Callagy Law Persuades the Third Circuit to Set Precedent in ERISA Cases

Paramus, NJ (Law Firm Newswire) August 27, 2015 – In a precedent-setting victory, Callagy Law successfully argued that an ERISA plan administrator’s failure to substantially comply with a certain Department of Labor (DOL) regulation results in annulling the plan’s contractual limitation on the period in which to bring a law suit in Federal Court.

Our client’s case was initially dismissed for filing his complaint after the plan’s one-year contractual limitation had run. But Callagy Law Counsel Matthew R. Major, Esq., persuaded the Third Circuit Court of Appeals that 29 C.F.R. § 2560.503-1(g)(1)(iv), a Department of Labor regulation governing the ERISA claims procedure process, “requires plan administrators to inform claimants of plan-imposed time limits for bringing civil actions in their adverse benefit determinations.”

Clear and plain notice of the contractual time limit is necessary, Mr. Major argued, to effectuate ERISA’s remedial purpose in providing claimants with effective judicial review of such determinations.

Adopting Mr. Major’s reasoning, the Third Circuit held, for the first time ever in this Circuit, that plan administrators must include such notice in adverse benefit determination letters “and that the appropriate remedy” for failing to do so “is to set aside the plan’s time limit and apply the limitations period from the most analogous state-law cause of action—here, New Jersey’s six-year deadline for breach of contract claims.”

For Callagy’s client, that means his suit will now be able to go forward on its merits. For all future ERISA clients within the Third Circuit’s jurisdiction—Pennsylvania, Delaware, and New Jersey — that means that plan administrators can no longer “hide the ball and obstruct access to the courts.”

That’s a victory for everyone.

Read a copy of the court’s opinion here.