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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.
