Plan's Refusal To Consider Late Appeal Not Arbitrary And Capricious
EDWARDS v. BRIGGS & STRATTON RETIREMENT PLAN (April 29, 2011)
Briggs & Stratton employed Augusta Edwards until November of 2005. She stopped working because of several nerve conditions, including carpal tunnel and cubital tunnel syndromes. Edwards' doctor believed that she was totally and permanently disabled. She filed a claim with the Briggs & Stratton Retirement Plan in August 2007. The Plan’s physician rendered an opinion that she was not permanently disabled. The Plan denied her claim on September 29 and advised her that she had 180 days to appeal the denial. The Plan received Edwards’ appeal on April 11, 2008, 195 days after she received the denial. She offered no explanation for her tardiness. The Plan refused to consider her appeal. Edwards filed suit under ERISA against the plan. Magistrate Judge Goodstein (E.D. Wis.) granted summary judgment to the Plan. Edwards appeals.
In their opinion, Circuit Judges Tinder and Hamilton and District Judge Murphy affirmed. The Court noted that its review was under the arbitrary and capricious standard because the Plan gave its administrator discretionary authority to determine eligibility. The Court further noted that it has interpreted ERISA to require exhaustion of administrative remedies. That requirement, however, rests with the discretion of the district court and can be excused where, for example, an appeal would have been futile. Here, Edwards does not dispute that her appeal was late. But she does not claim that an appeal would have been futile. The Court rejected her attempt to excuse the tardiness because of the "substantial compliance" doctrine. It noted that the doctrine had never been used in such a way. The Court also rejected her arguments based on the Wisconsin "notice-prejudice" statute, interpreting her earlier letters as notices of appeal, and the Plan's conflict of interest. Here, the Plan adopted a reasonable appeal deadline, included the deadline in the Plan documents, and gave Edwards specific notice at the time it denied her claim. Although the Plan could have exercised its discretion to entertain the appeal, it was not arbitrary and capricious for it not to do so.
Michael Rigney practices in the law offices of GVC Ltd. in Chicago. In this blog, he reports on select