:: Procedural Crossroads After Remand Of Case To Plan Administrator

The question raised, then, is whether an ERISA plaintiff who has been denied benefits on remand may challenge the denial by filing a timely motion in the same action, or must initiate a new action.

McKay v. Reliance Std. Life Ins. Co., 2008 U.S. Dist. LEXIS 82190 (October 16, 2008)

This dispute over long term disability benefits illustrates the exacting procedural requirements that must be observed in protecting a claim for benefits for appellate review.   In this instance, the district court applied Sixth Circuit authority to hold that a motion to reopen the case after a remand to the plan administrator was the proper procedural course.

The plaintiff had filed a motion for judgment on the pleadings in an action for wrongful denial of long-term disability benefits.    Two carriers were involved, and two policies, one an “executive” policy and one a “basic” policy.

The plaintiff challenged denial of benefits in district court and filed a motion for judgment on the pleadings.

The district court denied Plaintiff’s motion, and (1) dismissed his claim against Defendants Unum Life Insurance Company and Unumprovident Corporation (collectively the “Unum Defendants”), and (2) remanded his claim against Reliance Standard Life Insurance Company (”Reliance”) for further development of the “administrative record”:

Specifically, the Court ordered Reliance to further develop its administrative record and to determine (1) whether Plaintiff fell under Reliance’s “basic policy” or its “executive policy,” [*2] and (2) whether he was covered under the appropriate policy by its specific terms and definitions (Court File No. 33). After entry of the order in Court File No. 34, Plaintiff’s civil case was terminated.

After Reliance denied the claim for benefits on remand, the plaintiff filed a motion to reopen the case.  The issue, then, was stated thusly:

The question raised, then, is whether an ERISA plaintiff who has been denied benefits on remand may challenge the denial by filing a timely motion in the same action, or must initiate a new action.

This issue may seem rather simple but it has potential for controversy.  The Sixth Circuit is on the record here, however, and district court resolved the issue by resort to prior caselaw, stating:

The Sixth Circuit decided this question in Bowers v. Sheet Metal Workers’ Nat’l Pension Fund, 365 F.3d 535 (6th Cir. 2004). There, the plaintiff’s pension provider attempted to appeal from an order of remand for a determination of eligibility for benefits under the correct disability definitions. Id. at 536.

The Sixth Circuit dismissed the appeal for lack of jurisdiction, holding that such a remand does not constitute a final judgment, id., and that either party could challenge the remand determination in the same action, id. at 537. See also Petralia v. AT&T Global Info. Solutions Co., 114 F.3d 352, 354 (1st Cir. 1997) (”Ordinarily implicit in a federal district court’s order of remand to a plan fiduciary is an understanding that after a new decision by the plan fiduciary, a party seeking judicial review in the district court may do so by a timely motion filed in the same civil action, and is not required to commence a new civil action.”).

Therefore, the district court reinstated the case (in which the claim as to the UNUM defendants remained denied).

Note: The Sixth Circuit opinion in Bowers notes a similar conclusion by the First Circuit in Petralia v. AT&T Global Info. Solutions Co., 114 F.3d 352, 354 (1st Cir. 1997).  Both cases involved the question of whether an order “remanding” a claim to the plan administrator was a “final decision” under 28 U.S.C. § 1291.  In Mckay, the district court opinion discussed above, the court relied upon the reasoning on that issue – if the decision is not final, then it must be open to reinstatement on timely motion.

The “Final Decision” Issue – Also of interest from the Bowers opinion:

Two other circuits have concluded that in cases where a district court explicitly retains jurisdiction over a case it remands to a plan administrator, the order remanding the case does not constitute a final decision. See Rekstad v. First Bank Sys., Inc., 238 F.3d 1259, 1262 (10th Cir. 2001) (stating that the district court “expressly stated that either party may obtain review of the administrator’s determination simply by filing a motion”); Shannon v. Jack Eckerd Corp., 55 F.3d 561, 563 (11th Cir. 1995) (stating that the district court “retained jurisdiction, . . . indicating that further action is required”).

We note that two other circuits have issued decisions that come to the opposite conclusion regarding the appealability of orders remanding benefits determinations to ERISA plan administrators. See Hensley v. Northwest Permanente P.C. Retirement Plan & Trust, 258 F.3d 986 (9th Cir. 2001); Perlman v. Swiss Bank Corp. Comprehensive Disability Prot. Plan, 195 F.3d 975 (7th Cir. 2000). Those decisions conclude that, because orders remanding administrative benefit determinations to administrative agencies are appealable, orders remanding pension benefit determinations to ERISA plan administrators should be appealable too. Hensley, 258 F.3d at 993-94; Perlman, 195 F.3d at 979-80.

In Perlman, the Seventh Circuit relied specifically upon the similarity between remands to plan administrators in ERISA cases and remands to the Commissioner of Social Security in social security cases. Perlman, 195 F.3d at 979. However, as noted in Perlman, 42 U.S.C. § 405(g) specifically grants courts of appeals jurisdiction over orders remanding social security claims to the Commissioner.  Id. at 978. No statutory language permits similar appeals under ERISA. The existence of language authorizing appeals from remand orders under the social security laws implies that those orders would not constitute final decisions under 28 U.S.C. § 1291. In the absence of a statutory grant of jurisdiction, this court declines to expand its jurisdiction by analogy