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In McGahey, the court had previously denied discovery outside the administrative record but left open the possibility for reconsideration if the plaintiff could make a showing of a conflict of interest in the defendant's decision-making process at the summary judgment stage.
Summary of this case from Germana v. Hartford Life & Accident Ins. Co.Opinion
CIVIL ACTION NO. 08-10435-RGS.
March 25, 2009
MEMORANDUM AND ORDER ON PLAINTIFF'S MOTION FOR DISCOVERY
Plaintiff Rosemary McGahey brought this action pursuant to the Employee Retirement Income Security Act (ERISA), 29 U.S.C. § 1001, et seq., seeking disability benefits under a self-insured employee benefit plan sponsored by Harvard University. McGahey received benefits for twenty-four months until June 30, 2006, when Harvard determined that McGahey was no longer disabled from any occupation. McGahey now seeks to conduct discovery to determine whether Harvard's dual role as both Plan Administrator and funder of claims influenced an improper denial of benefits in her case.
1. Metropolitan Life Ins. Co. v. Glenn
McGahey argues that she is entitled to discovery in light of the Supreme Court's recent holding in Metro. Life Ins. Co. v. Glenn, 128 S.Ct. 2343 (2008). In Glenn, the Court announced that a conflict of interest exists whenever, as here, a "plan administrator both evaluates claims for benefits and pays benefits claims." Id. at 2348. While the Court in Glenn instructed district courts to "take account of [the conflict of interest] as a factor in determining the ultimate adequacy of the record's support for the agency's own factual conclusion," id. at 2352, it declined to establish rules as to how lower courts should weigh such a conflict.
Neither do we believe it 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. In principle, as we have said, conflicts are but one factor among many that a reviewing judge must take into account. Benefits decisions arise in too many contexts, concern too many circumstances, and can relate in too many different ways to conflicts — which themselves vary in kind and in degree of seriousness — for us to come up with a one-size-fits-all procedural system that is likely to promote fair and accurate review. Indeed, special procedural rules would create further complexity, adding time and expense to a process that may already be too costly for many of those who seek redress.Id. at 2351. The Court did note several factors that might be considered, such as a defendant's encouragement to a plaintiff to seek Social Security benefits and its subsequent disagreement with the Social Security Administration's determination that the plaintiff was disabled. See id. at 2352. (The Appeals Court inGlenn also pointed out that the administrator had weighed favorably a medical report recommending the denial of benefits, but had not provided its medical and vocational experts with reports reaching the opposite conclusion. Id.). The Supreme Court observed that some conflicts of interest are more significant than others.
[A]ny one factor will act as a tiebreaker when the other factors are closely balanced, the degree of closeness necessary depending on the tiebreaking factor's inherent or case-specific importance. The conflict of interest at issue here, for example, 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. 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 finances, or by imposing management checks that penalize inaccurate decisionmaking irrespective of whom the inaccuracy benefits.Id. at 2351 (internal citation omitted).
The court notes that the parties are in agreement on two crucial points: (1) that even after Glenn, Harvard's decision to deny McGahey benefits remains subject to the arbitrary and capricious standard of review, see Glenn, 128 S. Ct. at 2350; and (2) that the supplementation of the Administrative Record is not a matter of right in an ERISA appeal. Lopes v. Metro. Life Ins. Co., 332 F.3d 1, 5 (1st Cir. 2003).
2. McGahey's Discovery Requests
McGahey seeks extensive discovery into: (1) the historical record of Harvard's disability claims decisions (including statistical and financial information); (2) Harvard's policy of demanding reimbursement of Social Security benefits while at the same time denying continued benefits; and (3) the extent to which Harvard has implemented procedures to ensure that a presumptive conflict of interest does not taint the benefits decision-making process. Although Glenn identifies a structural conflict of interest as a factor to consider when reviewing an administrator's benefits decision, it gives little guidance for dealing with requests for discovery. The longstanding rule in the First Circuit holds that "some very good reason is needed to overcome the strong presumption that the record on review is limited to the record before the administrator." Liston v. Unum Corp. Officer Severance Plan, 330 F.3d 19, 23 (1st Cir. 2003). There is nothing in Glenn that suggests that this standard has been upset. Therefore, "[w]hether discovery [is] warranted depends in part on if and in what respect it matters . . . and this is not a question that has a neat mechanical answer." Id. at 25.
District courts, in responding to Glenn, have given answers ranging from a grant of discovery in every case where a structural conflict is shown to a reflexive denial of discovery in deference to the administrator's customarily broad discretion.Compare Reimann v. Anthem Ins. Cos., Inc., 2008 WL 4810543, *23 (S.D. Ind. Oct. 31, 2008) ("When there is a challenge to the objectivity and honesty of the plan administrator's decision,Glenn recognized, the plaintiff must have the opportunity to supplement the record (and, presumably, to conduct at least some targeted discovery.") and Myers v. Prudential Ins. Co. of Am., 581 F. Supp. 2d 904, 912 (E.D. Tenn. 2008) (rejecting the argument that a threshold showing is necessary and ruling that discovery will be granted if it appears relevant or "reasonably calculated to lead to the discovery of admissible evidence.")with DuBois v. Unum Life Ins. Co. of Am., 2008 WL 2783283, *1-*2 (D. Me. July 14, 2008) ("Glenn was not a case about discovery and does not suggest that discovery automatically should be permitted if a [structural conflict] exists" absent "casespecific circumstances demonstrating a possibility of bias in the denial of [the] claim."). See also Creasey v. Cigna Life Ins. Co. of N.Y., 255 F.R.D. 481, ___, 2008 WL 4810539 *2 (S.D. Ind. Oct. 31, 2008) (denying discovery where no showing had been made that the case was "close"); Weeks v. Unum Group, 2008 WL 4329223 *5 n. 1 (D. Utah Sept. 15, 2008) (because a conflict of interest does not alter the standard of review, the court is barred from considering materials outside the administrative record).
It seems apparent from a reading of Glenn's permissive language that the Court's intent was not to mandate automatic discovery into an administrator's alleged conflict of interest. Rather, to satisfy Liston's requirement that "some very good reason" must exist to justify discovery, 330 F.3d at 23, a plaintiff in an ERISA appeal must allege more than the existence of a structural conflict of interest (although a conflict of interest is a condition precedent to the grant of a discovery request). A court should permit discovery only where a plaintiff makes a threshold showing that the denial of benefits was improperly influenced by the administrator's conflict of interest. Because "[b]enefits decisions arise in too many contexts [and] concern too many circumstances," Glenn, 128 S. Ct. at 2351, it is difficult to formulate a precise test for making such a determination. However, in light of Glenn, this court will consider, among other factors, the extent to which the record discloses efforts to insulate the claims review process from institutional financial considerations; the thoroughness and consistency of the explanation of the denial; the care with which the claimant's own physician's opinions were treated; and, if the administrator relied on the opinion of independent experts, the extent to which these experts were in fact truly independent. Also relevant (asGlenn notes) are instances in which the administrator requires a claimant to reimburse it with any received Social Security benefits, while at the same time disagreeing with the Social Security Administration's determination that the claimant is in fact disabled. See Glenn, 128 S. Ct. at 2352.
McGahey claims that "the conflict of interest factor in this case cannot be fairly and fully understood without adducing the additional proof that the Plaintiff proposes to discover." Plaintiff's Memorandum, at 3. Simply put, McGahey's argument assumes its own conclusion without offering any facts to suggest that a conflict of interest may have caused an improper denial of her benefits application. As previously noted, the court will not permit discovery where a plaintiff can point to nothing more than the existence of a structural conflict of interest. "If additional information were already available and it suggested that the inherent conflict of interest (already well understood) is more weighty than normal, then perhaps in an appropriate case some discovery might be permitted. However, in the absence of some preliminary showing suggesting that the conflict is actually enhanced by some organizational factors, I am not inclined to permit this kind of discovery." Achorn v. Prudential Ins. Co. of Amer., 2008 WL 4427159 *5 (D. Me. Sept. 25, 2008) (Kravchuk, M.J.) (emphasis in original).
The court notes that Harvard demanded that McGahey reimburse it for part of the $27,657.72 in Social Security benefits that she received through July of 2006. While the court will consider this when reviewing the administrator's decision, there is no showing at this point justifying discovery into Harvard's policy of demanding reimbursement for such payments.
ORDER
For the foregoing reasons, McGahey's motion for discovery isDENIED without prejudice. If a showing of the improper intrusion of a conflict of interest in the administrator's decision making process can be made at the summary judgment stage, McGahey may file a motion pursuant to Fed.R.Civ.P. 56(f). Pursuant to the Scheduling Order, the court reminds the parties that summary judgment motions are due sixty (60) days from the date of this Order.
SO ORDERED.