Public Justice to Argue in Supreme Court Against ERISA Statue of Limitations Injustice
Public Justice will argue before the Supreme Court next week on behalf of a disabled former Wal-Mart employee who was denied disability benefits, yet unable to file a lawsuit challenging that denial because of a catch-22 in the Employee Retirement Income Security Act (ERISA) plan’s statute of limitations.
Heimeshoff v. Hartford Insurance revolves around the question of whether or not an ERISA plan can start running the limitations clock on a beneficiary’s federal lawsuit before the suit can actually be brought in court—because the beneficiary is still trying to resolve her disability claim through the plan’s required internal review process.
The question in this case has far reaching implications, as it impacts virtually every participant and beneficiary of an ERISA disability benefits plan. Currently, ERISA plans can effectively run the clock out on a disabled employee’s federal cause of action before that employee can ever even file a claim. The Second Circuit’s holding to this effect exacerbated a preexisting split among the circuits, and the Supreme Court agreed to hear the case.
Public Justice Staff Attorney Matt Wessler will argue the case. Last term, Wessler argued U.S. Airways v. McCutchen, a complicated case involving questions at the intersection of ERISA, tort law and equity. The U.S. Supreme Court issued a split decision in that case.
The plaintiff is Julie Heimeshoff, a former Wal-Mart employee of more than 20 years who rose to the position of Senior Public Relations Manager. When she began experiencing health issues so severe she was unable to work, she applied for the long-term disability insurance provided for her through her benefits plan. But instead of getting her insurance, she began a long and drawn out, Kafakaesque internal review process that ultimately resulted in her claim being denied.
First, several months after she filed the application, the Plan told Ms. Heimeshoff they needed more information from her doctor before it could make a “claim determination.” Though she was given 30 days to provide this information, the Plan officially denied her claim one week later. Ms. Heimeshoff then retained a lawyer to pursue a mandatory appeal of her benefits denial. But the Plan told her that her initial claim was still pending, and said that if she provided the additional information from her doctor it would re-open her claim. So, she underwent more testing and provided more evidence to back up her diagnoses, but the plan again denied her claim, finding her able to work. Lastly, she pursued the required internal appeal of her denial, which again was ultimately denied.
At this point, as a beneficiary who had exhausted the internal appeals process, Ms. Heimeshoff should have had the legal right to file a claim in federal court challenging the plan’s denial. But, rather than starting the clock for the three-year deadline for filing a claim start from the date Ms. Heimeshoff’s claim for benefits was finally denied by her plan, the plan started the clock from time “written proof of loss” was due—near the start of the mandatoryand long internal administrative requirements. In a catch-22, she lost most of the time for filing her lawsuit before she ever had the right to sue in the first place.
In addition to Matt Wessler, Public Justice’s in-house counsel includes Leslie Brueckner and Leah Nicholls. Peter Stris and Brendan Maher of Stris & Maher are co-counsel, and Steve Krafchick is Counsel of Record.