Theriot v. Building Trades United Pension Trust Fund

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF LOUISIANA

DEBORAH THERIOT CIVIL ACTION

VERSUS No. 18-10250

BUILDING TRADES UNITED

PENSION TRUST FUND SECTION I

ORDER & REASONS

Before the Court is a motion1 for reconsideration filed by plaintiff Deborah

Theriot (“Theriot”) for reconsideration of this Court’s July 17, 2019 order and reasons

(“Order & Reasons”),2 granting in part defendant Building Trades United Pension

Trust Fund’s (the “Fund”) motion3 to dismiss. The Court dismissed counts I and IV

of Theriot’s second amended complaint with prejudice for failure to exhaust

administrative procedures and counts II and V without prejudice for failure to state

a claim for relief.4

Theriot asserted her claims and this present motion in her capacity as the

court-appointed independent administrator of the Succession of Audry L. Hamann

(“the Estate”).5 Theriot brings the present motion for reconsideration pursuant to

Rule 54(b) of the Federal Rules of Civil Procedure and requests that the Court

1 R. Doc. No. 74.

2 R. Doc. Nos. 51.

3 R. Doc. No. 10-1.

4 R. Doc. No. 51.

5 R. Doc. No. 44, at 1. Initially, Theriot asserted her claims in her individual capacity,

but at a May 29, 2019 status conference, Theriot stated that she was no longer

asserting her claims in her individual capacity. R. Doc. No. 37.

reconsider and reverse its order dismissing counts I, II, IV, and V of her second

amended complaint.6 The Fund opposes her motion.7

The Court assumes familiarity with the factual background of the case. See

Theriot v. Building Trades United Pension Trust Fund, No. 18-10250, 2019 WL

3220106 (E.D. La. July 17, 2019).8

Legal Standard

I.

Reconsideration of interlocutory orders is governed by Federal Rule of Civil

Procedure 54(b). Namer v. Scottsdale Ins. Co., 314 F.R.D. 392, 393 (E.D. La. Apr. 5,

2016) (Africk, J.) (citing McKay v. Novartis Pharm. Corp., 751 F.3d 694, 701 (5th Cir.

2014)). Rule 54(b) provides that, in a case involving multiple claims or multiple

parties, “any order or other decision, however designated, that adjudicates fewer than

all the claims or the rights and liabilities of fewer than all the parties . . . may be

revised at any time before the entry of a judgment adjudicating all the claims and all

the parties’ rights and liabilities.” “Under Rule 54(b), the trial court is free to

reconsider and reverse its decision for any reason it deems sufficient, even in the

absence of new evidence or an intervening change in or clarification of the substantive

law.” Austin v. Kroger Texas, L.P., 864 F.3d 326, 336 (5th Cir. 2017) (internal citations

omitted).

6 R. Doc. No. 74-2, at 2–3, 24.

7 R. Doc. No. 82.

8 R. Doc. No. 51.

2

Compared to Rule 59(e) of the Federal Rules of Civil Procedure—which governs

motions to alter or amend final judgments—“Rule 54(b)’s approach to the

interlocutory presentation of new arguments as the case evolves [is] more flexible,

reflecting the inherent power of the rendering district court to afford such relief from

interlocutory judgments as justice requires.” Id. at 337 (internal citations omitted).

For example, unlike in a Rule 59(e) determination, a court conducting a Rule 54(b)

inquiry may consider new arguments that could have been previously raised. See

McClendon v. U.S., 892 F.3d 775, 781 (5th Cir. 2018).

When deciding whether to grant a Rule 54(b) motion, courts must “construe

the procedural rules with a preference toward resolving the case on the merits” and

weigh “the interests of justice.” Austin, 864 F.3d at 337–38. However, courts should

exercise their power “sparingly in order to forestall the perpetual reexamination of

orders and the resulting burdens and delays,” which disserve the interests of justice.

Ha Thi Le v. Lease Fin. Grp., LLC, No. 16-14867, 2017 WL 2911140, at *2 (E.D. La.

July 7, 2017) (Africk, J.) (quoting Castrillo v. Am. Home Mortg. Servicing Inc., No. 09-

4369, 2010 WL 1424398, at *3 (E.D. La. Apr. 5, 2010) (Vance, J.)).

The parties do not dispute that the instant motion was properly filed pursuant

to Rule 54(b), as this Court’s Order & Reasons constitutes an interlocutory order that

did not adjudicate all the claims.9 However, the Fund argues that this Court should

apply the 59(e) standard—which requires a party to show “manifest errors of law or

9 See R. Doc. No. 82, at 2–4; R. Doc. No. 74-2, at 2–3. Count III of Theriot’s second

amended complaint remains pending. See R. Doc. No. 51, at 1–2, n.2.

3

fact or newly discovered evidence,” Austin, 864 F.3d at 336 (internal citations

omitted)—because it was common practice in this circuit to do so before Austin was

decided, Austin and McClendon authorized this practice to continue, and district

courts have continued to apply the Rule 59(e) standard to Rule 54(b) motions for

reconsideration since Austin.10

The Fund misinterprets Austin and McClendon and relies on district court

opinions that do not in fact continue to apply the Rule 59(e) standard to Rule 54(b)

motions. In Austin, the Fifth Circuit specifically reversed the district court’s order

denying a motion for reconsideration under Rule 54(b) because the district court

applied the Rule 59(e) standard. Id. at 336–37. The Fifth Circuit explained that “Rule

54(b) is less stringent than Rule 59(e),” as Rule 59(e) “serves the narrow purpose of

allowing a party to correct manifest errors of law or fact to present newly discovered

evidence,” whereas Rule 54(b) is “more flexible, reflecting the inherent power of the

rendering district court to afford such relief from interlocutory judgments as justice

requires.” Id. (internal citations omitted).

In McClendon, the Fifth Circuit, following its decision in Austin, noted that

“[i]f the district court had relied only on its first basis for denying the motion—that

[plaintiff] could not raise his limitation of liability argument for the first time in a

motion to reconsider under Rule 59(e), we would be required under Austin to vacate

the district court’s denial of the motion to reconsider and remand for application of

the correct standard,” but because the district court also determined that the motion

10 See R. Doc. No. 82, at 3.

4

failed on the merits, the court properly exercised its discretion in affirming its prior

decision and denying the motion. 892 F.3d at 781–82.

II.

Theriot moves this Court to reconsider its dismissal of counts I, II, IV, and V

of her second amended complaint, all dismissed pursuant to Federal Rule of Civil

Procedure 12(b)(6). Under Rule 12(b)(6), a district court may dismiss a complaint or

part of a complaint when a plaintiff fails to set forth well-pleaded factual allegations

that “raise a right to relief above the speculative level.” Bell Atl. Corp. v. Twombly,

550 U.S. 544, 555 (2007); Cuvillier v. Taylor, 503 F.3d 397, 401 (5th Cir. 2007). The

complaint “must contain sufficient factual matter, accepted as true, to ‘state a claim

to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)

(quoting Twombly, 550 U.S. at 547)).

A facially plausible claim is one in which “the plaintiff pleads factual content

that allows the court to draw the reasonable inference that the defendant is liable for

the misconduct alleged.” Id. If the well-pleaded factual allegations “do not permit the

court to infer more than the mere possibility of misconduct,” then “the complaint has

alleged—but it has not ‘show[n]’—‘that the pleader is entitled to relief.’” Id. at 679

(quoting Fed. R. Civ. P. 8(a)(2)) (alteration in original).

In assessing the complaint, a court must accept all well-pleaded facts as true

and liberally construe all factual allegations in the light most favorable to the

plaintiff. Spivey v. Robertson, 197 F.3d 772, 774 (5th Cir. 1999). Furthermore, “the

Court must typically limit itself to the contents of the pleadings, including

5

attachments thereto.” Admins. of the Tulane Educ. Fund v. Biomeasure, Inc., No. 08-

5096, 2011 WL 4352299, at *3 (E.D. La. Sept. 6, 2011) (Vance, J.) (citing Collins v.

Morgan Stanley Dean Witter, 224 F.3d 496, 498 (5th Cir. 2000)). “[T]he Court may

consider documents that are essentially ‘part of the pleadings’—that is, any

documents attached to or incorporated into the plaintiff’s complaint by reference that

are central to the plaintiff’s claim for relief.” Zerangue v. Lincoln Nat’l Life Ins. Co.,

No. 19-1939, 2019 WL 2058984, at *2 (E.D. La. May 9, 2019) (Feldman, J.) (quoting

Causey v. Sewell Cadillac-Chevrolet, Inc., 394 F.3d 285, 288 (5th Cir. 2004)).

“Dismissal is appropriate when the complaint ‘on its face show[s] a bar to relief.’”

Cutrer v. McMillan, 308 F. App’x 819, 820 (5th Cir. 2009) (quoting Clark v. Amoco

Prod. Co., 794 F.2d 967, 970 (5th Cir. 1986)).

Count I

The Court dismissed count I of Theriot’s second amended complaint, a claim

for benefits pursuant to 29 U.S.C. § 1132(a)(1)(B), for failure to exhaust

administrative procedures.11 For the following reasons, the Court affirms its

dismissal of count I.

“Fifth Circuit precedent instructs that ‘claimants seeking benefits from an

ERISA plan [must] first exhaust available administrative remedies under the plan

before bringing suit to recover benefits.’” Zerangue, 2019 WL 2059894, at *2 (quoting

Crowell v. Shell Oil Co., 541 F.3d 295, 308 (5th Cir. 2008)). In order to trigger the

running of the administrative appeal period, notice of the adverse benefits

11 R. Doc. No. 51, at 29.

6

determination need only substantially comply with ERISA’s notice requirements. See

28 U.S.C. § 1133; 29 C.F.R. § 2560.503-1(g); see also McGowan v. New Orleans Emps.

Int’l Longshoremen’s Ass’n, 538 F. App’x 495, 498 (5th Cir. 2013).

I. Dismissal of Count I in This Court’s Order & Reasons

The Court found in its Order & Reasons, without opposition from the Fund,

that the Fund’s first benefit denial letter sent on April 18, 2017 did not substantially

comply with ERISA’s notice requirements and, therefore, did not trigger Theriot’s

sixty-day period to appeal the denial.12 The Court did find, however, that the Fund’s

second denial letter sent on March 2, 2018 was substantially compliant and thus

triggered Theriot’s sixty days to appeal.13 Theriot failed to appeal within this time

period, and therefore was precluded from seeking judicial review because she did not

exhaust administrative remedies.14

In order to trigger the running of the administrative appeal period, notice of

the adverse benefit determination need only substantially comply with ERISA’s

notice requirements, 28 U.S.C. § 1133 and 29 C.F.R. § 2560-503-1(g), under the

“substantial compliance doctrine.” McGowan v. New Orleans Emps. Int’l

Longshoremen’s Ass’n, 538 F. App’x 495, 498 (5th Cir. 2013) (“Strict compliance with

ERISA is not necessary . . . . Fifth Circuit precedent makes clear that substantial

compliance will suffice to trigger the running of the administrative appeal period.”)

12 Id. at 24. Under the Fund’s Pension Plan, a participant or claimant must request

review of a denial of benefits within sixty days of the participant’s or claimant’s

receipt of such denial. See R. Doc. No. 10-8, at 4 (Art. XIII, Section 3(b)(1), (c)(1)).

13 R. Doc. No. 51, at 24.

14 Id. at 26.

7

(per curiam) (citing Lacy, 405 F.3d at 257). “In assessing whether the administrator

has ‘substantially complied’ with the applicable procedural requirements, the court

must ‘consider[ ] all communications between an administrator and plan participant

to determine whether the information provided was sufficient under the

circumstances.’” Baptist Mem. Hosp.–DeSoto, Inc. v. Crain Automotive, Inc., 392 F.

App’x 288, 293 (5th Cir. 2010) (quoting Wade v. Hewlett-Packard Dev. Co. LP Short

Term Disability Plan, 493 F.3d 533, 539 (5th Cir. 2007), abrogated on other grounds

by Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 242 (2019)).

According to the Fund’s Pension Plan’s (“the Plan”)15 review procedures, an

initial denial by the administrator or Eligibility Committee can be reviewed by the

Eligibility Committee, but the request for review must be filed within sixty days of

the participant’s receipt of the denial.16 If the Eligibility Committee denies the claim

for benefits a second time, the participant can request a review by the Executive

Committee, but the participant must request review by the Executive Committee

within sixty days of the receipt of the Eligibility Committee’s decision upon review.17

When a claim for benefits is denied, the Plan, in accordance with 29 C.F.R. §

2560.501-1(g), requires that the Administrative Manager or the Eligibility

Committee of the Trustees (“Eligibility Committee”) provide the participant with

written or electronic notification that sets forth the specific reason(s) for the denial,

reference the specific provisions of the Plan that served as the basis for the denial,

15 See R. Doc. No. 20-1.

16 See id.

17 See id.

8

describe additional materials or information, if any, necessary for the participant to

perfect her claim and, where appropriate, explain why such information is

necessary.18 The Administrative Manager or Eligibility Committee must also provide

an explanation of the Plan’s review procedures within applicable time limitations.19

On January 5, 2018, Theriot’s then-counsel wrote to the Fund demanding the

value of the outstanding lump sum payment owed to the Estate.20 In response, by

letter dated March 2, 2018, Fund director Michael Gantert (“Gantert”) informed

Theriot that the Eligibility Committee had denied Theriot’s claim for Audry

Hamann’s (“Mrs. Hamann”) lump sum benefit, provided specific reasons for such

determination, provided the Plan provisions relied upon to reach that determination,

and attached the Plan’s review procedures, which clearly state that any appeal must

be filed within sixty days of receipt of such denial.21 Theriot’s next correspondence

with the Pension Fund was November 2, 2018, nearly eight months later.22

Theriot failed to explain in her opposition to the Fund’s motion to dismiss why

the March 2, 2018 letter did not comply with ERISA or provide proper notice of the

Plan’s review procedures.23 While the Pension Fund’s March 2, 2018 letter advised

18 R. Doc. No. 74-2, at 25; R. Doc. No. 10-8, at 4 (Art. XIII, Section 3(a)).

19 Id.

20 R. Doc. No. 10-10, at 1.

21 R. Doc. No. 10-8, at 4.

22 See R. Doc. No. 20-3. The November 2, 2018 letter was sent by Theriot’s current

counsel and requests a decision as to Theriot’s claim for Mrs. Hamann’s outstanding

lump sum benefit, “or, if [the Fund] believes such a decision to have been reached

previously, . . . an administrative appeal of that decision.” Id. at 1. Counsel’s

November 2, 2018 letter on Theriot’s behalf makes no mention of the Fund’s March

2, 2018 letter denying her claim for benefits.

23 See R. Doc. No. 51, at 26.

9

Theriot that it construed the April 18, 2017 letter as the initial denial of her claim for

benefits, making her January 5, 2018 letter untimely, the Pension Fund still provided

Theriot with the Plan provisions that made clear that she had sixty days from receipt

of the March 2, 2018 letter to appeal the Eligibility Committee’s denial.24

Theriot did not allege in her second amended complaint that she requested

review by the Eligibility Committee of the March 2, 2018 denial of her claim for

benefits.25 The Court noted that even if it were to construe her November 2, 2018

letter as a request for review by the Eligibility Committee, such request was clearly

untimely.26 Additionally, Theriot did not allege that she requested any further

review by the Executive Committee.27

Therefore, this Court held that because the March 2, 2018 benefit denial letter

substantially complied with ERISA and Theriot failed to appeal the Fund’s

determination within sixty days, as required by the Plan, Theriot failed to exhaust

administrative remedies and thus was not entitled to judicial review.28 See Crowell,

541 F.3d at 308 (holding that “claimants seeking benefits from an ERISA plan [must]

first exhaust administrative remedies under the plan before bringing suit to recover

benefits”); see also Hall v. Nat’l Gypsum Co., 105 F.3d 225, 231 (5th Cir. 1997)

(explaining that the exhaustion requirement “is not one specifically required by

ERISA, but . . . uniformly imposed by the courts in keeping with Congress’ intent in

24 See id.

25 See id.

26 Id.

27 See id.

28 Id.

10

enacting ERISA”); Medina v. Anthem Life Ins. Co., 983 F.2d 29, 33 (5th Cir. 1993)

(internal citations omitted) (“[W]e have fully endorsed the prerequisite of exhaustion

of administrative remedies in the ERISA context.”).

The Court further concluded that no exception to the exhaustion of remedies

requirement was applicable because Theriot failed to allege or argue that she received

hostile treatment from the Fund or Eligibility Committee or that Gantert

demonstrated bias in the March 2, 2018 letter, such that any request for further

review would have been rendered futile.29 Theriot also did not allege any hostility or

bias on the part of the Executive Committee such that any review by it would have

been futile.30 “[T]here is no indication in the record that [the Executive Committee]

would not have properly considered [Theriot’s] arguments and evidence if she had

submitted them within the [60]-day period.” Swanson v. Hearst Corp. Long Term

Disability Plan, 586 F.3d 1016, 1019 n.1 (5th Cir. 2009) (per curiam).

II. Reconsideration of Count I

Theriot argues that the Court should reconsider its dismissal of count I because

the first denial letter sent on April 18, 2017 did not substantially comply with

29 Id. at 27–28. “A claimant may be excused from the exhaustion requirement if he

shows . . . that pursuing an administrative remedy would be futile[.]” McGowan v.

New Orleans Emp'rs Int'l Longshoremen’s Ass’n, No. 12-990, 2012 WL 4885092, at *7

(E.D. La. Oct. 15, 2012), aff’d, 538 F. App’x 495 (5th Cir. 2013) (per curiam)

(citing Denton, 765 F.2d at 1302; Meza, 908 F.2d at 1279).

30 R. Doc. No. 51, at 28.

11

ERISA.31 The Court previously held that the April 18, 2017 letter did not comply with

ERISA in its Order & Reasons and it will not disturb that decision.32

Theriot also asserts that the Court should reconsider its dismissal of count I

because the March 2, 2018 letter did not substantially comply with ERISA, for

primarily four reasons: it was not sent within ninety days of receiving the initial claim

for benefits, as required by 29 C.F.R. § 2560.503-1(f)(1); regardless of the letter’s

untimeliness, it still did not substantially comply with ERISA because the body of the

letter “actively discouraged Plaintiff from seeking any type of review of her claim”

and did not fulfill the purpose of § 1133; the Court should have considered the Fund’s

conflict of interest when addressing count I; and any further appeal of Theriot’s claim

for benefits to the Fund would have been futile, as evidenced by recent declarations

made by Gantert and the Fund’s deposition testimony.33 The Court will address each

in turn.34

A. Ninety-Day Requirement

The Fund received Mrs. Hamann’s lump-sum application for benefits on April

4, 2017.35 On April 18, 2017, within ninety days of receiving the claim, the Fund

issued a benefit denial letter, but as discussed previously, it did not comply with

31 R. Doc. No. 74-2, at 8–10.

32 See R. Doc. No. 82.

33 R. Doc. No. 74-2, at 10–18.

34 The Court notes that Theriot’s after the fact of dismissal arguments, although

considered by the Court, have caused additional judicial resources to be expended on

arguments that should have previously been argued.

35 R. Doc. No. 51, at 4.

12

ERISA.36 The Fund did not send a benefit denial letter that complied with ERISA

until March 2, 2018, almost eleven months after receiving Mrs. Hamann’s

application.37 Therefore, Theriot argues, the March 2, 2018 letter is procedurally non-

compliant, which makes the substantial compliance doctrine inapplicable.38 See

McGowan, 538 F. App’x at 498 (holding that in order to trigger the running of the

administrative appeal period, notice of the adverse benefit determination need only

substantially comply with ERISA’s notice requirements).

As a preliminary matter, Theriot argues that the ninety-day period to issue an

ERISA compliant benefit denial letter started to run when the Fund received Mrs.

Hamann’s application for benefits on April 4, 2017, not when it received Theriot’s

claim for benefits on January 5, 2018.39 Theriot argues that while the Fund initially

stated that it treated the January 5, 2018 letter “in all respects like a claim or appeal,”

the recently produced minutes to the Eligibility Committee meeting at which the

Fund discussed Theriot’s letter show that the Fund actually treated the January 5,

2018 letter in all respects like an appeal.40 Therefore, according to Theriot, because

the January 5, 2018 letter was treated like an appeal, the April 4, 2017 letter was the

initial claim for benefits, and the Fund had ninety days from April 4, 2017 to issue

an ERISA-compliant benefit denial letter.41

36 Id. at 5, 24.

37 Id. at 24.

38 R. Doc. No. 74-2, at 10–12.

39 Id.

40 Id. at 11–12.

41 Id. at 12.

13

In response, the Fund argues that the April 18, 2017 letter denied a claim made

by Mrs. Hamann prior to her death, while the March 2, 2018 letter denied a claim

made by Theriot on behalf of the Estate on January 5, 2018.42 The Fund asserts that

“[c]ourts have recognized that the participant/beneficiary and estate are separate

entities,” and because “no evidence shows the Estate had appointed a personal

representative [by April 18, 2017],” the Estate could not have “decide[d] whether to

pursue the claim for a lump sum payout on its own behalf.”43

The Fund argues that “[t]he Estate failed to cite any authority holding that it

can rely on a procedural violation [the Fund] allegedly committed while processing

Mrs. Hamann’s claim to argue that [the Fund] violated ERISA procedural

requirements while processing the separate claim by Theriot.”44 The Fund further

argues that the correct chronology of the case, therefore, is that Theriot submitted a

new claim for benefits on January 5, 2018, which the Fund denied in a benefit denial

letter that substantially complied with ERISA on March 2, 2018, within the ninety-

day timeframe to issue a denial under § 2560.503-1(f)(1).45

Section 2560.503-1(f)(1) requires a plan to notify a claimant within ninety days

of receipt of a claim that the claim is denied, whereas § 2560.503-1(i)(1)(i) requires a

plan to notify a claimant of its decision on review within sixty days of receipt of a

request for review of its initial claim determination. Neither party addressed the

42 R. Doc. No. 82, at 10.

43 Id.

44 Id. at 11.

45 Id.

14

difference in the two regulations. However, the Court need not decide whether the

March 2, 2018 benefit denial letter denied an initial claim for benefits or an appeal of

a benefits determination, because either way, the letter was issued within the

applicable timeframe—the March 2, 2018 letter was issued fifty-six days from the

January 5, 2018 letter and, therefore, satisfies either the sixty-day or ninety-day

requirement. The Court will also not decide whether the January 5, 2018 claim was

an initial benefit claim made by Theriot or an appeal of the Fund’s benefit decision

issued on April 17, 2018, because it is of no consequence to this Court’s finding that

the March 2, 2018 benefit denial letter substantially complied with ERISA, and that

the doctrine of substantial compliance is applicable in this case.

Theriot argues that because the Fund did not respond with a substantially

compliant ERISA benefit denial letter within ninety days of April 4, 2017, it is

precluded from relying on the alleged substantial compliance of its March 2, 2018

letter, citing Fessenden v. Reliance Standard Life Ins. Co., 927 F.3d 998 (7th Cir.

2019).46 In Fessenden, the claimant filed suit before the plan issued its final decision,

but after the ninety-day deadline under § 2560.503-1(f)(1) had passed. Id. at 1000.

The plan argued that its decision should be afforded a deferential standard of review,

rather than a de novo standard, because it substantially complied with ERISA. Id. at

1001.

The Seventh Circuit held that although the plan was just eight days late in

issuing its decision, the substantial compliance doctrine did not apply to the blown

46 R. Doc. No. 74-2, at 12.

15

deadline because otherwise, the exception would upset the “delicate balance between

the administrator’s need for more time and the claimant’s need for a timely decision.”

Id. at 999, 1003. The court further held that “when a plan administrator fails to follow

required procedures, such as deadlines for issuing decisions, a claimant shall be

deemed to have exhausted the administrative remedies available under the plan, [§

2560.503-1(l)], and can seek judicial review even if the plan’s internal process has not

run its course,” because “applying the substantial compliance doctrine to blown

deadlines is incompatible with the doctrine itself.” Id. at 1001, 1004 (internal

citations omitted).

The court also reasoned that because there would be nothing to consider on

review if a plan failed to timely issue a benefit denial letter, it would be impossible

for courts to defer to plans, as there would be “neither an exercise of discretion to

which a court could defer nor anything for the court to use to measure the degree of

the administrator’s compliance.” Id. at 1005 (internal citations omitted).

Theriot argues that, similarly here, the Fund failed to meet the ninety-day

deadline and, therefore, the substantial compliance doctrine cannot apply to the

March 2, 2018 letter.47 Theriot further argues that this Court should adopt the

Seventh Circuit’s approach in Fessenden because “[t]he Court should not allow a ‘do-

over’ when Defendants failed to get it right the first time,” and “[p]ermitting

Defendants a second chance to follow ERISA after the time limit for doing so has

47 Id. at 11–12.

16

expired ‘would upset the careful balance that the regulations strike between the

competing interest of administrators and claimants.’”48

The Fund responds that regardless of whether the April 18, 2017 benefit denial

letter was sent in response to a claim made by Theriot on behalf of the Estate or Mrs.

Hamann, this case is distinguishable, because in all the cases cited by Theriot, the

claimant filed an immediate lawsuit after the fund violated ERISA disclosure

requirements, whereas here Theriot “opted to pursue further administrative

procedures, which led to one or more ERISA complaint [sic] benefit denial notices.”49

In addition, the Fund argues that ERISA permits two levels of administrative

appeals before the claimant is entitled to file suit. According to the Fund, even if

Theriot’s second letter on January 5, 2018 was an appeal, it was entirely permissible

for the Fund to require Theriot to file another administrative appeal before deeming

her to have exhausted administrative remedies.50 Therefore, ‘[r]egardless of whether

the . . . March 2, 2018 letter is characterized as a denial of claim or as a denial of

appeal, [Theriot] was required to initiate the next level of appeal within 60 days of

48 Id. at 12 (citing Eastman Kodak Co. v. STWB, Inc., 452 F.3d 215, 222 (2d Cir. 2006);

Fessenden, 927 F.3d at 1004).

49 R. Doc. No. 82, at 7–8.

50 Id. at 12 (citing 29 C.F.R. § 2560.503-1(b) and noting that it “does not contain any

requirement on the maximum number of mandatory administrative appeals a plan

can require a claimant to file before commencing judicial action; while § 2560.503-

1(c)(2) states that a Health Plan may require no more than two levels of mandatory

administrative appeal”).

17

receiving the March 2, 2018 letter” in accordance with subsection (c) of the Plan’s

appeal procedure.51

First, the Court assumes, for the purpose of responding to Theriot’s arguments,

that the April 4, 2017 benefits claim was in fact made by the Estate. Second, the Fund

is correct that all of the cases cited by Theriot—in which courts held that the doctrine

of substantial compliance did not apply when plans failed to comply with the

deadlines set forth in 29 C.F.R. § 2560.503-1—are inapplicable here, where Theriot

chose to continue pursuing remedies through the administrative process rather than

immediately seeking judicial review.

The concerns present in Fessenden are not at issue here. First, finding that the

March 2, 2018 denial letter substantially complied with ERISA, and therefore that

Theriot failed to exhaust administrative remedies, would not upset the “delicate

balance between the administrator’s need for more time and the claimant’s need for

a timely decision” because, even assuming Theriot would have appealed had she

received a substantially compliant benefit denial letter on April 18, 2017, she received

a substantially compliant denial letter on March 2, 2018 with information on how to

appeal, and took no action for almost eight months.52 Second, unlike in Fessenden,

where the plan had made no decision on the claim at the time the plaintiff filed suit,

51 Id. at 12–13. Theriot does not argue that the Fund’s claim procedures included an

impermissible number of appeals and, therefore, the Court need not determine how

many appeal procedures are potentially allowable under ERISA.

52 Theriot filed this suit on October 31, 2018 and requested administrative documents

from the Fund on November 2, 2018. See R. Doc. Nos. 1 & 20-3.

18

here, the Fund made a decision nearly eight months before Theriot initiated suit and

it issued a substantially compliant benefit denial letter with reasons for its decision.

Eastman Kodak, which Theriot cites, is similarly uninstructive. In Eastman,

the Second Circuit held that a plan cannot require a benefits claimant to exhaust

administrative remedies that were adopted only after the claimant brought an action

to recover benefits. 452 F.3d at 220, 223. The claimant sued to recover benefits when,

at the time the plan reviewed his claim, the plan had no claims procedure in place

and only responded to the claimant’s requests for a decision over the course of a year

with “skepticism, befuddlement, and silence.” Id. at 218. Here, the Fund did have a

claims procedure in place, responded to Theriot, and issued a substantially compliant

benefit denial letter nearly eight months before Theriot initiated suit.53

The Fund’s processing of Theriot’s claim for benefits is more analogous to the

facts of Wade v. Hewlett-Packard Development Co. LP Short Term Disability Plan,

493 F.3d 533 (5th Cir. 2007). In Wade, the claimant went through two levels of

administrative review that did not substantially comply with ERISA, because the

plan failed to notify the claimant of its denial within the timeframe set by § 2560.503-

53 Theriot also cites Halo v. Yale Health Plan, Director of Benefits & Records Yale

University, 819 F.3d 42, 57–58 (2d Cir. 2016), which is similarly inapposite, because

unlike the Fifth Circuit, the Second Circuit does not recognize the substantial

compliance doctrine and instead places the burden on the plan to prove that its

deviation from ERISA regulations was inadvertent and harmless. See R. Doc. No. 74-

2, at 8. The Second Circuit remanded the case for a determination of whether the

plan met its burden when its notification satisfied the timing requirements of ERISA

but failed to include the requisite notice provisions. Id. at 61; see also Halo v. Yale

Health Plan, 49 F. Supp. 3d 240, 258 (D. Conn. 2014).

19

1, among other reasons. See id. at 538. The claimant finally received proper review of

his claims and an ERISA-compliant benefit denial letter a full year after he initially

submitted his claim. See id. at 539. The Fifth Circuit reasoned that “[t]he end goal of

judicial intervention in ERISA is not to correct problems at every level of plan

administration, but to encourage resolution of the dispute at the administrator’s level

before judicial review.” Id. at 540. Therefore, the court reasoned, “although the Plan’s

claims processing at the first two levels of review did not comply with Section 1133,

the final level of review, and the most relevant one, substantially complied and

intended to correct the disputed procedural and technical errors below.” Id. at 540.

Thus, “[the claimant] was provided with ‘full and fair review’ of his claims based on

an examination of all communications at all levels between the administrator and the

beneficiary.” Id.

Here, the communications between the Fund and Theriot “as a whole . . .

constituted a meaningful dialogue between the beneficiary and administrator despite

technical violations” and, therefore, Theriot was provided with a full and fair review

of her claims. Id. As in Wade, the Fund did not comply with all ERISA regulations,

because it failed to notify Theriot of its denial in a timely fashion. However, the Fund

and Theriot engaged in back-and-forth communications regarding requests for

documents and claims for benefits, which culminated in the Fund sending a

substantially compliant benefit denial letter with its reasons for denying the claim

20

and information as to the proper means and timeframe to appeal eleven months after

Theriot’s initial claim for benefits.54

Theriot could have requested another level of review within the sixty-day

period to appeal, but she chose not to do so. Therefore, the doctrine of substantial

compliance is not inapplicable merely because the Fund did not meet the ninety-day

requirement to notify Theriot that her initial claim was denied. The Fund did

eventually send a benefit denial letter that substantially complied with ERISA in all

other respects, Theriot chose not to appeal within the timeframe outlined in the

appeal procedures attached to the March 2, 2018 benefit denial letter, and Theriot

did not file suit until almost eight months after she received the substantially

compliant benefit denial letter.55

Theriot next argues that she suffered prejudice as a result of the Fund’s failure

to comply with the notice requirement and therefore the “Court should reject [the

54 The Fund initially denied the claim for benefits on April 18, 2017. R. Doc. No. 10-

7. Theriot’s counsel requested plan documents from the Fund on November 1, 2017

and requested payment of the outstanding lump sum benefit on January 5, 2018. R.

Doc. Nos. 10-9 & 10-10. The Fund considered the benefits claim, either as an initial

claim or appeal, on February 20, 2018, and issued its second benefit denial letter on

March 2, 2018. R. Doc. Nos. 74-6 & 10-8.

55 Theriot further alleges that the recently produced minutes from the meeting of the

Eligibility Committee on April 18, 2017 “indicate that Audry Hamann’s claim was not

the subject of a full committee discussion,” but instead removed upon request of an

employee who “[came] to a conclusion, independent of the Eligibility Committee, that

Mrs. Hamann was not eligible for benefits.” R. Doc. No. 74-2, at 5. Even if this

evidence shows that the first level of review did not substantially comply with ERISA,

“the final level of review, and the most relevant one, substantially complied” with

ERISA, and the fact is that Theriot was apprised of her right to appeal and failed to

do so within the appropriate timeframe. See Wade, 493 F.3d at 540. Therefore,

Theriot was still provided with a full and fair review of her claims regardless of the

alleged deficiencies in the first level of review.

21

Fund’s] attempt to benefit from [its] failure to comply[.]”56 Theriot contends that the

Fund’s admission that the April 18, 2017 benefit denial letter did not substantially

comply with ERISA, and Gantert’s declaration that the Eligibility Committee may

have viewed Theriot’s January 5, 2018 claim differently had she argued that the first

benefit denial letter did not substantially comply with ERISA, show that the Fund is

attempting to “place the burden of rectifying [its] failure to provide a coherent review

process on Plaintiff.”57 Gantert declared that “[h]ad the Plaintiff filed a timely appeal

and argued that [her] January 5, 2018 request for benefits was timely submitted

because the Pension Fund’s April 18, 2017 benefit denial letter violated ERISA, [he]

would have asked Fund Counsel to research that question, so that the proper advice

[could] be provided to the Eligibility Committee,” which likely “would have stopped

relying on the untimeliness of the January 5, 2018 request as a ground for denying

the request.”58

Theriot argues that the Fund’s alleged unawareness that its initial benefit

denial letter did not comply with ERISA “is a claim of implausible ignorance of the

basic functions of ERISA,” and that the Fund’s argument that “the only way they

could have possibly realized that their meager, four sentence denial letter was non-

compliant was by receiving notice from Plaintiff” is not credible.59 Theriot also argues

56 R. Doc. No. 74-2, at 12–13.

57 Id. at 13.

58 Id. (quoting R. Doc. No. 68-5, at ¶ 12).

59 Id. at 14–15. Theriot points to the fact that the Fund manages over $2 billion in

assets, services over 26,000 participants, and uses in-house counsel at every stage of

the claims administrative process. Id. at 14. Therefore, Theriot argues, the claim that

22

that “[a]ny attempt to rectify [the failure to comply with ERISA] through a letter sent

eight months too late is ineffective,” and “[a]s a result of that failure, Plaintiff has

been forced to overcome a finding of untimeliness in the pursuit of her claim – a

finding that is entirely the fault of Defendants.”60

The Fund responds that Theriot cannot argue that she “was prejudiced by the

[the Fund’s] alleged failure to issue an ERISA-compliant benefit denial on April 18,

2017,” as “[t]he ERISA compliant denial dated March 2, 2018 denied Theriot’s claim

for a lump sum payout because the claim was barred by [the Fund’s] plan language,

while [also] reserv[ing] the right to also argue the claim was foreclosed from judicial

review because it was a disguised and untimely appeal from an earlier benefit

denial.”61 Additionally, the Fund argues, the letter gave Theriot notice of her right to

appeal that decision.62 Further, “[e]ven if [the Fund] did not assert the procedural

defense in its March 2, 2018 benefit denial letter, it still would have denied the claim

on the merits,” and “[t]he Estate has not provided the Court with any evidence

showing that it would have filed a timely appeal had [the Fund] denied its claim on

substantive but not procedural grounds.”63

Theriot has not shown that she suffered any prejudice as a result of the Fund’s

failure to issue an ERISA-compliant benefit denial letter within ninety days of the

the Fund did not know the April 18, 2017 letter was insufficient to meet ERISA

regulations is not credible. Id.

60 Id. at 14–15.

61 R. Doc. No. 82, at 9–10.

62 Id.

63 Id. at 10.

23

Estate’s initial claim for benefits on April 4, 2017.64 As discussed previously, she had

the proper procedures for appealing the March 2, 2018 benefit denial letter,

regardless of the reason why the claim for benefits was denied, and chose not to

appeal. The fact that Theriot has “been forced to overcome a finding of untimeliness

in the pursuit of her claim” is not “entirely the fault of [the Fund],” but rather the

direct result of Theriot’s own inaction.65

Theriot provides no evidence other than conclusory allegations that the non-

compliant benefit denial letter sent on April 18, 2017 was purposefully non-compliant

in an effort to avoid giving Theriot’s claim a full and fair review. Even if Theriot could

prove that the Fund purposefully sent an initial non-compliant benefit denial letter,

she has cited no authority for her argument that the Fund’s alleged ill-will precludes

it from relying on the substantial compliance of a subsequent benefit denial letter to

trigger Theriot’s sixty days to appeal or that it automatically precludes a finding that

the Fund provided a full and fair review. The Court finds that the March 2, 2018

letter substantially complied with ERISA even though it may have not been issued

within the timeframe required by § 2560.503-1.

64 The Court again assumes, arguendo, that the April 4, 2017 was in fact the initial

claim for benefits, and the January 5, 2018 letter to the Fund was an appeal of the

denial of the April 4, 2017 claim. It is unnecessary for the Court to determine whether

the January 5, 2018 letter to the Fund was, in fact, an initial claim for benefits rather

than an appeal because it is immaterial to the Court’s determination that the March

2, 2018 letter substantially complied with ERISA and that the substantial compliance

doctrine applies in this case.

65 See R. Doc. No. 74-2, at 14–15.

24

B. The March 2, 2018 Benefit Denial Letter’s Substantial Compliance

Theriot argues that regardless of the March 2, 2018 letter’s untimeliness, it

still does not substantially comply with ERISA. Theriot contends that the Fund did

not include the Plan’s administrative review procedures to advise Theriot of her

additional rights, but “to bolster [its] arguments that she was already irredeemably

late in the pursuit of her claim.”66 Theriot further asserts that the body of the letter

“actively discouraged [her] from seeking any type of review of her claim” by stating

that the untimeliness of Theriot’s January 5, 2018 letter “forecloses the ability to seek

judicial review.”67 Accordingly, Theriot concludes, the March 2, 2018 letter fails to

comply with the purpose of 29 U.S.C. § 1133, which is “‘to afford the beneficiary an

explanation of the denial of benefits that is adequate to ensure meaningful review of

that denial,’” and thus did not substantially comply with ERISA.68

First, Theriot cites no authority indicating that a plan’s motivation for

including its review procedures is relevant to determining whether the benefit denial

letter substantially complied with ERISA. In fact, as the Fund correctly points out,

under § 2560.503-1(g)(1)(iv), a plan must provide 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 [ERISA] following

an adverse benefit determination on review[.]”69 See also Dialysis Newco Inc. v.

66 R. Doc. No. 74-2, at 15.

67 Id.

68 Id. at 16 (quoting Wade, 493 F.3d at 539).

69 See R. Doc. No. 82, at 5.

25

Community Health Systems Trust Health Plan, et al., No. 5:15-CV-272, 2017 WL

2591806 at *11 (S.D. Tex. June 14, 2017) (holding that the plan did not comply with

the requirement to include a description of the plan’s review procedures because the

benefit denial letters all failed to inform the claimant that it had a right to a second

appeal, provided incorrect information about the appeals process, and/or failed to

provide the relevant time frame for an appeal and that the claimant had a right to

bring an ERISA action), rev’d on other grounds, No. 18-40863, 2019 WL 4296698 (5th

Cir. Sept. 11, 2019).

Second, the Fund argues that Theriot’s assertion that the March 2, 2018

benefit denial letter violates the “purpose” of § 503 of ERISA, “rather than the

regulation promulgated . . . to carry out the ‘purpose’ of § 503,” is “contrary to the

plain meaning of § 503(2), which . . . only requires [the Fund] to afford [Theriot] a

reasonable opportunity for a full and fair review.”70 The Fund further argues that it

did afford Theriot a reasonable opportunity for a full and fair review, because it

“provid[ed] Theriot [with] a full copy of the Fund’s claim review procedures, so that

Theriot [could] evaluate how to exhaust available administrative procedures.”71 The

Fund asserts that it was not “actively discourag[ing] [Theriot] from seeking any type

of review of her claim,” but rather was required to include its procedural argument

that the January 5, 2018 claim was untimely in order to reserve it for future

litigation.72

70 Id.

71 Id.

72 Id. at 6.

26

The Fund is correct that ERISA requires it to set forth in benefit denial letters

“[t]he specific reason or reasons for the adverse determination,” and “[r]eference to

the specific plan provisions on which the determination is based[.]” § 2560.503-

1(g)(1)(i)-(ii). The Fund had no choice but to include the procedural argument that

the January 5, 2018 claim was untimely and foreclosed judicial review, because if a

court were to later find that the first benefit denial letter on April 18, 2017 was

substantially compliant with ERISA, the Fund would not be able to argue that the

January 5, 2018 appeal was therefore untimely. See George v. Reliance Standard Life

Ins. Co., 776 F.3d 349, 353 (5th Cir. 2015) (holding that the court was limited to

considering whether the record supports the reasons that the plan provided to the

claimant during the claims proceeding, because “allowing plan administrators to offer

new justifications for a denial after the claims process has ended would undermine

the claims system that Congress envisioned when it drafted ERISA’s administrative

review provisions”); Lafleur v. Louisiana Health Service & Indemnity Co., 563 F.3d

148, 154–55 (5th Cir. 2009) (holding that the plan “did not substantially comply with

the procedural requirements of ERISA because . . . it raised new grounds for denial

in the federal courts that were not raised at the administrative level,” among other

reasons).

The Court is also not convinced that the March 2, 2018 benefit denial letter

“actively discouraged” Theriot from seeking judicial review. The letter, in three

sentences, states that the Fund is “reserv[ing] the right to assert [the defense]” and

27

that such a defense would “foreclose[] the ability to seek judicial review.”73 The letter

then continues for over a page, outlining the Fund’s interpretation of the plan and

explaining why it denied Theriot’s claim on the merits.74 But even if Theriot was

discouraged from seeking further review of her claim, the inclusion of the procedural

defense did not violate ERISA regulations or the purpose of ERISA because Theriot

was still “afford[ed] . . . an explanation of the denial of benefits that is adequate to

ensure meaningful review of that denial.” Wade, 493 F.3d at 539 (quotations and

citations omitted).75

Theriot next argues that attaching the appeals procedure to the March 2, 2018

benefit denial letter was insufficient, given the fact that the body of the letter actively

discouraged Theriot from seeking review by stating, “[t]his forecloses the ability to

seek judicial review.”76 Theriot also argues that the March 2, 2018 benefit denial

letter was non-compliant because the body of the letter failed to mention an appeal

to the Executive Committee or indicate the current stage of administrative

proceedings.77

A plan must include in its benefit denial letter “[a] description of the plan’s

review procedures and the time limits applicable to such procedures[.]” In McGowan,

73 R. Doc. No. 10-8, at 2.

74 Id.

75 For a discussion of the ways in which the Fund afforded Theriot an explanation of

the denial of benefits that is adequate to ensure meaningful review of the denial of

her claim, see this Court’s Order & Reasons dismissing count I with prejudice. R. Doc.

No. 51, at 25–26.

76 R. Doc. No. 74-2, at 15–16.

77 Id. at 15.

28

the court held that the benefit denial letter substantially complied with ERISA

because “[w]hile the letter itself did not explicitly state that [the claimant] had 180

days to file a written appeal, it incorporated that information by specifically

identifying the pages on which the 180-day rule was located,” and “a copy of the

benefit booklet was included with the letter.” 538 F. App’x at 498.

Theriot argues that McGowan is distinguishable because the body of the letter

in McGowan stated that “the beneficiary could appeal and . . . referenced the

pertinent pages of the attached Summary Plan Description.”78 In contrast, here, “the

Fund did not advise Plaintiff that it had treated her January letter request from

counsel as an appeal, [and] failed to include an explanation of any additional

materials or procedures Plaintiff could submit for review because [according to the

Fund] there was nothing that Mrs. Hamann’s estate or Theriot could have submitted

to perfect the claim.”79

To the extent that Theriot argues that the language of the letter somehow

negates the attachment of the appeal procedures, the Court is not convinced. The

procedures, attached to the letter, properly outline the review process.80 Like the

letter in McGowan, the Fund’s March 2, 2018 letter “did not explicitly state that

[Theriot] had [sixty] days to file a written appeal,” but “it incorporated that

information” by physically attaching the procedures to the letter. See 538 F. App’x at

498. It is true that in McGowan the letter specifically identified the pages of the

78 Id. at 15–16.

79 Id.

80 See R. Doc. No. 10-8, at 4–6.

29

enclosed booklet on which the time limit to appeal was located, whereas here the

letter did not mention the review procedures but instead just attached them. Id.

However, the Court finds the difference immaterial, especially considering that the

Fund’s attached review procedures were only three pages long, whereas the booklet

with the appeal procedures in McGowan was at least thirty-nine pages long. See id.

at 497. The Fund’s attachment of the review procedures to the March 2, 2018 letter

satisfied § 2560.503-1(g)(iv).

Theriot argues next that Gantert’s declaration “contradicts and undermines

[the Fund’s] argument regarding the compliance of the March [2, 2018] letter,”

because he now admits “there was a manner in which Plaintiff could have perfected

her claim, but [the Fund] did not inform her in violation of [29 C.F.R. §

2560.503(g)(1)(iii)].”81 As previously discussed, Gantert declared that had Theriot

argued that the April 18, 2017 benefit denial letter was non-compliant with ERISA

and therefore could not start the running of her sixty days to appeal, the Eligibility

Committee likely would have stopped relying on the January 5, 2018 letter’s

untimeliness as a basis for its denial of Theriot’s claim, made on behalf of the Estate.82

In response, the Fund argues that it “had no obligation to explain to Theriot

what arguments to raise in an appeal against the decision to deny benefits.”83 The

Fund asserts that “[w]hat C.F.R. § [2560.503-1(g)(1)(iii)] requires instead is for [the

Fund] to notify the claimant of additional material or information, if any, necessary

81 R. Doc. No. 74-2, at 14.

82 R. Doc. No. 68-5, at ¶ 12.

83 R. Doc. No. 82, at 4.

30

to perfect the claim,” not “what arguments [Theriot] could raise in response to the

benefit denial, such as that the April 18, 2017 letter to [Theriot] did not comply with

ERISA (or was a benefit denial issued to Mrs. Hamann rather than Theriot) so that

it could not start the running of Theriot’s 60 days to appeal the benefit denial.”84

The Court is not persuaded by Theriot’s arguments.85 The types of “additional

material or information” that courts have held to be within the scope of 2560.503-

1(g)(1)(iii) and thus required in the benefit denial letter have included medical

evidence to support a finding that the claim put the claimant in a category of people

within the plan’s coverage, i.e. psychiatric evaluations, office visit notices, diagnostic

testing results, and treatment plans, among others. See Crosby v. Blue Cross/Blue

Shield of Louisiana, No. 08-693, 2012 WL 5493761 at *9 (E.D. La. Nov. 13, 2012)

(Lemmon, J.) (holding that the plan’s notice of denial did not comply with ERISA

because it failed to inform the claimant that she should submit medical evidence to

support a finding that would afford her coverage under a particular benefit); see also

McBurnie v. Life Insurance Co. of N. America, 763 F. App’x 596, 599 (9th Cir. 2019)

(holding that the plan’s denial letter complied with ERISA because it informed the

claimant that “she could submit additional medical records, test results, and therapy

notes”); Blair v. Metropolitan Life Ins. Co., 569 F. App’x 827, 831 (11th Cir. 2014)

84 Id.

85 Section 2560.503-1(g)(1)(iii) requires a plan to include in its notification of denial,

“in a manner calculated to be understood by the claimant[,] [a] description of any

additional material or information necessary for the claimant to perfect the claim and

an explanation of why such material or information is necessary[.]”

31

(holding that the plan provided the claimant with the necessary information to

perfect her claim when it listed specific medical documents and reports from specific

doctors that it would need to consider the claim on review).

By contrast, in situations such as this one where there is no additional material

or information the claimant could submit to perfect her claim, courts have held

benefit denial letters are still compliant with ERISA when they do not mention any

additional material or information. See Daboh v. Baylor Health Care System

Occupational Injury Benefit, No. 3:06-CV-1006, 2009 WL 1748868 at *9 (N.D. Tex.

June 22, 2009); Duncan v. Assisted Living Concepts, Inc. et al., No. 3:03-CV-1931N,

2005 WL 331116 at *4 (N.D. Tex. Feb. 10, 2005).

The Fund denied Theriot’s claim either because it was untimely, failed on its

merits under the Fund’s interpretation of the current plan terms, or both.86

Regardless of the reason or reasons for which the Fund denied Theriot’s claim, there

is no additional material or information Theriot could have provided to perfect her

claim—Theriot could not suddenly make her claim timely, or change the terms of the

plan or the Fund’s interpretation of those terms. “Nor does [Theriot] point to

additional information she would have presented that would bolster her claim,”

Daboh, 2019 WL 1748868 at *9, other than the fact that she may have argued that

the April 18, 2017 letter failed to comply with ERISA and therefore could not start

86 The Court is aware that the reason for the Fund’s denial of Theriot’s claim for

benefits is disputed. Either reason, or both, would not trigger a duty on behalf of the

Fund to provide Theriot with a list of additional material or information needed to

perfect her claim, so it is unnecessary to determine the exact reason why the Fund

denied Theriot’s claim.

32

the running of her sixty days to appeal. The Court agrees with the Fund, however,

that “additional material or information” for purposes of § 2560.503-1(g)(1)(iii) does

not include potential legal arguments. Therefore, the Fund’s March 2, 2018 benefit

denial letter complied with § 2560.503-1(g)(iii).

C. The Fund’s Conflict of Interest

Theriot asserts that the Court should have considered the Fund’s conflict of

interest in its dual role as the entity determining eligibility for benefits and paying

those benefits out of its own pocket when analyzing count I.87

“[A] conflict should ‘be weighed as a factor in determining whether there is an

abuse of discretion.” Metropolitan Life Ins. Co. v. Glenn, 554 U.S. 105, 115 (2008).

However, Theriot’s failure to exhaust administrative remedies precludes her from

seeking judicial review of the Fund’s decision, so the Court need not even evaluate

the merits of Theriot’s claim and consider affording discretion to the plan’s decision.

87 R. Doc. No. 74-2, at 17 (citing Metro. Life Ins. Co. v. Glenn in support. 554 U.S. 105,

112 (2008) (discussing the conflict of interest that exists when plan administrators

occupy both roles, because “every dollar provided in benefits is a dollar spent by…the

[plan fiduciary]; and every dollar saved . . . is a dollar in [the plan fiduciary’s] pocket)).

Theriot points to the fact that the Fund is currently eighty-percent underfunded and

labeled as “endangered” by the Department of Labor as further evidence of its conflict

of interest. Id. Theriot alleges that further information on the Fund’s financial status,

which it has failed to produce, is relevant to her claim and “crucial for the Court to

consider[,]” because “[t]he Fund’s financial strife, . . . the fact that it has never

encountered the factual scenario presented by Mrs. Hamann’s claim,” and its conflict

of interest “may explain why the Fund, one of the largest pension funds in the

country, produced an initial claim denial so blatantly out of line with ERISA

procedures,” took a “defensive posture . . . in [its] March 2, 2018 letter to Plaintiff’s

then-counsel,” and failed to “produce required documents” that remain outstanding

“to this day.” Id. at 17–18.

33

Therefore, the Court will not consider the Fund’s potential conflict of interest when

evaluating Count I.

D. The Futility of An Appeal to the Fund

Finally, Theriot argues that any appeal of her claim to the Fund would have

been futile and, therefore, she should be excused from the exhaustion requirement.

See McGowin v. ManPower Int’l, Inc., 363 F.3d 556, 559 (5th Cir. 2004). Theriot

argues that the recent deposition of Gantert confirms the futility of any further

appeal because “[he] testified that only a change in the facts of the case would result

in an overturning of a decision that a claim was untimely.”88

“A failure to show hostility or bias on the part of the administrative review

committee is fatal to a claim of futility.” McGowin, 363 F.3d at 559 (citing Bourgeois

v. Pension Plan for Emps. of Santa Fe Int’l Corps., 215 F.3d 475, 479–80 (5th Cir.

2000)). The Court is not convinced that Gantert’s statement that a change in the facts

could overturn the decision by the Eligibility Committee shows that the Fund was so

hostile or biased against Theriot that any appeal would have been futile. Rather, the

Court agrees with the Fund that Gantert’s statement shows that the Fund “was open

to reconsider its decision based on new information,” not that any appeal would have

been futile.89

Therefore, the Court affirms its dismissal of count I for failure to exhaust

administrative procedures because the Fund’s March 2, 2018 benefit denial letter

88 Id. at 16.

89 R. Doc. No. 82, at 14.

34

substantially complied with ERISA and Theriot was afforded a full and fair review of

her claim.

Count II

The Court dismissed count II of Theriot’s second amended complaint for failure

to state a plausible claim for relief.90 Count II alleged that the Fund failed to provide

Theriot with a full and fair review of an adverse benefits determination pursuant to

ERISA, 29 U.S.C. § 1133; Article XIII, Section 3 of the Plan; and the Summary Plan

Description (SPD).91 For the following reasons, the Court affirms its dismissal of

count II.

I. Dismissal of Count II in This Court’s Order & Reasons

Theriot specifically alleged that the Fund’s April 18, 2017 letter failed to

provide reasons for the denial of the Estate’s lump sum benefit, provide the provisions

on which the Fund relied to reach its decision, and describe administrative review

procedures, rendering it noncompliant with ERISA, the Plan, and the SPD.92 Theriot

further alleged that the Fund repeatedly failed to apprise her of her appeal rights

90 R. Doc. No. 51, at 37–39.

91 R. Doc. No. 44, at ¶ 23. ERISA, 29 U.S.C. § 1133, provides that every employee

benefit plan shall:

(1) provide adequate notice in writing to any participant or beneficiary

whose claim for benefits under the plan has been denied, setting forth

the specific reasons for such denial, written in a manner calculated to

be understood by the participant, and

(2) afford a reasonable opportunity to any participant whose claim for

benefits has been denied for a full and fair review by the appropriate

named fiduciary of the decision denying the claim.

92 R. Doc. No. 44, at ¶¶ 24–25.

35

under ERISA, and asserted that these violations denied her the right to a full and

fair review of her benefits claim.93

The Court held in its Order & Reasons that Theriot had not stated a plausible

claim for relief because her allegations with respect to the Fund’s alleged violation of

§ 1133 concerned only the contents of the March 2, 2018 benefit denial letter, which

the Court found to have substantially complied with ERISA.94 The Fund provided

Theriot with specific reasons for the denial of benefits, the Plan provisions it relied

on to reach its decision, and the Plan’s review procedures that described her rights

and obligations in connection with administrative and judicial review.95 The Court

concluded that because Theriot did not allege any facts that might have supported an

additional theory or basis underlying her claim that the Fund failed to provide her

with a full a fair review, the Court could not reasonably infer that the Fund was liable

for the misconduct Theriot alleged.96

II. Reconsideration of Count II

Theriot argues that the Court should reconsider count II because the Fund’s

March 2, 2018 letter did not substantially comply with ERISA and, therefore, count

II stated a plausible claim for relief. As Theriot previously asserted with respect to

count I, because the Fund did not comply with the ninety-day procedural requirement

of 29 C.F.R. § 2560.503-1(f)(1), the doctrine of substantial compliance is inapplicable

93 Id. at ¶¶ 25–26.

94 See R. Doc. No. 51, at 38–39.

95 See R. Doc. No. 10-8.

96 R. Doc. No. 51, at 39.

36

to the March 2, 2018 benefit denial letter.97 In addition, as she also previously argued,

“[t]he new information revealed in the Fund’s deposition, including the Fund’s

treatment of Plaintiff’s correspondences and the manner in which it initially denied

Audry Hamann’s claim, further demonstrates the deviation from ERISA’s procedural

requirements.”98

The Court disagrees and finds that the March 2, 2018 letter substantially

complied with ERISA, even though the Fund may have failed to comply with the

ninety-day deadline in 29 C.F.R. § 2560.503-1. See supra Count I, Section II.A. The

Court also finds that Gantert’s declaration does not negate the March 2, 2018 letter’s

substantial compliance. See supra Count I, Section II.B.

Theriot also argues that the “recently-produced, and yet to be produced,

discovery from Defendants directly impacts Plaintiff’s ability to assert” count II.99

Theriot argues that “[t]he deprivation of information directly relevant to Plaintiff’s

claim, despite numerous requests before and after the filing of this lawsuit, deprived

Plaintiff of a full and fair review of her claim[,]” but she fails to identify what

additional discovery she needs to assert count II, or how this new information would

affect her ability to state a plausible claim for relief.100 The mere allegation that

additional discovery would help Theriot assert her claim does not “raise a right to

97 R. Doc. No. 74-2, at 18–19.

98 Id. at 20.

99 Id.

100 Id.

37

relief above the speculative level.”101 See Twombly, 550 U.S. at 555; Cuvillier, 503

F.3d at 401. Accordingly, the Court affirms its dismissal of count II for failure to state

a plausible claim for relief.102

Count IV

The Court dismissed count IV of Theriot’s second amended complaint, a claim

for breach of fiduciary duties pursuant to § 1132(a)(3), because it was a disguised

claim for benefits, and Theriot failed to exhaust administrative procedures.103 For the

following reasons, the Court affirms its dismissal with prejudice of count IV.

I. Dismissal of Count IV in This Court’s Order & Reasons

Theriot alleged in count IV that the Fund and the Board of Trustees did not

comply with ERISA regulations in several ways,104 and that the Fund violated its

fiduciary duties by operating under a conflict of interest because it was both the entity

charged with deciding whether benefits should be paid and the entity that paid such

benefits.105 Further, Theriot claimed that the Fund breached its fiduciary duties by

preparing an SPD that deviated from the Plan terms because the SPD failed to

101 In any event, the United States Magistrate Judge denied Theriot’s motion to

compel additional discovery as untimely, which was pending at the time this motion

was filed. R. Doc. No. 76. There was no appeal of such denial.

102 Theriot also asserts in the present motion that count II is not a disguised claim for

benefits. The Court does not address such argument, however, because it finds that

Theriot has not stated a plausible claim for relief. R. Doc. No. 74-2, at 19.

103 R. Doc. No. 51, at 36–37.

104 R. Doc. No. 44, at ¶ 30.

105 Id. at ¶ 32.

38

disclose the Fund’s position that a survivor’s lump sum benefit election could only be

made during a period for which benefits had not yet been paid.106

The Court dismissed paragraph 30 of the second amended complaint alleging

procedural irregularities and the claim in paragraph 32 alleging that the Fund

operated in a “dual role” that created a conflict of interest because they were

disguised claims for benefits that had not been exhausted through administrative

procedures.107

In Theriot’s response to the Fund’s motion to dismiss, Theriot only defended

her claim in paragraph 33 of her second amended complaint that the Fund

maintained a SPD that deviated from the Plan.108 Specifically, she argued that her

claim pursuant to 29 U.S.C. § 1132(a)(3) was based on the fact that the Fund did

not comply with § 1102, which requires that the SPD apprise participants of their

rights and obligations under the plan and include information concerning the

“circumstances which may result in disqualification, ineligibility, or denial or loss

of benefits.”109

This Court recognized that injuries related to SPD deficiencies are cognizable

under § 1132(a)(3), but found that Theriot had not alleged an injury related to an

SPD deficiency.110 See Manuel, 905 F.3d at 865–66 (holding that “claims for injuries

related to SPD deficiencies are cognizable under [§ 1132(a)(3)] and not

106 Id. at ¶ 33.

107 R. Doc. No. 51, at 34.

108 R. Doc. No. 46, at 2; see R. Doc. No. 44, at ¶ 33.

109 R. Doc. No. 46, at 2 (citing 29 U.S.C. § 1022(a) & (b)).

110 R. Doc. No. 51, at 35.

39

[§1132(a)(1)(B)],” and emphasizing that courts should focus on the underlying

alleged injury to determine whether a claim is duplicative of the claim for benefits).

Theriot alleged that the SPD deviated from the Plan’s terms by failing to

disclose the Fund’s position that the survivor’s lump sum benefit election could only

be made during a period for which benefits had not been paid rather than “at any

time” as stated in the Plan, but she did not allege that such deviation resulted in

any harm or injury other than the denial of benefits.111 The injury she alleged arose

from the denial of benefits based on the terms of the Plan—that she was denied the

lump sum benefit even though the Plan states that a survivor can elect the lump

sum benefit “at any time.”

Claims that arise under the interpretation of the Plan and plan documents

must be brought pursuant to § 1132(a)(1)(B). Innova Hospital San Antonio, Ltd.

Partnership v. Blue Cross and Blue Shield of Georgia, Inc., 892 F.3d 719, 733 (5th

Cir. 2018) (holding that a “claimant whose injury creates a cause of action under [§

1132(a)(1)(B)] may not proceed with a claim under [§ 1132(a)(3)]”) (citation omitted).

Therefore, the Court found that Theriot’s claim for breach of fiduciary duties in

connection with alleged deficiencies in the SPD, alleged in paragraph 33 of Theriot’s

second amended complaint, was a disguised claim for benefits and had to be

dismissed for failure to exhaust administrative procedures.112

111 See R. Doc. No. 44, at ¶ 33.

112 R. Doc. No. 51, at 34–37.

40

II. Reconsideration of Count IV

In the instant motion, Theriot only challenges the Court’s finding that she did

not allege an injury related to an SPD deficiency separate from the denial of

benefits.113 Theriot argues that the alleged injury is separate because the SPD failed

to disclose the Fund’s position that the survivor’s lump sum benefit election

“become[s] invalid if the beneficiary dies before the payment is made,” and had the

SPD disclosed the policy, Mrs. Hamann would have read it, realized her benefits

could not be converted “at any time,” and she would “not have elected to receive the

monthly annuities in the first place.”114

Theriot points to her deposition testimony in which she stated that “when

Audry Hamann realized she needed 24-hour caretakers due to her health, she was

torn between choosing the monthly payments and opting for the lump-sum payout,”

and “[h]ad Defendants accurately included the requirements for conversion of the

monthly benefits to a lump sum payment, in the SPD, Audry Hamann would not

have initially chosen the monthly annuity.”115 Therefore, Theriot asserts, Mrs.

Hamann was misled by the SPD and if the SPD had contained the alleged policy,

she would initially have chosen the lump-sum payout and Theriot would never have

been denied Mrs. Hamann’s benefits.116

113 R. Doc. No. 74-2, at 21–22.

114 Id. at 21.

115 Id.

116 Id.

41

It is unnecessary for the Court to consider any such evidence Theriot may

have to support her argument that Mrs. Hamann was misled and would not have

elected the monthly benefit if the potential consequences were disclosed in the SPD,

because, even when assuming the factual allegations as true, Theriot still has not

stated a plausible claim for relief. ERISA requires:

A summary plan description of any employee benefit plan shall be furnished

to participants and beneficiaries . . . The summary plan description shall . . .

be written in a manner calculated to be understood by the average plan

participant, and shall be sufficiently accurate and comprehensive to

reasonably apprise such participants and beneficiaries of their rights and

obligations under the plan.

29 U.S.C. § 1022(a). The federal regulations that govern summary plan descriptions

provide that a summary plan description “must not have the effect to misleading,

misinforming, or failing to inform participants and beneficiaries.” 29 C.F.R. §

2520.102-2(b). The summary plan description must contain “a statement clearly

identifying circumstances which may result in disqualification, ineligibility, or

denial, loss, forfeiture, suspension, offset, reduction, or recovery . . . of any benefits

that a participant or beneficiary might otherwise reasonably expect the plan to

provide on the basis of the description of benefits” in the summary plan description.

§ 2520.102-3(l). In addition, “[e]xceptions, limitations, reductions, or restrictions of

plan benefits” must be clearly noted. § 2520.102-2(b).

“Because it is merely a summary and cannot contain every term of a plan,

omission of certain terms from the SPD will not alter the governing plan.” Contreras

v. AT&T Services, Inc., 2011 WL 4731172, at *5 (W.D. Tex. Oct. 5, 2011) (citing Fallo

v. Piccadilly Cafeterias, Inc., 141 F.3d 580, 584 n.20 (5th Cir. 1998)). “If, however,

42

the terms of the SPD conflict with the plan, the SPD controls.” Contreras, 2011 WL

4731172, at *5 (citing Fallo, 141 F.3d at 583–84); see also Thomason v. Metropolitan

Life Ins. Co., 703 F. App’x 247, 252 (5th Cir. 2017) (internal citations omitted)

(holding that because a reasonable plan participant could not read the summary

plan description and know with any degree of certainty which of the conflicting

provisions in the summary plan description and plan should control, and would have

to refer to the actual policy for clarification, the ambiguity had to be resolved in

favor of the beneficiary).

Theriot does not cite any authority for her argument that ERISA requires the

Fund’s interpretation, which ultimately resulted in the denial of the Estate’s claim

for benefits, to be in the SPD when it is also not in the Plan’s terms. This is not a

case in which the SPD and Plan’s terms conflict, but rather one in which the alleged

required provision is located neither in the SPD nor the Plan. Assuming, arguendo,

that the interpretation of the provision in the Plan that resulted in the denial of the

Estate’s claim for benefits should have been expressly stated in the Plan and,

therefore, also potentially the SPD, Theriot would still be claiming that she

sustained an injury, i.e. the denial of benefits, as a result of the interpretation of the

Plan’s terms. Consequently, Theriot’s breach of fiduciary duty claim would still arise

under the interpretation of the Plan and would have to be brought pursuant to 29

U.S.C. § 1132(a)(1)(B). Therefore, the Court affirms its dismissal of Count IV

because count IV is a disguised claim for benefits and Theriot failed to exhaust

administrative remedies.

43

Count V

The Court dismissed Count V of Theriot’s second amended complaint for

failure to state a plausible claim for relief.117 Count V alleged that the Fund interfered

with Theriot’s right to be reasonably apprised of her rights, obligations and review

procedures under the Plan in a number of ways, in violation of ERISA, 29 U.S.C. §

1140.118 The Court was unable to draw the reasonable inference that the Fund could

be held liable for the misconduct Theriot alleged and it therefore dismissed count V

for failure to state a plausible claim for relief.119

Theriot does not provide any additional evidence or facts supporting any of her

allegations that the Fund interfered with her rights, but rather argues that the

March 2, 2018 letter did not substantially comply with ERISA, and therefore count V

does state a plausible claim for relief because “[t]he Court dismissed [count V] in large

part due to its conclusion that Defendants substantially complied with ERISA by

virtue of its March 2, 2018 letter.”120 Theriot then argues that her claim under § 1140

can be brought in conjunction with her claim under § 1132(a)(1)(B), and that it is not

a disguised claim for benefits.121

As previously discussed, the Court continues to find that the March 2, 2018

letter substantially complied with ERISA, although it was issued ninety days after

the Estate’s initial claim for benefits. See supra Count I, Section II.A. Additionally,

117 R. Doc. No. 51, at 40.

118 Id.

119 Id.

120 R. Doc. No. 74-2, at 22.

121 Id. at 23–24.

44

as previously discussed, the Fund’s reservation of its defense that the January 5, 2018

letter was untimely and therefore judicial review was foreclosed did not violate

ERISA. See supra Count I, Section II.B. It is therefore unnecessary to address

whether a claim under § 1140 can be brought in conjunction with a claim under §

1132(a)(1)(B), and/or whether this claim would be a duplicative claim for benefits,

because the Court cannot reasonably infer that the Fund interfered with Theriot’s

rights to review under § 1140.

Finally, Theriot argues that “[t]he recently produced, and yet to be produced,

discovery from Defendants directly impacts [her] ability to assert her claim in Count

V,” because “[t]he additional materials in the administrative record, including the

communications that resulted in the denial of Audry Hamann’s claim, should have

been disclosed months ago,” and “[t]he existence of these documents and the

Eligibility Committee meeting minutes, and the Fund’s actions in withholding them,

demonstrate that Defendants’ deviation from ERISA’s procedures interfered with

Plaintiff’s rights.”122 Theriot further argues that “Defendants did not even identify

the items in the administrative record, in violation of ERISA, until one day before the

Court ruled on the motion to dismiss,” and “[t]hese actions significantly interfered

with Plaintiff’s rights under ERISA.”123

Theriot neither identifies which “yet to be produced discovery” or “additional

materials in the administrative record” support her claims nor explains how such

122 Id. at 24.

123 Id.

45

information would show that the Fund purposefully interfered with her rights in the

circumstances identified in her second amended complaint.124 Furthermore, as

previously mentioned, the United States Magistrate Judge denied Theriot’s motion

to compel additional discovery as untimely while this motion was pending, so Theriot

will not receive any additional evidence in the future that she can argue may possibly

support her claim.125

Lastly, Theriot never asked for a continuance of her opposition to the Fund’s

motion to dismiss and, even now, having had several weeks with the produced

discovery, fails to identify the newly produced evidence that supports her allegations.

124 See R. Doc. No. 51, at 40–43. First, Theriot alleged that the Fund interfered with

her right to review when it “twice conveyed to Plaintiff its legal conclusion that she

had failed to exhaust her administrative remedies and even went so far as to state

that her options for administrative/judicial review were foreclosed instead of

apprising her of her rights.” R. Doc. No. 44, at ¶ 34. As just mentioned, the Fund’s

reservation of the defense was proper. Second, Theriot asserted that the Fund

interfered with her rights for review, including her right to appeal the adverse

benefits determination. Id. at ¶ 34. As explained previously, the Fund provided

Theriot with the Plan’s review procedures as an attachment to the March 2, 2018

benefit denial letter, which is sufficient notice under ERISA. Third, Theriot alleged

that the Fund interfered with her rights by failing “to include clear procedures in the

plan documents and SPD for addressing the distribution of benefits in Plaintiff’s

situation.” Id. Even considering the newly disclosed discovery in addition to Theriot’s

complaint, the Court cannot draw a reasonable inference that the Fund intended to

exclude proper distribution procedures in the plan documents or the SPD or that the

Fund failed to do so with the “purpose of interfering” with rights Theriot may become

entitled to under the Plan. See 29 U.S.C. § 1140. Finally, Theriot alleges that the

Fund discriminated against the exercise of her rights to appeal and to judicial review

“by failing to provide an initial formal claim denial and by subsequently instructing

her that she has no rights to judicial review.” R. Doc. No. 44, at ¶ 34. The Court notes

that Theriot’s second amended complaint is misnumbered and this citation refers to

the second ¶ 34 of the second amended complaint. The Court has already addressed

such allegations previously.

125 R. Doc. No. 76.

46

Accordingly, the Court affirms its dismissal of Count V without prejudice for failure

to state a claim for relief.

IT IS ORDERED that the motion for reconsideration is DENIED.

New Orleans, Louisiana, September 30, 2019.

LANGE M. AFRICK

UNITED STATES DISTRICT JUDGE

AT