Lawyers who handle ERISA cases always have to explain to their clients that in ERISA cases, the administrative process has to be completed before a lawsuit can be filed. This is illustrated in this 2019 opinion from the Southern District of Texas, Houston Division case styled, Lisa K. Bunner v. Dearborn National Life Insurance Company, et. al.
This case arises out of denial of long-term disability benefits to Lisa contained in her employee welfare benefit plan. This case is governed by the Employee Retirement Income Security Act of 1974 (ERISA).
The details of this case can be read in the opinion. What is relevant here is the Court stating / emphasizing the requirement that the administrative process be exhausted prior to filing a lawsuit.
The Fifth Circuit Court of Appeals, which is the example for this Court has made clear that it has a “policy of encouraging the parties to resolve their dispute at the administrator’s level before filing suit in district before filing suit in district court.” As the Court stated, in this case, the parties ignored the policy of the Fifth Circuit and much of the language of ERISA. Lisa argues that the defendants have violated many of ERISA’s provisions, including tolling their deadline for reasons not provided for in ERISA. Defendants argue that Lisa has rushed to file a lawsuit before Defendants rendered a final determination of Lisa’s appeal. As a result the parties conduct has led to two competing views of a messy administrative record. It is the Court’s job to review a final decision of the plan administrator, not to referee the administrative process for the parties.
Lisa has an obligation to exhaust her administrative remedies unless it was futile to do so. To show futility a claimant must generally show a certainty of an adverse decision or that her claim would not have been considered.
The language used by the Court is something all ERISA lawyers need to make clients understand. And clients must get an ERISA lawyer involved in the administrative appeal to enhance the chances of prevailing.