Case Information
*3 FUENTES, Circuit Judge .
The regulations implementing the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001 et seq. , provide that when a plan administrator denies a request for benefits, it must set forth a “description of the plan’s review procedures and the time limits applicable to such procedures, including a statement of the claimant’s right to bring a civil action.” 29 C.F.R. § 2560.503- 1(g)(1)(iv). The ERISA plan at issue in this case contains a one-year deadline for filing a civil action. Appellant Dr. Neville Mirza received a benefits denial letter advising him of his right to judicial review, but it did not mention the time limit for doing so. The principal question we address is whether plan administrators must inform claimants, of plan- imposed deadlines for judicial review, in their notifications denying benefits. We hold that they must, and that the appropriate remedy for this regulatory violation is to set aside the plan’s time limit and apply the limitations period from the most analogous state-law cause of action—here, New Jersey’s six-year deadline for breach of contract claims. Because Mirza filed his complaint before the expiration of this six-year limitations period, we vacate and remand for further proceedings.
I. “N.G.” is an employee of The Challenge Printing Company of the Carolinas (“Challenge”) and a participant in her employer’s ERISA plan. The plan documents contain a section on claims procedures, which provides a framework for the submission and review of claims for benefits. If a claimant receives an adverse initial benefit decision, she may appeal that determination through an internal review process. Once the claimant exhausts that process and receives a final decision from the plan administrator, the claimant has one year to bring a legal action for benefits.
In April 2010, N.G. consulted with Dr. Neville Mirza about severe back pain she was experiencing. Mirza diagnosed N.G. with a herniated disc and recommended she undergo an endoscopic discectomy. N.G. agreed to the proposed treatment plan and executed an assignment of benefits form that assigned to Mirza “any and all rights that [N.G.] may have including but not limited to [her] [personal injury protection] carrier for any payment of outstanding medical bills incurred with [Mirza].” App. 174. The parties agree that through this assignment Mirza stepped into the shoes of N.G. for purposes of pursuing any rights the latter might have under ERISA. Mirza performed the procedure on N.G.’s back and submitted a claim for $34,500 to Insurance Administrator of America (“Insurance Administrator”), the company charged with processing claims under Challenge’s ERISA plan.
Insurance Administrator first denied the claim on June 2, 2010, explaining that supporting documentation was missing. Mirza submitted additional documents in response *5 to this denial, but the claim was denied again. Mirza worked his way through the internal review process and, on August 12, 2010, he received a letter denying his final appeal. Insurance Administrator found that the medical procedure on N.G.’s back was not a covered benefit because it was medically investigational. At the end of the letter, Insurance Administrator informed Mirza of his “right to bring a civil action under ERISA § 502(a)” if he was not content with this final decision. App. 233. Neither the August 12 letter nor any of the earlier denials mentioned that, under the plan, Mirza had one year from the date of the final benefits denial to seek judicial review. At some point after Mirza received the August 12 letter, he retained the law firm of Callagy Law.
Around the same time that N.G. first visited Mirza in April 2010, she also met with Spine Orthopedics Sports (“Spine”). N.G. likewise assigned her benefits to Spine, which, after providing anesthesia services to N.G., submitted a claim to Insurance Administrator for benefits under the ERISA plan. After Insurance Administrator made only partial payment on the claim, Spine, like Mirza, retained Callagy Law to represent it in the benefits dispute. On November 23, 2010, an employee from Insurance Administrator spoke on the telephone with someone from Callagy Law about Spine’s claim for benefits. It is not clear what was said on this phone call. According to Insurance Administrator, its employee read verbatim the plan language about the one-year deadline for filing suit following the final denial of benefits. By Callagy Law’s account, the employee from Insurance Administrator said only that “a patient self- *6 funded plan allows 12 months to appeal.” App. 176 (internal quotation marks omitted). Several months later, an attorney from Callagy Law, in connection with its representation of Spine, requested a copy of the ERISA plan documents, which included the time limit for judicial review. Callagy Law received the plan documents on April 11, 2011. While the parties debate the substance of the November 23, 2010 phone call, it is undisputed that the first time either Mirza or Callagy Law received written notice of the one-year deadline was on April 11, 2011.
On March 8, 2012—almost 19 months after he received the August 12, 2010 denial letter—Mirza sued Insurance Administrator for unpaid benefits. Mirza thereafter filed an amended complaint, this time against both Insurance Administrator and Challenge (collectively, “Defendants”), asserting breach of contract (Count One), and claims under 29 U.S.C. § 1132(a) for violating ERISA by improperly denying benefits (Count Two) and for an administrator’s failure to supply requested information (Count Three). The District Court granted Defendants’ motion to dismiss as to Counts One and Three—neither of which is the subject of this appeal—and denied it as to Count Two. With respect to Count Two, the District Court directed the parties to exchange information on the issue of whether the claim was time-barred in light of the plan’s one-year limitations period. Following limited discovery, the District Court converted the motion to dismiss into one for summary judgment and ruled for Defendants.
*7 The District Court disposed of Mirza’s claim for benefits through a three-step analysis. First, it held the plan’s one-year deadline for seeking judicial review was enforceable because it was not unreasonable. Next, it observed that, absent equitable tolling, Mirza’s suit was time-barred because it was filed more than one year after the final denial of benefits. Finally, the District Court found Mirza was not entitled to equitable tolling because he had notice of the one- year deadline for suing Defendants. Recognizing there was no evidence that Mirza himself was aware of the deadline, the District Court imputed Callagy Law’s knowledge to Mirza. In its view, “[Mirza], through his counsel, was on notice of the time limit well in advance of the August 12, 2011 statute of limitations end date. [Mirza’s] counsel was notified of the time limit orally on November 23, 2010 and received a copy of the plan on April 11, 2011 in connection with the Spine appeal, which dealt with the same patient—N.G.—and same plan.” Mirza v. Ins. Adm’r of Am., Inc. , No. 12-7370, 2013 WL 5642587, at *5 (D.N.J. July 19, 2013). Because it held Mirza had notice of the contractual time limitation, the District Court said it did not need to address Mirza’s argument that Defendants violated ERISA by not specifically informing him of the one-year deadline in the August 12 denial letter.
*8 II.
Our approach to this case proceeds along a different path from that taken by the District Court because we do not find equitable tolling to be an obstacle, or even relevant, to Mirza’s claim. Instead, we focus our analysis on the issue the District Court avoided, namely, whether Defendants violated their regulatory obligations by failing to include the plan- imposed one-year time limit for seeking judicial review in the letter denying Mirza’s request for benefits. We do so because that issue—and not equitable tolling—controls.
ERISA provides that a participant or beneficiary may
bring a civil action “to recover benefits due to him under the
terms of his plan.” 29 U.S.C. § 1132(a)(1)(B). The statute,
however, does not prescribe any limitations period for filing
such an action. When a statute does not provide a limitations
period for filing a claim, we borrow the statute of limitations
from the most analogous state-law claim, which in this case is
breach of contract.
See Hahnemann Univ. Hosp. v. All Shore,
a reasonable jury could not rule for the nonmoving party.”
E.E.O.C. v. Allstate Ins. Co.
, 778 F.3d 444, 448 (3d Cir.
2015) (internal citations and quotation marks omitted).
We see no reason to remand to the District Court to decide
this issue in the first instance. It is “generally appropriate”
for an appellate court to reach the merits of an issue not
decided by the district court if “the factual record is
developed and the issues provide purely legal questions, upon
which an appellate court exercises plenary review.”
Hudson
United Bank v. LiTenda Mortg. Corp.
,
Inc.
,
The ERISA plan here provides that “no legal action may be commenced or maintained to recover benefits under the Plan more than 12 months after the final review/appeal decision by the Plan Administrator has been rendered.” App. 155. Mirza’s suit is facially time-barred because he received the final denial letter on August 12, 2010, but he did not file suit until March 8, 2012. Mirza’s pursuit of benefits is therefore doomed unless he can persuade us of a reason to toll or set aside the plan’s contractual deadline. To that end, Mirza does not claim on appeal that the one-year deadline is unreasonably short. Instead, he first argues that equitable tolling is warranted because he had no actual notice of the one-year deadline for suing Defendants. Mirza points out that the only supposed evidence of notice is that his retained law firm, Callagy Law, in connection with representing another client, Spine, was informed of the contractual limitation on a phone call and received a copy of the plan documents. In those circumstances, Mirza maintains, we cannot attribute Callagy Law’s knowledge to him. Second, Mirza urges us to either equitably toll or set aside the one-year deadline for filing suit because Insurance Administrator was required to, but did not, inform him of the time limit for judicial review in its adverse benefit determination. We discuss the second argument first.
A. ERISA tasks the Secretary of Labor with promulgating regulations governing the claims procedure process. 29 U.S.C. § 1133. Exercising that authority, the Department of Labor issued extensive regulations setting forth the minimum requirements for plan procedures pertaining to claims for benefits. See generally 29 C.F.R. § 2560.503-1. One subsection of those regulations is at the core of this case.
Subsection (g), titled “[m]anner and content of notification of benefit determination,” provides that the plan administrator shall provide a claimant with written notification of any adverse benefit determination. Id. § 2560.503-1(g)(1). And in those written notifications, the administrator shall set forth a “description of the plan’s review procedures and the time limits applicable to such procedures, including a statement of the claimant’s right to bring a civil action under section 502(a) of the Act following an adverse benefit determination.” Id. § 2560.503- 1(g)(1)(iv). We must decide whether this regulation requires plan administrators to inform claimants of plan-imposed time limits for bringing civil actions in their adverse benefit determinations. If it does, Defendants violated this provision by not including the plan deadline in the August 12, 2010 letter denying Mirza’s benefits.
As with any exercise in statutory interpretation, we
begin with the text. The parties, of course, offer competing
visions of what this regulation mandates. A claimant’s “right
to bring a civil action,” Mirza says, is one of the “review
procedures” for which “time limits” must be disclosed.
*11
Defendants respond that § 2560.503-1(g)(1)(iv) refers to two
distinct requirements. The first requirement is based on the
text that precedes the comma (i.e., notice of the plan’s review
procedures and applicable time limits for those procedures),
and the second is based on the text that follows (i.e., notice of
the right to sue). In other words, Defendants take the position
that the notice of the right to sue is in addition to and entirely
separate from the notice of the plan’s review procedures. As
one district court put it, “[t]hat the regulation requires
notification of time limits for plan review procedures but says
nothing about time limits with respect to civil actions
suggests that the [Department of Labor] did not intend to
require such a time limit notification in the benefit
determination.”
Heimeshoff v. Hartford Life & Accident Ins.
Co.
, No. 10-1813,
We disagree with Defendants’ view and find the plain language of the regulation supports Mirza’s construction. For purposes of interpretation, the most important word in the sentence is “including.” “[I]ncluding” modifies the word “description,” which is followed by a prepositional phrase explaining what must be described—the plan’s review procedures and applicable time limits for those procedures. If the description of the review procedures must “includ[e]” a statement concerning civil actions, then civil actions are logically one of the review procedures envisioned by the Department of Labor. And as with any other review *12 procedure, the administrator must disclose the plan’s applicable time limits.
Defendants’ arguments to the contrary fail to explain
how the clause regarding the right to sue fits within the
structure of the sentence. The argument that the language
speaks to time limits for plan procedures but is silent as to
time limits for civil actions reads the word “including” out of
the regulation. It also assumes, without explanation, that civil
actions cannot be considered plan review procedures. But
that interpretation contravenes the text of the regulation. In
any case, to the extent § 2560.503-1(g)(1)(iv) is ambiguous,
we construe it broadly and in favor of Mirza because ERISA
is a remedial statute.
See Brown v. J.B. Hunt Transp. Servs.,
Inc.
,
Both Courts of Appeals that have addressed this issue
agree with our interpretation of the regulation.
See Moyer v.
Metro. Life Ins. Co.
,
Defendants direct us to two other cases from the
Courts of Appeals.
See Scharff v. Raytheon Co. Short Term
Disability Plan
,
Defendants offer additional arguments against finding a regulatory violation. They suggest that Mirza’s reading of the regulation would put plan administrators in the precarious *15 position of having to provide legal advice to plan participants. Defendants argue that, where an ERISA plan itself does not contain a limitations period, the administrators would have to research the applicable statute of limitations for judicial review, which may vary from state to state and claimant to claimant. These are reasonable concerns, but our holding is narrower than that feared by Defendants. We conclude only that § 2560.503-1(g)(1)(iv) requires written disclosure of plan-imposed time limits on the right to bring a civil action. We express no view on the applicability of this provision to ERISA plans that are silent as to limitations periods and thus borrow from analogous state-law claims.
Defendants argue that ERISA requires only substantial compliance, not strict compliance, and that, at most, any shortcoming in the denial letter was a technical violation of the regulations. We acknowledge courts have found that, as Defendants observe, substantial compliance with ERISA’s notice requirements is all that is necessary. See, e.g. , Gagliano v. Reliance Standard Life Ins. Co. , 547 F.3d 230, 237 (4th Cir. 2008). We agree with the Sixth Circuit in concluding that the “failure to include the judicial review time limits in the adverse benefit determination letter renders the letter not in substantial compliance with § 1133.” Moyer , 762 F.3d at 506. One of the purposes of 29 U.S.C. § 1133, which is the statutory foundation for the regulations governing claims procedures, is to provide claimants with adequate information to ensure effective judicial review. See id. at 507; Brown , 586 F.3d at 1086. The disclosure of a reduced time limitation in a denial letter ensures a fair opportunity to review by making it readily apparent to a claimant that he or *16 she may have only one year—or even much less than that — before the courthouse doors close.
Accordingly, we hold that 29 C.F.R. § 2560.503- 1(g)(1)(iv) requires that adverse benefit determinations set forth any plan-imposed time limit for seeking judicial review. Without this time limit, a notification is not in substantial compliance with ERISA. Defendants in this case violated this regulation by not including in the August 12, 2010 denial letter the plan’s one-year deadline for bringing a civil action.
B. According to Defendants, none of our analysis thus far matters. They argue that regardless of whether there is a regulatory violation, there is no basis for equitably tolling the contractual limitation because Mirza was on notice of the one-year filing deadline. The District Court agreed. It found that Mirza’s law firm, Callagy Law, was informed of the time limit during a November 2010 phone call and received the plan documents with the deadline in April 2011. Though Callagy Law acquired this information during its representation of another client (Spine), the District Court nonetheless imputed Callagy Law’s notice to Mirza.
Assuming Mirza was in fact on notice, Defendants’
argument is not without some support. As mentioned earlier,
the Second Circuit, in an unpublished opinion, concluded that
*17
a claimant’s delay in filing her ERISA suit could not be saved
by the defendant’s alleged violation of § 2560.503-1(g)(1)(iv)
because she conceded she had a copy of the plan that
contained
the
three-year
limitations provision.
See Heimeshoff
,
Though we have some doubt as to whether the District Court erred in finding Mirza on notice through his law firm, [8] we need not decide that issue. In our view, the doctrine of equitable tolling should not bear on Mirza’s case. If we *18 allowed plan administrators in these circumstances to respond to untimely suits by arguing that claimants were either on notice of the contractual deadline or otherwise failed to exercise reasonable diligence, plan administrators would have no reason at all to comply with their obligation to include contractual time limits for judicial review in benefit denial letters. Instead, they could almost invariably argue that the contractual deadline was in the plan documents and that claimants are charged with knowledge of this fact. But that approach would render hollow the important disclosure function of § 2560.503-1(g)(1)(iv). As we mentioned earlier, we believe claimants are much more likely to read benefit denial letters than the voluminous descriptions of their entire ERISA plans.
The better course here is to set aside the plan’s one-
year deadline for filing suit. We have previously found that
“[w]hen a letter terminating or denying Plan benefits does not
explain the proper steps for pursuing review of the
termination or denial, the Plan’s time bar for such a review is
not triggered.”
Epright
,
III. For the foregoing reasons, we vacate the order of the District Court and remand for further proceedings consistent with this opinion.
Notes
[1] Section 502(a) is codified in 29 U.S.C. § 1132(a).
[2] Spine is not a party to this litigation.
[3] The District Court had jurisdiction under 28 U.S.C. §§ 1331 and 1367, and we have jurisdiction to review the District Court’s final order under 28 U.S.C. § 1291. We exercise plenary review over the District Court’s grant of summary judgment and will affirm only if, “viewing the underlying facts and all reasonable inferences therefrom in the light most favorable to the party opposing the motion, we conclude that
[5] For reasons explained below, we disagree with the finding in Heimeshoff that a claimant’s notice of the filing deadline can work to the benefit of a defendant who violates the terms of § 2560.503-1(g)(1)(iv).
[6] See, e.g. , Northlake Reg’l Med. Ctr. v. Waffle House Sys. Emp. Benefit Plan , 160 F.3d 1301, 1304 (11th Cir. 1998) (finding ninety-day deadline reasonable).
[7]
Moyer
,
[8] See Epright v. Envtl. Res. Mgmt., Inc. Health & Welfare Plan , 81 F.3d 335, 342 (3d Cir. 1996) (“The fact that [plaintiff’s] attorney had a copy of the plan, and thus the means to ascertain the proper steps for requesting review, in no way excuses [defendant’s] failure to comply with the Department of Labor’s regulations.”).
[9]
See also Syed v. Hercules Inc.
, 214 F.3d 155, 162 (3d Cir.
2000) (“Where a termination letter does not comply with the
statutory and regulatory requirements, the time limits for
bringing an administrative appeal are not enforced against the
claimant.”);
Burke v. Kodak Ret. Income Plan
,