Rules Aren’t Always Meant to be Broken

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Attorney Harrison Oldham



In McQuillin v. Hartford Life and Accident Ins. Co., 36 F.4th 416 (2d Cir. 2022), a federal appeals court revived a former surgical-equipment salesman’s lawsuit against an insurer, for denying his claim for long-term disability benefits, even though the insurer argued it was still considering his appeal when the suit was filed. Specifically, on June 7, 2022, the 2nd U.S. Circuit Court of Appeals reversed a lower-court judge’s dismissal of John McQuillin’s lawsuit for failure to exhaust his employee-benefit plan’s internal appeals process. In doing so, the U.S Court of Appeals restored Mr. McQuillin’s action for disability benefits due to the plan administrator’s failure to adhere to a procedural deadline. The Court concluded that the administrator’s failure resulted in the automatic exhaustion of Mr. McQuillin’s administrative remedies—which meant he could go straight to court to file a lawsuit.



Under ERISA, a claimant generally may not bring a suit for benefits unless the claimant has timely exhausted their rights under the plan’s administrative claims procedure. When this process is followed, a court’s review of the administrator’s decision is generally subject to an “arbitrary and capricious” standard—which means that the court will defer to the plan administrator’s decision and will not overturn it unless the court finds an abuse of discretion.


In contrast, if the administrator does not follow the Department of Labor’s requirements and regulations on claim and appeal procedures, the claimant will be deemed to have exhausted their administrative rights. When this happens, the claimant may go straight to court, where the court can review the claim without an administrative record to guide the court’s review.


The McQuillin Case

In September 2019, Mr. McQuillin, suffering side effects from prostate cancer treatment, applied for long-term disability benefits. Mr. McQuillin’s claim was reviewed by Hartford, which administered the disability plan for his prior employer, Wright Medical Technology.


Hartford denied Mr. McQuillin’s claim in a letter dated October 25, 2019, “based on the fact that [Hartford] didn’t have enough proof of loss to evaluate [his] disability” and that it was missing certain medical records “necessary to make a decision on [McQuillin’s] claim.”  The letter stated that McQuillin could appeal the decision and correctly informed him that ERISA required Hartford to provide a “final decision” within 45 days of the appeal, a period that Hartford could extend with prior written notice. The letter also informed him that if he disagreed with the decision on administrative appeal, he could file a lawsuit. In response, McQuillin filed the administrative appeal with additional evidence on April 11, 2020.


29 C.F.R. governed the administrative appeal § 2560.503-1, which the Department of Labor promulgated under ERISA, and which “sets forth minimum requirements” for the review of disability claims. Those minimum requirements include, among other things, that the plan administrator must inform the claimant of its “benefit determination on review” within 45 days, unless “special circumstances” require a 45-day extension.


On April 23, 2020, twelve days after Mr. McQuillin filed his appeal, Hartford responded with a letter saying that it had “completed [its] review of the appeal” and the additional evidence, that it had “overturned the original decision to deny [the claim],” and that it had “forwarded [the claim] to the claim department … to determine if [d]isability is supported.” However, the administrator did not provide any further follow-up.


On May 27, 2020, 46 days after filing his appeal, Mr. McQuillin sued Hartford in the Eastern District of New York. Shortly after that, Hartford denied Mr. McQuillin’s claim.  Thereafter, the district court accepted a magistrate judge’s recommendation to dismiss Mr. McQuillin’s suit on the basis that he had failed to exhaust his plan remedies because his claim was still under review by Hartford when he filed suit. Mr. McQuillin timely appealed.


The Second Circuit held that the administrator’s response lacked finality and therefore did not satisfy the procedural requirement to render a decision within 45 days after Hartford received the claim. As a result of the failure to “strictly adhere” to the procedure, the claimant was deemed to have exhausted his administrative remedies. Consequently, the case was remanded to the District Court for further proceedings.



The McQuillin decision illustrates the importance of carefully following the regulatory requirements for administrative claims procedures. Had the procedures been strictly followed, the court would have been obliged to defer to the administrative record and the administrator’s decision. By failing to adhere strictly to the procedural requirements, the plan’s administrator lost an opportunity to develop a record to guide the court’s review. Hopefully, this result clarifies that administrative processes matter and that a single misstep can take the decision out of the administrator’s purview.


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About Harrison Oldham

Harrison grew up in Mansfield, Texas. He attended Texas A&M University for his bachelor’s degree, where he met his wonderful wife, Kelsey. After graduating magna cum laude from Texas A&M, he attended SMU Dedman School of Law, graduating with honors in 2012. Today, Harrison and his wife live in Dallas, Texas with their son, Teddy.

Since graduating from SMU Law, Harrison has worked exclusively in the field of business law. He has spent time in private practice and in-house, working with clients of every size; from single person startups to Fortune 250 companies. Today his practice focuses on serving the diverse needs of businesses and individuals throughout Texas. You can learn more about Harrison by visiting his website, at: http://lonestarbusinesslaw.com/.

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