In abuse of discretion cases, evidence outside the administrative record is completely inadmissible. Newman v. Standard Insurance Company, 997 F.Supp. 1276, 1280 (C.D. Cal. 1998). "Permitting a district court to examine evidence outside the administrative record would open the door to the anomalous conclusion that a plan administrator abused its discretion by failing to consider evidence not before it."
Finally, the Court notes that because the evidence Plaintiff seeks to discover pertains to a conflict of interest of a vocational consultant hired by Defendant, permitting discovery requests such as this one would increase both the time and expense involved in reviewing ERISA benefits decisions. See Newman v. Standard Ins. Co., 997 F. Supp. 1276, 1280-81 (C.D.Cal. 1998) (discussing practical problems with opening up discovery to permit plaintiffs to explore motivations of, for example, "claims reviewers, consulting physicians, and corporate officers of plan administrators"); Palmer v. University Med. Group, 973 F. Supp. 1179, 1188 (D.Or. 1997) (opining that permitting broad discovery into conflict of interest issue would "exponentially increase both the complexity and the cost of ERISA litigation"). The Court notes further that it is a fact of litigation that parties routinely hire consultants and experts whose independence can be seriously questioned, and judges are not oblivious to the influence wielded by companies who can afford to provide large amounts of business to consultants who render opinions in their favor.
If the plan does not meet its burden, courts review the decision to deny benefits de novo.Friedrich, 181 F.3d at 1109 (citing Atwood, 45 F.3d at 1323); see also Newman v. Standard Ins. Co., 997 F. Supp. 1276, 1279 (C.D.Cal. 1998). "Only if the administrator does meet its burden is it entitled to the deferential abuse of discretion standard of review."
In such cases, courts have not granted discovery. See e.g. Shemano-Krupp v. Mut. of Omaha Ins. Co., 2006 U.S. Dist. LEXIS 84352, *29-31 (N.D. Cal. Nov. 20, 2006) (denying discovery where there was no evidence of a conflict of interest beyond the "apparent conflict which exists when the insurer both funds and administers the plan"); Baldoni v. Unumprovident, Ill. Tool Works, Inc., 2007 U.S. Dist. LEXIS 14127, *15 (D. Or. Feb. 26, 2007) (denying discovery when an insurer both administers and funds the plan unless the plaintiff makes "a threshold showing"); Newman v. Standard Ins. Co., 997 F. Supp. 1276, 1280-81 (C.D. Cal. 1998) (denying discovery when an insurer both administers and funds the plan because of "immense practical problems associated with this position," including expensive litigation which "flies in the face of the purpose of ERISA"). B. Applicable Standard of Review — Abuse of Discretion
The court recognizes that some courts have refused to grant any discovery requests in ERISA actions. In Newman v. Standard Insurance Co., 997 F.Supp. 1276 (C.D.Cal. 1998), the Central District of California held that there is no entitlement to discovery on the plan's possible conflict of interest because such discovery might be so extensive that it would undermine one of the primary goals of ERISA — to resolve disputeS over benefits inexpensively and expeditiously. Id. at 1280-81.
That is true regardless of whether in the particular case the standard of review is de novo or abuse of discretion. Id. Because review is primarily limited to the administrative record, and because, "`[a] primary goal of ERISA was to provide a method for workers and beneficiaries to resolve disputes over benefits inexpensively and expeditiously,'" permitting discovery is rarely appropriate in cases such as this. Newman v. Standard Insurance Co., 997 F.Supp. 1276, 1281 (C.D. Cal. 1998). Here, the primary thrust of Fisher's motion is her contention that there are "anomalies" in the administrative record that she should be allowed to explore through ordinary discovery mechanisms.
Indeed, as Plaintiff argues, the consequence of interpreting Tremain to endow a beneficiary with the ability to present evidence of conflict of interest, without allowing that beneficiary to conduct discovery on those issues would amount to granting the beneficiary a right without an effective remedy. Defendants correctly cite Newman v. Standard Insurance Co., 997 F.Supp. 1276, 1280-81 (C.D.Cal. 1998) in support of their position with regard to discovery. Id. (holding that there is no entitlement to discovery on the apparent conflict between an insurance company's role as administrator and funding source of a benefits plan because such discovery might be so extensive that it would undermine one of the primary goals of ERISA — to resolve disputes over benefits inexpensively and expeditiously). Nevertheless, the only effective way for an ERISA plaintiff to enforce the right to present evidence of conflict of interest is to preserve his or her ability to discover such evidence.
In the context of ERISA litigation, for example, judicial review of an administrator's decision to grant or deny benefits is usually restricted to the administrative record. Newman v. Standard Ins. Co., 997 F.Supp. 1276, 1280-81 (C.D. Cal. 1998); andTaft v. Equitable Life Assur. Soc., 9 F.3d 1469, 1471 (9th Cir. 1993)) In sum, it appears the general principles of administrative law suggest that judicial review should limited to the administrative record.
In the context of ERISA litigation, for example, judicial review of an administrator's decision to grant or deny benefits is usually restricted to the administrative record. Newman v. Standard Ins. Co., 997 F. Supp. 1276, 1280-81 (C.D. Cal. 1998); and Taft v. Equitable Life Assur. Soc., 9 F.3d 1469, 1471 (9th Cir. 1993)) In sum, it appears the general principles of administrative law suggest that judicial review should limited to the administrative record.
To allow discovery in every ERISA case involving an administrator who is also the funding source "would involve far-reaching, open-ended, nearly limitless discovery." Newman v. Standard Ins. Co.. 997 F. Supp. 1276,1280 (C.D. Cal. 1998). The tremendous expenses thereby incurred would frustrate the prompt and affordable resolution of benefit claims. Plaintiff cites several Ninth Circuit cases for the proposition that the court is not limited to the administrative record when determining whether an actual conflict of interest has tainted the benefit decision.