The opinion of the court was delivered by: Anthony J. Battaglia, Magistrate Judge
Order Granting in Part and Denying in Part Defendant's Motion for
Protective Order [Doc. No. 10]
Defendant Unum Life Insurance Company of America moves the Court for a
Protective Order precluding Plaintiff Susan Waggener from conducting any
discovery outside the administrative record in this ERISA case. Waggener
has filed an opposition. Unum Life has filed a reply. This motion is
appropriate for submission on the papers and without oral argument
pursuant to Local Rule 7.1(d)(1). For the reasons set forth herein, Unum's
motion is GRANTED IN PART AND DENIED IN PART.
Waggener was a partner in the real estate department of the Los Angeles
law firm of Gibson, Dunn & Crutcher until October of 1989. In
November 1989, Waggener was diagnosed with chronic fatigue syndrome.
Based upon that diagnosis, Waggener applied for and began receiving
disability benefits under the firm's group disability benefits policy
with Unum Life.
Over the course of the next ten years, Waggener saw more than a dozen
different doctors complaining primarily of debilitating fatigue and
cognitive impairment. Unum Life continued to pay benefits to Waggener.
The administrative record includes records from many of these physicians
including a cardiologist, rheumatologist, psychologist, chiropractor,
endocrinologist, internist, and sleep disorder specialist. The
administrative record also contains information from "independent medical
examiners" and surveillance videotapes of Waggener.
On October 25, 2000, Unum Life notified Waggener that it had reevaluated
her claim and was discontinuing benefits. Unum Life claims that it
discontinued benefits because independent examinations have failed to
substantiate Waggener's claims of impairment, and because her self-reported
limitations lack credibility in light of surveillance it has conducted.
After Unum Life denied Waggener's administrative appeal of its benefits
termination decision, Waggener filed the current case.
To further its argument in this regard, Waggener has propounded
discovery seeking to expand upon the conflict of interest posed as a
result of Unum Life's position as both administrator and insurer. Through
interrogatories, Waggener seeks to discover, among other things, (1) the
identity of each person "who participated in any way in the evaluation or
handling of Plaintiff's claims and/or appeal and who is not a current
employee," (2) for each of those persons who was an independent
contractor "the number of times [Unum has] employed that person to
participate in evaluating or handling a claim . . . [and] the total amount
of compensation paid on each occasion," (3) the identity of "every
attorney who provided claims advice" regarding Waggener, (4) the identity
of "every attorney who provided legal advice" regarding Waggener, (5) the
identity and position of "every person who participated in the decision
to terminate Susan Waggener's benefits," (6) the similar identification
of persons involved in evaluating Waggener's appeal, (7) "all other
lawsuits against UNUM from 1998 to the present where the parties disputed
whether or not the insured was disabled on account of chronic fatigue,
CFS, CFIDS, or cognitive dysfunction," and (8) "all other lawsuits
against UNUM from 1998 to the present where the plaintiff contended you
improperly made use of surveillance or an independent medical
examination." Declaration of Kira Schlesinger, Exhibit B.
Waggener also propounded document requests. Waggener sought the
following types of documents: (1) "[a]ll documents that reflect, refer or
relate to surveillance of plaintiff," (2) "[a]ny other documents that
refer or relate to Plaintiff not contained in your administrative file,
including any email," (3) "[a]ll documents that reflect claim guidelines"
from 1992 to the present that refer or relate in any way to topics such
as CFS, cognitive impairment, mental or psychological illness,
surveillance, self-reported illness, the occupation of "attorney", social
security disability, investigation of job duties, secondary gain,
compromise offers, and independent medical examinations, (4) documents
from January 1998 to the present reflecting "general selection of
physicians for Independent Medical Examinations," (5) documents from
January 1977 regarding the definition of "disability" in the Gibson, Dunn
insurance policy, (6) any communications with Gibson, Dunn, from 1977 to
the present, regarding many of the topics listed in (3) above, (7)
communications with any insurance regulatory authority from January 1992
to the present on the same subjects, (8) documents from January 1992 to
the present that "refer or relate to" twenty different physicians who
examined Waggener, (9) documents from January 1992 to the present
regarding plans to toughen claims practices, (10) documents from January
1992 to the present reflecting discussions to or from shareholders or
prospective acquisition companies regarding the topics listed at (3)
above, (11) documents from 1998 to the present of similar communications
with claims departments serving insureds of the former Provident or Paul
Revere companies, (12) documents from 1998 to the present reflecting
complaints or criticisms made by any current or former employee regarding
unfair claims practices, use of surveillance, self-reported illness,
CFS, use of compromise offers, or independent medical examinations, and
(13) similar documents relating
to complaints made by any court
concerning Unum's claims practices, use of surveillance, self-reported
illness, CFS, use of compromise offers, independent medical
examinations, or definition of the occupation of attorney. Schlesinger
Decl., Exhibit C.
Unum Life did not respond to any of this discovery, but instead brought
the current motion for protective order to bar any discovery in this
case.
Although Unum focuses almost exclusively upon whether the information
sought by Waggener is admissible at the time of summary judgment or trial
in this matter, the question posed by the current motion is not the
admissibility of the information sought. Instead, this Court must
determine whether the information sought in discovery "is relevant to the
claim or defense of any party." Fed.R.Civ.P. 26(b)(1). Waggener argues
that the discovery she propounded is relevant to demonstrate that Unum
Life was not acting as a neutral administrator, but instead was acting
under a conflict of interest. Waggener argues that the conflict of
interest resulting from Unum's position as both administrator and insurer
implicates the adequacy of the administrative record in this case.
Waggener also argues that the information it seeks is relevant to the
credibility and qualifications of Unum's medical examiners.
A plan administrator's alleged conflict of interest is relevant to the
district court's review of an ERISA claim in two ways. First, it is well
established that evidence of an administrator's conflict of interest is
relevant to the determination of what standard of review the district
court should apply when evaluating the propriety of the benefits denial
decision. Regula v. Delta Family-Care Disability survivorship Plan,
266 F.3d 1130, 1145 (9th Cir. 2001). Ordinarily, the district court
reviews de novo the decision of a plan administrator to deny benefits
"unless the benefit plan gives the administrator or fiduciary
discretionary authority to determine eligibility for benefits or to
construe the terms of the plan." Firestone Tire & Rubber Co. v.
Bruch, 489 U.S. 101, 115 (1989). Where the plan confers discretion upon
the administrator, the district court will apply an abuse of discretion
standard unless the administrator is "operating under a conflict of
interest." Regula, 266 F.3d at 1145. Where the plan beneficiary plaintiff
provides "material, probative evidence of a conflict," such evidence
creates a rebuttable presumption that the administrator's decision
denying benefits "was in fact a dereliction of its fiduciary
responsibilities." Id. (citing Lang v. Long-Term Disability Plan,
125 F.3d 794, 798 (9th Cir. 1997)). If the plan fails to produce evidence
to show that the conflict of interest did not, in fact, affect the
decision to terminate benefits, then the district court will review the
decision de novo. Id. (citing Tremain v. Bell Industries, Inc.,
196 F.3d 970, 976 (9th Cir. 1999)). In this case, however, both parties
agree that the de novo standard of review applies. Thus, the evidence
Waggener seeks is not relevant to the standard of review issue.
Nonetheless, an administrator's conflict of interest is also relevant
to the question of what, if any, evidence the district court will
consider outside of the administrative record. Where the district court
is reviewing a plan administrator's decision for abuse of discretion,
such review is strictly limited to the evidence in the record. Taft v.
Equitable Life Assurance Society, 9 F.3d 1469, 1472 (9th Cir. 1993). In
addition, in most cases where the district court is reviewing the plan
administrator's decision de novo,
"additional evidence is not necessary
for adequate review of the benefits decision, [and] the district court
should only look at the evidence that was before the plan administrator
. . . at the time of the determination." Mongeluzo v. Baxter Travenol
Long Term Disability Benefit Plan, 46 F.3d 938, 944 (9th Cir. 1995)
(quoting Quesinberry v. Life Ins. Co. of North America, 987 F.2d 1017,
1025 (4th Cir. 1993)). In order to enable the district court to come to a
fully informed and independent judgment regarding the question of whether
the plaintiff is entitled to benefits, however, the Ninth Circuit has
held that a district court has the discretion to consider evidence
outside the record when conducting a de novo review of a benefits
decision. Mongeluzo, 46 F.3d at 943-44. The district ...