ERISA-Seventh Circuit Rules That The Plaintiff’s Failure To Timely File An Administrative Appeal Resulted In Her Failure To Exhaust The Plan’s Administrative Procedures, So She Could Not File A Suit For Disability Benefits

In Edwards v. Briggs & Stratton Retirement Plan, No. 09-2326 (7th Cir. 2011), the Court faced the question of whether the defendant, the Briggs & Stratton Retirement Plan (the “Plan”), should have considered the plaintiff’s administrative appeal from a denial of her claim for disability benefits by the Plan, even though the appeal was filed eleven days late. The broader issue is whether the plaintiff exhausted the Plan’s administrative procedures as a predicate to filing suit under ERISA in federal court. Finding that the plaintiff failed to exhaust those procedures, the district court dismissed the plaintiff’s case on summary judgment. The plaintiff appealed.

On August 9, 2007, the plaintiff had made a claim for disability retirement benefits under the Plan, based on an assortment of ailments. On September 26, 2007, the Plan denied the plaintiff’s claim for the benefits, and on September 29, 2007, the plaintiff was notified of this denial. The denial letter told the plaintiff that she had 180 days from receipt of the letter to appeal the denial of the benefits to the Plan’s Retirement Committee. This 180-day requirement is contained in the Plan document. The 180 days ran out on March 27, 2008, but the plan administrator extended it to March 31, 2008. The plaintiff did appeal, but the appeals letter was not received by the Plan until April 11, 2008, eleven days after the March 31 deadline. The Plan refused to consider the plaintiff’s appeal on the grounds that the appeal was untimely. On June 9, 2008, the plaintiff filed suit against the Plan under ERISA. The question: did the Plan have to consider the plaintiff’s administrative appeal?

In analyzing the case, the Court noted that it is undisputed that the plaintiff’s appeal letter was filed late. The plaintiff argued that the untimeliness of her appeal should be excused because she was in “substantial compliance” with the Plan’s administrative review procedures. However, no prior case has applied the “substantial compliance” doctrine to excuse a late filing of an appeal. The Plan has fixed a clear deadline of 180 days for filing administrative appeals from benefit denials. The Plan has the right to enforce that deadline. Also, while the plan administrator has discretion to consider an appeal which is filed late, it is not required to do so, and the plaintiff never offered any reason for the late filing. In this case, nothing indicated that the plan administrator’s refusal to entertain the plaintiff’s untimely administrative appeal was an abuse of its discretion. Finally, the plan administrator did not have a conflict of interest (see the Supreme Court’s ruling in Glenn) that changes the result.

Continuing with the case, the courts have held that the untimely filing means that the plaintiff has failed to exhaust the Plan’s administrative procedures. The result of this failure means that the plaintiff cannot file suit in court for the denied benefits. A court may, in its discretion, excuse a plaintiff’s failure to exhaust the administrative procedures. However, in this case, nothing indicated that it was an abuse of discretion for the district court to not excuse the failure. As such, the Court affirmed the district court’s summary judgment against the plaintiff, so she could not file suit for disability benefits.