We see plaintiffs asserting an ERISA claim for statutory penalties more frequently now.

These claims seek statutory penalties (up to $110 per day), alleging the plan administrator “fail[ed] or refus[ed] to comply with a request for information” by the beneficiary. 29 U.S.C. 1332(c)(1).

How easy is it for plaintiffs to win a statutory penalty claim for failing to provide information? Not all that easy.

Here’s the case of Smiley v. Hartford Life and Accident Insurance Company, Smile Brands, Inc. et al, __ Fed. Appx. __, 2015 WL 4385673 (11th Cir. July 17, 2015) (Kudos for some nice work by my friends Elizabeth Bondurant and Russ Buhite).

FACTS: Smiley requested and received relevant ERISA Plan documents from plan administrator Smile Brands. After Smiley’s ERISA benefits were terminated, she again requested plan documents. This time, however, she made the request to claims administrator Hartford. Hartford provided Smiley with an outdated address (contained in the Plan documents) for the plan administrator. Smiley then sent a second request for plan documents to the outdated address. The letter was returned as “undeliverable.”

11th CIRCUIT HELD: Statutory Penalty Claim Properly Dismissed.

  1. ERISA authorizes the imposition of a daily penalty upon a plan administrator that “fails or refuses to comply with a request for information which such administrator is required…to supply to a participant or a beneficiary.” 19 U.S.C. 1332(c)(1).  Op. at 2.
  2. A plan administrator is either “the person specifically so designated” in Plan documents, or a company acting as a plan administrator. Op. at 2-3.
  3. Hartford was not the plan administrator and therefore not subject to statutory penalties. Op. at 3.
  4. Hartford also was not a “de facto administrator[.]” “We have consistently rejected the use of de facto plan administrator doctrine ‘where a plaintiff has sought to hold a third-party administrative services provider liable, rather than the employer….’” Op. at 3.
  5. Statutory penalties should not be awarded here because the plan administrator, Smile Brands, “did not refuse or fail to provide Smiley with the Plan documents.” Smile Brands “had no knowledge that Smiley was attempting to obtain the same Plan documents until it was served with Smiley’s amended complaint….” Op. at 4.
  6. Smiley failed to show any prejudice in denying disclosure of the requested documents. “Although a plaintiff need not demonstrate [prejudice] to obtain [statutory penalties], a court may consider those factors, among others, in making its determination.” Op. at 4-5.

KEY TAKE AWAY: The circuits are not consistent in how they approach the statutory penalty claim. Surveys suggest that the $110 per day penalty is rarely if ever given, and awards (if they occur) typically range from ten to fifty dollars per day, with an average of about $33 per day.