A Failure to Timely Produce Documents = Bar to Subrogation?

Question: Does the doctrine of laches bar a subrogation claim when the plan has failed to produce required documentation on a timely basis?

Answer: Although we are not aware of any case law mimicking the exact circumstances you are describing (applying laches to a delay in the production of plan documentation), ERISA does authorize its enforcement by “appropriate equitable relief.” 29 U.S.C. § 1132(a)(3)(B). To that point, the United States Supreme Court has recognized a number of equitable defenses in other contexts, including laches. See National R.R. Passenger Corp. v. Morgan, 536 U.S. 101, 121-22, 122 S.Ct. 2061, 2077 (2002). Thus, there is a reasonable argument that laches could apply, although there is no case law authority or statutory provisions within ERISA which provide for an express application under the facts that you describe.

While the laches issue is debatable, ERISA does provides for a discretionary penalty against the plan where a proper request for plan documentation is made. In particular, ERISA grants a plan participant the right to make a written request and receive certain specified documentation from the plan administrator. This right is stated at 29 U.S.C. § 1024(b)(4) which provides as follows:

The administrator shall, upon written request of any participant or beneficiary, furnish a copy of the latest updated summary, plan description, and the latest annual report, any terminal report, the bargaining agreement, trust agreement, contract, or other instruments under which the plan is established or operated.

The failure to provide this information within 30 days can result in the imposition of a penalty of up to $110 per day for each day of noncompliance. See 29 U.S.C. § 1132(c)(1)(B) and 29 C.F.R. § 2575.502c-1 (increased penalty from $100 to $110).

It is important to note, however, that this penalty is purely discretionary and in cases where courts have enforced the actual figure is closer to $30 per day. Thus, the teeth to this provision are not as big as they appear but it certainly is something that can be used in negotiating a resolution of the claim.