UNITED STATES COURT OF APPEALS
For the Fifth Circuit
No. 95-60664
Summary Calendar
JULIE WOODS DAVIS
Plaintiff - Appellant
VERSUS
AIG LIFE INSURANCE COMPANY
Defendant - Appellee
Appeal from the United States District Court
For the Southern District of Mississippi
3:94-CV-512-WS
April 26, 1996
Before HIGGINBOTHAM, DUHÉ, and EMILIO M. GARZA, Circuit Judges.
PER CURIAM:1
Appellant sued to recover benefits under an accidental death
policy issued to Ethyl Corporation and allegedly covering her
deceased husband who was an Ethyl employee. The insurer sought
summary judgment alleging that the claim was governed by ERISA and
that Appellant had not exhausted her administrative remedies under
the Plan. The district court agreed and granted summary judgment
dismissing Appellant’s claims without prejudice. We affirm.
1
Pursuant to Local Rule 47.5, the Court has determined that this
opinion should not be published and is not precedent except under
the limited circumstances set forth in Local Rule 47.5.4.
Appellant raised two issues on appeal: Is ERISA applicable?
If so, is administrative exhaustion futile? While Appellant lists
the first issue it is not adequately briefed therefore we do not
consider it. Villanueva v. CNA Insurance Companies, 868 F.2d 684,
687 n.5 (5th Cir. 1989). Even if we did consider the argument, the
facts are undisputed that the benefit of the policy in question was
extended to employees by Ethyl Corporation as part of an ERISA
plan.
Appellant contends that exhaustion of administrative remedies
should be excused as futile principally because the outcome is
certain since, in its letter denying her claim, the Appellee stated
its reasons for considering the death not accidental and indicated
it would hold her to a clear and objective evidence standard to
prevail on administrative review. These arguments cannot prevail
in the face of legal precedent in this Circuit beginning with
Denton v. First National Bank, in which an employee contended that
the employer’s hostility toward him was such as to make
administrative remedies futile:
Pursuing his administrative remedy after the denial of
benefits would have allowed the trustees to reconsider their
decision on Denton’s request. The primary purposes of the
exhaustion requirement are to: (1) uphold Congress’ desire the
ERISA trustees be responsible for their actions, not the
federal courts; (2) provide a sufficiently clear record of
administrative action if litigation should ensue; and (3)
assure that any judicial review of fiduciary action (or
inaction) is made under the arbitrary and capricious standard,
not de novo. Accordingly, decisions for the trustees are
disturbed only if they are arbitrary and capricious, not on
the basis of what the district court would have done in the
first instance. This is necessary to keep from turning every
ERISA action, literally, into a federal case.
The logic behind the exhaustion requirement was set forth
2
in Amato v. Bernard, 618 F.2d 559 (9th Cir. 1980). The Amato
court required benefit claimants to exhaust their
administrative remedies prior to seeking federal court review
of a benefit denial. The court based its decision on an
examination of the legislative history of ERISA which clearly
suggested that “Congress intended to grant authority to the
courts to apply the exhaustion doctrine in suits arising under
the act.” Denton. 765 F.2d 1295 (5th Cir. 1985).
The various public policies strongly supporting the exhaustion
requirement are further stated in Medina v. Anthem Life Insurance
Co., 983 F.2d 29 (5th Cir. 1993) and in the Eighth Circuit opinion
in Conley v. Pitney Bowes, 34 F.3d 714 (8th Cir. 1994).
Appellant complains that the administrative process lacks
necessary standards and guidelines and that only insurance company
personnel will be involved, thereby foreclosing the possibility of
a favorable result. These arguments have been found invalid in
Denton.
If Denton’s view of exhaustion were to prevail, no
plaintiff who knew how to claim “bitterness or hostility” on
the part of the Plan’s review committee could be compelled to
submit his claim for administrative review of the denial of
benefits prior to filing of a federal lawsuit. Accordingly,
benefit disputes would not only be more numerous and more
often frivolous, but less defined as a result of this evasion
of the Congressionally mandated administrative process. We
agree with Amato that Congress, in enacting ERISA, clearly
wanted potential plaintiffs to first exhaust their
administrative remedies before resorting to the federal courts
. . . .
Another important facet of the exhaustion requirement is
that it prevents fiduciaries from avoiding their duties under
the Plan by insulating all benefit decisions in the protective
mantel of federal judicial review. If fiduciaries were to
find their decisions more closely supervised by an intervening
federal judiciary, it is likely that they would go to court to
seek instruction by declaratory relief on questions involving
claims for benefits, rather than deciding those questions
themselves as Congress intended. By requiring exhaustion of
remedies, we strike a balance between judicial intervention
and the discharge of the fiduciary’s duties. Denton, 765 F.2d
at 1303 and n.13.
3
Exhaustion is to be excused only in the most exceptional
circumstances. Communications Workers of America v. AT&T, 40 F.3d
426 (D.C. Circuit 1994). This is not such a case.
Appellant’s state law claims were properly denied as preempted
by ERISA.
AFFIRMED.
4