Ramsay v. Kane County Human Resource Special Service District
322 P.3d 1163
| Utah | 2014Background
- Kane County Hospital established a private 401(k) plan in 1993; employees Lori Ramsay and Dan Smalling alleged the hospital failed to fund retirement benefits as required by the Utah State Retirement and Insurance Benefit Act (Retirement Act).
- Utah Retirement Systems (URS) initiated an administrative proceeding before the Utah State Retirement Board in 2009 to recover unpaid contributions; Ramsay and Smalling intervened in that administrative action in 2010.
- Ramsay and Smalling also filed a separate class-action complaint in Third District Court against the Hospital (operated by Kane County Human Resource Special Service District), URS, the hospital’s insurance/investment agents (Dean Johnson and John Hancock), asserting breach of contract, breach of fiduciary duty, negligence, and declaratory/injunctive relief seeking the defined benefits and consequential damages.
- Defendants moved to dismiss for lack of subject-matter jurisdiction on the ground plaintiffs had not exhausted administrative remedies under the Utah Administrative Procedures Act (UAPA) and the Retirement Act; the district court dismissed for lack of jurisdiction.
- The court of appeals reversed and stayed the district action pending the administrative proceeding, reasoning some claims might fall outside the Retirement Act but their scope could not be determined until administrative resolution.
- The Utah Supreme Court granted certiorari to decide whether plaintiffs’ claims fall within the Retirement Act (and thus require exhaustion) and whether any exhaustion exceptions apply.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiffs’ claims are governed by the Retirement Act and thus subject to UAPA exhaustion | Ramsay/Smalling: some causes of action fall outside the Act, especially claims against non-URS parties | Defendants: the Act covers “any dispute regarding a benefit, right, obligation, or employment right under” title 49, so exhaustion is required for all claims | Held: All claims fall within the scope of the Retirement Act and require exhaustion; district court dismissal for lack of jurisdiction affirmed |
| Whether absence of certain parties in the administrative proceeding makes those claims outside the Act | Plaintiffs: claims against Dean Johnson and John Hancock are outside the administrative forum because they weren’t named in the URS action | Defendants: Scope turns on statutory delegation to the Board, not on who URS has actually named; plaintiffs can join/add parties administratively | Held: Not relevant—plaintiffs may pursue/add such claims administratively; failure to have those parties in the administrate proceeding does not excuse exhaustion |
| Whether statutory exceptions to exhaustion apply because administrative remedies are inadequate (e.g., consequential damages, class relief) | Plaintiffs: Board cannot adequately award consequential damages, class procedures, or redress claims against third parties | Defendants: Administrative remedies can make plaintiffs whole and the Board may provide adequate relief | Held: Plaintiffs failed to meet burden showing administrative remedies are inadequate; exceptions do not apply |
| Whether exhaustion should be excused due to irreparable harm (statute of limitations run) | Plaintiffs: exhaustion will cause statute of limitations to expire and irreparable injury | Defendants: filing tolled limitations; savings statute applies; no irreparable harm | Held: No irreparable harm shown; tolling and savings provisions defeat the argument; exhaustion required |
Key Cases Cited
- State v. Levin, 144 P.3d 1096 (Utah 2006) (standard of review on certiorari: review the court of appeals’ decision for correctness)
- Housing Authority v. Snyder, 44 P.3d 724 (Utah 2002) (jurisdictional rule to address exhaustion before other claims)
- Salt Lake City Mission v. Salt Lake City, 184 P.3d 599 (Utah 2008) (recognition of limited exceptions to exhaustion in unusual circumstances)
- Mack v. Utah State Dep’t of Commerce, 221 P.3d 194 (Utah 2009) (analysis of when legal remedies are inadequate for injunctive relief)
- Varian-Eimac, Inc. v. Lamoreaux, 767 P.2d 569 (Utah Ct. App. 1989) (court lacking subject-matter jurisdiction may only dismiss the action)