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Theriot v. Building Trades United Pension Trust Fund

United States District Court, E.D. Louisiana

September 30, 2019

DEBORAH THERIOT
v.
BUILDING TRADES UNITED PENSION TRUST FUND

         SECTION I

          ORDER & REASONS

          LANCE M. AFRICK JUDGE.

         Before the Court is a motion[1] for reconsideration filed by plaintiff Deborah Theriot (“Theriot”) for reconsideration of this Court's July 17, 2019 order and reasons (“Order & Reasons”), [2] granting in part defendant Building Trades United Pension Trust Fund's (the “Fund”) motion[3] to dismiss. The Court dismissed counts I and IV of Theriot's second amended complaint with prejudice for failure to exhaust administrative procedures and counts II and V without prejudice for failure to state a claim for relief.[4]

         Theriot asserted her claims and this present motion in her capacity as the court-appointed independent administrator of the Succession of Audry L. Hamann (“the Estate”).[5] Theriot brings the present motion for reconsideration pursuant to Rule 54(b) of the Federal Rules of Civil Procedure and requests that the Court reconsider and reverse its order dismissing counts I, II, IV, and V of her second amended complaint.[6] The Fund opposes her motion.[7]

         The Court assumes familiarity with the factual background of the case. See Theriot v. Building Trades United Pension Trust Fund, No. 18-10250, 2019 WL 3220106 (E.D. La. July 17, 2019).[8]

         Legal Standard

         I.

         Reconsideration of interlocutory orders is governed by Federal Rule of Civil Procedure 54(b). Namer v. Scottsdale Ins. Co., 314 F.R.D. 392, 393 (E.D. La. Apr. 5, 2016) (Africk, J.) (citing McKay v. Novartis Pharm. Corp., 751 F.3d 694, 701 (5th Cir. 2014)). Rule 54(b) provides that, in a case involving multiple claims or multiple parties, “any order or other decision, however designated, that adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties . . . may be revised at any time before the entry of a judgment adjudicating all the claims and all the parties' rights and liabilities.” “Under Rule 54(b), the trial court is free to reconsider and reverse its decision for any reason it deems sufficient, even in the absence of new evidence or an intervening change in or clarification of the substantive law.” Austin v. Kroger Texas, L.P., 864 F.3d 326, 336 (5th Cir. 2017) (internal citations omitted).

         Compared to Rule 59(e) of the Federal Rules of Civil Procedure-which governs motions to alter or amend final judgments-“Rule 54(b)'s approach to the interlocutory presentation of new arguments as the case evolves [is] more flexible, reflecting the inherent power of the rendering district court to afford such relief from interlocutory judgments as justice requires.” Id. at 337 (internal citations omitted). For example, unlike in a Rule 59(e) determination, a court conducting a Rule 54(b) inquiry may consider new arguments that could have been previously raised. See McClendon v. U.S., 892 F.3d 775, 781 (5th Cir. 2018).

         When deciding whether to grant a Rule 54(b) motion, courts must “construe the procedural rules with a preference toward resolving the case on the merits” and weigh “the interests of justice.” Austin, 864 F.3d at 337-38. However, courts should exercise their power “sparingly in order to forestall the perpetual reexamination of orders and the resulting burdens and delays, ” which disserve the interests of justice. Ha Thi Le v. Lease Fin. Grp., LLC, No. 16-14867, 2017 WL 2911140, at *2 (E.D. La. July 7, 2017) (Africk, J.) (quoting Castrillo v. Am. Home Mortg. Servicing Inc., No. 09-4369, 2010 WL 1424398, at *3 (E.D. La. Apr. 5, 2010) (Vance, J.)).

         The parties do not dispute that the instant motion was properly filed pursuant to Rule 54(b), as this Court's Order & Reasons constitutes an interlocutory order that did not adjudicate all the claims.[9] However, the Fund argues that this Court should apply the 59(e) standard-which requires a party to show “manifest errors of law or fact or newly discovered evidence, ” Austin, 864 F.3d at 336 (internal citations omitted)-because it was common practice in this circuit to do so before Austin was decided, Austin and McClendon authorized this practice to continue, and district courts have continued to apply the Rule 59(e) standard to Rule 54(b) motions for reconsideration since Austin.[10]

         The Fund misinterprets Austin and McClendon and relies on district court opinions that do not in fact continue to apply the Rule 59(e) standard to Rule 54(b) motions. In Austin, the Fifth Circuit specifically reversed the district court's order denying a motion for reconsideration under Rule 54(b) because the district court applied the Rule 59(e) standard. Id. at 336-37. The Fifth Circuit explained that “Rule 54(b) is less stringent than Rule 59(e), ” as Rule 59(e) “serves the narrow purpose of allowing a party to correct manifest errors of law or fact to present newly discovered evidence, ” whereas Rule 54(b) is “more flexible, reflecting the inherent power of the rendering district court to afford such relief from interlocutory judgments as justice requires.” Id. (internal citations omitted).

         In McClendon, the Fifth Circuit, following its decision in Austin, noted that “[i]f the district court had relied only on its first basis for denying the motion-that [plaintiff] could not raise his limitation of liability argument for the first time in a motion to reconsider under Rule 59(e), we would be required under Austin to vacate the district court's denial of the motion to reconsider and remand for application of the correct standard, ” but because the district court also determined that the motion failed on the merits, the court properly exercised its discretion in affirming its prior decision and denying the motion. 892 F.3d at 781-82.

         II.

         Theriot moves this Court to reconsider its dismissal of counts I, II, IV, and V of her second amended complaint, all dismissed pursuant to Federal Rule of Civil Procedure 12(b)(6). Under Rule 12(b)(6), a district court may dismiss a complaint or part of a complaint when a plaintiff fails to set forth well-pleaded factual allegations that “raise a right to relief above the speculative level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007); Cuvillier v. Taylor, 503 F.3d 397, 401 (5th Cir. 2007). The complaint “must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 547)).

         A facially plausible claim is one in which “the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. If the well-pleaded factual allegations “do not permit the court to infer more than the mere possibility of misconduct, ” then “the complaint has alleged-but it has not ‘show[n]'-‘that the pleader is entitled to relief.'” Id. at 679 (quoting Fed.R.Civ.P. 8(a)(2)) (alteration in original).

         In assessing the complaint, a court must accept all well-pleaded facts as true and liberally construe all factual allegations in the light most favorable to the plaintiff. Spivey v. Robertson, 197 F.3d 772, 774 (5th Cir. 1999). Furthermore, “the Court must typically limit itself to the contents of the pleadings, including attachments thereto.” Admins. of the Tulane Educ. Fund v. Biomeasure, Inc., No. 08-5096, 2011 WL 4352299, at *3 (E.D. La. Sept. 6, 2011) (Vance, J.) (citing Collins v. Morgan Stanley Dean Witter, 224 F.3d 496, 498 (5th Cir. 2000)). “[T]he Court may consider documents that are essentially ‘part of the pleadings'-that is, any documents attached to or incorporated into the plaintiff's complaint by reference that are central to the plaintiff's claim for relief.” Zerangue v. Lincoln Nat'l Life Ins. Co., No. 19-1939, 2019 WL 2058984, at *2 (E.D. La. May 9, 2019) (Feldman, J.) (quoting Causey v. Sewell Cadillac-Chevrolet, Inc., 394 F.3d 285, 288 (5th Cir. 2004)). “Dismissal is appropriate when the complaint ‘on its face show[s] a bar to relief.'” Cutrer v. McMillan, 308 Fed.Appx. 819, 820 (5th Cir. 2009) (quoting Clark v. Amoco Prod. Co., 794 F.2d 967, 970 (5th Cir. 1986)).

         Count I

         The Court dismissed count I of Theriot's second amended complaint, a claim for benefits pursuant to 29 U.S.C. § 1132(a)(1)(B), for failure to exhaust administrative procedures.[11] For the following reasons, the Court affirms its dismissal of count I.

         “Fifth Circuit precedent instructs that ‘claimants seeking benefits from an ERISA plan [must] first exhaust available administrative remedies under the plan before bringing suit to recover benefits.'” Zerangue, 2019 WL 2059894, at *2 (quoting Crowell v. Shell Oil Co., 541 F.3d 295, 308 (5th Cir. 2008)). In order to trigger the running of the administrative appeal period, notice of the adverse benefits determination need only substantially comply with ERISA's notice requirements. See 28 U.S.C. § 1133; 29 C.F.R. § 2560.503-1(g); see also McGowan v. New Orleans Emps. Int'l Longshoremen's Ass'n, 538 Fed.Appx. 495');">538 Fed.Appx. 495, 498 (5th Cir. 2013).

         I. Dismissal of Count I in This Court's Order & Reasons

         The Court found in its Order & Reasons, without opposition from the Fund, that the Fund's first benefit denial letter sent on April 18, 2017 did not substantially comply with ERISA's notice requirements and, therefore, did not trigger Theriot's sixty-day period to appeal the denial.[12] The Court did find, however, that the Fund's second denial letter sent on March 2, 2018 was substantially compliant and thus triggered Theriot's sixty days to appeal.[13] Theriot failed to appeal within this time period, and therefore was precluded from seeking judicial review because she did not exhaust administrative remedies.[14]

         In order to trigger the running of the administrative appeal period, notice of the adverse benefit determination need only substantially comply with ERISA's notice requirements, 28 U.S.C. § 1133 and 29 C.F.R. § 2560-503-1(g), under the “substantial compliance doctrine.” McGowan v. New Orleans Emps. Int'l Longshoremen's Ass'n, 538 Fed.Appx. 495');">538 Fed.Appx. 495, 498 (5th Cir. 2013) (“Strict compliance with ERISA is not necessary . . . . Fifth Circuit precedent makes clear that substantial compliance will suffice to trigger the running of the administrative appeal period.”) (per curiam) (citing Lacy, 405 F.3d at 257). “In assessing whether the administrator has ‘substantially complied' with the applicable procedural requirements, the court must ‘consider[ ] all communications between an administrator and plan participant to determine whether the information provided was sufficient under the circumstances.'” Baptist Mem. Hosp.-DeSoto, Inc. v. Crain Automotive, Inc., 392 Fed.Appx. 288, 293 (5th Cir. 2010) (quoting Wade v. Hewlett-Packard Dev. Co. LP Short Term Disability Plan, 493 F.3d 533, 539 (5th Cir. 2007), abrogated on other grounds by Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 242 (2019)).

         According to the Fund's Pension Plan's (“the Plan”)[15] review procedures, an initial denial by the administrator or Eligibility Committee can be reviewed by the Eligibility Committee, but the request for review must be filed within sixty days of the participant's receipt of the denial.[16] If the Eligibility Committee denies the claim for benefits a second time, the participant can request a review by the Executive Committee, but the participant must request review by the Executive Committee within sixty days of the receipt of the Eligibility Committee's decision upon review.[17]

         When a claim for benefits is denied, the Plan, in accordance with 29 C.F.R. § 2560.501-1(g), requires that the Administrative Manager or the Eligibility Committee of the Trustees (“Eligibility Committee”) provide the participant with written or electronic notification that sets forth the specific reason(s) for the denial, reference the specific provisions of the Plan that served as the basis for the denial, describe additional materials or information, if any, necessary for the participant to perfect her claim and, where appropriate, explain why such information is necessary.[18] The Administrative Manager or Eligibility Committee must also provide an explanation of the Plan's review procedures within applicable time limitations.[19]

         On January 5, 2018, Theriot's then-counsel wrote to the Fund demanding the value of the outstanding lump sum payment owed to the Estate.[20] In response, by letter dated March 2, 2018, Fund director Michael Gantert (“Gantert”) informed Theriot that the Eligibility Committee had denied Theriot's claim for Audry Hamann's (“Mrs. Hamann”) lump sum benefit, provided specific reasons for such determination, provided the Plan provisions relied upon to reach that determination, and attached the Plan's review procedures, which clearly state that any appeal must be filed within sixty days of receipt of such denial.[21] Theriot's next correspondence with the Pension Fund was November 2, 2018, nearly eight months later.[22]

         Theriot failed to explain in her opposition to the Fund's motion to dismiss why the March 2, 2018 letter did not comply with ERISA or provide proper notice of the Plan's review procedures.[23] While the Pension Fund's March 2, 2018 letter advised Theriot that it construed the April 18, 2017 letter as the initial denial of her claim for benefits, making her January 5, 2018 letter untimely, the Pension Fund still provided Theriot with the Plan provisions that made clear that she had sixty days from receipt of the March 2, 2018 letter to appeal the Eligibility Committee's denial.[24]

         Theriot did not allege in her second amended complaint that she requested review by the Eligibility Committee of the March 2, 2018 denial of her claim for benefits.[25] The Court noted that even if it were to construe her November 2, 2018 letter as a request for review by the Eligibility Committee, such request was clearly untimely.[26] Additionally, Theriot did not allege that she requested any further review by the Executive Committee.[27]

         Therefore, this Court held that because the March 2, 2018 benefit denial letter substantially complied with ERISA and Theriot failed to appeal the Fund's determination within sixty days, as required by the Plan, Theriot failed to exhaust administrative remedies and thus was not entitled to judicial review.[28] See Crowell, 541 F.3d at 308 (holding that “claimants seeking benefits from an ERISA plan [must] first exhaust administrative remedies under the plan before bringing suit to recover benefits”); see also Hall v. Nat'l Gypsum Co., 105 F.3d 225, 231 (5th Cir. 1997) (explaining that the exhaustion requirement “is not one specifically required by ERISA, but . . . uniformly imposed by the courts in keeping with Congress' intent in enacting ERISA”); Medina v. Anthem Life Ins. Co., 983 F.2d 29, 33 (5th Cir. 1993) (internal citations omitted) (“[W]e have fully endorsed the prerequisite of exhaustion of administrative remedies in the ERISA context.”).

         The Court further concluded that no exception to the exhaustion of remedies requirement was applicable because Theriot failed to allege or argue that she received hostile treatment from the Fund or Eligibility Committee or that Gantert demonstrated bias in the March 2, 2018 letter, such that any request for further review would have been rendered futile.[29] Theriot also did not allege any hostility or bias on the part of the Executive Committee such that any review by it would have been futile.[30] “[T]here is no indication in the record that [the Executive Committee] would not have properly considered [Theriot's] arguments and evidence if she had submitted them within the [60]-day period.” Swanson v. Hearst Corp. Long Term Disability Plan, 586 F.3d 1016, 1019 n.1 (5th Cir. 2009) (per curiam).

         II. Reconsideration of Count I

         Theriot argues that the Court should reconsider its dismissal of count I because the first denial letter sent on April 18, 2017 did not substantially comply with ERISA.[31] The Court previously held that the April 18, 2017 letter did not comply with ERISA in its Order & Reasons and it will not disturb that decision.[32]

         Theriot also asserts that the Court should reconsider its dismissal of count I because the March 2, 2018 letter did not substantially comply with ERISA, for primarily four reasons: it was not sent within ninety days of receiving the initial claim for benefits, as required by 29 C.F.R. § 2560.503-1(f)(1); regardless of the letter's untimeliness, it still did not substantially comply with ERISA because the body of the letter “actively discouraged Plaintiff from seeking any type of review of her claim” and did not fulfill the purpose of § 1133; the Court should have considered the Fund's conflict of interest when addressing count I; and any further appeal of Theriot's claim for benefits to the Fund would have been futile, as evidenced by recent declarations made by Gantert and the Fund's deposition testimony.[33] The Court will address each in turn.[34]

         A. Ninety-Day Requirement

         The Fund received Mrs. Hamann's lump-sum application for benefits on April 4, 2017.[35] On April 18, 2017, within ninety days of receiving the claim, the Fund issued a benefit denial letter, but as discussed previously, it did not comply with ERISA.[36] The Fund did not send a benefit denial letter that complied with ERISA until March 2, 2018, almost eleven months after receiving Mrs. Hamann's application.[37] Therefore, Theriot argues, the March 2, 2018 letter is procedurally non-compliant, which makes the substantial compliance doctrine inapplicable.[38] See McGowan, 538 Fed.Appx. at 498 (holding that in order to trigger the running of the administrative appeal period, notice of the adverse benefit determination need only substantially comply with ERISA's notice requirements).

         As a preliminary matter, Theriot argues that the ninety-day period to issue an ERISA compliant benefit denial letter started to run when the Fund received Mrs. Hamann's application for benefits on April 4, 2017, not when it received Theriot's claim for benefits on January 5, 2018.[39] Theriot argues that while the Fund initially stated that it treated the January 5, 2018 letter “in all respects like a claim or appeal, ” the recently produced minutes to the Eligibility Committee meeting at which the Fund discussed Theriot's letter show that the Fund actually treated the January 5, 2018 letter in all respects like an appeal.[40] Therefore, according to Theriot, because the January 5, 2018 letter was treated like an appeal, the April 4, 2017 letter was the initial claim for benefits, and the Fund had ninety days from April 4, 2017 to issue an ERISA-compliant benefit denial letter.[41]

         In response, the Fund argues that the April 18, 2017 letter denied a claim made by Mrs. Hamann prior to her death, while the March 2, 2018 letter denied a claim made by Theriot on behalf of the Estate on January 5, 2018.[42] The Fund asserts that “[c]ourts have recognized that the participant/beneficiary and estate are separate entities, ” and because “no evidence shows the Estate had appointed a personal representative [by April 18, 2017], ” the Estate could not have “decide[d] whether to pursue the claim for a lump sum payout on its own behalf.”[43]

         The Fund argues that “[t]he Estate failed to cite any authority holding that it can rely on a procedural violation [the Fund] allegedly committed while processing Mrs. Hamann's claim to argue that [the Fund] violated ERISA procedural requirements while processing the separate claim by Theriot.”[44] The Fund further argues that the correct chronology of the case, therefore, is that Theriot submitted a new claim for benefits on January 5, 2018, which the Fund denied in a benefit denial letter that substantially complied with ERISA on March 2, 2018, within the ninety-day timeframe to issue a denial under § 2560.503-1(f)(1).[45]

         Section 2560.503-1(f)(1) requires a plan to notify a claimant within ninety days of receipt of a claim that the claim is denied, whereas § 2560.503-1(i)(1)(i) requires a plan to notify a claimant of its decision on review within sixty days of receipt of a request for review of its initial claim determination. Neither party addressed the difference in the two regulations. However, the Court need not decide whether the March 2, 2018 benefit denial letter denied an initial claim for benefits or an appeal of a benefits determination, because either way, the letter was issued within the applicable timeframe-the March 2, 2018 letter was issued fifty-six days from the January 5, 2018 letter and, therefore, satisfies either the sixty-day or ninety-day requirement. The Court will also not decide whether the January 5, 2018 claim was an initial benefit claim made by Theriot or an appeal of the Fund's benefit decision issued on April 17, 2018, because it is of no consequence to this Court's finding that the March 2, 2018 benefit denial letter substantially complied with ERISA, and that the doctrine of substantial compliance is applicable in this case.

         Theriot argues that because the Fund did not respond with a substantially compliant ERISA benefit denial letter within ninety days of April 4, 2017, it is precluded from relying on the alleged substantial compliance of its March 2, 2018 letter, citing Fessenden v. Reliance Standard Life Ins. Co., 927 F.3d 998 (7th Cir. 2019).[46] In Fessenden, the claimant filed suit before the plan issued its final decision, but after the ninety-day deadline under § 2560.503-1(f)(1) had passed. Id. at 1000. The plan argued that its decision should be afforded a deferential standard of review, rather than a de novo standard, because it substantially complied with ERISA. Id. at 1001.

         The Seventh Circuit held that although the plan was just eight days late in issuing its decision, the substantial compliance doctrine did not apply to the blown deadline because otherwise, the exception would upset the “delicate balance between the administrator's need for more time and the claimant's need for a timely decision.” Id. at 999, 1003. The court further held that “when a plan administrator fails to follow required procedures, such as deadlines for issuing decisions, a claimant shall be deemed to have exhausted the administrative remedies available under the plan, [§ 2560.503-1(l)], and can seek judicial review even if the plan's internal process has not run its course, ” because “applying the substantial compliance doctrine to blown deadlines is incompatible with the doctrine itself.” Id. at 1001, 1004 (internal citations omitted).

         The court also reasoned that because there would be nothing to consider on review if a plan failed to timely issue a benefit denial letter, it would be impossible for courts to defer to plans, as there would be “neither an exercise of discretion to which a court could defer nor anything for the court to use to measure the degree of the administrator's compliance.” Id. at 1005 (internal citations omitted).

         Theriot argues that, similarly here, the Fund failed to meet the ninety-day deadline and, therefore, the substantial compliance doctrine cannot apply to the March 2, 2018 letter.[47] Theriot further argues that this Court should adopt the Seventh Circuit's approach in Fessenden because “[t]he Court should not allow a ‘do-over' when Defendants failed to get it right the first time, ” and “[p]ermitting Defendants a second chance to follow ERISA after the time limit for doing so has expired ‘would upset the careful balance that the regulations strike between the competing interest of administrators and claimants.'”[48]

         The Fund responds that regardless of whether the April 18, 2017 benefit denial letter was sent in response to a claim made by Theriot on behalf of the Estate or Mrs. Hamann, this case is distinguishable, because in all the cases cited by Theriot, the claimant filed an immediate lawsuit after the fund violated ERISA disclosure requirements, whereas here Theriot “opted to pursue further administrative procedures, which led to one or more ERISA complaint [sic] benefit denial notices.”[49]

         In addition, the Fund argues that ERISA permits two levels of administrative appeals before the claimant is entitled to file suit. According to the Fund, even if Theriot's second letter on January 5, 2018 was an appeal, it was entirely permissible for the Fund to require Theriot to file another administrative appeal before deeming her to have exhausted administrative remedies.[50] Therefore, ‘[r]egardless of whether the . . . March 2, 2018 letter is characterized as a denial of claim or as a denial of appeal, [Theriot] was required to initiate the next level of appeal within 60 days of receiving the March 2, 2018 letter” in accordance with subsection (c) of the Plan's appeal procedure.[51]

         First, the Court assumes, for the purpose of responding to Theriot's arguments, that the April 4, 2017 benefits claim was in fact made by the Estate. Second, the Fund is correct that all of the cases cited by Theriot-in which courts held that the doctrine of substantial compliance did not apply when plans failed to comply with the deadlines set forth in 29 C.F.R. § 2560.503-1-are inapplicable here, where Theriot chose to continue pursuing remedies through the administrative process rather than immediately seeking judicial review.

         The concerns present in Fessenden are not at issue here. First, finding that the March 2, 2018 denial letter substantially complied with ERISA, and therefore that Theriot failed to exhaust administrative remedies, would not upset the “delicate balance between the administrator's need for more time and the claimant's need for a timely decision” because, even assuming Theriot would have appealed had she received a substantially compliant benefit denial letter on April 18, 2017, she received a substantially compliant denial letter on March 2, 2018 with information on how to appeal, and took no action for almost eight months.[52] Second, unlike in Fessenden, where the plan had made no decision on the claim at the time the plaintiff filed suit, here, the Fund made a decision nearly eight months before Theriot initiated suit and it issued a substantially compliant benefit denial letter with reasons for its decision.

         Eastman Kodak, which Theriot cites, is similarly uninstructive. In Eastman, the Second Circuit held that a plan cannot require a benefits claimant to exhaust administrative remedies that were adopted only after the claimant brought an action to recover benefits. 452 F.3d at 220, 223. The claimant sued to recover benefits when, at the time the plan reviewed his claim, the plan had no claims procedure in place and only responded to the claimant's requests for a decision over the course of a year with “skepticism, befuddlement, and silence.” Id. at 218. Here, the Fund did have a claims procedure in place, responded to Theriot, and issued a substantially compliant benefit denial letter nearly eight months before Theriot initiated suit.[53]

         The Fund's processing of Theriot's claim for benefits is more analogous to the facts of Wade v. Hewlett-Packard Development Co. LP Short Term Disability Plan, 493 F.3d 533 (5th Cir. 2007). In Wade, the claimant went through two levels of administrative review that did not substantially comply with ERISA, because the plan failed to notify the claimant of its denial within the timeframe set by § 2560.503- 1, among other reasons. See Id. at 538. The claimant finally received proper review of his claims and an ERISA-compliant benefit denial letter a full year after he initially submitted his claim. See Id. at 539. The Fifth Circuit reasoned that “[t]he end goal of judicial intervention in ERISA is not to correct problems at every level of plan administration, but to encourage resolution of the dispute at the administrator's level before judicial review.” Id. at 540. Therefore, the court reasoned, “although the Plan's claims processing at the first two levels of review did not comply with Section 1133, the final level of review, and the most relevant one, substantially complied and intended to correct the disputed procedural and technical errors below.” Id. at 540. Thus, “[the claimant] was provided with ‘full and fair review' of his claims based on an examination of all communications at all levels between the administrator and the beneficiary.” Id.

         Here, the communications between the Fund and Theriot “as a whole . . . constituted a meaningful dialogue between the beneficiary and administrator despite technical violations” and, therefore, Theriot was provided with a full and fair review of her claims. Id. As in Wade, the Fund did not comply with all ERISA regulations, because it failed to notify Theriot of its denial in a timely fashion. However, the Fund and Theriot engaged in back-and-forth communications regarding requests for documents and claims for benefits, which culminated in the Fund sending a substantially compliant benefit denial letter with its reasons for denying the claim and information as to the proper means and timeframe to appeal eleven months after Theriot's initial claim for benefits.[54]

         Theriot could have requested another level of review within the sixty-day period to appeal, but she chose not to do so. Therefore, the doctrine of substantial compliance is not inapplicable merely because the Fund did not meet the ninety-day requirement to notify Theriot that her initial claim was denied. The Fund did eventually send a benefit denial letter that substantially complied with ERISA in all other respects, Theriot chose not to appeal within the timeframe outlined in the appeal procedures attached to the March 2, 2018 benefit denial letter, and Theriot did not file suit until almost eight months after she received the substantially compliant benefit denial letter.[55]

         Theriot next argues that she suffered prejudice as a result of the Fund's failure to comply with the notice requirement and therefore the “Court should reject [the Fund's] attempt to benefit from [its] failure to comply[.]”[56] Theriot contends that the Fund's admission that the April 18, 2017 benefit denial letter did not substantially comply with ERISA, and Gantert's declaration that the Eligibility Committee may have viewed Theriot's January 5, 2018 claim differently had she argued that the first benefit denial letter did not substantially comply with ERISA, show that the Fund is attempting to “place the burden of rectifying [its] failure to provide a coherent review process on Plaintiff.”[57] Gantert declared that “[h]ad the Plaintiff filed a timely appeal and argued that [her] January 5, 2018 request for benefits was timely submitted because the Pension Fund's April 18, 2017 benefit denial letter violated ERISA, [he] would have asked Fund Counsel to research that question, so that the proper advice [could] be provided to the Eligibility Committee, ” which likely “would have stopped relying on the untimeliness of the January 5, 2018 request as a ground for denying the request.”[58]

         Theriot argues that the Fund's alleged unawareness that its initial benefit denial letter did not comply with ERISA “is a claim of implausible ignorance of the basic functions of ERISA, ” and that the Fund's argument that “the only way they could have possibly realized that their meager, four sentence denial letter was non-compliant was by receiving notice from Plaintiff” is not credible.[59] Theriot also argues that “[a]ny attempt to rectify [the failure to comply with ERISA] through a letter sent eight months too late is ineffective, ” and “[a]s a result of that failure, Plaintiff has been forced to overcome a finding of untimeliness in the pursuit of her claim - a finding that is entirely the fault of Defendants.”[60]

         The Fund responds that Theriot cannot argue that she “was prejudiced by the [the Fund's] alleged failure to issue an ERISA-compliant benefit denial on April 18, 2017, ” as “[t]he ERISA compliant denial dated March 2, 2018 denied Theriot's claim for a lump sum payout because the claim was barred by [the Fund's] plan language, while [also] reserv[ing] the right to also argue the claim was foreclosed from judicial review because it was a disguised and untimely appeal from an earlier benefit denial.”[61] Additionally, the Fund argues, the letter gave Theriot notice of her right to appeal that decision.[62] Further, “[e]ven if [the Fund] did not assert the procedural defense in its March 2, 2018 benefit denial letter, it still would have denied the claim on the merits, ” and “[t]he Estate has not provided the Court with any evidence showing that it would have filed a timely appeal had [the Fund] denied its claim on substantive but not procedural grounds.”[63]

         Theriot has not shown that she suffered any prejudice as a result of the Fund's failure to issue an ERISA-compliant benefit denial letter within ninety days of the Estate's initial claim for benefits on April 4, 2017.[64] As discussed previously, she had the proper procedures for appealing the March 2, 2018 benefit denial letter, regardless of the reason why the claim for benefits was denied, and chose not to appeal. The fact that Theriot has “been forced to overcome a finding of untimeliness in the pursuit of her claim” is not “entirely the fault of [the Fund], ” but rather the direct result of Theriot's own inaction.[65]

         Theriot provides no evidence other than conclusory allegations that the non-compliant benefit denial letter sent on April 18, 2017 was purposefully non-compliant in an effort to avoid giving Theriot's claim a full and fair review. Even if Theriot could prove that the Fund purposefully sent an initial non-compliant benefit denial letter, she has cited no authority for her argument that the Fund's alleged ill-will precludes it from relying on the substantial compliance of a subsequent benefit denial letter to trigger Theriot's sixty days to appeal or that it automatically precludes a finding that the Fund provided a full and fair review. The Court finds that the March 2, 2018 letter substantially complied with ERISA even though it may have not been issued within the timeframe required by § 2560.503-1.

         B. The March 2, 2018 Benefit Denial Letter's Substantial Compliance

         Theriot argues that regardless of the March 2, 2018 letter's untimeliness, it still does not substantially comply with ERISA. Theriot contends that the Fund did not include the Plan's administrative review procedures to advise Theriot of her additional rights, but “to bolster [its] arguments that she was already irredeemably late in the pursuit of her claim.”[66] Theriot further asserts that the body of the letter “actively discouraged [her] from seeking any type of review of her claim” by stating that the untimeliness of Theriot's January 5, 2018 letter “forecloses the ability to seek judicial review.”[67] Accordingly, Theriot concludes, the March 2, 2018 letter fails to comply with the purpose of 29 U.S.C. § 1133, which is “‘to afford the beneficiary an explanation of the denial of benefits that is adequate to ensure meaningful review of that denial, '” and thus did not substantially comply with ERISA.[68]

         First, Theriot cites no authority indicating that a plan's motivation for including its review procedures is relevant to determining whether the benefit denial letter substantially complied with ERISA. In fact, as the Fund correctly points out, under § 2560.503-1(g)(1)(iv), a plan must provide a “description of the plan's review procedures and the time limits applicable to such procedures, including a statement of the claimant's right to bring a civil action under section 502(a) of [ERISA] following an adverse benefit determination on review[.]”[69] See also Dialysis Newco Inc. v. Community Health Systems Trust Health Plan, et al., No. 5:15-CV-272, 2017 WL 2591806 at *11 (S.D. Tex. June 14, 2017) (holding that the plan did not comply with the requirement to include a description of the plan's review procedures because the benefit denial letters all failed to inform the claimant that it had a right to a second appeal, provided incorrect information about the appeals process, and/or failed to provide the relevant time frame for an appeal and that the claimant had a right to bring an ERISA action), rev'd on other grounds, No. 18-40863, 2019 WL 4296698 (5th Cir. Sept. 11, 2019).

         Second, the Fund argues that Theriot's assertion that the March 2, 2018 benefit denial letter violates the “purpose” of § 503 of ERISA, “rather than the regulation promulgated . . . to carry out the ‘purpose' of § 503, ” is “contrary to the plain meaning of § 503(2), which . . . only requires [the Fund] to afford [Theriot] a reasonable opportunity for a full and fair review.”[70] The Fund further argues that it did afford Theriot a reasonable opportunity for a full and fair review, because it “provid[ed] Theriot [with] a full copy of the Fund's claim review procedures, so that Theriot [could] evaluate how to exhaust available administrative procedures.”[71] The Fund asserts that it was not “actively discourag[ing] [Theriot] from seeking any type of review of her claim, ” but rather was required to include its procedural argument that the January 5, 2018 claim was untimely in order to reserve it for future litigation.[72]

         The Fund is correct that ERISA requires it to set forth in benefit denial letters “[t]he specific reason or reasons for the adverse determination, ” and “[r]eference to the specific plan provisions on which the determination is based[.]” § 2560.503-1(g)(1)(i)-(ii). The Fund had no choice but to include the procedural argument that the January 5, 2018 claim was untimely and foreclosed judicial review, because if a court were to later find that the first benefit denial letter on April 18, 2017 was substantially compliant with ERISA, the Fund would not be able to argue that the January 5, 2018 appeal was therefore untimely. See George v. Reliance Standard Life Ins. Co., 776 F.3d 349, 353 (5th Cir. 2015) (holding that the court was limited to considering whether the record supports the reasons that the plan provided to the claimant during the claims proceeding, because “allowing plan administrators to offer new justifications for a denial after the claims process has ended would undermine the claims system that Congress envisioned when it drafted ERISA's administrative review provisions”); Lafleur v. Louisiana Health Service & Indemnity Co., 563 F.3d 148, 154-55 (5th Cir. 2009) (holding that the plan “did not substantially comply with the procedural requirements of ERISA because . . . it raised new grounds for denial in the federal courts that were not raised at the administrative level, ” among other reasons).

         The Court is also not convinced that the March 2, 2018 benefit denial letter “actively discouraged” Theriot from seeking judicial review. The letter, in three sentences, states that the Fund is “reserv[ing] the right to assert [the defense]” and that such a defense would “foreclose[] the ability to seek judicial review.”[73] The letter then continues for over a page, outlining the Fund's interpretation of the plan and explaining why it denied Theriot's claim on the merits.[74] But even if Theriot was discouraged from seeking further review of her claim, the inclusion of the procedural defense did not violate ERISA regulations or the purpose of ERISA because Theriot was still “afford[ed] . . . an explanation of the denial of benefits that is adequate to ensure meaningful review of that denial.” Wade, 493 F.3d at 539 (quotations and citations omitted).[75]

         Theriot next argues that attaching the appeals procedure to the March 2, 2018 benefit denial letter was insufficient, given the fact that the body of the letter actively discouraged Theriot from seeking review by stating, “[t]his forecloses the ability to seek judicial review.”[76] Theriot also argues that the March 2, 2018 benefit denial letter was non-compliant because the body of the letter failed to mention an appeal to the Executive Committee or indicate the current stage of administrative proceedings.[77]

         A plan must include in its benefit denial letter “[a] description of the plan's review procedures and the time limits applicable to such procedures[.]” In McGowan, the court held that the benefit denial letter substantially complied with ERISA because “[w]hile the letter itself did not explicitly state that [the claimant] had 180 days to file a written appeal, it incorporated that information by specifically identifying the pages on which the 180-day rule was located, ” and “a copy of the benefit booklet was included with the letter.” 538 Fed.Appx. at 498.

         Theriot argues that McGowan is distinguishable because the body of the letter in McGowan stated that “the beneficiary could appeal and . . . referenced the pertinent pages of the attached Summary Plan Description.”[78] In contrast, here, “the Fund did not advise Plaintiff that it had treated her January letter request from counsel as an appeal, [and] failed to include an explanation of any additional materials or procedures Plaintiff could submit for review because [according to the Fund] there was nothing that Mrs. Hamann's estate or Theriot could have submitted to perfect the claim.”[79]

         To the extent that Theriot argues that the language of the letter somehow negates the attachment of the appeal procedures, the Court is not convinced. The procedures, attached to the letter, properly outline the review process.[80] Like the letter in McGowan, the Fund's March 2, 2018 letter “did not explicitly state that [Theriot] had [sixty] days to file a written appeal, ” but “it incorporated that information” by physically attaching the procedures to the letter. See 538 Fed.Appx. at 498. It is true that in McGowan the letter specifically identified the pages of the enclosed booklet on which the time limit to appeal was located, whereas here the letter did not mention the review procedures but instead just attached them. Id. However, the Court finds the difference immaterial, especially considering that the Fund's attached review procedures were only three pages long, whereas the booklet with the appeal procedures in McGowan was at least thirty-nine pages long. See Id. at 497. The Fund's attachment of the review procedures to the March 2, 2018 letter satisfied § 2560.503-1(g)(iv).

         Theriot argues next that Gantert's declaration “contradicts and undermines [the Fund's] argument regarding the compliance of the March [2, 2018] letter, ” because he now admits “there was a manner in which Plaintiff could have perfected her claim, but [the Fund] did not inform her in violation of [29 C.F.R. § 2560.503(g)(1)(iii)].”[81] As previously discussed, Gantert declared that had Theriot argued that the April 18, 2017 benefit denial letter was non-compliant with ERISA and therefore could not start the running of her sixty days to appeal, the Eligibility Committee likely would have stopped relying on the January 5, 2018 letter's untimeliness as a basis for its denial of Theriot's claim, made on behalf of the Estate.[82]

         In response, the Fund argues that it “had no obligation to explain to Theriot what arguments to raise in an appeal against the decision to deny benefits.”[83] The Fund asserts that “[w]hat C.F.R. § [2560.503-1(g)(1)(iii)] requires instead is for [the Fund] to notify the claimant of additional material or information, if any, necessary to perfect the claim, ” not “what arguments [Theriot] could raise in response to the benefit denial, such as that the April 18, 2017 letter to [Theriot] did not comply with ERISA (or was a benefit denial issued to Mrs. Hamann rather than Theriot) so that it could not start the running of Theriot's 60 days to appeal the benefit denial.”[84]

         The Court is not persuaded by Theriot's arguments.[85] The types of “additional material or information” that courts have held to be within the scope of 2560.503-1(g)(1)(iii) and thus required in the benefit denial letter have included medical evidence to support a finding that the claim put the claimant in a category of people within the plan's coverage, i.e. psychiatric evaluations, office visit notices, diagnostic testing results, and treatment plans, among others. See Crosby v. Blue Cross/Blue Shield of Louisiana, No. 08-693, 2012 WL 5493761 at *9 (E.D. La. Nov. 13, 2012) (Lemmon, J.) (holding that the plan's notice of denial did not comply with ERISA because it failed to inform the claimant that she should submit medical evidence to support a finding that would afford her coverage under a particular benefit); see also McBurnie v. Life Insurance Co. of N. America, 763 Fed.Appx. 596, 599 (9th Cir. 2019) (holding that the plan's denial letter complied with ERISA because it informed the claimant that “she could submit additional medical records, test results, and therapy notes”); Blair v. Metropolitan Life Ins. Co., 569 Fed.Appx. 827, 831 (11th Cir. 2014) (holding that the plan provided the claimant with the necessary information to perfect her claim when it listed specific medical documents and reports from specific doctors that it would need to consider the claim on review).

         By contrast, in situations such as this one where there is no additional material or information the claimant could submit to perfect her claim, courts have held benefit denial letters are still compliant with ERISA when they do not mention any additional material or information. See Daboh v. Baylor Health Care System Occupational Injury Benefit, No. 3:06-CV-1006, 2009 WL 1748868 at *9 (N.D. Tex. June 22, 2009); Duncan v. Assisted Living Concepts, Inc. et al., No. 3:03-CV-1931N, 2005 WL 331116 at *4 (N.D. Tex. Feb. 10, 2005).

         The Fund denied Theriot's claim either because it was untimely, failed on its merits under the Fund's interpretation of the current plan terms, or both.[86]Regardless of the reason or reasons for which the Fund denied Theriot's claim, there is no additional material or information Theriot could have provided to perfect her claim-Theriot could not suddenly make her claim timely, or change the terms of the plan or the Fund's interpretation of those terms. “Nor does [Theriot] point to additional information she would have presented that would bolster her claim, ” Daboh, 2019 WL 1748868 at *9, other than the fact that she may have argued that the April 18, 2017 letter failed to comply with ERISA and therefore could not start the running of her sixty days to appeal. The Court agrees with the Fund, however, that “additional material or information” for purposes of § 2560.503-1(g)(1)(iii) does not include potential legal arguments. Therefore, the Fund's March 2, 2018 benefit denial letter complied with § 2560.503-1(g)(iii).

         C. The Fund's Conflict of Interest

         Theriot asserts that the Court should have considered the Fund's conflict of interest in its dual role as the entity determining eligibility for benefits and paying those ...


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