By Ada Dolph and Chris Busey

In a divided decision, in Moyer v. Metropolitan Life Insurance Co.,  No. 13-1396 (6th Cir. Aug. 7, 2014) the Sixth Circuit held that MetLife’s failure to provide notice of a contractual limitations period in its final denial letter violated 29 U.S.C. § 1133 and related regulations and rendered the limitations period unenforceable against the plaintiff, sending it back to the district court for a merits review.

By way of background, the plaintiff Joseph Moyer received disability benefits under his employer’s ERISA-governed long term disability plan.  After paying two years of benefits, MetLife determined that the plaintiff could perform work other than his own occupation, and terminated the plaintiff’s benefits.  On administrative appeal, MetLife upheld the decision and notified the plaintiff of his right to bring suit, but failed to include notice of the benefit plan’s contractual limitations period in the adverse determination letter.  The plaintiff filed suit under ERISA Section 502(a)(1)(B), 29 U.S.C. § 1132(a)(1)(B), beyond the three years permitted under the plan’s contractual limitations period.  The district court held that the plaintiff had constructive notice of the limitations period because the applicable provision was contained in the plan documents that were available to participants upon request, and dismissed the complaint as untimely.

On appeal, writing for the majority, Judge Stranch rejected MetLife’s argument that the issue of limitations was not properly before the Court because the plaintiff had failed to argue that the denial letter’s failure to include the limitations period violated 29 U.S.C. § 1133.  Moving to the merits, the Court analyzed 29 C.F.R. § 2560.503-1 which provides that denial letters must include “[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 . . . following an adverse benefit determination on review.”  The Sixth Circuit concluded that “[t]he claimant’s right to bring a civil action is expressly included as a part of those procedures for which applicable time limits must be provided” (emphasis added).  Because MetLife failed to include notice of the contractual limitations period in the denial letter, the Court concluded that the letter was “inconsistent with ensuring a fair opportunity for review and rendered the letter not in substantial compliance [with Section 1133]” thereby failing to “trigger” any time bar contained in the plan.  The Sixth Circuit reversed the district court’s dismissal of the case on limitations grounds and remanded for review of the benefit determination.

The dissenting opinion argued that the issue of whether the administrator violated § 1133 was not before the court because the plaintiff had previously only argued that the summary plan description’s omission of the limitations period violated another ERISA provision.

Notably, in 2014 alone, district courts in the Third, Ninth and Eleventh circuits have rejected the position adopted here by the Sixth Circuit.  See, e.g., Fontenot v. Intel Corp. Long Term Disability Plan, No. 3:14–cv–00153–AA, 2014 WL 2871371, at *1 (D. Or. June 24, 2014); Torpey v. Anthem Blue Cross Blue Shield of California, No. 13-3853, 2014 WL 1569498, at *1 (D.N.J. April 17, 2014); Freeman v. American Airlines, Inc. Long Term Disability Plan, No. CV 13–05161–RSWL–AJWx, 2014 WL 690207, at *1 (C.D. Cal. Feb. 20, 2014); Wilson v. Standard Ins. Co., No. 4:11–CV–02703–MHH, 2014 WL 358722 (N.D. Ala. Jan. 31, 2014).

Recognizing that there is a difference of opinion, after the Sixth Circuit’s Moyer opinion, plans and administrators should nonetheless consider including a notice regarding any applicable contractual limitations period in their denial letters to eliminate any question as to whether a limitations period may be enforceable against a claimant who files an untimely lawsuit.