FOR PUBLICATION
 UNITED STATES COURT OF APPEALS
      FOR THE NINTH CIRCUIT

RAYMOND VAUGHT,                      
              Plaintiff-Appellant,         No. 06-15507
              v.
                                            D.C. No.
                                         CV-05-00718-DGC
SCOTTSDALE HEALTHCARE
CORPORATION HEALTH PLAN,                    OPINION
             Defendant-Appellee.
                                     
       Appeal from the United States District Court
                for the District of Arizona
       David G. Campbell, District Judge, Presiding

                  Argued and Submitted
       January 15, 2008—San Francisco, California

                Filed September 29, 2008

      Before: William A. Fletcher, Carlos T. Bea, and
              Sandra S. Ikuta, Circuit Judges.

                 Opinion by Judge Ikuta;
   Partial Concurrence and Partial Dissent by Judge Bea




                          13847
13850     VAUGHT v. SCOTTSDALE HEALTHCARE CORP.


                       COUNSEL

Randolph G. Bachrach, Phoenix, Arizona, for the plaintiff-
appellant.

Lawrence J. Rosenfeld, Greenberg Traurig, LLP, Phoenix,
Arizona, for the defendant-appellee.
           VAUGHT v. SCOTTSDALE HEALTHCARE CORP.           13851
                          OPINION

IKUTA, Circuit Judge:

   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 previ-
ously 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 col-
lided 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 hos-
pital after the accident) revealed that Vaught’s blood alcohol
content was .2618 percent, which is more than three times
13852      VAUGHT v. SCOTTSDALE HEALTHCARE CORP.
Arizona’s legal limit for an individual operating a motor vehi-
cle.

   Vaught sought reimbursement of his accident-related medi-
cal 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 gov-
erned by ERISA, which sets minimum substantive and proce-
dural requirements for employee benefit plans. 

Under ERISA, the Plan is a separate legal entity that can sue
and be sued. 

A private company that elects
to establish such a plan is referred to as the “plan sponsor.”

The fiduciary responsible for administering
such a plan is referred to as the plan “administrator.” 

Here, Scottsdale Health Care Corporation is
both the plan sponsor and the plan administrator. Scottsdale
Health Care Corporation retained Professional Benefit Ser-
vices (PBS) to serve as the claims administrator for the Plan.

   Kathy Vaught, Raymond Vaught’s wife and primary bene-
ficiary 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 BEN-
EFITS 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 ini-
tial determination of your 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 deter-
           VAUGHT v. SCOTTSDALE HEALTHCARE CORP.            13853
mination of your claim.” In a section entitled “Review Pro-
cess,” 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 authori-
    zation 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 deter-
    mination 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 appro-
    priate health care professional in deciding an appeal
    involving medical judgment. The decision on review
    of your claim will state the specific reason for the
13854      VAUGHT v. SCOTTSDALE HEALTHCARE CORP.
    determination, reference the specific Plan provision
    upon which the decision was based and provide you
    with the right to request copies of all documents rel-
    evant 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 Janu-
ary 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 infor-
    mation 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 charge, reasonable
             VAUGHT v. SCOTTSDALE HEALTHCARE CORP.                13855
      access to and copies of all documents, records and
      other information relevant to the claim has been pro-
      vided;

      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 Admin-
istrator 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 rep-
resentative, Melamed asked Rocco to provide such authoriza-
tion, 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 spe-
  1
    Melamed subsequently identified himself as an attorney representing
the Plan, and therefore the Claims Administrator did not directly respond
to Vaught’s appeal, although the EOB indicated that the Claims Adminis-
trator was the decisionmaker for the first-level appeal. However, neither
party places any weight on this procedural irregularity.
13856       VAUGHT v. SCOTTSDALE HEALTHCARE CORP.
cific reason for denial of coverage is driving under the influ-
ence 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 rec-
ommend 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 rais-
ing 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 alco-
hol 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 rely-
ing. Melamed sent subsequent letters to Rocco requesting a
copy of Vaught’s signed authorization.

   On September 2, 2004, Randolph Bachrach (Vaught’s
attorney in the district court, and on appeal) sent a letter to the
Plan Administrator, with copies to Melamed and the Claims
Administrator, explaining that Vaught had retained Bachrach
to appeal the denial of benefits. Bachrach stated that “Mr.
Vaught appeals the denial of his claim, dated March 16,
2004,” and requested copies of “all relevant claim and Plan
documents” relating to the denial of benefits.
           VAUGHT v. SCOTTSDALE HEALTHCARE CORP.           13857
   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 for-
warded 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 authoriza-
tion 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 han-
dling Vaught’s claim. The complaint requested (1) Plan bene-
fits, (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
13858      VAUGHT v. SCOTTSDALE HEALTHCARE CORP.
that this claim was unexhausted 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 fail-
ure 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 the 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, 

, 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, 

, 1113 (9th Cir.
2006); see also Welch v. UNUM Life Ins. Co. of Am., 

, 1082 (10th Cir. 2004) (“In interpreting the terms
             VAUGHT v. SCOTTSDALE HEALTHCARE CORP.                   13859
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 origi-
nal.)).

   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

   [1] ERISA itself does not require a participant or benefi-
ciary 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 con-
cluded 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, 

, 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, 

, 1483
(9th Cir. 1995).

  [2] We have also recognized exceptions to our prudential
exhaustion requirement.2 For example, we noted “that despite
  2
    While recognizing exceptions to the exhaustion requirement, Amato
and some of its progeny confusingly suggest that a district court lacks
jurisdiction to review a plan’s denial of benefits where the participant has
13860        VAUGHT v. SCOTTSDALE HEALTHCARE CORP.
the usual applicability of the exhaustion requirement, there
are occasions when a court is obliged to exercise its jurisdic-
tion and is guilty of an abuse of discretion if it does not, the
most familiar examples perhaps being when resort to the
administrative route is futile or the remedy inadequate.”

(internal quotation marks omitted);
see also 

. Likewise, the current regula-
tions implementing ERISA create an exception to the judge-
made exhaustion requirement. Under 29 C.F.R. § 2560.503-
1(l), 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 avail-
able under the plan and shall be entitled to pursue any avail-
able remedies under section 502(a) of [ERISA] on the basis
that the plan has failed to provide a reasonable claims proce-
dure that would yield a decision on the merits of the claim.”
Cf. Gatti v. Reliance Standard Life Ins. Co., 

,
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., 

,
223 (2d Cir. 2006) (discussing § 2560.503-1(l)).

failed to exhaust the internal remedies. See, e.g., Dishman v. UNUM Life
Ins. Co. of Am., 

, 984 n.41 (9th Cir. 2001) (quoting 

); White v. Jacobs Eng’g Group Long Term Disability Ben-
efit Plan, 

, 352 (9th Cir. 1990); 

, 568.
However, Bowles v. Russell, 

(2007), clarified that court-
promulgated rules are not jurisdictional: “[o]nly Congress may determine
a lower federal court’s subject-matter jurisdiction.” 

(internal
quotation marks omitted) (alteration in original). Because Bowles super-
cedes our prior decisions, we must clarify that the exhaustion requirement
set forth in Amato is not a jurisdictional requirement. See Miller v. Gam-
mie, 

, 893 (9th Cir. 2003) (en banc). We agree with the rea-
soning of our sister circuit in Metropolitan Life Insurance Co. v. Price,

(3rd Cir. 2007), on this issue. See 

see also
Pension Benefit Guar. Corp. v. Carter & Tillery Enters., 

,
1187 (9th Cir. 1998) (recognizing that where Congress has not clearly
required exhaustion, failure to follow such procedures does not create a
jurisdictional bar).
            VAUGHT v. SCOTTSDALE HEALTHCARE CORP.           13861
                                B

   [3] 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 inter-
nal 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 sum-
mary 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.” 

Among other
things, the summary plan description must contain “the reme-
dies available under the plan for the redress of claims which
are denied in whole or in part.” 

   [4] 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 Mark Air, Inc., 

, 1143 (9th Cir. 2002), which we interpret based on “con-
tract principles derived from state law . . . guided by the poli-
cies expressed in ERISA and other federal labor laws.”
Gilliam v. Nev. Power Co., 

, 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 

(“We see nothing in ERISA that precludes incorpora-
tion by reference . . . .”); see also Seborowski v. Pittsburgh
Press Co., 

, 169-70 (3d Cir. 1999) (upholding
13862      VAUGHT v. SCOTTSDALE HEALTHCARE CORP.
arbitrator’s determination that an employee benefit plan incor-
porated by reference provisions of another written agree-
ment). 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 is 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 represen-
tative (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 recon-
sider your claim.” The Plan interprets this EOB language as
requiring claimants to provide a substantive basis for their
           VAUGHT v. SCOTTSDALE HEALTHCARE CORP.           13863
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 chal-
lenge 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 require-
ment, and agreed with the Plan that Vaught raised his “first
substantive challenge” in the district court.

   [5] We must consider this interpretation of the EOB in light
of our principle that “terms in an ERISA plan should be inter-
preted in an ordinary and popular sense as would a [person]
of average intelligence and experience.” 

(internal quotation marks omitted) (alteration in origi-
nal). Where a plan instrument does not define a term, we may
“look to the dictionary definition to determine the ordinary
and popular meaning.” 

Here, the EOB’s plain lan-
guage 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 ordi-
nary 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 deci-
sion 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 justi-
fication” of the claimant’s request for reconsideration for sev-
eral 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 Aba-
tie v. Alta Health & Life Ins. Co., 

, 973-74 (9th
Cir. 2006) (en banc). A plan may also want the opportunity
13864        VAUGHT v. SCOTTSDALE HEALTHCARE CORP.
to reconsider a procedurally flawed decision in order to cor-
rect its own procedural errors and avoid de novo review by
the district court. See 

(“[I]f the plan administrator’s
procedural defalcations are flagrant, de novo review
applies.”); see also 

(“[P]rior fully con-
sidered 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 reason-
ably conclude that a claimant could explain “the reason why”
the Claims Administrator should reconsider a claim by point-
ing to procedural errors.

   [6] We conclude that the seven procedural reasons offered
by Rocco in his initial letter to the Claims Administrator satis-
fied the EOB’s requirement that the plan participant “clearly
explain . . . the reason why you think the Claims Administra-
tor 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 bene-
fits stand and made clear that it had completed its decision-
making 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.
  3
    In light of this conclusion, we need not consider whether § 2560.503-
1(l) or an exception to Amato’s prudential exhaustion requirement is appli-
cable. 

.
           VAUGHT v. SCOTTSDALE HEALTHCARE CORP.           13865
                               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 ini-
tial 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 13880-81. 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 must identify the main reason or rea-
sons for the participant’s challenge to the denial of benefits in
the participant’s initial appeal. Dis. Op. at 13879. In the dis-
sent’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 compli-
ance with the plan’s requirement.” Dis. Op. at 13879 n.10.

  [7] 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-
13866      VAUGHT v. SCOTTSDALE HEALTHCARE CORP.
established duty under ERISA to exhaust administrative rem-
edies. 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 deci-
sion 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. 

, 107 (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 theo-
ries or issues in his internal appeal to the Plan in order to
obtain judicial review of those theories or issues, Dis. Op. at
13880-81, the dissent and Plan are effectively arguing that
Vaught was subject to an issue-exhaustion requirement.

   [8] 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 

. 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. 

(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 exhaus-
tion in administrative appeals when they provide that a peti-
tion for review must “ ‘list the specific issues to be considered
on appeal.’ ” 

(quoting 20 C.F.R. § 802.211(a)).
And, when regulations impose such a requirement, “courts
reviewing agency action regularly ensure against the bypass-
ing of that requirement by refusing to consider unexhausted
issues.” 

SCOTTSDALE HEALTHCARE CORP.           13867
   [9] But neither issue-exhaustion situation identified in Sims
is present here. No ERISA statute precludes courts from hear-
ing 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,” 

(internal quota-
tion 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).

   In 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.” 

-09. However, Sims noted that issue exhaus-
tion is “not necessarily” a corollary of exhaustion of remedies
and declined to require issue exhaustion in the Social Security
Act context. 

. In a non-adversarial proceeding,
“the reasons for a court to require issue exhaustion are much
weaker.” 

A plurality of justices concluded that
issue exhaustion was not appropriate because the Social
Security agency proceedings were “inquisitorial rather than
adversarial.” 

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 inap-
propriate to impose an issue-exhaustion requirement where
the agency had failed to notify claimants of such a require-
ment. 

(O’Connor, J., concurring). Because the
Social Security Act regulations affirmatively suggested that
issue exhaustion was not required, Justice O’Connor con-
cluded that “[r]equiring issue exhaustion is particularly inap-
propriate here.” 

  [10] Sims leads to the conclusion that issue exhaustion is
not applicable in the ERISA context. First, the internal review
13868      VAUGHT v. SCOTTSDALE HEALTHCARE CORP.
process mandated by ERISA and set forth in the EOB pro-
vides for an inquisitorial process, in which the plan must pro-
vide 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 non-
adversarial, we recognized in Amato that the institution of
these review procedures “was apparently intended by Con-
gress to,” among other things, “provide a nonadversarial
method of claims 

(emphasis
added).

   ERISA’s internal review procedures share the nonadver-
sarial 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. § 2560.503-1(h)(iv) (requiring that an ERISA plan
“[p]rovide 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 Secur-
ity 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)(ii)
(requiring that a plan’s appeal procedures “[p]rovide 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 stan-
dards of review). Both schemes contemplate that many claim-
ants will not be represented by attorneys, and neither requires
claimants to provide formal briefing. See 

; Cann v. Carpenters’ Pension Trust Fund, 

,
           VAUGHT v. SCOTTSDALE HEALTHCARE CORP.          13869
317 (9th Cir. 1993) (noting that “some claimants and some
plans may use informal internal review procedures, accom-
plished by nonlawyers, perhaps union or other employee rep-
resentatives and plan representatives”). Most significant,
neither scheme contemplates that the claimant will face an
adversary opposing the claim for benefits in the review pro-
cess. See 

(“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,” 

such an analogy is even less apt in the ERISA con-
text, because ERISA’s “administrative” proceedings are “part
of a private, albeit regulated, claims process.” See 

. The non-adversarial nature of the ERISA pro-
ceeding weighs against imposing an issue-exhaustion require-
ment. See 

.

   [11] The Plan’s failure to notify claimants of any issue-
exhaustion requirement also weighs against imposing one. See

(O’Connor, J., concurring). Justice O’Connor’s con-
cern that Social Security claimants could be misled is equally
applicable in this case, where the Plan’s internal appeal proce-
dures suggested that issue exhaustion was not required. The
EOB directed claimants to use the Plan’s internal review pro-
cedures in order to “have a right to bring a civil action under
ERISA Section 502(a),” but did not provide notice that claim-
ants must raise specific issues to preserve them for future
actions. See 

. Similar to the Social
Security requirements, the EOB provided for an informal
appeal process in which decisionmakers 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 fur-
ther develop the record by consulting “any appropriate health
care professional in deciding an appeal involving medical
judgment.” Because the EOB does not require issue exhaus-
13870        VAUGHT v. SCOTTSDALE HEALTHCARE CORP.
tion, 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 

.4

   [12] Because ERISA and its implementing regulations
create an inquisitorial, rather than adversarial process, and
because the EOB does not notify a claimant that issue exhaus-
tion 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, 

, 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, 

(9th Cir. 1988), where we cited Wolf with approval in reject-
ing a plan’s argument that a claimant did not exhaust avail-
able administrative remedies because he presented new
evidence supporting his claim to the district court. 

92. Here, as in Sims, Vaught exhausted his administrative
remedies by requesting review of his claim denial and obtain-
ing 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 adminis-
trative remedies.
  4
    Sims suggests that the analysis would be different if the Summary Plan
Description or EOB required issue exhaustion at some stage in the admin-
istrative 

(noting that where agency regula-
tions require issue exhaustion in administrative appeals, “courts reviewing
agency action regularly ensure against the bypassing of that requirement
by refusing to consider unexhausted issues”). Moreover, such a require-
ment would put the claimant on notice of an issue-exhaustion requirement.

(O’Connor, J., concurring). We do not reach this issue, because
we conclude that the summary plan description and EOB in this case do
not contain an issue-exhaustion requirement.
            VAUGHT v. SCOTTSDALE HEALTHCARE CORP.          13871
                                D

   We conclude that Vaught exhausted his administrative rem-
edies 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 appro-
priate in this case, and whether de novo or deferential review
applies to the Plan’s decision. See Metropolitan Life Ins. Co.
v. Glenn, 

, 2351-52 (2008); 

.

                               III

   Vaught also argues that the district court’s summary judg-
ment 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, 

, 638 (9th Cir. 2005) (“We may
affirm the district court on any basis supported by the
record.”).

   Section 1132(c)(1) allows the district court to impose sanc-
tions 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., 

, 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 

; Moran v. Aetna
13872       VAUGHT v. SCOTTSDALE HEALTHCARE CORP.
Life Ins. Co., 

, 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

   [13] 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 pen-
alties for nondisclosure of documents because the Plan is not
the proper defendant under § 1132(c).

  Affirmed in part, reversed in part, and remanded.



BEA, Circuit Judge, concurring in part and dissenting in part:

   Raymond Vaught crashed his motorcycle into a stopped
vehicle. Vaught was driving drunk, extremely so—his blood
alcohol content was three times Arizona’s legal limit. Vaught
lived, but was hospitalized with serious injuries.1 Unfortu-
nately for Vaught, his ERISA health plan (the “Plan”) con-
tains an express exclusion of coverage for medical care
expenses “relating to . . . [d]riving under the influence of alco-
hol or drugs” (the “DUI exclusion”). Accordingly, the Plan
denied his claim, based on this DUI exclusion.

   Vaught appealed the Plan’s denial to the Plan’s Claims
Administrator. For such an appeal, the plain language of the
Plan’s internal review procedures required Vaught to state in
his written appeal “the reason” he thought the Claims Admin-
istrator should reconsider the denial of coverage. In his writ-
ten appeal, Vaught gave seven procedural reasons he claimed
  1
   The driver of the car with which Vaught collided was not injured.
               VAUGHT v. SCOTTSDALE HEALTHCARE CORP.                  13873
the Claims Administrator should reconsider its denial of cover-
age.2 Not a single one of these seven reasons challenged the
applicability of the DUI exclusion.

   The Plan rejected Vaught’s appeal, and he brought an
action in district court. There, for the first time, he raised the
cockamanie claim that the DUI exclusion did not apply
because the collision, not the alcohol, caused his injuries.
Because he had never presented this “reason” to the Plan, as
was required by his policy, the district court found he had not
satisfied the policy requirement that he present “the reason”
  2
   The seven procedural reasons—lifted almost verbatim from 29 C.F.R.
§ 2560.503-1 with no earthly relation to the reality of Vaught’s case and
no support in the record—were:
      1. The specific reason or reasons for the adverse benefit deter-
      mination 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 neces-
      sary 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 deter-
      mination has been provided;
      5. No statement that the Vaughts are entitled to receive on
      request and free of charge, 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 ambigu-
      ous, fails to meet the requirements for a claim denial as outlined
      at page 37 of the “Flex Choice — Medical Benefit Summary Plan
      Description.”
13874         VAUGHT v. SCOTTSDALE HEALTHCARE CORP.
he thought the denial of coverage was in error first to the
Plan.

   The majority reads the policy as requiring only that a
claimant give the Administrator any old reason he thinks ben-
efits should not have been denied, whether or not later aban-
doned. The majority transforms the Plan’s requirement that
Vaught state “the reason” he is challenging the denial of cov-
erage into a requirement that can be satisfied if he states “a
reason” or “any reason” for his challenge.

   By transforming the Plan’s review requirement in this man-
ner, however, the majority allows an ERISA claimant to
engage in a court-sanctioned game of Texas Hold ‘Em against
a Plan playing with all of its cards face up. An ERISA claim-
ant challenging his plan’s denial of coverage can keep his
cards close during the administrative appeals process, rolling
the throw-aways, and waiting until his action in district court
and after the Plan Administrator has stopped playing, to play
his trump card: the real reason he challenges his plan’s denial
of coverage. An action challenging an ERISA plan’s denial of
benefits, however, should not be a game of poker. Indeed, a
primary purpose of the exhaustion requirement is to give an
ERISA fiduciary the first opportunity to interpret its plan and
fully to consider its determination before a claimant seeks
court intervention.3 Requiring an ERISA claimant to present
to the ERISA fiduciary the reasons upon which he claims
error for the Plan’s denial of coverage—at least where, as
here, the policy itself contains this express requirement—is
critical to effectuate this purpose.
  3
    See Amato v. Bernard, 

, 568 (9th Cir. 1980) (“[A] primary
reason for the exhaustion requirement, here as elsewhere, is that prior fully
considered actions by pension plan trustees interpreting their plans and
perhaps also further refining and defining the problem in given cases, may
well assist the courts when they are called upon to resolve the controver-
sies.”).
             VAUGHT v. SCOTTSDALE HEALTHCARE CORP.                  13875
   Vaught, whether deliberately or not, failed to comply with
his plan’s internal review procedures and failed to ask the dis-
trict court to excuse him from that failure. Accordingly, I
would affirm the district court’s order dismissing Vaught’s
claim for failure to exhaust his administrative remedies.4

   As the majority recognizes, Vaught was required first to
exhaust his Plan’s internal review procedures before challeng-
ing the denial of coverage in district court. See Diaz v. United
Agric. Employee Welfare Benefit Plan & Trust, 

,
1483 (9th Cir. 1995) (“Quite early in ERISA’s history, we
announced as the general rule governing ERISA claims that
a claimant must avail himself or herself of a plan’s own inter-
nal review procedures before bringing suit in federal court.”).
When determining whether a party has exhausted his plan’s
internal review procedures, we look to the requirements of the
plan’s procedures and determine whether the party has com-
plied with them. See, e.g., Chappel v. Lab. Corp. of Am., 

, 724 (9th Cir. 2000).

   The parties dispute whether Vaught exhausted the Plan’s
internal review procedures. Thus, we are required to deter-
mine (1) what are the requirements of the Plan’s review pro-
cedures, and (2) whether Vaught complied with them. Our
task when determining this issue is a fairly straightforward
one.

   The majority correctly notes we “interpret terms in ERISA
insurance policies in an ordinary and popular sense as would
a person of average intelligence and experience.” Babikian v.
Paul Revere Life Ins. Co., 

, 840 (9th Cir. 1995)
(citation omitted). Our analysis of the Plan’s requirements
begins and ends with the Plan’s plain language. Indeed, the
language could not be any more plain: the Explanation of
Benefits form (“EOB”) states the claimant must, in writing,
  4
    I concur in the majority’s judgment affirming the dismissal of Vaught’s
claim for failure to disclose plan documents under 29 U.S.C. § 1132(c).
13876        VAUGHT v. SCOTTSDALE HEALTHCARE CORP.
“clearly explain that you are appealing a claim denial and the
reason why you think the Claims Administrator should recon-
sider your claim.” (emphases added).

   The “ordinary and popular sense” of the Plan’s requirement
the claimant “clearly explain . . . the reason why you think the
Claims Administrator should reconsider your claim” is that
the claimant is required to tell the Claims Administrator why
its initial denial of coverage was in error. Such a requirement
makes sense. ERISA “requires covered benefit plans to pro-
vide administrative remedies for persons whose claims for
benefits have been denied.” 

(citing 29
U.S.C. § 1133). ERISA requires plans to afford a reasonable
opportunity for a “full and fair review” by the ERISA fidu-
ciary of the denial of benefits. 29 U.S.C. § 1133.5 To be able
to provide a full and fair review of the denial of Vaught’s
claim, the Plan quite reasonably required Vaught to state in
his appeal the issue or issues upon which he claims error. By
failing to tell the Plan the reason he now claims the Plan erred
in denying his claim, however, Vaught thwarted the Plan’s
ability to provide such a review. In effect, he is “sandbag-
ging” the Plan by submitting all sorts of “reasons,” save the
real reason he held close until filing his complaint.

   The reason Vaught thinks the Plan erred in denying his
claim is that the alcohol exclusion does not apply to him. Spe-
cifically, he contends the alcohol exclusion does not apply
because his “injuries were not ‘caused[,]’ either directly or
indirectly, by alcohol. Rather, [Vaught’s] injuries were the
direct result of and proximately caused by an automobile/
motorcycle collision.”6 Vaught, however, never told the
   5
     By imposing this requirement, Congress sought “to help reduce the
number of frivolous lawsuits under ERISA; to promote the consistent
treatment of claims for benefits; to provide a nonadversarial method of
claims settlement; and to minimize the costs of claims settlement for all
concerned.” 

.
   6
     This contention fails on the face of the policy. The policy does not
exclude only expenses for injuries “proximately caused” by alcohol; it
broadly excludes “all expenses incurred for services, supplies, medical
care, or treatment relating to, arising out of, or given in connection with
. . . [d]riving under the influence of alcohol or drugs.”
             VAUGHT v. SCOTTSDALE HEALTHCARE CORP.                 13877
Claims Administrator this was the reason it should reconsider
his claim.

   Vaught submitted two appeals of the Plan’s denial. The
first was his attorney’s February 19, 2004 letter, which listed
the seven grounds for the appeal noted at footnote 

.
The majority aptly describes these seven grounds as “proce-
dural,” since none of the grounds challenged the basis of the
denial on the merits. Not a single one of the seven reasons
gave the Plan notice that Vaught thought the alcohol exclu-
sion did not apply to him, let alone inform the Plan the spe-
cific reason he thought the alcohol exclusion did not apply.

   The Plan, through counsel, responded by letter on March
16, 2004. The letter spelled out again, in even clearer terms,
the reason for the denial of Vaught’s claim: the “Plan does not
cover any expenses incurred related to ‘driving under the
influence of alcohol or drugs . . . . The 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.”7 The Plan responded, point by point, to each of the
seven procedural challenges Vaught raised in his September
2004 appeal.8 Finally, the Plan, in an abundance of caution
(“based on this apparently being the first formal notifica-
tion”), gave Vaught another 180 days in which to file an
appeal in accordance with the Plan’s procedures.

   Yet, Vaught missed his second chance to do so. Vaught’s
first attorney responded to the Plan’s March 16, 2004 letter
with a letter of his own on March 29, 2004, asking several ques-
tions9 and requesting a list of documents the Plan Administra-
  7
     Arizona state law proscribes driving with a blood alcohol content of
0.08 parts alcohol/blood. Ariz. Rev. Stat. § 28-1381(A)(2) (2003). Hence,
Vaught was more than three times (300%) over the limit.
   8
     The merits of the Plan’s responses to Vaught’s procedural contentions
are not at issue on appeal, nor did Vaught challenge them in the district
court.
   9
     These included questions such as “whether the Plan would refuse to
cover an individual driving under the ‘influence’ of drugs if the drugs
13878        VAUGHT v. SCOTTSDALE HEALTHCARE CORP.
tor relied upon to reach its determination. The letter once
again failed to state “the reason” Vaught thought the Plan
erred in denying his claim ; i.e., the alcohol exclusion does
not apply to Vaught because his injuries were “caused” by the
collision, not alcohol.

   On September 2, 2004, represented by new counsel,
Vaught filed his second appeal of the denial of benefits. Yet
again, he failed to state “the reason” why he now thinks the
Claims Administrator should have reconsidered his claim.
The September 2, 2004 letter states it is an appeal, requests
all documents relevant to the denial, and notes that “ERISA
provides for imposition of substantial monetary penalties for
the failure of a Plan Administrator to make timely disclosures
as required by law.” Yet, nowhere in such appeal letter does
Vaught’s attorney state a single reason he thinks the Plan
erred when it denied Vaught’s claim. In neither of his appeals
to the Plan did Vaught comply with the Plan’s express
requirement he state “the reason” the Claims Administrator
should reconsider his claim. In neither of his appeals did he
take issue with the Plan’s determination the alcohol exclusion
applied to him.

   Vaught held his cards close until his action in district court.
There, for the first time in the joint case management report,
Vaught set forth the reason he thinks the Plan erred in deny-
ing benefits; i.e., the alcohol exclusion did not apply to him.
By then, however, it was too late. He had failed to comply
with the Plan’s internal review procedures, and failed to give
the Plan the opportunity to consider the merits of his chal-
lenge. Having failed to do so, he is barred from bringing an
action challenging the denial of coverage on this basis. See

.

were mis-prescribed by a Plan physician”—perhaps in preparation for that
well-known DUI defense: “the bartender gave me the wrong drink!”—and
how the Plan would prove Vaught received notice of the Plan’s “driving
under the influence” exclusion.
              VAUGHT v. SCOTTSDALE HEALTHCARE CORP.                  13879
   The majority, however, holds Vaught exhausted the Plan’s
internal review procedures because Vaught’s February 19,
2004 appeal stated seven “procedural” reasons the Plan erred
in denying coverage, although none of these purported proce-
dural defects are related to the reason Vaught now challenges
the denial, the applicability of the alcohol exclusion. In effect,
the majority interprets the Plan’s requirement to state “the
reason why” the Claims Administrator should reconsider the
claim as a requirement the claimant state “a” reason why or
“any” reason why. According to the majority, once Vaught
stated a reason—any reason—he “effectively invoked the
Plan’s internal review procedures.” I respectfully disagree.
Under no “ordinary and popular sense” of the term does “the
reason” mean “a reason” or “any reason.” See The Random
House Dictionary of the English Language 1965 (2d ed.
1987) (the: “used, esp. before a noun, with a specifying or
particularizing effect, as opposed to the indefinite or general-
izing force of the indefinite article a or an.”).

   The majority goes wrong in its definition of “the reason” by
concentrating on the noun to the exclusion of the restrictive
article. “The reason” does not include any “explanation or jus-
tification.” It may be a claimant has more than one reason for
appealing the Plan’s decision, and I do not interpret the Plan’s
requirement to limit a claimant to a singular reason to the
exclusion of all other legitimate reasons.10 But when requiring
  10
     Indeed, if an ERISA plan attempted to limit a claimant to presentation
of a singular reason for his appeal although the claimant may have multi-
ple legitimate reasons, I have no doubt a court would excuse compliance
with the plan’s requirement and permit the claimant to raise the additional
reasons in district court. See 

(stating a district
court would abuse its discretion if it failed to excuse exhaustion where “re-
sort to the administrative route is futile or the remedy inadequate.”). Nor
could a plan require a claimant to state any and all reasons in the initial
appeal, on pain of never being able to raise other reasons before the dis-
trict court, no matter what equitable grounds there may be for failure to
comply with the requirement. See 

is that, where possible, the
Plan must be given the first opportunity to consider the errors a plaintiff
claims, before the district court gets involved.
13880       VAUGHT v. SCOTTSDALE HEALTHCARE CORP.
“the reason,” the ordinary and popular meaning is certainly to
include the main reason on which one relies. If there are two
or more equally important, or at least substantial, reasons,
they should be presented to the Claims Administrator, so the
Plan has the first opportunity to evaluate, accept, or reject the
contentions. “The reason” certainly does not mean “any rea-
son but not necessarily the reason on which I intend to rely
in court.”

   If one were to recur to the “purpose” of the provision
requiring the insured to state the reason he thinks the Plan’s
denial erroneous, it clearly is to allow the Claims Administra-
tor first to consider the basis upon which the insured claims
he was improperly denied his claim. Exhaustion of the
claimed bases of error should precede judicial action. Other-
wise, we destroy the purpose of exhaustion and allow plaintiff
to play bait and switch. Plaintiff could have laid out as a “rea-
son” that the right to payment is a right guaranteed him as a
right retained by the People under the Ninth Amendment to
the United States Constitution. That would be “a” or “any rea-
son.” But that would not engage the Claims Administrator to
consider plaintiff’s novel interpretation of the DUI exclusion:
damages due to drinking are excluded only in the case of
alcohol-induced cirrhosis of the liver, but not when the wasted
motorcyclist wipes himself out.

   It may be that a plan requirement that the claimant state the
reason he challenges a benefit denial is unfair in certain cir-
cumstances; where, for example, the reason develops during
the appeals process and the claimant could not have raised the
reason earlier. If “the reason,” or reasons, a plaintiff claims in
court that he was erroneously denied benefits was not put
before the Claims Administrator, and there are equitable
grounds for excusing that failure, the district must consider
those equitable grounds. In such a circumstance, the district
court may exercise its discretion to excuse the claimant from
the exhaustion requirement. See 

(“[T]here are occasions when a court is obliged to exercise its
             VAUGHT v. SCOTTSDALE HEALTHCARE CORP.                   13881
jurisdiction and is guilty of an abuse of discretion if it does
not, the most familiar examples perhaps being when resort to
the administrative route is futile or the remedy inadequate.”)
(citation omitted).

   This, however, is not such a case. Vaught never asked the
district court to excuse his failure to raise in his administrative
appeal the reason he now claims the Plan erred when it denied
coverage based on the DUI exclusion. Had Vaught presented
some evidence to the district court that he could not have
challenged the applicability of the DUI exclusion in his initial
appeal to the Claims Administrator, this might be a different
case.11 He did not, nor did he request the district court excuse
him from the exhaustion requirement for any other reason.

   Accordingly, I would hold that Vaught failed to exhaust his
plan’s remedies, because he failed to comply with the Plan’s
requirement he state “the reason” he thinks the Claims
Administrator should have reconsidered his claim, namely,
the alcohol exclusion did not apply to him.12 Thus, I would
affirm the district court’s dismissal of Vaught’s claim chal-
lenging the Plan’s denial of benefits, and I dissent from the
majority’s opinion reversing and remanding that claim.




  11
      It may be that Vaught’s novel interpretation of the DUI exclusion
clause had not occurred to him and his attorney until just before filing his
district court action, because neither had achieved another 0.2618 blood
alcohol level since the accident. However, I doubt that would be an
acceptable reason for his earlier failure.
   12
      Because we should affirm the dismissal for failure to exhaust the
Plan’s internal review procedures, we should not reach the novel issue
whether the judicially-created ERISA exhaustion requirement includes an
“issue exhaustion” requirement independent of the requirements of a par-
ticular plan’s internal review procedures.