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."
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.
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.
If such a conflict of interest appears to be present, the court still reviews the decision for abuse of discretion — assuming the Plan contains the requisite language conferring discretion upon the plan administrator — but the court's review is a little more searching (depending upon the severity of the conflict) and the court is not as quick to defer to the administrator's discretion.Id; see also Spangler v. Unum Life Ins. Co., 38 F. Supp.2d 952, 955-56 (N.D. Okla. 1999) (denying discovery on conflict of interest relevant to what standard of review applies); Newman v. Standard Ins. Co., 997 F. Supp. 1276, 1280-81 (C.D. Cal. 1998) (same). The approach of the court in Palmer may make sense where the district court is reviewing the record for abuse of discretion, where evidence outside the record simply may not be considered.
In Newman v. Standard Insurance Co., the plaintiff requested the court to allow discovery beyond the administrative record regarding a potential conflict in defendant's decision to deny plaintiff benefits. Newman v. Standard Insurance Co., 997 F.Supp. 1276, 1280 (C.D. Cal. 1998). The court refused because of practical and policy considerations in ERISA cases.