Opinion ID: 1381305
Heading Depth: 2
Heading Rank: 2

Heading: Count IClaim for Benefits

Text: Brown contends the district court erred in dismissing Count I, her claim for LTD benefits under § 1132(a). Brown maintains she was not required to exhaust her administrative remedies because it was futile to do so. [5] Brown stresses Prudential's repeated failures to provide her with the Administrative Record and the other documents she requested would have forced an appeal in the blind. Prudential and Hunt maintain Brown's failure to file a written appeal is fatal to Count I. Hunt argues it cannot be held liable on Count I in any event, because it is the plan administrator and not the claims administrator.
ERISA's exhaustion requirement finds its genesis in 29 U.S.C. § 1133, which provides: In accordance with regulations of the Secretary [of Labor], every employee benefit plan shall (1) provide adequate notice in writing to any participant . . . whose claim for benefits under the plan has been denied. . ., [and] (2) afford a reasonable opportunity to any participant whose claim for benefits has been denied for a full and fair review by the appropriate named fiduciary of the decision denying the claim. On its face, § 1133 only imposes an affirmative duty upon ERISA-governed plans to provide plan participants with appropriate notice and reviewit does not contain an express requirement that employees exhaust contractual remedies prior to bringing suit. Wert v. Liberty Life Assurance Co. of Boston, 447 F.3d 1060, 1062 (8th Cir.2006) (citing Conley v. Pitney Bowes, 34 F.3d 714, 716 (8th Cir.1994)). Nonetheless federal courts have universally construed § 1133 to require exhaustion. See id. at 1062-63; Kinkead v. Sw. Bell Corp. Sickness & Accident Disability Benefit Plan, 111 F.3d 67, 68 (8th Cir.1997) (stating Federal courts . . . have uniformly concluded exhaustion is required under ERISA); see, e.g., Midgett v. Wash. Group Int'l Long Term Disability Plan, 561 F.3d 887, 898 (8th Cir.2009) (recognizing, `[i]n this circuit, benefit claimants must exhaust. . . before bringing claims for wrongful denial to court') (quoting Galman v. Prudential Ins. Co. of Am., 254 F.3d 768, 770 (8th Cir.2001)). `Where a claimant fails to pursue and exhaust administrative remedies that are clearly required under a particular ERISA plan, [her] claim for relief is barred.' Id. (quoting Layes v. Mead Corp., 132 F.3d 1246, 1252 (8th Cir. 1998)). This judicially created exhaustion requirement serves important purposes. Back v. Danka Corp., 335 F.3d 790, 792 (8th Cir.2003). It enables an employer, or its plan, to obtain full information about a claim for benefits, to compile an adequate record, and to make a reasoned decision. Id. The process is of substantial benefit to reviewing courts, because it gives them a factual predicate upon which to proceed. Id. The exhaustion requirement is not absolute. When an ERISA-governed plan fails to comply with its antecedent duty under § 1133 to provide participants with notice and review, aggrieved participants are not required to exhaust their administrative remedies before filing a lawsuit for benefits under § 1132(a). See Wert, 447 F.3d at 1064 (concluding prior cases recognized exhaustion was not required when notice in compliance with a plan was not provided to a claimant . . . or when the available review procedures neither complied with ERISA's fiduciary review requirements nor applied to the specific claimants); see, e.g., Back, 335 F.3d at 792 (holding claimant was not required to exhaust when the plan failed to provide notice). Nor are plan participants required to exhaust if doing so would prove futile. See Union Pac. R.R. Co. v. Beckham, 138 F.3d 325, 332 n. 4 (8th Cir.1998) (recognizing the futility exception in the context of the accrual of an ERISA action); Wilczynski v. Lumbermens Mut. Cas. Co., 93 F.3d 397, 402 (7th Cir.1996) (declaring [a] plaintiff's failure to exhaust administrative remedies is excused . . . where exhaustion of internal remedies would be futile).
At first glance, Brown's attempt to except her case from ERISA's exhaustion requirement would appear to fail. Brown mistakenly labels her argument as a futility argument. The futility exception is narrowthe plan participant `must show that it is certain that [her] claim will be denied on appeal, not merely that [she] doubts that an appeal will result in a different decision.' Zhou v. Guardian Life Ins. Co. of Am., 295 F.3d 677, 680 (7th Cir.2002) (quoting Lindemann v. Mobil Oil Corp., 79 F.3d 647, 650 (7th Cir.1996)). Because Brown has not proffered any facts to show Prudential certainly would have denied her claim had she given Prudential written notice of her intention to appeal, the futility exception is inapplicable here. We must take care, however, to refrain from focusing on the facial label Brown places upon her argument while ignoring its substance. See, e.g., Wardair Can., Inc. v. Fla. Dep't of Revenue, 477 U.S. 1, 5-6, 106 S.Ct. 2369, 91 L.Ed.2d 1 (1986) (considering the substance of preemption argument despite the parties' failure to label it properly); Liquidation Comm'n of Banco Intercontinental, S.A. v. Renta, 530 F.3d 1339, 1350 (11th Cir.2008) (similar); United States v. Wheeler, 330 F.3d 407, 413 (6th Cir.2003) (similar). Although couched in terms of futility, the gravamen of Brown's argument in the district court and this court is simply this: Prudential's failure to comply with its duty under § 1133 to afford Brown a reasonable opportunity . . . for a full and fair review excuses her failure to exhaust. More specifically, Brown argues Prudential's failure to respond to her requests for the Administrative Record and other documents absolves Brown's failure to file a timely written appeal of Prudential's decision to discontinue her LTD benefits. We choose to analyze the substance, and not the label, of Brown's debate. When stripped of its futility label, Brown's argument is a winner. Prudential's failure to comply with its duty under § 1133(2) to provide Brown with a reasonable opportunity . . . for a full and fair review of Prudential's decision to discontinue her LTD benefits excuses Brown's failure to exhaust before bringing suit under § 1132(a). Without the Administrative Record and other requested documents in hand, Brown was unable fully and fairly to prepare her appeal. One of the purposes of § 1133 is to provide claimants with sufficient information to prepare adequately for any further administrative review or for an appeal to the federal courts. See DuMond v. Centex Corp., 172 F.3d 618, 622 (8th Cir.1999); Richardson v. Cent. States, Se. & Sw. Areas Pension Fund, 645 F.2d 660, 665 (8th Cir. 1981) (stating § 1133 and its regulations were intended to help claimants process their claims efficiently and fairly). To the extent the statute is ambiguous, § 1133's disclosure requirements should be construed broadly, because ERISA is remedial legislation and should be liberally construed to effectuate Congress's intent to protect plan participants. See Starr v. Metro Sys., Inc., 461 F.3d 1036, 1040 (8th Cir.2006). Prudential's failures to respond deprived Brown of sufficient information to prepare adequately for further administrative review or an appeal to the federal courts. Brown did not know the identity of critical persons, including the medical and vocational experts who determined she was not disabled and who calculated her residual functional capacity. See, e.g., Lafleur v. La. Health Serv. and Indem. Co., 563 F.3d 148, 156 (5th Cir.2009) (holding an insurance company denied a claimant full and fair review in part because it did not identify the board certified urologist whose advice was obtained on behalf of the plan in connection with [claimant's] adverse benefit determination). Brown did not have access to Prudential's methodologies or reports. She had no opportunity to challenge Prudential's bald assertion she had the residual functional capacity to work as a semiconductor bonder, a surveillance system monitor, a food checker, or an assembler. Cf. Grossmuller v. Int'l Union, United Auto., Aero. & Agric. Implement Workers of Am., UAW, Local 813, 715 F.2d 853, 858 n. 5 (3d Cir.1983) (identifying the persistent core requirements of full and fair review as including knowing what evidence the decision-maker relied upon and having an opportunity to address the accuracy and reliability of that evidence). It must be emphasized the Plan required Brown to do much more than simply file a written notice of appeal to exhaust her administrative remedies. Brown was required to (1) state the reasons why she disagreed with Prudential's decision; (2) provide medical evidence or other information to support her position, such as copies of her treatment notes and medical test results; and/or (3) submit other written comments, documents, records, or information related to her claim. In other words, unlike a court of law, Brown was required to mount a detailed challenge to Prudential's decision at the moment she appealed. Yet Prudential deprived Brown of meaningful information necessary to do so. The Supreme Court has stressed [t]he relevant regulations . . . establish extensive requirements to ensure full and fair review of benefit denials. Aetna Health Inc. v. Davila, 542 U.S. 200, 220, 124 S.Ct. 2488, 159 L.Ed.2d 312 (2004) (citing 29 C.F.R. § 2560.503-1). We have characterized these regulations, including 29 C.F.R. § 2560.503-1, as `set[ting] forth minimum requirements for employee benefit plan procedures pertaining to claims for benefits.' Midgett, 561 F.3d at 893 (quoting 29 C.F.R. § 2560.503-1(a)). Prudential violated § 2560.503-1(h)(2)(iii) and (3)(iv) when it ignored Brown's repeated requests for relevant information. Under § 2560.503-1(h)(2)(iii), a plan only provides a claimant with a full and fair review of a claim and adverse benefit determination if the claims procedures. . . [p]rovide that [the] claimant shall be provided, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the claimant's claim for benefits. Midgett, 561 F.3d at 894. Subparagraph 2560.503-1(h)(3)(iv), in turn, requires plans to [p]rovide for the identification of medical or vocational experts whose advice was obtained on behalf of the plan in connection with a claimant's adverse benefit determination, without regard to whether the advice was relied upon in making the benefit determination. Prudential offers no explanation for ignoring Brown's repeated requests for information. Prudential opines Brown may have possessed most of the documents in the Administrative Record, but it remains undisputed Brown did not have access to the entire Administrative Record or identification of the medical and vocational experts, and did not know the particular bases for Prudential's decision to discontinue her LTD benefits. Cf. Midgett, 561 F.3d at 894-96 (holding claims administrator complied with the regulations, where the claimant concede[d] that she received copies of her administrative record following [the plan administrator's] initial denial of her short-term disability claim, and abrogating in part Abram v. Cargill, Inc., 395 F.3d 882 (8th Cir.2005)); DuMond, 172 F.3d at 623 (deciding the participant had a reasonable opportunity for full and fair review in part because the claims administrator informed [her] each time of the reasons for [its] decision to deny benefits). Full and fair review includes the right to review all documents, records, and other information relevant to the claimant's claim for benefits, and the right to an appeal that takes into account all comments, documents, records, and other information submitted by the claimant relating to the claim. Midgett, 561 F.3d at 893 (quoting Abram, 395 F.3d at 886) (emphasis added). In sum, Prudential denied Brown a reasonable opportunity for full and fair review. Because Prudential violated § 1133(2), Brown was not required to exhaust her administrative remedies under the facts of this case. Cf. Kinkead, 111 F.3d at 70.
The appropriate remedy for Prudential's violation of § 1133(2) is not an award of benefits from this court. Rather, we reverse and remand this case to the district court with instructions to remand to Prudential for an out-of-time appeal. See, e.g., Abram, 395 F.3d at 888 (remanding to the district court for remand to the plan administrator with instructions to reopen the administrative record); Lafleur, 563 F.3d at 157 (concluding a remand to the plan administrator is usually the appropriate remedy); Krauss v. Oxford Health Plans, Inc., 517 F.3d 614, 630 (2d Cir.2008) (similar); Perrino v. S. Bell Tel. & Tel. Co., 209 F.3d 1309, 1317-18 (11th Cir.2000) (similar); Syed v. Hercules Inc., 214 F.3d 155, 162 (3d Cir.2000) (Alito, J.) (holding the remedy for a violation of [§ 1133] is to remand to the plan administrator so the claimant gets the benefit of a full and fair review); accord Love v. Dell, Inc., 551 F.3d 333, 338 & n. 6 (5th Cir. 2008) (observing failures to provide `full and fair review' . . . do not usually lead to a claim for damages). [6] The district court shall retain jurisdiction over Count I as to Prudential until such time as the district court determines Brown's claim for LTD benefits is fully resolved. See, e.g., Maida v. Life Ins. Co. of N. Am., 949 F.Supp. 1087, 1093-94 (S.D.N.Y.1997). We express no view as to the merits of Brown's claim for LTD benefits. Cf. Borntrager v. Cent. States, Se. & Sw. Areas Pension Fund, 425 F.3d 1087, 1090, 1092-93 (8th Cir.2005) (explaining we ordinarily lack jurisdiction over an order remanding a case to an ERISA plan administrator for further proceedings). We affirm the district court's dismissal of Count I as to Hunt, because Hunt, as plan administrator, is not the proper defendant for an award of benefits under the Plan. See, e.g., Moore v. LaFayette Life Ins. Co., 458 F.3d 416, 438 (6th Cir.2006) (affirming district court's decision to dismiss a plan administrator as a defendant). ERISA only provides Brown with a cause of action to recover benefits due to [her] under the terms of [the Plan]. 29 U.S.C. § 1132(a)(1)(B). It is undisputed the Plan requires Prudential, not Hunt, to pay LTD benefits to Brown if she is disabled.