMOTHY F. 

KINSLEY, PAUL F. DUFLO, STEVEN J. COHEN, JOHN L. 

BARNES, JULIAN M. FRANK, PAUL S. POWERS, II, STEVEN 

K. FLANDERS, CRAIG O. NICHOLSON, THOMAS E. 

WATSON, SCOTT D. ARCHER, JULIAN FRANK, STEVEN 

GREENBERG, DAVID R. MCSEMEK, MICHAEL D. RASNER, 

PAUL A. LEVITT, RICHARD P. HALE, BRIAN T. FENELON, 

KEVIN D. PURCELL, GERALD J. FERRANTE, JOHN 

TURNER, WILLIAM G. HENDRIX, JACOB SHAPIRA, LEE 

MORRIS, GARY R. KRON, ROBERT MANNING, JOHN A. 

WALLA, ROBERT M. FREEDMAN, 
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 Plaintiffs-Appellants,

JOHN L. VESSA,

Plaintiff,

v. 12-613-cv

CITIGROUP SUPPLEMENTAL PLAN FOR SHEARSON 

TRANSFERS, PLAN ADMINISTRATION COMMITTEE OF 

CITIGROUP INC., As Plan Administrator,

 Defendants-Appellees.

____________________________________________________

FOR APPELLANTS: EDGAR PAUK, Law Offices of Edgar Pauk, Brooklyn, New York.

FOR APPELLEES: LEWIS R. CLAYTON (G. Karthik Srinivasan, on the brief), Paul, 

Weiss, Rifkind, Wharton & Garrison LLP, New York, New York.

____________________________________________________

Appeal from a judgment of the United States District Court for the Southern District of 

New York (Gardephe, J.). 

UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND 

DECREED that the judgment of the district court is AFFIRMED. 

Plaintiffs-Appellants, forty-seven former employees of Citigroup (“Plaintiffs”), appeal an 

Order of the United States District Court for the Southern District of New York (Gardephe, J.) 

entered on March 29, 2011 granting a motion to dismiss Plaintiffs’ complaint pursuant to Fed. R. 

Civ. P. 12(b)(6) filed by Defendants-Appellees, Citigroup Supplemental Plan for Shearson 

Transfers (the “Plan”) and Plan Administration Committee of Citigroup Inc. (the “Committee”) 

(collectively, “Defendants”), and a Judgment entered on March 30, 2011 dismissing Plaintiffs’ 
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amended complaint without prejudice.

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 We assume the parties’ familiarity with the relevant 

facts and procedural history.

We review de novo a district court’s dismissal of a claim pursuant to Fed. R. Civ. P. 

12(b)(6). Freedom Holdings, Inc. v. Spitzer, 357 F.3d 205, 216 (2d Cir. 2004). In addition to the 

complaint, we may also consider documents attached to the complaint as exhibits and documents 

on which the complaint “relies heavily” or which are “integral to the complaint.” Chambers v. 

Time Warner, Inc., 282 F.3d 147, 152-53 (2d Cir. 2002) (internal quotation marks omitted). 

Plaintiffs are participants in the Plan, which is administered by the Committee. The thrust of 

Plaintiffs’ argument on appeal is that they were not required to exhaust the Plan’s claims 

procedures, or alternatively, to the extent they were required to do so, they were excused from 

this requirement due to the unreasonableness of the internal claims and appeals procedures.

First, Plaintiffs contend that the Release of Claims (the “Release”) forwarded to Plaintiffs 

on July 24, 2009 rendered the Plan’s claims procedures inapplicable. The Release required an 

employee to execute and return it by November 5, 2009 as a prerequisite to receiving the OneTime Shearson Transfer Supplemental Contribution under the Plan (the “Excess Benefit”). 

Plaintiffs argue that the Release placed them in the impossible position of being required to 

exhaust their administrative remedies as a prerequisite to filing suit in the district court, while at 

the same time being unable to exhaust before the November 5, 2009 deadline because the 

Committee’s claims review process would not be complete by that date.

This argument is without merit. As the district court’s dismissal was expressly without 

prejudice, Plaintiffs were free to refile their complaint once the administrative review process 

was complete. To the extent that the district court’s Order granting Defendants’ motion to 

 

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Plaintiffs also appeal the district court’s Order entered January 17, 2012 denying Plaintiffs’ motion for 

reconsideration of the district court’s March 29, 2011 Order. Plaintiffs, however, advance no argument that the 

district court erred in denying reconsideration.
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dismiss effectively ended the case for Plaintiffs who filed administrative claims prior to filing 

suit, this result was the consequence of their failure to appeal the Committee’s adverse 

determination, not a consequence of the deadline imposed on them by the Release. And to the 

extent that the rest of the Plaintiffs may be barred from filing suit in the future due to limitations 

in the Plan, such a consequence would likewise result from their own decisions and actions, and 

not the deadline in the Release.2 

Plaintiffs next contend that the Plan’s claims procedure is unreasonable and they are 

therefore excused from the Plan’s exhaustion requirement. Section 2560.503-1 of 29 C.F.R., 

which “sets forth minimum requirements for employee benefit plan procedures pertaining to 

claims for benefits,” provides:

Every employee benefit plan shall establish and maintain reasonable procedures

governing the filing of benefit claims, notification of benefit determinations, and

appeal of adverse benefit determinations . . . . The claims procedures for a plan 

will be deemed to be reasonable only if . . . [t]he claims procedures do not contain 

any provision, and are not administered in a way, that unduly inhibits or hampers 

the initiation or processing of claims for benefits. For example, a provision or 

practice that requires payment of a fee or costs as a condition to making a claim or 

to appealing an adverse benefit determination would be considered to unduly

inhibit the initiation and processing of claims for benefits. . . .

29 C.F.R. § 2560.503-1(b) (emphases added). Subsection (l) of the regulation provides that “[i]n 

the case of the failure to establish or follow claims procedures consistent with the requirements 

of this section,” a claimant is not required to exhaust administrative remedies as a prerequisite to 

seeking judicial review of an adverse determination. 

In asserting that the Plan’s claims procedure is unreasonable and that Plaintiffs are 

therefore excused from administrative exhaustion, Plaintiffs rely on the same argument as raised 

above—that the Release unreasonably required Plaintiffs to exhaust the claims process and file 

 

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Since this issue was not raised in litigation or briefed by the parties, we take no position regarding whether the 43 

Plaintiffs who had not filed administrative claims prior to suit would still be able to file their claims with Citigroup, 

exhaust the claims procedure, and bring a new action.
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suit by the November 5, 2009 deadline. For the reasons discussed above, that argument cannot 

succeed. Moreover, the regulation cited by Plaintiffs sets forth minimum requirements for a 

plan’s claims and appeal procedure, not the conditions under which a claimant may pursue civil 

litigation after exhausting his or her administrative remedies. See id. at § 2560.503-1(b) (“Every

employee benefit plan shall establish and maintain reasonable procedures governing the filing of 

benefit claims, notification of benefit determinations, and appeal of adverse benefit 

determinations . . . .”). The examples provided in the regulation of an unreasonable “provision 

or practice” in a claims procedure—e.g., requiring a claimant to bear his or her own costs as a 

condition of making a claim—further indicate that the regulation is focused on ensuring the 

reasonableness of the claims procedure itself. The regulation does not address postadministrative review litigation, except to require a notice of an adverse benefit determination to 

alert the claimant of his or her right to bring an action under section 502(a) of ERISA, and other 

tangential references. Id. at § 2560.503-1(j)(4). Plaintiffs have failed to establish that the 

regulation excused them from complying with the requirement to exhaust their administrative 

remedies.

We have considered all of Plaintiffs’ remaining arguments and find them to be without 

merit. The judgment of the district court is AFFIRMED. 

FOR THE COURT:

Catherine O’Hagan Wolfe, Clerk