United States District Court, S.D. Indiana, Indianapolis Division
ORDER ON MOTION TO DETERMINE STANDARD OF
J. McKINNEY, United States District Court Judge
matter comes before the Court on Plaintiff Michael
Mesker's (“Mesker's”) Motion to Determine
Standard of Adjudication (the “Motion”). Dkt. No.
12. On January 10, 2017, Mesker initiated this action
pursuant to the Employee Retirement Income Security Act, 29
U.S.C. § 1001 et seq. (“ERISA”), in
order to obtain disability insurance benefits from Defendant,
Reliance Standard Life Insurance Company
(“Reliance”). See generally, Dkt. No. 1.
In the Motion, Mesker requests that this case be adjudicated
under a de novo standard of review in light of
Reliance's failure to timely render a decision regarding
Mesker's disability benefits. Dkt. No. 12 at 1. Reliance
opposes the Motion and asserts that the Court should apply an
arbitrary and capricious standard of review because it
substantially complied with ERISA's procedural
regulations. See generally, Dkt. No. 21. For the
reasons stated herein, the Court DENIES the Motion to the
extent it seeks application of a de novo standard of
worked for the Indiana State Teachers Association
(“ISTA”) until June 2010. Dkt. No. 7, ¶ 7.
Through his employment with ISTA, Mesker participated in an
employee welfare benefit plan with long term disability
benefits through a group insurance policy provided by
Reliance (the “Plan”). Id. at
¶¶ 4, 7. Under the Plan, Reliance was required to
pay monthly disability benefits for 60 months in the event
that an insured was unable to work due to illness. Dkt. No.
21, Ex. A at 13. The Plan also granted Reliance “the
discretionary authority to interpret the Plan and the
insurance policy to determine eligibility for
benefits.” Id. at 17.
16, 2010, after being diagnosed with HIV/AIDS, Mesker left
his job with ISTA due to severe symptoms related to his
condition. Dkt. No. 7, ¶ 7. Pursuant to the Plan, Mesker
applied for disability benefits with Reliance on December 8,
2010. Dkt. No. 21 at 2. On January 24, 2011, Reliance
approved Mesker's application for disability benefits, to
be effective as of December 14, 2010. Id.; Dkt. No.
7, ¶ 8. Following this approval, Mesker received regular
monthly disability payments from Reliance until May 3, 2016.
Dkt. No. 7, ¶ 8.
April 22, 2016, Reliance informed Mesker that it would be
discontinuing his disability benefit payments on May 3, 2016,
because Mesker's condition would no longer be considered
a “disability, ” as defined by the Plan.
Id.; see also, Dkt. No. 21, Ex. A at 13.
Mesker appealed Reliance's decision to discontinue his
disability benefits on October 6, 2016. Dkt. No. 7, ¶ 9.
With his appeal, Mesker included some medical evidence,
including a summary of the medical records provided by his
treating physician, Dr. Steven Norris (“Dr.
Norris”). Dkt. No. 12, Ex. 3.
acknowledged Mesker's appeal in a letter dated October
18, 2016, and explained that “[t]o the extent that
additional information is needed, Reliance … will toll
the relevant time frames for reaching an appeal determination
from the time of [its] request for additional information
until such time as [it] receive[s] the requested
information.” Dkt. No. 21, Ex. B at 2. On October 20,
2016, Reliance sent another letter to update Mesker that
Reliance “determined that additional medical
documentation from [Mesker's] treatment providers will be
required prior to the conclusion of [its] assessment”
and required such information from Dr. Norris. Dkt. No. 12,
Ex. 2. Reliance further informed Mesker that it had
“tolled the statutory time allotted to [it] in order to
complete [its] review [of Mesker's appeal], pending
receipt of the requested information.” Id. On
November 16, 2016, Reliance advised Mesker that it still had
not received the information it requested from Dr. Norris
regarding Mesker's treatments. Dkt. No. 21, Ex. C at 2-3.
In a letter dated January 9, 2017, Reliance informed Mesker
that it had received the information requested from Dr.
Norris on November 29, 2016, but that it required
“beyond 45 days to make a final decision on
[Mesker's] appeal, pending the results of [an]
Independent Peer Review.” Dkt. No. 21, Ex. D at 2.
January 10, 2017, one day after receiving this letter from
Reliance, Mesker filed the instant action, seeking past and
future long-term disability benefits. See generally,
Dkt. No. 1. On January 19, 2017, Reliance upheld its prior
determination to terminate Mesker's disability benefits.
Dkt. No. 7, ¶ 9.
a de novo standard of review is applied to
disability benefit determinations under ERISA “unless
the benefit plan [at issue] gives the administrator or
fiduciary discretionary authority to determine eligibility
for benefits or to construe the terms of the plan.”
Firestone Tire & Rubber Co. v. Bruch, 489 U.S.
101, 115 (1989). When a benefit plan reserves such
discretionary authority, a disability benefit determination
is reviewed only for an abuse of discretion. Metro. Life
Ins. Co. v. Glenn, 554 U.S. 105, 111 (2008) (citing
Firestone, 489 U.S. at 111, 115).
the existence of a discretionary authority provision in the
Plan, Mesker asserts that the Court should review
Reliance's denial of his disability benefits using a
de novo standard of review because Reliance failed
to comply with the timing procedures set forth in 29 C.F.R.
§ 2560.503-1. See generally, Dkt. No. 12. Under
29 C.F.R. § 2560.503-1, a plan administrator must
respond to a claim for disability benefits within 45 days of
receiving the claim. 29 C.F.R. §§
2560.503-1(h)-(i). A plan administrator may receive an
extension of up to an additional 45 days to respond to such a
claim if the plan administrator determines special
circumstances exist to justify the extension and provides the
claimant with written notice of the extension prior to the
termination of the initial 45-day time period. Id.
When an extension is properly obtained, “the period of
time for making the benefit determination on review shall be
tolled from the date on which the notification of the
extension is sent to the claimant until the date on which the
claimant responds to the request for additional
information.” 29 C.F.R. § 2560.503-1 (i)(4).
to 2000, if a plan administrator did not issue a timely
decision regarding a claimant's appeal of a denial of
disability benefits, the appeal would be “ʻdeemed
denied, '” and the claimant would be allowed to
bring a civil action against the plan administrator to
evaluate the merits of his application. Lundsten v.
Creative Cmty. Living Serv., Inc. Long Term Disability
Plan, No. 13-C-108, 2014 WL 2440716, at *4 (E.D. Wis.
May 30, 2014) (quoting Nichols v. Prudential Ins. Co. of
Am., 406 F.3d 98, 106 (2nd Cir. 2005)). However, in
2000, the Department of Labor (“DOL”) made
amendments to this regulation and eliminated the
“deemed denied” provision. Lundsten,
2014 WL 2440716 at *4. In its place, 29 C.F.R. §
2560.503-1 provided that if a plan administrator fails
“to establish or follow claims procedures consistent
with the requirements of [29 C.F.R. § 2560.503-1], a
claimant shall be deemed to have exhausted the administrative
remedies available under the plan and shall be entitled to
pursue any available remedies under [ERISA §]
502(a).” 29 C.F.R. § 2560.503-1(1).
§ 2560.503-1 was amended in 2000, the DOL provided
additional guidance in a preamble to the amended regulation,
in which it explained that “the new standards are
intended to ensure more timely benefit determinations, to
improve access to information on which a benefit
determination is made, and to assure that participants and
beneficiaries will be afforded a full and fair review of
denied claims.” Employee Retirement Income Sec. Act
of 1974, Rules & Regulations for Admin. &
Enforcement; Claims Procedures, 65 Fed. Reg. 70, 246
(Nov. 21, 2000)). With respect to 29 C.F.R. §
2560.503-1(1) specifically, the DOL noted that it intended
for this provision “to clarify that the procedural
minimums of the regulation are essential to procedural
fairness and that a decision made in the absence of the
mandated procedural protections should not be entitled to any
judicial deference.” Id. at 70, 255.
response to Mesker's claim that a de novo
standard of review should apply, Reliance argues that its
disability benefit decision is still entitled to a more
deferential standard of review, pursuant to the substantial
compliance doctrine. Dkt. No. 21 at 5-7. “In general
the doctrine of substantial compliance means that a plan
administrator who has violated a technical rule under ERISA
… may be excused for the violation if the
administrator has been substantially compliant with the
requirements of ERISA.” Edwards v. Briggs &
Stratton Retirement Plan, 639 F.3d 355, 361-62 (7th Cir.
2011) (citing Halpin v. W.W. Grainger, Inc., 962
F.2d 685, 693-94 (7th Cir. 1992)). When applying the
substantial compliance doctrine, a plan administrator that
has retained discretionary authority through an applicable
benefits plan, “notwithstanding his or her error, is
given the benefit of deferential review of [his or her]
determination about a claim under the arbitrary and
capricious standard … rather than more stringent de
novo review.” Edwards, 639 F.3d at 362 (citing
Rasenack v. AIG Life Ins. Co., 585 F.3d 1311, 1317
(10th Cir. 2009)). A plan administrator who does not render a
decision within the time specified by the applicable ERISA
regulations “can only be in substantial compliance with
ERISA's procedural requirements if there is an ...