Court Opinion

ID: 9491363
Source: CourtListenerOpinion
Date Created: 2023-08-05 14:11:58.160442+00
Date Added: 2024-06-11T17:54:41.397740
License: Public Domain

ROBERT M. PARKER, Circuit Judge,
dissenting:
I respectfully dissent. I begin by noting that the exhaustion requirement is not present in the statute — it has been created out of thin air. As the majority points out, in Den-ton, this court adopted the rule that a plaintiff generally must exhaust administrative remedies afforded by an ERISA plan before suing to obtain benefits wrongfully denied.1 But see Held v. Manufacturers Hanover Leasing Corp., 912 F.2d 1197, 1205 (10th Cir.1990); Zipf v. American Tel. & Tel. Co., 799 F.2d 889, 891-94 (3d Cir.1986); Amaro v. Continental Can Co., 724 F.2d 747, 750-53 (9th Cir.1984) (exhaustion not required for claims of statutory violations of ERISA).
After Denton, this court held in Simmons v. Willcox, 911 F.2d 1077, 1081 (5th Cir.1990), that a plaintiff must exhaust administrative remedies before complaining of a breach of fiduciary duty under ERISA. There is no reason why exhaustion should not be required for a Varity claim for breach of fiduciary duties, when this circuit has required it for other breach-of-fiduciary-duty claims and benefit-denial claims under ERISA. There is no principled reason for treating Varity claims differently. I recognize that exhaustion is the law of the circuit, and we are bound by that precedent.
*401Where the majority and I part ways is with respect to the tolling issue. If we require exhaustion of administrative remedies for claims under Varity which we must under existing circuit precedent, then we must also hold that the statute of limitations will be tolled during the pendency of the administrative process.2 Although the Appellees contend and the majority agrees that a plaintiff should be required to both exhaust administrative remedies and file suit within the limitations period, I consider such a procedure anathema to judicial economy. According to the Appellees, even if suit is filed before administrative procedures have concluded, the ease can be stayed in federal court until it is ripe for decision. Not only does this create a potentially unnecessary step in the judicial process, but it also undermines the policy reasons supporting an exhaustion requirement: (1) minimizing the number of frivolous ERISA suits; (2) promoting the consistent treatment of benefit claims; (3) providing a nonadversarial dispute resolution process; (4) decreasing the time and cost of claims settlement; (5) providing a clear record of administrative action if litigation should ensue; and (6) assuring that judicial review is not made under a de novo standard. See Hall v. National Gypsum Co., 105 F.3d 225, 231 (5th Cir.1997).
The only other court to have addressed this precise issue concluded that the limitations period would be tolled while the plaintiff exhausted administrative remedies. See Mitchell v. Shearson Lehman Brothers, Inc., 1997 WL 277381 (S.D.N.Y.1997). The court reasoned that such a conclusion was the only way to avoid unfairness to the plaintiff and that it was “simply illogical to say that a claim has accrued if it is automatically subject to dismissal when filed.” 1997 WL 277381, *5.
The majority cites a Supreme Court decision, Lampf, and three circuit court decisions, Wolin, Larson, and Landivehr in support of its position that the court should not toll the limitations period. In Lampf the Supreme Court held that § 9(e) of the Securities Exchange Act of 1934 was a statute of repose not subject to equitable tolling. In so holding, the Court rejected the argument that the statute of limitations should not begin to run until the party who is a victim of fraud or concealment discovers his injury. Likewise in Wolin and Larson, the issue with respect to equitable tolling involved the discovery rule. Landwehr merely stands for the proposition that “the limitations period in an ERISA action begins to run on the date that the person bringing suit learns of the breach or violation.” 72 F.3d at 732. Land-wehr left open the possibility that if someday a case arose in which the application of the general rule would frustrate the purpose of ERISA, the rule would be applied in a manner that would not permit such a result. 72 F.3d at 733. These cases are distinct from the situation presented in the ease sub judice wherein this court has legislated an additional requirement of exhaustion not expressly provided in the statute.
If our circuit case law would allow us to hold that there is no exhaustion requirement for a Varity claim, then I would wholeheartedly agree with the majority that the statute of limitations in § 413 of ERISA should not be tolled. But instead, our circuit has read into ERISA an exhaustion requirement where it does not expressly exist. Common sense and basic fairness dictates that if we are willing to read in an exhaustion requirement, we must toll the limitations period while exhaustion occurs. I also take issue with the majority’s reference to and backdoor application of the 300-day rule — an argument raised by General Dynamics for the first time on appeal. I would hold that the statute of limitations should be tolled while the plaintiff exhausts his court-mandated administrative remedies and reverse and remand the case for further proceedings.

. The Denton court relied upon a Ninth Circuit decision, Amato v. Bernard, 618 F.2d 559 (9th Cir.1980), involving a claim for declaration of rights under a plan. The Ninth Circuit distinguished Amato in Amaro v. Continental Can Co., 724 F.2d 747, 751-52 (9th Cir.1984), by pointing out that the pension plan in Amato contained the internal appeal procedure required by section 503 of ERISA. The Amaro court concluded that exhaustion would not be required to bring an action under § 510 of ERISA, and that Amato did not apply.
The difference between Amato (cited in Den-ton ) and Amaro is that Amato involved a dispute about the rights and duties under the plan for which exhaustion would be required; Amaro involved a dispute as to whether the statute had been violated, so that exhaustion of administrative remedies would not be required. The en banc court may wish to reexamine Denton and its progeny to make a distinction with respect to the exhaustion requirement between cases involving rights under a plan and rights under ERISA. Cf. Chadland v. Brown & Root, Inc., 45 F.3d 947, 950 (5th Cir.1995) (“Our cases applying this common law exhaustion requirement presuppose that the grievance upon which the lawsuit is based arises from some action of a plan covered by ERISA, and that the plan is capable of providing the relief sought by the plaintiff.”).

. Radford had actual knowledge of the alleged breach on January 9, 1989. Radford avers that he immediately initiated an administrative claim, and that his administrative claim was denied by Lockheed on December 16, 1994. Radford filed suit on October 17, 1996. Thus, if the statute of limitations is tolled during exhaustion of administrative remedies, his suit under ERISA is not time-barred for purposes of a motion filed pursuant to Rule 12(b)(6).