Chief U.S. District Judge John G. Heyburn II of the U.S. District Court for the Western District of Kentucky decided that the five-year statute of limitations under Kentucky law began running when the plaintiffs got their payments. He said if the participants had begun the plan’s administrative appeals process in that five-year time frame, the clock would not have started to run until the administrative process had been completed.
Since all but one of the plaintiffs did not kick off their administrative appeals until more than five years after receiving their distributions, they were now barred by the time limit from filing suit, the opinion said.
The plaintiffs had each received lump-sum distributions from the Commonwealth Industries Inc. Cash Balance Plan between 1998 and 2002 and did not challenge the distribution calculations until 2007. They sued under the Employee Retirement Income Security Act (ERISA) after their appeals were exhausted.
Heyburn rejected the argument by the plaintiffs’ lawyers that the case was more like a state breach of contract claim and, as such, should carry a 15-year time limit. He also turned away arguments that the time limit on the plaintiffs’ claims did not start to run until after the plan issued its final denial for a benefit recalculation in March 2007.
“Here, there can be no question that Plaintiffs received ‘clear and unequivocal’ notice of the amount of benefits they would be receiving no later than when they received their lump-sum distributions. Any expectation of a sum greater than what was received was ‘repudiated’ at that time, and could not reasonably have been maintained beyond that point,” Heyburn wrote.
The ruling in Fallin v. Commonwealth Industries Inc. Cash Balance Plan, W.D. Ky., No. 3:07CV-196-H, 11/13/07 is here .