ERISA-Second Circuit Rules That Plaintiffs Need Not Exhaust Administrative Remedies To Seek Declaration Of Their Rights To Benefits Under ERISA

In Kirkendall v. Halliburton, Inc., Docket No. 11-2733-cv (2nd Cir. 2013), the plaintiffs had brought suit under ERISA, seeking clarification of benefits to which they might be entitled. The district court dismissed the plaintiffs’ case, on the grounds that the plaintiffs had failed to exhaust their administrative remedies. The plaintiffs appealed. The Second Circuit Court of Appeals (the “Court”) held that, when a plaintiff reasonably interprets a plan’s terms not to require exhaustion of her administrative remedies, and does not exhaust her remedies as a result, she is not required to exhaust her administrative remedies. As such, the Court vacated the district court’s dismissal of the case, and remanded the case back to the district court.

In this case, the plaintiffs brought suit under ERISA, to clarify the amount of the benefit they would receive under a pension plan if they retired early. However, the plaintiffs filed this suit without first availing themselves of the procedure described in the plan documents for “benefits claims”. The plaintiffs argued that the plan documents did not have a procedure for filing a claim for clarification of future benefits. The Court found that the plan’s terms were ambiguous on this matter. It concluded that the plaintiffs reasonably interpreted the plan terms to not require them to file a benefits claim. As such, under case law, plaintiffs were not required to exhaust administrative remedies in pursuing their claim under ERISA of clarifying their benefits .

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