Brown v. J.B. Hunt Transport Services, Inc.

• Citation: 586 F.3d 1079
• Decision Date: 17 November 2009
• Docket Number: No. 08-3803.,08-3803.
• Parties: Barbara BROWN, Appellant, v. J.B. HUNT TRANSPORT SERVICES, INC., Defendant/Appellee, Prudential Insurance Company of America, Intervenor Defendant/Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (8th Circuit)

586 F.3d 1079

Barbara BROWN, Appellant, v. J.B. HUNT TRANSPORT SERVICES, INC., Defendant/Appellee Prudential Insurance Company of America, Intervenor Defendant/Appellee.

No. 08-3803.

United States Court of Appeals, Eighth Circuit.

Submitted: September 22, 2009.

Filed: November 17, 2009.

Luther Oneal Sutter, argued, Benton, AR, for appellant.

Ellen L. Perlioni, argued, Melissa Mona Hensley, Sharon Fast Fulgham, on the brief, Dallas, TX, for appellee Prudential Ins. Co.

Mark D. Spencer, argued, Oklahoma City, OK, Charles W. Reynolds, Little Rock, AR, Brandon P. Long, on the brief, Oklahoma City, OK, for appellee J.B. Hunt Transportation.

Before MURPHY, JOHN R. GIBSON, and RILEY, Circuit Judges.

RILEY, Circuit Judge.

Barbara Brown (Brown) hurt her knee while working as a truck driver for J.B. Hunt Transport Services, Inc. (Hunt). Prudential Insurance Company of America (Prudential), which insured Hunt's employee welfare benefits plan (Plan), discontinued Brown's long-term disability (LTD) benefits and ignored her requests for information about its decision. Brown sued Hunt and Prudential under ERISA¹ for reinstatement of her LTD benefits and penalties, but the district court held she failed to exhaust her administrative remedies and dismissed her lawsuit. Because we hold Prudential failed to afford Brown a reasonable opportunity for a full and fair review of Prudential's decision to discontinue her LTD benefits, we affirm in part, reverse in part, and remand for further proceedings.

I. BACKGROUND

A. Prudential Discontinues Brown's LTD Benefits

Brown worked for Hunt as a truck driver and enrolled in the Plan. Hunt sponsored the Plan and served as plan administrator. Pursuant to a group insurance contract with Hunt, Prudential insured the Plan and served as claims administrator. Prudential, not Hunt, was responsible for processing claims, determining eligibility, and paying benefits under the Plan.

In August 2005, Brown stopped working for Hunt due to neck, back, and left knee pain. She made a claim for LTD benefits under the Plan. In September 2005, Prudential awarded Brown LTD benefits based upon her left knee condition. Prudential found Brown met the Plan's definition of "disabled," i.e., "unable to perform the material and substantial duties of [one's] regular occupation due to . . . injury." Brown was a lifelong trucker, and her knee pain made it impossible for her to continue driving a truck.

In June 2007, Prudential discontinued Brown's LTD benefits. The Plan's definition of "disabled" changes after the first year of payments. The Plan states: "After 12 months of payments, you are disabled when Prudential determines that due to the same . . . injury, you are unable to perform the duties of any gainful occupation for which you are reasonably fitted by education, training or experience." Prudential determined that, even though Brown's knee pain prevented her from returning to work as a truck driver, there were other jobs she could perform.

Prudential informed Brown it had "obtain[ed] and review[ed] information" about her "medical condition," "daily activities," and "education, experience, and other occupations [she] would be qualified to perform." Prudential explained that, "[b]ased on [its] clinical reviews, the medical documentation supports that [Brown had] sedentary work capacity and [was] limited to lifting up to ten pounds, stooping and bending [was] generally to be avoided, and sitting and standing [could] be alternated as needed." Prudential indicated one of its vocational rehabilitation specialists had determined Brown was employable as a semiconductor bonder, a surveillance system monitor, a food checker, or an assembler.

Prudential notified Brown of her right to an internal administrative appeal of its decision "in writing . . . within 180 days." Prudential required any appeal to state the reasons for disagreeing with its decision and to contain supporting evidence, including: "[c]opies of therapy treatment notes," "[a]ny additional treatment records from physicians," "[a]ctual test results," and "any other written comments, documents, records, or information related to [her] claim." Prudential informed Brown of her concomitant right "to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to [her] claim."

B. Brown Requests Information from Prudential and Hunt

In June 2007, Brown called Prudential and indicated she wanted to appeal. One of Prudential's representatives told Brown she needed to explain in writing why she disagreed with Prudential's decision, but Brown never did so. Instead, Brown requested a copy of the Plan from Prudential and, through her attorney, sent Hunt and Prudential a series of letters requesting a wide variety of information. Brown asked Hunt for copies of all employee welfare or pension plans in which she had enrolled and copies of all summary plan descriptions, annual reports, and amendments thereto. Brown asked Prudential for a copy of the Plan and a complete copy of the Administrative Record. Brown also requested Prudential provide her all Plan documents, internal guidelines, and administrative precedents upon which Prudential had relied when deciding to discontinue her LTD benefits, as well as the names and addresses of all individuals who reviewed her personal health information.

At Prudential's request, Hunt sent Brown a copy of the Plan's summary plan description and "Wrap" document, a description of the various benefits available to Hunt employees. Hunt sent Brown copies of summary plan descriptions and benefit booklets for every plan in which she had enrolled while working for Hunt. Prudential otherwise ignored Brown's requests. Thereafter, Brown sent Prudential another letter through her attorney, in which she demanded a response within ten days. Absent a response, Brown stated she would "assume [Prudential had] no intention of responding to [her] letter, and [would] take appropriate action." Prudential again failed to respond to Brown's request for information.

In January 2008, Brown's attorney called Prudential and asked whether Brown had filed an administrative appeal. Prudential informed Brown's attorney that Brown had not filed a written appeal. Prudential contends Brown's deadline for filing such an appeal expired in late November 2007.

In February 2008, Brown's attorney reminded Hunt he had "previously requested certain documents from Hunt, but . . . did not receive certain information." Brown's attorney requested all relevant documents under the pertinent regulations, "including but not limited to claims manuals." On March 21, 2008, Hunt mailed the Administrative Record to Brown.² Hunt did not send any claims manuals.

C. Relevant Prior Proceedings

In April 2008, Brown filed a two-count amended complaint against Hunt and Prudential in the district court.³ In Count I, Brown sought an order reinstating her LTD benefits under the Plan and awarding her back benefits. See 29 U.S.C. § 1132(a)(1)(B). In Count II, Brown sought statutory penalties for the failures of Hunt and Prudential to respond to her requests for information. See id. § 1132(c). The district court dismissed both counts after Hunt and Prudential filed a series of motions for summary judgment.

The district court dismissed Count I because Brown did not file a written administrative appeal of Prudential's decision to discontinue her LTD benefits. The court held Brown did not exhaust her administrative remedies. The court reasoned there was no substantial compliance exception to ERISA's exhaustion requirement and the futility exception did not apply.

The district court dismissed Count II as to Prudential because § 1132(c) only governs the conduct of plan administrators. The court rejected Brown's argument that Prudential was the Plan's de facto plan administrator. The court dismissed Count II as to Hunt because Hunt could not be held liable for any failure to provide Brown with claims manuals. The court reasoned a claims manual is not an "instrument," 29 U.S.C. § 1024(b), and a plan administrator cannot be held liable for penalties under § 1132(c) for a violation of the regulations to § 1133. The court denied Brown's motion under Federal Rule of Civil Procedure 56(f) to conduct discovery concerning whether Hunt possessed any claims manuals.

II. DISCUSSION

A. Standard of Review

Brown appeals the district court's grant of the defendants' motions for summary judgment and the denial of her Rule 56(f) motion. We review the district court's grant of the motions for summary judgment de novo. See Hutson v. Wells Dairy, Inc., 578 F.3d 823, 825 (8th Cir.2009).⁴ Summary judgment is appropriate only if there are no genuine issues of material fact and Hunt and Prudential are entitled to judgment as a matter of law. See Fed. R.Civ.P. 56; Eisenrich v. Minneapolis Retail Meat Cutters & Food Handlers Pension Plan, 574 F.3d 644, 647 (8th Cir. 2009). We view the evidence in the light most favorable to the nonmoving party, Brown, and afford her all reasonable inferences. See id.; Weitz Co. v. Lloyd's of London, 574 F.3d 885, 892 (8th Cir.2009). "We review for abuse of discretion the district court's denial of a Rule 56(f) continuance, upholding the decision if the nonmoving party was not deprived of a fair chance to respond to the summary judgment motion." Rakes v. Life Investors Ins. Co. of Am., 582 F.3d 886, 893 (8th Cir.2009) (citations omitted).

B. Count I—Claim for Benefits

Brown contends the district court erred in dismissing Count I, her claim for LTD benefits under § 1132(a). Brown maintains she was not required to exhaust her administrative remedies because it was "futile" to do so.⁵ Brown stresses Prudential's repeated failures to provide her with the Administrative Record and the other documents she requested would have forced "an appeal in the blind." Prudential and Hunt maintain Brown's...