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Brown v. United Healthcare Insurance Co.

United States District Court, S.D. California

September 12, 2014

CHRISTOPHER BROWN, an individual, Plaintiff,
UNITED HEALTHCARE INSURANCE COMPANY, a Corporation; QUALCOMM INCORPORATED, a Corporation; and DOES 1 through 10, inclusive, Defendants.


DAVID H. BARTICK, Magistrate Judge.

On August 25, 2014, Plaintiff Christopher Brown and Defendants United Healthcare Insurance Company ("United") and Qualcomm Inc. ("Qualcomm") filed a Joint Motion Regarding Plaintiff's Request for Limited Discovery Beyond the Administrative Record. (ECF No. 13.) After reviewing the Joint Motion and the applicable law, the Court hereby GRANTS 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. § 1001, et seq. ("ERISA"). Plaintiff alleges that at all relevant times he was insured under the Qualcomm Choice Plus PPO Plan (the "Plan"), group number 704201. (Compl., ¶ 6.) Plaintiff alleges United acted as a third party administrator of the Plan and that it was "involved in the authorization and appeal/review process relative to Plaintiffs [sic] claim at issue herein." (Compl., ¶ 2.) Plaintiff further alleges:

While the subject plan was in effect, Plaintiff's treating neurologist recommended an occipital nerve stimulator implant for the treatment of Plaintiff's occipital neuralgia and chronic head pain which is debilitating to Plaintiff who has exhausted other treatment options without relief. Plaintiff submitted a claim for a one week trial run of nerve stimulation using temporary leads which was approved by the Defendants. The trial run was completely successful and resulted in life changing relief from the severe pain. Thereafter a claim was submitted for approval of a permanent occipital nerve stimulator implant. Although Defendants preliminarily authorized this procedure which was scheduled for July 19, 2012, approximately one week before the scheduled procedure the Defendants notified Plaintiff and his neurologist that the procedure would not be covered.

(Compl., ¶ 7.)

Plaintiff contends Defendants breached their contractual and fiduciary duties under the Plan, in violation of ERISA, "by failing to approve/authorize Plaintiff's covered claim for the implantation of an occipital nerve stimulator." (Compl., ¶ 9.) Plaintiff further alleges that in response to a "second level appeal" to Qualcomm, "he obtained the claim file and learned from the Defendants [sic] own materials in the claim file that the procedure was proven and supported by clinical trials. Plaintiff also learned that the implantation of an occipital nerve stimulator was recognized as an appropriate treatment option by the American Association of Neurological Surgeons." (Compl., ¶ 10.)

Through this action Plaintiff now seeks a judicial determination that he is entitled to coverage of an occipital nerve stimulator implant.

On August 7, 2014, the Court held a Case Management Conference during which Plaintiff's counsel advised the Court that he intended to pursue discovery outside of the administrative record. The Court ordered the parties to file a joint motion concerning this issue, which they did on August 25, 2014.


1. Legal Standard

Under Federal Rule of Civil Procedure 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) ("[I]n general, a district court may review only the administrative record when considering whether the plan administrator abused its discretion."); see also Klein v. Northwestern Mut. Life Ins. Co., 806 F.Supp.2d 1120, 1125 (S.D. Cal. 2011) ("Normally, no discovery is allowed in an action in federal court seeking review of a denial of benefits under an ERISA plan."). 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) (quoting Taft v. Equitable Life Assurance Soc'y, 9 F.3d 1469, 1472 (9th Cir. 1993)).

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; Metro. 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 ...

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