Opinion ID: 78061
Heading Depth: 1
Heading Rank: 5

Heading: The Former Employees Were Required To Exhaust Their Administrative Remedies.

Text: The district court determined that the former employees were required to exhaust their administrative remedies, and the court chose not to exercise its discretion to excuse their failure to exhaust administrative remedies. The former employees present three arguments against the decision of the district court: (1) the district court erred when it applied the precedent of the Eleventh Circuit instead of the Second Circuit, where the action was originally filed; (2) Eleventh Circuit precedent does not require exhaustion of administrative remedies when the complaint is for breach of fiduciary duty, instead of a denial of benefits, and it seeks relief on behalf of the entire plan; and (3) the district court clearly abused its discretion when it declined to excuse the former employees' failure to exhaust their administrative remedies. Each of these arguments fails. The former employees erroneously argue that the district court should have applied Second Circuit precedent instead of Eleventh Circuit precedent after the case was transferred to the Northern District of Georgia from the Eastern District of New York. The former employees cite Van Dusen v. Barrack, 376 U.S. 612, 84 S.Ct. 805, 11 L.Ed.2d 945 (1964), for the proposition that, after a transfer of venue, 28 U.S.C. § 1404(a), the transferee court must apply the law of the transferor court, but that decision held that, in a diversity case, the transferee court must apply the state law that would have been applied in the transferor court. Murphy v. FDIC, 208 F.3d 959, 965 (11th Cir.2000). A transferee court is not required to apply the law of the transferor court when, as here, the transferee court interprets federal law. Id. at 964. The law is clear in this circuit that plaintiffs in ERISA actions must exhaust available administrative remedies before suing in federal court. Bickley v. Caremark RX, Inc., 461 F.3d 1325, 1328 (11th Cir.2006) (quoting Counts v. Am. Gen. Life & Accident Ins. Co., 111 F.3d 105, 108 (11th Cir.1997)) (internal quotation marks omitted). Th[e] exhaustion requirement applies equally to claims for benefits and claims for violations of ERISA itself. Id. (citing Perrino, 209 F.3d at 1316 n. 6). In Bickley, we applied the exhaustion requirement to a claim for breach of fiduciary duty in the administration of a plan governed by ERISA when the claim sought relief on behalf of the plan. Id. at 1327, 1330. The former employees attempt to distinguish Bickley on the ground that the breach of fiduciary duty in Bickley, unlike in this appeal, was committed by a third-party administrator of the plan, but our decision in Bickley did not rest on this distinction. The exhaustion requirement applies to complaints for breach of fiduciary duty under ERISA regardless of whether the breach was committed by a third-party administrator of the plan or the employer. The former employees argue that the district court clearly abused its discretion when it declined to excuse their failure to exhaust administrative remedies because the plan did not provide an administrative remedy. [D]istrict courts have discretion to excuse the exhaustion requirement when resort to administrative remedies would be futile or the remedy inadequate. Counts, 111 F.3d at 108 (citing Curry v. Contract Fabricators, Inc. Profit Sharing Plan, 891 F.2d 842, 846 (11th Cir.1990), abrogated on other grounds by Murphy v. Reliance Standard Life Ins. Co., 247 F.3d 1313, 1315 (11th Cir.2001)). The former employees contend that the provision in the plan regarding initial review of a claim refers only to [c]laims for benefits and the provision regarding appeals refers only to participants and beneficiaries who have been denied a benefit. They maintain that their complaint is for damages instead of benefits. This argument fails for two reasons. First, as we explained in the previous section, the former employees' complaint is for benefits. Second, the plan provides an administrative remedy for a wide range of claims, including breach of fiduciary duty: (a) Rights. If a Participant or Beneficiary has any grievance, complaint or claim concerning any aspect of the operation or administration of the Plan or Trust, including but not limited to claims for benefits and complaints concerning the investments of Plan assets ..., the Participant or Beneficiary shall submit the claim within the applicable limitations period. The plan grants its administrators complete control of the administration of the Plan ..., with all discretionary authority and powers necessary to enable it properly to carry out its duties, including the duty to construe the Plan and to determine all questions that shall arise thereunder. In Bickley, we concluded that a similar grant of discretionary authority was sufficient to establish the availability of an administrative remedy. 461 F.3d at 1329-30. The former employees also argue that exhaustion of their administrative remedies would have been futile, but we disagree. The former employees allege that the same parties who breached their fiduciary duty would have been the decisionmakers in the administrative proceeding, but the futility exception protects participants who are denied meaningful access to administrative procedures, not those whose claims would be heard by an interested party. In Curry, for example, we found that exhaustion was futile because plan administrators had denied a participant meaningful access to administrative proceedings by repeatedly ignoring requests for documents supporting the denial of benefits. 891 F.2d at 844, 846-47. Our decisions in Bickley and Springer v. Wal-Mart Associates' Group Health Plan, 908 F.2d 897 (11th Cir.1990), also establish that the futility exception is about meaningful access to administrative proceedings, not a potential conflict of interest of the decisionmakers. In Bickley, we rejected an argument of futility as speculative because the participant had not attempted to pursue administrative remedies. 461 F.3d at 1330. In Springer, we ruled that a participant may not invoke the futility exception to avoid recourse to an administrative procedure on the ground that the reviewer is basically the same entity as the initial internal decider and ... both deciders have an interest in `holding costs down.' 908 F.2d at 901 (quoting Springer v. Wal-Mart Associates' Group Health Plan, 714 F.Supp. 1168, 1176 (N.D.Ala. 1989), rev'd, 908 F.2d 897) (omission in original) (internal quotation mark omitted).