Summary
In Pylant v. Hartford Life and Accident Ins. Co., No. 3-05-CV-0379-G (N.D. Tex. Jan. 20, 2006), this magistrate judge held that identical discovery requests did not "fall within one of the limited areas that the court is permitted to consider besides the record."
Summary of this case from Dramse v. Delta Family-Care Dis. Survivorship PlanOpinion
No. 3-05-CV-0379-G.
January 20, 2006
MEMORANDUM ORDER
Plaintiff Andrea D. Pylant has filed a second motion to compel answers to interrogatories and document requests and for an extension of the discovery deadline. [Doc. #54]. For the reasons stated herein, the motion is granted in part and denied in part.
I.
This is a civil action brought under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001, et seq., seeking a judicial review of a decision by Hartford Life and Accident Insurance Company ("Hartford") to terminate benefits under a long-term disability insurance policy. Succinctly stated, plaintiff contends that Hartford, as plan administrator, operates under a conflict of interest because it administers claims filed under its own policy. As a result of this conflict, plaintiff believes that Hartford's evaluation of her claim was so flawed and self-interested that the resulting decision to terminate her benefits was arbitrary and capricious. ( See Plf. Orig. Compl. at 4, ¶¶ 27-30).
As part of discovery in this case, plaintiff served interrogatories and document requests seeking, inter alia, information regarding: (1) the compensation of Hartford employees involved in reviewing plaintiff's disability claim; (2) the number of record reviews performed by the medical consultants who evaluated plaintiff's claim; (3) the "system of communication" used by Hartford to convey information regarding claims handling practices and procedures to its employees; and (4) Hartford's compliance with federal regulations. Hartford objects that these discovery requests are overly broad, unduly burdensome, not reasonably calculated to lead to the discovery of admissible evidence, and outside the scope of permissible discovery in an ERISA action. The parties have briefed their respective positions in a joint status report filed on January 11, 2006, and the motion is ripe for determination.
In a face-to-face conference held before the parties filed their joint status report, Hartford agreed to produce its claims manual and plaintiff agreed to withdraw her motion to compel answers to certain interrogatories and document requests. Therefore, the specific discovery items still in dispute are Interrogatory Nos. 4, 5, 7, 8, 10 11 and Request for Production Nos. 10 16. ( See Jt. Stat. Rep. at 2, ¶ (c)).
II.
With limited exceptions, discovery in an ERISA action seeking judicial review of the denial of benefits is restricted to consideration of the administrative record. See Vega v. National Life Insurance Services, Inc., 188 F.3d 287, 299 (5th Cir. 1999) (en banc). One such exception is where the participant or beneficiary alleges that the plan administrator operates under a conflict of interest. See, e.g. Arnold v. F.A. Richard Associates, Inc., No. CIV 99-2135, 2000 WL 1693659 at *5 (E.D. La. Nov. 8, 2000). In such cases, discovery outside the administrative record is permitted to enable the beneficiary to develop evidence demonstrating the extent of the conflict. Id.; see also Kergosien v. Ocean Energy, Inc., 390 F.3d 346, 356 (5th Cir. 2004) ("There is no practical way for the extent of the administrator's conflict of interest to be determined without [] going beyond the record of the administrator."). The extent of the administrator's conflict of interest is relevant in ERISA cases because "[t]he greater the evidence of conflict on the part of the administrator, the less deferential [the court's] abuse of discretion standard will be." Vega, 188 F.3d at 297. See also Ellis v. Liberty Life Assurance Co. of Boston, 394 F.3d 262, 270 (5th Cir. 2004), cert. denied, 125 S.Ct. 2941 (2005) ("The degree to which a court must abrogate its deference to the administrator depends on the extent to which the challenging party has succeeded in substantiating its claim that there is a conflict.").A.
In two interrogatories and one document request, plaintiff seeks information regarding the compensation of Hartford employees involved in reviewing her disability claim:
Interrogatory No. 4 :
Identify the person(s) whom you believe have the most complete knowledge regarding Defendant's compensation system or policy for the category or job description of any of the personnel with decision making authority identified by name or initial in the Plaintiff's claim file, involved in reviewing Plaintiff's Claim for LTD benefits and for their respective supervisors up to the head of the claims department, including any policy, method or calculation of bonuses paid to said personnel, for the period of 2000 to Present.Interrogatory No. 5 :
Describe the compensation system which is the subject of inquiry in interrogatory number 4 above.Request for Production No. 10 :
Any documents reflecting the Defendant's compensation system or policy for the category or job description of any of the personnel involved in reviewing Plaintiff's Claim for LTD benefits that had decision making authority and for their respective supervisors up to the head of the claims department that had decision making authority, including any policy, method or calculation of performance evaluations and/or bonuses, pay increases or benefits paid to said personnel for the period of 2000 to present, including but not limited to the individual criteria under which employees are evaluated to determine the amount of their bonus or compensation.
Hartford initially argues that these discovery requests are overly broad, unduly burdensome, and require the disclosure of confidential information. However, no evidence has been adduced to support these conclusory objections. Nor is plaintiff precluded from conducting discovery on the conflict issue merely because Hartford concedes that it acts both as a claims administrator and an insurer. See MacLachlan v. ExxonMobil Corp., 350 F.3d 472, 479 n. 8 (5th Cir. 2003), cert. denied, 124 S.Ct. 2413 (2004) (court will not presume that conflict exists merely because the defendant both insures and administers the plan).
The discovery sought by plaintiff is reasonably calculated to lead to evidence regarding the extent of Hartford's conflict of interest in both administering and insuring the plan. More particularly, the court would be justified in giving Hartford's decision to terminate benefits less deference if discovery revealed that its claims handlers and supervisors were compensated or rewarded for cutting benefits or denying claims. See, e.g. Lain v. UNUM Life Insurance Co. of America, 279 F.3d 337, 343 n. 7 (5th Cir. 2002) (district court justified in finding that administrator's decision was entitled to a "modicum less deference" under sliding-scale analysis where employees received substantial financial bonus incentives to deny claims); Arensberg v. UNUM Life Insurance Co. of America, No. 3-02-CV-0108-P, 2003 WL 23193265 at *13 (N.D. Tex. Aug 27, 2003) (evidence of financial arrangement that rewarded administrator for cutting benefits was a factor in determining abuse of discretion). Accordingly, Hartford shall answer Interrogatory Nos. 4 5 and produce the documents specified in Request for Production No. 10, subject to an appropriate protective order preventing the further disclosure or dissemination of confidential information.
B.
Plaintiff also seeks information regarding the number of record reviews performed by the medical consultants who evaluated her claim: Interrogatory No. 11 :
Identify by year, the number of records reviews like the one in Plaintiff's claim performed by (a) Dr. David Trock, M.D. and (b) University Disability Corporation for Defendant, specifically including the number of the evaluations that supported the Claimant's alleged disability and the number of the evaluations that did not support the Claimant's alleged disability. This interrogatory is limited to the time period of 2002 to 2005 and for each such years.
Unlike the prior discovery requests, plaintiff does not seek information regarding the financial relationship between Hartford and its consulting physicians. Rather, it appears that plaintiff wants to determine only the number of record reviews performed by Dr. Trock and University Disability Corporation over a three-year period that support a claimant's entitlement to disability benefits and those that do not. While such discovery may show a bias on the part of Dr. Trock and University Disability Corporation, these medical consultants were not the decisionmakers in this case and it is not their decision the court is reviewing. Therefore, such evidence is not relevant to determining whether Hartford has a conflict of interest. See Abromitis v. Continental Casualty Co./CNA Insurance Cos., 261 F.Supp.2d 388, 390 (W.D.N.C. 2003), aff'd, 114 Fed. Appx. 57 (4th Cir. 2004).
C.
In two interrogatories, plaintiff attempts to discover the "system of communication" used by Hartford to convey information regarding claims handling practices and procedures to its employees:
Interrogatory No. 7 :
Identify the person(s) whom you believe have the most complete knowledge regarding any system of communication, other than the claim manual or training material, used by Defendant's management and supervisors to communicate with employees handling LTD claims that informs, suggests or outlines:
1. the number of files that need to be closed over a period of time i.e., at the end of the month or quarter;
2. the dollars of reserves that need to be reduced over a time period i.e., at the end of the month or quarter; or
3. the number of new files opened versus the number of files closed.Interrogatory No. 8 :
Describe the system of communication which is the subject of inquiry in interrogatory number 7 above.
Hartford objects to these interrogatories on multiple grounds, but has agreed to produce its confidential claims manual to plaintiff, subject to a protective order. In a sworn declaration, Bruce Luddy, Director of Litigation and Appeals for Hartford, states that no other "system of communication" exists. According to Luddy:
Hartford does not have an additional or alternative claims manual by which it instructs or provides guidelines to its claims personnel as to claims practices. Moreover, Hartford does not instruct its claims personnel as to the number of files that need to be closed over a period of time or the amount of reserves that need to be reduced over a time period.
(Jt. Stat. Rep. App., Luddy Aff. at 2, ¶ 5). Skeptical of this representation, plaintiff speculates that Hartford has drafted a generic claims manual, "reserving the real instructions for handling claims to a clandestine system under various names." (Jt. Stat. Rep. at 28, ¶ 40). Absent evidence to support such a suspicion, the court is unwilling to enter an order compelling discovery beyond the claims manual. However, Hartford shall supplement its answers to Interrogatory Nos. 7 8 to affirmatively and unequivocally state that no "system of communication" exists, other than what is contained in the claims manual produced to plaintiff.
D.
Finally, plaintiff seeks information and documents showing that Hartford has complied with the following requirements of 29 C.F.R. § 2560.503-1:
(b)(5) The claims procedures contain administrative processes and safeguards designed to ensure and to verify that benefit claim determinations are made in accordance with governing plan documents and that, where appropriate, the plan provisions have been applied consistently with respect to similarly situated claimants.
* * * *
(h)(2)(iv) Provide 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.
(Interrog. No. 10 Doc. Req. No. 16). In Griffin v. Raytheon Company Long Term Disability Plan No. 558, No. 3-04-CV-2179-D (N.D. Tex. Aug. 31, 2005), another judge in this district held that a similar discovery request did not "fall within one of the limited areas that the court is permitted to consider besides the record." Although a court may go outside the record to consider evidence of "how an administrator has interpreted terms of the plan in other instances . . ., [and] evidence, including expert opinion, that assists the district court in understanding the medical terminology or practice related to a claim," see Vega, 188 F.3d at 299, plaintiff does not seek discovery for those limited purposes. Rather, it appears that plaintiff wants information and documents which may show that Hartford failed to adhere to the requirements of federal law. Such discovery is not permitted in an ERISA action. See MacDonell v. Prudential Insurance Co. of America, No. 3-05-CV-1264-G, op. at 2 (N.D. Tex. Nov. 15, 2005) (Kaplan, J.), citing Griffin, No. 3-04-CV-2179-D, op. at 7.
The court notes that counsel for plaintiff in the instant case also represented the plaintiff in Griffin.
CONCLUSION
Plaintiff's second motion to compel answers to interrogatories and document requests is granted in part and denied in part. The motion is granted with respect to Interrogatory Nos. 4 5 and Request for Production No. 10. Hartford shall answer these interrogatories and produce responsive documents, subject to a protective order to be negotiated by the parties, or before February 6, 2006. Hartford shall also supplement its answers to Interrogatory Nos. 7 8 to affirmatively and unequivocally state that no "system of communication" exists, other than what is contained in the claims manual produced to plaintiff. In all other respects, plaintiff's motion is denied.The discovery deadline is extended for limited purpose of allowing Hartford to comply with this order.
SO ORDERED.