Vaught v. Scottsdale Healthcare Corp. Health Plan

Opinion by Judge IKUTA; Partial Concurrence and Partial Dissent by Judge BEA.

Plaintiff-appellant Raymond Vaught appeals the district court’s grant of summary judgment in favor of defendant-appellee Scottsdale Healthcare Corp. Health Plan (the Plan), Vaught’s health plan. The Plan is governed by the Employee Retirement Income Security Act of 1974 (ERISA). After denying Vaught’s claim for benefits, the Plan declined to grant Vaught’s requests for internal review of that denial. Vaught then challenged the Plan’s denial of benefits in district court based on a new theory. Because Vaught had not previously raised this theory to the Plan in his requests for internal review, the district court held that Vaught had failed to exhaust his administrative remedies. The district court granted the Plan’s motion for summary judgment and dismissed Vaught’s ERISA claim.

On appeal, we must consider whether Vaught effectively exhausted his administrative remedies, and, if not, whether he was excused from such exhaustion. We must also consider whether ERISA claimants are subject to an issue-exhaustion requirement. We have jurisdiction under 28 U.S.C. § 1291, and we affirm in part, reverse in part, and remand for further proceedings.

I

Raymond Vaught was injured when his motorcycle collided with an automobile on July 26, 2003. The police report from the accident stated that, “pending the outcome of the blood results from the Scottsdale Police Laboratory, Vaught will be charged via long form for driving under the influence of alcohol.” The results from the blood tests (taken at the hospital after the accident) revealed that Vaught’s blood alcohol content was .2618 percent, which is more than three times Arizona’s legal limit for an individual operating a motor vehicle.

Vaught sought reimbursement of his accident-related medical costs from the Plan, a health plan established by Vaught’s wife’s employer, Scottsdale Health Care Corporation. This health plan is deemed to be an “employee benefit plan,” as defined in ERISA, 29 U.S.C. § 1002(3). As such, it is governed by ERISA, which sets minimum substantive and procedural requirements for employee benefit plans. Id. § 1003(a). Under ERISA, the Plan is a separate legal entity that can sue and be sued. Id. § 1132(d)(1). A private company that elects to establish such a plan is referred to as the “plan sponsor.” Id. § 1002(16)(B). The fiduciary responsible for administering such a plan is referred to as the plan “administrator.” Id. § 1002(16)(A). Here, Scottsdale Health Care Corporation is both the plan sponsor and the plan administrator. Scottsdale Health Care Corporation retained Professional Benefit Services (PBS) to serve as the claims administrator for the Plan.

Kathy Vaught, Raymond Vaught’s wife and primary beneficiary of the Plan, received an explanation of benefits (EOB) from PBS on August 15, 2003. The EOB denied Raymond Vaught’s claim, stating: “INJURY DETAILS NEEDED: MUST INCLUDE HOW, WHEN & WHERE INJURY OCCURRED.” In response, Kathy Vaught sent the claims administrator a copy of the police report indicating that her husband would be charged for driving under the influence of alcohol. A second EOB followed, again denying Raymond Vaught’s claim and directing him to “REFER TO THE BENEFITS BOOKLET UNDER EXCLUSIONS AND WHAT THE PLAN DOES NOT COVER REGARDING MOTOR VEHICLE RELATED CHARGES.”

The reverse side of this EOB stated that the EOB “is an initial determination of *623your claim.” It informed the claimant: you “may request a copy of the documents governing the Plan and any internal rule, guideline or protocol used in the determination of your claim.” In a section entitled “Review Process,” the EOB noted a claimant’s right to appeal any determination, and described the appeal process:

If your claim is denied in whole or in part or if you disagree with the decision, you have a right to appeal the claim determination.

This Plan maintains a two-level appeals process for post-service claims. You have 180 days from the date of this initial claim determination to file an appeal to the Claims Administrator. You can review documents relevant to the claim and submit written comments and evidence supporting your claim. You may appoint a provider or other person as your authorized representative by filing a written authorization with the Claims Administrator. Your appeal must be sent in writing to the Administrative Office and clearly explain that you are appealing a claim denial and the reason why you think the Claims Administrator should reconsider your claim. If still dissatisfied with the initial appeal level determination you have 90 calendar days from receipt of the first level determination to request a second level appeal review by writing to the Plan Administrator. Following an adverse benefit determination after both levels of review, you have a right to bring a civil action under ERISA Section 502(a). During the appeal process, the Claims Administrator and the Plan Administrator will conduct a full and fair review, consider all the evidence and exercise their fiduciary discretion to interpret the Plan and decide the appeal. They will consult with any appropriate health care professional in deciding an appeal involving medical judgment. The decision on review of your claim will state the specific reason for the determination, reference the specific Plan provision upon which the decision was based and provide you with the right to request copies of all documents relevant to the review.

Vaught sent a letter to the Claims Administrator on January 22, 2004, stating that “[a]s per the plan agreement I am going to file an appeal within the 180 day time frame from the receipt of your claim denial,” and designating the Rocco Law Firm as his representative for the appeal. The letter was stamped “RECEIVED” by the Claims Administrator on January 26, 2004.

On February 19, 2004, Joseph Rocco, an attorney with the Rocco Law Firm, sent a letter to the Claims Administrator explaining that his office represented the Vaughts, and that on their behalf (and pursuant to the Vaughts’ January 22nd letter) his office was appealing the adverse determination of benefits under the plan. The letter listed seven grounds for the appeal:

1. The specific reason or reasons for the adverse benefit determination have not been provided;

2. References to the specific plan provisions on which the adverse benefit determination is based have not been provided;

3. No description of additional material or information necessary to complete the claim has been requested;

4. No description of the plan’s appeal procedures, including applicable time limits, plus a statement of the right to bring suit under § 502 of ERISA with respect to any adverse benefit determination has been provided;

5. No statement that the Vaughts are entitled to receive on request and free of *624charge, reasonable access to and copies of all documents, records and other information relevant to the claim has been provided;

6. No description of adverse benefit determination based upon an internal rule, guideline, protocol or similar criteria, if so based, has been provided;

7. The sole description provided, “AM refer to the benefits booklet under exclusions and what the plan does not recover [sic] regarding motor vehicle related charges” is vague and ambiguous, fails to meet the requirements for a claim denial as outlined at page 37 of the “Flex Choice' — Medical Benefit Summary Plan Description.”

The letter was stamped “RECEIVED” by the Claims Administrator on February 24, 2004.

On March 16, 2004, Mitchell Melamed replied to Rocco regarding the February letter to the Claims Administrator.1 In the letter, Melamed acknowledged receipt of Rocco’s letter “requesting an appeal” of the adverse benefits determination, and explained that Vaught’s claim was denied because the Plan does not cover “expenses incurred related to ‘driving under the influence of alcohol or drugs.’ ” Apparently unaware that the Claims Administrator had already received Vaught’s written authorization designating Rocco as his representative, Melamed asked Rocco to provide such authorization, adding “[i]f you have already forwarded that written authorization to the Plan, please forward a copy for my file.” In response to Rocco’s letter, Melamed stated that “[t]he specific reason for denial of coverage is driving under the influence of alcohol or drugs, your client having an indicated blood alcohol level of 0.261.” Melamed further advised that “[n]o additional material or information was necessary to complete the claim.” Finally, Melamed stated that, “based on this apparently being the first formal notification, I would recommend that you now have 180 days within which to submit your appeal as set forth on page 37 of the Summary Plan Description.”

On March 29, 2004, Rocco responded to Melamed by raising additional questions, and requesting a list of all documents reviewed by the Claims Administrator in order to reach its determination to deny coverage to Vaught because of his blood alcohol level, as well as copies of “any other documents or testimony of whatsoever kind” on which the Claims Administrator intended to rely. Instead of including a copy of Vaught’s signed authorization, as Melamed requested in the March 16 letter, Rocco asked Melamed to confirm that the Plan had received Vaught’s earlier authorization.

Melamed responded on April 28, 2004, noting that hospital records indicated that Vaught was driving with a blood alcohol level that was over three times the legal limit for Arizona. However, Melamed did not provide copies of the records or other documents on which the Claims Administrator was relying. Melamed sent subsequent letters to Rocco requesting a copy of Vaught’s signed authorization.

On September 2, 2004, Randolph Ba-chrach (Vaught’s attorney in the district court, and on appeal) sent a letter to the Plan Administrator, with copies to Me-lamed and the Claims Administrator, explaining that Vaught had retained Ba-chrach to appeal the denial of benefits. Bachrach stated that “Mr. Vaught appeals *625the denial of his claim, dated March 16, 2004,” and requested copies of “all relevant claim and Plan documents” relating to the denial of benefits.

On September 14, 2004, Melamed replied to Bachrach in a letter which recited Melamed’s understanding of the history of the denial of benefits. Melamed noted that Rocco had forwarded a letter to the Claims Administrator “stating in part that he was appealing the notice of declination of coverage and the basis of the alleged appeal.” Melamed also recounted his repeated requests that Vaught provide a written authorization appointing a representative, and concluded that “[t]o the best of [Melamed’s] knowledge, this was never done.” Finally, Melamed concluded:

The fact remains that the Covered Person[Raymond Vaught] or that Covered Person’s authorized agent, being authorized in writing and sent to the Claims Administrator, has 180 days from the date of the original post-service denial to file an appeal to the Claims Administrator, and this has not been done. As a result, the original denial of benefits as set forth on the Explanation of Benefits must stand.

Bachrach replied on September 20, stating his “understanding of the Plan’s position is that Mr. Vaught’s appeal will not be accepted or acted upon for the reasons set forth in Mr. Melamed’s letter,” and that he assumes “the same to be true with respect to his request for claim and Plan documents.”

Vaught filed a complaint in the United States District Court for the District of Arizona on March 7, 2005, alleging that the Plan had violated ERISA and the terms of the Plan in handling Vaught’s claim. The complaint requested (1) Plan benefits, (2) penalties for non-disclosure of Plan documents under 29 U.S.C. § 1132(c)(1), and (3) attorney’s fees and costs under 29 U.S.C. § 1132(g)(1). On July 27, 2005, the parties submitted a joint case management report, in which Vaught first raised his theory that his “injuries were not ‘caused,’ either directly or indirectly, by alcohol,” and instead “were the direct result of and proximately caused by an automobile/motorcycle collision.” In the same report, the Plan contended that this claim was unex-hausted because Vaught had never explained to the Plan why the alcohol-related exclusion did not apply to him.

Recognizing that exhaustion could be a dispositive issue, the district court ordered both parties to brief whether Vaught had exhausted the Plan’s appeal procedures, and whether failure to exhaust would preclude him from pursuing his claim in district court. In lieu of simply briefing the issue, however, the Plan filed a motion for summary judgment.

On January 23, 2006, the district court granted the Plan’s motion for summary judgment on the ground that Vaught had failed to exhaust the Plan’s internal remedies. The district court stated that Vaught’s communications with the Claims Administrator and Melamed had failed “to administratively challenge Defendant’s determination that the accident was a result of his driving under the influence.” The court noted that Vaught raised his “first substantive challenge” to the Plan’s determination in court. Because Vaught had not previously presented these arguments to the plan administrator, the court ruled that Vaught had failed to exhaust his administrative remedies, and could not raise his substantive challenges to the denial of benefits in federal court. Vaught, timely appealed.

II

We review the district court’s grant of summary judgment de novo. Viewing *626the evidence in the light most favorable to the nonmoving party, we must determine whether there are any genuine issues of material fact and whether the district court correctly applied the relevant substantive law. BankAmerica Pension Plan v. McMath, 206 F.3d 821, 824 (9th Cir.2000). “We also review de novo the district court’s interpretation of an ERISA insurance policy’s language.” Metro. Life Ins. Co. v. Parker, 436 F.3d 1109, 1113 (9th Cir.2006); see also Welch v. Unum Life Ins. Co. of Am., 382 F.3d 1078, 1082 (10th Cir.2004) (“In interpreting the terms of an ERISA plan[,] we examine the plan documents as a whole and, if unambiguous, we construe them as a matter of law.” (Internal quotation marks omitted, alteration in original.)).

On appeal, Vaught contends that the district court erred in granting the Plan’s summary judgment motion because Vaught had exhausted the Plan’s administrative remedies and, alternatively, that he was excused from exhausting them.

A

ERISA itself does not require a participant or beneficiary to exhaust administrative remedies in order to bring an action under § 502 of ERISA, 29 U.S.C. § 1132. Section 502 allows an ERISA plan participant or beneficiary to bring an action in district court “to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan.” § 1132(a)(1)(B). However, based on both the text of ERISA and its legislative history, we long ago concluded that “federal courts have the authority to enforce the exhaustion requirement in suits under ERISA, and that as a matter of sound policy they should usually do so.” Amato v. Bernard, 618 F.2d 559, 568 (9th Cir.1980). Accordingly, we have consistently held that before bringing suit under § 502, an ERISA plaintiff claiming a denial of benefits “must avail himself or herself of a plan’s own internal review procedures before bringing suit in federal court.” Diaz v. United Agric. Employee Welfare Benefit Plan & Trust, 50 F.3d 1478, 1483 (9th Cir.1995).

We have also recognized exceptions to our prudential exhaustion requirement.2 For example, we noted “that despite the usual applicability of the exhaustion requirement, there are occasions when a court is obliged to exercise its jurisdiction and is guilty of an abuse of discretion if it does not, the most familiar examples perhaps being when resort to the administra*627tive route is futile or the remedy inadequate.” Amato, 618 F.2d at 568 (internal quotation marks omitted); see also Diaz, 50 F.3d at 1483. Likewise, the current regulations implementing ERISA create an exception to the judge-made exhaustion requirement. Under 29 C.F.R. § 2560.503 — l(i), where a plan fails to establish or follow “reasonable” claims procedures as required by ERISA, “a claimant shall be deemed to have exhausted the administrative remedies available under the plan and shall be entitled to pursue any available remedies under section 502(a) of [ERISA] on the basis that the plan has failed to provide a reasonable claims procedure that would yield a decision on the merits of the claim.” Cf. Gotti v. Reliance Standard Life Ins. Co., 415 F.3d 978, 981-82 & n. 1 (9th Cir.2005) (discussing the predecessor of current § 2560.503-1(l), which used the phrase “deemed denied”); Eastman Kodak Co. v. STWB, Inc., 452 F.3d 215, 223 (2d Cir.2006) (discussing § 2560.503-l(l)).

B

The parties disagree whether Vaught availed himself of the Plan’s internal review procedures and thus exhausted his administrative remedies for purposes of bringing an action in district court. Under ERISA, an employee benefit plan’s internal review procedures must be included in the plan’s written documents, which include the plan instrument, see 29 U.S.C. § 1102(a)(1), and a summary of the plan instrument, called the “summary plan description.” 29 U.S.C. § 1022. The summary plan description must be “written in a manner calculated to be understood by the average plan participant,” and must be “sufficiently accurate and comprehensive to reasonably apprise such participants and beneficiaries of their rights and obligations under the plan.” Id. § 1022(a). Among other things, the summary plan description must contain “the remedies available under the plan for the redress of claims which are denied in whole or in part.” Id. § 1022(b).

In this case, the Plan set forth the details of its internal review procedures in the EOB. The Plan’s summary plan description, “FlexChoice Medical Benefit Summary Plan Description,” stated that “a description of the plan’s appeal procedures” would be included in the notices denying benefits (i.e., the EOBs). The summary plan description is part of the contract between the plan and the plan participants, see Bergt v. Ret. Plan for Pilots Employed by MarkAir, Inc., 293 F.3d 1139, 1143 (9th Cir.2002), which we interpret based on “contract principles derived from state law ... guided by the policies expressed in ERISA and other federal labor laws.” Gilliam v. Nev. Power Co., 488 F.3d 1189, 1194 (9th Cir.2007) (internal quotation marks omitted) (ellipsis in original). Based on general rules of contract interpretation, we interpret the Plan’s summary plan description as incorporating the EOB’s review procedures by reference. See Parker, 436 F.3d at 1115(“We see nothing in ERISA that precludes incorporation by reference ....”); see also Seborowski v. Pittsburgh Press Co., 188 F.3d 163, 169-70 (3d Cir.1999) (upholding arbitrator’s determination that an employee benefit plan incorporated by reference provisions of another written agreement). As a result, the EOB internal review procedures were part of the contract between the Plan and the participants and beneficiaries, and were therefore applicable to Vaught.

According to the EOB, a claimant must first file an appeal to the Claims Administrator. This first-level appeal must: (1) be made within 180 days of a claim denial; (2) be in writing; (3) “clearly explain” that it *628is an appeal; (4) “clearly explain ... the reason why you think the Claims Administrator should reconsider your claim”; and (5) be authorized by the claimant in writing, if the claimant has appointed a representative to file the appeal. If dissatisfied with the Claims Administrator’s “initial appeal level determination,” the claimant may then request a second level appeal review by writing to the Plan Administrator. The claimant then has a right to bring a civil action under ERISA Section 502(a) if there is “an adverse benefit determination after both levels of review.”

The parties do not dispute that Rocco’s February 19, 2004 letter satisfies three of these five requirements: it was timely, in writing, and clearly explained that it was an appeal. Although Melamed previously took the position that Vaught had failed to file a written authorization to appoint a representative (the fifth requirement), the record establishes that Vaught did submit a written authorization to the Claims Administrator. The Plan did not rely on this rationale in the district court or on appeal, and therefore this fifth requirement is no longer in dispute.

Instead, the Plan contended before the district court, and now on appeal, that Vaught failed to exhaust administrative remedies because he did not discharge the fourth EOB requirement: Rocco’s letter did not “clearly explain ... the reason why you think the Claims Administrator should reconsider your claim.” The Plan interprets this EOB language as requiring claimants to provide a substantive basis for their appeals — that is, to explain “why the initial determination was supposedly incorrect.” Although Rocco’s letter set forth seven procedural reasons why the Claims Administrator should reconsider Vaught’s claim, the Plan contends that Vaught did not effectively invoke the Plan’s internal review procedures as required by the EOB because he did not challenge the basis on which the Plan denied his claim or the Plan’s interpretation of the relevant coverage exclusion. The district court accepted this interpretation of the EOB requirement, and agreed with the Plan that Vaught raised his “first substantive challenge” in the district court.

We must consider this interpretation of the EOB in light of our principle that “terms in an ERISA plan should be interpreted in an ordinary and popular sense as would afperson] of average intelligence and experience.” Gilliam, 488 F.3d at 1194 (internal quotation marks omitted) (alteration in original). Where a plan instrument does not define a term, we may “look to the dictionary definition to determine the ordinary and popular meaning.” Id. at 1195. Here, the EOB’s plain language does not support the Plan’s interpretation of the EOB requirement that a claimant provide “the reason why” the Claims Administrator should reconsider the claimant’s claim. We first note that the phrase “the reason why” is not defined in the Plan, and that we therefore must interpret it “in an ordinary and popular sense.” The dictionary definition of the word “reason” includes any “explanation or justification of an act.” Webster’s New World College Dictionary 1194(4th ed.2005). A claimant asked to explain the “reason why” a decision should be reviewed could respond, consistent with this definition, that the decision was flawed by procedural errors. Such a response constitutes a reasonable “explanation or justification” of the claimant’s request for reconsideration for several reasons. For example, a claimant may be entitled to relief if the plan’s procedural errors were so significant that the plan’s initial denial of benefits was simply arbitrary. See Abatie v. Alta Health & Life Ins. Co., 458 F.3d 955, 973-74(9th Cir.2006) (en banc). *629A plan may also want the opportunity to reconsider a procedurally flawed decision in order to correct its own procedural errors and avoid de novo review by the district court. See id. at 973(“[I]f the plan administrator’s procedural defalcations are flagrant, de novo review applies.”); see also Amato, 618 F.2d at 568 (“[Pjrior fully considered actions by pension plan trustees interpreting their plans ... may well assist the courts when they are called upon to resolve the controversies.” (Emphasis added.)). In sum, a person of “average intelligence and experience” could reasonably conclude that a claimant could explain “the reason why” the Claims Administrator should reconsider a claim by pointing to procedural errors.

We conclude that the seven procedural reasons offered by Rocco in his initial letter to the Claims Administrator satisfied the EOB’s requirement that the plan participant “clearly explain ... the reason why you think the Claims Administrator should reconsider your claim.” The Claims Administrator therefore erred in determining that Vaught had not effectively invoked the Plan’s internal review procedures. Due to this mistake, the Plan erroneously declined to hear Vaught’s appeal, and thus did not give Vaught an initial appeal-level determination. Instead, the Plan let the initial denial of benefits stand and made clear that it had completed its decisionmaking process. Because Vaught did not receive the initial appeal-level determination, he could not have requested a second-level review or have taken any further steps within the Plan to obtain further review of his claim; the original denial of benefits was the Plan’s final decision.3 Therefore, contrary to the Plan’s argument that Vaught failed to avail himself of the Plan’s internal review process, Vaught’s initial assertion of procedural errors was sufficient to invoke this process and — because the Plan declined to hear his appeal — to exhaust his administrative remedies.

C

Our conclusion that Vaught exhausted his administrative remedies does not end our analysis, however, because the Plan also argues that Vaught failed to avail himself of the Plan’s internal review procedures by failing to raise all his reasons for contesting the Plan’s denial of benefits in his initial appeal. The Plan notes that Vaught’s claim for benefits in district court was based on a legal theory (that his injuries were caused by a collision, not by alcohol) that was not raised in his initial letter to the Claims Administrator, or in any of the further correspondence with Melamed. The Plan argued, and the district court held, that Vaught’s failure to identify this new theory to the plan administrator within the appeal time frame prevented him from bringing it before the district court.

The dissent similarly argues that Vaught failed to exhaust his administrative remedies because his initial letter of appeal failed to identify all his reasons for contesting the Plan’s denial of benefits. Dis. Op. at 638-39. The dissent bases this conclusion on the following analysis: As noted above, the EOB requires a plan participant filing a first-level appeal to “clearly explain ... the reason why you think the Claims Administrator should reconsider your claim.” According to the dissent, the EOB’s use of the words “the reason” means that a plan participant *630must identify the main reason or reasons for the participant’s challenge to the denial of benefits in the participant’s initial appeal. Dis. Op. at 637. In the dissent’s view, a plan participant cannot raise a new reason for challenging a denial of benefits before the district court unless the court exercises its equitable discretion to “excuse compliance with the plan’s requirement.” Dis. Op. at 637-38 n. 10.

Both the Plan and dissent seem to assume that the requirement they advocate (i.e., the requirement that a plan participant must raise all reasons for challenging a denial of benefits during the initial appeal process) is part of the long-established duty under ERISA to exhaust administrative remedies. But this requirement is actually an issue-exhaustion requirement, not a remedy-exhaustion requirement. In Sims v. Apfel, the Supreme Court explained the difference between the two: the requirement that a claimant “obtain a final decision on his claim” is a remedy-exhaustion requirement, while the requirement that a claimant must also “specify that issue in his request for review” by the agency is an issue-exhaustion requirement. 530 U.S. 103, 107, 120 S.Ct. 2080, 147 L.Ed.2d 80 (2000). By arguing that Vaught not only needed to obtain the Plan’s final decision on his claim that benefits were wrongfully denied (remedy exhaustion) but also needed to raise each of his specific theories or issues in his internal appeal to the Plan in order to obtain judicial review of those theories or issues, Dis. Op. at 638-39, the dissent and Plan are effectively arguing that Vaught was subject to an issue-exhaustion requirement.

In considering whether a district court may impose an issue-exhaustion requirement on an ERISA claimant, we are guided by the framework of analysis set forth by the Supreme Court. See Sims, 530 U.S. at 107-08, 120 S.Ct. 2080. As explained in Sims, issue exhaustion is typically a creature of statute or agency regulation. For example, a statute may deprive a court of jurisdiction to hear specific issues or objections not raised before the agency. Id. at 107-08, 120 S.Ct. 2080(noting that “the Court of Appeals lacked jurisdiction to review objections not raised before the National Labor Relations Board” because “a statute provided that ‘no objection that has not been urged before the Board ... shall be considered by the court’ ”) (alterations in original). An agency’s regulations also require issue exhaustion in administrative appeals when they provide that a petition for review must “ ‘list the specific issues to be considered on appeal.’ ” Id. at 108, 120 S.Ct. 2080 (quoting 20 C.F.R. § 802.211(a)). And, when regulations impose such a requirement, “courts reviewing agency action regularly ensure against the bypassing of that requirement by refusing to consider unexhausted issues.” Id.

But neither issue-exhaustion situation identified in Sims is present here. No ERISA statute precludes courts from hearing objections not previously raised to the Plan, nor does any ERISA statute or regulation require claimants to identify all issues they wish to have considered on appeal. Nor has the Plan instituted issue exhaustion as a matter of contract. Instead of requiring claimants to “list the specific issues to be considered on appeal,” Sims, 530 U.S. at 108, 120 S.Ct. 2080(inter-nal quotation marks omitted), the Plan’s appeal procedures on their face limit a claimant to a single reason: the EOB directs the claimant to provide “the reason why you think the Claims Administrator should reconsider your claim” (emphasis added).

*631In the absence of a statute or regulation, issue exhaustion may be required as “an analogy to the rule that appellate courts will not consider arguments not raised before trial courts.” Id. at 108-09, 120 S.Ct. 2080. However, Sims noted that issue exhaustion is “not necessarily” a corollary of exhaustion of remedies and declined to require issue exhaustion in the Social Security Act context. Id. at 107-08, 120 S.Ct. 2080. In a non-adversarial proceeding, “the reasons for a court to require issue exhaustion are much weaker.” Id. at 110, 120 S.Ct. 2080. A plurality of justices concluded that issue exhaustion was not appropriate because the Social Security agency proceedings were “inquisitorial rather than adversarial.” Id. at 111, 120 S.Ct. 2080. In a concurring opinion, Justice O’Connor noted that, “[i]n most cases, an issue not presented to an administrative decisionmaker cannot be argued for the first time in federal court,” but opined that it would be inappropriate to impose an issue-exhaustion requirement where the agency had failed to notify claimants of such a requirement. Id. at 112-14, 120 S.Ct. 2080 (O’Connor, J., concurring). Because the Social Security Act regulations affirmatively suggested that issue exhaustion was not required, Justice O’Connor concluded that “[requiring issue exhaustion is particularly inappropriate here.” Id. at 113, 120 S.Ct. 2080.

Sims leads to the conclusion that issue exhaustion is not applicable in the ERISA context. First, the internal review process mandated by ERISA and set forth in the EOB provides for an inquisitorial process, in which the plan must provide the opportunity for “a full and fair review” of any claim denial. See 29 U.S.C. § 1133(2). While the ERISA statute and regulations do not explicitly describe these procedures as nonadversarial, we recognized in Amato that the institution of these review procedures “was apparently intended by Congress to,” among other things, “provide a nonadversarial method of claims settlement.” 618 F.2d at 567(emphasis added).

ERISA’s internal review procedures share the nonadversarial characteristics of the Social Security Act procedures. Both contemplate that a claimant’s appeal will be heard by an impartial decisionmaker who may review new information in addition to information from the previous denial. Compare 29 C.F.R. § 2560.503-l(h)(iv)(requiring that an ERISA plan “[pjrovide for a review that takes into account all comments, documents, records, and other information submitted by the claimant relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination”), with 20 C.F.R. §§ 404.900(b), 404.970(b) (describing the similarly expansive scope of the Social Security Act administrative review process). ERISA’s regulations require an even less deferential appellate review of the initial denial of benefits than is required by the Social Security Act review process. Compare 29 C.F.R. § 2560.503 — 1(h)(3)(h) (requiring that a plan’s appeal procedures “[pjrovide for a review that does not afford deference to the initial adverse benefit determination and that is conducted by an appropriate named fiduciary of the plan who is neither the individual who made the adverse benefit determination that is the subject of the appeal, nor the subordinate of such individual”), with 20 C.F.R. § 404.970(a) (describing the Appeals Council’s standards of review). Both schemes contemplate that many claimants will not be represented by attorneys, and neither requires claimants to provide formal briefing. See Sims, 530 U.S. at 112, 120 S.Ct. 2080; Cann v. Carpenters’ Pension Trust Fund, 989 F.2d 313, 317 (9th Cir.1993) (noting that “some claimants and some plans may use informal internal review *632procedures, accomplished by nonlawyers, perhaps union or other employee representatives and plan representatives”). Most significant, neither scheme contemplates that the claimant will face an adversary opposing the claim for benefits in the review process. See Sims, 530 U.S. at 111, 120 S.Ct. 2080(“The Commissioner has no representative before the ALJ to oppose the claim for benefits, and we have found no indication that he opposes claimants before the Council.”). To the extent issue exhaustion may be imposed as “an analogy to the rule that appellate courts will not consider arguments not raised before trial courts,” id. at 108-09, 120 S.Ct. 2080, such an analogy is even less apt in the ERISA context, because ERISA’s “administrative” proceedings are “part of a private, albeit regulated, claims process.” See Cann, 989 F.2d at 317. The non-adversarial nature of the ERISA proceeding weighs against imposing an issue-exhaustion requirement. See Sims, 530 U.S. at 109-10, 120 S.Ct. 2080.

The Plan’s failure to notify claimants of any issue-exhaustion requirement also weighs against imposing one. See id. at 113, 120 S.Ct. 2080 (O’Connor, J., concurring). Justice O’Connor’s concern that Social Security claimants could be misled is equally applicable in this case, where the Plan’s internal appeal procedures suggested that issue exhaustion was not required. The EOB directed claimants to use the Plan’s internal review procedures in order to “have a right to bring a civil action under ERISA Section 502(a),” but did not provide notice that claimants must raise specific issues to preserve them for future actions. See Sims, 530 U.S. at 113, 120 S.Ct. 2080. Similar to the Social Security requirements, the EOB provided for an informal appeal process in which decision-makers would provide “a full and fair review, consider all the evidence and exercise their fiduciary discretion to interpret the Plan and decide the appeal.” The EOB suggested that decisionmakers would further develop the record by consulting “any appropriate health care professional in deciding an appeal involving medical judgment.” Because the EOB does not require issue exhaustion, but rather suggests that a claimant need not raise all issues to the Plan in order to preserve them for further review, issue exhaustion would be particularly inappropriate in this case. See Sims, 530 U.S. at 113, 120 S.Ct. 2080.4

Because ERISA and its implementing regulations create an inquisitorial, rather than adversarial process, and because the EOB does not notify a claimant that issue exhaustion is required, Sims leads us to conclude that Vaught was not required to exhaust his issues or theories in the context of this case. Accord Wolf v. Nat'l Shopmen Pension Fund, 728 F.2d 182, 186 (3d Cir.1984) (“Section 502(a) of ERISA does not require either issue or theory exhaustion; it requires only claim exhaustion.”). Our conclusion here is consistent with our decision in Smith v. Retirement Fund Trust, 857 F.2d 587 (9th Cir.1988), where we cited Wolf with approval in re*633jecting a plan’s argument that a claimant did not exhaust available administrative remedies because he presented new evidence supporting his- claim to the district court. Id. at 591-92. Here, as in Sims, Vaught exhausted his administrative remedies by requesting review of his claim denial and obtaining the Plan’s final decision on his claim. His subsequent decision to raise a new issue before the district court did not retroactively erase his prior effective exhaustion of administrative remedies.

D

We conclude that Vaught exhausted his administrative remedies and was not precluded from raising his new theory to the district court. The district court therefore erred in granting the Plan’s summary judgment motion. Accordingly, we remand to the district court to review the plan administrator’s decision to deny Vaught’s claim for benefits. The district court should decide in the first instance whether allowing additional evidence outside the administrative record is appropriate in this case, and whether de novo or deferential review applies to the Plan’s decision. See Metropolitan Life Ins. Co. v. Glenn, — U.S. -, 128 S.Ct. 2343, 2351-52, 171 L.Ed.2d 299 (2008); Abatie, 458 F.3d at 973.

Ill

Vaught also argues that the district court’s summary judgment order improperly dismissed his claim against the Plan under § 502(c), 29 U.S.C. § 1132(c), for failure to disclose plan documents. Although the district court did not expressly address this issue in its order granting summary judgment, we affirm the district court’s dismissal of Vaught’s § 1132(c)(1) claim because the claim fails as a matter of law. See, e.g., Moreno v. Baca, 431 F.3d 633, 638 (9th Cir.2005) (“We may affirm the district court on any basis supported by the récord.”).

Section 1132(c)(1) allows the district court to impose sanctions for a plan administrator’s failure or refusal to comply with document requests. “Under 29 U.S.C. § 1132(c), only the plan ‘administrator’ can be held liable for failing to comply with the reporting and disclosure requirements.” Cline v. Indus. Maint. Eng’g & Contracting Co., 200 F.3d 1223, 1234 (9th Cir.2000). It is undisputed that Scottsdale Health Care Corporation is the “plan administrator.” The Plan is not an “administrator” and therefore not a proper defendant under § 1132(c)(1). See Cline, 200 F.3d at 1234; Moran v. Aetna Life Ins. Co., 872 F.2d 296, 299-300 (9th Cir.1989). Because Vaught brought his action against the Plan, not the plan administrator, his claim fails as a matter of law.

IV

In sum, we hold that Vaught exhausted the Plan’s internal remedies and was not required to exhaust issues. Accordingly, we reverse the district court’s grant of summary judgment to the Plan and remand for further proceedings. We affirm the district court’s dismissal of Vaught’s claim for penalties for nondisclosure of documents because the Plan is not the proper defendant under § 1132(c).

Affirmed in part, reversed in part, and remanded.