This disposition is not appropriate for publication and is not precedent *

except as provided by 9th Cir. R. 36-3.

The Honorable Lyle E. Strom, Senior United States District Judge for **

the District of Nebraska, sitting by designation.

NOT FOR PUBLICATION

UNITED STATES COURT OF APPEALS

 FOR THE NINTH CIRCUIT

ARNOLD SCHIMSKY, as Trustee of The

Ann P. Shimsky Trust and representative

of Ann P. Shimsky, deceased,

 Plaintiff - Appellant,

 v.

UNITED STATES OFFICE OF

PERSONNEL MANAGEMENT and

THC-ORANGE COUNTY INC., doing

business as Kindred Hospital San Diego,

 Defendants - Appellees.

No. 08-56983

D.C. No. 3:07-cv-02432-H-LSP

MEMORANDUM*

Appeal from the United States District Court

for the Southern District of California

Marilyn L. Huff, District Judge, Presiding

Argued and Submitted October 7, 2010

Pasadena, California

Before: FISHER and BYBEE, Circuit Judges, and STROM, District Judge.** 

FILED

OCT 18 2010

MOLLY C. DWYER, CLERK

U.S. COURT OF APPEALS
If the parties wish to pursue court-facilitated mediation, we will consider a 1

motion to stay the mandate.

2

Arnold Schimsky appeals the district court’s dismissal of his complaint

against the United States Office of Personnel Management (“OPM”). In his

complaint, Schimsky sought to recover benefits under the Federal Employees

Health Benefits Act. Because Schimsky did not exhaust administrative remedies

prior to filing his action, the district court dismissed the complaint for lack of

subject matter jurisdiction. On appeal, Schimsky argues the district court erred in

dismissing rather than staying his action. We agree and remand to the district court

with instructions to stay the action pending exhaustion of administrative remedies.1

We review the district court’s dismissal for lack of subject matter

jurisdiction de novo. Snell v. Cleveland, Inc., 316 F.3d 822, 825 (9th Cir. 2002)

(per curiam). Additionally, where exhaustion is non-jurisdictional, we review the

district court’s decision to dismiss an action for failure to exhaust administrative

remedies for abuse of discretion. Pension Benefit Guar. Corp. v. Carter & Tillery

Enters., 133 F.3d 1183, 1187 (9th Cir. 1998). 

Contrary to the district court’s determination, the exhaustion requirement in

this case was non-jurisdictional because it was created by agency regulations and

was not mandated by statute. See id. (“[W]hen . . . the exhaustion requirement is
At oral argument, OPM raised 5 C.F.R. § 890.105(e)(1)(iii) for the first 2

time and argued that Schimsky was not diligent because he could have treated Blue

Cross’s failure to issue an initial coverage decision within 120 days as a denial of

coverage. Because OPM failed to raise this argument either in its brief or before

the district court, it has been waived. Butler v. Curry, 528 F.3d 624, 642 (9th Cir.

2008). We note, however, that by its plain language, the regulation refers to

review of a denied claim, not to OPM review of a claim that has not yet been

denied.

3

created by agency regulations, the decision whether to require exhaustion is a

matter for district court discretion.” (quoting Kobleur v. Grp. Hosp. & Med. Servs.,

954 F.2d 705, 711 (11th Cir. 1992))); cf. Kucana v. Holder, 130 S. Ct. 827, 831

(2010) (holding that a statutory jurisdiction-stripping provision applied only to

“[agency] determinations made discretionary by statute, [and not] to

determinations declared discretionary by the [agency itself] through regulation”). 

Accordingly, the district court had discretion to stay rather than dismiss the action. 

Schimsky filed his action on December 31, 2007, the day before the statute

of limitations was set to expire for some of his claims. Schimsky did not exhaust

administrative remedies because he had not yet received a denial of coverage from

Blue Cross. Without a denial of coverage, Schimsky could not commence the

administrative review process. See 5 C.F.R. § 890.105(a). Yet if Schimsky 2

waited for a denial of coverage, the statute of limitations would have run out for

some of his claims. See id. § 890.107(d)(2). Under these circumstances, the
4

district court erred by dismissing rather than staying the action pending exhaustion

of administrative remedies. See Pension Benefit Guar. Corp., 133 F.3d at 1187 

(“[P]articularly where a statute of limitations problem might develop, [a stay

pending exhaustion] may represent the best accommodation of the competing

interests.” (quoting Morrison-Knudsen Co. v. CHG Int’l, Inc., 811 F.2d 1209,

1223 (9th Cir. 1987))) (emphasis in original); accord Sharber v. Spirit Mountain

Gaming Inc., 343 F.3d 974, 976 (9th Cir. 2003) (per curiam). Accordingly, we

reverse the judgment of the district court and remand with instructions to stay the

action pending Schimsky’s exhaustion of his administrative remedies.

REVERSED and REMANDED.