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SUPREME COURT OF THE UNITED STATES
_________________
No. 12–729
_________________
JULIE HEIMESHOFF, PETITIONER v. HARTFORD LIFE
& ACCIDENT INSURANCE CO. et al.
on writ of certiorari to the united states
court of appeals for the second circuit
[December 16, 2013]
Justice Thomas
delivered the opinion of the Court.
A participant in an
employee benefit plan covered by the Employee Retirement Income
Security Act of 1974 (ERISA), 88Stat. 829, as amended, 29 U. S. C.
§1001 et seq., may bring a civil action under §502(a)(1)(B) to re-
cover benefits due under the terms of the plan. 29
U. S. C. §1132(a)(1)(B). Courts have generally required
participants to exhaust the plan’s administrative remedies before
filing suit to recover benefits. ERISA does not, however, specify a
statute of limitations for filing suit under §502(a)(1)(B). Filling
that gap, the plan at issue here requires participants to bring
suit within three years after “proof of loss” is due. Because proof
of loss is due before a plan’s administrative process can be
completed, the ad- ministrative exhaustion requirement will, in
practice, shorten the contractual limitations period. The question
presented is whether the contractual limitations provision is
enforceable. We hold that it is.
I
In 2005, petitioner
Julie Heimeshoff began to report chronic pain and fatigue that
interfered with her duties as a senior public relations manager for
Wal-Mart Stores, Inc. Her physician later diagnosed her with lupus
and fibromyalgia. Heimeshoff stopped working on June 8.
On August 22, 2005,
Heimeshoff filed a claim for long-term disability benefits with
Hartford Life & Accident Insurance Co., the administrator of
Wal-Mart’s Group Long Term Disability Plan (Plan). Her claim form,
supported by a statement from her rheumatologist, listed her
symptoms as “ ‘extreme fatigue, significant pain, and
difficulty in concentration.’ ” [
1 ] App. to Pet. for Cert. 7. In November 2005, Hartford
notified Heimeshoff that it could not determine whether she was
disabled because her rheumatologist had never responded to
Hartford’s request for additional information. Hartford denied the
claim the following month for failure to provide satisfactory proof
of loss. Hartford instructed Heimeshoff that it would con- sider an
appeal filed within 180 days, but later informed her that it would
reopen her claim, without the need for an appeal, if her
rheumatologist provided the requested information.
In July 2006, another
physician evaluated Heimeshoff and concluded that she was disabled.
Heimeshoff sub- mitted that evaluation and additional medical
evidence in October 2006. Hartford then retained a physician to
review Heimeshoff’s records and speak with her rheumatologist. That
physician issued a report in November 2006 concluding that
Heimeshoff was able to perform the activities required by her
sedentary occupation. Hartford denied Heimeshoff’s claim later that
November.
In May 2007, Heimeshoff
requested an extension of the Plan’s appeal deadline until
September 30, 2007, in order to provide additional evidence.
Hartford granted the extension. On September 26, 2007, Heimeshoff
submitted her appeal along with additional cardiopulmonary and
neuropsychological evaluations. After two additional physicians
retained by Hartford reviewed the claim, Hartford issued its final
denial on November 26, 2007.
On November 18, 2010,
almost three years later (but more than three years after proof of
loss was due), Heimeshoff filed suit in District Court seeking
review of her denied claim pursuant to ERISA §502(a)(1)(B).
Hartford and Wal-Mart moved to dismiss on the ground that
Heimeshoff’s complaint was barred by the Plan’s limitations
provision, which stated: “Legal action cannot be taken against The
Hartford . . . [more than] 3 years after the time written
proof of loss is required to be furnished according to the terms of
the policy.” Id., at 10.
The District Court
granted the motion to dismiss. Recognizing that ERISA does not
provide a statute of limitations for actions under §502(a)(1)(B),
the court explained that the limitations period provided by the
most nearly analogous state statute applies. See North Star Steel
Co. v. Thomas, 515 U. S. 29 –34 (1995). Under Connecticut law,
the Plan was permitted to specify a limitations period expiring
“[not] less than one year from the time when the loss insured
against occurs.” [
2 ] Conn.
Gen. Stat. §38a–290 (2012); see App. to Pet. for Cert. 13. The
court held that, under Circuit precedent, a 3-year limitations
period set to begin when proof of loss is due is enforceable, and
Heimeshoff’s claim was therefore untimely. [
3 ] Id., at 13, 15 (citing Burke v.
PriceWaterHouseCoopers LLP Long Term Disability Plan, 572
F. 3d 76, 79–81 (CA2 2009) (per curiam)).
On appeal, the Second
Circuit affirmed. 496 Fed. Appx. 129 (2012). Applying the precedent
relied on by the District Court, the Court of Appeals concluded
that it did not offend ERISA for the limitations period to commence
before the plaintiff could file suit under §502(a)(1)(B). Because
the policy language unambiguously provided that the 3-year
limitations period ran from the time that proof of loss was due
under the Plan, and because Heimeshoff filed her claim more than
three years after that date, her action was time barred.
We granted certiorari
to resolve a split among the Courts of Appeals on the
enforceability of this common contractual limitations provision.
569 U. S. ___ (2013). Compare, e.g., Burke, supra, at 79–81
(plan provision requiring suit within three years after
proof-of-loss deadline is enforceable); and Rice v. Jefferson Pilot
Financial Ins. Co., 578 F. 3d 450, 455–456 (CA6 2009) (same),
with White v. Sun Life Assurance Co. of Canada, 488 F. 3d 240,
245–248 (CA4 2007) (not enforceable); and Price v. Provident Life
& Acc. Ins. Co., 2 F. 3d 986, 988 (CA9 1993) (same). We
now affirm.
II
Statutes of
limitations establish the period of time within which a claimant
must bring an action. As a general matter, a statute of limitations
begins to run when the cause of action “ ‘accrues’ ”—that
is, when “the plaintiff can file suit and obtain relief.” Bay Area
Laundry and Dry Cleaning Pension Trust Fund v. Ferbar Corp. of
Cal., 522 U. S. 192, 201 (1997) .
ERISA and its
regulations require plans to provide certain presuit procedures for
reviewing claims after par- ticipants submit proof of loss
(internal review). See 29 U. S. C. §1133; 29 CFR
§2560.503–1 (2012). The courts of appeals have uniformly required
that participants exhaust internal review before bringing a claim
for judicial review under §502(a)(1)(B). See LaRue v. DeWolff,
Boberg & Associates, Inc., 552 U. S. 248 –259 (2008) (Roberts,
C. J., concurring in part and concurring in judgment). A
participant’s cause of action under ERISA accordingly does not
accrue until the plan issues a final denial.
ERISA §502(a)(1)(B)
does not specify a statute of limitations. Instead, the parties in
this case have agreed by contract to a 3-year limitations period.
The contract specifies that this period begins to run at the time
proof of loss is due. Because proof of loss is due before a
participant can exhaust internal review, Heimeshoff contends that
this limitations provision runs afoul of the general rule that
statutes of limitations commence upon accrual of the cause of
action.
For the reasons that
follow, we reject that argument. Absent a controlling statute to
the contrary, a participant and a plan may agree by contract to a
particular limitations period, even one that starts to run before
the cause of action accrues, as long as the period is
reasonable.
A
Recognizing that
Congress generally sets statutory limitations periods to begin when
their associated causes of action accrue, this Court has often
construed statutes of limitations to commence when the plaintiff is
permitted to file suit. See, e.g., Graham County Soil & Water
Conservation Dist. v. United States ex rel. Wilson, 545 U. S.
409, 418 (2005) (resolving an ambiguity in light of “the ‘standard
rule that the limitations period commences when the plaintiff has a
complete and present cause of action’ ” (quoting Bay Area
Laundry, supra, at 201)); Rawlings v. Ray, 312 U. S. 96, 98
(1941) . At the same time, we have recognized that statutes of
limitations do not inexorably commence upon accrual. See Reiter v.
Cooper, 507 U. S. 258, 267 (1993) (noting the possibility that
a cause of action may “accru[e] at one time for the purpose of
calculating when the statute of limitations begins to run, but at
another time for the purpose of bringing suit”); see also Dodd v.
United States, 545 U. S. 353, 358 (2005) (the statute of
limitations in the federal habeas statute runs from “ ‘the
date on which the right asserted was initially recognized by the
Supreme Court’ ” even if the right has not yet been
“ ‘made retroactively applicable to cases on collateral
review’ ”); McMahon v. United States, 342 U. S. 25 –27
(1951) (the limitations period in the Suits in Admiralty Act runs
from the date of injury rather than when plaintiffs may sue).
None of those
decisions, however, addresses the critical aspect of this case: the
parties have agreed by contract to commence the limitations period
at a particular time. For that reason, we find more appropriate
guidance in precedent confronting whether to enforce the terms of a
contractual limitations provision. Those cases provide a
well-established framework suitable for resolving the ques- tion in
this case:
“[I]n the absence of a controlling statute
to the con-trary, a provision in a contract may validly limit,
between the parties, the time for bringing an action on such
contract to a period less than that prescribed in the general
statute of limitations, provided that the shorter period itself
shall be a reasonable period.” Order of United Commercial Travelers
of America v. Wolfe, 331 U. S. 586, 608 (1947) .
We have recognized that some statutes of
limitations do not permit parties to choose a shorter period by
contract. See, e.g., Louisiana & Western R. Co. v. Gardiner,
273 U. S. 280, 284 (1927) (contractual provision requiring
suit against common carrier within two years and one day after
delivery was invalid under a federal statute “declar[ing] unlawful
any limitation shorter than two years from the time notice is given
of the disallowance of the claim”). The rule set forth in Wolfe
recognizes, however, that other statutes of limitations provide
only a default rule that permits parties to choose a shorter
limitations period. See Riddlesbarger v. Hartford Ins. Co., 7 Wall.
386, 390 (1869) (finding “nothing in th[e] language or object [of
statutes of limitations] which inhibits parties from stipulating
for a shorter period within which to assert their respective
claims”); see also Missouri, K. & T. R. Co. v. Harriman, 227
U. S. 657 –673 (1913) (citing examples). If parties are
permitted to contract around a default statute of limitations, it
follows that the same rule applies where the statute creating the
cause of action is silent regarding a limitations period.
The Wolfe rule
necessarily allows parties to agree not only to the length of a
limitations period but also to its commencement. The duration of a
limitations period can be measured only by reference to its start
date. Each is therefore an integral part of the limitations
provision, and there is no basis for categorically preventing
parties from agreeing on one aspect but not the other. See
Electrical Workers v. Robbins & Myers, Inc., 429 U. S.
229, 234 (1976) (noting that “the parties could conceivably have
agreed to a contract” specifying the “ ‘occurrence’ ”
that commenced the statutory limitations period).
B
The principle that
contractual limitations provisions ordinarily should be enforced as
written is especially appropriate when enforcing an ERISA plan.
“The plan, in short, is at the center of ERISA.” US Airways, Inc.
v. McCutchen, 569 U. S. ___, ___ (2013) (slip op., at 11).
“[E]mployers have large leeway to design disability and other
welfare plans as they see fit.” Black & Decker Dis- ability
Plan v. Nord, 538 U. S. 822, 833 (2003) . And once a plan is
established, the administrator’s duty is to see that the plan is
“maintained pursuant to [that] written instrument.” 29
U. S. C. §1102(a)(1). This focus on the written terms of
the plan is the linchpin of “a system that is [not] so complex that
administrative costs, or litigation expenses, unduly discourage
employers from offering [ERISA] plans in the first place.” Varity
Corp. v. Howe, 516 U. S. 489, 497 (1996) .
Heimeshoff’s cause of
action for benefits is likewise bound up with the written
instrument. ERISA §502(a)(1)(B) authorizes a plan participant to
bring suit “to recover benefits due to him under the terms of his
plan, to enforce his rights under the terms of the plan, or to
clarify his rights to future benefits under the terms of the plan.”
29 U. S. C. §1132(a)(1)(B) (emphasis added). That
“statutory language speaks of ‘enforc[ing]’ the ‘terms of the
plan,’ not of changing them.” CIGNA Corp. v. Amara, 563 U. S.
___, ___ (2011) (slip op., at 13). For that reason, we have
recognized the particular importance of enforcing plan terms as
written in §502(a)(1)(B) claims. See id., at ___ (slip op., at
13–14); Conkright v. Frommert, 559 U. S. 506 –513 (2010);
Kennedy v. Plan Administrator for DuPont Sav. and Investment Plan,
555 U. S. 285 –301 (2009). Because the rights and duties at
issue in this case are no less “built around reliance on the face
of written plan documents,” Curtiss-Wright Corp. v. Schoonejongen,
514 U. S. 73, 83 (1995) , we will not presume from statu- tory
silence that Congress intended a different approach here.
III
We must give effect
to the Plan’s limitations provision unless we determine either that
the period is unreason- ably short, or that a “controlling statute”
prevents the limitations provision from taking effect. Wolfe, 331
U. S., at 608. Neither condition is met here.
A
Neither Heimeshoff
nor the United States claims that the Plan’s 3-year limitations
provision is unreasonably short on its face. And with good reason:
the United States acknowledges that the regulations governing
internal review mean for “mainstream” claims to be resolved in
about one year, Tr. of Oral Arg. 22, leaving the participant with
two years to file suit. [
4 ]
Even in this case, where the administrative review process required
more time than usual, Heimeshoff was left with approximately one
year in which to file suit. Heimeshoff does not dispute that a
hypothetical 1-year limitations period commencing at the conclusion
of internal review would be reasonable. Id., at 4. We cannot fault
a limitations provision that would leave the same amount of time in
a case with an unusually long internal review process while
providing for a significantly longer period in most cases.
Heimeshoff’s reliance
on Occidental Life Ins. Co. of Cal. v. EEOC, 432 U. S. 355
(1977) , is therefore misplaced. There, we declined to enforce a
State’s 1-year statute of limitations as applied to Title VII
employment discrimination actions where the limitations period
commenced before accrual. We concluded that “[i]t would hardly be
reasonable” to suppose that Congress intended to enforce state
statutes of limitations as short as 12 months where the Equal
Employment Opportunity Commission faced a backlog of 18 to 24
months, leaving claimants with little chance of bringing a claim
not barred by the State’s statute of limitations. Id., at 369–371.
In the absence of any evidence that there are similar obstacles to
bringing a timely §502(a)(1)(B) claim, we conclude that the Plan’s
limitations provision is reasonable.
B
Heimeshoff and the
United States contend that even if the Plan’s limitations provision
is reasonable, ERISA is a “controlling statute to the contrary.”
Wolfe, supra, at 608. But they do not contend that ERISA’s statute
of limitations for claims of breach of fiduciary duty controls this
action to recover benefits. See 29 U. S. C. §1113. Nor do
they claim that ERISA’s text or regulations contradict the Plan’s
limitations provision. Rather, they assert that the limitations
provision will “undermine” ERISA’s two-tiered remedial scheme.
Brief for Petitioner 39; Brief for United States as Amicus Curiae
19. We cannot agree.
1
The first tier of
ERISA’s remedial scheme is the internal review process required for
all ERISA disability-benefit plans. 29 CFR §2560.503–1. After the
participant files a claim for disability benefits, the plan has 45
days to make an “adverse benefit determination.” §2560.503–1(f)(3).
Two 30-day extensions are available for “matters beyond the control
of the plan,” giving the plan a total of up to 105 days to make
that determination. Ibid. The plan’s time for making a benefit
determination may be tolled “due to a claimant’s failure to submit
information necessary to decide a claim.” §2560.503–1(f)(4).
Following denial, the
plan must provide the participant with “at least 180 days . . .
within which to appeal the determination.” §§2560.503–1(h)(3)(i),
(h)(4). The plan has 45 days to resolve that appeal, with one
45-day extension available for “special circumstances (such as the
need to hold a hearing).” §§2560.503–1(i)(1)(i), (i)(3)(i). The
plan’s time for resolving an appeal can be tolled again if the
participant fails to submit necessary information.
§2560.503–1(i)(4). In the ordinary course, the regulations
contemplate an internal review process lasting about one year. Tr.
of Oral Arg. 22. If the plan fails to meet its own deadlines under
these procedures, the participant “shall be deemed to have
exhausted the administrative remedies.” §2560.503–1(l). Upon
exhaustion of the internal review process, the participant is
entitled to proceed immediately to judicial review, the second tier
of ERISA’s remedial scheme.
2
Heimeshoff and the
United States first claim that the Plan’s limitations provision
will undermine the foregoing internal review process. They contend
that participants will shortchange their own rights during that
process in order to have more time in which to seek judicial
review. Their premise—that participants will sacrifice the benefits
of internal review to preserve additional time for filing suit—is
highly dubious in light of the consequences of that course of
action.
First, to the extent
participants fail to develop evidence during internal review, they
risk forfeiting the use of that evidence in district court. The
Courts of Appeals have generally limited the record for judicial
review to the administrative record compiled during internal
review. See, e.g., Foster v. PPG Industries, Inc., 693 F. 3d
1226, 1231 (CA10 2012); Fleisher v. Standard Ins. Co., 679
F. 3d 116, 121 (CA3 2012); McCartha v. National City Corp.,
419 F. 3d 437, 441 (CA6 2005). Second, participants are not
likely to value judicial review of plan determinations over
internal review. Many plans (including this Plan) vest discretion
over benefits determinations in plan administrators. See Firestone
Tire & Rubber Co. v. Bruch, 489 U. S. 101 –112 (1989)
(permitting the vesting of discretion); see also App. in No.
12–651–cv (CA2), p. 34. Courts ordinarily review determinations by
such plans only for abuse of discretion. Metropolitan Life Ins. Co.
v. Glenn, 554 U. S. 105 –116 (2008). In short, participants
have much to lose and little to gain by giving up the full measure
of internal review in favor of marginal extra time to seek judicial
review.
3
Heimeshoff and the
United States next warn that it will endanger judicial review to
allow plans to set limitations periods that begin to run before
internal review is complete. The United States suggests that
administrators may attempt to prevent judicial review by delaying
the resolution of claims in bad faith. Brief for United States as
Amicus Curiae 19; see also White, 488 F. 3d, at 247–248. But
administrators are required by the regulations governing the
internal review process to take prompt action, see supra, at 10–11,
and the penalty for failure to meet those deadlines is immediate
access to judicial review for the participant. 29 CFR
§2560.503–1(l). In addition, that sort of dilatory behavior may
implicate one of the traditional defenses to a statute of
limitations. See infra, at 14–15.
The United States
suggests that even good-faith administration of internal review
will significantly diminish the availability of judicial review if
this limitations provision is enforced. Forty years of ERISA
administration sug- gest otherwise. The limitations provision at
issue is quite common; the vast majority of States require certain
insurance policies to include 3-year limitations periods that run
from the date proof of loss is due. [
5 ] But there is no significant evidence that limitations
provisions like the one here have similarly thwarted judicial
review. As explained above, see supra, at 10–11, ERISA regulations
structure internal review to proceed in an expeditious manner. It
stands to reason that the cases in which internal review leaves
participants with less than one year to file suit are rare.
Heimeshoff identifies only a handful of cases in which
§502(a)(1)(B) plaintiffs are actually time barred as a result of
this 3-year limitations provision. See Abena v. Metropolitan Life
Ins. Co., 544 F. 3d 880 (CA7 2008); Touqan v. Metropolitan
Life Ins. Co., 2012 WL 3465493 (ED Mich., Aug. 14, 2012); Smith v.
Unum Provident, 2012 WL 1436458 (WD Ky., Apr. 24, 2012); Fry v.
Hartford Ins. Co., 2011 WL 1672474 (WDNY, May 3, 2011); Rotondi v.
Hartford Life & Acc. Group, 2010 WL 3720830 (SDNY, Sept. 22,
2010). Those cases suggest that this barrier falls on participants
who have not diligently pursued their rights. See Abena, supra, at
884 (by his own admission, there was “no reason” plaintiff could
not have filed suit during the remaining seven months of
limitations period); Smith, supra, at *2 (plaintiff filed suit four
years after the limitations period expired, and six years after
final de- nial); Rotondi, supra, at *8 (“Application of the
. . . limitations period works no unfairness here”); see also
Rice, 578 F. 3d, at 457 (the participant “has not established
that he has been diligently pursuing his rights” and “has given no
reason for his late filing”); Burke, 572 F. 3d, at 81
(following exhaustion, “two years and five months of the
limitations period remained”); Salerno v. Prudential Ins. Co. of
America, 2009 WL 2412732, *6 (NDNY, Aug. 3, 2009) (“Plaintiff’s
proof of loss was untimely by over ten years”). The evidence that
this 3-year limitations provision harms diligent participants is
far too insubstantial to set aside the plain terms of the
contract.
Moreover, even in the
rare cases where internal review prevents participants from
bringing §502(a)(1)(B) actions within the contractual period,
courts are well equipped to apply traditional doctrines that may
nevertheless allow participants to proceed. If the administrator’s
conduct causes a participant to miss the deadline for judicial
review, waiver or estoppel may prevent the administrator from
invoking the limitations provision as a defense. See, e.g.,
Thompson v. Phenix Ins. Co., 136 U. S. 287 –299 (1890);
LaMantia v. Voluntary Plan Adm’rs, Inc., 401 F. 3d 1114, 1119
(CA9 2005). To the extent the participant has diligently pursued
both internal review and judicial review but was prevented from
filing suit by extraordinary circumstances, equitable tolling may
apply. Irwin v. Department of Veterans Affairs, 498 U. S. 89,
95 (1990) (limitations defenses “in lawsuits between private
litigants are customarily subject to ‘equitable tolling’ ”). [
6 ] Finally, in addition to
those traditional remedies, plans that offer appeals or dispute
resolution beyond what is contemplated in the internal review
regulations must agree to toll the limitations provision during
that time. 29 CFR §2560.503–1(c)(3)(ii). Thus, we are not persuaded
that the Plan’s limitations provision is inconsistent with
ERISA.
C
Two additional
arguments warrant mention. First, Heimeshoff argues—for the first
time in this litigation—that the limitations period should be
tolled as a matter of course during internal review. By effectively
delaying the commencement of the limitations period until the
conclusion of internal review, however, this approach reconstitutes
the contractual revision we declined to make. As we explained, the
parties’ agreement should be enforced unless the limitations period
is unreasonably short or foreclosed by ERISA. The limitations
period here is neither. See supra, at 9–10, 11–14, and this
page.
Nor do the ERISA
regulations require tolling during internal review. A plan must
agree to toll the limitations provision only in one particular
circumstance: when a plan offers voluntary internal appeals beyond
what is permitted by regulation. §2560.503–1(c)(3)(ii). Even then,
the limitations period is tolled only during that specific portion
of internal review. This limited tolling requirement would be
superfluous if the regulations contemplated tolling throughout the
process.
Finally, relying on our
decision in Hardin v. Straub, 490 U. S. 536 (1989) ,
Heimeshoff contends that we must inquire whether state law would
toll the limitations period throughout the exhaustion process. In
Hardin, we interpreted 42 U. S. C. §1983 to borrow a
State’s statutory limitations period. We recognized that when a
federal statute is deemed to borrow a State’s limitations period,
the State’s tolling rules are ordinarily borrowed as well because
“ ‘[i]n virtually all statutes of limitations the
chronological length of the limitation period is interrelated with
provisions regarding tolling . . . .’ ” 490 U. S., at 539
(quoting Johnson v. Railway Express Agency, Inc., 421 U. S.
454, 464 (1975) ); see also Board of Regents of Univ. of State of
N. Y. v. Tomanio, 446 U. S. 478, 484 (1980) (in §1983 actions
“a state statute of limitations and the coordinate tolling rules”
are “binding rules of law”). But here, unlike in Hardin, the
parties have adopted a limitations period by contract. Under these
circumstances, where there is no need to borrow a state statute of
limitations there is no need to borrow concomitant state tolling
rules.
IV
We hold that the
Plan’s limitations provision is enforceable. The judgment is,
accordingly, affirmed.
It is so ordered.
