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Cerone v. Reliance Standard Life Insurance Co.

United States District Court, Ninth Circuit

December 13, 2013

DEBRA CERONE, Plaintiff,


DAVID H. BARTICK, Magistrate Judge.

On November 26, 2013, the parties filed a Joint Motion for Determination of Discovery Dispute. (ECF No. 24.) After reviewing the Joint Motion, the Court hereby GRANTS in part, and DENIES in part, Plaintiff's request to compel, as outlined below.


Plaintiff brings this action under the Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C. ยง 1001, et seq. ("ERISA"). Plaintiff's husband, Donald Cerone, was insured under an employer sponsored plan issued by Defendant Reliance Standard Life Insurance Company. On August 8, 2011, Mr. Cerone was fatally injured in a single vehicle accident after he left the Pala Casino, where he was observed drinking three martinis. Plaintiff made a claim for benefits under the policy. Defendant paid $250, 000 in basic death benefits, but denied accidental death benefits. The denial was based on the following exclusion in the policy:

"A benefit will not be payable for a loss:... (6) to which the insured's acute or chronic alcohol intoxication is a contributing factor; or (7) to which the insured's voluntary consumption of an illegal or controlled substance or non prescribed narcotic or drug is a contributing factor."

Plaintiff now seeks a judicial determination that she is entitled to accidental death benefits under the plan.

On September 12, 2013, Plaintiff propounded interrogatories and requests for production on Defendant. (ECF No. 24-1 at 1.) Defendant responded to the discovery requests on October 11, 2013, and objected to several of Plaintiff's requests. ( Id. ) After meeting and conferring regarding the disputed requests, the parties reached an impasse, and filed the instant Joint Motion for Determination of Discovery Dispute. Plaintiff seeks to compel further responses to Interrogatories Numbers 14 through 19, and Request For Production Number 7. Plaintiff argues the requested discovery is necessary to assess Defendant's conflict of interest. Defendant counters the requests exceed the permissible scope of ERISA discovery and are unduly burdensome and oppressive.


1. Legal Standard

Under Rule 26(b)(1), parties may obtain discovery of "any non privileged matter that is relevant to any party's claim or defense." Fed.R.Civ.P. 26(b)(1). "Relevant information need not be admissible at the trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence." Id. However, the Court must limit discovery if it determines that "the burden or expense of the proposed discovery outweighs its likely benefit, considering the needs of the case, the amount in controversy, the parties' resources, the importance of the issues at stake in the action, and the importance of the discovery in resolving the issues." Fed.R.Civ.P. 26(b)(2)(C)(iii). "The party who resists discovery has the burden to show discovery should not be allowed, and has the burden of clarifying, explaining, and supporting its objections." Duran v. Cisco Sys., Inc., 258 F.R.D. 375, 378 (C.D. Cal. 2009) (citing Blankenship v. Hearst Corp., 519 F.2d 418, 429 (9th Cir. 1975); Sullivan v. Prudential Ins. Co. of Am., 233 F.R.D. 573, 575 (C.D. Cal. 2005)).

Generally, discovery is disfavored in ERISA actions. Abatie v. Alta Health & Life Ins. Co., 458 F.3d 955, 970 (9th Cir. 2006) ("[A] district court may review only the administrative record when considering whether the plan administrator abused its discretion."). This is because a primary goal of ERISA is "to provide a method for workers and beneficiaries to resolve disputes over benefits inexpensively and expeditiously." Boyd v. Bert Bell/Pete Rozelle NFL Players Ret. Plan, 410 F.3d 1173, 1178 (9th Cir. 2005). However, if there is a structural conflict of interest, the court may consider evidence outside the record to determine if the plan administrator's denial was affected by the conflict. Abatie, 458 F.3d at 970; Metropolitan Life Ins. Co. v. Glenn, 554 U.S. 105, 112 (2008) (holding that when a plan administrator is operating under a structural conflict of interest, that conflict must be weighed as a factor in determining whether there was an abuse of discretion). A structural conflict of interest occurs when the insurer acts as "both the plan administrator and the funding source for benefits." Abatie, 458 F.3d at 965.

When ERISA discovery is allowed, it "should generally be limited to information relevant to the nature, extent, and effect on the decision-making process of any conflict of interest that may appear in the record.'" Duran, 258 F.R.D. at 380 (quoting Abatie, 458 F.3d at 965) (citing Welch v. Metro. Life Ins. Co., 480 F.3d 942, 949-50 (9th Cir. 2007) ("Because an ERISA plaintiff may be permitted to supplement the administrative record with evidence of a conflict of interest on the part of the defendant, [], we agree with [plaintiff] that some discovery aimed at demonstrating a conflict of interest may have been appropriate."). However, broad fishing expeditions are not allowed. See Groom v. Standard Ins. Co., 492 F.Supp.2d 1202, 1205 (C.D. Cal. 2007); Klund v. Hight Tech. Solutions, Inc., 417 F.Supp.2d 1155, 1159 (S.D. Cal. 2005) (noting that "discovery cannot be as broad and overreaching in ERISA cases as in other types of litigation"). Whether to permit discovery is up to the discretion of the district court. Burke v. Ptiney Bowes Long-Term Disability Plan, 544 F.3d 1016, 1028 n.15 (9th Cir. 2008).

2. Interrogatories Numbers 14 Through 19

The parties agree there is a structural conflict of interest here because Defendant both funded the plan and was the claims administrator for the plan. (ECF No. 24 at 3.) Abatie, 458 F.3d at 965. Plaintiff argues Interrogatories ...

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