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. e du/thir dc ir c uit_2000/116Filed May 30, 2000

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

No. 99-5472

SAJID L. SYED, Appellant

v.

HERCULES INC., a Delaware corporation; HERCULES
INCORPORATED INCOME PROTECTION PLAN, an employee welfare benefit plan; HERCULES INCORPORATED, Plan Administrator of Disability Plan

ON APPEAL FROM THE

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF DELAWARE

(Dist. Court No. 96-62) District Court Judge: Joseph J. Farnan, Jr., C.J.

Argued January 11, 2000

Before: BECKER, Chief Judge, and ALITO and BARRY, Circuit Judges.

(Opinion Filed: May 30, 2000)

John M. Stull, Esq. (Argued) 1220 North Market St., Ste. 510

P.O. Box 1947 Wilmington, DE 19899

Counsel for AppellantKevin R. Shannon (Argued)

Potter, Anderson & Corroon, LLP
1313 N. Market St.

P.O. Box 951 Wilmington, DE 19899

Counsel for Appellee

OPINION OF THE COURT

ALITO, Circuit Judge:

Sajid Syed ("Syed") injured his back in January 199 2, while working as a chemical operator for Hercules, Inc. ("Hercules"). Syed brought this action under ERISA S 502(a)(1)(B), 29 U.S.C. S 1132(a)(1)(B), alleging that Hercules denied him disability benefits owed under the company's employee benefits plan. In addition to da mages, Syed requested the imposition of sanctions against Hercules for failure to provide him with the plan d ocument pursuant to a written request, as required by ERISA S 502(c), 29 U.S.C. S 1132(c). He also sought redre ss for Hercules's failure to give him adequate written not ice of the reasons for the denial of his claim, as required by ERISA S 503, 29 U.S.C. S 1133. Syed appeals the District Court's grant of summary judgment in favor of Hercules on a ll
counts. We affirm.

Hercules discharged Syed on March 4, 1992, effectiv e March 31, 1992, as part of a reduction in force. Fo llowing his termination, Syed submitted a claim for long-te rm disability benefits under the Hercules Incorporated Income Protection Plan (the "Plan"). His claim was approve d on June 18, 1993, and Syed began receiving benefits retroactive to April 1, 1992.

Benefits are payable under the Plan when a worker becomes totally disabled and remains disabled for s ix consecutive months.1 See App. at B21. Because Syed was

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1. This six-month period, known as the "elimination period," was apparently not imposed by Provident in Syed's case. He began receiving benefits less than three months after his workplace accident.

2under 62 when he started receiving benefits, he was eligible

to receive benefits for as long as he remained tota lly disabled, up to age 65. See id. at B22. The Plan pr ovides two definitions of total disability, one that appli es for the first 24 months after the "elimination period" and another that applies thereafter. The Plan states:

During the elimination period, normally 6 mo nths, and the first 24 months of benefit payments, you are considered totally disabled if you are not a ble to perform your job. You must not engage in any work for wages or profit during this time.

After receiving 24 monthly payments, you are considered totally disabled for as long as y ou are not able to engage in any employment for wage or profit for which you are reasonably qualified by traini ng, education, or experience.

App. at B24.

After paying benefits to Syed for almost two years, Provident Life and Accident Insurance Co. ("Provide nt"), the Claims Fiduciary under the Plan, asked Syed to unde rgo an independent medical evaluation in February 1994 to determine if he was totally disabled under the latt er definition. Dr. Joson, who performed the examinatio n in March 1994, reported that Syed could not do heavy w ork, but that he could do "sedentary to light" work. App . at A4. Because Syed would no longer qualify for benefits a fter the 24-month period lapsed, Provident notified Syed tha t his benefits would be terminated as of March 31, 1994. See id.

at A6-7.

Syed appealed the decision to terminate his disabil ity benefits to Provident's ERISA Committee, which uphe ld its previous decision. See App. at A19-20. Syed renewed his appeal to the ERISA Committee on July 27 and Octobe r 28, 1994, each time including updated medical reports. The
ERISA Committee sent its final denial of benefits t o Syed by letter dated November 9, 1994. On February 24, 1995 , Syed requested a copy of the plan document that was effe ctive as of the date he began receiving benefits. Hercules s ent him a document entitled "Summary Plan Description" (SPD ). App. at B15-32.

3Syed filed suit on February 6, 1996 -- one year and

eleven months after the initial denial of benefits on March 31, 1994, and one year and three months after thefi nal letter from Provident dated November 9, 1994. Short ly thereafter, he filed a motion for summary judgment seeking recovery of benefits under ERISA S 502(a)(1)(B), sa nctions under S 502(c) for failure to produce the Plan docu ment in response to a written request, and a remedy underS 503 for failure to provide written notice of the reason s for
termination of benefits. Hercules made a cross-moti on for summary judgment, claiming that Syed owed money for overpayments made under the Plan.

The District Court denied Syed's motion. As the Pla n gave the Claims Fiduciary the exclusive discretion to de ny claims for benefits, the District Court reviewed Syed'sS 5 02(a)(1)(B)
claim under the abuse of discretion standard in acc ordance with Firestone Tire and Rubber Co. v. Bruch, 489 U. S. 101, 115 (1989); see also Abnathya v. Hoffman-La Roche, Inc., 2 F.3d 40, 45 (3d Cir. 1993). After reviewing the med ical evidence, the District Court found that there was a genuine issue as to whether Provident acted arbitrarily and capriciously in terminating Syed's medical benefits

. Nonetheless, after borrowing Delaware's one-year st atute of limitations applicable to claims for "other benefit s arising from . . . work, labor or personal services perform ed," 10 Del. C. S 8111, the Court granted summary judgment for
Hercules on this claim.

Next, the Court dismissed Syed's S 502(c) claim. ER ISA S 502(c) provides that an administrator must comply with a request for information by a plan participant and i mposes personal liability for failure to do so. Syed conte nded that Hercules improperly sent him the SPD, rather than t he Insurance Policy, see App. at B60, in response to h is request. However, the Court held that the SPD was t he operative plan document for the relevant time perio d and therefore granted summary judgment in favor of Herc ules on this count. Likewise, the Court refused to reman d Syed's case to the plan administrator for an out-of-time administrative appeal for the alleged violation of ERISA S 503, because Hercules's March 31 letter adequatel y set forth the reasons for denying Syed's benefits.

4Syed makes four arguments on appeal. First, he cont ends

that his ERISA claim for employee benefits should b e governed by Delaware's three-year statute of limita tions for contract actions, not the one-year statute for clai ms arising out of work, labor, or personal services performed. Second, he maintains that Hercules, as Plan Administrator, should be subject to sanctions for failing to provide prop er disclosure as required by ERISA S 502(c). Third, Sy ed argues that Hercules violated ERISA S 503 both by f ailing to provide specific reasons for the denial of his clai m and by neglecting to name any additional material or infor mation that would have helped him perfect his claim. Final ly, Syed
asserts that the District Court should have exercis ed plenary review over the Claims Fiduciary's decision to deny his benefits, rather than reviewing for an abuse of discretion, as the Plan did not grant discretion to the Claims Fiduciary to make a disability determination

. Because we hold that Delaware's one-year statute of limitations governs this action, we affirm the Dist rict Court's grant of summary judgment on Syed's S 502(a )(1)(B) claim without deciding whether Provident's decision to deny Syed's benefits was arbitrary and capricious. We li kewise affirm the District Court's dismissal of Syed's cla ims under ERISA SS 502(c) and 503.

ERISA S 502(a)(1)(B): Statute of Limitations

The chief issue in this appeal concerns the statute of limitations that is applicable to Syed's claim for benefits under ERISA S 502(a)(1)(B).2 Unfortunately, ERISA d oes not provide a statute of limitations for suits brought under S 502(a)(1)(B) to recover benefits, and the new, ge neral
federal statute of limitations set out in 28 U.S.C. S 1658 does not apply in this situation.3 Under these circumstances, courts generally turn to the most an alogous

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2. We exercise plenary review over the District Cou rt's choice of the applicable statute of limitations. See Nelson v. Co unty of Allegheny, 60 F.3d 1010, 1013 (3d Cir. 1995).

3. This provision, which prescribes a four-year lim itations period, applies only to claims arising under acts of Congress enact ed after December 1,
1990. ERISA was enacted much earlier.

5state statute of limitations. See DelCostello v. In ternational

Bhd. of Teamsters, 462 U.S. 151, 158-60 (1983). Alt hough
this Circuit has not decided which state statute of limitations is applicable to ERISA S 502(a)(1)(B),4 every other circuit to address the issue has applied the statut e of
limitations for a state contract action. See Harris on v. Digital Health Plan, 183 F.3d 1235, 1239-40 (11th C ir. 1999); Daill v. Sheet Metal Workers' Local 73 Pensi on Fund, 100 F.3d 62, 65 (7th Cir. 1996); Adamson v. Armco, 44 F.3d 650, 652 (8th Cir. 1995); Hogan v. Kraft Foods , 969 F.2d 142, 145 (5th Cir. 1992); Meade v. Pension App eals & Review Comm., 966 F.2d 190, 195 (6th Cir. 1992); He ld v. Manufacturers Hanover Leasing Corp., 912 F.2d 1197, 1207 (10th Cir. 1990); Pierce County Hotel Employees & Restaurant Employees Health Trust v. Elks Lodge, 82 7 F.2d 1324, 1328 (9th Cir. 1987); Dameron v. Sinai Hosp., 815 F.2d 975, 981 (4th Cir. 1987). Because Delaware, in essence, has two statutes of limitation for contrac t disputes, however, we must determine which is more appropriate.

Delaware Code S 8106 establishes a three-year statu te of limitations for general actions on a promise. See G oldman v. Braunstein's, Inc., 240 A.2d 577, 578 (Del. 1968 ). Section 8106 provides:

No action to recover damages for trespass, n o action to regain possession of personal chattels, . . . no action based on a promise, . . . shall be brought a fter the expiration of 3 years from the accruing of t he cause of
such action.

Del. Code Ann. tit. 10, S 8106 (emphasis added). De laware also has a more specific statute of limitations cov ering employment disputes, S 8111, which provides:

No action for recovery upon a claim of wages , salary, or overtime for work, labor or personal service s

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4. We have previously suggested in dicta that the N ew Jersey state
statute of limitations for a contract action would apply to claims under ERISA S 502(a)(1)(B), but we have never squarely de cided the issue. See
Connell v. Trustees of the Pension Fund of the Iron workers Dist. Council of N. New Jersey, 118 F.3d 154, 156 n.4 (3d Cir. 19 97).

6performed, . . . or for any other benefits a rising from

such work, labor or personal services perfor med . . . shall be brought after the expiration of one year from the accruing of the cause of action on which such
action is based.

Del. Code Ann. tit. 10, S 8111 (emphasis added). In this case, the District Court applied S 8111, relying on Mitchell v. E.I. DuPont de Nemours & Co., 310 A.2d 641, 642 (Del. 1973).

In Mitchell, the Delaware Supreme Court applied S 8 110 (now S 8111) to a claim challenging the denial of b enefits under a disability wage plan. See Mitchell, 310 A.2 d at 642. The Court reasoned that the plan at issue was a"ben efit" arising from work, labor, or services performed wit hin the meaning of the statute because eligibility for the plan accrued from tenure on the job. See id. Although th e District Court in the present case mistakenly refer red to Mitchell as an ERISA case (Mitchell was decided in 1973 and ERISA was not effective until 1974), the applicatio n of S 8111's predecessor in the pre-ERISA context is st rong evidence of its close relationship to the ERISA cla im that Syed asserts. See also Sorenson v. Overland Corp., 142 F. Supp. 354, 360 (D. Del. 1956) ("The one year statut e has a comprehensive sweep. It was intended to bar all cla ims arising out of the employer-employee relationship. The Act bars claims for `wages', `salary', and it likewise applies to `overtime' and to any other `benefits' arising from the corporate-officer employment relationship. The word `benefits' is embracing and covers all advantages g rowing out of the employment.").

The Eighth Circuit dealt with a similar issue in Ad amson v. Armco, 44 F.3d 650 (8th Cir. 1995). There, the C ourt had to choose between Minnesota's six-year statute of limitations governing general contract disputes and the state's two-year statute of limitations for wage cl aims. The Court reasoned that the wage-claim statute of limit ations was the most analogous to the appellant's S 502(a)( 1)(b) claim because Minnesota courts had uniformly applie d that statute broadly to cover all damages arising out of the employment relationship. See Adamson, 44 F.3d at 65 2. In support of its conclusion, the Court noted that pre -ERISA

7case law in Minnesota had applied the two-year stat ute of

limitations to cases of unpaid benefits. See id. (c iting Kohout v. Shakopee Foundry Co., 162 N.W.2d 237 (Min n. 1968)).

Syed relies primarily on two cases to bolster his argument for application of S 8106: Rich v. Zeneca, Inc., 845 F. Supp. 162 (D. Del. 1994) and Shaw v. Aetna Life Insurance Co., 395 A.2d 384 (Del. Super. Ct. 1978). Rich held that S 8106 should apply to a claim under ERIS A S 510, 29 U.S.C. S 1140, for wrongful termination b ased on a pension-defeating motive. See Rich, 845 F. Supp. at 166 (citing Goldman v. Braunstein, Inc., 240 A.2d 577 ( Del. 1968)). The Rich Court chose S 8106 rather than S 8 111 because the latter applies to claims for breach of a promise to pay something already earned, whereas the former applies to claims for breach of a promise to pay wh at would have been earned had employment continued. See id. Since Syed's disability benefits were already "earned" th rough his period of employment at Hercules, Rich does not sup port the argument that S 8106 should apply here.

In Shaw, the Delaware Superior Court refused to app ly S 8111 where an employee brought an action under th e employer's voluntary group accident insurance polic y. Shaw, 395 A.2d at 385. The employee was injured in a workplace injury which resulted in his permanent an d total disability. The employer argued that S 8111 should apply to the claim because coverage under the policy arose o ut of the employment relationship. See id. at 387 (relyin g on Mitchell). The Court dismissed defendant's argument summarily. See id. ("That contention of the defenda nt is without merit."). Instead, the Court applied Delawa re's twoyear statute of limitations for personal injury cla ims. Del. Code S 8119. It is not immediately clear how Shaw i s distinguishable from Syed's case, and Hercules has not pointed out any meaningful distinction. Nonetheless
, because the Shaw Court failed to explain whyS 8111 should not apply, we find Mitchell to be more persu asive.

Although Syed's S 502(a)(1)(B) claim comes within Delaware's more specific statute of limitations for claims arising out of the employer-employee relationship, that does not conclusively resolve the issue. After all, the selection of

8an appropriate statute of limitations is a question of federal

law. See United Auto Workers v. Hoosier, 383 U.S. 6 96, 706 (1966).

Generally, we presume that Congress intended courts to apply the most closely analogous state statute of limitations. See DelCostello, 462 U.S. at 158. This principle rests on the assumption that "Congress would likely intend that courts follow their previous practice of borro wing state
statutes." Id. at 158-59 n.12. We remain mindful of the Supreme Court's warning not to apply state statutes of limitation mechanically since "[s]tate legislatures do not devise their limitations periods with national inte rests in mind, and it is the duty of the federal courts to a ssure that the importation of state law will not frustrate or interfere with the implementation of national policies." Occi dental Life Ins. Co. v. EEOC, 432 U.S. 355, 367 (1977). Nonetheless, there is no reason to reject the state statute
unless we find it "inconsistent with national labor policy." Auto Workers, 383 U.S. at 706.

In this case, we recognize that the one-year statut e of limitations of S 8111 is short, but we cannot say t hat it is inconsistent with the policy of ERISA. We therefore agree with the District Court that Syed's claim was gover ned by
S 8111 and was thus barred.

We are not persuaded by the arguments advanced by t he dissent in support of its position that Syed's clai m for disability benefits is more analogous to an ordinar y contract claim, subject to S 8106, than to a claim for "other benefits arising from . . . work, labor or personal services," subject to S 8111. Noting that the Mitchell court d escribed the plan at issue there as providing a "fringe bene fit," the dissent argues that "Syed's claim . . . has little or nothing to do with work or services performed or fringe ben efits . . . .," Dissent at 15, but this is simply not tru e. First, Syed's claim was squarely based on his prior employ ment. In order to qualify under the long term disability plan, he had to be "a regular, full-time non-represented emp loyee of the Company . . . ." Appendix to Answering Brief at B20 (Summary Plan Desciption). Second, ERISA benefits a re often termed "fringe benefits." See, e.g., Bricklay ers and
Allied Craftsmen Int'l Union Local 33 Benefit Funds v.

9America's Marble Source, Inc., 950 F.2d 114, 118 (3 d Cir.

1991).5 We are inclined to agree with the dissent t hat the one-year limitations period of S 8111 is not optima l, and we also believe that a uniform, national statute of li mitations for claims such as Syed's would be beneficial. But forced to identify the most analogous Delaware statute of lim itations, we agree with the District Court that S 8111 is the best fit.6

ERISA S 502(c)

Syed urges the Court to impose sanctions on Hercule s for failing to provide the Plan document pursuant to a written request. ERISA S 502(c) provides that a plan admini strator must comply with a request for information from a p lan participant within 30 days or face personal liabili ty, at the Court's discretion, of $100 a day from the date of the refusal. 29 U.S.C. S 1132(c). The District Court di d not abuse its discretion in refusing to order sanctions against Hercules, and we affirm the grant of summary judgme nt on
this issue.

Hercules sent Syed the SPD on March 22, 1995, in response to his February 24, 1995, written request for "a complete copy of LTD Plan document effective as of March 4, 1992." App. at A28. Syed contends that a differe nt document was in effect at the time he was injured a nd at the time his benefits were denied. Specifically, he points to

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5. We also note that Delaware's Wage Payment and Co llection Act (WPCA), Del. Code Ann. tit. 19, SS 1101-1115, defin es "benefits" as "compensation for employment other than wages, incl uding, but not limited to, reimbursement for expenses, health, wel fare or retirement benefits . . . ." Del. Code Ann. tit. 19, S 1109(b) . Although the WPCA

does not provide a statutory remedy for the denial of be nefits, its definition quite clearly encompasses the disability benefits S yed has sued to

recover here.

6. In view of the dissent's reference (Dissent foot note 3) to the Pennsylvania Wage Payment and Collection Law, 43 P. S. S 260.1 et seq., which has a three-year statute, see 43 Pa. Cons. St at. Ann. S 260.9a(g), we wish to make it clear that we express no view re garding the statute of limitations that would apply if a claim such as Syed's were brought in Pennsylvania. We note, however, that we have held t hat some ERISA claims are governed by the WCPL's statute of limita tions and others are not. See Gluck v. Unisys Corp., 960 F.2d 1168, 1180 -81 (3d Cir. 1992).

10the insurance policy used to fund Hercules's long-t erm

disability plan (LTD). App. at B35-72.

A comparison of the SPD and LTD reveals no material differences between the two documents. Syed complai ns that he was not able to verify "whether the definit ion of disability is based on official plan language, SPD language, or some internal policy, written or unwritten." App ellant's Br. at 20. This argument lacks merit. For example, the March 31, 1994, letter denying Syed's benefits, see App. at A6, quotes the definition of total disability found at page 8 of the SPD, see App. at B24. This definition is exa ctly the same as the definition of total disability found on page 3 of the LTD, see App. at B43, thus belying Syed's asser tion that the two-tier definition of disability did not exist in the SPD, see Appellant's Br. at 22. The affidavit of Do uglas Hill, Director of Employee Benefits for Hercules, makes c lear that the document Hercules allegedly refused to sen d to Syed pursuant to his March 1995 request was, in fac t, not executed until October 1995 (although it was effect ive retroactively to July 1990). Because the SPD and th e LTD are identical in all respects material to this disp ute, the District Court properly refused to impose sanctions against Hercules under ERISA S 502(c), 29 U.S.C. S 1132(c).

ERISA S 503

ERISA S 503 provides, in pertinent part, that every employee benefit plan shall:

provide adequate notice in writing to any pa rticipant or beneficiary whose claim for benefits under t he plan has been denied, setting forth the specific reas ons for such denial, written in a manner calculated to be understood by the participant.

29 U.S.C. S 1133(1). Pursuant to this section, the Secretary
of Labor has established that written notice of den ial of a
claim must:

provide to every claimant who has been denie d a claim for benefits written notice setting forth in a manner calculated to be understood by the claimant:

(1) The specific reason or reasons for the d enia l;

11(2) Specific reference to pertinent plan pro visi ons on

which the denial is based;

(3) A description of any additional material or information necessary for the claimant to pe rfect the claim and an explanation of why such materia l or information is necessary; and

(4) Appropriate information as to the steps to be taken if the participant or beneficiary wishes to submit his or
her claim for review.

29 C.F.R. S 2560.503-1(f).

We have previously held that S 503 sets forth only the disclosure obligations of "the Plan" and that it do es not establish that those obligations are enforceable th rough the sanctions of S 502(c). See Groves v. Modified Retir ement Plan, 803 F.2d 109, 118 (3d Cir. 1986). Where a termination letter does not comply with the statuto ry and regulatory requirements, the time limits for bringi ng an administrative appeal are not enforced against the claimant. See Epright v. Environmental Resources Management, Inc. Health and Welfare Plan, 81 F.3d 3 35, 342 (3d Cir. 1996). Thus, the remedy for a violatio n of S 503 is to remand to the plan administrator so the claim ant gets
the benefit of a full and fair review. See Weaver v . Phoenix Home Life Mut. Ins. Co., 990 F.2d 154, 159 (4th Cir . 1993).

The March 31, 1994, letter from Provident to Syed b egan with a quotation from the Plan's definition of tota l disability. See App. at A6. Next, the letter explai ned that Syed's benefits were being terminated because the results of Dr. Joson's independent medical evaluati on demonstrated that Syed was no longer totally disabl ed as the term was defined in the Plan. See App. at A6-7. The letter went on to identify several jobs for which S yed would be qualified given his present physical condition. See App. at A7. Provident stated that Syed could submit a re quest for reconsideration of the decision, accompanied by documents from Syed's physician. See id. Lastly, th e letter noted that any information to be considered in conn ection with an appeal would have to be received within 60 days of Syed's receipt of the letter. See id. In short, Pro vident fully complied with the statutory and regulatory requirem ents for

12notice under ERISA S 503, and Syed has not raised a ny

genuine issue of material fact to the contrary. Acc ordingly, we affirm the District Court's grant of summary jud gment as to Syed's claim under ERISA S 503, 29 U.S.C. S 1 133.

13BARRY, Circuit Judge, concurring and dissenting.

While I agree with much of the majority's opinion, I cannot agree with the conclusion that the most anal ogous state statute of limitations for a S 502(a)(1)(B) c laim is found in Delaware's S 8111. It is on that issue, and that issue alone, that I dissent.

First, it is clear, as the majority notes, that eve ry circuit which has addressed this issue has applied the stat ute of
limitations for a state contract action as most ana logous to
an ERISA claim for the denial of benefits. As the m ajority also notes, we, too, have suggested, albeit in dict a, that the
state statute of limitations for a contract action would apply to claims under S 502(a)(1)(B). See Connell v. Trus tees of the
Pension Fund of the Ironworkers Dist. Council of No rthern New Jersey, 118 F.3d 154, 156 n.4 (3d Cir. 1997). Moreover, district courts too numerous to mention h ave also concluded that a state contract statute of lim itations is most analogous to a S 502(a)(1)(B) claim. This is, indeed, a resounding chorus.

The rub here, however, is this. The majority conclu des that "Delaware, in essence, has two statutes of lim itations for contract disputes," specifically S 8106 and S 8 111, and one, of course, must be selected. The majority then selects S 8111, which relates to claims "for wages, salary, or overtime for work, labor or personal services perfo rmed . . . or for any other benefits arising from such work, l abor or personal services" as being "more specific" and, th us, most analogous to a claim for denied disability benefits under ERISA than S 8106, the statute traditionally used i n Delaware for breach of contract, or breach of promi se, actions. While I agree that S 8111 is "more specifi c," it simply does not apply to a claim that ERISA benefit s were wrongly denied.

Delaware courts restrict S 8111 and its one-year st atute to work or services which have already been perform ed and apply S 8106 to a promise of compensation for work or services to be performed. The S 8111 action, in oth er words, is based on the services performed rather than on t he original promise while the S 8106 action is based o n the underlying promise with respect to services not yet

14completed. See Goldman v. Braunstein's, Inc., 240 A .2d

577, 578 (Del. 1968); Brown v. Colonial Chevrolet C o., 249 A.2d 439, 441 (Del. Super. Ct. 1968).1 Moreover, b enefits for work or services which have been performed have been described in the case on which the majority primari ly relies as "fringe" benefits. Mitchell v. E.I. duPont deNem ours & Co., 310 A.2d 641, 642 (Del. 1973). Claims for fringe be nefits are typically governed by S 8111. See e.g. , Compas s v. American Mirrex Co., 72 F. Supp. 2d 462, 467-68 (D. Del. 1999)(claim for unpaid bonus governed by S 8111); S COA Industries, Inc. v. Bracken, 374 A.2d 263, 264 (Del

. 1977)(claim for year-end bonus was equivalent of"wa ges" and governed by S 8111).

In Mitchell, a pre-ERISA case, the Supreme Court of
Delaware determined that Mitchell's action under Delaware's Disability Wage Plan was governed byS 81 11. The Disability Wage Plan, however, had one and only one requirement for eligibility -- "at least one year o f continuous service." The Plan was a "fringe benefit ," said the Court, which accrued to Mitchell simply because she had worked for the one year -- her "work" had been "performed." Mitchell, 310 A.2d at 642.

Syed's claim, however, has little or nothing to do with work or services performed or fringe benefits and h as everything to do with benefits for disability based on an interpretation and analysis of the Plan documents, akin to the analysis required in a traditional breach of co ntract
claim:

The [claimant] has brought this action to re cover benefits allegedly due him under the terms o f the employee pension benefit plan and to enforce and/or

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1. As the majority acknowledges, selecting the appr opriate statute of limitations is a matter of federal, not state, law, and thus our task is

not to predict which statute of limitations the Delawar e Supreme Court might select for an ERISA claim. Rather, "in borrow ing the state statute of limitations to impose a time limitation on the f ederal cause of action, the federal court is `closing the gap' left by Cong ress in order to
fashion a body of federal common law to supplement the fede ral statutory cause of action." Harrison v. Digital Health Plan , 183 F .3d 1235, 1238-39 (11th Cir. 1999).

15clarify his rights under the terms of that P lan. The

employee pension benefit plan and its predec essor . . . are in written form. Each of the Plans conta in extensive and detailed terms and conditions governing the rights and duties of all participants in the fund.

Jenkins v. Local 705 Int'l Bd. of Teamsters Pension Plan, 713 F.2d 247, 252-53 (7th Cir. 1983); see also Hoga n v. Kraft Foods, 969 F.2d 142, 145 (5th Cir. 1992)("[Th e] claim involves the interpretation of the annuity contract [.]"); Meade v. Pension Appeals and Review Comm., 966 F.2d 190, 195 (6th Cir. 1992)("[T]he Plan at issue in th is case constitutes a written contract [for disability bene fits]."); Johnson v. State Mut. Life Assur. Co. of America, 9 42 F.2d 1260, 1264 (8th Cir. 1991)(noting that life insuran ce policy governed by ERISA "is a written promise to pay mone y if a specified condition, accidental death, occurs in th e future").

Here, as in Jenkins, it is the Plan which will dict ate the outcome of Syed's claim for unpaid disability benef its.2 There is simply no reasoned basis for concluding th at fringe benefits given by the employer to the employee, i.e

. "benefits arising from . . . work, labor or persona l services performed," should be stretched to include the very different pension and health benefits governed by a n ERISA plan that is subject to contract interpretation. 3 The majority's two-fold rejoinder to this is not persua sive. The majority misses the point by stating the hardly sta rtling

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2. It also bears mention that ERISA plans involve p arties outside the employment relationship such as family members, the insurance company, and the plan administrator, and for that r eason as well a S 502(a)(1)(B) claim does not fit squarely within S 8111. See Harrison, 183 F.3d at 1241-42 (noting that ERISA claims may i nvolve non-work related injuries or illnesses and, thus, concluding that state breach of contract statute was more analogous to S 502(a)(1)( B) claims than workers compensation statute).

3. Pennsylvania has a similar statute, the Wage Pay ment and Collection Law, 43 P.S. S 260.1 et seq. See Ferguson v. Greyho und Retirement and Disability Trust, 613 F. Supp. 323, 324 (W.D. Pa. 1 985)(rejecting use of wage statute -- and other statutes of limitations-- as most analogous and stating "[t]his is an action for recovery of be nefits due under the terms of an employee pension benefit plan[.] We bel ieve that the claim is most analogous to contract law.").

16proposition that "Syed's claim was squarely based o n his

prior employment," "hardly startling" because Syed, of course, had to have been an employee to have brough t an ERISA claim. Beyond that, the majority's citation t o one case -- a preemption case which emanated from New Jersey, not Delaware -- for the proposition that ER ISA benefits are "often" termed fringe benefits is some what disingenuous. The category of funds to which the Ne w Jersey Construction Workers' Fringe Benefit Securit y Act at issue in that case applied consisted "largely if no t entirely of employee benefit plans governed by ERISA." Brick layers
and Allied Craftsmen Int'l Union Local 33 Benefit F unds v. America's Marble Source Inc., 950 F.2d 114, 118 (3d Cir. 1991).

Mitchell aside, the majority also invokes a 1956 Di strict of
Delaware case which states that S 8111 is meant to encompass all disputes arising from the employment relationship. See Sorensen v. Overland Corp., 142 F . Supp. 354 (D. Del. 1956), aff 'd, 242 F.2d 70 (3d Cir. 19 59). Separate and apart from the fact that this sweeping language emanates from a case decided long before E RISA was even a twinkle in Congress's eye, the statement which the majority quotes has been qualified in at least two postERISA District of Delaware cases. In Rich v. Zeneca , Inc., 845 F. Supp. 162 (D. Del. 1994), relied on by Syed, the District Court found Mitchell and the "fairly broad " statement in Sorenson inapplicable to Rich's claim under ERISA that his employer wrongfully interfered with his attainment of pension and employment benefits:

S 8111 and its one year statute of limitatio ns for wage, salary and benefit claims should not be read as being so comprehensive as to bar all claims arisin g out of the employer-employee relationship. Rather [S 81 11] is directed to claims alleging a breach of a du ty to pay wages, salary or overtime for work performed . Where, as here, a plaintiff alleges that a defendan t has breached a different duty arising out of the employer- employee relationship, another statute of li mitations may apply to the plaintiff 's claim.

Rich, 845 F. Supp. at 165. The Court concluded that Rich's claims were most analogous to the breach of contrac t and

17breach of promise claims asserted in Goldman and Br own

and, thus, subject to the S 8106 three-year statute of limitations. See id. at 165-66. Parenthetically, th e majority's effort to distinguish Rich by shoe-horni ng Syed's case into "work performed" because his benefits hav e been
"earned" makes no sense both on its face and becaus e those contracted-for benefits can only be "earned" when
certain criteria -- criteria stated in the Plan-- a re met, a finding which cannot now be made.4

In the second post-ERISA District of Delaware case, the Court, referencing what it called the "broad interp retation" of S 8111 in Sorensen, found that the bonus at issu e -- a clear "fringe" benefit -- was subject toS 8111's on e-year statute of limitations. The Court summarized the
distinction between S 8106 and S 8111:

If a plaintiff alleges a breach of a duty to provide benefits or to pay wages for work already pe rformed, then the one year statute of limitations in section 8111 governs. On the other hand, if plaintiff all eges that his employer breached a different duty arising o ut of the employment agreement, then the three year st atute of limitations in section 8106 applies.

Compass, 72 F. Supp. 2d at 467. Just such a"differe nt duty" has been alleged here. See also DeWitt v. Pen n-Del Directory Corp., 872 F. Supp. 126, 134-35 (D. Del. 1994)(S 8106 is the most analogous statute of limit ations for ERISA S 510 claim).

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4. The majority rejects a second case relied on by Syed primarily because the Court in that case did not explain why it found S 8111 inapplicable to a claim brought under a group accident insurance policy for personal injuries resulting in disability. See Shaw v. Aetna Life Ins. Co., 395

A.2d 384 (Del. Super. Ct. 1978). It is very clear, howev er, why the Shaw Court found as it did: the very specific two-year statute of limitations for personal injury claims was the perfect fit. I note, for what it is worth, that by virtue of subsequent amendments to the pers onal injury protection ("PIP") provisions of Delaware's No Faul t Insurance Statute, actions for PIP benefits are now statutory causes o f action, subject to

the three-year statute of limitations of S 8106. See Ha rper v. State Farm Mut. Auto. Ins. Co., 703 A.2d 136 (Del. 1997).

18Finally, the majority cites a 1995 Eighth Circuit c ase

which applied Minnesota's two-year statute of limit ations for wage claims as more analogous to a S 502(a)(1)( B) claim than the six-year statute of limitations governing contract disputes. See Adamson v. Armco, Inc., 44 F.3d 650 ( 8th Cir.), cert. denied, 516 U.S. 823 (1995). Conceding that
Minnesota courts have not had occasion to determine whether claims for employee benefits under an ERISA plan are wage claims, the Adamson Court found the issue "hardly in doubt," but cited in support of its"hard ly in doubt" conclusion only pre-ERISA cases involving cl aims not for disability benefits but for unpaid vacation benefits, salary increases and "adjustment of all fringe bene fits." 447 F.3d at 653. Hardly ringing support.

It is, thus, clear, at least to me, that S 8106's s tatute of limitations for contract actions is more analogous to an
ERISA claim for the denial of benefits than that fo und in S 8111.5 Moreover, in our search for the most analo gous statute, we are not necessarily limited to reviewin g the two presented to us. It might well be appropriate, ther efore, to consider Delaware's three-year statute of limitatio ns for claims alleging breach of insurance policies, 19 De l. C.
S 3315. Other circuits have concluded that similar state statutes are the most analogous to S 502(a)(1)(B) c laims and supply the appropriate statute of limitations. See, e.g., Lang

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5. I note in passing, and only in passing because t he parties have not discussed it, that S 8106 also provides a statute o f limitations for "action[s] based on a statute". Delaware courts hav e applied the provision to S 8106/S 8111 disputes. See Johnson v. Williams, 728 A.2d 1185, 1188-89 (Del. Super. Ct. 1998)(concluding tha t lower court's use of S 8106 where fireman sought line-of-duty disabil ity benefits pursuant
to state statute as an "action based on statute" wa s not clearly erroneous); Vassallo v. Haber Elec. Co., 435 A.2d 1 046, 1051 (Del. Super. Ct. 1981)(applying S 8106 to plaintiff 's cl aim that based on a state statute he should have been registered by emp loyer to receive higher wages). Section 8106 has also been found to provide the statute of limitations for a federal RICO claim, a claim"ba sed on a statute." See Creamer v. General Teamsters Local Union 326, 579 F . Supp. 1284, 1290 (D. Del. 1984). Syed's claim is indisputably based on a statute -- ERISA -- and because the more specific S 8111 simply does not apply, S 8106 is arguably a more appropriate candidate for the mo st analogous statute
of limitations for this reason as well.

19v. Aetna Life Ins. Co., 196 F.3d 1102, 1104 (10th C ir. 1999)

("Our duty . . . is to choose the most analogous st ate statute of limitation. While plaintiff 's ERISA cla im is based upon a contract, it is more precisely based upon a contract of insurance. Therefore, we hold that the three-yea r statute of limitations applies to plaintiff 's claim."); Ni kaido v. Centennial Life Ins. Co., 42 F.3d 557, 559 (9th Cir

. 1994)(using California's "limitations statute speci fically for disability policies" rather than general breach of contract statute where ERISA Plan contained provision simila r to that of California's insurance code); Duchek v. Blu e Cross and Blue Shield of Nebraska, 153 F.3d 648, 649-50 ( 8th Cir. 1998)(applying Nebraska Insurance Statute to a ction for benefits under ERISA). As the Duchek Court put it:

[I]t would be anomalous to characterize this suit as a contract action and then borrow Nebraska's g eneric
contract statute of limitations rather than the specific section of the Nebraska insurance laws permi tting the contractual limitation in question.

153 F.3d at 649-50.

The majority, after concluding that Syed's claim co mes within S 8111's statute of limitations, recognizes that that does not conclusively resolve the issue because the selected
statute of limitations must not be "inconsistent wi th national labor policy." It is, indeed, quite clear that a state's statute of limitations for ERISA claims will only b e borrowed "so long as application of state statute's time period would not impede effectuation of federal pol icy." Pierce County Hotel Employees and Restaurant Employ ees Health Trust v. Elks Lodge, 827 F.2d 1324, 1328 (9t h Cir. 1987); see also Jenkins, 713 F.2d at 251 ("In deter mining the most appropriate state statute of limitations, the court must be cognizant of and examine the underlying nat ure of the federal claim as well as the federal policies i nvolved."). The majority, while finding S 8111's one-year statu te of limitations to be "short," and while choosing not t o discuss the policy behind ERISA, simply concludes that it"c annot say" the one-year statute of limitations is inconsi stent with that policy. That conclusion is not so clear to me.

In enacting ERISA, "Congress sought to protect the

20interests of participants in employee benefits plan s by

regulating the administration of such plans and by providing participants and beneficiaries with a var iety of remedies to assure compliance with the statutory framework." Harrison, 183 F.3d at 1239; see also He ld v. Manufacturers Hanover Leasing Corp., 912 F.2d 1197, 1202 (10th Cir. 1990)("The principal purpose of ERISA is to protect employees' rights to benefits under a cover ed plan."). While I cannot say that applying S 8111's one-year statute of limitations (which, it must be remembere d, bars Syed's claim) is so unreasonable as to impede the effectuation of federal policy, I surely cannot say that we are furthering Congress's clearly stated goal by co ncluding that Delaware's employees have a much shorter perio d of time within which to file claims for the wrongful d enial of benefits than employees in virtually every other st ate.6 Perhaps the Delaware Legislature will feel obliged to consider this unfortunate result. See Johnson , 942 F.2d at 1266 ("Either Congress, by amending ERISA, or the Missouri Legislature is free to modify the statute of limitations. Until such legislative action, we are required to

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6. See e.g., Carey v. Int'l Broth. of Elec. Workers Local 363 Pension Plan, 201 F.3d 44, 46-47 (2d Cir. 1999)(applying New York 's six-year limitations period); Lang, 196 F.3d at 1104 (applyi ng Utah's three-year limitations period); Harrison, 183 F.3d at 1239-40 (applying Georgia's six-year limitations period); Duchek, 153 F.3d at 6 49-50 (applying Nebraska's three-year limitations period); Blue Cro ss & Blue Shield of Alabama v. Sanders, 138 F.3d 1347, 1357 (11th Cir. 1998)(applying Alabama's six-year limitations); Daill, 100 F.3d at 65 (applying Illinois' ten-year limitations period); Nikaido, 42 F.3d at 5 59 (applying California's three-year limitations period); Hogan, 969 F.2d at 145 (applying Texas' four-year limitations period); Joh nson, 942 F.2d at 1263 (applying Missouri's ten-year limitations period); Meade 966 F.2d at 193, 195 (applying Ohio's fifteen-year limitations perio d); Wright v. Southwestern Bell Telephone Co., 925 F.2d 1288, 129 1 (10th Cir. 1991)(applying Oklahoma's five-year limitations per iod); Pierce, 827 F.2d at 1328 (applying Washington's six-year limitations period); Hawaii Carpenters Trust Funds v. Waiola Carpenter Shop, In c., 823 F.2d 289, 297-98 (9th Cir. 1987)(applying Hawaii's six-year l imitations period); Dameron v. Sinai Hosp. of Baltimore, Inc., 815 F.2d 975, 981-82 (4th Cir. 1987)(applying Maryland's three-year limitations pe riod); Trustees for

Alaska Laborers-Constr. Indus. Health and Sec. Fund v. Ferrell, 812 F.2d 512, 517 (9th Cir. 1987)(applying Alaska's six-year limitations period).

21hold, consistent with Missouri law, that plaintiff 's claim to

enforce defendant's written promise for the payment of money is governed by the ten-year statute of limita tions.").

One final note. The Supreme Court of Delaware has
instructed that when a Delaware court is in doubt a s to which of two statutes of limitations control, it sh ould choose the longer. See Sonne v. Sacks, 314 A.2d 194 , 196 (Del. 1973). Indeed, we, ourselves, have recognized this principle in a diversity case dealing with an S 810 6 and S 8111 dispute. See Lindsey v. M.A. Zeccola & Sons, Inc., 26 F.3d 1236, 1245 (3d Cir. 1994). Although we, of cou rse, are not bound to follow that sensible instruction, choo sing the concededly applicable longer statute of limitations period would not only further the federal policy behind ER ISA but would bring Delaware into line with all of the othe r states in which substantially longer statutes of limitatio ns are applied than the one-year period deemed applicable here. I respectfully dissent.

A True Copy:

Teste:

Clerk of the United States Court of Appeals
for the Third Circuit

22