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Failure to Exhaust Administrative Remedies: S.D. Ill.

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  • Failure to Exhaust Administrative Remedies: S.D. Ill.

    In a recent case from Illinois, the Plaintiff retired from employment at the Union Electric Company (the predecessor of the Defendant in the case), and was due monthly disability payments under the company's applicable LTD plan. In a letter he received from the company, these benefits would be due to him for the rest of his life, assuming he remained disabled. However, in August of 2017, the Defendant wrote to the Plaintiff to inform him that an internal audit revealed he had been improperly receiving benefits longer than the maximum benefit period. Even though the company was not seeking repayment for these benefits, they informed the Plaintiff that his final payment would be on September 1, 2017. A few weeks later, the Plaintiff initiated this action.

    The Defendant argues that the court should grant its motion to dismiss as the Plaintiff has failed to exhaust his administrative remedies, and the court reasons as follows:

    Requiring the exhaustion of administrative remedies prior to commencing a civil suit serves several important policy and practical purposes. First, it “encourages informal, non-judicial resolution of disputes about employee benefits.” Id. This is consistent with the purpose of the statute because “the institution of . . . administrative claim-resolution procedures was apparently intended by Congress to help reduce the number of frivolous lawsuits under ERISA; to promote the consistent treatment of claims for benefits; to provide a nonadversarial method of claims settlement; and to minimize the cost of claims settlement for all concerned.” Id. (quoting Kross v. Western Elec. Co., 701 F.2d 1238, 1244–45 (7th Cir. 1983)). The administrative remedy exhaustion prerequisite also helps to “prepare the ground for litigation in case administrative dispute resolution proves unavailing,” because “[c]ompelling parties to exhaust administrative remedies can help a court by requiring parties, in advance of bringing suit, ‘to develop a full factual record’ and by enabling the court to ‘take advantage of agency expertise.’” Id. at 361 (quoting Janowski v. International Bhd. of Teamsters Local No. 710 Pension Fund, 673 F.2d 931, 935 (7th Cir. 1982), vacated on other grounds, 463 U.S. 1222 (1983)).
    Given the lack of evidence that the Plaintiff presented to substantiate his claim, the court held:

    Here, Feazel has not pleaded sufficient facts to show that he is entitled to excusal from the exhaustion requirement on either of the theories he advances. First, Feazel has not alleged any facts to suggest that it would be futile for him to pursue the administrative procedures apparently available to him under the LTD Plan. The August 18, 2017 letter from Ameren refers Feazel to “the Plan’s summary plan description for . . . claims and appeals procedures” (Doc. 1, Ex. B), which plaintiff’s counsel appears to have received (See, e.g., Doc. 1, ¶¶ 36–37; Doc. 22, Ex. A). The letter also includes a phone number for the Ameren Benefits Center, to which “questions regarding [Feazel’s] Long Term Disability Plan benefit payment” may be directed (Doc. 1, Ex. B). Feazel argues that the defendants’ failure to provide him with certain other Plan documents “leaves ample possibility . . . that there is no such appeal procedure” (Doc. 22, pp. 6–7). Notwithstanding the plain language of Ameren’s letter, which appears to contradict Feazel’s claim, Feazel has not alleged facts to indicate that the claims and appeals procedures referenced in the letter could not redress his grievance. Feazel has thus failed to demonstrate that he should be excused from the exhaustion requirement based on futility.
    The opinion is attached below.

    Attached Files