Yesterday, in Card v. Principal Life Ins. Co., No. 20-6217, __F.4th__, 2021 WL 5074692 (6th Cir. Nov. 2, 2021), a case involving denied claims for disability benefits under an ERISA-governed benefit plan, the Sixth Circuit addressed how “remands” to plan administrators should work. Here, Plaintiff-Appellant Susan Card sought short-term, long-term, and total disability benefits from Defendant-Appellee Principal Life Insurance Company. The district court found in favor of Principal and Card appealed to the Sixth Circuit. The Sixth Circuit found that Principal’s review of Card’s claim had procedural problems and rather than award Card benefits, the court decided to send the case back to Principal Life. Its decretal language: “We therefore remand the case to Principal Life for further proceedings consistent with this opinion.”
Following the remand, Principal paid Card’s short-term disability benefits but requested additional information to decide the other claims. During this time, Card filed motions at the district court including a motion for attorneys’ fees and a motion to reopen the case based on Principal’s alleged failure to make a decision within the 45 days required by ERISA regulations. The district court did not resolve the motions based on “lack of jurisdiction.” Its order stated that the matter was remanded by the Sixth Circuit to Principal for further consideration. Therefore, the district court did not believe that it had jurisdiction to consider the motions.
On the case’s second appeal to the Sixth Circuit, the court first found that it had jurisdiction to consider Card’s appeal. The district court’s order constitutes a final decision appealable to the court under 28 U.S.C. § 1291. A circuit court has jurisdiction to review a district court’s without-prejudice dismissal for procedural issues such as lack of venue or personal jurisdiction, or lack of subject-matter jurisdiction. It was clear that the district court was finished with the case because it thought it lacked jurisdiction. This is enough to invoke appellate jurisdiction.
The Sixth Circuit then analyzed remands in the context of ERISA claims. When an appellate court determines that an administrator has made an arbitrary-and-capricious decision, the court will either award the benefits due if the record clearly supports that decision or will “remand” the claim to the plan administrator for a second determination. When a district court orders a remand to the plan administrator, it retains jurisdiction over the case while the administrator reconsiders the claim. The first panel should have vacated the district court’s judgment in favor of Principal and remanded the case to the district court with instructions that it remand the case to Principal. Because the first panel remanded the matter to Principal, the district court erroneously determined that it had nothing else to do. The Sixth Circuit noted that no other circuit court has ever ordered a remand directly to the plan administrator without vacating the district court’s decision and keeping the matter alive there. The district court did have jurisdiction over Card’s motions for fees and to reopen the case. The Sixth Circuit vacated the district court’s order and remanded the matter for consideration of Card’s motions.
In a concurring opinion, Judge Murphy questioned why it was appropriate to remand a case to a private litigant for further proceedings rather than completing those proceedings in court. He questioned that the Supreme Court would sanction it but since it is well established in the Sixth Circuit, he concurred in the majority opinion explaining how a remand should be implemented.
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