In Mead v. Reliastar Life Ins. Co., — F.3d –, 2014 WL 4548868 (2d Cir. Sept. 16, 2014), the district court determined that Reliastar’s decision on plaintiff’s disability claim was arbitrary and capricious, and remanded the matter to Reliastar to calculate the benefits owed for plaintiff’s own-occupation disability, and to determine whether she was disabled from any occupation. Reliastar appealed, and plaintiff moved to dismiss for lack of appellate jurisdiction, arguing that the remand order was not a “final decision” under 28 U.S.C. § 1291. The court noted that it had “never definitively decided whether, or under what circumstances, a district court’s remand to an ERISA plan administrator is immediately appealable.” It held now that it was not appealable.
The court observed that circuits were split on this issue, and fell into three camps. “A majority of circuits—the First, Fourth, Sixth, Eighth, and Eleventh—hold that because an ERISA remand order contemplates further proceedings before the plan administrator, it is not ‘final’ and therefore may not be immediately appealed except when the familiar collateral order doctrine applies. … Several circuits—the Third, Ninth, and Tenth—have analogized ERISA remands to decisions remanding matters to administrative agencies and have imported into the ERISA context their precedents governing the finality of administrative remand orders, which permit immediate appeals in certain circumstances. … Staking out a lone position, the Seventh Circuit analyzes the finality of ERISA remand orders by reference to the statute governing remands to the Social Security Administration, 42 U.S.C. § 405(g), which also permits immediate appeals in certain situations.” The court noted that, whenever this issue had arisen in prior cases before it, the order in question was not appealable under any of the three approaches, permitting the court to avoid deciding in which camp it stood. But this case, the court held, would be appealable under the Seventh Circuit’s approach.
The court held: “Taking into consideration our prior case law and the various analytical approaches used by our sister circuits, we now hold that remands to ERISA plan administrators generally are not ‘final’ because, in the ordinary case, they contemplate further proceedings by the plan administrator. … We decline, however, to adopt a hard-and-fast rule that such orders are never immediately appealable in recognition of the reality that, as exemplified by this case, remands to ERISA plan administrators may take on a number of permutations. Instead, as in all cases where our jurisdiction is questionable, we must examine the content of the particular ERISA remand order to determine its appealability.”
The court also held that “to preserve an ERISA plan administrator’s ability to obtain appellate review of a nonfinal remand order, we generally will interpret a district court’s remand order as having retained jurisdiction over the case such that, after a determination by the plan administrator on remand, either party may seek to reopen the district court proceeding and obtain a final judgment.” The court was able to “leave for another day the question of whether our case law governing the finality of administrative remands permits an immediate appeal by an ERISA plan administrator when the district court’s remand order cannot be construed as having retained jurisdiction over the case.”
The court specifically held that the remand order was not final because it directed Reliastar to consider plaintiff’s claim under the any occupation test, and therefore did not “conclusively determine” Reliastar’s liability. The court also noted that, even if the any occupation claim were separated, the order was not final regarding own occupation benefits, because it did not award a specific amount, but remanded to Reliastar to calculate benefits due. The court rejected Reliastar’s argument that the calculation of benefits was merely ministerial, ruling that calculating benefits required resolution of a number of underlying factual questions.
The fact that the district court entered a “judgment” and “closed the case” did not affect the finality analysis, because substance governs over form, and a district court cannot turn a non-final order into a final one by calling it final.
The court did not need to address whether its precedent on the finality of orders remanding to administrative agencies applied to ERISA claims, because the order in this case would not be final under that precedent. It did, however, expressly reject the Ninth Circuit’s approach to that issue, holding that it was contrary to Second Circuit precedent.
Finally, the court explained that, under Seventh Circuit precedent, an order would be appealable whenever the district court passed judgment on the merits of a claim determination, regardless of whether there was a remand. The court declined to follow the rationale that the Seventh Circuit followed to reach that result.