United States District Court, W.D. Tennessee, Western Division
ORDER DENYING PLAINTIFF"S RULE 37 MOTION TO COMPEL DISCOVERY RESPONSES
CHARMIANE G. CLAXTON, Magistrate Judge.
Before the Court, by way of Order of Reference (Docket Entry "D.E." #18), is Plaintiff's Rule 37 Motion to Compel Discovery Responses (D.E. #15). After reviewing the motion and Defendant's Response (D.E. #17), Plaintiff's motion is hereby DENIED.
The instant Complaint asks the District Court to review the most recent denial of long-term disability benefits after Plaintiff's initial benefits denial by Defendant was remanded for a full and fair review by District Judge William G. Young (11-cv-02344-WGY-dkv, D.E. #30) on March 27, 2013. On December 18, 2013, Plaintiff filed her Complaint for recovery of plan benefits alleging that Defendant "failed to provide benefits due under the terms of the Plan, and this denial of benefits to Plaintiff constitutes a breach of the Plan" (Compl. ¶ 26), that "the decision to deny benefits was wrong under the terms of the Plan" (Compl. ¶ 27), that "the decision to deny long term disability benefits and decision-making process were arbitrary and capricious" (Compl. ¶ 28), and that "the decision to deny long term disability benefits was not supported by substantial evidence in the record" (Compl. ¶ 29).
On August 15, 2014, Plaintiff filed the instant motion to compel responses to certain interrogatories and requests for production of documents propounded upon Defendant. Plaintiff argues that the interrogatories and requests for production are appropriate because they seek information regarding Defendant's "conflict of interest and potential bias on the part of reviewing doctors." Plaintiff asserts that she has modeled her requests on those approvingly permitted by other courts in the Sixth Circuit.
Defendant's August 29, 2014 response urges the Court to deny Plaintiffs motion because "discovery is inappropriate under the particular facts and circumstances of this ERISA matter, and it unnecessarily increases litigation costs." Defendant further argues that Plaintiff "does not provide specific reasons why discovery is pertinent to United of Omaha's decision after remand, " that Plaintiff "seeks irrelevant discovery about demonstrably unbiased independent physician reviews that she did not review or pursue in her initial action, " and that "United of Omaha has already provided much of what she requested."
The Federal Rules of Civil Procedure generously permit discovery "regarding any nonprivileged matter that is relevant to any party's claim or defense..." Fed.R.Civ.P. 26(b)(1). Generally, the trial court cannot consider evidence outside the administrative record in adjudicating the merits of an ERISA denial of benefits plan. Wilkins v. Baptist Healthcare Sys., Inc., 150 F.3d 609, 619 (6th Cir. 1998). The review of solely the administrative record serves ERISA's purpose of providing "a method for workers and beneficiaries to resolve disputes over benefits inexpensively and expeditiously." Perry v. Simplicity Eng'g, 900 F.2d 963, 967 (6th Cir. 1990). Consequently, matters outside the record are generally not relevant or discoverable. See Wilkins, 150 F.3d at 619; Fed.R.Civ.P. 26(b) (1). "An exception is recognized, however, when evidence outside the record is offered in support of a procedural challenge to the administrator's decision, such as an alleged lack of due process afforded by the administrator or alleged bias on its part:" Johnson v. Conn. Gen. Life Ins. Co., 324 F.Appx. (6th Cir. 2009) (quoting Wilkins, 150 F.3d at 619). In instances involving such challenges, evidence outside the record may be relevant and discoverable. See id.; Fed.R.Civ.P. 26(b) (1).
The United States Supreme Court, in Metropolitan Life Insurance Co. v. Glenn, 554 U.S. 105 (2008), made clear that a plan administrator who is a professional insurance company operates under a conflict of interest when it serves the dual role of an ERISA plan administrator and payor of plan benefits. Id. at 114. The Glenn Court then proceeded to consider how this conflict "should be taken into account on judicial review of a discretionary benefit determination." Id. at 115 (internal quotation marks and citation omitted). The Court concluded that the structural conflict of interest created by the administrator's dual roles is a relevant consideration, among several case-specific considerations, lower courts should consider, with the significance of such a conflict to depend on the circumstances of each case. Id. at 115-17. "The conflict of interest... should prove more important (perhaps of great importance) where circumstances suggest a higher likelihood that it affected the benefits decision, including, but not limited to, cases where an insurance company administrator has a history of biased claims administration." Id. at 117. "It should prove less important (perhaps to the vanishing point) where the administrator has taken active steps to reduce potential bias and to promote accuracy, for example, by walling off claims administrators from those interested in firm fianances, or by imposing management checks that penalize inaccurate decision-making irrespective of whom the inaccuracy benefits." Id.
Following Glenn, in Johnson v. Connecticut General Life Insurance Company, 324 F.Appx. 459 (6th Cir. 2009), the United States Court of Appeals for the Sixth Circuit considered the propriety of a district court's decision to allow limited discovery concerning the conflict of interest created when an employer utilizes dual-role administrators under an ERISA plan. Id. at 465-67. The Johnson court first cited with approval the Sixth Circuit precedent holding that "a mere allegation of bias is not sufficient to permit discovery under Wilkins' exception." Id. at 466. Citing Glenn, the Johnson court nevertheless rejected the defendant's contention that Sixth Circuit precedent should be interpreted to impose a threshold evidentiary showing of bias as a prerequisite to discovery under Wilkins. Id. at 466. The Johnson court also rejected the notion that Glenn permits discovery automatically in instances where the defendant is both the administrator and the payor. Id. at 467. Instead, the court indicated that "[dlistrict courts are well-equipped to evaluate and determine whether and to what extent limited discovery is appropriate in furtherance of a colorable procedural challenge under Wilkins." Id. at 467; accord Bell v. Ameritech Sickness & Acc. Dis. Ben. Plan, 399 F.Appx. 991, 998 (6th Cir. 2010) ("Discovery may be appropriate to determine the weight to accord a conflict of interest, . but the district court retains discretion to decide when to allow such discovery.").
After Johnson, courts have taken several approaches concerning requests for discovery outside the administrative record. Some have found that discovery regarding claims of bias is appropriate when the only showing of bias is the allegation of an inherent conflict of interest. Pemberton v. Reliance Standard Life Ins. CO., No. 08-86-JBC, 2009 WL 89696, at *2 (E.D.Ky. Jan. 13, 2009); Cramer v. Appalachian Reg? Healthcare, Inc., No. 5:11-49-KKC, 2012 WL 996583, at *2 (E.D.Ky. Mar. 23, 2012); Busch v. Hartford Life & Accident Ins. Co., No. 5:01-111-KKC, 2010 WL 3842367, at *3 (E.D.Ky. Sept. 27, 2010). These courts reason that the act of denying discovery until there has been an initial showing of bias "essentially handcuffs the plaintiff, who... will rarely have access to any evidence beyond a bare allegation of bias, in the absence of discovery." Kinsler v. Lincoln Nat. Life Ins. Co., 660 F.Supp.2d 830, 836 (M.D.Tenn. 2009). These courts find that the Supreme Court's instruction that it does not "believe it is necessary or desirable for courts to create special burden-of-proof rules, or other special procedural or evidentiary rules, focused narrowly upon the evaluator/payor conflict" renders the inherent conflict of interest sufficient to allow limited discovery. Busch, 2010 WL 3842367, at *2 (quoting Glenn, 544 U.S. at 106).
Conversely, other courts have required more than a mere showing of an inherent administrator/payor conflict. Donavan v. Hartford Life & Acc. Ins. Co., No. 1:10-2627-PAG, 2011 WL 1344252, at *2 (N.D.Ohio Apr. 8, 2011); see also Geer v. Hartfore Life & Acc. Ins. Co., NO. 08-12837-DAS, 2009 WL 1620402, at *5 (E.D.Mich. June 9, 2009) ("discovery should be allowed where a plaintiff has provided sufficient initial facts suggesting a likelihood that probative evidence of bias or procedural deprivation would be developed."). These courts have found that an allegation of bias alone is insufficient to permit discovery. Instead, a plaintiff must make a sufficient factual showing to expand discovery beyond the administrative record. Similarly, one court has created a two-step process under which a plaintiff may obtain discovery on the sole issue of whether the defendant or the individuals participating in the review of the plaintiff's claim have any financial interest in the outcome of the claim. Clark v. Am. Elec. Power Sys. Long Term Disability Plan, 871 F.Supp.2d 655, 662 (W.D.Ky. 2012). Despite the differing approaches, this Court has sided with the Courts that allow limited discovery if the plaintiff alleges that the insurer occupies this dual role under the reasoning that an inherent conflict of interest exists and that Glenn "resolved the threshold or no threshold' debate in favor of the ERISA plaintiff" Linda Byrd v. GTX, Inc., No. 2:08-cv-02852-JPM-cgc, 2009 WL 3839478 (W.D.Tenn. Nov. 13, 2009).
In the instant case, while it is undisputed that United of Omaha is a professional insurance company that acts both as an ERISA plan administrator and payor of plan benefits, Plaintiffs Complaint contains no allegation that United of Omaha acted improperly based upon this conflict of interest. Thus, the United States Court of Appeals for the Sixth Circuit has explicitly held in Johnson that Plaintiff is not automatically entitled to even limited discovery based solely upon the inherent conflict of interest of an insurer occupying this dual role. 324 F.Appx. at 467.
Even assuming, arguendo, that raising the issue of a conflict of interest for the first time in discovery requests on an ERISA claim is sufficient to be deemed an "allegation, " which the Court finds it is not, Plaintiff would at most be permitted very limited discovery. Plaintiff has propounded four interrogatories and four requests for production to which she argues in the instant motion Defendant has not adequately responded. These eight discovery requests all pertain to the two doctors who reviewed Plaintiff's claim on United of Omaha's behalf-Dr. Vicki Kalen and ...