Marcin v. Reliance Standard Life Ins. Co.

• Decision Date: 20 June 2014
• Docket Number: Civil Action No. 13–1308 (ABJ)
• Citation: 50 F.Supp.3d 23
• Court: U.S. District Court — District of Columbia
• Parties: Jill Marcin, Plaintiff, v. Reliance Standard Life Insurance Company, et al., Defendants.

50 F.Supp.3d 23

Jill Marcin, Plaintiff,

v.Reliance Standard Life Insurance Company, et al., Defendants.

Civil Action No. 13–1308 (ABJ)

United States District Court, District of Columbia.

Signed June 20, 2014

Motion granted. Scott Bertram Elkind, Elkind & Shea, Silver Spring, MD, for Plaintiff.

Walter L. Williams, Wilson Elser Moskowitz Edelman & Dicker, LLP, McLean, VA, for Defendants.

MEMORANDUM OPINION

AMY BERMAN JACKSON, United States District Judge

Plaintiff Jill Marcin has brought this action seeking review of a denial of disability benefits. Compl. [Dkt. # 1]. Defendants Reliance Standard Life Insurance Company (“Reliance”) and the Mitre Corporation (“Mitre”) Long Term Disability Insurance Program have moved to dismiss that portion of the claim that seeks penalties under section 1132(c) of the Employee Retirement Income Security Act (ERISA), 29 U.S.C. § 1132(c) (2012). Defs.' Mot. to Dismiss at 1 [Dkt. # 4] (“Defs.' Mot.”); Mem. of P. & A. in Supp. of Defs.' Mot. to Dismiss at 2 [Dkt. # 4–1] (“Defs.' Mem.”). Because penalties under ERISA section 1132(c) are not available for the documents plaintiff seeks, and because defendant Reliance would not be subject to those penalties in any event, the Court will grant defendants' motion.

STANDARD OF REVIEW

“To survive a [Rule 12(b)(6) ] motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ ” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009), quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). In Iqbal, the Supreme Court reiterated the two principles underlying its decision in Twombly : “First, the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions.” Id. And “[s]econd, only a complaint that states a plausible claim for relief survives a motion to dismiss.” Id. at 679, 129 S.Ct. 1937.

A claim is facially plausible when the pleaded factual content “allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. at 678, 129 S.Ct. 1937. “The plausibility standard is not akin to a ‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Id., quoting Twombly, 550 U.S. at 566, 127 S.Ct. 1955. A pleading must offer more than “labels and conclusions” or a “formulaic recitation of the elements of a cause of action,” id., quoting Twombly, 550 U.S. at 555, 127 S.Ct. 1955, and “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id.

When considering a motion to dismiss under Rule 12(b)(6), the complaint is construed liberally in the plaintiff's favor, and the Court should grant the plaintiff “the benefit of all inferences that can be derived from the facts alleged.” Kowal v. MCI Commc'ns Corp., 16 F.3d 1271, 1276 (D.C.Cir.1994). Nevertheless, the Court need not accept inferences drawn by the plaintiff if those inferences are unsupported by facts alleged in the complaint, nor must the Court accept a plaintiff's legal conclusions. See id.; see also Browning v. Clinton, 292 F.3d 235, 242 (D.C.Cir.2002). In ruling upon a motion to dismiss for failure to state a claim, a court may ordinarily consider only “the facts alleged in the complaint, documents attached as exhibits or incorporated by reference in the complaint, and matters about which the Court may take judicial notice.” Gustave–Schmidt v. Chao, 226 F.Supp.2d 191, 196 (D.D.C.2002).

ANALYSIS

ERISA section 1132(c) makes penalties available against a “plan administrator” who fails to provide certain plan documents to a plan participant or beneficiary upon request. 29 U.S.C. § 1132(c). Here, plaintiff argues that defendants should be penalized under section 1132(c) for their failure to provide her with the disability durational guidelines and claims guidelines they allegedly relied upon when they denied her request for coverage. Pl.'s Opp. at 3. But the section 1132(c) non-disclosure penalties do not extend to the documents plaintiff seeks. Moreover, defendant Reliance is not subject to section 1132(c) penalties for the separate reason that it is not a “plan administrator” for purposes of ERISA. Therefore, the Court will grant defendants' motion to dismiss plaintiff's claim for penalties.

I. Section 1132(c) penalties are not available for the non-disclosure of the disability durational guidelines and claims guidelines.

Under section 1132(c) of ERISA, “[a]ny administrator ... who fails or refuses to comply with a request for any information which such administrator is required by this subchapter to furnish to a participant or beneficiary” may be “personally liable” for that “failure or refusal.” 29 U.S.C. § 1132(c)(1). The “information” subject to non-disclosure penalties includes documents such as 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,” id. § 1024(b)(4), as well as automatic notices from plan administrators at the start of coverage, automatic notices of rights at qualifying events, and annual statements of benefits. See id. §§ 1021(e)–(f), 1025(a), 1166(a)(1)–(4); see also 29 C.F.R. §§ 2560.502–1–2560.502i–1 (regulations implementing ERISA section 1132(c)).

But section 1132(c) penalties are not available to plaintiff because the documents she seeks fall under ERISA section 1133 and its related regulations, which govern “claims procedures” and do not impose penalties for non-disclosure. See 29 U.S.C. § 1133 (governing “claims procedures”); 29 C.F.R. § 2560.503–1 (2014) (entitled “[c]laims procedures” and stating “[i]n accordance with the authority of ... 29 U.S.C. §§ 1133, 1135, ² this section sets forth minimum requirements for employee benefit plan procedures pertaining to claims for benefits by participants and beneficiaries”); see also Byars v. Coca–Cola Co., 517 F.3d 1256, 1270 (11th Cir.2008) (noting that ERISA section 1133 “establishes the types of claims procedures that administrators are required to maintain”).

Section 1133 states in full:

In accordance with regulations of the Secretary, every employee benefit plan shall—

(1) provide adequate notice in writing to any participant or beneficiary whose claim for benefits under the plan has been denied, setting forth the specific reasons for such denial, written in a manner calculated to be understood by the participant, and

(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.

29 U.S.C. § 1133.

The regulations at 29 C.F.R. § 2560.503–1 implement ERISA section 1133 and require that a claimant have “reasonable access to, and copies of, all documents, records, and other information relevant to the claimant's claim for benefits.” 29 C.F.R. § 2560.503–1(h)(2)(iii). A claim document is “relevant” if it “[w]as relied upon in making the benefit determination; [or] [w]as submitted, considered, or generated in the course of making the benefit determination, without regard to whether such document ... was relied upon in making the benefit determination....” Id. § 2560.503–1(m)(8)(i)–(ii). There is no mention of penalties.

The disability durational and claims guidelines that plaintiff requested fall under the ERISA section 1133 regulations because, construing the facts in favor of plaintiff, they were “relied upon” or at least “considered ... in the course of making [plaintiff's] benefit determination.” See id. Indeed, that is the very reason plaintiff seeks them. See Pl.'s Opp. at 15 (“Plaintiff has been prejudiced during the administrative appeal process by not having the claims guidelines available to provide additional insight into the insurer's review process to assist her in preparing her administrative appeal.”). Moreover, plaintiff herself argues that the section 1133 regulations required disclosure of the documents. See id. at 11–12.

But even if the ERISA section 1133 regulations required defendants to produce these documents to plaintiff, the statute does not impose monetary penalties for a failure to do so. Nothing in the text of the ERISA statute or regulations indicates that section 1132(c) penalties are available for violations of section 1133 or its regulations, and section 1133 does not provide for penalties. See 29 U.S.C. §§ 1132–33; see also Byars, 517 F.3d at 1270 (determining that section 1132 penalties were not available in part because “the regulations that [plaintiff] relied on as authority for her request do not apply to section 1132(c)(1), but rather apply to section 1133”). Moreover, these sections of ERISA do not even apply to the same actors: section 1132(c) penalizes “plan administrator[s],” while section 1133 and 29 C.F.R. § 2560.503–1 govern the conduct of “employee benefit plans.” See Groves v. Modified Ret. Plan, 803 F.2d 109, 116 (3d Cir.1986) (holding that a “plan” and a “plan administrator” are distinct actors); Stuhlreyer v. Armco, Inc., 12 F.3d 75, 79 (6th Cir.1993) (differentiating between a “plan” and a “plan administrator” for purposes of section 1133). Plaintiff cannot receive statutory penalties that are only available against “plan administrators” under section 1132 for the failure of her “employee benefit plan” to produce documents under regulations implementing section 1133. VanderKlok v. Provident Life & Accident Ins. Co., 956 F.2d 610, 615, 618 (6th Cir.1992) (holding that section 1132(c) penalties do not apply to violations of section 1133 and its regulations based, in part, on the “plan administrator” and “benefit plan” distinction).

Thus, even if plaintiff is correct that defendants...