36 F.4th 416
2d Cir.2022Background
- McQuillin applied for long-term disability benefits; Hartford (plan administrator) initially denied the claim on Oct. 25, 2019 for insufficient proof of loss and advised he could appeal and that a "final decision" would be issued within 45 days (absent extension).
- McQuillin filed an administrative appeal with additional evidence on April 11, 2020.
- On April 23, 2020 Hartford sent a letter saying it had "overturned" the initial denial, "completed [its] review of the appeal," and "forwarded [the claim] to the claim department . . . to determine if [d]isability is supported," but it did not definitively grant payment.
- McQuillin sued in federal court on May 27, 2020 (46 days after the appeal). Hartford later issued a formal denial in July while the suit was pending.
- The district court dismissed McQuillin's suit for failure to exhaust administrative remedies. The Second Circuit reversed, holding that under 29 C.F.R. §2560.503-1 a "benefit determination on review" must decide entitlement to benefits within 45 days (unless timely extended), and Hartford did not meet that requirement.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a "benefit determination on review" under 29 C.F.R. §2560.503-1 must finally decide entitlement to benefits within 45 days | Yes — the regulation requires a final decision on benefits within 45 days | No — the determination need only address the issues on appeal and may remand for further internal consideration | Court: It must finally determine entitlement; "benefit determination" implies finality and resolution of the claim |
| Whether Hartford's April 23, 2020 letter satisfied the regulation so McQuillin had not exhausted remedies when he sued on day 46 | The April 23 letter did not determine benefits and Hartford gave no extension, so remedies were exhausted on day 46 | The April 23 letter was a timely benefit determination on review because it overturned the initial denial and referred the case to claims department | Court: The April 23 letter did not decide entitlement; no extension was invoked; remedies were deemed exhausted and dismissal was erroneous |
Key Cases Cited
- Eastman Kodak Co. v. STWB, Inc., 452 F.3d 215 (2d Cir. 2006) (standard of review: de novo review of dismissal for failure to exhaust)
- Halo v. Yale Health Plan, 819 F.3d 42 (2d Cir. 2016) (ERISA exhaustion and claims-procedure principles)
- Kisor v. Wilkie, 139 S. Ct. 2400 (U.S. 2019) (limits on Auer deference when regulation is not genuinely ambiguous)
- Fifth Third Bancorp v. Dudenhoeffer, 573 U.S. 409 (U.S. 2014) (ERISA's purposes and statutory context)
- Gilbertson v. Allied Signal, Inc., 328 F.3d 625 (10th Cir. 2003) (rejecting indefinite extensions/remands that would unfairly delay claim resolution)
- Marino Indus. Corp. v. Chase Manhattan Bank, N.A., 686 F.2d 112 (2d Cir. 1982) (principle that strict compliance is required where rules impose explicit requirements)