sufficient to satisfy the exhaustion requirement.
Barnett argues that she did not "simply ignore" the procedure available to her as did Cappiello, but that she knew that this procedure would be futile. However, Cappiello also alleged futility, claiming that a de facto denial of her informal appeal established the futility of filing an appeal in accordance with formal administrative procedures. Id. Judge Mukasey responded that Cappiello's position amounted to "a request that this court disregard the administrative procedures entirely, a position contrary to both the Plan and case law." Id. at *4.
A de facto denial is simply not sufficient to satisfy the futility exception to the exhaustion requirement. In Schein v. News America Publishing, Inc., No. 89 Civ. 0052, 1989 U.S. Dist. LEXIS 5705, 1989 WL 56255 (S.D.N.Y. May 23, 1989) (Mukasey, J.), the court held that in a situation in which a minority of the members of a benefits committee express firm beliefs to the plaintiff that the plaintiff's claims are without merit and that the view of the committee is fixed, there is still no futility and the exhaustion requirement bars the plaintiff's claims, because a majority of the committee has not considered them. Schein, 1989 U.S. Dist. LEXIS 5705, 1989 WL 56255, at *3-4.
The threshold required by the futility exception is very high and informal representations of the views of a committee are not a sufficient basis for claiming futility. In the present case, the representations that IBM had conducted an independent review were made only by IBM managers and personnel department employees. There was no effort by the plaintiff to present her claims to the full committee and certainly no effort to pursue any appeal.
IBM argues, in the alternative, that even if Barnett had made an adequate showing of futility, her § 1132 claim is nonetheless barred by the applicable statute of limitations. ERISA does not itself prescribe a limitations period for actions to obtain benefits. The statute of limitations applicable to a claim arising under ERISA is the statute of limitations of the most analogous state law claim. Miles v. New York State Teamsters Conference Pension and Retirement Fund Employee Pension Benefit Plan, 698 F.2d 593, 598 (2d Cir.), cert. denied, 464 U.S. 829, 78 L. Ed. 2d 108, 104 S. Ct. 105 (1983); see generally, Wilson v. Garcia, 471 U.S. 261, 266-67, 85 L. Ed. 2d 254, 105 S. Ct. 1938 (1985) ("When Congress has not established a time limitation for a federal cause of action, the settled practice has been to adopt a local time limitation as federal law if it is not inconsistent with federal law or policy to do so.").
Citing Miles, IBM argues that claims under § 1132 are most often analogized to actions for breach of contract. See also Patterson-Priori v. Unum Life Ins. Co. of America, 846 F. Supp. 1102, 1104 (E.D.N.Y. 1994). Barnett replies that in Miles the court stated only that the six year statute of limitations provided by CPLR 213 is the applicable statute of limitations for a claim for benefits under § 1132 when New York is the state whose law is controlling, but not that CPLR 213(2), applicable to contract actions, is the specific provision of CPLR 213 that applies.
Barnett argues it is more reasonable to conclude that CPLR 213(1) is the provision of CPLR 213 on which the court in Miles relied. CPLR 213(1) provides that an action must be commenced in six years if it is "an action for which no limitation is specifically prescribed by law. . . ." N.Y. CPLR 213(1). The issue of whether Miles relied on CPLR 213(1) or CPLR 213(2) is significant, because IBM argues that under the New York borrowing statute, CPLR 202, the Court should apply the shorter relevant statute of limitations as between the statute of limitations in New York and in North Carolina, where the plaintiff resides. Under North Carolina law, the statute of limitations for breach of contract is not equivalent to the statute of limitations for actions for which no limitation is specifically prescribed by law.
The Court of Appeals in Miles was apparently referring to the six year statute of limitations for breach of contract contained in CPLR 213(2). If the Court of Appeals had intended to rely upon the statute of limitations for actions for which no limitation is specifically proscribed by law, a more analogous state law provision would have been CPLR 214(2) which provides a limitations period for actions to recover upon a liability created by statute when no statute is otherwise applicable and it is thus more applicable to § 1132 claims than CPLR 213(1).
In Patterson-Priori, the court also read Miles as holding that "New York's six-year statute of limitations for contract actions, N.Y. Civ. Prac. L. & R. § 213 (McKinney 1990), is most analogous to Section 1132 actions and hence should control." Patterson-Priori, 846 F. Supp. at 1104 (citations omitted).
Every other court of appeals to have considered the question has also concluded that a breach of contract statute of limitations is the appropriate statute of limitations to be applied to § 1132 claims. See, e.g., Meade v. Pension Appeals and Review Committee, 966 F.2d 190, 195 (6th Cir. 1992) ("Other courts have uniformly characterized section 1132(a)(1)(B) claims as breach of contract claims for purposes of determining the most analogous statute of limitations under state law."); Johnson v. State Mutual Life Assurance Co., 942 F.2d 1260, 1263 (8th Cir. 1991) ("We agree with those federal courts that have held, without exception to our knowledge, that a suit for ERISA benefits under § 1132(a)(1)(B) should be characterized as a contract action for statute of limitations purposes, unless a breach of the ERISA trustee's fiduciary duties is alleged.") (citations omitted); Dameron v. Sinai Hospital of Baltimore, Inc., 815 F.2d 975, 981 (4th Cir. 1987) (same); Jenkins v. Local 705 Int'l Bhd. of Teamsters Pension Plan, 713 F.2d 247, 252-53 (7th Cir. 1983) (same).
For all of the foregoing reasons, the statute of limitations to be applied to § 1332 claims is the statute of limitations for contract actions under state law.
IBM correctly argues that because the plaintiff's cause of action accrued in North Carolina, where she was employed, the Court should consider North Carolina's statute of limitations for contract actions under New York's "borrowing statute," CPLR 202,
to determine whether New York or North Carolina law applies. See Arneil v. Ramsey, 550 F.2d 774, 779 (2d Cir. 1977); Gorlin v. Bond Richman & Co., 706 F. Supp. 236, 239 (S.D.N.Y. 1989). CPLR 202 requires the Court to apply the shorter of the two applicable statutes of limitation, because Barnett is not a New York resident. The North Carolina period of limitations for contract actions is three years, which is shorter than New York's six year period. See N.C. Gen. Stat. § 1-52(1).
The accrual of a claim under ERISA is determined by federal law. Tolle v. Carroll Touch, Inc., 977 F.2d 1129, 1138 (7th Cir. 1992); Smith v. Rochester Tel. Bus. Marketing Corp., 786 F. Supp. 293, 306 (W.D.N.Y. 1992), aff'd, 40 F.3d 1236 (2d Cir. 1994); see also Keating v. Carey, 706 F.2d 377, 382 (2d Cir. 1983) (holding for § 1983 actions that although state law determines the limitations period, federal law determines when the claim arises). A claim for benefits under ERISA accrues when an application for benefits is denied. Held, 912 F.2d 1197 at 1205-06; Miles, 698 F.2d at 598; Patterson-Priori, 846 F. Supp. at 1106. In this case, the claim under § 1132 accrued at the time at which it became futile to apply for benefits, because the plaintiff alleges that at that time there was a de facto denial of her claim.
A summons with notice for this action was filed on April 22, 1994 in the New York State Supreme Court, from which the action has been removed and thus the § 1132 claim is time barred if it accrued prior to April 22, 1991. Barnett was terminated on April 25, 1991. Paragraph 38 of the complaint alleges that "Barnett did not apply for long-term disability benefits because such an application would have been futile," but does not specify when the alleged futility, resulting from the de facto denial, commenced. If the de facto denial occurred prior to April 22, 1991, then Barnett's § 1132 claim is deficient not only because it fails to show cause for departing from the exhaustion requirement, but also because it is time-barred.
Barnett's § 1132 claim would not be time barred only if the de facto denial occurred after April 22, 1991. This conclusion further reinforces the finding that Barnett has not pleaded facts sufficient to justify an exception to the exhaustion requirement on the ground of futility. Futility must be established by a clear and positive showing. Kennedy, 989 F.2d at 594. In this case, any showing of futility must establish that the futility occurred after April 22, 1991, because any earlier de facto denial that is alleged to constitute futility would trigger the accrual of the limitations period and bar this suit under the applicable three year statute of limitations. The complaint makes no showing that the de facto denial occurred subsequent to April 22, 1991, let alone a clear and positive one. Indeed plaintiff attempts to rely on actions that occurred in 1989 to support her allegation of futility such as the allegation that beginning in January, 1989, IBM advised Barnett not to file for disability benefits pending determination of her workers' compensation dispute. A claim based on such allegations would plainly be time barred.
IBM correctly argues that yet another reason that the plaintiff's § 1132 claim must be dismissed is that ERISA only authorizes suits for benefits against the plan itself, not against the plaintiff's employer or the plan sponsor. See Leonelli v. Pennwalt Corp., 887 F.2d 1195, 1199 (2d Cir. 1989); Gelardi v. Pertec Computer Corp., 761 F.2d 1323, 1324-25 (9th Cir. 1985). In Leonelli, the Court of Appeals for the Second Circuit upheld, on several grounds, the district court's refusal to allow the plaintiff to amend his complaint to plead ERISA claims. The Court held that ERISA did not provide for an action against the two individual defendants under § 1132, because:
The proposed amended cause of action under ERISA's civil enforcement provision, § 1132(a)(1)(B), for failure to pay benefits due under the pension Plan would be barred by plaintiff's failure to name the Pension Administrative Committee as a defendant. In a recovery of benefits claim, only the plan and the administrators and trustees of the plan in their capacity as such may be held liable. See § 1132(d)(2); see also Gelardi v. Pertec Computer Corp., 761 F.2d 1323, 1324-25 (9th Cir. 1985) (per curiam).
Leonelli, 887 F.2d at 1199; see also 29 U.S.C. §§ 1132(d)(1), (2).
In the present case, neither the plan nor an administrator, trustee, or other fiduciary
is named as a defendant. The § 1132 claim against IBM must be dismissed, because IBM is not a proper defendant to such a claim and it is therefore not a claim upon which relief can be granted.
IBM argues that the plaintiff's second claim, arising under 29 U.S.C. § 1140 (ERISA § 510), should be dismissed because it was not brought within the applicable limitations period. IBM acknowledges that there is no exhaustion requirement for claims brought under 29 U.S.C. § 1140. See Held v. Manufacturers Hanover Leasing Corp., 912 F.2d 1197, 1205 (10th Cir. 1990); Zipf v. American Tel. & Tel. Co., 799 F.2d 889, 891-94 (3d Cir. 1986); Amaro v. Continental Can Co., 724 F.2d 747 (9th Cir. 1984); Molina v. Mallah Org., Inc., 804 F. Supp. 504, 511-512 (S.D.N.Y. 1992); Lawford v. New York Life Ins. Co., 739 F. Supp. 906, 911-13 (S.D.N.Y. 1990).
A claim accrues under § 1140 when the employer decides to discharge an employee and communicates that decision to him. Tolle, 977 F.2d at 1138. Barnett was terminated on or about April 25, 1991 according to the complaint, and she has conceded that her claim accrued no later than this date. Memo in Opp. at 5.
IBM correctly argues that the state law claim most analogous to a wrongful discharge claim under § 1140 is a claim for wrongful discharge or employment discrimination. See Byrd v. MacPapers, Inc., 961 F.2d 157, 159 (11th Cir. 1992); McClure v. Zoecon, Inc., 936 F.2d 777, 778 (5th Cir. 1991) ("Nearly all [courts] have construed § 510 claims as wrongful discharge or employment discrimination claims.") (citations omitted); Held, 912 F.2d at 1205 (holding that the most analogous claim for relief under New York Law is a claim for employment discrimination). In particular, a claim for discharge in retaliation for seeking workers' compensation benefits or to prevent the seeking of workers' compensation benefits is the claim most analogous to a § 1140 claim, the only difference in the nature of the claims being in the type of benefits involved. See Byrd, 961 F.2d at 159 ("Florida Statute § 440.205 is most closely analogous to § 510 of ERISA in that it prohibits the discharge of an employee in retaliation for the employee's claim or attempted claim for compensation under Florida's workers' compensation law.").
New York Workers' Compensation Law § 120 provides a two year period in which to bring claims for retaliatory discharge or discrimination resulting from an attempt to claim workers' compensation benefits.
North Carolina General Statutes § 97-6.1 provided a one year limitations period for such claims. Section 97-6.1 was repealed effective October 1, 1992 by 1991 (Regular Session 1992) N.C. Sess. Laws c. 1021, § 4. Nonetheless, if otherwise applicable, it bars the plaintiff's § 1140 claim because that claim was barred under the statute before the statute was repealed. See Gillespie v. American Motors Corp., 51 N.C. App. 535, 538, 277 S.E.2d 100, 101 (N.C. Ct. App. 1981) ("Once a claim is barred by the running of the applicable statute of limitations, it cannot be revived by a subsequent action of the legislature.") (citations omitted). Barnett's claim under § 1140 accrued no later than April 25, 1991 and was therefore barred by § 97-6.1 on April 25, 1992, prior to October 1, 1992 when the repeal of the statute was effective.
Under CPLR 202, the New York borrowing statute, N.C. Gen. Stat. § 97-6.1 provides the applicable statute of limitations, rather than New York Workers' Compensation Law § 120, because it provides a shorter limitations period and Barnett is not a resident of New York. Barnett did not commence this action prior to April 25, 1992, and therefore her § 1140 claim is time barred by § 97-6.1.
Barnett argues that the Court should not apply a statute of limitations for wrongful discharge or discrimination in retaliation for seeking workers' compensation benefits to her § 1140 claim, but rather a statute of limitations for general discrimination claims. She relies on Held v. Manufacturers Hanover Leasing Corp., 912 F.2d 1197 (10th Cir. 1990), which found that the most analogous claim under New York law to a § 1140 claim is a claim for employment discrimination, for which CPLR 214(2) provides a three year limitations period. However, in Held the court did not explicitly consider whether a claim alleging discriminatory retaliation for seeking workers' compensation benefits was more analogous to a § 1140 claim than a general discrimination claim. Indeed, there was no statute of limitations specifically provided in § 120 of the N.Y. Workers' Compensation Law until October 26, 1987, three years after the plaintiff in Held was discharged. See 1987 N.Y. Laws c. 436, § 1 (creating two year limitation period). A claim alleging retaliation based on a plaintiff's attempt to secure workers' compensation benefits is more analogous to a § 1140 claim, which also alleges retaliation based on a plaintiff's efforts to secure benefits. See Byrd, 961 F.2d at 159.
IBM argues that the plaintiff's third claim for relief, arising under 29 U.S.C. § 1133 (ERISA § 503), should be dismissed because § 1133 does not provide a basis for relief independent of that provided by § 1132. IBM asserts that any claim under § 1133 is necessarily subsumed by the plaintiff's claim under § 1132. In Chambless v. Masters, Mates & Pilots Pension Plan, 571 F. Supp. 1430 (S.D.N.Y. 1983), relied on by IBM, the court found that it had jurisdiction under 29 U.S.C. § 1132(f) over a cause of action that contained a claim alleging a violation of § 1133. See Chambless, 571 F. Supp. at 1436 & n.8, 1457-58. The court did not regard the § 1133 claim as subsumed in a § 1132 claim, but considered § 1132 as providing the jurisdictional basis to the claim under § 1133 that the hearing denying benefits was not fair. In Guthrie v. Hewlett-Packard Co. Employee Benefits Org., 773 F. Supp. 1414 (D. Colo. 1991), relied on by Barnett in opposition to IBM's argument, the court took a similar approach. It found that the plaintiff's action challenging a denial of long-term disability benefits was brought under 29 U.S.C. § 1132(a)(1)(B), which by its terms authorizes persons to bring suit, and that one of three grounds of alleged arbitrariness was a charge that the defendant had failed to comply with 29 U.S.C. § 1133 and 29 C.F.R. § 2560.503-1(f).
See Guthrie, 773 F. Supp. at 1415-16, 1418-19.
The parties dispute over the characterization of the § 1133 claim is merely a matter of semantics.
The plaintiff's claim under § 1133 must be dismissed not because it is subsumed by her § 1132 claim, but because it is a claim authorized by § 1132 and is therefore subject to the requirement of exhaustion of administrative remedies and the requirement that the plan be named as a defendant in a suit to recover benefits allegedly due.
Moreover, Barnett's § 1133 claim would otherwise be subject to dismissal, because it is undisputed that there was no formal, administrative denial of any claim for benefits. In Cappiello, the court held that Cappiello's claim arising under § 1133 was without merit, because, having never actually filed the claim for review at issue, she could not assert that she had improperly been denied notice of the reasons for denial of such a claim or that she had not been provided a full and fair review of the claim. Cappiello, 1994 U.S. Dist. LEXIS 968, 1994 WL 30429, at *4. The court therefore granted summary judgment in favor of the defendants. The same is true in this case. Barnett cannot complain about the absence of a full and fair hearing when she never asked for one.
For the foregoing reasons, the complaint is dismissed with prejudice. The plaintiff's claims under 29 U.S.C. §§ 1132, 1133 are dismissed for failure to exhaust administrative remedies and for failure to state a claim upon which relief may be granted. The plaintiff's claim under 29 U.S.C. 1140 is dismissed for failure to commence this action within the applicable statute of limitations.
Dated: New York, New York
May 8, 1995
John G. Koeltl
United States District Judge