This article was published in the Chicago Daily Law Bulletin on June 11, 2015.
By Mark D. DeBofsky
Mark D. DeBofsky is a name partner of DeBofsky, Sherman & Casciari, PC. He handles civil and appellate litigation involving employee benefits, disability insurance and other insurance claims and coverage, and Social Security law. He can be reached at firstname.lastname@example.org.
The issue presented in a recent 9th U.S. Circuit Court of Appeals case is a simple one - if the 180-day deadline for appealing an employee benefit claim falls on a weekend, is the deadline extended to the following business day?
The court said yes:
"We hold that because the last day of the appeal period fell on a Saturday, neither that day nor Sunday count in the computation of the 180 days. As LeGras mailed his notice of appeal on Monday, it was timely. This method of counting time is widely recognized and furthers the goals and purposes of the Employee Retirement Income Security Act. ... We therefore adopt it as part of ERISA's federal common law." LeGras v. Aetna Life Insurance Co., 2015 WL 3406182 (9th Cir. May 28, 2015).
Plaintiff Andre LeGras, who had worked as a ramp transport driver for Federal Express Corp. for 23 years, suffered a career-ending back injury. Although he was initially approved to receive disability benefits under FedEx's long-term disability plan, he was notified that he was no longer deemed disabled on April 18, 2011.
The notification letter informed LeGras that he had 180 days to appeal if he wished to contest the determination. That deadline fell on Oct. 15, 2011, a Saturday. However, LeGras mailed his appeal on Oct. 17, the following Monday.
The plan deemed the appeal untimely and rejected it. The district court agreed and upheld the dismissal of the complaint based on the plaintiff's failure to submit a timely claim appeal, however, the 9th Circuit reversed.
Under ERISA, benefit plans are required to provide an opportunity to any claimant whose benefits have been denied "a full and fair review ... of the decision denying the claim." 29 U.S.C. Section 1133(2).
The Labor Department has prescribed detailed regulations implementing that provision (29 C.F.R. Section 2560.503-1), which include a provision that allows claimants "at least 180 days following receipt of a notification of an adverse benefit determination within which to appeal."
However, there is no regulation that specifies a method for computing time or that offers any guidance as to what occurs when the deadline falls on a weekend or holiday.
The 9th Circuit observed that ERISA is a remedial statute and that the courts have been directed to develop a common law that furthers ERISA's purposes and construes the law liberally to protect participants in employee benefit plans. See, e.g., Schikore v. BankAmerica Supplemental Retirement Plan, 269 F.3d 956 (9th Cir. 2001) (incorporating "mailbox rule" ) and Saltarelli v. Bob Baker Group Medical Trust, 35 F.3d 382 (9th Cir. 1994) (adopting doctrine of "reasonable expectations" when interpreting insurance contracts).
The court also pointed out that the extension of a deadline that falls on a weekend to the following business day is well recognized, stretching back as far as 1890. Street v. U.S., 133 U.S. 299, 306 (1890).
The Federal Rules of Civil Procedure also embody the doctrine of extending deadlines in such a manner. Rule 6 applies this principle to "any local rule or court order, or in any statute that does not specify a method of computing time." And the court identified a host of other federal regulations that incorporate the same methodology.
Thus, the court determined that extending deadlines falling on weekends to the next business day "protects the interests of insureds, thereby effectuating the policy goals of ERISA."
A lengthy dissent was filed by Judge N.R. Smith, who deemed the majority opinion as simply "bailing LeGras out." The dissent utilized a strict contractual argument and found no ambiguity in the deadline.
The dissent was further troubled because LeGras could have mailed his appeal on Saturday to preserve his rights yet failed to do so. Thus, the dissent found no need to extend federal common law to adopt the Rule 6 principle into the ERISA claim regulations.
While it may seem that a 180-day deadline to submit a claim appeal is generous, that is not necessarily so in matters as complex as disability claims.
First, claimants may not immediately seek legal representation. There also may be delays in securing a copy of the claim file from the plan administrator, a critical part of every claim appeal. Disability claimants also are frequently in the middle of treatment and obtaining records and medical reports can be exceptionally time-consuming.
Additional testing may be necessary. And because of the vocational aspects of disability claims, having the claimant evaluated by a vocational rehabilitation consultant often takes a significant amount of time. Thus, claimants are often furiously racing against the clock to meet the claim submission deadline.
Nor have courts been overly generous in creating federal common law benefiting claimants whose claims are submitted after the 180-day deadline. For example, in Gayle v. United Parcel Service Inc., 401 F.3d 222 (4th Cir. 2005), the 4th Circuit refused to apply the equitable tolling doctrine to an attorney's neglect in submitting a timely appeal, and the claim was barred in its entirety.
Further, while many courts have recognized a substantial compliance doctrine in excusing plan administrators who fail to decide claim appeals within the deadlines set forth in the ERISA regulations (a maximum of 90 days for disability benefit claim appeals) in Edwards v. Briggs & Stratton Retirement Plan, 639 F.3d 355 (7th Cir. 2011), the 7th Circuit refused to recognize the same substantial compliance forgiveness to a plaintiff whose appeal submission was a few days tardy. (Note: I represented the plaintiff in the Edwards case.)