Opinion
No. 3:03-0070.
January 22, 2004.
Robert Jan Jennings, Branstetter, Kilgore, Stranch Jennings, Nashville, TN, Attorney for Plaintiff, BRENDA S. WILSON.
John M. Scannapieco, Kathryn S. Caudle, Boult, Cummings, Conners Berry, Robert Jan Jennings, Branstetter, Kilgore, Stranch Jennings, Nashville, TN, Attorney for Defendant, WILLIS ADMINISTRATIVE SERVICES CORPORATION.
S. Russell Headrick, Jennifer M. Eberle, Husch Eppenberger, LLC, Memphis, TN.
S. Russell Headrick, Jennifer M. Eberle, Husch Eppenberger, LLC, Memphis, TN, Attorney for Defendant, UNUM LIFE INSURANCE COMPANY OF AMERICA.
ORDER
For the reasons explained more fully in the Court's accompanying Memorandum, the Court rules as follows:
1. Plaintiff's Motion for Review of the Magistrate Judge's Order entered on September 4, 2003 (Docket Entry No. 34) is hereby GRANTED. Having reviewed the Motion, the Court hereby DENIES Plaintiff's request to reverse the Magistrate Judge's rulings for the reasons stated in the accompanying Memorandum;
2. Defendant's Motion to Strike (Docket Entry No. 40) is hereby DENIED; and
3. Plaintiff's Motion to Stay (Docket Entry No. 43) is hereby DENIED.
This case is hereby returned to the Magistrate for further proceedings consistent with Local Rule 11.
It is so ORDERED.
MEMORANDUM
Presently pending before the Court are the following motions, to which opposition has been filed: (1) Plaintiff's Motion for Review of the Magistrate Judge's Order (Docket Entry No. 34); (2) Defendant's Motion to Strike (Docket Entry No. 40); and (3) Plaintiff's Motion to Stay (Docket Entry No. 43).On January 21, 2003, Plaintiff Brenda S. Wilson initiated this lawsuit against her former employer, Willis Administrative Services Corporation, and Unum Life Insurance Company under the Employee Retirement Security Income Act ("ERISA"), 29 U.S.C. § 1132. Plaintiff seeks to recover long term disability benefits, a judgment for all unpaid benefits to which she is entitled, and all other benefits ancillary to those long term disability benefits.
By agreement of the parties and with the permission of the Court, Willis Administrative Services Corporation was dismissed as a defendant in this action on August 13, 2003. (Docket Entry No. 21).
I. MOTION TO REVIEW MAGISTRATE JUDGE'S ORDER
Plaintiff now seeks review of the Magistrate Judge's Order entered on September 4, 2003. (Docket Entry No. 33). In that Order, the Magistrate Judge (1) denied Plaintiff's motion to allow limited discovery in this matter; and (2) denied as moot Defendant's motion for a protective order. (Id.) Plaintiff contends that the Magistrate Judge's ruling is contrary to law as Plaintiff is entitled to limited discovery to determine the manner in which Defendant compiled the administrative record, to learn about the processes and procedures utilized by Defendant in considering her claim, and to discover information about the premium and financial arrangements between her former employer and Defendant Unum Life Insurance Company.In response, Defendant maintains the Magistrate Judge's ruling is correct because the Court may consider only the administrative record before the claims decision-maker at the time of the final decision to deny benefits unless a plaintiff asserts a procedural challenge, and Plaintiff makes no such challenge here.
Under the Federal Rules of Civil Procedure and the Local Rules for the Middle District of Tennessee, a party may object to a Magistrate Judge's order before a district judge within ten (10) days after service of the order. See Fed.R.Civ.P. 72(a)(b); M.D. Tenn. R. 203(d). The applicable local rule provides that the decision of the Magistrate Judge "shall be reversed or modified only upon a showing that it is clearly erroneous or contrary to law." M.D. Tenn. R. 203(g). "A finding is clearly erroneous when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed." Norris v. Schotten, 146 F.3d 314, 323 (6th Cir. 1997) (citing Anderson v. City of Bessemer City, 470 U.S. 564, 573 (1985) (quotation omitted)).
In the instant case, Plaintiff timely filed her objections to the Magistrate Judge's Order on September 10, 2003. The Court has reviewed Plaintiff's Motion and considered the arguments therein. However, the Court finds that the Magistrate Judge's decision to deny Plaintiff discovery in this matter was not clearly erroneous or contrary to law.
In reviewing an administrator's decision to deny benefits, a district court typically reviews only the evidence contained in the administrative record. Perry v. Simplicity, 900 F.2d 963, 966 (6th Cir. 1990). This general rule applies when the court conducts an ERISA review under both the arbitrary and capricious and de novo standards of review. Id. at 966-67 (de novo review); Miller v. Metro. Life Co., 925 F.2d 979, 986 (6th Cir. 1991) (arbitrary and capricious review). A court may consider evidence outside of the administrative record, however, when "that evidence is offered in support of a procedural challenge to the administrator's decision, such as an alleged lack of due process afforded by the administrator or alleged bias on its part." Wilkins v. Baptist Healthcare Sys., Inc., 150 F.3d 609, 619 (6th Cir. 1998).
Here, Plaintiff alleges that Defendant operates under a bias or a conflict of interest since Defendant is ultimately responsible for paying benefits to claimants if their claims are allowed, and Plaintiff seeks discovery to determine the nature and extent of Defendant's conflict of interest. Where, as here, "the same entity wears both the administrator's hat and the payor's hat,"Schey v. Unum Life Ins. Co. of Am., 145 F. Supp.2d 919, 923 (N.D. Ohio 2001), courts have found that an "irrebuttable presumption" of a conflict of interest exists. Id.; Boswell v. Unum Life Ins. Co. of Am., No. 2:02-0002 (M.D. Tenn. Mar. 27, 2003) (Knowles, J.). "Because of this irrebuttable presumption, no need exists for discovery to establish it." Schey, 145 F. Supp.2d at 943; Boswell, No. 2:02-0002.
The Magistrate Judge found that such an irrebuttable presumption exists in this case due to Defendant's dual roles of administrator and payor of benefits, and, as a result, no discovery was necessary to establish that such a bias or conflict exists. The Court agrees. It is apparent from the current record that Defendant operated under a conflict of interest in determining whether to award Plaintiff long term disability benefits, thus there is no need for Plaintiff to conduct discovery on that issue. Defendant's conflict of interest will be considered when the Court determines the reasonableness of Defendant's decision to deny benefits to Plaintiff.
Although not discussed by the Magistrate Judge in his Order, the Court recognizes that Plaintiff alleged in her Complaint that after Defendant denied Plaintiff's claim for benefits on June 17, 2002, Plaintiff submitted certain additional information substantiating her claim that Defendant refused to consider. (Docket Entry No. 1, Compl. ¶¶ 15-16). Such an allegation of a procedural error could support a request for discovery outside of the administrative record, but not in the present case. Plaintiff stated that she seeks discovery to determine the manner in which Defendant compiled the administrative record, the reason or reasons for duplicate entries in the administrative record, and the processes and procedures utilized by Defendant in connection with consideration of Plaintiff's claim. (Docket Entry No. 19). However, the requested discovery is not tailored toward the goal of remedying Defendant's alleged procedural error of failing or refusing to consider certain additional information submitted by Plaintiff in support of her claim. Accordingly, the Magistrate Judge's ruling stands, and Plaintiff's Motion for Review of the Magistrate Judge's Order entered on September 4, 2003 (Docket Entry No. 34) will be DENIED.
The specific items identified by Plaintiff include medical records from Plaintiff's primary care physician, cardiologist, pulmonologist, gastroenterologist, and clinical neuropsychologist, as well as an evaluation by a vocational expert. (Docket Entry No. 1, Compl. ¶ 15).
Moreover, Defendant has represented to the Court that the documents claimed by Plaintiff to have been ignored by Defendant appear in the administrative record and were considered by Defendant in making its decision to deny benefits to Plaintiff. (Docket Entry No. 39 at 15). If Defendant's representation is true, Plaintiff's claimed procedural error would certainly fail, as Plaintiff has identified no other evidence missing from the administrative record which she claims to have submitted to Defendant, which was ignored by Defendant.
II. MOTION TO STRIKE
Defendant has filed a Motion to Strike (Docket Entry No. 40) the affidavit of Plaintiff and the attachment thereto (Docket Entry No. 20) and Plaintiff's Notice of Filing the August 25, 2003 letter from counsel for Willis Administrative Services Corporation (Docket Entry No. 28). It appears that Plaintiff submitted these documents in an attempt to bolster her argument for allowing discovery in this case. However, as explained above, in ruling on Plaintiff's claims, the Court may not consider evidence outside of the administrative record. The challenged affidavit, its attachment, and the August 2003 letter are not part of the administrative record in this case, and as such, they will not be considered by the Court. Because this case will be resolved by the Court and without a jury, however, it is unnecessary that the items be stricken from the record. Defendant's Motion to Strike (Docket Entry No. 40) therefore will be DENIED.III. MOTION TO STAY
Plaintiff alternatively has filed a Motion to Stay (Docket Entry No. 43). Therein, she asks the Court to stay this action pending resolution of a series of actions in the Eastern District of Tennessee involving allegations of ERISA violations against Defendant, its sister corporations, and its parent corporation, Unum Provident Corporation. Defendant opposes a stay, arguing that Plaintiff has not met her burden of showing that she will suffer irreparable harm if the case moves forward.
"`The power to stay proceedings is incidental to the power inherent in every court to control the disposition of the causes on its docket with economy of time and effort for itself, for counsel, and for litigants.'" Ohio Envtl. Council v. United States Dist. Court, Southeastern Dist. of Ohio, 565 F.2d 393, 396 (6th Cir. 1977) (quoting Landis v. Am. Water Works Elec. Co., 299 U.S. 248, 254 (1936)). The decision to stay proceedings lies within the Court's discretion. In the exercise of that discretion, the Court must weigh and maintain an even balance among competing benefits and hardships. See Landis, 299 U.S. at 258-59.
A party seeking a stay of proceedings must show (1) that there is a pressing need for delay; and (2) neither the opposing party nor the public will suffer harm from the imposition of a stay.See Ohio Envtl. Council, 565 F.2d at 396. With regard to the first factor, the most important consideration is the balance of hardships. The moving party has the burden of proving that it will suffer "irreparable injury" if the case moves forward. Id. Once a litigant meets its burden of showing that there is a pressing need for a delay in the proceedings, the requested stay must not be immoderate and must be set within reasonable time limits. See id.
The Court finds that Plaintiff has not demonstrated a pressing need for delay in this matter. Plaintiff has presented no evidence that she will suffer an irreparable injury if the case proceeds. It is not clear from Plaintiff's motion in what way the cases filed in the Eastern District of Tennessee relate to the instant case. Accordingly, Plaintiff's Motion for a Stay (Docket Entry No. 43) will be DENIED.
IV. CONCLUSION
For the reasons explained above, Plaintiff's Motion for Review of the Magistrate Judge's Order entered on September 4, 2003 (Docket Entry No. 34) will be GRANTED; however, upon review of the Order, Plaintiff's request to reverse the Magistrate Judge's rulings will be DENIED; Defendant's Motion to Strike (Docket Entry No. 40) will be DENIED; and Plaintiff's Motion to Stay (Docket Entry No. 43) will be DENIED.An appropriate Order will be entered.