                                                                           FILED
                           NOT FOR PUBLICATION
                                                                           MAR 21 2016
                    UNITED STATES COURT OF APPEALS                      MOLLY C. DWYER, CLERK
                                                                         U.S. COURT OF APPEALS


                            FOR THE NINTH CIRCUIT


RICHARD CAREY,                                   No. 14-55483

              Plaintiff - Appellant,             D.C. No. 8:13-cv-00740-CJC-
                                                 RNB
 v.

UNITED OF OMAHA LIFE                             MEMORANDUM*
INSURANCE COMPANY,

              Defendant - Appellee.


                    Appeal from the United States District Court
                       for the Central District of California
                    Cormac J. Carney, District Judge, Presiding

                      Argued and Submitted March 11, 2016
                              Pasadena, California

Before: REINHARDT, MURGUIA, and OWENS, Circuit Judges.

      Richard Carey appeals from the district court’s order granting United of

Omaha Life Insurance Company’s motion for summary judgment. We have

jurisdiction under 28 U.S.C. § 1291, and we reverse and remand.


        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
      Carey was not required to exhaust his administrative remedies because he

qualifies for the futility exception to the exhaustion requirement. Although not

specifically mandated by the Employee Retirement Income Security Act of 1974

(ERISA), this court requires an ERISA plaintiff to “avail himself or herself of a

plan’s own internal review procedures before bringing suit in federal court.”

Vaught v. Scottsdale Healthcare Corp. Health Plan, 546 F.3d 620, 626 (9th Cir.

2008) (quoting Diaz v. United Agric. Emp. Welfare Benefit Plan & Tr., 50 F.3d

1478, 1483 (9th Cir. 1995)). There are, however, a few exceptions to that rule.

One such exception is the futility doctrine, under which a claimant does not have to

exhaust administrative remedies if doing so would be futile. See id. at 626-27.

      Here, Carey has demonstrated that the exception applies by showing that a

further request for review would have been futile. After United denied Carey

benefits under his long-term disability (LTD) plan, Carey filed a complaint with

the California Department of Insurance (DOI), stating that his benefits were

improperly denied. The DOI then sent a letter to United, asking United to

“reevaluate” Carey’s claim for benefits. United responded in a letter to Carey that

it had “review[ed] all of the documentation in [Carey’s] file” and was “unable to

approve [his] LTD claim.” United states that, in this letter, it was not conducting a




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substantive review of Carey’s claim, but was instead simply “summarizing” the

“history of United’s initial claim decision.”

      Because of the imprecision in United’s communications, however, a person

in Carey’s position would have thought that United had reviewed the substance of

his case and decided anew that he was not entitled to benefits. The plain language

of the communications indicated to Carey that pursuing a further request for

review—thinking that one had already occurred—would have been futile. C.f.

Vaught, 546 F.3d at 628 (explaining this court’s “principle that terms in an ERISA

plan should be interpreted in an ordinary and popular sense as would a [person] of

average intelligence and experience” (internal quotation marks omitted)); Booton v.

Lockheed Med. Benefit Plan, 110 F.3d 1461, 1463 (9th Cir. 1997) (when

communicating to claimants that benefits are denied, “the reason for the denial

must be stated in reasonably clear language”).

      United argues that Carey cannot establish futility because its letter informed

Carey that he could appeal the results of the review it conducted after receiving the

DOI inquiry. This portion of the letter does not alter our conclusion, however,

because it does not suggest to the ordinary reader that the appeal would be

conducted by an outside body or by a different body within United that might, on

the basis of the same evidence that United had already twice rejected, find good


                                           3
cause to come to an opposite conclusion. That is, a person in Carey’s position

would have thought that it would be futile to appeal again to United after it had

twice denied his claim. The district court abused its discretion by holding that

exhaustion would not have been futile and granting summary judgment in favor of

United.

      As we hold that exhaustion would have been futile, we need not address

Carey’s arguments regarding whether the DOI could act as his representative in the

administrative appeals process.

      REVERSED and REMANDED.




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