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Tag Archives: Nonforfeitability provisions of ERISA

Exhaustion of Administrative Remedies–the Effect on Claims Alleging Statutory Violations of ERISA

14 Friday Oct 2011

Posted by Lisa T. Silvestri in ERISA

≈ 1 Comment

Tags

Anti-cutback provisions of ERISA, COLA, ERISA, Exhaustion of Administrative Remedies, Nonforfeitability provisions of ERISA, Statutory Violations of ERISA

In Pikas v. Williams Companies, Inc., 2011 WL 4606705 (N.D. Okla. Sept. 30, 2011), Judge Frizzell of the United States District Court for the Northern District of Oklahoma ruled that although statutory claims are not subject to the exhaustion of administrative remedies requirement, exhaustion of remedies may affect when a claim is clearly repudiated and therefore when the statute of limitations is triggered. Plaintiff Pikas filed a class action on behalf of himself and all others who took lump sum pension payments under the Williams Pension Plan, alleging the plan illegally denied lump sum pension recipients the actuarial equivalent of a cost of living adjustment in violation of anti-cutback and nonforfeitability provisions of ERISA. Williams moved to dismiss Pikas’ individual claims as time barred, arguing that although claims for benefits due under the terms of a plan are subject to administrative exhaustion, statutory claims are not, and Pikas filed his lawsuit more than three years after he received the lump sum payment about which he complains. Judge Frizzell agreed with Williams that administrative exhaustion was not required for statutory violation claims, stating “[i]nterests of judicial economy would not be served by requiring administrative exhaustion because the dispute is one of law, not fact.” Id. at *3. Judge Frizzell turned to the issue of what facts and circumstances lead to a clear repudiation of the plaintiffs’ claims, concluding that “class plaintiffs’ claims accrued when they received their lump sum payments.” Id. at *5. However, because Pikas questioned whether he received a COLA and pursued his administrative remedies, his claims did not accrue until the administrative remedies were exhausted because “Pikas did not have clear knowledge he would be denied a COLA until after he exhausted his administrative remedies.” Id. Among other things, Judge Frizzell noted language in the relevant plan that stated beneficiaries must file a claim and “request a review of any complete or partial denial prior to seeking a review of your claim for benefits in a court of law” and noted that Williams had sent a letter to Pikas at the conclusion of the administrative process stating that Pikas “has now” exhausted his remedies and has a right to bring a civil action. Pikas, 2011 WL 4606705 at *5. Judge Frizell held that “[b]ecause Pikas relied on the Plan and pursued his administrative remedies, and because Williams then communicated that he had a right to bring a civil action, Williams is now estopped from claiming otherwise….Pikas timely pursued his administrative remedies as directed by the Plan, and should not now be penalized for doing so.” Id. Judge Frizzell declined Pikas’ invitation to extend the holding to require exhaustion of administrative remedies for clear repudiation to occur. Id. Thus, the class was left with one rule for Pikas (trigger upon exhaustion of administrative remedies) and another for the rest of the class (trigger upon receipt of the lump sum payment). Judge Frizzell noted that Williams had advised the result could make class treatment inappropriate but did not seek to decertify the class or withdraw its stipulation that the case qualified for class treatment. Id. at *1.

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