UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT
______________________________
No. 00-31320 ______________________________
MONTY J. DEGRUISE,
Plaintiff-Appellant
VERSUS
SPRINT CORPORATION, ET AL,
Defendants
SPRINT CORPORATION,
Defendant-Appellee
____________________________________________
Appeal from the United States District Court for the Eastern District of Louisiana ____________________________________________
January 28, 2002
Before JOLLY and PARKER, Circuit Judges, and MILLS*, District Judge.
RICHARD MILLS, DISTRICT JUDGE:
This case presents an issue of first impression for this
Court.
The sole issue is whether a company meets its notification
duty under COBRA by sending a letter by “certified mail” to an
* District Judge of the Central District of Illinois, sitting by designation.
1 individual’s last known address even when the company knows that
the individual did not actually receive the letter.
The answer is yes.
The district court is affirmed.
FACTS
Sprint terminated Monty Degruise’s employment on February 4,
1998. By letter dated February 11, 1998, Sprint mailed to
Degruise, by certified mail with return receipt requested, the
notice required by the Consolidated Omnibus Budget Reconciliation
Act (“COBRA”) amendment to the Employee Retirement Income
Security Act, 29 U.S.C. §§ 1161-1168, concerning his right to
elect continuing health care coverage.
On February 17 and 22, the United States Postal Service
twice attempted to deliver the COBRA notice that Sprint sent to
Degruise. Degruise was out of town on both occasions. The
Postal Service left a notification in Degruise’s mail box that a
certified letter awaited him at the post office.
When Degruise returned to town, he went to the post office
to retrieve his letter. Postal workers could not locate the
letter. They advised him to return in a couple of days and check
to see if the letter had been located. Degruise did as the
postal workers directed, but his letter still could not be
located by the time he returned. Degruise had no way of knowing
who sent the letter or what it contained. The Postal Service
finally located the letter and returned it to Sprint on March 1,
2 1998, with an indication that the letter had never been claimed
by Degruise.
Soon after his employment with Sprint ended, Degruise began
a new job with a new employer. The new employer provided
Degruise with medical coverage. Before this coverage began,
however, Degruise started to receive treatment for a medical
condition. When he filed coverage claims with his new employer’s
insurer, his claims were denied as a pre-existing medical
condition.
Degruise filed suit against his new employer and Sprint
under ERISA, alleging that he had not received notice from Sprint
regarding his right to continue health care coverage under COBRA.
He claimed that he had incurred significant medical expenses for
which either his new employer or Sprint should have been
responsible.
Sprint filed a motion for summary judgment arguing that it
met its duties under COBRA when it sent Degruise a notification
letter via certified mail. The district court held that COBRA
requires only a “good faith” effort to comply with notification
provisions. Degruise appealed and this Court has jurisdiction
pursuant to 28 U.S.C. § 1291.
STANDARD OF REVIEW
The Court uses a de novo standard when reviewing a district
court’s decision to allow summary judgment. See Tolson v.
3 Avondale Indus., Inc., 141 F.3d 604, 608 (5th Cir. 1998). Under
this standard a district court’s decision to enter summary
judgment will be allowed when, viewing the evidence in the light
most favorable to the nonmoving party, the record shows that no
genuine issue of material fact exists and the moving party is
entitled to judgment as a matter of law. See Fed. R. Civ. P.
56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322-24, 106 S.Ct.
2548, 91 L.Ed.2d 265 (1986).
ANALYSIS
COBRA requires sponsors of group health plans to provide
plan participants who lose coverage because of a “qualifying
event” with the opportunity to choose to continue health care
coverage on an individual basis. See 29 U.S.C. §§ 1162, 1163.
“Qualifying events” include the termination of a covered
employee’s employment. See 29 U.S.C. § 1163(2). When a
“qualifying event” occurs, the plan sponsor must provide written
notice to the plan participant within 14 days of the date it was
notified of the “qualifying event”. See 29 U.S.C. §§ 1166(a)(1),
(a)(2), (a)(4),and (c).
Although Congress intended for the Secretary of Labor to
issue regulations defining what adequate notice is, the Secretary
has not issued any such regulations. See 29 U.S.C. § 1166(a).
Thus, “‘employers are required to operate in good faith
compliance with a reasonable interpretation’ of what adequate
notice entails.” See Kidder v. H & B Marine, Inc., 734 F.Supp.
4 730 n.6 (E.D. La. 1990)(quoting H.R. Rep. No. 99-453, at 653
(1985)), aff’d in part and rev’d in part, 932 F.2d 347 (5th Cir.
1991). This does not mean, however, that employers are required
to ensure that plan participants actually receive notice.
Rather, it merely obligates employers to use means “reasonably
calculated” to reach plan participants.1
It is undisputed that Degruise never received a notification
letter from Sprint about his rights under COBRA. Sprint sent
Degruise a notification letter by certified mail to his home
address on February 12, 1998, but neither Degruise nor anyone on
his behalf was present to receive it. Degruise, it turns out,
had recently gotten married and was out of town on a three-week
honeymoon. After making two attempts to deliver the letter, the
Postal Service left a note at Degruise’s house informing him that
1 See Lawrence v. Jackson Mack Sales, Inc., 837 F.Supp. 771, 782 (S.D.Miss.1992), (“Methods of notification which are reasonably calculated to reach the employee or benficiary are considered to conform to the standard of good faith compliance with the statute.”)), aff’d 42 F.2d 642 (5th Cir.1994); Myers v. King’s Daughter’s Clinic, 912 F.Supp. 233, 236 (W.D.Tex.1996) same)), aff’d 96 F.3d 1445 (5th Cir.1996); see also Bryant v. Food Lion, Inc., 100 F.Supp.2d 346, 367 (D.S.C. 2000) (same), aff’d 2001 WL 434566 (4th Cir. Apr. 30, 2001); Keegan v. Bloomingdale’s, Inc., 992 F.Supp. 974, 977 (N.D.Ill.
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UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT
______________________________
No. 00-31320 ______________________________
MONTY J. DEGRUISE,
Plaintiff-Appellant
VERSUS
SPRINT CORPORATION, ET AL,
Defendants
SPRINT CORPORATION,
Defendant-Appellee
____________________________________________
Appeal from the United States District Court for the Eastern District of Louisiana ____________________________________________
January 28, 2002
Before JOLLY and PARKER, Circuit Judges, and MILLS*, District Judge.
RICHARD MILLS, DISTRICT JUDGE:
This case presents an issue of first impression for this
Court.
The sole issue is whether a company meets its notification
duty under COBRA by sending a letter by “certified mail” to an
* District Judge of the Central District of Illinois, sitting by designation.
1 individual’s last known address even when the company knows that
the individual did not actually receive the letter.
The answer is yes.
The district court is affirmed.
FACTS
Sprint terminated Monty Degruise’s employment on February 4,
1998. By letter dated February 11, 1998, Sprint mailed to
Degruise, by certified mail with return receipt requested, the
notice required by the Consolidated Omnibus Budget Reconciliation
Act (“COBRA”) amendment to the Employee Retirement Income
Security Act, 29 U.S.C. §§ 1161-1168, concerning his right to
elect continuing health care coverage.
On February 17 and 22, the United States Postal Service
twice attempted to deliver the COBRA notice that Sprint sent to
Degruise. Degruise was out of town on both occasions. The
Postal Service left a notification in Degruise’s mail box that a
certified letter awaited him at the post office.
When Degruise returned to town, he went to the post office
to retrieve his letter. Postal workers could not locate the
letter. They advised him to return in a couple of days and check
to see if the letter had been located. Degruise did as the
postal workers directed, but his letter still could not be
located by the time he returned. Degruise had no way of knowing
who sent the letter or what it contained. The Postal Service
finally located the letter and returned it to Sprint on March 1,
2 1998, with an indication that the letter had never been claimed
by Degruise.
Soon after his employment with Sprint ended, Degruise began
a new job with a new employer. The new employer provided
Degruise with medical coverage. Before this coverage began,
however, Degruise started to receive treatment for a medical
condition. When he filed coverage claims with his new employer’s
insurer, his claims were denied as a pre-existing medical
condition.
Degruise filed suit against his new employer and Sprint
under ERISA, alleging that he had not received notice from Sprint
regarding his right to continue health care coverage under COBRA.
He claimed that he had incurred significant medical expenses for
which either his new employer or Sprint should have been
responsible.
Sprint filed a motion for summary judgment arguing that it
met its duties under COBRA when it sent Degruise a notification
letter via certified mail. The district court held that COBRA
requires only a “good faith” effort to comply with notification
provisions. Degruise appealed and this Court has jurisdiction
pursuant to 28 U.S.C. § 1291.
STANDARD OF REVIEW
The Court uses a de novo standard when reviewing a district
court’s decision to allow summary judgment. See Tolson v.
3 Avondale Indus., Inc., 141 F.3d 604, 608 (5th Cir. 1998). Under
this standard a district court’s decision to enter summary
judgment will be allowed when, viewing the evidence in the light
most favorable to the nonmoving party, the record shows that no
genuine issue of material fact exists and the moving party is
entitled to judgment as a matter of law. See Fed. R. Civ. P.
56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322-24, 106 S.Ct.
2548, 91 L.Ed.2d 265 (1986).
ANALYSIS
COBRA requires sponsors of group health plans to provide
plan participants who lose coverage because of a “qualifying
event” with the opportunity to choose to continue health care
coverage on an individual basis. See 29 U.S.C. §§ 1162, 1163.
“Qualifying events” include the termination of a covered
employee’s employment. See 29 U.S.C. § 1163(2). When a
“qualifying event” occurs, the plan sponsor must provide written
notice to the plan participant within 14 days of the date it was
notified of the “qualifying event”. See 29 U.S.C. §§ 1166(a)(1),
(a)(2), (a)(4),and (c).
Although Congress intended for the Secretary of Labor to
issue regulations defining what adequate notice is, the Secretary
has not issued any such regulations. See 29 U.S.C. § 1166(a).
Thus, “‘employers are required to operate in good faith
compliance with a reasonable interpretation’ of what adequate
notice entails.” See Kidder v. H & B Marine, Inc., 734 F.Supp.
4 730 n.6 (E.D. La. 1990)(quoting H.R. Rep. No. 99-453, at 653
(1985)), aff’d in part and rev’d in part, 932 F.2d 347 (5th Cir.
1991). This does not mean, however, that employers are required
to ensure that plan participants actually receive notice.
Rather, it merely obligates employers to use means “reasonably
calculated” to reach plan participants.1
It is undisputed that Degruise never received a notification
letter from Sprint about his rights under COBRA. Sprint sent
Degruise a notification letter by certified mail to his home
address on February 12, 1998, but neither Degruise nor anyone on
his behalf was present to receive it. Degruise, it turns out,
had recently gotten married and was out of town on a three-week
honeymoon. After making two attempts to deliver the letter, the
Postal Service left a note at Degruise’s house informing him that
1 See Lawrence v. Jackson Mack Sales, Inc., 837 F.Supp. 771, 782 (S.D.Miss.1992), (“Methods of notification which are reasonably calculated to reach the employee or benficiary are considered to conform to the standard of good faith compliance with the statute.”)), aff’d 42 F.2d 642 (5th Cir.1994); Myers v. King’s Daughter’s Clinic, 912 F.Supp. 233, 236 (W.D.Tex.1996) same)), aff’d 96 F.3d 1445 (5th Cir.1996); see also Bryant v. Food Lion, Inc., 100 F.Supp.2d 346, 367 (D.S.C. 2000) (same), aff’d 2001 WL 434566 (4th Cir. Apr. 30, 2001); Keegan v. Bloomingdale’s, Inc., 992 F.Supp. 974, 977 (N.D.Ill. 1998) (“[T]he issue is not whether the former employee actually received notice; the issue is whether the plan administrator ‘caused the notice to be sent in a good faith manner reasonably calculated’ to reach the former employee.” (quoting Jachim v. KUTV, Inc., 783 F.Supp. 1328, 1333-34 (D.Utah 1992))); Marsaglia v. L. Beinhauer & Sons, Co., 987 F.Supp. 425, 432 (W.D.Pa. 1997) (“[T]he few courts that have considered the matter have determined that a good faith effort that is reasonably calculated to reach the employee satisfies COBRA’s notice requirement.”)).
5 it had a letter for him at its office. Degruise went to the post
office to retrieve the letter, but it could not be located. When
the Postal Service later found the letter, it returned the letter
to Sprint marked “undelivered”. The district court concluded
that Sprint’s attempt to contact Degruise constituted a “good
faith” notification effort under COBRA. Degruise contends that
the district court erred.
We disagree.
The district court correctly found that “the law requires
only that the employer make a good faith attempt to comply with
[COBRA’s] notification provision.” See Degruise v. Sprint Corp.,
1999 WL 486887, *2 (E.D.La.) (citing Myers, 912 F.Supp. at 236);
Truesdale v. Pacific Holding Co./Hay Adams Div., 778 F.Supp. 77,
81-82 (D.D.C.1991)). “Good faith” can be demonstrated in a
variety of ways with respect to COBRA’s notification
requirements. An employer can hand deliver a letter to an
individual or, more commonly, send a letter via first class mail.
See, i.e., Lawrence, 837 F.Supp. at 782 (finding that employer
acted in “good faith” by sending COBRA notification to individual
via first class mail); Dehner v. Kansas City Southern Indus.,
Inc., 713 F.Supp. 1397 (D.Kan. 1989) (employer acted in “good
faith” when it hand delivered a COBRA notification letter).
Here, Sprint sent Degruise’s notification letter via
certified mail---a special type of first class mail whose primary
purpose is to provide evidence of an individual’s receipt of
6 delivery. See United States v. McGlory, 202 F.3d 664, 673 (3rd
Cir.2000) (citations omitted); see also United States Postal
Service, Domestic Mail Manual, Issue 54, §912.1.2 (12/2/1999) (on
the Web at http://pe.usps.gov/) (”Only mailable matter on which
postage is paid at a First-Class mail rate (including Priority
Mail) may be accepted as certified mail”)). By using a type of
first class mail, Sprint made a “good faith” effort to notify
Degruise of his rights under COBRA. See Lawrence, 837 F.Supp. at
782.
Sprint later discovered Degruise’s letter went undelivered,
but this does not affect the outcome here. The law requires
nothing more than for an employer to make a “good faith” attempt
to provide notification. Sprint sent Degruise a notification
letter by certified mail to the address Degruise listed. It had
no knowledge why and was not responsible for the letter going
undelivered. Therefore, Sprint did nothing to undermine the
presumption of “good faith” established under the case law once
it attempted to notify Degruise of his COBRA benefits by
certified mail.2
CONCLUSION
For these reasons, we AFFIRM the district court’s entry of
2 It is worth noting that this whole episode could have been avoided had Sprint taken the added precaution of mailing Degruise his COBRA notification by ordinary first-class mail at the same time it sent the notification by certified mail. Sprint was not legally required to do this, but it would have been a good practice.
7 summary judgment for Sprint.