ERISA participants are often told they must exhaust their administrative remedies., i.e., appeal an adverse decision to the claims administrator, before filing a lawsuit. In Mead v. Reliastar, decided September 16, 2014, the Second Circuit held that a Plan Administrator must do a similar thing, comply with the district court’s instructions to compute owed benefits before appealing that order. The district court had found that “Reliastar’s denial of Mead’s claim for “own occupation” benefits was arbitrary and capricious identifying several flaws in Reliastar’s reasoning, and further noting Reliastar had “ignored” several physical requirements of Mead’s former position, refused to recognize the “ample” objective evidence supporting her subjective complaints of pain, and provided “obviously false or misleading reasons” for discrediting the conclusions of its own neurologist.” Accordingly, the district court ordered Reliastar to compute the amount of benefits owed for the initial “own occupation” two year period under the Plan, and further ordered the administrator to determine if Mead met the “any occupation” definition of disabled.
After noting that its sister circuits are split on this issue, and, broadly speaking, fall into three different camps. A majority of circuits—the First, Fourth, Sixth, Eighth, and Eleventh—hold that because an ERISA remand order contemplates further proceedings before the plan administrator, it is not “final” and therefore may not be immediately appealed except when the familiar collateral order doctrine applies. Next, the Second Circuit explained that the Third, Ninth, and Tenth—have analogized ERISA remands to decisions remanding matters to administrative agencies and have imported into the ERISA context their precedents governing the finality of administrative remand orders, which permit immediate appeals in certain circumstances. Finally, it noted that the Seventh Circuit took its own approach, by analyzing the finality of ERISA remand orders by reference to the statute governing remands to the Social Security Administration, 42 U.S.C. § 405(g), which also permits immediate appeals in certain situations.
Eventually, the Second Circuit adopted an approach most akin to the majority of circuits which typically hold that a remand to a plan administrator is not final, but left open the possibility of certain circumstances arising which would allow an appeal.