United States Court of Appeals

FOR THE EIGHTH CIRCUIT

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No. 05-3398

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Brian J. Price, *

*

Appellant, * Appeal from the United States

* District Court for the

v. * District of Minnesota. 

*

Xerox Corporation; a New York *

corporation; SHPS, Inc., a Florida *

corporation, also known as *

SHPS Healthcare Services, Inc., *

*

Appellees. *

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Submitted: March 15, 2006

 Filed: April 19, 2006 

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Before MURPHY, BOWMAN, and BENTON, Circuit Judges.

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BENTON, Circuit Judge. 

Brian J. Price sued Xerox Corporation, his employer, and SHPS, Inc., the

administrator of its Long-Term Disability Income Plan. Price claimed that the Plan

itself violates the Employee Retirement Income Security Act of 1974, 29 U.S.C. §§
1

The Honorable David S. Doty, United States District Judge for the District of

Minnesota. 

2

Price has never argued that the notice of his appeal rights was inadequate or

that SHPS's explanation for the denial of benefits under applicable regulations was

insufficient. 

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1001 – 1461 (ERISA). The district court1 granted summary judgment to defendants.

Price appeals. Having jurisdiction under 28 U.S.C. § 1291, this court affirms. 

On May 7, 2002, Price became disabled and began receiving short-term and

long-term disability benefits under the Plan. On September 30, 2003, SHPS notified

him that he was no longer medically eligible, and terminated his benefits. By the Plan,

he had 180 days to file a first-level internal appeal with SHPS to contest the denial.

He requested and received a 90-day extension, filing his first appeal on July 6, 2004.

On September 3, SHPS notified Price of its decision to uphold the termination of

benefits. In the notice, SHPS also told him that, under the Plan, he was required to file

a second-level internal appeal within 60 days. 

Price never filed a second appeal. Rather, he sued Xerox and SHPS, alleging

that the Plan violates ERISA by requiring claimants to pursue a second appeal within

60 calendar days of notification that SHPS has upheld the denial in the first appeal.2

He argued to the district court that ERISA regulations require all disability plans to

provide at least 180 days for a mandatory internal appeal of the denial, whether it is

first-level or second-level. The district court disagreed, finding the relevant ERISA

regulations inapplicable to second appeals. The court granted summary judgment to

defendants, holding that Price failed to exhaust administrative remedies under the Plan

by not pursuing the mandatory second appeal. 

This court reviews the grant of summary judgment de novo, applying the same

standards as the district court. See Young v. Pollock Eng'g Grp., Inc., 428 F.3d 786,
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788 (8th Cir. 2005). The district court is affirmed if, viewing the evidence most

favorably to the non-moving party, there are no genuine issues of material fact and the

moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c);

Richmond v. Higgins, 435 F.3d 825, 828 (8th Cir. 2006). 

The only issue is whether ERISA regulations require at least 180 days for a

second internal appeal of a denial. ERISA plans must include a reasonable

opportunity to appeal from an "adverse benefit determination," to allow full and fair

review of the contested claim. 29 C.F.R. § 2560.503-1(h)(1). See also 29 U.S.C. §

1133(2). To be "full and fair," claimants must have at least 180 days after an "adverse

benefit determination" to file an administrative appeal. See 29 C.F.R. §§ 2560.503-

1(h)(3)(i), (h)(4). The regulations also permit, but do not require, plans to mandate

a second internal appeal of a denial before a claimant may sue. Id. §§ 2560.503-

1(c)(2), (d). The regulations, however, do not explicitly specify the time period for

a second internal appeal, which frames the issue in this case. 

Price contends that SHPS's decision upholding the denial in his first appeal is

an "adverse benefit determination," triggering the 180-day period for appeal. See id.

§§ 2560.503-1(h)(3)(i), (h)(4). He asserts that, because the Xerox Plan provides only

60 days for the mandatory second appeal, he is not required to exhaust administrative

remedies under the Plan before seeking judicial review. See id. § 2560.503-1(l)

(deeming administrative remedies exhausted where a plan fails to establish or follow

reasonable claims procedures). 

The regulations define an "adverse benefit determination" as: 

a denial, reduction, or termination of, or a failure to provide or make

payment (in whole or in part) for, a benefit, including any such denial,

reduction, termination, or failure to provide or make payment that is

based on a determination of a participant's or beneficiary's eligibility to

participate in a plan. . . . 
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Id. § 2560.503-1(m)(4). The parties agree that the initial denial is an "adverse benefit

determination," mandating the 180-day period for a first appeal (which Price was

given). The parties dispute whether the definition also encompasses the decision on

the first appeal. 

The definition is unclear and, as the district court found, no case law interprets

this specific provision. However, language elsewhere in the regulations indicates that

only the initial denial of benefits is an "adverse benefit determination." Specifically,

plans shall not require "more than two appeals of an adverse benefit determination."

Id. §§ 2560.503-1(c)(2), (d). See also id. § 2560.503-1(h)(1) (requiring "a reasonable

opportunity to appeal an adverse benefit determination" affording "full and fair review

of the claim and the adverse benefit determination") (emphasis added). The use of the

singular "determination" in these regulations shows that only the initial denial is an

"adverse benefit determination," and a decision on appeal is not. 

Price asserts that the regulations consistently use the term "adverse benefit

determination on review" to describe mandatory claims procedures and the notice the

plan must give after a first appeal. See id. §§2560.503-1(f)(3) (content of notification

in plan description); 2560.503-1(h)(3)(vi)(B) (notice method); 2560.503-1(i)(1)(i)

(time period for rendering administrative decision); 2560.503-1(i)(2) (time periods for

urgent-care, pre-service, and post-service claims); 2560.503-1(i)(4) (calculation of

time period for rendering administrative decision); 2560.503-1(i)(5) (furnishing

documents that form basis of administrative decision); 2560.503-1(j) (written or

electronic notice of decision, including contents).

The provisions Price cites do not discuss the time period for a mandatory

second appeal. The inclusion of the language "on review" differentiates the initial

"adverse benefit determination" from later internal appeals of it. Given the regulatory

language, the district court did not err in concluding that a plan administrator's
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affirmance of the denial in a first appeal is not an "adverse benefit determination."

Accordingly, an ERISA plan need not provide a claimant with at least 180 days to file

a mandatory second appeal.

Although the 180-day requirement does not govern second appeals, the

regulations mandate a "reasonable opportunity for full and fair review" of an adverse

decision. See id. §§ 2560.503-1(b), (h)(2). The Plan here provides 60 days for filing

the mandatory second appeal, after notification of SHPS's decision on the first appeal.

A regulation does specify 60 days as a reasonable period to appeal the denial of

benefits under a general, non-disability ERISA plan. See id. § 2560.503-1(h)(2)(i).

While not applicable to disability plans like the Plan here, this regulation does indicate

that 60 days is a "reasonable opportunity for full and fair review." 

Price contends that 60 days is unreasonable, because it restricts new evidence

and adequate dialogue with the administrator. However, this argument ignores that

he had over 180 days to present evidence and contest the denial in the first appeal.

Price fails to show that the Plan's provision of 60 days for the second appeal is

unreasonable or otherwise does not comply with relevant ERISA regulations. 

Because Price failed to exhaust administrative remedies under the Plan, the

district court properly summary judgment to defendants. See Norris v. Citibank, N.A.

Disability Plan (501), 308 F.3d 880, 884 (8th Cir. 2002), citing Layes v. Mead Corp.,

132 F.3d 1246, 1252 (8th Cir. 1998).

The judgment of the district court is affirmed. 

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