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Good Discovery Overview – S.D.Fl.

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  • Good Discovery Overview – S.D.Fl.

    Good Discovery Overview – S.D.Fl.

    Attached hereto is a case out of the Southern District of Florida, Johnston v. Aetna Life Insurance Company. This case is before the court on plaintiff’s request for discovery beyond the administrative record. I only post this case because the judge goes into a pretty good overview regarding discovery in ERISA cases.

    Given this broad discretion, the Undersigned makes the following observations (in general) and rulings about discovery (in this particular case) -- and notes that these rulings concern only discovery, and not admissibility at trial or for use in other settings, such as advancing or defending a summary judgment motion. To be sure, another magistrate judge could reach a different decision about the permissible scope of discovery here in this ERISA case, but the mere fact that a reviewing court may decide the issue “differently is not sufficient to overturn a decision when there are two permissible views of the issue.” Sun Capital Partners, 2015 WL 11921411, at *1 (denying objections to magistrate judge’s discovery order) (internal quotation omitted). See generally Am. Family Mut. Ins. Co. v. Roth, No. 05C 3839, 2010 WL 3397362, at *2 (N.D. Ill. Aug. 25, 2010) (“indeed, on virtually identical facts, two decision makers can arrive at opposite conclusions, both of which constitute appropriate exercises of discretion”) (internal citations omitted).

    First, the controlling principle is the one articulated in Blankenship: review of the plan administrator’s denial of benefits is generally limited to consideration of the material available to the administrator at the time it made its decision.

    Second, the material “made available” to the administrator may not in all cases be limited to the administrative record, which, after all, is prepared by the plan administrator.

    Third, material “made available” to the person deciding whether to award benefits may well be oral. Thus, a plaintiff would be permitted to ask the claims examiner if she was provided with any oral information concerning the claim, and, if so, to identify the information and explain what significance, if any, it had on the claims decision (or appeals decision).

    Fourth, when a defendant is in a structural conflict scenario, both funding the plan and evaluating benefits claims, this conflict is a relevant factor. Therefore, some discovery about this conflict or potential conflict is permitted.

    Fifth, to consider the structural conflict, a court may need to permit a plaintiff to obtain discovery beyond the written administrative record compiled by the administrator. Basically, this means that discovery about the apparent structural conflict and its possible impact on the decision-making process, including procedural irregularities, should be permitted. Therefore, as explained in Agrifolio, “the claims manual is discoverable because it may be relevant in demonstrating procedural misconduct by Defendant.” [ECF No. 58, p. 3].

    Sixth, the mere fact that a structural conflict might exist does not give a plaintiff challenging a benefits denial carte blanche rights to probe into every aspect of the decision.

    Seventh, any plaintiff-generated discovery in an ERISA benefits challenge lawsuit must comply with the proportionality requirement of Rule 26(b)(1).

    Eighth, because Aetna advised that applicable regulations require the plan administrator which uses a physician to assist in the claim evaluation to be one with appropriate credentials, a disappointed benefits claimant should ordinarily be entitled to obtain discovery about the credentials of physicians who participated in the analysis. But this discovery is limited and could be accomplished through the simple and basic production of a physician’s resume or C.V. or similar summary. Aetna shall produce this information by October 20, 2017.

    Ninth, if an administrator has a structural conflict, then a plaintiff would be entitled to obtain discovery about whether anyone involved in the claims process could receive a bonus, commission, promotion, pay grade reassessment, or other compensation based on his or her track record for approving or rejecting ERISA claims. This permissible discovery, however, is narrow, and would, for example, permit basic and straightforward interrogatories. It would not ordinarily entitle a plaintiff to discover information about the actual compensation paid to a specific claims examiner or appellate specialist, nor would it routinely permit discovery of an employee’s personnel file or their employment contracts. It would permit a simple discovery request about whether the administrator kept statistics on the numbers or percentages of claims approved or rejected by examiners or reviewing physicians. Therefore, Aetna is required to produce responsive discovery about this general issue by October 20, 2017.

    Tenth, although an administrator’s failure to comply with an applicable claims manual procedure might not be dispositive of the issue of whether the denial decision was arbitrary and capricious, a plaintiff should in most cases be entitled to the relevant sections of the claims manual. This would enable a plaintiff to determine whether an administrator complied with applicable rules and internal guidelines, which could be a factor to consider in the structural conflict assessment. If, on the other hand, a plaintiff could not obtain copies of relevant sections of a procedures manual, then the plaintiff would likely never know whether the person who denied the claim complied with an applicable procedure (because it would not be in “the administrative record”). Therefore, Aetna shall produce the responsive portions of its claims and procedures manuals by October 20, 2017.

    Eleventh, because the issue is based on what information was available to the administrator at the time the decision was made, post-record discovery about later events would ordinarily not be permitted.

    Twelfth, a plaintiff would be entitled to obtain in discovery a copy of a surveillance report and might be permitted to discover the reason why the surveillance was requested (if the reason was contrary to the applicable procedures manual section). If not already produced, Aetna, shall by October 20, 2017, produce responsive discovery reflecting its reasons for requesting surveillance of Dr. Johnston.

    Framed by these principles, the Undersigned concludes that the discovery outlined above is permissible even though it might not actually be in the technical administrative record
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