Vernon Cannon v. Crown Cork & Seal Co. ( 2018 )

NOT RECOMMENDED FOR PUBLICATION
File Name: 18a0446n.06
No. 18-3280
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT FILED
Aug 28, 2018
VERNON CANNON, ) DEBORAH S. HUNT, Clerk
)
Plaintiff-Appellant, )
)
ON APPEAL FROM THE
v. )
UNITED STATES DISTRICT
)
COURT FOR THE
CROWN CORK & SEAL CO., INC., )
NORTHERN DISTRICT OF
)
OHIO
Defendant-Appellee. )
)
)
BEFORE: SILER, MOORE, and ROGERS, Circuit Judges
ROGERS, Circuit Judge. The Crown Cork & Seal Company denied Vernon Cannon’s
application for disability retirement benefits because Cannon had applied for these benefits after
the relevant deadline had passed. Instead of following the required administrative process to
contest this denial, Cannon filed this civil suit, which the district court below dismissed for
Cannon’s failure to exhaust his administrative remedies. In this appeal, Cannon argues that
pursuing such remedies would have been futile and—for the first time on appeal, and somewhat
in contradiction of his first argument—that the company’s subsequent decision to provide benefits
to him constitutes waiver of the requirement. Neither of these arguments has any merit. Cannon
also contends that the district court erred in dismissing a RICO fraud claim brought by Cannon,
but the district court correctly dismissed this claim for Cannon’s failure to plead any fraud.
No. 18-3280, Cannon v. Crown Cork & Seal Co., Inc.
Vernon Cannon was employed by Crown Cork & Seal, a company sponsoring a disability
retirement plan regulated by ERISA. To be eligible for disability retirement benefits, the plan
required employees to apply before their “Severance of Service Date,” which the plan defined as:
“[t]he date which is the earlier of: (1) the date you quit, retire, are discharged, or die; or (2) the
later of (i) the first anniversary of your absence for any other reason, or (ii) the date all wage
continuation benefits or short term disability benefits end.” Cannon’s last day of active
employment with the company was March 23, 2012; Cannon did not show up for work after this
date. On May 7, 2015, Cannon applied for disability retirement benefits, but the benefits
administrator denied him those benefits because she determined that Cannon was required to have
applied for these benefits by March 23, 2013, the first anniversary of Cannon’s absence. The
benefits administrator explained that Cannon “ha[d] the right to appeal this decision within 60 days
of the date you receive this denial,” and explained the procedures for filing an appeal.
Cannon did not follow up on this denial by pursuing any administrative remedies within
the company, but instead filed this civil suit, contending that the company had misinterpreted the
“Severance of Service Date” definition when it required Cannon to have applied for benefits by
March 23, 2013. Cannon also argued that the company had committed a RICO civil fraud violation
in sending him (and, Cannon speculated, other employees) a letter stating that employees were
required to submit an application for disability benefits within one year of ceasing to be actively
employed by the company. The company moved for dismissal and the district court granted that
motion on the grounds that ERISA required Cannon to exhaust his administrative remedies before
filing a civil suit, see Miller v. Metro. Life Ins. Co., 925 F.2d 979, 986 (6th Cir. 1991), and that
Cannon’s alleged RICO claim had not pleaded any fraud.
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No. 18-3280, Cannon v. Crown Cork & Seal Co., Inc.
Cannon now appeals, arguing first that the district court erred in not excusing his failure to
exhaust administrative remedies on grounds of futility, but the district court was correct in
determining that this exception did not apply here. Cannon’s only reason for why an administrative
appeal would have been futile is the fact that the company’s frontline benefits administrator had
determined that Cannon was required to apply for benefits before March 23, 2013. This is clearly
not enough to show that any appeal of that decision would have been pointless, in the sense that
the outcome would be predetermined without regard to any argument that Cannon might offer. To
establish futility, “[a] plaintiff must show that ‘it is certain that his claim will be denied on appeal,
not merely that he doubts that an appeal will result in a different decision.’” Coomer v. Bethesda
Hosp., Inc., 370 F.3d 499, 505 (6th Cir. 2004) (quoting Fallick v. Nationwide Mut. Ins. Co.,
162 F.3d 410, 419 (6th Cir. 1998)). Cannon offers no reason to believe that the internal appeals
process would not have reached a fair and proper outcome had he offered any factual or legal
objection to the benefits administrator’s decision. This is enough to say that the futility exception
to the exhaustion requirement was not available to Cannon here.
Cannon also contends that the company’s decision—subsequent to the filing of this case—
to allow Cannon to submit a tardy application, and ultimately to award him benefits, constitutes a
waiver of the exhaustion requirement with respect to this case, but Cannon’s argument is without
merit. Waiver requires a party’s “intentional relinquishment or abandonment of a known right.”
United States v. Olano, 507 U.S. 725, 733 (1993) (quoting Johnson v. Zerbst, 304 U.S. 458, 464
(1938)). Here, the company had the legal right to defend the benefits administrator’s initial denial
of benefits on the ground that Cannon had not exhausted the administrative process. Its separate
decision to allow Cannon another shot at an application was not a relinquishment of that first right,
much less a clear and intentional relinquishment. Cannon offers neither authority nor argument to
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No. 18-3280, Cannon v. Crown Cork & Seal Co., Inc.
prove that a subsequent decision to allow an application for benefits has anything to do with the
factual question of whether a previous application for benefits completed the necessary
prerequisites to allow judicial review. Such an outcome would not make sense, in light of the
strong and numerous justifications underlying the exhaustion requirement. See Costantino v. TRW,
Inc., 13 F.3d 969, 975 (6th Cir. 1994). Moreover, the company’s ultimate grant of benefits indeed
shows the particular weakness of Cannon’s argument that exhaustion would have been futile.
Cannon finally asserts that the district court erred in dismissing his RICO fraud claim. For
the reasons given by the district court, which need not be repeated here, that dismissal was entirely
appropriate. See Cannon v. Crown Cork & Seal Co., Inc., No. 17-CV-0003, 2018 WL 1393290,
at *3–4 (N.D. Ohio Mar. 19, 2018).
We AFFIRM the judgment of the district court.
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