District Court Decision Highlights Two (2) Major Impediments to “Failure to Supply Information” Claim

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Nov 262013
 

Although the goal, or at least the primary goal, of most ERISA cases is the recovery of some sort of employment “benefit,” as to which suit is authorized under 29 U.S.C. 1132(a)(1)(B), occasionally an ERISA litigant will pursue a claim under 29 U.S.C. 1132(a)(1)(A). That subsection authorizes suit “for the relief provided for in” 29 U.S.C. 1132(c), which, in turn, requires that certain information be made available to a beneficiary within thirty (30) days of a request, and sets out a penalty — currently $110.00 per day — for noncompliance.

The number of reported decisions that have addressed (a)(1)(A) claims is minuscule in comparison to those that have addressed (a)(1)(B) claims, but from those that exist, a common theme has emerged to the effect that there are two (2) primary obstacles to an (a)(1)(A) claim. The first is that not every information “possessor” is a proper target for an (a)(1)(A) claim; only an “administrator” is. The second is that the subsection only covers certain “information,” to wit, “information which [the] administrator is required by [subchapter I of ERISA] to furnish.” The consensus is that this boils down to 29 U.S.C. 1024(b)(4), which lists, among other things, the “latest updated summary plan description” and “other instruments under which the plan is established or operated.” No where on the list does “claim material” or the like appear, and since it is that brand of “information” that forms the basis for most (a)(1)(A) claims that have resulted in reported decisions, most have come up short.

A recent decision out of the Southern District of New York, Curran v. Aetna Life Ins. Co., 2013 WL 6049121, highlights these issues quite effectively.

Curran v. Aetna Life Ins. Co., 2013 WL 6049121 (S.D.N.Y. Nov. 15, 2013)

Supreme Court Review of Second Circuit “Recoupment” Case Sought

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Nov 072013
 

In the “prototypical” ERISA benefits case, a claimant sues a provider to obtain benefits asserted to have been wrongfully withheld. Occasionally, however, the dynamic is reversed, with the benefit provider going on the offensive and the claimant being the target. This happens, generally speaking, in one of three scenarios: (i) when a disability benefit provider is looking to recover or “recoup” benefits paid, because the recipient of the benefits subsequently received benefits from a different source (e.g., Social Security) that the provider is permitted (under the terms of the plan) to offset; (ii) when a claimant obtains a third-party recovery that covers (in whole or in part) medical expenses for which a benefit provider made payment; and (iii) when a benefit provider is trying to recover benefits that it claims to have paid in error.

In March 2013, the Second Circuit held in Thurber v. Aetna Life Ins. Co. that a disability insurer should be permitted to recoup benefits that are subject to an offset (category (i) above) notwithstanding the fact that when recoupment was first sought, the funds were no longer in the claimant’s possession (because they had, in the vernacular used by the court, “dissipated”). The decision contains an excellent synopsis of the Supreme Court’s treatment of recoupment cases over the years, and there is, at present, an application pending to have the Supreme Court review the “dissipation” issue on which the case is centered. More on that if the application is granted. Stay tuned.

Thurber v. Aetna Life Ins. Co., 712 F.3d 654 (2d Cir. 2013)