United States District Court, W.D. Washington, Tacoma
September 24, 2014
KEN BOURLAND, Plaintiff,
HARTFORD LIFE AND ACCIDENT INSURANCE COMPANY, et al., Defendants.
ORDER GRANTING IN PART, DENYING IN PART, RESERVING RULING, AND REQUESTING SUPPLEMENTAL BRIEFING ON PLAINTIFF'S MOTION FOR LEAVE TO CONDUCT DISCOVERY
BENJAMIN H. SETTLE, District Judge.
This matter comes before the Court on Plaintiff Ken Bourland's ("Bourland") motion for leave to conduct discovery (Dkt. 20). The Court has considered the pleadings filed in support of and in opposition to the motion and the remainder of the file and hereby grants the motion in part, denies it in part, reserves ruling, and requests supplemental briefing as discussed herein.
I. PROCEDURAL HISTORY
On December 10, 2013, Bourland filed suit against Defendants Hartford Life and Accident Insurance Company ("Hartford"), U.S. Bank, and U.S. Bank Long-Term Disability Plan (collectively "Defendants"). Dkt. 1. Bourland challenges Hartford's decision to terminate his long-term disability benefits. Id. Bourland alleges that Hartford has a conflict of interest. Id. at 34. Bourland also alleges that Hartford's medical reviewers and evaluation companies have a financial bias. Id. at 36.
The Employee Retirement Income Security Act of 1974 (ERISA) governs Bourland's claims. See 29 U.S.C. § 1132.
On April 23, 2014, Bourland sent discovery requests to Defendants. Dkt. 21, Declaration of Lisa V. Benedetti ("Benedetti Dec."), Exs. A, B, and C. On May 27, 2014, Defendants responded with general objections to most of Bourland's requests. Benedetti Dec., Exs. E and F.
On July 25, 2014, the parties held a telephonic discovery conference, but did not resolve the discovery issues. Benedetti Dec., Ex. G.
On July 28, 2014, Bourland filed a motion for leave to conduct discovery. Dkt. 20. On August 18, 2014, Hartford responded. Dkt. 25. On August 22, 2014, Bourland replied. Dkt. 29.
Bourland seeks discovery outside of the administrative record regarding Hartford's alleged conflict of interest, the credibility of Hartford's medical reviewers, and other matters. Dkt. 20 at 2. In response, Hartford argues that discovery should be limited to the administrative record. Dkt. 25 at 6-9. Hartford also argues that Bourland's requests are a fishing expedition and not narrowly tailored. Id. at 17.
A. Discovery in ERISA Cases
The availability and scope of discovery in ERISA cases "is directly related to the standard of review employed by the Court." Santos v. Quebecor World Long Term Disability Plan, 254 F.R.D. 643, 647 (E.D. Cal. 2009). To determine the applicable standard of review, courts look at the language in the benefit plan. Abatie v. Alta Health & Life Ins. Co., 458 F.3d 955, 962-63 (9th Cir. 2006). When the plan grants discretion to the administrator, abuse of discretion review applies. Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989). When the plan does not grant discretion, de novo review applies. Id.
In Washington, however, disability insurance policies may not contain discretionary clauses. See WAC 284-96-012. "Discretionary clause' means a provision that purports to reserve discretion to an insurer, its agents, officers, employees, or designees in interpreting the terms of a policy or deciding eligibility for benefits...." Id .
WAC 284-96-012 therefore voids any benefit plan language that grants discretion to the administrator. The standard of review becomes de novo once any discretionary language is invalidated. Landree v. Prudential Ins. Co. of Am., 833 F.Supp.2d 1266, 1274 (W.D. Wash. 2011); see also Firestone, 489 U.S. at 115.
Under de novo review, "[t]he court simply proceeds to evaluate whether the plan administrator correctly or incorrectly denied benefits, without reference to whether the administrator operated under a conflict of interest." Abatie, 458 F.3d at 963. In doing so, the Court considers the evidence in the administrative record. Opeta v. Nw. Airlines Pension Plan, 484 F.3d 1211, 1217 (9th Cir. 2007). The Court should consider extrinsic evidence "only when circumstances clearly establish that additional evidence is necessary to conduct an adequate de novo review of the benefit decision." Mongeluzo v. Baxter Travenol Long Term Disability Benefit Plan, 46 F.3d 938, 944 (9th Cir. 1995) (quoting Quesinberry v. Life Ins. Co. of N. Am., 987 F.2d 1017, 1025 (4th Cir. 1993)). Extrinsic evidence may be necessary when there are "issues regarding the credibility of medical experts." Opeta, 484 F.3d at 1217 (quoting Quesinberry, 987 F.2d at 1027).
B. Bourland's Motion
1. Standard of Review
In his complaint, Bourland invokes WAC 284-96-012 and alleges that Hartford's decision should be reviewed de novo. Dkt. 1 at 37. Bourland makes a similar argument in the parties' joint status report. Dkt. 16 at 3. Bourland's motion, however, is largely premised on abuse of discretion review. See Dkt. 20. Hartford argues that discovery should be limited to the administrative record under either standard of review. Dkt. 25 at 5-6.
The standard of review in this case is de novo. Bourland's benefit plan grants Hartford discretion to determine eligibility for benefits. Dkt. 1, Bourland App. 3 at 38 ("[Hartford has] full discretion and authority to determine eligibility for benefits and to construe and interpret all terms and provisions of the [benefit plan]."). WAC 284-96-012, however, voids the plan's discretionary language. Once the plan's discretionary language is invalidated, the standard of review becomes de novo. See Landree, 833 F.Supp.2d at 1274. Accordingly, extrinsic evidence should be considered only if the circumstances clearly establish that additional evidence is necessary. See Mongeluzo, 46 F.3d at 944.
2. Discovery Requests
a. Conflict of Interest
Bourland seeks discovery regarding Hartford's alleged conflict of interest. Dkt. 20 at 5-11. To that end, Bourland requests an order compelling Hartford to answer the following discovery requests:
Hartford's in-house documents and contracts regarding the handling of disability claims like Bourland's (RFP Nos. 1-2);
Statistical data concerning Hartford's claims granting history in cases involving Dr. Brock, Dr. Schindler, and Reliable Review Services (RFP Nos. 3-5; Interrog. No. 1);
Hartford's financial relationships with Dr. Brock, Dr. Schindler, and Reliable Review Services (RFP Nos. 6-8; Interrog. No. 2);
Hartford's performance evaluations and compensation programs of employees involved in the decision to terminate Bourland's benefits (RFP Nos. 10-12; Interrog. No. 3).
Id. at 4-11.
Under de novo review, Hartford's alleged conflict of interest is irrelevant. See Abatie, 458 F.3d at 970. The Court therefore denies Bourland's motion for leave to conduct discovery regarding Hartford's alleged conflict of interest.
b. Credibility of Hartford's Witnesses
Bourland also seeks discovery regarding the credibility of Hartford's medical reviewers and evaluation companies. Dkt. 20 at 6-10. Bourland requests an order compelling Hartford to answer two of the same discovery requests as above:
Statistical data concerning Hartford's claims involving Dr. Brock, Dr. Schindler, and Reliable Review Services (RFP Nos. 3-5; Interrog. No. 1);
Hartford's financial relationships with Dr. Brock, Dr. Schindler, and Reliable Review Services (RFP Nos. 6-8; Interrog. No. 2).
Id. at 6-10.
The credibility of Hartford's medical reviewers is relevant because it goes to the weight the Court will assign their medical opinions on de novo review. Discovery regarding Hartford's financial relationship with medical reviewers and evaluation companies is therefore appropriate in this case. See Opeta, 484 F.3d at 1217. The Court grants Bourland's motion to conduct discovery on Hartford's financial relationships with Dr. Brock, Dr. Schindler, and Reliable Review Services.
In regards to the statistical data, Hartford argues that producing such data would be a "complicated, extensive and time consuming process and analysis." Dkt. 25 at 13; see also Dkt. 26, Declaration of Joseph Altiere at 2. Although Hartford provides conclusory statements of this burden, Hartford does not provide specific evidence to support these statements.
The Court asks the parties to submit supplemental briefing on the burden of producing the requested statistical data. Hartford should file its opening brief by October 1, 2014. Bourland should file his responsive brief by October 3, 2014. Briefs should be no longer than ten pages. In the meantime, the Court reserves ruling on Bourland's request for statistical data.
c. Amount of Benefits at Issue
Bourland seeks discovery regarding the amount of benefits at issue. Dkt. 20 at 12; see also Interrog. No. 6. In response to Bourland's discovery request, Hartford provided Bourland with the policy and booklet. Benedetti Dec., Ex. E at 11. These documents provide sufficient guidance as to how Bourland's benefits should be calculated. Accordingly, the Court denies Bourland's motion for leave to conduct discovery on the amount of benefits at issue.
d. Administrative Record
Finally, Bourland requests the administrative record and any documents that Hartford relied on in making its benefit determination. Dkt. 20 at 12; see also RFP No. 13. Hartford has already provided Bourland with the administrative record. Benedetti Dec., Ex. E at 12. Bourland nevertheless argues that Hartford did not to produce documents that "demonstrate compliance with administrative processes and safeguards." Id. Bourland also argues that Hartford did not produce documents that "constitute a statement of policy or guidance with respect to the Plan concerning the denied benefit for [Bourland's] diagnoses." Id. Bourland therefore requests an order compelling Hartford to produce those documents. Id.
ERISA requires that claimants be given access to "all documents, records, and other information relevant to the claimant's claim for benefits." 29 C.F.R. § 2650.503-1(h)(2)(iii). A document, record, or other information is considered "relevant" if it:
(i) Was relied upon in making the benefit determination;
(ii) Was submitted, considered, or generated in the course of making the benefit determination, without regard to whether such document, record, or other information was relied upon in making the benefit determination;
(iii) Demonstrates compliance with the administrative processes and safeguards required pursuant to paragraph (b)(5) of this section in making the benefit determination; or
(iv) In the case of a group health plan or a plan providing disability benefits, constitutes a statement of policy or guidance with respect to the plan concerning the denied treatment option or benefit for the claimant's diagnosis, without regard to whether such advice or statement was relied upon in making the benefit determination.
29 C.F.R. § 2650.503-1(m)(8).
Bourland seeks documents that are "relevant to [his] claim for benefits." 29 C.F.R. § 2650.503-1(h)(2)(iii). The Court therefore grants Bourland's motion on this issue. The Court orders Hartford to produce documents that ERISA regulations expressly require Hartford to disclose. See 29 C.F.R. § 2650.503-1(m)(8).
e. Protective Order
Hartford may produce responsive documents pursuant to a protective order. Hartford apparently concedes that some documents are responsive to Bourland's requests, because Hartford offers to produce those documents subject to a protective order. Dkt. 25 at 10. Hartford appears to show good cause to protect its proprietary documents, so the parties should be able to agree on an appropriate protective order. Id. at 10-11. In the unlikely event that the parties are unable to agree on this issue, Hartford may file a motion for a protective order covering the documents in question.
Therefore, it is hereby ORDERED that Bourland's motion for leave to conduct discovery (Dkt. 20) is GRANTED in part and DENIED in part. The Court RESERVES ruling on Bourland's request for statistical data. The Court requests additional briefing on the burden of producing the statistical data, and Bourland's motion is renoted for October 3, 2014.