Heimeshoff v. Hartford Life & Accident Insurance Co.

PETITIONER: Julie Heimeshoff
RESPONDENT: Hartford Life & Accident Insurance Co. and Walmart Stores
LOCATION: Hartford Life & Accident Insurance Co. Headquarters

DOCKET NO.: 12-729
DECIDED BY: Roberts Court (2010-2016)
LOWER COURT:

CITATION: 571 US (2013)
GRANTED: Apr 15, 2013
ARGUED: Oct 15, 2013
DECIDED: Dec 16, 2013

ADVOCATES:
Catherine M.A. Carroll - for the respondents
Ginger D. Anders -
Ginger D. Anders - Assistant to the Solicitor General, Department of Justice, for the United States, as amicus curiae, supporting the petitioner
Matthew W.H. Wessler - for the petitioner

Facts of the case

Julie Heimeshoff worked for Wal-Mart as Senior Public Relations Manager from April 1986 through June 2005. In January 2005, she began suffering from pain from fibromyalgia as well as Irritable Bowel Syndrome and lupus. By June, her condition was so severe that she had to leave work. In August 2005, Heimsehoff filed a claim with Hartford Life & Accident Insurance Co. (Hartford) for Long Term Disability benefits. Heimsehoff's doctor failed to provide an analysis of her condition to Harford, so Hartford denied her claim in December 2005. In May 2006, Heimsehoff obtained counsel to assist her in obtaining benefits. After several evaluations by other doctors, Hartford denied Heimsehoff's claim again in November 2006, finding that she could perform the duties of her former position. Heimsehoff appealed the decision, but Hartford denied her claim for a final time in November 2007.

Heimsehoff sued in district court, alleging that Hartford violated the Employment Retirement Income Security Act (ERISA) in denying her claim. The district court dismissed the suit as time barred because the plan unambiguously prohibited legal action more than three years after proof of loss is required. Heimsehoff argued that the three-year statute of limitations should instead run from the date when Hartford denied her claim for the final time. The U.S. Court of Appeals for the Second Circuit affirmed.

Question

When should the statute of limitations period for judicial review of an ERISA disability benefit decision begin?

Media for Heimeshoff v. Hartford Life & Accident Insurance Co.

Audio Transcription for Oral Argument - October 15, 2013 in Heimeshoff v. Hartford Life & Accident Insurance Co.

Audio Transcription for Opinion Announcement - December 16, 2013 in Heimeshoff v. Hartford Life & Accident Insurance Co.

In case 12-729, versus Heimeshoff versus Hartford Life & Accident Insurance Company.

Justice Thomas has the opinion of the court.

This case comes though us on a writ of certiorari to the United States Court of Appeals for the Second Circuit.

Respondent Hartford is the administrator of Wal-Mart's Group Long Disability Plan, an employee benefit plan covered by the Employee Retirement Income Security Act of 1974 or ERISA.

Under the statute, if a plan participant brings a claim for benefits and the plan denies a claim, the participant may seek judicial review.

ERISA does not specify a statute of limitations for judicial review, but the insurance policy for this particular plan requires participants to file suit within three years after the participant's proof of loss is due.

Petitioner Julie Heimeshoff filed a claim for long-term disability benefits with Hartford.

She submitted proof of loss in the form of a physician's diagnostics statement.

Following the administrative review process required by ERISA regulations, Hartford issued its final decision after some back and forth, its final denial two years later.Less than three years after that final denial, but more than three years after her proof of loss was due, Heimeshoff filed a claim for judicial review.

Hartford and Wal-Mart moved to dismiss on the ground that the claim was untimely.

Heimeshoff opposed the motion and argue that the limitation's period should not commence until after the completion of the administrative review process when she could first file suit.

The District Court granted the motion to dismiss recognizing that while ERISA does not provide a statute of limitations, the three-year limitations period in the insurance policy was enforceable under applicable state law and Circuit precedent.

The Second Circuit affirmed.

In an opinion filed with the clerk today, we now affirmed the judgment of the Second Circuit.

According to our precedent, a contractual limitations provision is enforceable as long as two conditions are met.

First, the limitations period must be -- must not be unreasonably short.

Second, there must not be a controlling statute that is contrary to the contractual provision.

We conclude that this approach allows parties to agree not only to the length of -- of the limitations period, but also to the date of its commencement.

The principle that contractual limitations provision should ordinarily be enforced is especially appropriate when it comes to ERISA, a statute that generally insists on enforcing planned terms as written.

Applying that framework, we conclude that this plan's limitations provision is enforceable.

First, the plan's limitations period is a reasonable length on its face.

ERISA regulations contemplate that plans will resolve mainstream claims in about one year, leaving participants with two years to file suit even in this case where the administrative review process was unusually long, Heimeshoff still have approximately one year to file suit.

We conclude that three years is not an unreasonably short period.

Second, the plan's limitations provision is consistent with ERISA's two-step remedial framework, that is administrative review first, followed by judicial review.

It is true that proof of loss is due before a plan's administrative process can be completed, and that will effectively shorten the contractual limitations period.

But participants are unlikely to sacrifice the full measure of administrative review in order to preserve more time for filing suit.

Enforcing this common contractual limitations provision will not diminish the availability of judicial review.

Evidence from 40 years of ERISA administration suggest that very few participants who seek judicial review are time barred as a result of the three-year limitations provision.

Heimeshoff has identified only a handful of such cases and those suggest that the bar falls on participants who have not diligently pursued their rights.

In any event, courts are well equipped to apply traditional doctrines such as waiver, estoppel or equitable tolling that may allow otherwise time-barred participants to proceed.