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W.D. Ky.: Motion to Compel Discovery

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  • W.D. Ky.: Motion to Compel Discovery

    In a case from the Western District of Kentucky, the court takes up the issue of compelling discovery in ERISA cases. The Plaintiff moved to compel Hartford to respond to requests for production and interrogatories concerning its affirmative defenses, the compensation and bonus structure for its claims and appeals personnel, its reasons for terminating his claim and denying his appeal, and its organizational structure. The Judge denied Quarles’s motion to compel based on Hartford’s supplemental discovery responses and stipulation that the Court would review its decision to terminate benefits de novo.

    The court here found that:
    Hartford has stipulated to a de novo standard of review for purposes of this case. Judge Lindsay reasoned that because the Court would apply de novo review, “there [was] no need for discovery regarding any factors internal to Hartford that may have influenced the persons who made the decision to terminate Quarles’s long-term disability benefits or to deny his appeal.” (D.N. 38, PageID # 1038) Judge Lindsay therefore denied the motion to compel Hartford to produce information on employee compensation, employee bonus and incentive structure, and company organization, as well as the deposition requests, because the requested materials were aimed at uncovering evidence of conflicts of interest and bias—concerns that were diminished by the Court’s de novo review of Hartford’s decisions.
    The court then addressed the relevance of conflict or bias discovery and how it relates to the de novo standard; something that the court mentions the Sixth Circuit has not addressed:

    [T]rial courts within the Sixth Circuit typically conclude that potential conflicts of interest or bias are relevant only if the Court is applying arbitrary-and-capricious review. See Sim v. Reliance Standard Life Ins. Co. (“It is appropriate for the Court to consider the applicable standard of review at this juncture because whether discovery is permitted to explore defendants’ alleged bias is irrelevant if the standard of review is de novo.”); Smiertka v. Guardian Life Ins. Co. of Am., No. 1:12-CV-99, 2013 WL 1304498, at *6 (W.D. Mich. Mar. 28, 2013) (quoting Daul v. PPM Energy, Inc., [cite omitted]) (“[I]n ERISA benefits cases, conflict of interest discovery can only be relevant if the standard of review is abuse of discretion. If . . . the standard of review is de novo, then conflict of interest discovery is irrelevant.”); Mulligan v. Provident Life & Accident Ins. Co., 271 F.R.D. 584, 588 n.5 (E.D. Tenn. 2011) (“An administrator’s conflict of interest is relevant only if the administrator’s decision is to be reviewed under the arbitrary and capricious standard of review.”); Guy v. Sun Life Assurance Co. of Can., [cite omitted] (“If the standard of review is de novo, Defendant’s decision-making, and its conflict of interest, becomes irrelevant. . . . If Plaintiff prevails in her argument that the court should conduct a de novo review of the administrative record, then her motion to compel becomes moot.”); McCollum v. Life Ins. Co. of N. Am., [cite omitted] (“[T]he court will review Plaintiff’s denial of benefits de novo, so no discovery is needed on [the insurance company’s] structural conflict of interest.”); Price v. Hartford Life & Accident Ins. Co., 746 F. Supp. 2d 860, 866 (E.D. Mich. 2010) (“If the standard of review is de novo, then the significance of the administrator’s conflict of interest evaporates.”); Weidauer v. Broadspire Servs., Inc., [cite omitted] (“However, since a plan administrator’s decision is accorded no deference or presumption of correctness when conducting a de novo review, whether there is a conflict of interest in this case is irrelevant.”). In light of this well-reasoned and persuasive authority, and in the absence of guidance from the Sixth Circuit, Judge Lindsay’s conclusion that no discovery is needed on Hartford’s potential conflict of interest or bias was not contrary to law.
    Ultimately, the court upheld the decision of the lower court. The opinion is attached below.
    Attached Files