The opinion
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TENNESSEE
WESTERN DIVISION
PHILLIP DAVID HASKETT, )
)
Plaintiff, )
) No. 2:19-cv-02355-TLP-dkv
v. )
) JURY DEMAND
SOUTHERN BENEFIT )
ADMINISTRATORS, INC., et al., )
)
Defendants. )
ORDER ADOPTING REPORT AND RECOMMENDATION
Plaintiff Phillip David Haskett sued thirteen Defendants pro se under the Employee
Retirement Income Security Act of 1974 (“ERISA”), 29 U.S. Code § 1132(a)(1)(B).1 (ECF
No. 1; ECF No. 22.) Three Defendants—Board of Trustees, Ironworkers Local Union No. 167
Pension Fund; International Association of Bridge, Structural and Ornamental Ironworkers
Local Union No. 167; and Ironworkers Local Union No. 167 Pension Fund—moved to dismiss
Plaintiff’s complaint for failure to state a claim or, in the alternative, to hold the case in
abeyance pending more administrative proceedings. (ECF No. 25.) Plaintiff responded to
Defendants’ motion. (ECF No. 27.) And Defendants did not reply.
The Court referred this case to the Magistrate Court for determination of all pretrial
matters under Administrative Order 2013-05. The Magistrate Court entered a Report and
Recommendation (“R&R”) recommending that the Court grant Defendants’ motion to dismiss
1 Plaintiff filed his initial complaint on May 31, 2019. (ECF No. 1.) He later amended his
complaint on August 22, 2019. (ECF No. 22.)
in part, and that the Court stay this case pending remand for further administrative proceedings.
(ECF No. 30.)
For the reasons below, the Court ADOPTS the R&R in full. The Court thus GRANTS
IN PART AND DENIES IN PART Defendants’ motion to dismiss and STAYS this case
pending remand for further administrative proceedings.
I. The R&R2
A. Failure to Exhaust Administrative Remedies as Properly Presented in a Fed.
R. Civ. P. 12(b)(6) Motion
The first issue that the Magistrate Judge analyzed in the R&R is whether a Fed. R. Civ. P.
12(b)(6) motion “is the proper motion to bring when asserting failure to exhaust administrative
remedies.” (Id. at PageID 386.) The Magistrate Judge determined that Defendants’ “motion to
dismiss is properly presented under Rule 12(b)(6).” (Id. at PageID 389.)
She explained that “[a] Rule 12(b)(6) motion is appropriate where reference to the
affirmative defense of failure to exhaust appears from the face of the plaintiff’s complaint.”
(Id.) (citing Beamon v. Assurant Emp. Benefits, 917 F. Supp. 2d 662, 666 (W.D. Mich. 2013);
Zappley v. The Stride Rite Corp., 2010 WL 234713, at *4 (W.D. Mich. Jan. 13, 2010)).
The Magistrate Judge made these observations about Plaintiff’s complaint:
[Plaintiff]’s amended complaint contains several specific allegations relating to
the issue of exhaustion of required administrative remedies: (i) that he was told
he was “not a participant in the Local [] 167 Plan, and is therefore without any
right to appeal the decision denying his application for pension benefits”; (ii) that
SBA “denied his appeal on February 12, 2019” claiming it was not timely; and
(iii) that he “has fully exhausted his administrative remedies.”
(ECF No. 30 at PageID 389) (quoting ECF No. 22 at PageID 236.)
2 The Court ADOPTS the R&R’s proposed findings of fact in whole. (See ECF No. 30 at
PageID 378–83.)
As a result of these allegations, the Magistrate Judge found that “the defense of
exhaustion of administrative remedies is properly presented in the Rule 12(b)(6) motion.” (Id.)
B. Exhaustion of Administrative Remedies
The second issue that the Magistrate Judge decided in the R&R is whether Plaintiff
exhausted his administrative remedies before suing. (See id. at PageID 389–92.) She
concluded that Plaintiff did not. (Id. at PageID 392.)
The Magistrate Judge explained that, “while the text of ERISA does not explicitly require
exhaustion, the Sixth Circuit has held ‘[t]he administrative scheme of ERISA requires a
participant to exhaust his or her administrative remedies prior to commencing suit in federal
court.’” (Id. at PageID 390) (quoting Miller v. Metro. Life Ins. Co., 925 F.2d 979, 986 (6th Cir.
1991)).
The Magistrate explained why courts require exhaustion under ERISA.
Exhaustion aims to: (i) reduce the number of frivolous lawsuits; (ii) promote the
consistent treatment of claimants; (iii) provide a non-adversarial method of claims
settlement; (iv) minimize the cost of claims settlement for all concerned; (v)
enhance the ability of trustees of benefit plans to expertly and efficiently manage
their funds by preventing premature judicial intervention in their decision-making
processes; (vi) enhance the ability of trustees of benefit plans to correct their
errors; (vii) enhance the ability of trustees to interpret plan provisions; and (viii)
help assemble a factual record which will assist a court in reviewing the
fiduciaries’ actions.
(Id. at PageID 390–91) (citing Barix Clinics of Ohio, Inc. v. Longaberger Family of Cos. Grp.
Med. Plan, 459 F. Supp. 2d 617, 621–22 (S.D. Ohio 2005)).
The Magistrate Judge found that, “[d]espite being told he had no right to appeal,
[Plaintiff] ‘promptly filed a written appeal pursuant to the procedures enumerated in the [Local
167 Summary Plan Description (“SPD”)] booklet’ by sending a letter in which he stated, ‘please
consider this letter to be my appeal.’” (Id. at PageID 391) (quoting ECF No. 22 at PageID 236.)
The Magistrate Judge noted that Defendant Southern Benefit Administrators, Inc.
informed Plaintiff “that he ‘had no right to appeal under the Plan.’” (Id.) (quoting ECF No. 20-
2.) She then found that, although Plaintiff filed this lawsuit in May (see ECF No. 1), “[i]t was
not until July 15, 2019 that the Local 167 Defendants communicated to [Plaintiff] that the Board
of Trustees had ‘agreed to hear [his] appeal of the denial of [his] pension benefits.’” (ECF No.
30 at PageID 391) (quoting ECF No. 25-3.)
Given these developments, the Magistrate Court determined that, “[d]espite [Plaintiff]’s
allegation that he has exhausted his administrative remedies, it appears from the face of the
amended complaint that the Board of Trustees—the only entity authorized by the Plan to
interpret the Plan—has yet to decide [Plaintiff]’s application for benefits.” (Id. at PageID 392.)
Thus, the Magistrate Judge found that Plaintiff had not exhausted administrative remedies under
ERISA. (Id.)
C. Remand for Further Administrative Proceedings
The third and final issue that the Magistrate Judge decided in the R&R is whether this
Court “should remand this case back to the plan administrator for further proceedings.” (Id. at
PageID 392.) The Magistrate Judge found that such a remand is warranted. (Id. at PageID
397.)
The Magistrate Court explained that “the Sixth Circuit listed three circumstances where
remand is appropriate: (i) where the decision to deny benefits suffers from a procedural defect
(e.g., non-compliance with ERISA’s appeal-notice requirements); (ii) where the initial
decisionmaker fails to provide adequate reasoning for its denial; and (iii) where the factual
record is incomplete.” (Id. at PageID 398) (citing Shelby Cty. Health Care Corp. v. Majestic
Star Casino, 581 F.3d 355, 373 (6th Cir. 2009)).
The Magistrate Judge found that all three circumstances are present here. (See id. at
PageID 394.) First, she found that Plaintiff “alleges that SBA’s denial letter was ‘devoid of any
documentation or accounting . . . to support [its] decision to deny [his] application for pension
benefits.’” (Id.) (quoting ECF No. 22 at PageID 235.) This allegation, according to the
Magistrate Judge, constitutes “a claim that SBA failed to comply with ERISA’s appeal-notice
requirements and that SBA failed to provide adequate reasoning for its denial.” (Id.) (citing 29
U.S.C. § 1133(1)).
Second, the Magistrate Judge found that the “allegations regarding SBA’s allegedly
improper handling of his claim also underscores the fact that the Board of Trustees have yet to
decide [Plaintiff]’s application for benefits.” (Id.) And because “the Board of Trustees—not
SBA—is the actual administrator of the Local 167 Defendants’ fund,” it “should have a chance
to fully explain the grounds for [Plaintiff]’s benefit determination.” (Id. at 394–95) (citing
Hackney v. Lincoln Nat. Life Ins. Co., 2012 WL 13343, at *5 (W.D. Ky. Jan. 4, 2012)).
Third, the Magistrate Judge found that “[r]emand . . . will help to further develop the
factual record—'enabling [the Local 167 Defendants] to consider [Plaintiff’s] claims before
premature judicial intervention.’” (Id. at PageID 395) (quoting Coomer v. Bethesda Hosp., Inc.,
370 F.3d 499, 506 (6th Cir. 2004)). To this point, she emphasized that “[a]n incomplete factual
record, alone, is a basis to remand an ERISA case back to the plan administrator.” (Id.) (citing
Majestic Star Casino, 581 F.3d at 373).
As a result of these findings, the Magistrate Judge recommended that this Court should
remand this case “so that the Board of Trustees can make a final determination regarding
[Plaintiff]’s right to pension benefits based on a more complete factual record.” (Id. at PageID
397) (citing Majestic Star Casino, 581 F.3d at 373). That said, the Magistrate Judge found that,
“[r]ather than dismiss this action,” this Court should stay this action pending more
administrative proceedings. (Id.)
II. Disposition
Under Fed. R. Civ. P. 72(b)(2), “[w]ithin 14 days of being served with a copy of the
recommended disposition, a party may serve and file specific written objections to the proposed
findings and recommendations.” Fed. R. Civ. P. 72(b)(2). Neither party objected to the R&R,
and the time for filing objections has expired. See Fed. R. Civ. P. 5(b)(2), 6(d), 72(b)(2).
“When no timely objection is filed, the court need only satisfy itself that there is no clear
error on the face of the record in order to accept the recommendation.” Fed. R. Civ. P. 72(b)
advisory committee notes.
Plaintiff did not file any objections to the Magistrate Judge’s R&R. Having reviewed the
R&R and the record here, the Court finds no clear error and ADOPTS the R&R in its entirety.
Thus, the Court GRANTS IN PART AND DENIES IN PART Defendants’ motion to dismiss
and STAYS this case pending remand for further administrative proceedings.
SO ORDERED, this 20th day of February, 2020.
s/Thomas L. Parker
THOMAS L. PARKER
UNITED STATES DISTRICT JUDGE