Opinion
Case No. 5:02-CV-2
January 30, 2003
OPINION
Before the Court is Plaintiff, Daniel Smith's ("Smith"), Motion for Judgment on the Administrative Record under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 to 1461, of Defendant Iron Workers' Local No. 25 Pension Plan's ("Pension Plan") denial of early retirement benefits to Smith. After a thorough review of the record, the Court will dismiss Smith's claim without prejudice because Smith failed to exhaust his administrative remedies under the Pension Plan prior to filing suit.
Facts and Procedural History
Smith is a participant in the Pension Plan within the meaning of ERISA § 3(7), 29 U.S.C. § 1002(7), and in accordance with the terms of the Pension Plan, by virtue of his employment with various qualified employers in the iron working industry and his membership in Local Union No. 25 of the International Association of Bridge, Structural, Ornamental, and Reinforcing Iron Workers. The Pension Plan is an employee benefit plan within the meaning of ERISA § 3(2), 29 U.S.C. § 1002(2), and is administered by the Trustees of the Iron Workers' Local No. 25 Pension Trust ("Trustees"). The Pension Plan was amended and restated by the Trustees, effective February 1, 2000. (Amend. Rest. of Iron Workers Local 25 Pension Plan, Defs.' Proposed Administrative R. (hereinafter "D.P.A.R.") Exs. 1-5.)
Smith applied for the "30 years and out, minimum age 50," unreduced, early retirement benefits under the Pension Plan. On May 18, 2000, Smith was informed that his request for early retirement benefits was declined, and that he may appeal this decision to the Trustees. (Letter from Chamblin to Smith of 5/18/00, D.P.A.R. Ex. 7.) Smith sent a letter of appeal to the Trustees dated August 7, 2000. (Letter from Smith to Trustees of 8/7/00, D.P.A.R. Ex. 7.) In a letter dated October 2, 2000, the Pension Fund's Administrative Manager, James Horvath, notified Smith that the Trustees denied Smith's benefit request at the Trustees' September 21, 2000, meeting. (Letter from Horvath to Smith of 10/2/00, D.P.A.R. Ex. 7.) On October 5, 2000, Smith requested a copy of the Pension Plan language upon which the Trustees relied to support the Trustees' denial of Smith's benefit request. (Mem. from Chamblin to Horvath of 10/5/00, D.P.A.R. Ex. 7.) In a letter dated October 6, 2000, Pension Examiner Mary Chamblin explained to Smith the Trustees' reasons for rejecting Smith's benefit request and enclosed a copy of the Pension Plan. (Letter from Chamblin to Smith of 10/6/00, D.P.A.R. Ex. 7.) The record indicates that neither Smith, nor his attorney, Elizabeth M. Madigan, further contacted the Trustees or other Pension Plan representatives until February 22, 2001.
While Smith's Complaint does not state under which provision of the Pension Plan Smith is seeking benefits, the Court presumes Smith's benefit request was pursuant to the May 1, 2000, amendment to the Iron Workers' Local No. 25 Pension Plan contained in Appendix A, because the previous versions of the Pension Plan did not contain an unreduced, early retirement benefit for fifty-year-old participants. (Amend. Rest. of Iron Workers Local 25 Pension Plan, App. A at iv, D.P.A.R. Ex. 4.)
The Pension Plan provides a detailed appellate process for claimants whose benefits claims are denied. Sections 7.6 and 7.7 of Article VII set forth the Pension Plan's appellate procedure. (Amend. Rest. of Iron Workers Local 25 Pension Plan, Art. VII, §§ 7.6, 7.7, D.P.A.R. Ex. 4.) Section 7.6 states that a claimant may file a written claim for benefits with the Trustees, and the Trustees must respond in writing within ninety days after the application is filed. (Id. at § 7.6.) If the Trustees deny the claimant's benefit request, the Pension Plan entitles the claimant to a hearing before the Trustees:
7.7 CLAIM REVIEW PROCEDURE
Any Participant, former Participant, or Beneficiary of either, who has been denied a benefit by a decision of the Trustees shall be entitled to request the Trustees to give further consideration to his claim by filing with the Trustees (on a form which may be obtained from the Trustees) a request for a hearing. Such request, together with a written statement of the reasons why the claimant believes his claim should be allowed, shall be filed with the Trustees no later than sixty (60) days after receipt of the written notification that the claim was denied. The Trustees shall then conduct a hearing within the next sixty (60) days, at which the claimant may be represented by an attorney or any other representative of his choosing and at which the claimant shall have an opportunity to submit written and oral evidence and arguments in support of his claim. At the hearing (or prior thereto upon five (5) business days written notice to the Trustees) the claimant or his representative shall have an opportunity to review all documents in the possession of the Trustees which are pertinent to the claim at issues and its disallowance. Either the claimant or the Trustees may request that a court reporter attend the hearing and record the proceedings. . . . A final decision as to the allowance of the claim shall be made by the Trustees within sixty (60) days of receipt of the appeal . . . Such communication shall be written in a manner calculated to be understood by the claimant and shall include specific reasons for the decision and specific references to the pertinent Plan provisions on which the decision is based. . . .
(Id., Art. VII, § 7.7 (capitalization in original).)
Discussion
Defendants contend that Smith's suit is not properly before the Court, because Smith failed to exhaust his administrative remedies under the Pension Plan. (Defs.' Br. Resp. Pl.'s Br. Regarding Proper Standard Review Proper Analysis D.P.A.R. at 5.) Under the administrative scheme of ERISA, a claimant may not file suit in federal court until the claimant has exhausted all administrative remedies available under the claimant's pension plan. Miller v. Metro. Life Ins. Co., 925 F.2d 979, 986 (6th Cir. 1991) ("The administrative scheme of ERISA requires a participant to exhaust his or her administrative remedies prior to commencing suit in federal court."). "[T]he exhaustion requirement enables plan fiduciaries to `efficiently manage their funds; correct their errors; interpret plan provisions; and assemble a factual record which will assist a court in reviewing the fiduciaries' actions.'" Baxter v. C.A. Muer Corp., 941 F.2d 451, 454 (6th Cir. 1991) (per curiam) (quoting Makar v. Health Care Corp. of Mid-Atlantic, 872 F.2d 80, 83 (4th Cir. 1989)). The exhaustion requirement "is the law in most circuits despite the fact that ERISA does not explicitly command exhaustion." Ravencraft v. UNUM Life Ins. Co. of Am., 212 F.3d 341, 343 (6th Cir. 2000). Unless the court finds that the claimant does meets any of the exceptions to the exhaustion requirement, including futility of the administrative process or inadequacy of the administrative remedy, Baxter, 941 F.2d at 453 (citing Springer v. Wal-Mart Ass'n Group Health Plan, 908 F.2d 897, 899 (11th Cir. 1990)), the court will dismiss the claimant's suit without prejudice, Ravencraft, 212 F.3d at 344 (holding that dismissal without prejudice is proper when dismissing an action solely for failure to exhaust administrative remedies).
Smith did not request a hearing before the Trustees pursuant to Section 7.7 of the Pension Plan prior to filing suit in this Court. (Compl. ¶¶ 10, 11.) Smith, therefore, has failed to exhaust his administrative remedies. The Court will dismiss Smith's suit without prejudice, unless Smith has demonstrated that he meets any of the exceptions to the exhaustion requirement, including futility of the administrative process or inadequacy of the administrative remedy.
Smith contends that exhaustion would be futile. (Compl. ¶ 11.) In support of his contention, Smith cites attorney Cynthia J. Billings' letter to Madigan of May 15, 2001, in which Billings stated:
Please find enclosed a copy of the Iron Workers' Local No. 25 Trust Agreement. As far as the application for benefits, a copy of the application was recently forwarded to Mr. Smith pursuant to his request from the Fund office. Please be advised, however, that his application will be rejected if he submits same prior to attaining eligibility of benefits.
(Letter from Billings to Madigan of 5/15/01, D.P.A.R. Ex. 7.) The record indicates that Billings' May 15, 2001, letter to Madigan was in response to Madigan's letter to Billings of May 8, 2001, in which Madigan requested:
Please also provide me with the forms necessary for Mr. Smith to apply for his retirement pension under the "30 years of service/any age" special retirement provisions of the contract.
(Letter from Madigan to Billings of 5/8/01, D.P.A.R. Ex. 7.) Thus, Billings' statement that Smith's "application will be rejected" merely conveyed that the Trustees would reject Smith's resubmitted benefits application just as they had rejected his original benefits application. Billings' letter does not reference Smith's right to a hearing before the Trustees pursuant to Section 7.7, or state that Smith's Section 7.7 appeal would be denied. Rather, Billings' letters simply says that if Smith repeats the first step in the benefits application process, his request will be met with a consistent result. As there is no additional evidence in the Administrative Record that an appeal by Smith pursuant to Section 7.7 would have been futile, the Court will accordingly dismiss Smith's suit without prejudice for failure to exhaust his administrative remedies under the Pension Plan.
Conclusion
For the foregoing reasons, Smith's claim will be dismissed without prejudice. An order consistent with this opinion with be entered.
ORDER
In accordance with the Opinion filed on this date,
IT IS HEREBY ORDERED that Plainfiff's Motion for Judgment on the Administrative Record (Docket No. 37) under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 to 1461, of Defendants' denial of early retirement benefits is DENIED, on grounds that Plaintiff failed to exhaust his administrative remedies under the Iron Workers' Local No. 25 Pension Plan prior to filing suit in this Court.
IT IS FURTHER ORDERED that Plaintiff's Complaint (Docket No. 1) is DISMISSED WITHOUT PREJUDICE.
This case is CLOSED.