Oral argument was heard on October 15 in the case of Heimeshoff v. Hartford Life & Acc. Ins. Co.. Briefly, the relevant background of this case is as follows: In August 2005, Heimeshoff filed a claim with Hartford Life & Accident Insurance Co. (Hartford) for long term disability benefits and Hartford denied her claim in December 2005. After retaining counsel and several evaluations by other doctors, Hartford denied Heimeshoff’s claim again in November 2006. Heimeshoff appealed the decision, but Hartford upheld its denial in November 2007. Heimeshoff filed a suit against her employer and the insurer in November 2010.
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. Heimeshoff argued that the three-year statute of limitations should instead run from the date when Hartford denied her claim for the final time in November 2007. The U.S. Court of Appeals for the Second Circuit affirmed.
The question taken up by the Supreme Court was,
When should a statute of limitations accrue for judicial review of an ERISA disability adverse benefit determination?
ERISA does not contain a specific limitations period for challenging the denial of benefits, and the parties must use the most nearly analogous state limitations statute. During argument, the Justices wondered whether the issues in the case even matter. The Justices searched for other avenues to address the problem asking petitioner’s counsel questions along this line. Justice Breyer queried whether the problem could be solved by simply filing suit before the statute of limitations ran and then asking the court to stay the lawsuit pending the outcome of administrative proceedings. Justice Sotomayor: whether the Department of Labor couldn’t just solve the problem by enacting a regulation establishing a statute of limitations. And Justice Kagan: whether Heimeshoff had “identified any cases in which this [accrual date] serves to prevent somebody from bringing a suit,” commenting that his proposed rule “seems just a little bit like a solution in search of a problem.”
According to the petitioner, permitting the statute of limitations to run during the administrative process turns “what should be a non-adversarial, private process into one that is adversarial.” The respondent’s rule would provide an incentive for “more lawyers [to] get involved, because if you are uncertain about how much time you’ll have you will be in a position where you want advice. This provision breeds confusion, and when we are confused we look for help, and the help that is going to come into this process are lawyers.” “That in and of itself drastically undermines the point of this internal benefit administration and just amplifies and magnifies the litigation costs associated with it.”
In questioning Hartford, Justice Breyer wanted to know why it wouldn’t be much simpler to always run the statute of limitations from the date of exhaustion, when the claim accrues. Counsel for Hartford redirected the court, rephrasing the question presented as follows: “The question is, is this term in an ERISA plan, in a suit from which the Petitioner’s rights flow from that plan and her cause of action seeks to enforce the terms of that plan – may that provision be excised from every plan in which it appears in all cases on a categorical basis, because we can imagine the possibility of five or nine cases in which its operation had to be addressed through the application of traditional equitable doctrines?”
According to Chief Justice Roberts, “the last thing you want in this process is to get lawyers involved at the claim procedure.”
For a copy of the decision, click here.