Card v. Principal Life Ins. Co.
| Decision Date | 02 November 2021 |
| Docket Number | No. 20-6217,20-6217 |
| Citation | 17 F.4th 620 |
| Parties | Susan CARD, Plaintiff-Appellant, v. PRINCIPAL LIFE INSURANCE COMPANY, Defendant-Appellee. |
| Court | U.S. Court of Appeals — Sixth Circuit |
ARGUED: Andrew M. Grabhorn, GRABHORN LAW INSURED RIGHTS®, Louisville, Kentucky, for Appellant. Edna S. Kersting, WILSON, ELSER, MOSKOWITZ, EDELMAN & DICKER, LLP, Chicago, Illinois, for Appellee. ON BRIEF: Andrew M. Grabhorn, Michael D. Grabhorn, GRABHORN LAW | INSURED RIGHTS®, Louisville, Kentucky, for Appellant. Edna S. Kersting, WILSON, ELSER, MOSKOWITZ, EDELMAN & DICKER, LLP, Chicago, Illinois, for Appellee.
Before: McKEAGUE, NALBANDIAN, and MURPHY, Circuit Judges.
The court delivered a PER CURIAM opinion. MURPHY, J. (pp. 626 – 29), delivered a separate concurring opinion.
This case under the Employee Retirement Income Security Act (ERISA) reaches our court for a second time. On Susan Card's first appeal, we found that the administrator of her disability plan arbitrarily denied her benefits, so we ordered a remand to the plan administrator for it to take a second look at her claims. See Card v. Principal Life Ins. Co. , 790 F. App'x 730, 732 (6th Cir. 2019). When Card filed various motions in the district court after this remand, the district court held that it lacked jurisdiction because we had bypassed the court and remanded Card's case directly to the administrator. Card now appeals this jurisdictional ruling. The ruling requires us to address how "remands" to plan administrators should work. Because a district court retains jurisdiction over a beneficiary's ERISA suit during the remand, we vacate the court's order holding that it lacked jurisdiction and remand for it to consider Card's motions.
In February 2013, a doctor diagnosed Card with "chronic lymphocytic leukemia
," a slow-growing blood cancer that can cause fatigue. See
id. at 732 & n.1. By the following December, Card alleges, her worsening fatigue left her unable to perform her job as a night-shift nurse at a long-term care and skilled rehabilitation center. Id. at 732–33. She applied for disability benefits under an ERISA-governed plan administered by Principal Life Insurance Company. Id. at 733. Principal Life denied her requests for short-term, long-term, and total disability benefits on the ground that she did not fall within the plan's various "disability" definitions. Id. at 733–34.
Card sued Principal Life seeking these benefits under ERISA. The district court granted summary judgment to Principal Life. Id. at 734. We reversed. The plan delegated discretionary claims-processing authority to Principal Life, so we reviewed its denial of benefits under the deferential arbitrary-and-capricious test. See id. at 734–36. But we held that Principal Life's denial failed this test. Id. at 737–43. The plan's definition of short-term disability turned on whether beneficiaries could perform the essential tasks of their specific jobs; its definition of long-term disability turned on whether beneficiaries could perform the essential tasks of their general occupations. Id. at 737–39. We reasoned that Principal Life had not analyzed whether Card's cancer
prevented her from performing the tasks of her job or occupation. Id. at 738–42.
Turning to the remedy, we recognized a choice between remanding to the administrator for a second decision or granting benefits outright. Id. at 742 n.7. Because we had identified only procedural problems with Principal Life's denial without resolving Card's ultimate eligibility for benefits, we opted for a remand. Id. at 742. Our conclusion noted: "We therefore remand the case to Principal Life for further proceedings consistent with this opinion." Id. at 743.
After we issued our mandate, Principal Life quickly granted Card short-term disability benefits but requested additional information for her claims seeking long-term and total disability benefits. Card then filed two motions in the district court. She first sought attorney's fees. She next asked the court to reopen the case because Principal Life had not reached a benefits decision for her other claims within the 45 days allegedly required by ERISA regulations.
The district court did not resolve these motions on their merits. Rather, it issued a "virtual order" on its docket that denied the motions for lack of jurisdiction. Its order indicated: Order, R.103.
Card filed a timely notice of appeal from this order. But Principal Life claims that the district court's jurisdictional ruling did not qualify as a final decision appealable to this court under 28 U.S.C. § 1291. It is mistaken. Section 1291 provides: "The courts of appeals ... shall have jurisdiction of appeals from all final decisions of the district courts of the United States ..., except where a direct review may be had in the Supreme Court." Id. The Supreme Court often notes that the key statutory phrase "final decision" reaches any order that "ends the litigation on the merits and leaves nothing for the court to do but execute the judgment." Hall v. Hall , ––– U.S. ––––, 138 S. Ct. 1118, 1124, 200 L.Ed.2d 399 (2018) (citation omitted). So the classic "final decision" comes in the form of a with-prejudice judgment ruling that the plaintiff has won or lost on the merits of all claims against all defendants. See id. ; Mohawk Indus., Inc. v. Carpenter , 558 U.S. 100, 106, 130 S.Ct. 599, 175 L.Ed.2d 458 (2009).
But appealable orders do not always take that shape. District courts often dismiss a suit on procedural grounds—say, for lack of venue or personal jurisdiction—without prejudice to the plaintiff's ability to refile the suit elsewhere. As long as these without-prejudice dismissals leave nothing for the district court to do in the specific case, courts usually treat them as "final" and so appealable under § 1291. See Ritzen Grp., Inc. v. Jackson Masonry, LLC , ––– U.S. ––––, 140 S. Ct. 582, 590, 205 L.Ed.2d 419 (2020) ; Zayed v. United States , 368 F.3d 902, 904–05 (6th Cir. 2004) ; Union Oil Co. of Cal. v. Serv. Oil Co., Inc. , 766 F.2d 224, 227–28 (6th Cir. 1985) ; see also 15A Charles A. Wright et al., Federal Practice and Procedure § 3914.6, at 533–35 & 533 n.18 (2d ed. 1992 & Supp. 2021).
This same logic gives a circuit court jurisdiction to review a district court's dismissal for lack of subject-matter jurisdiction. See, e.g. , Lam v. United States , 979 F.3d 665, 670 (9th Cir. 2020) ; Kowalski v. Boliker , 893 F.3d 987, 994–95 (7th Cir. 2018) ; 16 Front Street, L.L.C. v. Miss. Silicon, L.L.C. , 886 F.3d 549, 561 (5th Cir. 2018) ; Davis v. Wells Fargo , 824 F.3d 333, 341 n.5, 346 (3d Cir. 2016) ; Blitz v. Napolitano , 700 F.3d 733, 738 (4th Cir. 2012). Our court, for example, routinely reviews dismissals of suits for lack of jurisdiction after a district court finds that a plaintiff lacks Article III standing. See, e.g. , Gerber v. Herskovitz , 14 F.4th 500, 505–08 (6th Cir. 2021). Although a plaintiff may be able to file a similar suit later in a court with jurisdiction (hence, why the dismissal is without prejudice), the dismissal is final because "the district court has finished with the case." Blitz , 700 F.3d at 738 (citation omitted).
This framework shows that we have jurisdiction over Card's appeal under § 1291. The district court's order ruled that it lacked subject-matter jurisdiction over Card's motions (and this suit) because this court's prior decision had remanded the case to the plan administrator rather than the court. This reasoning leaves no doubt that the court "was finished with this case" because it thought it lacked jurisdiction. Kowalski , 893 F.3d at 994. Even if Card could have filed another suit to challenge Principal Life's new benefits decision (or its allegedly undue delay in making it), the district court's order was still appealable because the court made clear that Card could not do anything else in this specific case. See Union Oil , 766 F.2d at 227–28.
Principal Life responds with the broad claim that dismissals for lack of subject-matter jurisdiction are not appealable. But the sole decision it cites— Thackeray v. Boats Express Corp. , 1999 WL 644163 (6th Cir. Aug. 16, 1999) (order)—was a case that the defendant had removed from state court to federal court. Id. at *1. When a district court remands a suit to state court on the ground that it lacks jurisdiction, a specific statute indicates that such an order "is not reviewable on appeal or otherwise[.]" 28 U.S.C. § 1447(d). This statute does not apply here.
With our appellate jurisdiction secure, we turn to the district court's subject-matter jurisdiction. When administrators deny benefits claims under ERISA-governed welfare plans, beneficiaries often sue to recover the benefits using a federal cause of action. 29 U.S.C. § 1132(a)(1)(B). District courts have subject-matter jurisdiction over these suits under ERISA (). Id. § 1132(e)(1) ; 28 U.S.C. § 1331. A federal court considering such a claim starts with the presumption that it should review the administrator's denial of benefits de novo. See Firestone Tire & Rubber Co. v. Bruch , 489 U.S. 101, 115, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989). If, however, the terms of the plan give the administrator discretionary power to make benefits decisions, the court reviews the administrator's denial under a deferential arbitrary-and-capricious standard. See id. ; Frazier v. Life Ins. Co. of N. Am. , 725 F.3d 560, 567 (6th Cir. 2013).
When a court finds that an administrator's denial of benefits flunked even this deferential test, what should the court do next? Our answer has turned on the underlying reason for the arbitrary-and-capricious finding. See Elliott v. Metro. Life Ins. Co. , 473...
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