Heimeshoff v. Hartford Life & Accident Ins. Co.

• Decision Date: 16 December 2013
• Docket Number: No. 12–729.,12–729.
• Court: U.S. Supreme Court
• Parties: Julie HEIMESHOFF, Petitioner v. HARTFORD LIFE & ACCIDENT INSURANCE CO. et al.

134 S.Ct. 604
187 L.Ed.2d 529
82 USLW 4035

Julie HEIMESHOFF, Petitioner
v.
HARTFORD LIFE & ACCIDENT INSURANCE CO. et al.

No. 12–729.

Supreme Court of the United States

Argued Oct. 15, 2013.
Decided Dec. 16, 2013.

[134 S.Ct. 606]

Syllabus^*

Respondent Hartford Life & Accident Insurance Co. (Hartford) is the administrator of Wal–Mart Stores, Inc.'s (Wal–Mart) Group Long Term Disability Plan (Plan), an employee benefit plan covered by the Employee Retirement Income Security Act of 1974 (ERISA). The Plan's insurance policy requires any suit to recover benefits pursuant to the judicial review provision in ERISA § 502(a)(1)(B), 29 U.S.C. § 1132(a)(1)(B), to be filed within three years after “proof of loss” is due. Petitioner Heimeshoff filed a claim for long-term disability benefits with Hartford. After petitioner exhausted the mandatory administrative review process, Hartford issued its final denial. Almost three years after that final denial but more than three years after proof of loss was due, Heimeshoff filed a claim for judicial review pursuant to ERISA § 502(a)(1)(B). Hartford and Wal–Mart moved to dismiss on the ground that the claim was untimely. The District Court granted the motion, recognizing that while ERISA does not provide a statute of limitations, the contractual 3–year limitations period was enforceable under applicable State law and Circuit precedent. The Second Circuit affirmed.

Held : The Plan's limitations provision is enforceable. Pp. 609 – 616.

(a) The courts of appeals require participants in an employee benefit plan covered by ERISA to exhaust the plan's administrative remedies before filing suit to recover benefits. A plan participant's cause of action under ERISA § 502(a)(1)(B) therefore does not accrue until the plan issues a final denial. But it does not follow that a plan and its participants cannot agree to commence the limitations period before that time. Pp. 609 – 612.

(1) The rule set forth in Order of United Commercial Travelers of America v. Wolfe, 331 U.S. 586, 608, 67 S.Ct. 1355, 91 L.Ed. 1687, provides that a contractual limitations provision is enforceable so long as the limitations period is of reasonable length and there is no controlling statute to the contrary. That is the appropriate framework for determining the enforceability of the Plan's limitations provision. The Wolfe approach necessarily allows parties to agree both to the length of a limitations period and to its commencement. Pp. 610 – 612.

(2) The principle that contractual limitations provisions should ordinarily be enforced as written is especially appropriate in the context of an ERISA plan. Heimeshoff's cause of action is bound up with the written terms of the Plan, and ERISA authorizes a participant to bring suit “to enforce his rights under the terms of the plan.” § 1132(a)(1)(B). This Court has thus recognized the particular importance

[134 S.Ct. 607]

of enforcing plan terms as written in § 502(a)(1)(B) claims, see, e.g.,CIGNA Corp. v. Amara, 563 U.S. ––––, ––––, 131 S.Ct. 1866, 179 L.Ed.2d 843, and will not presume from statutory silence that Congress intended a different approach here. Pp. 611 – 612.

(b) Unless the limitations period is unreasonably short or there is a “controlling statute to the contrary,” Wolfe, supra, at 608, 67 S.Ct. 1355, the Plan's limitations provision must be given effect. Pp. 612 – 616.

(1) The Plan's period is not unreasonably short. Applicable regulations mean for mainstream claims to be resolved by plans in about one year. Here, the Plan's administrative review process (“internal review”) required more time than usual but still left Heimeshoff with approximately one year to file suit. Her reliance on Occidental Life Ins. Co. of Cal. v. EEOC, 432 U.S. 355, 97 S.Ct. 2447, 53 L.Ed.2d 402, in which this Court declined to enforce a 12–month statute of limitations applied to Title VII employment discrimination actions where the Equal Employment Opportunity Commission faced an 18– to 24–month backlog, is unavailing in the absence of any evidence that similar obstacles exist to bringing a timely ERISA § 502(a)(1)(B) claim. Pp. 612 – 613.

(2) This Court rejects the contentions of Heimeshoff and the United States that the limitations provision is unenforceable because it will undermine ERISA's two-tiered remedial scheme. Pp. 613 – 616.

(i) Enforcement of the Plan's limitation provision is unlikely to cause participants to shortchange the internal review process. The record for judicial review generally has been limited to the administrative record, so participants who fail to develop evidence during internal review risk forfeiting the use of that evidence in district court. In addition, many plans vest discretion over benefits determinations in the plan administrator, and courts ordinarily review such determinations only for abuse of discretion. Pp. 613 – 614.

(ii) It is also unlikely that enforcing limitations periods that begin to run before the internal review process is exhausted will endanger judicial review. To the extent that administrators attempt to prevent judicial review by delaying the resolution of claims in bad faith, the penalty for failure to meet the regulatory deadlines is immediate access to judicial review for the participant. Evidence from forty years of ERISA administration of this common contractual provision suggests that the good-faith administration of internal review will not diminish the availability of judicial review either. Heimeshoff identifies only a handful of cases in which ERISA § 502(a)(1)(B) plaintiffs have been time barred as a result of the 3–year limitations provision, and these cases suggest that the bar falls on participants who have not diligently pursued their rights. Moreover, courts are well equipped to apply traditional doctrines, such as waiver or estoppel, see, e.g.,Thompson v. Phenix Ins. Co., 136 U.S. 287, 298–299, 10 S.Ct. 1019, 34 L.Ed. 408, and equitable tolling, see, e.g.,Irwin v. Department of Veterans Affairs, 498 U.S. 89, 95, 111 S.Ct. 453, 112 L.Ed.2d 435, that nevertheless may allow participants to proceed. Finally, plans offering appeals or dispute resolution beyond what is contemplated in the internal review regulations must agree to toll the limitations provision during that time. 29 C.F.R. § 2560.503–1(c)(3)(ii). Pp. 614 – 616.

(3) Heimeshoff's additional arguments are unpersuasive. The limitations period need not be tolled as a matter of course during internal review because that would be inconsistent with the text of the limitations provision, which is enforceable. And

[134 S.Ct. 608]

federal courts need not inquire whether state law would toll the limitations period during internal review because the limitations period is set by contract, not borrowed from state law. Pp. 615 – 616.

496 Fed.Appx. 129, affirmed.

THOMAS, J., delivered the opinion for a unanimous Court.

Matthew W.H. Wessler, for Petitioner.

Ginger D. Anders, for the United States as amicus curiae, by special leave of the Court, supporting the petitioner.

Catherine M.A. Carroll, Washington, DC, for Respondents.

Steven P. Krafchick, Carla Tachau Lawrence, Krafchick Law Firm, Seattle, WA, Peter K. Stris, Brendan S. Maher, Victor O'Connell, Stris & Maher LLP, Gardena, CA, Matthew W.H. Wessler, Leah M. Nicholls, Public Justice, P.C., Washington, DC, Leslie A. Brueckner, Arthur H. Bryant, Sarah E. Belton, Public Justice, P.C., Oakland, CA, for Petitioner.

Seth P. Waxman, Catherine M.A. Carroll, Counsel of Record, Weili J. Shaw, Ari Holtzblatt, Wilmer Cutler Pickering Hale and Dorr LLP, Washington, DC, for Respondents.

Justice THOMAS delivered the opinion of the Court.

A participant in an employee benefit plan covered by the Employee Retirement Income Security Act of 1974 (ERISA), 88 Stat. 829, as amended, 29 U.S.C. § 1001 et seq., may bring a civil action under § 502(a)(1)(B) to recover benefits due under the terms of the plan. 29 U.S.C. § 1132(a)(1)(B). Courts have generally required participants to exhaust the plan's administrative remedies before filing suit to recover benefits. ERISA does not, however, specify a statute of limitations for filing suit under § 502(a)(1)(B). Filling that gap, the plan at issue here requires participants to bring suit within three years after “proof of loss” is due. Because proof of loss is due before a plan's administrative process can be completed, the administrative exhaustion requirement will, in practice, shorten the contractual limitations period. The question presented is whether the contractual limitations provision is enforceable. We hold that it is.

I

In 2005, petitioner Julie Heimeshoff began to report chronic pain and fatigue that interfered with her duties as a senior public relations manager for Wal–Mart Stores, Inc. Her physician later diagnosed her with lupus and fibromyalgia. Heimeshoff stopped working on June 8.

On August 22, 2005, Heimeshoff filed a claim for long-term disability benefits with Hartford Life & Accident Insurance Co., the administrator of Wal–Mart's Group Long Term Disability Plan (Plan). Her claim form, supported by a statement from her rheumatologist, listed her symptoms as “ ‘extreme fatigue, significant pain, and difficulty in concentration.’ ” ¹ App. to Pet. for Cert. 7. In November 2005, Hartford notified Heimeshoff that it could not determine whether she was disabled because her rheumatologist had never responded

[134 S.Ct. 609]

to Hartford's request for additional information. Hartford denied the claim the following month for failure to provide satisfactory proof of loss. Hartford instructed Heimeshoff that it would consider an appeal filed within 180 days, but later informed her that it would reopen her claim, without the need for an appeal, if her rheumatologist provided the requested information.

In July 2006, another physician evaluated Heimeshoff and concluded that she was disabled. Heimeshoff submitted that evaluation and additional medical evidence in October 2006. Hartford then...