Opinion
CIVIL ACTION No: 03-1059 SECTION-"R"
February 20, 2004
ORDER AND REASONS
This is an action for review of the denial of long-term disability benefits by the administrator of an employee welfare benefit plan governed by the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1054, et seq. Before the Court is plaintiff's motion in limine to exclude evidence from the administrative record. For the following reasons, the Court denies plaintiff's motion.
I. BACKGROUND
Plaintiff, Debora Roig, was employed as a District Sales Manager for Victoria's Secret Stores, Inc. in Louisiana from July 21, 1986 to July 14, 1998. Plaintiff's job duties at Victoria's Secret involved, inter alia, working up to 8-12 hours per day with a one-half to one-hour break; travel on an average of 3-4 days per week; extensive driving to oversee multiple store locations 4-5 times per week; and store maintenance. Her job also involved heavy lifting.
As a Victoria's Secret employee, plaintiff participated in The Limited Long Term Disability Program ("the Plan"), an employee welfare benefit plan governed by the Employee Retirement Income Security Act ("ERISA"). The Limited, Inc. self-funded the Plan, and the Limited Associate Benefits Committee served as the Plan Administrator. Under an Administrative Services Agreement, the Limited contracted with Metropolitan Life Insurance Co. ("MetLife") to serve as Claims Administrator. The Limited delegated to MetLife the responsibility and discretionary authority for determining eligibility for disability benefits, construing Plan terms, and providing a full and fair review of determinations in connection with the appeal of claims denied. MetLife did not insure and was not liable for the Plan benefits.
The plan provides two types of benefits: 1) those paid during the first twelve months of disability ("initial benefits"); and 2) those paid beyond the first twelve months ("long-term" benefits). The Plan establishes different criteria for each type of benefit.
In September 1995, plaintiff was involved in an automobile accident. Approximately one year later, she sought treatment at a local medical center for low back pain and occasional leg pain and numbness. The attending physician diagnosed plaintiff with a moderate disc herniation and degenerative disc disease. Plaintiff saw Thomas P. Perone, M.D. for a neurosurgical evaluation. Despite later improvement in the herniated disc, on June 1, 1998, after examining plaintiff, Dr. Perone concluded that the plaintiff could no longer physically do the requirements of her job due to the extensive travel it required.
On June 15, 1998, plaintiff saw Dr. Perone again and told him that she had fallen at a mall on her way to work that morning, striking her left knee and further injuring her back. Dr. Perone noted that although plaintiff's disc herniation had resolved with conservative measures, she still suffered from significant degeneration of the bottom three discs in her lumbar spine. As a result of this degenerative condition of her spine, Dr. Perone recommended that plaintiff permanently avoid activities that were an integral part of her job.
On July 13, 1998, plaintiff stopped working at Victoria's Secret. She submitted an application to MetLife for disability benefits on August 1, 1998. MetLife denied plaintiff's claim for benefits on August 27, 1998. Plaintiff requested a review of the denial of her benefits on September 15, 1998. After review, MetLife again denied plaintiff's claim for benefits on January 18, 1999.
On August 12, 1999, plaintiff filed suit in this Court against MetLife and the Plan for failure to pay benefits and breach of fiduciary duties under ERISA, Civil Action No. 99-2460. The parties submitted the case on the record to this Court for a bench trial. This Court found that MetLife was not a proper party to the suit and dismissed it from the proceedings. The Court awarded plaintiff initial benefits but denied long-term benefits because the record lacked evidence to support them. Roig appealed this Court's denial of long-term benefits, and the Plan cross-appealed this Court's grant of initial benefits. In an opinion dated October 9, 2001, the Fifth Circuit affirmed the grant of initial benefits and reversed the denial of long-term benefits. The Fifth Circuit concluded that because the plan administrator denied initial benefits, it did not reach the issue of long-term benefits, and this Court should have remanded the case to the plan administrator to determine whether Roig is entitled to long-term benefits before it made the determination itself. On October 12, 2001, this Court remanded the case to the plan administrator to conduct further proceedings consistent with the Fifth Circuit's opinion.
Defendant asserts that MetLife commenced its review of plaintiff's claim for long-term benefits on December 12, 2001. MetLife sent a letter to plaintiff that requested copies of her medical records from all of her treating physicians since July 14, 1999. The letter also indicated that after MetLife received the medical records, it would schedule her for an Independent Medical Examination ("IME"). Plaintiff sent MetLife a letter dated February 8, 2002 with the requested information. Plaintiff was scheduled for a Functional Capacity Examination on July 15-16, 2002. She completed the first day of the test but did not complete the second day of testing due to complaints of pain. On September 17, 2002, MetLife requested that the plaintiff submit to an IME, which was performed October 16, 2002.
Def.'s Memo, in Opp. to Pla.'s Mot. in Limine, Ex. 1 at LTD-314.
Id.
MetLife denied plaintiff's claim for long-term benefits on January 2, 2003. Plaintiff submitted additional information to MetLife in January and indicated her intent to request an appeal. Plaintiff formally requested an appeal in a letter dated February 25, 2003. Defendant asserts that MetLife received the request on March 3, 2003. In a letter dated March 4, 2003, MetLife advised plaintiff that her claim had been referred to an independent panel for review and that MetLife would evaluated the panel's findings and advise her of its final determination within 45 days. MetLife noted that the review may take up to an additional 45 days if special circumstances existed that required additional time. On April 15, 2003, 43 days after MetLife received plaintiff's formal appeal request, plaintiff filed this suit, in which she alleged that MetLife had constructively denied her claim and thus all of her administrative remedies had been exhausted. MetLife notified plaintiff on April 22, 2003, that it would require an additional 45 days to render a decision on her appeal. MetLife affirmed its denial of benefits on August 7, 2003.
Id. at LTD-094-96.
Id. at LTD-090-91.
Id. at LTD-077.
Id. at LTD-076.
Id.
Plaintiff asserts that defendant presented her with the administrative record in this case, and the record contains documents created after April 15, 2003, the date that she filed this complaint. Plaintiff now moves to exclude this evidence from the administrative record.
See Vega v. Nat'l Life Ins. Serv., 188 F.3d 287, 299 (5th Cir. 1999) (noting that Fifth Circuit case law makes it clear that "the plan administrator has the obligation to identify the evidence in the administrative record and that the claimant may then contest whether that record is complete.").
II. DISCUSSION
Plaintiff cites the Vega case to support her contention that documents created after she filed suit must be excluded. In Vega, the Fifth Circuit held that "the administrative record consists of relevant information made available to the administrator before the complainant's filing a lawsuit and in a manner that gives the administrator a fair opportunity to consider it." Id., 188 F.3d at 300. Plaintiff argues that under the regulations, MetLife constructively denied her claim, and she therefore filed suit. Defendant, on the other hand, contends that plaintiff's claim was not "deemed" denied, and all evidence that MetLife considered should be a part of the administrative record.
A. Applicable Regulations
As an initial matter, the parties dispute which ERISA regulations, if any, apply to MetLife's decision on plaintiff's claim for benefits. Under the authority of sections 503 and 5050 of ERISA, Title 29 of the Code of Federal Regulations, Section 2560.503-1, sets forth the minimum requirements for employee benefit plan claims procedures. See 29 C.F.R. § 2560.503-1. Defendant first argues that the timeframes for initial benefit determination and review established in the ERISA regulations do not apply to MetLife's determination of long-term benefits in this case because the Court ordered the determination. Defendant argues that the court-mandated benefit determination is not a "claim for benefits" as defined under the regulations. See 29 C.F.R. § 2560.503-1 (2000) (applicable to claims filed before Jan. 1, 2002). The regulations define a "claim" as a "request for a plan benefit by a participant or beneficiary[.]" Id. To support its argument that the regulated deadlines do not apply to court ordered benefits determinations, defendant cites two federal district court cases, Caldwell v. Life Ins. Co. of North Amer., 959 F. Supp. 1361 (D.Kan. 1997), and Schadler v. Anthem Life Ins. Co., 1999 WL 202568 (N.D.Tex.). Defendant contends that the courts ordered benefits determinations in these cases and imposed timeframes independent of the claims procedures established by the regulations.
The Court rejects defendant's argument that the timeframes established in the ERISA regulations do not apply to the court-mandated determination in this case. First, the Court remanded the previous case to MetLife for further proceedings consistent with the Fifth Circuit's opinion in that case. The Fifth Circuit opinion required that MetLife render a decision on plaintiff's claim for long-term benefits. When MetLife determined whether plaintiff qualified for long-term benefits based on the request for benefits that she submitted, it evaluated a "claim for benefits," and thus the ERISA regulations apply to MetLife's consideration of plaintiff's claim. Defendant cites no authority for its general proposition that the ERISA regulations do not apply to court-ordered benefits determinations, and the Court is unable to find any such authority. Defendant cites two cases in which the courts established deadlines for the completion of the court-ordered benefits determinations. See Caldwell, 959 F. Supp. 1361; Schadler, 1999 WL 202568. The Court finds these cases unpersuasive. In Caldwell, the court ordered a review of plaintiff's claim for benefits and established deadlines that matched deadlines required by the ERISA regulations in effect at the time and even cited the regulations to support its deadlines. See Caldwell, 959 F. Supp. at 1369 (citing 29 C.F.R. § 2560.503-l(h) (1996)). In Schadler, the court remanded the case to the plan administrator to consider the claim in light of the Fifth Circuit opinion in the case. See Schadler, 1999 WL 202568, at *1. In the opinion cited by defendant, the Court remanded the case to the plan administrator for a second time after the administrator's first benefits determination was not consistent with the Fifth Circuit opinion. See id., at *2. The Schadler court established an independent timeframe for the second determination by the administrator. See id. Schadler is distinguishable from this case because in Schadler, the court remanded the case to the administrator to reconsider a claim it had previously considered. Here, the Court remanded the case to MetLife to render its first long-term benefits determination. The Court finds that neither the Caldwell case nor the Schadler case supports defendant's argument. Thus, the Court concludes that the ERISA regulations apply to MetLife's court-mandated benefits determination in this case.
In November of 2000, the Department of Labor modified the ERISA regulations on claims procedure. See 65 FR 70246-01. The revised regulations apply to claims filed after January 1, 2002. See id.; see also 29 C.F.R. § 2560.503-1 (o) (2001). The revised regulations establish shorter timeframes for disability benefits determinations than those contained in the earlier version of the regulations. See 29 C.F.R. § 2560.503-l(f)(3), (I)(3) (2001). Plaintiff contends that the shorter timeframes apply to her claim because she filed her claim for long-term benefits with MetLife on February 8, 2002. Plaintiff's contention is not borne out by the record. Plaintiff filed her claim for disability benefits on August 1, 1998. MetLife never considered plaintiff's claim for long-term benefits because it denied her claim for initial benefits. After proceedings in this Court and in the Fifth Circuit based on MetLife's denial of benefits, the Court remanded the case to MetLife on October 12, 2001. MetLife contends that it initiated its consideration of plaintiff's claim for long-term benefits on December 12, 2001. Although plaintiff's counsel sent a letter to MetLife on February 8, 2002, the letter provides more information about plaintiff's medical treatment in response to MetLife's December 2001 letter and is not an initial request for benefits by plaintiff. To determine which regulations apply to plaintiff's claim, the Court need not decide whether plaintiff's claim is considered filed as of the date she originally filed the claim (August 1, 2001), the date the Court remanded the case to MetLife (October 12, 2001), or the date defendant contends MetLife began to consider plaintiff's claim for long-term benefits (December 12, 2001). If any of these dates apply, the regulations applicable to claims filed before January 1, 2002 apply to plaintiff's claim. See 29 C.F.R. § 2560.503-1 (2000). Because plaintiff's appeal is a part of the claim filed before January 1, 2002, these regulations apply to the appeal also. Cf. DiCamillo v. Liberty Life Assurance Co., 287 F. Supp.2d 616, 625 (D.Md. 2003); Wertheim v. Hartford Life Ins. Co., 268 F. Supp.2d 643, 659 (E.D.Va. 2003).
B. MetLife's Initial Denial
The regulations applicable to pre-2002 claims establish that an initial benefits determination must be made within a reasonable period of time from the receipt of the claim, which the regulations define as 90 days. See 29 C.F.R. § 2560.503-l(e)(3) (2000). If the benefit determination requires more time due to special circumstances, the plan administrator may extend the time by an additional 90 days, but it must furnish written notice of the extension to the claimant in which it identifies the special circumstances and the date by which the plan expects to render a final decision. See id. If a plan exceeds a reasonable amount of time to make a benefits determination, then "the claim shall be deemed denied and the claimant shall be permitted to proceed to the review stage [.]" 29 C.F.R. § 2560.503-1 (e)(2) (2000).
Here, defendant asserts that MetLife began its review of plaintiff's claim for long-term benefits on December 12, 2001. MetLife initially denied plaintiff's claim on January 2, 2003, 388 days later. Plaintiff contends that MetLife failed to render a timely decision, and thus her claim was "deemed denied." Defendant contends that the applicable time period was tolled when MetLife requested additional documentation, when MetLife requested a Functional Capacity Evaluation, and when MetLife requested that plaintiff submit to an Independent Medical Examination. Even if the Court were to assume that the applicable time period was tolled in the manner that defendant asserts, then MetLife took 158 days to render its decision. Thus, MetLife did not make its benefits determination within the 90 days required by the regulations, and there is no evidence that MetLife properly extended the time period for its decision with the necessary notice to plaintiff. Because MetLife failed to render a timely decision, plaintiff's claim was denied under the applicable regulations, and she could have requested a review of her claim. See id. She did not, however, exercise this right. She waited until MetLife formally denied her claim in writing and then requested a review of her claim.
C. MetLife's Review of Plaintiff's Claim
Under the applicable regulations, a plan administrator shall review a claim within 60 days of the plan's receipt of the request for review. See 29 C.F.R. § 2560.503-1(h)(1)(i) (2000). If special circumstances exist that require an extension of this time period, then the plan administrator must render a decision within 120 days. See id. If a decision is not rendered within this time frame, then "the claim shall be deemed denied on review." 29 C.F.R. § 2560.503-1(h)(4) (2000).
Plaintiff sent her formal notice of appeal of MetLife's initial adverse determination by letter dated February 25, 2003, and defendant contends that MetLife received the notice of appeal on March 3, 2003. MetLife notified plaintiff that it would require 45 days to process her appeal, and if special circumstances existed, it may require an additional 45 days. Plaintiff filed this lawsuit 43 days after MetLife received her appeal. At the time that plaintiff filed this suit, MetLife had not yet decided her appeal and the necessary time period had not yet expired for her claim to be deemed denied under the regulations. Accordingly, plaintiff filed this suit before she exhausted her administrative remedies. ERISA does not specifically require a claimant to exhaust her administrative remedies. See Hall v. National Gypsum Co., 105 F.3d 225, 231 (5th Cir. 1997). The Fifth Circuit has relied on Congressional intent, however, and adopted the rule that a "plaintiff generally must exhaust administrative remedies afforded by an ERISA plan before suing to obtain benefits wrongfully denied." Chailland v. Brown Root, Inc., 45 F.3d 947, 950 (5th Cir. 1995).
Plaintiff's argument that she exhausted her administrative remedies by the time she filed suit is misplaced. In her complaint and motion in limine, plaintiff contends that the regulations provided a total timeframe of 300 days during which her claim was to be decided, and because MetLife exceeded this total time, her claim was constructively denied. The applicable regulations do not establish cumulative time requirements as the plaintiff suggests. The regulations establish that a claim may be deemed denied if the plan takes longer than 90 days, or 180 days under special circumstances, to make its initial benefits determination. See 29 C.F.R. § 2560.503-1 (e)(2) (2000). If the claimant's request for benefits was deemed denied at this initial stage, then the regulations permit the claimant to request a review of the denial. See id. Once the claimant requests a review, then a separate and distinct time period comes into play. See 29 C.F.R. § 2560.503-1(h)(1)(i), (h)(4) (2000). The regulations require the plan to render a decision on the request for review within 60 days, or 120 days under special circumstances, or the review is deemed denied. See id. As noted supra, plaintiff's review was not yet deemed denied under the regulations when she filed suit, and thus the Court rejects plaintiff's argument that her claim was constructively denied by MetLife before she filed suit. In her supplemental memorandum in support of her motion, plaintiff argues that her suit was timely under the new version of the regulations. As discussed above, however, the Court finds that the new regulations do not apply to plaintiff's claim. Accordingly, the Court finds that plaintiff failed to exhaust her administrative remedies before she filed suit in this Court.
Courts have handled a plaintiff's failure to exhaust administrative remedies in various ways. See, e.g., Sutherland v. United States Life Ins., 2001 WL 179918, at *1 (E.D.La.) (staying the case until plaintiff exhausts his administrative remedies); Lavigne v. The Liberty Life Ins. United Healthcare of Louisiana, Inc., 2001 WL 40828 (E.D.La.) (dismissing plaintiff's complaint without prejudice); Hebert v. Aetna Life Ins. Co., N 96 F. Supp.2d 540, 542 (E.D.La. 1998) (dismissing plaintiff's case without prejudice and remanding it to the plan appeals review committee for consideration); Hingle v. Board of Adm'rs. of Tulane Educational Fund, 1996 WL 304321, at *2 (E.D.La.) (dismissing plaintiff's complaint). In this case, however, the plan administrator has already competed its review of plaintiff's claim. MetLife continued to review the claim after plaintiff filed suit and affirmed its denial of long-term benefits on August 7, 2003. Because plaintiff's administrative remedies are exhausted, this case is now ripe for judicial review.
The Court notes that MetLife decided plaintiff's appeal on August 7, 2003, which is more than 120 days after it received her formal request for appeal. The Court therefore considers whether plaintiff's appeal was deemed denied before MetLife issued its final decision. Defendant argues that plaintiff's suit in this case tolled any time period applicable to MetLife's decision. Defendant cites no case law for this proposition and contends that it found no federal court opinion that addresses the issue. The Court is likewise unable to find such a case. The Court finds that tolling of the time period applicable to MetLife's decision is appropriate in this case because plaintiff prematurely filed suit. Once plaintiff filed suit, the Plan and and MetLife were forced to contend with the premature lawsuit, in addition to the appeal already pending before MetLife. Further, plaintiff's suit raised questions about whether MetLife continued to have jurisdiction to decide the plaintiff's appeal. In light of the additional burden imposed upon the Plan and MetLife and the jurisdictional questions raised by plaintiff's premature suit, the Court finds tolling of the time period applicable to MetLife's decision is appropriate. Consequently, the Court finds that plaintiff's appeal was not deemed denied before MetLife rendered its decision on August 7, 2003, The Court will therefore consider the full review by MetLife of plaintiff's appeal that occurred after plaintiff filed this suit and denies plaintiff's motion to exclude the portion of the administrative record created after she filed suit.
III. CONCLUSION
For the foregoing reasons, the Court denies plaintiff's motion in limine.