Ruderman v. Liberty Mut. Grp.
| Decision Date | 27 January 2022 |
| Docket Number | 21-817 |
| Parties | Jennifer Ruderman, Plaintiff-Appellant, v. Liberty Mutual Group, Inc., Liberty Life Assurance Company of Boston, fka Lincolon Life Assurance Company of Boston, Lincoln Financial Group, Defendants-Appellees. |
| Court | U.S. Court of Appeals — Second Circuit |
UNPUBLISHED OPINION
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT'S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION "SUMMARY ORDER"). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.
At a stated term of the United States Court of Appeals for the Second Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the 27th day of January, two thousand twenty-two.
Appeal from a judgment of the United States District Court for the Northern District of New York (Hurd, J.).
For Plaintiff-Appellant: Mario D. Cometti, Cometti Law Firm Delmar, New York.
For Defendants-Appellees: Byrne J. Decker (Ann-Martha Andrews, on the brief), Ogletree, Deakins, Nash, Smoak & Stewart P.C., Portland, Maine.
Present: Debra Ann Livingston, Chief Judge, Robert D. Sack Circuit Judge, Brian M. Cogan, District Judge. [*]
UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that the judgment of the district court is AFFIRMED.
Jennifer Ruderman appeals from a March 4, 2021 order of the district court (Hurd, J.) dismissing her complaint as preempted by the Employee Retirement Income Security Act of 1974 ("ERISA") and denying as futile her cross-motion for leave to amend her complaint to plead for recovery under ERISA. See Ruderman v. Liberty Mutual Grp., Inc., No. 1:20-cv-945, 2021 WL 827693, at *4 (N.D.N.Y. Mar. 4, 2021). On appeal, Ruderman argues that the district court erred in denying leave to amend her complaint based on her failure to exhaust administrative remedies because, inter alia, administrative review would have been futile and Defendants-Appellees Liberty Mutual Group, Inc., Liberty Life Assurance Company of Boston, and Lincoln Financial Group's regulatory noncompliance excused the requirement to pursue administrative remedies. For the following reasons, we AFFIRM the district court's dismissal of the complaint and denial of leave to amend the complaint. We assume the parties' familiarity with the underlying facts, the procedural history of the case, and the issues on appeal, which we reference here only as necessary to explain our decision.
"We review the grant of a motion to dismiss a claim under Rule 12(b)(6) de novo," accepting the complaint's factual allegations as true and drawing all reasonable inferences in Ruderman's favor pursuant to the "the well-established pleading standard articulated in Bell Atlantic Corp. v. Twombly and Ashcroft v. Iqbal." Sacerdote v. N.Y. Univ., 9 F.4th 95, 106-07 (2d Cir. 2021) (citing Palin v. N.Y. Times Co., 940 F.3d 804, 809 (2d Cir. 2019)). "We review a district court's denial of leave to amend for abuse of discretion, unless the denial was based on an interpretation of law, such as futility, in which case we review the legal conclusion de novo." Pyskaty v. Wide World of Cars, LLC, 856 F.3d 216, 224 (2d Cir. 2017) (quoting Panther Partners Inc. v. Ikanos Commc'ns, Inc., 681 F.3d 114, 119 (2d Cir. 2012)).
Ruderman does not directly challenge the district court's dismissal of her operative complaint as preempted by ERISA.[1] Under ERISA, a plaintiff may bring a civil action "to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan." ERISA § 502(a)(1)(B), codified at 29 U.S.C. § 1132(a)(1)(B). This civil enforcement scheme "completely preempts any state-law cause of action that 'duplicates, supplements, or supplants' an ERISA remedy." Montefiore Med. Ctr. v. Teamsters Loc. 272, 642 F.3d 321, 327 (2d Cir. 2011) (quoting Aetna Health Inc. v. Davila, 542 U.S. 200, 209 (2004)). Given that Ruderman's operative complaint sought a declaratory judgment of her entitlement to long-term disability benefits and alleged breach of contract under state law, the district court correctly concluded that ERISA preempted her claims.
Ruderman does, however, contest the district court's denial of leave to amend her complaint as futile based on her failure to exhaust administrative remedies.[2] Under Federal Rule of Civil Procedure 15, when a party requests leave to amend a pleading before trial, the court "should freely give leave when justice so requires." Fed.R.Civ.P. 15(a)(2). Yet "it is well established that leave to amend a complaint need not be granted when amendment would be futile." Ellis v. Chao, 336 F.3d 114, 127 (2d Cir. 2003) (citing Foman v. Davis, 371 U.S. 178, 182 (1962)). "Futility is a determination, as a matter of law, that proposed amendments would fail to cure prior deficiencies or to state a claim under Rule 12(b)(6) of the Federal Rules of Civil Procedure." Panther Partners, 681 F.3d at 119 (citing Cortec Indus., Inc. v. Sum Holding L.P., 949 F.2d 42, 50 (2d Cir. 1991)).
Ruderman principally argues that the district court should have granted leave to amend her complaint because pursuing administrative review of her claims would have been futile, therefore excusing the requirement that she exhaust administrative remedies. In particular, she asserts that she would have submitted the "exact same evidence," Appellant's Br. at 17, on administrative review as she provided on a prior appeal that resulted in the reclassification of her benefits; that Defendants-Appellees' conduct "exposed . . . a ruse to end an expensive payout of [her] benefits," Appellant's Br. at 19; and that Defendants-Appellees refused to consider "any further documentation," Appellant's Br. at 22, in evaluating her claim. We disagree.
As Ruderman recognizes, "the federal courts - including this Circuit - have recognized a 'firmly established federal policy favoring exhaustion of administrative remedies in ERISA cases.'" Paese v. Hartford Life & Accident Ins. Co., 449 F.3d 435, 443 (2d Cir. 2006) (quoting Kennedy v. Empire Blue Cross & Blue Shield, 989 F.2d 588, 594 (2d Cir. 1993)). "The exhaustion requirement, however, is not absolute." Kirkendall v. Halliburton, Inc., 707 F.3d 173, 179 (2d Cir. 2013). "We do not require plaintiffs to exhaust their administrative remedies where they 'make a clear and positive showing that pursuing available administrative remedies would be futile.'" Id. (quoting Kennedy, 989 F.2d at 594). For instance, we have excused the failure to exhaust administrative remedies where the provider "informed [the plaintiff] that he had exhausted any administrative remedies available," and the recent denial of the plaintiff's benefits under a "more lenient" standard suggested to "any reasonable person" the futility of pursuing an administrative claim under a stricter standard. Paese, 449 F.3d at 449 (internal quotation marks and citations omitted).
Here, Ruderman's allegations fall short of the "clear and positive showing," Kennedy, 989 F.2d at 594, required to excuse her failure to exhaust administrative remedies. Even if we were to determine that Ruderman's factual allegations indicate she would be unlikely to succeed on administrative appeal, we cannot conclude that "any reasonable person," Paese, 449 F.3d at 449, in her position would not pursue administrative review. Furthermore, as with administrative futility claims that we have previously rejected, there is "no evidence in the record that [Ruderman] even notified [Defendants-Appellees] of any disputed claim," Kennedy, 989 F.2d at 595 (emphasis in original), before filing suit. See also Greifenberger v. Hartford Life Ins. Co., 131 Fed.Appx. 756, 759 (2d Cir. 2005) ( insufficient showing of futility where the plaintiff "made no attempt . . . to notify the insurer that she disputes its denial of benefits" (citing Kennedy, 989 F.2d at 593-95)). And to the extent that Ruderman asserts that the reclassification of her disability after her previous appeal indicates the futility of further administrative review, "this [C]ourt has expressly ruled that such allegations are insufficient to establish futility, particularly where a plaintiff has made no attempt whatsoever to file an administrative claim." Id. (citing Kennedy, 989 F.2d at 593-95); cf. Teitel v. Deloitte & Touche Pension Plan, 420 Fed.Appx. 116, 116 (2d Cir. 2011) (). In fact, Ruderman's success in appealing the initial termination of her benefits suggests that "administrative rejection of her challenge was not a foregone conclusion." Saladin v. Prudential Ins. Co. of Am., 337 Fed.Appx. 78, 80 (2d Cir. 2009). Thus, the district court appropriately rejected Ruderman's contention of the futility of administrative review and, by extension, properly denied leave to amend the complaint in light of her failure to exhaust administrative remedies.
Ruderman also asserts that Defendants-Appellees did not comply with their regulatory obligations, therefore excusing her failure to exhaust administrative remedies. She argues that the September 11, 2018 letter stating that she was entitled to benefits under a different classification of disability should have included notice of her right to appeal because the reclassification qualified as an "adverse benefit determination" that...
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