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5th Cir.: ERISA and the "borrowing" of state Statute of Limitations

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  • 5th Cir.: ERISA and the "borrowing" of state Statute of Limitations

    In a case decided in December of 2017, the court discusses the relationship between ERISA's omission of any SOL, and what statutes the court must borrow from state law to fill the void. In this case, Plaintiff became disabled in 2012, was denied February of 2013, requested plan documents February 2014, and ultimately filed suit in October of 2015. Plaintiff alleged that Louisianan's ten-year prescriptive period should apply, while the court ultimately found the one-year period for delictual actions applied instead:

    Babin primarily argues that the ten-year period should apply because his claim is based on a contractual and fiduciary obligation. Binding Fifth Circuit precedent forecloses the conclusion that a § 1132(c) action is contractual. See id. at 509; accord Brown v. Rawlings Fin. Servs., LLC, 868 F.3d 126, 131 (2d Cir. 2017). However, Lopez does not foreclose concluding that a breach of fiduciary duty is the closest state analogue to a § 1132(c) claim. But analogizing § 1132(c) to a breach of fiduciary duty does not help Babin’s case. Louisiana courts do not apply the ten-year statute of limitations to all breach of fiduciary duty claims. See Young v. Adolph, 821 So. 2d 101, 106 (La. App. 2002). Rather, a breach of fiduciary duty claim is contractual if it arises “from the breach of a special obligation between the parties” and delictual if it arises “from the violation of a general duty.” Omega Ctr. for Pain Mgmt., L.L.C. v. Omega Inst. of Health, Inc., 975 So. 2d 48, 51 (La. App. 2007). Accordingly, Louisiana courts treat a fiduciary’s deliberate offenses (like fraud) as personal actions subject to the ten-year prescriptive period and simple negligence as a delictual offense subject to the one-year period. Young, 821 So. 2d at 106.
    The court summarizes its holding as follows:

    In sum, a § 1132(c) claim alleges the breach of a general statutory duty, rather than a specific contractual provision, and it does not require deliberate misconduct on the part of the plan administrator. Therefore, a § 1132(c) claim better resembles a delictual claim subject to a one-year prescriptive period under Louisiana law than a personal action subject to a ten-year prescriptive period. Accordingly, Babin’s § 1132(c) claim prescribed one year after it accrued.
    The opinion is attached below.
    Attached Files