Court Awards Penalties for Missing Piece of SPD

September 8, 2006 ( - The US District Court for the Northern District of Georgia has awarded statutory penalties to a long-term disability (LTD) plan participant who requested a summary plan description (SPD) and failed to receive a part of it.

The SPD the participant received was missing a booklet that described the plan’s claim appeal process, EBIA reports. The participant requested the document on her first appeal of the denial of her claim.

The plan’s claims administrator upheld the denial of her claim and notified her that she may file a second appeal within a certain number of days, according to EBIA. Instead the participant filed a lawsuit seeking benefits, statutory penalties and attorney’s fees.

The court dismissed her claims for benefits and attorney’s fees, ruling she had failed to exhaust her administrative remedies under the plan. Because she had not received the part of the SPD detailing the appeal process and did not show reliance on the SPD in not filing a second appeal, the court said the plan document governed.

However, the court decided the plan administrator’s failure to provide an SPD correctly should be punished. The participant was awarded $32,400 in statutory penalties.

The case is Palmeri v. Coca-Cola Co., No. 1:01-CV-3498-TWT (N.D. Ga. Aug. 28, 2006).