FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

DONNA SCHARFF, 

Plaintiff-Appellant,

No. 07-55951 v.

D.C. No. RAYTHEON COMPANY SHORT TERM  CV-07-00134-PSG DISABILITY PLAN; RAYTHEON

COMPANY LONG TERM DISABILITY OPINION

PLAN,

Defendants-Appellees. 

Appeal from the United States District Court

for the Central District of California

Philip S. Gutierrez, District Judge, Presiding

Argued and Submitted

February 4, 2009—Pasadena, California

Filed September 9, 2009

Before: Harry Pregerson, Susan P. Graber, and

Kim McLane Wardlaw, Circuit Judges.

Opinion by Judge Graber;

Dissent by Judge Pregerson

12807
COUNSEL

Peter S. Sessions and Lisa S. Kantor, Kantor & Kantor LLP,

Northridge, California, for the plaintiff-appellant.

Ariadne Staples, Metropolitan Life Insurance Company, Long

Island City, New York; and Robert K. Renner, Barger &

Wolen LLP, Irvine, California, for the defendants-appellees.

OPINION

GRABER, Circuit Judge:

Plaintiff Donna Scharff worked for the Raytheon Company.

The Raytheon Company employees’ contributions, which are

held in the Raytheon Employees Disability Trust (“Trust”),

and the Company jointly fund Defendant Raytheon Company

12810 SCHARFF v. RAYTHEON COMPANY
Short Term Disability Plan (“Short Term Plan”). Only the

Trust funds Defendant Raytheon Company Long Term Disability Plan (“Long Term Plan”). Metropolitan Life Insurance

Company (“MetLife”) administers, but does not insure, the

Plans. The Employee Retirement Income Security Act of

1974, 29 U.S.C. §§ 1001-1461 (“ERISA”), governs both

Plans.

The Plans contained a contractual one-year statute of limitations. After MetLife denied her claim for Short Term Plan

benefits, Plaintiff brought suit in federal court seeking benefits under both Plans, but she filed the action twenty days after

the one-year contractual statute of limitations had lapsed. The

district court dismissed the action as untimely. We hold that

even if the doctrine of “reasonable expectations” applied here,

the one-year statute of limitations met its requirements and

also met the statutory and regulatory standards for disclosure.

We decline to import into federal common law a California

regulation requiring insurers to inform claimants expressly of

statutes of limitations that may bar their claims. Accordingly,

we affirm the judgment dismissing the action.

FACTUAL AND PROCEDURAL HISTORY

When Plaintiff applied for short-term disability benefits,

she was an employee of the Raytheon Company and a participant in the Raytheon Company’s employee benefit plans. As

noted above, both the Short Term and Long Term Plans were

self-funded. MetLife administers the plans and has sole discretionary authority to determine a participant’s eligibility for

benefits. 

Raytheon provided Plaintiff and other plan participants

with a Summary Plan Description (“SPD”) called “Your 2005

Benefits Handbook.” The SPD is divided into chapters that

address the different benefits available to Raytheon employees. The final chapter of the document is entitled “Administrative” and provides participants with information relating to

SCHARFF v. RAYTHEON COMPANY 12811
their rights and obligations under all of the benefit plans discussed in earlier chapters. The Administrative chapter contains a section titled “Your Right to Appeal a Denied Claim,”

which explains the procedure for appealing a denied claim to

MetLife. On the same page, a large-typeface, bolded heading,

“Special Rules for Disability and Health Claims,” introduces a paragraph that cautions: “With respect to disability

and health plans . . . time limits for deciding and appealing

claims are significantly different from those for [other] claims

. . . .” Later in the Administrative chapter is a section titled

“Your Rights under ERISA.” A subsection, titled “Enforce

Your Rights,” states: “If you have a claim for benefits that is

denied or ignored in whole or in part, you may file suit in a

state or federal court.” 

The “Disability” chapter, which contains information about

the Plan under which Plaintiff sought benefits, sets forth the

deadline for bringing a lawsuit regarding a denied claim. The

last page of this chapter contains a paragraph with the largetypeface, bolded, and italicized heading, “Claims Appeal Procedure.” That paragraph states:

The procedure to be followed to appeal a denied

claim is explained in the Administrative section. It is

important to note that under the applicable [Plan]

documents, any action at law or in equity must be

commenced within one year of the denial of the

appeal from an initial claim denial, regardless of any

state or federal statutes establishing provisions relating to limitations of actions.

On April 15, 2005, MetLife received a claim from Plaintiff

for Short Term Plan benefits. The claim was denied in a letter

dated July 18, 2005, on the ground that the clinical reports did

not show that Plaintiff had a condition that would render her

totally disabled and unable to work. The letter described the

MetLife process for appealing the denial. Plaintiff submitted

additional medical information without formally appealing the

12812 SCHARFF v. RAYTHEON COMPANY
denial. MetLife reviewed the information and issued a second

denial letter on September 16, 2005. Plaintiff formally

appealed that denial on October 28, 2005. 

On January 12, 2006, MetLife issued a decision upholding

its previous determination. That letter provided, in relevant

part, that “[t]his determination is the final decision on review

and constitutes completion of the full and fair review required

by the [Short Term] Plan and federal law.” The letter

informed Plaintiff that if she wished to pursue the matter further, “[she] should consult the information provided concerning [her] rights, as set forth in the [SPD].” The letter went on

to explain that no further administrative appeals were available concerning Plaintiff’s claim for disability benefits, but

that she had a “right to bring a civil action under Section

502(a) of [ERISA].” MetLife also promised to provide Plaintiff with copies of the documents relevant to her claim upon

her request. None of the letters mentioned the contractual oneyear statute of limitations. 

Following receipt of the final denial letter, Plaintiff ’s

daughter and personal representative, Jessica Leighty, filed a

complaint with the California Department of Insurance on

Plaintiff ’s behalf. On June 14, 2006, MetLife responded to

the Department, informing it that, because the Plan is not

funded through an insurance policy, it is not subject to state

laws governing insurers. MetLife also wrote to Ms. Leighty

to explain how it had administered Plaintiff’s claim. That letter reminded her that “denial of the claim was upheld on January 12, 2006.” 

Under the one-year statute of limitations contained in the

SPD, the deadline to file suit was January 12, 2007. Plaintiff

filed suit on February 1, 2007, twenty days after expiration of

the limitations period. In her complaint, Plaintiff alleged that

MetLife upheld its prior determination denying benefits in its

June 14, 2006, letter to her daughter, rather than in its January

12, 2006, letter. Defendants moved to dismiss under Federal

SCHARFF v. RAYTHEON COMPANY 12813
Rule of Civil Procedure 12(b)(6), on the ground that the complaint was untimely. In her response, Plaintiff conceded that

the statute of limitations ran on January 12, 2007, and that her

complaint was untimely. She later conceded that the one-year

limitation was reasonable, and she did not assert that the

wording of the one-year limitations period was unclear. She

argued, however, that her late filing should be excused

because the limitations provision was placed neither in what

she believed was the appropriate section of the SPD nor in the

correspondence that she received from MetLife. 

The district court first addressed whether an insurer may

shorten the limitations period for bringing an ERISA suit and

whether the contractual limitations period is enforceable,

issues that Plaintiff does not raise on appeal and that we therefore do not consider. The court then declined to use the reasonable expectations doctrine to find that the limitations

period was not displayed conspicuously enough, holding that

the reasonable expectations rule has not been extended to selffunded benefits plans. The court also declined to apply section

2695.4(a) of title 10 of the California Code of Regulations,

which provides that an insurer must disclose to a claimant any

time limits that may apply to the claim. The court noted that

state insurance regulation of self-funded plans, like the Plan

at issue here, is preempted, and the California regulation has

not been incorporated into federal common law. Plaintiff

timely appeals.

STANDARD OF REVIEW

We have jurisdiction under 28 U.S.C. § 1291. We review

de novo an order granting a motion to dismiss for failure to

state a claim pursuant to Federal Rule of Civil Procedure

12(b)(6). Madison v. Graham, 316 F.3d 867, 869 (9th Cir.

2002). We must take all allegations of material fact in the

complaint as true and must construe the facts in the light most

favorable to Plaintiff. Id.

12814 SCHARFF v. RAYTHEON COMPANY
DISCUSSION

A. Disclosure of the One-Year Deadline

Plaintiff first argues that we should adopt the reasonable

expectations doctrine to analyze the SPD and that we should

hold that the placement and display of the deadline in this

case violated participants’ reasonable expectations. Defendants argue, in response, that the doctrine of reasonable

expectations does not apply to self-funded welfare benefit

plans. For the reasons explained below, we need not decide

whether the reasonable expectations doctrine applies to selffunded welfare benefit plans. 

[1] ERISA’s central policy goal is to protect benefit plan

participants “by requiring the disclosure and reporting to participants and beneficiaries of financial and other information

. . . and by providing for appropriate remedies, sanctions, and

ready access to the Federal courts.” 29 U.S.C. § 1001(b);

Chuck v. Hewlett Packard Co., 455 F.3d 1026, 1035 (9th Cir.

2006). To further that goal, employee benefit plans must provide plan participants with an SPD, which is the “statutorily

established means of informing participants of the terms of

the plan and its benefits,” and which serves as “the employee’s primary source of information regarding employment

benefits.” Bergt v. Ret. Plan for Pilots Employed by MarkAir,

Inc., 293 F.3d 1139, 1143 (9th Cir. 2002) (internal quotation

marks omitted); 29 U.S.C. § 1022(a). 

[2] Section 1022(a) provides in pertinent part: 

The [SPD] shall include the information described in

subsection (b) of this section, shall be written in a

manner calculated to be understood by the average

plan participant, and shall be sufficiently accurate

and comprehensive to reasonably apprise such participants and beneficiaries of their rights and obligations under the plan. 

SCHARFF v. RAYTHEON COMPANY 12815
Section 1022(b) lists the specific information that the SPD is

required to contain. One of the required pieces of information

is any “circumstances which may result in disqualification,

ineligibility, or denial or loss of benefits.” 29 U.S.C.

§ 1022(b). Accordingly, the SPD must explain the “circumstances which may result in disqualification, ineligibility, or

denial or loss of benefits” in a manner “calculated to be

understood by the average plan participant,” and that information must be “sufficiently accurate and comprehensive to reasonably apprise” plan participants of their rights and

obligations under the plan. Id. § 1022(a) & (b). 

The Federal Regulations further provide:

Any description of exception, limitations, reductions,

and other restrictions of plan benefits shall not be

minimized, rendered obscure or otherwise made to

appear unimportant. Such exceptions, limitations,

reductions, or restrictions of plan benefits shall be

described or summarized in a manner not less prominent than the style, captions, printing type, and

prominence used to describe or summarize plan benefits.

29 C.F.R. § 2520.102-2(b). The SPD must also disclose limitations in close conjunction to benefits provisions, or refer the

participant to the page numbers on which the relevant restrictions appear. Id.

Those are the relevant statutory and regulatory disclosure

provisions relating to the SPD. In addition to those requirements, the federal courts have developed a body of ERISA

federal common law. See Menhorn v. Firestone Tire & Rubber Co., 738 F.2d 1496, 1500 (9th Cir. 1984) (“The courts are

directed to formulate a nationally uniform federal common

law to supplement the explicit provisions and general policies

set out in ERISA, referring to and guided by principles of

12816 SCHARFF v. RAYTHEON COMPANY
state law when appropriate, but governed by the federal policies at issue.”). 

[3] It is one of those common law principles, the doctrine

of reasonable expectations, that Plaintiff asks us to use to analyze the display and placement of the one-year deadline in this

case. The doctrine can be summarized as follows:

Under the so-called “doctrine of reasonable expectations,” which is often applied in interpreting or

construing policies of insurance, the meaning of an

insurance policy is determined in accordance with

the reasonable expectations of the insured. In other

words, the meaning of the terms in an insurance policy is to be determined by considering it in light of

whether a reasonable person in the position of the

insured would expect coverage. The term “insured’s

reasonable expectations” refers to what a hypothetical reasonable insured would glean from the wording

of the particular policy and kind of insurance at

issue, rather than how a particular insured who happened to buy the policy might understand it.

16 Samuel Williston & Richard A. Lord, A Treatise on the

Law of Contracts § 49:20, at 111-12 (4th ed. 2000) (footnotes

omitted). Plaintiff argues that the placement and display of the

deadline failed to meet plan participants’ reasonable expectations because (1) the deadline should have been placed in the

Administrative chapter rather than the Disability chapter, and

(2) the deadline should have been displayed more conspicuously in the text of the SPD. 

Plaintiff is correct in asserting that we have incorporated

the reasonable expectations doctrine into ERISA federal common law when we have interpreted insured plans. In Saltarelli

v. Bob Baker Group Medical Trust, 35 F.3d 382, 387 (9th Cir.

1994), we “adopt[ed] the doctrine of reasonable expectations

as a principle of the uniform federal common law informing

SCHARFF v. RAYTHEON COMPANY 12817
interpretation of ERISA-governed insurance contracts.” At

issue in Saltarelli was a pre-existing conditions exclusion that

appeared in the SPD. Id. at 385. We noted that the plan

administrator “chose to bury one of the plan’s most significant provisions amidst definitions, rather than forthrightly

stating the pre-existing conditions exclusion in the operative

clauses of the plan description.” Id. We therefore held that the

exclusion for pre-existing conditions “was not clear, plain,

and conspicuous enough to negate layman Saltarelli’s objectively reasonable expectations of coverage.” Id. at 387. 

We noted that the application of the reasonable expectations doctrine to ERISA insurance contract law was, at the

time, an issue of first impression for our circuit. Id. at 386.

We gave two reasons for adopting the doctrine into the federal

common law: (1) “protecting the reasonable expectations of

insureds appropriately serves the federal policies underlying

ERISA,” and (2) “at least thirty states ha[d] explicitly incorporated . . . the reasonable expectations doctrine into their

own law, . . . demonstrat[ing] its widespread acceptance and

vitality.” Id. at 386-87. 

After Saltarelli, we assumed, in dictum, that the reasonable

expectations doctrine applied to a self-funded benefit plan. In

Winters v. Costco Wholesale Corp., 49 F.3d 550 (9th Cir.

1995), the plaintiff sought reimbursement from a self-funded

benefit plan for a procedure similar to in vitro fertilization.

The district court held that the plan administrator should not

have denied benefits. Id. at 552. The administrator argued that

the district court (1) applied the wrong standard of review to

its decision and (2) improperly applied the doctrine of contra

proferentem, under which ambiguities in a contract are construed against the contract’s drafter. Id. at 553. After addressing those two issues, we discussed the holding of Saltarelli.

Id. at 554-55. We then concluded—even though the plaintiff

had not argued that the reasonable expectations doctrine

applied to her case—that she had “no objectively reasonable

12818 SCHARFF v. RAYTHEON COMPANY
expectation of coverage” for her procedure because the SPD

conspicuously exempted those types of procedures. Id. at 555.

We hemmed in the doctrine just two years after Winters. In

Estate of Shockley v. Alyeska Pipeline Service Co., 130 F.3d

403, 407 (9th Cir. 1997), we declined to extend Saltarelli’s

rule to an ERISA pension plan. We held that the doctrine of

reasonable expectations applies only to “insurance contracts,

including ERISA insurance contracts.” Id. We noted that the

doctrine “ ‘grew out of the law of adhesion contracts and construction of ambiguities in insurance policies,’ ” id. (quoting

Saltarelli, 35 F.3d at 386), so it made sense to apply the

“body of law dealing generally with insurance policy interpretation” to “insurance policies that happened to be ERISA

insurance policies.” Id. In our view, there was “no reason to

extend the doctrine beyond insurance contracts” because “[the

doctrine] was developed for and applies directly to insurance

policies.” Id. 

Self-funded benefit plans like Raytheon’s are not insurance

policies. As a result, Estate of Shockley would appear to bar

application of the doctrine of reasonable expectations to the

plan at issue here. But, at the same time, Winters could be

read to have extended the doctrine implicitly to apply to selffunded ERISA welfare benefit plans. Estate of Shockley mistakenly cites Winters as an example of an ERISA insurance

contract. Estate of Shockley, 130 F.3d at 407 (citing Winters,

49 F.3d at 554-55).

What we have, then, are two opinions that are seemingly in

tension with one another: Winters, which applied the reasonable expectations doctrine to a self-funded plan, at least in

dictum, and Estate of Shockley, which prohibits us from

expanding the doctrine beyond insured plans. As a threejudge panel, we cannot overrule either decision. Ross Island

Sand & Gravel Co. v. Matson (In re Complaint of Ross Island

Sand & Gravel), 226 F.3d 1015, 1018 (9th Cir. 2000) (per

curiam). 

SCHARFF v. RAYTHEON COMPANY 12819
[4] But we need not call for en banc consideration, nor try

to harmonize the apparent conflict in our precedents. Assuming, without deciding, that the reasonable expectations doctrine applies, the SPD here met plan participants’ reasonable

expectations, in addition to fulfilling the statutory and regulatory requirements. See Estate of Shockley, 130 F.3d at 407

(treating the statutory disclosure requirements and the common law reasonable expectations doctrine as different inquiries). It is the statutory and regulatory requirements to which

we turn next. Our task is to determine whether the deadline

was “written in a manner calculated to be understood by the

average plan participant” and whether it was “sufficiently

accurate and comprehensive to reasonably apprise” participants of their rights and obligations under the plan. 29 U.S.C.

§ 1022(a). We must also ensure that the deadline was not minimized or otherwise obscured and that the limitations provision was placed near the benefits provisions. 29 C.F.R.

§ 2520.102-2(b). 

[5] Preliminarily, we note that a statute of limitations for

bringing suit qualifies as a circumstance “which may result in

disqualification, ineligibility, or denial or loss of benefits.” 29

U.S.C. § 1022(b); see Dodson v. Woodmen of World Life Ins.

Soc’y, 109 F.3d 436, 439 (8th Cir. 1997) (noting that the

omission from the SPD of a time limit for filing suit violated

§ 1022(b) because the time limit was a circumstance that

might result in loss of benefits). Therefore, the placement and

display of the deadline must meet the statutory and regulatory

standards. 

[6] We hold that the manner of disclosure in this case met

those standards. First, placement of the deadline in the Disability chapter, rather than in the Administrative chapter

(where Plaintiff argues it should have appeared) was reasonable. See Abena v. Metro. Life Ins. Co., 544 F.3d 880, 884

(7th Cir. 2008) (holding that placement of a contractual limitations period in a section entitled “Claims” was reasonable).

The correspondence that MetLife sent to Plaintiff informed

12820 SCHARFF v. RAYTHEON COMPANY
her that she had a right to sue and that she could find more

information about her rights in the SPD. A reasonable plan

participant applying for disability benefits would be expected

to read, in its entirety, the Disability chapter of the SPD, as

it explains the rules relating to the benefits for which she is

applying. The one-year deadline for filing suit regarding disability claims was, logically, placed at the end of the disability

chapter, satisfying the nearness requirement of 29 C.F.R.

§ 2520.102-2(b).

[7] Second, within the Disability chapter, the deadline was

written in a manner calculated to be understood by the average plan participant and was not minimized. 29 U.S.C.

§ 1022(a); 29 C.F.R. § 2520.102-2(b). A reasonable plan participant whose disability claim had been denied would proceed, naturally, to examine the information that appears under

the large-typeface, bolded, and italicized heading, “Claims

Appeal Procedure.” There, the participant would find out

that, if she wishes to bring a lawsuit, she must do so within

one year of MetLife’s denial of the appeal of her claim. The

deadline was not obscured by being placed in the middle of

other terms relating to claims appeal procedure; nor was it relegated to “fine print.” We believe that the average plan participant in Plaintiff ’s position would have located and

understood the one-year deadline in the SPD. 

[8] For these reasons, we hold that the placement and display of the one-year statute of limitations met the statutory

and regulatory requirements. Turning, then, to the final issue

concerning the wording of the SPD, we hold that the placement and display of the one-year statute of limitations sufficed to meet plan participants’ reasonable expectations,

assuming that the doctrine applies.

B. Duty to Inform

Plaintiff next argues that the one-year limitation should not

be enforced because MetLife did not inform her of the time

SCHARFF v. RAYTHEON COMPANY 12821
limit in any of its correspondence to her. Plaintiff concedes

that the Plan met all applicable ERISA disclosure requirements and that MetLife was not obligated under ERISA to

inform her of the deadline. She argues, however, that we

should impose an additional “duty to inform” on claims

administrators, drawn from a California insurance regulation.

We decline to do so.

[9] Plaintiff urges us to incorporate into ERISA federal

common law the following California state insurance regulation: “Every insurer shall disclose to a first party claimant or

beneficiary, all benefits, coverage, time limits or other provisions of any insurance policy issued by that insurer that may

apply to the claim presented by the claimant.” Cal. Code

Regs. tit. 10, § 2695.4(a). As noted above, under ERISA’s

“deemer clause,” state insurance regulation of self-funded

plans is preempted by ERISA. Holliday, 498 U.S. at 58.

Plaintiff concedes that, because the Plans here are self-funded,

the California regulation cannot be applied directly, but she

maintains that we should adopt the California rule into the

federal common law. 

In support of this position, Plaintiff cites Mogck v. Unum

Life Insurance Co. of America, 292 F.3d 1025 (9th Cir. 2002),

where we stated in a footnote that we

need not decide whether the amended California regulations1

 clarified an existing duty of the insurer to

provide notice of a contractual statute of limitation,

or whether a new duty to provide written notice was

created, because, in any event, [the insurer’s] correspondence was ineffective to trigger the policy’s

time limitation provision.

Id. at 1028 n.1 (footnote added). Plaintiff acknowledges that

Mogck did not actually rule on whether the insurer has a duty

1The California regulation is not the same regulation at issue here. 

12822 SCHARFF v. RAYTHEON COMPANY
to inform, but asserts that the fact that we even touched upon

the issue (albeit in a footnote) implies that we believe the

argument is plausible. We are not persuaded. Our statement

that we need not decide an issue cannot be taken as an

implicit endorsement of the argument that we expressly chose

not to address.

[10] Plaintiff’s argument fails for other reasons as well. As

the Third Circuit has noted, “federal courts may not lightly

create additional rights under the rubric of federal common

law; we may exercise our common law authority to fashion

new ERISA causes of action only where we deem it necessary

to fill in interstitially or otherwise effectuate the statutory pattern enacted in the large by Congress.” Hooven v. Exxon

Mobil Corp., 465 F.3d 566, 573 n.5 (3d Cir. 2006) (internal

quotation marks omitted). ERISA and its implementing regulations contain broad and detailed disclosure rules to protect

plan beneficiaries. See, e.g., 29 U.S.C. § 1021 (providing the

disclosure and reporting requirements); id. § 1022 (describing

the disclosure requirements for the SPD); id. § 1132(c)

(imposing penalties on plan administrators who fail to disclose required information to plan participants); 29 C.F.R.

§§ 2520.104b-1 to .104b-4, .104b-10 (providing detailed regulations for reporting and disclosure). We see no need to supplement the comprehensive scheme already in place for

regulating plan administrators’ disclosures to participants.

[11] We also must take into account that “Congress expects

uniformity of decisions under ERISA.” Evans v. Safeco Life

Ins. Co., 916 F.2d 1437, 1440 (9th Cir. 1990) (per curiam);

see also Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 56

(1987) (“The uniformity of decision which the Act is

designed to foster will help administrators, fiduciaries and

participants to predict the legality of proposed actions without

the necessity of reference to varying state laws.” (internal

quotation marks omitted)). At least four circuits have held that

plan participants who have been provided with an SPD are

charged with constructive knowledge of the contents of the

SCHARFF v. RAYTHEON COMPANY 12823
document. Clark v. NBD Bank, N.A., 3 F. App’x 500, 504-05

(6th Cir. 2001) (per curiam) (unpublished table decision);

Barnes v. Lacy, 927 F.2d 539, 543 (11th Cir. 1991); Schultz

v. Metro. Life Ins. Co., 872 F.2d 676, 680 (5th Cir. 1989);

Castello v. Gamache, 593 F.2d 358, 360-61 (8th Cir. 1979)

(per curiam). The Fifth and Eighth Circuits specifically

declined to require plan administrators to inform participants

separately of provisions already contained in the SPD. 

[12] To require plan administrators within the Ninth Circuit

to inform participants separately of time limits already contained in the SPD, when other circuits have rejected a similar

rule, would place the Ninth Circuit out of line with current

federal common law and would inject a lack of uniformity

into ERISA law. Moreover, large multistate employers often

issue the same welfare benefit plan to cover all their employees, regardless of their locations. For these employers, a lack

of uniformity among the circuits would be detrimental. In

short, we decline to impose on plan administrators the additional requirements of California Code of Regulations title 10,

section 2695.4(a), by adopting that rule into ERISA federal

common law.

AFFIRMED.

PREGERSON, Circuit Judge, dissenting:

I respectfully dissent. I do not think that an average plan

participant could successfully navigate through Raytheon’s

labyrinthine Summary Plan Description. In my view, the

Summary Plan Description bounces a reader between important provisions in the Disability and Administrative chapters

in a way that makes it all too easy to miss the one-year deadline for filing a claim under ERISA in federal court. First, I

believe that the Summary Plan Description at issue does not

meet the statutory and regulatory requirements governing

12824 SCHARFF v. RAYTHEON COMPANY
employee benefit plan disclosures. Those disclosures are

required to be “written in a manner calculated to be understood by the average plan participant.” 29 U.S.C. § 1022(a)

(emphasis added). Second, even if those statutory and regulatory requirements were met, we have already applied the doctrine of reasonable expectations to self-funded ERISA plans,

so I would hold that the one-year deadline here is unenforceable because it was not set forth in a clear, plain and conspicuous statement in the plan.1

I.

The majority opinion holds that the placement and display

of the one-year deadline meets the statutory and regulatory

requirements provided by ERISA and ERISA’s implementing

regulations. I disagree.

A summary plan description must be “written in a manner

calculated to be understood by the average plan participant,

and shall be sufficiently accurate and comprehensive to reasonably apprise such participants and beneficiaries of their

rights and obligations under the plan.” 29 U.S.C. § 1022(a).

Regulations also state that:

The format of the summary plan description must

not have the effect [of] misleading, misinforming or

failing to inform participants and beneficiaries. Any

description of exception, limitations, reductions, and

other restrictions of plan benefits shall not be minimized, rendered obscure or otherwise made to

appear unimportant. Such exceptions, limitations,

reductions, or restrictions of plan benefits shall be

described or summarized in a manner not less promi1We have never addressed whether a contractual provision may validly

shorten the limitations period for bringing an ERISA claim, as was done

here. Scharff does not object to the one-year statute of limitations on that

ground, and I do not address that argument here. 

SCHARFF v. RAYTHEON COMPANY 12825
nent than the style, captions, printing type, and

prominence used to describe or summarize plan benefits. The advantages and disadvantages of the plan

shall be presented without either exaggerating the

benefits or minimizing the limitations.

29 C.F.R. § 2520.102-2(b).

In concluding that the Summary Plan Description satisfies

the statutory and regulatory requirements stated above, the

majority opinion determines that a reasonable plan participant

applying for disability benefits would be expected to read, in

its entirety, the Disability chapter of the Summary Plan

Description. Because the one-year deadline is placed within

the Disability chapter and located at the end of that chapter,

the majority opinion determines that notice of the one-year

deadline was sufficient. The majority opinion also concludes

that the one-year deadline is written in a manner calculated to

be understood by the average plan participant. I cannot agree

with the majority opinion’s conclusions.

If a reasonable participant were to read the entire Disability

chapter of the Summary Plan Description, the “Claims Appeal

Procedure” subsection of the Disability chapter would first

notify her that “[t]he procedure to be followed to appeal a

denied claim is explained in the Administrative section.” It is

true that the next sentence in the Disability chapter’s “Claims

Appeal Procedure” subsection states that “any action at law or

in equity must be commenced within one year of the denial

of the appeal from an initial claim denial, regardless of any

state or federal statutes establishing provisions relating to limitations of actions.” Even assuming that the majority opinion

is correct when it states that this sentence is written in a manner calculated to be understood by the average plan participant and not minimized,2

 this sentence, which makes no

2While Scharff has not argued that the language of the plan is unclear,

U.S. District Court Judge David C. Bury of the District of Arizona,

12826 SCHARFF v. RAYTHEON COMPANY
mention of ERISA, is of limited use. For one thing, the reader

would not yet know that she has a right under ERISA to file

suit in state or federal court if her claim for benefits is denied,

because that crucial piece of information can only be found in

the Administrative chapter. In fact, the reader would not yet

know the appeal procedure at all, because appeal procedures

are explained later, in the Administrative chapter.

Once she found the Administrative chapter of the Summary

Plan Description, there is a subsection titled “Your Right to

Appeal a Denied Claim.” This subsection deals with internal,

administrative claims procedures and would not alert the

reader to her right to file an action in federal court if her

appeal is denied.3

reviewing this same Raytheon Summary Plan Description, noted his own

difficulty in locating the one-year limitation, and further observed that “it

is dubious that a lay person would understand that her limited right to file

any ‘action at law or in equity’ referred to her right under ERISA to ‘file

suit in state or federal court.’ ” Solien v. Raytheon Long Term Disability

Plan, No. CV 07-456, 2008 WL 2323915 at *7 (June 2, 2008 D.Ariz.). 

3

In its Factual and Procedural History, the majority opinion describes

the Summary Plan Description’s Administrative chapter as including, on

the same page as the “Your Right to Appeal a Denied Claim” section, a

subsection with the large, bold heading “Special Rules for Disability and

Health Claims.” This subsection states: 

With respect to disability and health plans, including claims arising under the medical, prescription drug, vision, dental, health

care reimbursement account, and employee assistance plans, time

limits for deciding and appealing claims are significantly different from those for claims under RAYSIP [Raytheon Savings and

Investment Plan] and the insurance plan. 

The majority opinion suggests that this subsection “cautions” the reader

that there are different time limitations on filing suit under ERISA in federal court from the denial of a disability claim. But even the Raytheon

Plan defendants acknowledge in their briefing that this “Special Rules for

Disability and Health Claims” subsection of the plan has nothing to do

with time limits on filing claims in federal court. Instead, as explained by

the defendants, this subsection describes “time limits for administrative

review of health and disability claims, as opposed to other types of welfare

SCHARFF v. RAYTHEON COMPANY 12827
In sum, the Administrative chapter is the only place a plan

participant would definitively learn that she has the right

under ERISA to file suit in court if her claim for benefits is

denied by the plan administrator. But the Disability section is

the only place she would learn that there is a one-year statute

of limitations on filing an “action at law or in equity.” The

plan’s one-year limitation only becomes clear after a coordinated reading of the two passages, bouncing a lay reader back

and forth in a way that obscures the importance of the oneyear filing deadline. I would hold that this plan does not satisfy the statutory and regulatory requirements governing Summary Plan Descriptions because it is not “written in a manner

calculated to be understood by the average plan participant.”

29 U.S.C. § 1022(a).

II.

The majority opinion also hesitates to apply the doctrine of

reasonable expectations in this case, and finds crucial the distinction between a self-funded plan (the kind of plan at issue

here) and an insured plan. It concludes that our case law is

unclear as to whether the doctrine of reasonable expectations

can be applied to a self-funded plan. Because we have already

applied the doctrine of reasonable expectations to a selffunded plan in Winters v. Costco Wholesale Corp., 49 F.3d

550 (9th Cir. 1995), I see no reason why we would not do so

here.

benefit claims” (emphasis added). A person who reads the sentence at the

beginning of the subsection warning that disability claimants face “significantly different” time limits for deciding and appealing claims would not

learn anything about the one-year statute of limitations on filing an ERISA

claim in federal court. Later in the Administrative chapter is a subsection

titled “Your Rights under ERISA” and within that subsection, a smaller

heading that states “Enforce Your Rights.” Under that smaller heading, the

reader would learn that if she “ha[s] a claim of benefits that is denied or

ignored in whole or in part, [she] may file suit in a state or federal court.”

12828 SCHARFF v. RAYTHEON COMPANY
In Saltarelli v. Bob Baker Group Medical Trust, 35 F.3d

382, 387 (9th Cir. 1994), we “adopt[ed] the doctrine of reasonable expectations as a principle of the uniform federal

common law informing interpretation of ERISA-governed

insurance contracts.” In that case, the plan administrator

“chose to bury one of the plan’s most significant provisions

amidst definitions, rather than forthrightly stating the preexisting conditions exclusion in the operative clauses of the

plan description.” Id. at 385. We held that the district court

correctly found “that the lack of a clear, plain and conspicuous statement of the exclusion” rendered the exclusion provision unenforceable. Id. at 386.

Later, in Winters, we applied the reasonable expectations

doctrine in a case involving a self-funded ERISA health benefits plan, such as the plan at issue in this case. 49 F.3d at 555.

In Winters we applied the doctrine and determined in a reasoned and thoughtful discussion that the petitioner had no reasonable expectation of coverage. See id. at 554-55 (describing

the exclusionary clauses in the summary plan description and

observing that there was “no evidence in the record upon

which a reasonable trier of fact could find an objective, reasonable expectation of coverage”).

Here, the plan administrators allotted Scharff one-quarter of

the amount of time she would otherwise have had to file a

complaint in federal court,4 but failed to announce this drastic

change in a clear, plain and conspicuous statement. The one4ERISA does not contain a statute of limitations for suits brought to

recover benefits, so to determine the applicable statute of limitations, we

“look to the most analogous state statute of limitations.” Wetzel v. Lou

Ehlers Cadillac Group Long Term Disability Ins. Program, 222 F.3d 643

(9th Cir. 2000) (citing Flanagan v. Inland Empire Elec. Workers Pension

Plan, 3 F.3d 1246, 1252 (9th Cir. 1993)). In California, looking to California Code of Civil Procedure § 337, the applicable statute of limitations is

four years. Wetzel, 222 F.3d at 648. In this case, the plan administrators

slashed that four-year-period to one year, and buried this pivotal change

within the Summary Plan Description. 

SCHARFF v. RAYTHEON COMPANY 12829
year deadline was buried in the confusing Summary Plan

Description. Even if this plan satisfied the statutory and regulatory disclosure requirements, I would hold that the doctrine

of reasonable expectations, as articulated in Saltarelli and

Winters, should apply to prevent Scharff’s claim from being

dismissed for failure to meet the one-year statute of limitations.

III.

If one thing is clear, it’s that this plan is confusing. ERISA

declares that “owing to the lack of employee information and

adequate safeguards concerning [the operation of employee

benefit plans], it is desirable in the interests of employees and

their beneficiaries . . . that disclosure be made and safeguards

be provided with respect to the establishment, operation, and

administration of such plans[.]” 29 U.S.C. § 1001(a). Raytheon’s Summary Plan Description does not provide the

required safeguards either under ERISA or under the doctrine

of reasonable expectations. I respectfully dissent.

12830 SCHARFF v. RAYTHEON COMPANY