Sedgwick Healthcare Attorneys Obtain Precedential Second Circuit Opinion On Issue of First Impression
Addressing an issue of first impression for the circuit, the U.S. Circuit Court of Appeals for the Second Circuit affirmed a judgment obtained by Sedgwick partner Michael H. Bernstein and associate John T. Seybert for our client in a precedential ruling, upholding the explicit terms of a benefits plan’s limitations period.
Plaintiff filed an ERISA suit in the U.S. District Court for the Southern District of New York to challenge denial of long-term disability benefits by our clients, an insurance carrier and a long-term disability plan. Sedgwick asserted that plaintiff’s claim was time-barred due to her policy’s limitation provision. Plaintiff countered that the policy’s contractual limitations clause cannot start the limitations period until the plaintiff has fully exhausted the administrative appeal process.
The district court agreed with our clients’ position that a court may not override the clear pronouncements of the plan terms and that deference must be “generally afforded (to) written contractual obligations.”
Affirming the district court’s finding, the Second Circuit court ruled that the Department of Labor (DOL) regulations specifying strict time limits for claim adjudication ensures that plan participants will always be able to exhaust administrative remedies and still have a reasonable time within which to commence a lawsuit challenging an adverse decision. This case overrules several prior district court decisions, clarifying a once muddy issue in the circuit. It also impacts other jurisdictions, because other courts can follow the Second Circuit's rationale, addressing the impact of the DOL regulations on plan prescribed limitation of actions clauses.
The case is Burke v. PriceWaterHouseCoopers LLP Long Term Disability Plan, 2009 WL 1964972 (July 9, 2009)