Grant v. Eaton Corporation Long-Term Disability Plan
Memorandum Opinion and Order granting 57 motion to amend complaint, said amended complaint to be filed within 5 days. Signed by District Judge Tom S. Lee on 2/5/13 (LWE)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF MISSISSIPPI
CIVIL ACTION NO. 3:10CV164TSL-FKB
EATON DISABILITY LONG-TERM
MEMORANDUM OPINION AND ORDER
This cause is before the court on the motion of plaintiff
Sandra Grant for leave to amend her original complaint to add
Eaton Corporation as a party under Federal Rule of Civil Procedure
Defendant Eaton Corporation Long-Term Disability Plan has
responded in opposition to the motion and the court, having
considered the memoranda of authorities submitted by the parties,
concludes the motion to amend should be granted.
Plaintiff was employed by Eaton Corporation from 1981 until
her termination in August 2003.
During her employment with Eaton,
plaintiff was covered under the Eaton Corporation Long-Term
Disability Plan for U.S. Employees.
Eaton Corporation is the
Employer, Plan Administrator and Plan Sponsor of the Eaton LTD
Plaintiff advises in her rebuttal memorandum that she
moved to amend to name Eaton Corporation Health and Welfare
Administrative Committee (Committee) because she mistakenly
thought the Committee was the plan administrator. As she now
understands that Eaton Corporation is the plan administrator
identified in the plan documents, she advises that she seeks to
amend to add Eaton Corporation as the plan administrator.
Soon after her termination, plaintiff applied for Social
Security Disability benefits claiming she was disabled as of
August 12, 2003 (the date of her termination) due to multiple
conditions, including “Fibromyalgia (Arthritis), Stress, Chronic
Fatigue Syndrome, High Blood Pressure & Stress), Back Strain and
By letter dated September 10, 2006, the Social
Security Administration (SSA) notified plaintiff that it had found
her disabled from substantial gainful employment, with an
effective disability onset date of August 12, 2003.
More than a year later, on October 15, 2007, plaintiff wrote
to Eaton’s LTD Plan Claims Administrator, Sedgwick Claims
Management Services, Inc. (Sedgwick), advising she had been
approved for Social Security Disability benefits and requesting an
application for LTD benefits under the Eaton LTD Plan.
provided an application, and in December 2007, plaintiff filed an
application for LTD benefits, noting thereon her Social Security
On June 12, 2008, Sedgwick notified plaintiff
her claim was denied.
Thereafter, on March 16, 2010, following
denial of her claim for reconsideration, plaintiff filed the
present action asserting her claim for benefits under Eaton’s LTD
Plan was wrongly denied.
On June 24, 2011, this court granted summary judgment in
favor of the Plan, finding that the denial of benefits was proper
because plaintiff’s “application for LTD benefits was untimely.”
Plaintiff moved to reconsider and on December 13, 2011, the court
entered its order denying plaintiff’s motion to the extent
plaintiff sought judgment in her favor but ordering the case
remanded based on a “procedural violation.”
court held that plaintiff had been denied the “full and fair
review” to which she was entitled, see 29 U.S.C. § 1133, since she
had not been afforded the opportunity in the administrative
proceeding to present her contention that the one-year deadline
claims had been waived.2
Thereafter, on June 27, 2012, the Committee issued its final
determination on remand in which it found that “under the terms of
the Plan, as they apply to Ms. Grant, the one-year deadline was
The Committee found that plaintiff had failed to
submit evidence demonstrating that the Plan’s one-year
requirement was waived.
Accordingly, the Committee upheld the
denial of benefits on remand.
On July 27, 2012, plaintiff filed the present motion,
requesting leave to amend her complaint to assert a cause of
action for penalties under 29 U.S.C. § 1132(c)(1) against Eaton
Corporation, the plan administrator, for its putative failure to
The court’s order stated, “[T]he matter is remanded to
the plan administrator for further review regarding the denial of
benefits, and in particular regarding plaintiff’s assertion that
the one-year filing deadline was waived.”
provide her with certain documents pursuant to what she contends
was a request under 29 U.S.C. § 1024(b)(4).
plaintiff alleges in her proposed amended complaint that in
connection with the claims review process following remand by the
court, she made repeated requests for “Administrative Services
Agreement between Sedgwick [Claims Management Services, Inc.] and
Eaton” and a “claims manual that Sedgwick uses when adjusting
Eaton disability claims,” and yet these documents were not
Defendant Eaton LTD Plan contends plaintiff’s motion
should be denied on the basis of futility since plaintiff’s
proposed amended complaint fails to state a claim upon which
relief can be granted.
See Stripling v. Jordan Production Co.,
LLC, 234 F.3d 863, 872–73 (5th Cir. 2000) (stating that “[i]t is
within the district court's discretion to deny a motion to amend
if it is futile,” meaning “that the amended complaint would fail
to state a claim upon which relief could be granted”).
Pursuant to 29 U.S.C. § 1024(b)(4), the administrator of a
plan has an obligation to produce to a plan participant certain
documents upon her request:
The administrator shall, upon written request of
any participant or beneficiary, furnish a copy of the
latest updated summary[ ] plan description, and the
latest annual report, any terminal report, the
bargaining agreement, trust agreement, contract, or
other instruments under which the plan is established or
29 U.S.C. § 1024(b)(4).
This obligation is enforceable through 29
U.S.C. § 1132(c)(1)(B), which provides that an administrator who
fails to comply with a request for such documents within thirty
days “may in the court's discretion be personally liable to such
participant or beneficiary in the amount of up to [$110] a day3
from the date of such failure or refusal, and the court may in its
discretion order such other relief as it deems proper.”
In its response, defendant first contends that plaintiff
has no cognizable claim against Eaton for its purported failure to
provide the requested documents since the documents plaintiff
requested are not subject to the requirements and penalties
attributable to § 1024(b)(4).
The documents plaintiff sought were
not the plan summary, plan description, an annual report or
terminal report, or a bargaining agreement or trust agreement.
The question, then, is whether either of the documents she
requested qualifies as a contract or other instrument “under which
the plan is established or operated.”
Courts that have considered
the issue have consistently held that claims manuals or guidelines
for processing claims are not covered by § 1024(b)(4).
Brown v. J.B. Hunt Transport Servs., Inc., 586 F.3d 1079,
The statute provides for a penalty of up to $100 per
day. This has been raised to $110 per day by regulation. See 29
C.F.R. § 2575.502c-3.
1088-1089 (8th Cir. 2009) (holding that “claims manuals are not the
‘other instruments’ mentioned in § 1024(b)(4)”); Castro v.
Hartford Life and Acc. Ins. Co., No. 5:11–cv–446–Oc–34TBS, 2011 WL
4889174, 6 (M.D. Fla. Oct. 14, 2011) (concluding that claims
manuals and guidelines not covered by § 1024 since plain text of
the statute “refers only to the formal legal documents governing a
plan, and does not refer to claims-related documents”); Black v.
Pitney Bowes Inc., No. 05 Civ. 108(GEL), 2008 WL 3992306, 11
(S.D.N.Y. Aug. 26, 2008) (concluding that "Policies and Procedures
Manual" which set forth internal procedures to guide the
processing of disability claims was “not one of the documents set
forth in Section 1024(b)(4)”); Brucks v. Coca–Cola Co., 391 F.
Supp. 2d 1193, 1210–11 (N.D. Ga. 2005) (rejecting claim for
section 1132(c) penalties in connection with administrator's
failure to supply requested “claims manuals” and “claims
guidelines” because such documents are not “plan documents
required to be provided under Section 1024”).
The Administrative Services Agreement is another matter,
In a number of cases, courts have held that an
administrative services agreement between a plan and claims
administrator is not covered by § 1024((b)(4).
See, e.g., Hively
v. BBA Aviation Ben. Plan, 331 Fed. Appx. 510, 511, 2009 WL
2431368, 1 (9th Cir. 2009) (finding that Administrative Services
Agreement between the Plan and United Health Care (UHC) did not
fall within the documents subject to disclosure under § 1024(b)(4)
since it governed the relationship between UHC and the Plan, not
the relationship between the plan participants and the provider;
documents that “‘relate only to the manner in which the plan is
operated’ are not subject to disclosure under § 1024(b)(4)”)
(citing Shaver v. Operating Eng'rs Local 428 Pension Trust Fund,
332 F.3d 1198, 1202 (9th Cir. 2003)); Morley v. Avaya Inc. Long
Term Disability Plan For Salaried Employees, D. N.J. No. 04-409,
2006 WL 2226336, *18-19 (Aug. 3, 2006) (holding that a services
agreement “between the Plan and the Claims Administrator as to
each party’s respective duties and obligations … is not a plan
document or a document ‘under which the plan is established or
operated’” under ERISA § 104(b)(4)).
On the other hand, some
courts have recognized that there may be circumstances in which an
administrative services agreement is subject to disclosure under
In Michael v. American International Group, Inc.,
No. 4:05CV02400 ERW, 2008 WL 4279582 (E.D. Mo. 2008), the court
wrote at length on the issue, stating, in pertinent part,
The proper inquiry for the Court to determine whether
the contract at issue should have been disclosed is to
consider whether the administrative services agreement
“allow[s] ‘the individual participant [to] know ...
exactly where he stands with respect to the plan-what
benefits he may be entitled to, what circumstances may
preclude him from obtaining benefits, what procedures he
must follow to obtain benefits, and who are the persons
to whom the management and investment of his plan funds
have been entrusted.” Hughes Salaried Retirees Action
Comm. v. Administrator of the Hughes Non-Bargaining
Retirement Plan, 72 F.3d 686, 690 (9th Cir. 1995)
(quoting S.Rep. No. 93-127(1974)).
The Court has not found much guidance from other
courts on this issue. Several courts have found that
the terms of administrative services agreements cannot
be held against a plan participant or administrator
because they are not plan documents. See Fritcher v.
Health Care Service Corp., 301 F.3d 811, 817 (7th Cir.
2002); Parente v. Aetna Life Ins. Co., 2001 WL 818345,
at *7 (E.D. Pa. June 19, 2001). However, this does not
automatically result in the conclusion that this
document is exempt from ERISA disclosure requirements,
because ERISA requires the disclosure of “the latest
updated summary, plan description, and the latest annual
report, any terminal report, the bargaining agreement,
trust agreement, contract, or other instruments under
which the plan is established or operated.” 29 U.S.C. §
A more persuasive rationale was used by the
District of New Jersey, when the court found that an
administrative services agreement was not a formal plan
document because it did not “describ[e] health benefits;
rather the ASA merely memorialized the obligations [the
contracting parties] owed to each other.” Local 56,
United Food and Commercial Workers Union v. Campbell
Soup Co., 898 F. Supp. 1118, 1136 (D.N.J. 1995).
However, the Court notes that while it has not seen the
administrative services agreement at issue, Defendants
state that it contains a provision that purports to
grant discretion and authority from AIG Inc. to
Defendant DRMS to determine eligibility for benefits and
construe and interpret all terms and provisions of the
Group Insurance Policy. As a result, this
administrative services contract did more than just
memorialize the obligations owed between Defendant AIG
Inc. and Defendant DRMS, it also contained information
on “who are the persons to whom the management ... of
his plan ... have been entrusted.” Hughes Salaried
Retirees Action Comm., 72 F.3d at 690. As a result, the
Court finds that the administrative services agreement
was subject to the ERISA disclosure requirements as it
is a document “that restrict[s] or govern[s] a plan's
operation.” Allen, 382 F. Supp. 2d at 1168 ( quoting
Shaver, 332 F.3d at 1202).
Additionally, the Court notes that the Eleventh
Circuit has found that administrative services contracts
may be subject to disclosure under ERISA not just as
“other instruments under which the plan is established
or operated” but as a “contract” pursuant to 29 U.S.C. §
1024(b)(4). Heffner v. Blue Cross and Blue Shield of
Alabama, Inc., 443 F.3d 1330, 1343 (11th Cir. 2006).
The Eleventh Circuit succinctly stated that “[a]
contract between a group and an insurer such as Blue
Cross is specifically listed as an ERISA document which
may control a plan's operation.” Id.
administrative services agreement at issue before the
Court controls the operation of the plan as it purports
to grant discretion and authority from Defendant AIG
Inc. to Defendant DRMS to determine eligibility for
benefits and construe and interpret all terms and
provisions of the Group Insurance Policy.
Michael, 2008 WL 4279582, at 5-7.
Cf. Fisher v. Metropolitan Life
Ins. Co., 895 F.2d 1073, 1077 (5th Cir. 1990) (observing that Plan
which by its terms contemplated delegation of the named Plan
administrator's responsibilities to administer the Plan and to
process all claims and appeals procedures and provide other
administrative services “arguably incorporat[ed] the
Administrative Services Agreement ... as a further delineation of
how the Plan would in fact operate”).
At this stage, without
having seen the Administrative Services Agreement, the court is
unable to conclude as a matter of law that the Administrative
Services Agreement necessarily falls beyond the purview of
Defendant next argues that even if a requested document was
covered by 1024(b)(4), plaintiff cannot state a claim under § 1132
for penalties for failing to provide any such document since
plaintiff’s request for such document was made in connection with
the claims review process and not as a general participant request
for plan details pursuant to ERISA § 104(b)(4), 29 U.S.C. §
In the court’s opinion, there is no merit to this
As defendant notes, “there is ... a separate statutory
provision that may, in conjunction with regulations that the
Secretary of Labor has promulgated, entitle a plan beneficiary to
copies of the internal guidelines and other documents on which a
claims administrator has relied in denying her claim for
Mondry v. American Family Mut. Ins. Co., 557 F.3d 781,
798 (7th Cir. 2009).
Specifically, 29 U.S.C. § 1133 provides that
“[i]n accordance with regulations of the Secretary, every employee
benefit plan shall-... (2) afford a reasonable opportunity to any
participant whose claim for benefits has been denied for a full
and fair review by the appropriate named fiduciary of the decision
denying the claim.”
The Secretary's regulations in turn state
that a plan will not be deemed to have afforded a claimant “full
and fair review” unless, among other things, the claimant was
provided “reasonable access to, and copies of, all documents,
records, and other information relevant to the claimant's claim
29 C.F.R. § 2560.503-1(h)(2)(iii).
557 F.3d at 798.
A document is deemed “relevant” if it “[w]as
relied upon in making the benefit determination” or, in the case
of a group health plan, the document “constitutes a statement of
policy or guidance with respect to the plan concerning the denied
treatment option or benefit for the claimant's diagnosis, without
regard to whether such advice or statement was relied upon in
making the benefit determination.”
(iv); Mondy, 557 F.3d at 798.
§ 2560.503-1(m)(8)(i) and
As the court explained in Mondy,
Many items that do not qualify as documents that govern
the establishment or operation of a plan for purposes of
section 1024(b)(4) may qualify as documents that are
relevant to a plan participant's claim for benefits for
purposes of section 1133(2) and the Secretary's
regulations. Doe, 167 F.3d at 60-61. Thus, a
participant who is denied access to internal guidelines
that relate to her unsuccessful claim for benefits may
be able to show that she was denied full and fair review
of the denial by the claims administrator. Id.; Brucks,
391 F. Supp. 2d at 1212 n.18. Cf. Wilczynski v.
Lumbermens Mut. Cas. Co., 93 F.3d 397, 402-03, 406-07
(7th Cir. 1996) (although plaintiff's contention that
she was denied a copy of her disability claim file
failed to state a claim for statutory penalties under
section 1132(c), her allegation that without the claim
file she could not identify “pertinent documents” and
formulate a meaningful appeal was sufficient to state
viable claim that insurance company denied her
meaningful access to final administrative review).
Mondry, 557 F.3d at 798-99.
Unlike § 1024(b)(4), “a plan
administrator may not be penalized under § 1132(c) for a violation
of the regulations to § 1133]”.
Servs., 586 F.3d at 1089.
Brown v. J.B. Hunt Transport
See also Wilczynski, 93 F.3d at 401
(holding that § 1132(c) “cannot be used to impose civil liability
for [a] violation of” § 1133).
However, the mere fact that
documents that are subject to disclosure under § 1024(b)(4) may
also be subject to disclosure under § 1133 does not absolve the
Plan Administrator for liability under § 1132 for failing to
produce such documents pursuant to a proper request under
That is to say, nothing in § 1024(b)(4) suggests an
exception where covered documents are requested in connection with
the review of a claim for benefits.4
Defendant next appears to object that there was no proper
request for documents under § 1024(b)(4) both because the request
was made not by plaintiff herself but by her counsel, who is
neither a participant or beneficiary under the Plan, and because
the request was directed to counsel for the Plan Administrator
rather than the Plan Administrator.
The request by plaintiff’s
counsel on her behalf, if properly directed, is covered by
In Minadeo v. ICI Paints, 398 F.3d 751 (6th Cir.
2005), the court held while a plan administrator may require
written authorization from a plan participant before satisfying a
non-participant's request for benefits information, “a plan
administrator is not entitled to ignore a request for pension
Defendant argues at length in its response that the
documents at issue were not relevant to plaintiff’s claim for
benefits. However, an objection that a document is not relevant
to the claim for benefits is pertinent to an inquiry under 29
U.S.C. § 1133 and C.F.R. § 2560.503-1(h)(2)(iii), not to the
inquiry whether a document is subject to disclosure under 29
U.S.C. § 1024(b)(4) and penalties for non-disclosure under 29
U.S.C. § 1132.
benefits information made by an attorney on behalf of a
Id. at 758.
The court determined that
a plan administrator must either provide the requested
information directly to the plan beneficiary..., or must
... inform the attorney that the information will be
released upon the receipt of an authorization signed by
the plan participant. A plan administrator who fails to
take either of these steps within the thirty day period
imposed by 29 U.S.C. § 1132(c) is subject to the fines
authorized by that same provision, at the discretion of
the district court.
See also Daniels v. Thomas & Betts Corp., 263 F.3d 66, 77 (3d
Cir. 2001) (holding that “a representation by an attorney that he
is making a request on behalf of a participant or beneficiary
triggers the duty to respond under § 1024(b)(4) when the
administrator has no reason to question the attorney's authority.
In the rare case where the administrator has reason to question
that authority, it can respond by requesting further evidence.
The objective of the statute would be ill served, however, by
permitting administrators to refuse to respond with no indication
that authority is even an issue.”); Kellogg v. Metropolitan Life
Ins. Co., 549 F.3d 818, 827 (10th Cir. 2008) (finding that plan
administrator “clearly had a responsibility under ERISA to provide
[participant’s] counsel with a copy of the latest SPD and plan
documentation” under § 1024(b)(4)); Rust v. Electrical Workers
Local No. 26 Pension Trust Fund, No. 3:10–CV–00029, 2011 WL
4565501, 20 (W.D.Va. Sept. 29, 2011) (finding administrator liable
under § 1024(b)(4) for failing to produce covered documents in
response to requests by plaintiff’s counsel).
Likewise, defendant’s objection that plaintiff’s request for
documents that was made to the Plan’s counsel and not the Plan
Administrator is no basis for denial of the motion to amend.
Defendant submits that plaintiff’s request, through her counsel,
was not a valid communication to the Plan Administrator.
plaintiff alleges in her proposed amended complaint that her
request for documents was properly directed to the Plan
This is a factual allegation which the court, for
purposes of the present motion to amend, accepts as true.
Furthermore, the court finds unpersuasive defendant’s apparent
contention that a request for documents directed to counsel for a
plan administrator cannot be a proper request under § 1024(b)(4).
In Krape v. PDK Labs Inc., 194 F.R.D. 82 (S.D.N.Y. 1999), the
court rejected an argument that a plaintiff's claim for penalties
under § 1132 should be dismissed because he did not request a copy
of the retirement plan from the plan administrator as required by
§ 1024(b)(4) but instead mailed letters requesting plan
information to counsel for the plan administrator.
Id. at 87.
The court acknowledged that the Second Circuit had not directly
addressed the question of whether a letter to the plan
administrator's counsel is a proper request for plan information
under § 1024(b)(4), though it had recognized in Long Island
Lighting Co. v. Becher, 129 F.3d 268 (2d Cir. 1997) that plan
participants should be able to access information about the plan
administrator's fiduciary duties from the plan administrator's
194 F.R.D. at 87.
The court noted, however, that “the
Tenth Circuit has explicitly held that when a participant requests
plan information from the attorney for the retirement plan or
other personnel who routinely handle the retirement plan's
business, this request should be treated as though it were given
directly to the plan administrator.”
Id. (citing Boone v.
Leavenworth Anesthesia, Inc., 20 F.3d 1108, 1109-10 (10th Cir.
1994), and McKinsey v. Sentry Ins., 986 F.2d 401, 404-05 (10th
The court concluded, “These legal precedents
indicate that plaintiff's letters to PDK's counsel may have been
proper requests for plan information under 29 U.S.C.
§ 1024(b)(4),” but that further discovery was needed to determine
whether the lawyer to whom plaintiff sent his information requests
to was, at that time, serving as the plan administrator’s plan
counsel or routinely handling the retirement plan's business.
The only authority cited by defendant, Jones v. UOP, 16
F.3d 141 (7th Cir. 1994), is inapposite. There, the court held
that where the summary plan description stated that the plan was
administered by the employer through administrative committee,
requests for information had to be made to the administrative
committee, in order to begin running of daily penalties for
unjustified delay, and it was not sufficient to address requests
to the employer’s legal and personnel departments.
Defendant last argues that plaintiff’s motion to amend should
be denied because plaintiff’s proposed amended complaint, if
allowed, would cause unnecessary delay and prejudice the Plan.
The court, however, is not persuaded that defendant has
demonstrated a valid basis for denial of the motion.
Based on the foregoing, it is ordered that plaintiff’s motion
to amend is granted.
Her amended complaint shall be filed within
five days of the entry of this order.
SO ORDERED this 5th day of February, 2013.
/s/Tom S. Lee
UNITED STATES DISTRICT JUDGE
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