                 United States Court of Appeals
                            For the Eighth Circuit
                        ___________________________

                                No. 19-2163
                        ___________________________

                                 Avera McKennan,

                        lllllllllllllllllllllPlaintiff - Appellee,

                                           v.

   Meadowvale Dairy Employee Benefit Plan; Meadowvale Dairy, LLC, in its
                     Capacity as Plan Administrator,

                     lllllllllllllllllllllDefendants - Appellants.
                                       ____________

                     Appeal from United States District Court
                   for the Northern District of Iowa - Sioux City
                                  ____________

                             Submitted: May 14, 2020
                              Filed: August 28, 2020
                                  ____________

Before COLLOTON, WOLLMAN, and BENTON, Circuit Judges.
                       ____________

COLLOTON, Circuit Judge.

       The Meadowvale Dairy Employee Benefit Plan appeals from judgments of the
district court ordering the Plan to pay benefits and attorney’s fees to Avera
McKennan (Avera) under the Employee Retirement Income Security Act of 1974
(ERISA), 29 U.S.C. § 1132(a)(1)(B). Avera claims that the benefits at issue were due
to a former employee of Meadowvale who received care at a hospital operated by
Avera. We conclude that although the beneficiary assigned any causes of action to
Avera, he never had a cause of action against the Plan, so Avera may not proceed
against the Plan under ERISA as an assignee of a beneficiary or otherwise.

      In September 2015, Meadowvale Dairy, LLC hired a man who identified
himself as Gilberto Fuentes Cruz. Shortly thereafter, using the same name, the
employee enrolled in medical coverage provided by the company’s self-insured
Employee Benefit Plan, which is governed by ERISA. Meadowvale Dairy sponsors
the Plan and serves as its administrator, so it is responsible for making decisions
about employee eligibility and coverage under the Plan.

        In January 2016, the employee sought medical treatment at Avera’s hospital for
Guillain-Barré syndrome, a rapid-onset autoimmune disorder that eventually caused
his death. During the treatment, Meadowvale discovered that the employee’s true
name was Juan Pablo Garcia Marquez. Meadowvale informed Marquez in April 2016
that it was rescinding his coverage retroactively to the date of enrollment because he
falsely represented his identity to Meadowvale. The Plan provides for rescission
when a beneficiary commits an act of fraud or makes an intentional misrepresentation
of a material fact.

      While undergoing treatment at Avera, Marquez (through his mother) executed
a document entitled “Partial Assignment of Cause of Action, Assignment of Proceeds,
Contractual Lien and Treatment Agreement.” The document purported to assign to
Avera all “rights, remedies, [and] benefits” that Marquez was due from any “Payer,”
which included any insurance carrier or health benefit plan administrator. The
assignment also encompassed “any and all causes of action that [Marquez] might
have now or in the future against any Payer.” Marquez died without appealing
Meadowvale’s decision to rescind his medical coverage.



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       Avera attempted to bring an internal appeal of Meadowvale’s decision to
rescind Marquez’s coverage. Meadowvale, in its capacity as plan administrator,
denied the appeal for three independent reasons. First, Avera had “no right to pursue
this appeal because it is not an authorized representative of Mr. Marquez/Fuentes.”
Second, the assignment was invalid because it was signed by Marquez’s mother, and
she did not have power to act for him. Third, because Marquez had submitted a false
name and social security number to Meadowvale, the company properly rescinded
coverage retroactively based on Marquez’s fraud or misrepresentation of a material
fact. Avera filed a second-level internal appeal, and Meadowvale denied it on the
same grounds.

      Avera then sued the Plan under 29 U.S.C. § 1132(a)(1)(B) to recover benefits
owed to Marquez. The district court determined that Marquez validly assigned any
causes of action to Avera, and that Avera adequately exhausted administrative
remedies under the Plan, so it possessed a cause of action against the Plan. The court
then ruled that Meadowvale abused its discretion as plan administrator when it
rescinded Marquez’s coverage, because any misrepresentations by Marquez were
immaterial to his enrollment in the Plan. The court ordered the Plan to pay to Avera
$760,713.45 plus interest for the cost of Marquez’s medical treatment, and awarded
attorney’s fees to Avera.

       On appeal, the Plan contends that Avera is not a proper party to sue under
ERISA. A “participant or beneficiary” may sue to enforce rights or recover benefits
owed under a benefits plan governed by ERISA. 29 U.S.C. § 1132(a)(1)(B). An
assignee of a participant or beneficiary also may sue, provided that the assignment is
not prohibited by the relevant plan. See Lutheran Med. Ctr. of Omaha v. Contractors,
Laborers, Teamsters & Eng’rs Health and Welfare Plan, 25 F.3d 616, 619 (8th Cir.
1994).




                                         -3-
        The assignment here ostensibly assigned to Avera “all of [Marquez’s] rights,
remedies, [and] benefits” under the Plan, as well as “any and all causes of action that
[Marquez] might have now or in the future against” any payer such as the Plan.
Meadowvale Plan expressly prohibits the assignment of benefits. Section 7.01 of the
Plan states that “[n]o Participant or Beneficiary shall have the right to . . . assign any
of the benefits or payments” owed to him under the Plan. In Lutheran Medical,
however, this court distinguished between “benefits” and “causes of action” and held
that comparable language “does not prohibit assignment of causes of action arising
after the denial of benefits.” 25 F.3d at 619. Because the assignment here
encompassed “any and all causes of action,” we may assume in light of Lutheran
Medical that Avera acquired any cause of action against the Plan that Marquez had
at the time of the assignment or would have in the future. Cf. City of Hope Nat’l Med.
Ctr. v. HealthPlus, Inc., 156 F.3d 223, 229 (1st Cir. 1998) (declining to follow
Lutheran Medical); Vardag v. Motorola, Inc., 264 F. Supp. 2d 1056, 1062 (S.D. Fla.
2003) (same).

       The question, then, is whether Marquez ever had a cause of action against the
Plan. “A participant’s cause of action under ERISA . . . does not accrue until the plan
issues a final denial” of the claim. Heimeshoff v. Hartford Life & Accident Ins. Co.,
571 U.S. 99, 105 (2013). A final denial requires exhaustion of any internal remedies
prescribed by the ERISA plan. If a claimant fails to pursue and exhaust
administrative remedies that are clearly required under a plan, then his claim for
contractual benefits is barred. Burds v. Union Pac. Corp., 223 F.3d 814, 817 (8th Cir.
2000). Meadowvale’s Plan requires that “[b]efore a suit can be filed in federal court,
claims must exhaust internal remedies,” and clearly sets forth procedures that a
claimant must follow.

      The claim at issue in this case was not properly exhausted. Meadowvale
informed Marquez in April 2016 that it was retroactively rescinding his coverage.
Marquez was entitled to appeal that decision to the plan administrator, but he died in

                                           -4-
July 2016 and never did so. Avera attempted to appeal on Marquez’s behalf, and
argues that it was empowered to do so as Marquez’s assignee. But according to the
Plan, “[a]n assignment of benefits by a Covered Person to a provider will not
constitute appointment of that provider as an authorized representative.”

       Under the Plan, a “Covered Person” like Marquez may appoint an “authorized
representative” to act on his or her behalf with respect to a claim or appeal. But to
appoint such a representative, the Covered Person must complete a form that can be
obtained from the plan administrator. Marquez never did so. Nor did he furnish the
Plan with any other statement that substantially complied with the Plan’s requirement
to designate an authorized representative. Given that the Plan specifically disclaims
that an assignment of benefits will constitute appointment of an authorized
representative, we cannot accept Avera’s contention that the assignment constitutes
substantial compliance with the “authorized representative” form. Therefore, Avera
was not authorized to bring an appeal to challenge Meadowvale’s rescission of
Marquez’s benefits, and Marquez never exhausted his claim for benefits. As a result,
no cause of action accrued. Because Marquez never had a cause of action against the
Plan, there was no cause of action for Avera to receive through the assignment.

      The district court determined that Marquez’s claim against the Plan was
exhausted because “[t]he purposes of the exhaustion requirement” had been fulfilled.
The court reasoned that the Plan “processed Marquez’s claim in the same way it
would process any other claim,” and thereby produced an administrative record that
the court deemed sufficient to evaluate the claim.

      Although the Plan’s response to Avera concluded in the alternative that
Meadowvale properly rescinded Marquez’s benefits, that does not mean that Avera
properly exhausted internal remedies on behalf of Marquez. The Plan rejected both
internal appeals on the ground that Avera was not authorized to appeal on behalf of
Marquez. ERISA allows benefit plans to “establish reasonable procedures” for

                                         -5-
regulating who can act on behalf of beneficiaries to submit or appeal claims, 29
C.F.R. § 2560.503-1(b)(4), and Meadowvale’s Plan required Marquez to designate
an authorized representative. The Plan did not waive or eliminate this requirement
when it notified Avera why it also believed that Meadowvale’s prior decision to
rescind Marquez’s coverage was proper. The Plan could have denied Avera’s
attempted appeal solely on the ground that Avera was not authorized to bring it.

       Avera contends that Marquez was not required to exhaust his internal remedies
because any effort would have been futile. See Burds, 223 F.3d at 817 n.4. Futility,
however, must be considered ex ante, and Avera has not shown that it would have
been futile for Marquez or an authorized representative to pursue an internal appeal.
An unauthorized party cannot avoid the Plan’s “authorized representative”
requirement by eliciting an adverse response to an unauthorized appeal and then
claiming that proper exhaustion would have been futile. Nor is the fact that
Meadowvale was both plan administrator and the employer who rescinded coverage
sufficient to show futility. Dale v. Chi. Trib. Co., 797 F.2d 458, 467 (7th Cir. 1986).

       After Meadowvale rescinded Marquez’s coverage under the Plan, neither
Marquez nor an authorized representative of Marquez exhausted internal remedies to
challenge the decision. Marquez thus never enjoyed a cause of action against the
Plan, and there was no cause of action for Avera to receive from him by assignment.
Accordingly, Avera cannot sue to recover benefits under 29 U.S.C. § 1132(a)(1)(B).

      The judgments of the district court are reversed.
                     ______________________________




                                         -6-
