At the District Court, Heimeshoff also argued that the limitation period in the plan should be equitably tolled because, she claimed the applicable ERISA regulation required Hartford to disclose the limitation period in its denial letter, and it failed to do so. Hartford argued that it was irrelevant whether the regulation required disclosure because Heimeshoff and her attorney knew what the plan said, and their knowledge precluded them from seeking equitable tolling. Hartford also argued that the regulation did not require disclosure.
29 C.F.R. § 2560.503-1(g)(1)(iv) requires an adverse benefit determination to contain, inter alia “[a] description of the plan’s review procedures and the time limits applicable to such procedures, including a statement of the claimant’s right to bring a civil action under section 502(a) of the Act following an adverse benefit determination on review[.]” Heimeshoff argued that this provision required the letter to contain “the time limits applicable” to “the claimant’s right to bring a civil action…” Hartford argued that the regulation specifies one level of disclosure for “the plan’s review procedures” (i.e., “[a] description of the plan’s review procedures and the time limits applicable to such procedures”), while specifying less disclosure for litigation (i.e., “a statement of the claimant’s right to bring a civil action”).
This interpretation of section 2560.503-1(g), which applies to an adverse benefit determination, is supported by section 2560.503-1(j), which applies to an adverse benefit determination “on review” (i.e., on administrative appeal). Subsection (j) states: “In the case of an adverse benefit determination [on review], the notification shall set forth … [a] statement describing any voluntary appeal procedures offered by the plan … and a statement of the claimant’s right to bring an action under section 502(a) of the Act.” Section 2560.503-1(j)(4). There is no requirement to disclose any time limits in this provision. An ERISA claimant generally cannot sue until after she has received the plan’s adverse benefit determination on review. It is thus the subsection (j) notice that will precede litigation. If the Department of Labor wanted to require administrators to give claimants notice of a litigation deadline, it would not require such disclosure in the initial determination but not in the final determination. Therefore, subsection (j) confirms that subsection (g) was not intended to require disclosure of litigation deadlines.
Moreover, litigation cannot logically be considered one of “the plan’s review procedures[.]” Litigation is neither conducted by the administrator nor controlled by the terms of the plan. Certainly, if the Department of Labor intended to require an administrator to describe the “procedures and time limits applicable to” litigation, it easily could have said so.
Hartford argued that interpreting the regulation as Heimeshoff argued would pose insurmountable problems for ERISA claim administration. Heimeshoff assumed that a court can interpret the regulation to require only the disclosure of information about the litigation deadline. But, if litigation were interpreted as being part of “the plan’s review procedures,” then the regulation would require “[a] description of the [litigation] procedures” in addition to a description of the time limits applicable to litigation.
The plan’s review procedures are found in the plan and are entirely under the control of the plan sponsor or administrator (provided only that they comply with the statute and regulations). Therefore, an administrator can easily determine and describe these procedures. In contrast, litigation procedures are not determined by the plan; they are almost entirely the province of statutes, cases and court rules.
More significantly, litigation procedures will vary, perhaps dramatically, depending on where a claimant chooses to litigate. Yet, when an administrator is issuing an adverse benefit determination, it will not know what forum the claimant will choose to sue in (if she sues at all). To provide “[a] description of the … procedures” applicable to ERISA litigation in every forum would require a treatise. Even if it were possible for an administrator to compile a description of all of the litigation procedures, it would violate one of ERISA’s goals. Egelhoff v. Egelhoff ex rel. Breiner, 532 U.S. 141, 149-50, 121 S.Ct. 1322, 149 L.Ed.2d 264 (2001) (“Requiring ERISA administrators to master the relevant laws of 50 States … would undermine the congressional goal of minimizing the administrative and financial burdens on plan administrators – burdens ultimately borne by the beneficiaries.” [quotation marks and brackets omitted]).
There was little case law interpreting this particular provision. Heimeshoff relied on two cases, Candelaria v. Orthobiologics LLC, 661 F.3d 675 (1st Cir. 2011), and Novick v. Metropolitan Life Ins. Co., 764 F. Supp.2d 653 (S.D.N.Y. 2011).
Hartford argued that the discussion of section 2560.503-1(g) in Candelaria was dictum. While Candelaria’s disability claim was on administrative appeal, the plan sponsor amended the plan to include a one-year contractual limitation period; the plan previously had no limit. Candelaria was not given a copy of the amended plan or even told of the amendment, and thus had no knowledge of the contractual limitation. The First Circuit held that Candelaria had established equitable tolling. Candelaria, 661 F.3d at 680 (“we find that Ortega missed the critical one-year deadline because he was ‘materially misled’ into doing so by Orthobiologics”).
Candelaria then went on, in a footnote, to raise and dispose of an argument about section 2560.503–1(g) that neither party had raised or briefed:
One could arguably read this regulation as setting forth two distinct requirements. That is, it could be argued that notice of the right to sue under ERISA is in addition to, and divorced from, notice of review procedures and the time frame pertaining to such procedures. As such, there would be no regulatory requirement that Orthobiologics advise Ortega of the one-year statute of limitations in the benefit determination notification. Orthobiologics, however, has made no such argument. Nor would we find such an argument compelling. We think it clear that the term “including” indicates that an ERISA action is considered one of the “review procedures” and thus notice of the time limit must be provided.
Candelaria, 661 F.3d at 680 (emphasis added).
Because no one briefed the issue for the First Circuit, the court did not consider any of the arguments Hartford had made. It did not evaluate subsection (g) in light of subsection (j). Nor did it consider the numerous problems that would result from deciding that litigation is considered one of the plan’s review procedures.
Novick also based its conclusion on the premise that litigation is part of the plan’s “review procedures.” 764 F. Supp. 2d at 661. But, as Hartford argued, litigation is controlled by statutes, rules and case law, not the plan. Novick also stated: “[b]ecause the limitations period for seeking judicial review is established by the plan itself, and not by law, judicial review must be part of and governed by the plan’s review procedures[.]” Id. (emphasis by the court). Hartford argued that this was incorrect for several reasons. First, time limits for litigation are not “established by the plan itself and not by law” because a contractual limitation is subject to the laws of the state and circuit in which the litigation is brought. Second, given the language of subsection (g), one cannot separate litigation time limits from other litigation procedures, and hold that the regulation requires disclosure of the former without the latter.
The district court held that the regulation did not require disclosure of the contractual limitation period:
In Novick, after initially approving plaintiff Karen Novick’s short-term disability benefits due to her lyme disease symptoms, defendant Metropolitan Life Insurance Company terminated those benefits and denied her long-term benefits claim in a letter that informed her that she could appeal the termination internally, and if her appeal were denied, she could bring a civil action. 764 F.Supp.2d at 656–57. “The letter did not mention any limitations period for bringing that action.” Id. at 657. Metropolitan later denied her appeal in a letter, which “[l]ike the initial termination letter, … did not mention any time limits applicable to any civil action.” Id. at 658. The court found that in failing to state the limitations period applicable to any civil action in the initial termination letter, Metropolitan violated the Department of Labor’s regulations governing ERISA, and therefore the six-year limitations period under New York law, rather than the limitations period in the SPD, which was 6 months following the issuance of the final written decision on appeal, applied to Plaintiff’s action. Id. at 664. It interpreted the DOL’s regulation governing ERISA claim procedures at 29 C.F.R. § 2560.503–1(g)(1)(iv)–which requires that notification of adverse benefit determination contain “[a] description of the plan’s review procedures and the time limits applicable to such procedures, including a statement of the claimant’s right to bring a civil action under section 502(a) of the Act following an adverse benefit determination on review”—to include within the “review procedures” for which time limits must be described any civil action initiated after the appeal. Id. at 660–662.
Novick’s outcome notwithstanding, 29 C.F.R. § 2560.503–1(g)(1)(iv) unambiguously requires that the notification of benefit determination include “a statement of the claimant’s right to bring a civil action,” whereas its description of the necessary notification for claim review procedures requires “[a] description of the plan’s review procedures and the time limits applicable to such procedures.” That the regulation requires notification of time limits for plan review procedures but says nothing about time limits with respect to civil actions suggests that the DOL did not intend to require such a time limit notification in the benefit determination. The court in Novick found that because the limitations period for seeking judicial review “is established by the plan itself, and not by law, judicial review must be a part of and governed by the plan’s review procedures,” 764 F.Supp.2d at 661 (emphasis in original); however, while the time period for commencing a civil action is established by the plan, the judicial review process itself is not subject to the plan. A civil action seeking remedies under the plan is a separate and distinct review process from those contemplated in the claim proceedings under a benefits plan.
The court in Novick also relies on Chappel v. Laboratory Corp. of America, 232 F.3d 719, 726–27 (9th Cir.2000), in which the Ninth Circuit held that post-denial arbitration of ERISA claims was a part of the claims procedure, and that therefore benefits denials letters would have to include time limits applicable to the arbitration. Arbitration is a different review process than a civil action in a district court, however, and particularly given the requirement in the DOL regulation that states only a statement of the claimant’s right to a civil action must be included in the denial letter, it is unclear how this bears on the limitations period for a civil action. The Court therefore declines to follow Novick. Hartford was not required to inform Ms. Heimeshoff of the Plan’s limitations period for legal action in its benefits determination letter, thus its failure to do so does not affect the untimeliness of Ms. Heimeshoff’s Complaint.
Heimeshoff v. Hartford Life & Acc. Ins. Co., 2012 WL 171325 (D. Conn. Jan. 20, 2012) aff’d, 496 F. App’x 129 (2d Cir. 2012) cert. granted in part, 133 S. Ct. 1802, 185 L. Ed. 2d 810 (2013).
The Second Circuit determined that it was unnecessary to determine whether the regulation required disclosure, because, even if it did, Heimeshoff’s actual knowledge of the time limit precluded her from establishing equitable tolling
“Equitable tolling is an extraordinary remedy because if applied too liberally it threatens to undermine the purpose of statutes of limitations of allowing potential defendants predictability and ultimate repose.” Veltri v. Building Service 32B-J Pension Fund, 393 F.3d 318, 326 (2d Cir. 2004). Equitable tolling “applies only when plaintiff is prevented from filing despite exercising that level of diligence which could reasonably be expected in the circumstances.” Veltri, 393 F.3d at 322.
Because of the requirement that the plaintiff act diligently, her actual knowledge of the information a plan fiduciary allegedly failed to disclose precludes equitable tolling:
We are not establishing a simple mechanical rule that failure to notify a claimant of her right to bring an action in court automatically tolls the statute of limitations. Thus, for example, a plaintiff who has actual knowledge of the right to bring a judicial action challenging the denial of her benefits may not rely on equitable tolling notwithstanding inadequate notice from her pension plan.
Veltri, 393 F.3d at 326. See also, Strom v. Siegel Fenchel & Peddy P.C. Profit Sharing Plan, 497 F.3d 234, 246 (2d Cir. 2007) (“for purposes of the statute of limitations, a claimant will be held to her actual knowledge, regardless of the plan administrator’s failure to provide adequate § 1133 notice”); Saunders v. City of New York, 594 F. Supp. 2d 346, 359 (S.D.N.Y. 2008) (a “plaintiff who has actual knowledge of the right to bring a judicial action … may not rely on equitable tolling notwithstanding inadequate notice”).
One of Heimeshoff’s attorney’s first actions after she retained him in 2006 was to obtain the Policy. He admitted that he knew the Policy limited the time to commence legal action, and knew what it said. His actual knowledge of the deadline precludes Heimeshoff from establishing equitable tolling.
This argument was adopted by the Second Circuit:
Heimeshoff argues that Hartford was required to disclose the time limits for filing a civil action in its denial of benefits letters pursuant to 29 C.F.R. § 2560.503–1(g)(1)(iv). Appellant contends that Hartford’s failure to do so entitles Appellant to equitable tolling of her claim. Appellant relies upon a case from the Southern District of New York to support its claim that the regulation in question requires notice. See Novick v. Metropolitan Life Ins. Co., 764 F.Supp.2d 653, 660–64 (S.D.N.Y.2011). We need not address this issue. Appellant’s counsel conceded in the district court and at oral argument that he had received a copy of the plan containing the unambiguous limitations provision long before the three-year period for Appellant to bring the claim had expired. Thus, Appellant is not entitled to equitable tolling. See Veltri v. Building Service 32B–J Pension Fund, 393 F.3d 318, 326 (2d Cir.2004) (“a plaintiff who has actual knowledge of the right to bring a judicial action challenging the denial of her benefits may not rely on equitable tolling notwithstanding inadequate notice from her pension plan”).
Heimeshoff v. Hartford Life & Acc. Ins. Co., 496 F. App’x 129, 130-31 (2d Cir. 2012) cert. granted in part, 133 S. Ct. 1802, 185 L. Ed. 2d 810 (2013)