## Facts

- Edwin L. Glocker retired from W. R. Grace & Company in 1973 and received retiree medical benefits through Grace’s employee welfare plan, administered/insured by Aetna.
- In 1988, Edwin was hospitalized with advanced prostate cancer. At his physician’s recommendation, Edwin hired private-duty nurses to assist with his care during hospitalization.
- After Edwin died, his wife, Elma A. Glocker (as personal representative), submitted a claim for reimbursement of the private-duty nurse expenses. Grace denied the claim on the ground that the plan excluded “custodial care.”
- Elma filed an ERISA action in federal district court challenging the benefits denial.
- To prepare her case, Elma repeatedly requested plan and policy documents from Grace. Grace did not timely produce all requested documents, citing difficulty locating materials within its many-file recordkeeping system.
- After about 18 months and roughly 16 requests, Elma moved to compel production and amended her complaint to seek civil penalties under ERISA § 502(c), 29 U.S.C. § 1132(c), based on the failure to furnish requested documents.
- Grace produced the documents after the motion to compel.
- The district court initially granted summary judgment to Grace, reviewed the benefits denial under an abuse-of-discretion standard, and declined to award § 1132(c) penalties.
- In an earlier appeal (“Glocker I”), the Fourth Circuit held the benefits denial required de novo review and remanded; it also directed the district court to reconsider the civil-penalties request.
- On remand, the district court again ruled for Grace and again refused to impose civil penalties, focusing heavily on the absence of shown prejudice to Elma from the delay.
- Elma appealed again, challenging the refusal to impose § 1132(c) penalties.

## Issues

1. Whether the district court abused its discretion by effectively treating lack of prejudice to the participant as a prerequisite to awarding civil penalties under ERISA § 502(c), 29 U.S.C. § 1132(c), for delayed production of plan documents.

## Decision

- The Fourth Circuit vacated the district court’s order denying § 1132(c) civil penalties.
- The case was remanded for the district court to reconsider penalties under the correct standard.
- The court held that prejudice may be considered, but it is not an absolute requirement for imposing § 1132(c) penalties.

## Legal Principles

- ERISA § 502(c), 29 U.S.C. § 1132(c), authorizes discretionary per-day civil penalties against a plan administrator who fails to furnish required plan documents after a proper request.
- The penalty provision serves to induce administrators to comply with ERISA’s disclosure duties and is not limited to compensating for proven injury.
- A participant’s prejudice (or lack of it) is a factor the court may weigh, but the statute does not make prejudice a condition for penalties.
- In deciding whether to impose penalties and in what amount, courts may consider: the length of the delay, the number of requests, the importance of the information withheld, and the administrator’s reasons for noncompliance.
- A district court abuses its discretion when it applies an incorrect legal standard—such as treating absence of prejudice as dispositive—when exercising its discretion under § 1132(c).

## Conclusion

The Fourth Circuit held that the district court applied the wrong standard when it denied ERISA § 1132(c) penalties based mainly on the participant’s failure to show prejudice from the delayed document production; the court vacated the denial and remanded for reconsideration using a multi-factor analysis in which prejudice is only one consideration.


Glocker v. W. R. Grace & Co., 68 F.3d 460 (1995)