Doe v. PriceWaterHouseCoopers Health and Welfare Benefit Plan et al

Filing 37

ORDER REGARDING MOTION FOR LEAVE TO CONDUCT DISCOVERY. Signed by Judge Jeffrey S. White on 3/14/14. (jjoS, COURT STAFF) (Filed on 3/14/2014)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA
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JOHN DOE,
Plaintiff,

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For the Northern District of California

United States District Court

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No. C 13-02710 JSW

v.
PRICEWATERHOUSECOOPERS HEALTH
AND WELFARE BENEFIT PLAN; LIFE
INSURANCE COMPANY OF NORTH
AMERICA, et al.,

ORDER REGARDING MOTION
FOR LEAVE TO CONDUCT
DISCOVERY

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Defendants.
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Now before the Court is the motion filed by Plaintiff John Doe (“Plaintiff”) for leave to

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conduct discovery. This matter is now fully briefed and ripe for decision. The Court finds that

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this matter is appropriate for disposition without oral argument and the matter is deemed

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submitted. See N.D. Civ. L.R. 7-1(b). Accordingly, the hearing set for March 21, 2014 is

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VACATED. Having considered the parties’ arguments, relevant legal authority, and having had

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the benefit of oral argument, the Court grants in part and denies in part Plaintiff’s motion for

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leave to conduct discovery.1
Plaintiff brings this motion to conduct discovery regarding defendant Life Insurance

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Company of North America’s (“LINA”) conflict of interest. Plaintiff argues that there was an

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apparent conflict of interest because LINA acted as both the funding source and the

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administrator of the ERISA plan. See Metropolitan Life Ins. Co. v. Glenn, 554 U.S. 105, 111

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The Court sustains Defendants’ objections to exhibits 5 and 6 to the Declaration of
Laurence D. Padway based on his lack of personal knowledge. The Court overrules to
remainder of Defendants’ objections.
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under a conflict of interest, that conflict must be weighed as a factor in determining whether

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there is an abuse of discretion.”) (emphasis in original, internal quotations omitted); see also

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Abatie v. Alta Health & Life Ins. Co., 458 F.3d 955, 965 (9th Cir. 2006) (“an insurer that

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acts both as the plan administrator and the funding source for the plan operates under what may

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be termed a structural conflict of interest”). Under Glenn and Abatie, a court must consider a

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conflict of interest as a factor to be weighed in abuse of discretion review. Glenn, 554 U.S. at

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115-119; Abatie, 458 F.3d at 970. In determining how much weight to give a conflict of

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interest under the abuse of discretion standard, courts may consider evidence outside the

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administrative record. Abatie, 458 F.3d at 970 (“The district court may, in its discretion,

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For the Northern District of California

(2008) (“If a benefit plan gives discretion to an administrator or fiduciary who is operating

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United States District Court

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consider evidence outside the administrative record to decide the nature, extent, and effect on

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the decision-making process of any conflict of interest; the decision on the merits, though, must

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rest on the administrative record once the conflict (if any) has been established by extrinsic

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evidence or otherwise.”); see also Welch v. Metropolitan Life Ins. Co., 480 F.3d 942, 949-50

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(9th Cir. 2007).

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in order to show a conflict of interest. In reviewing the district court’s determination of

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attorney’s fees, the Ninth Circuit stated that, “[b]ecause an ERISA plaintiff may be permitted to

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supplement the administrative record with evidence of a conflict of interest on the part of the

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defendants, ... some discovery aimed at demonstrating a conflict of interest may have been

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appropriate.” Id. at 949-50 (emphasis in original); see also Gullidge v. Hartford Life &

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Accident Ins. Co., 501 F. Supp. 2d 1280, 1283 (C.D. Cal. 2007) (citing Welch for the

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proposition that conducting discovery regarding whether a conflict of interest existed is

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appropriate).

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In Welch, the court implicitly held that a plaintiff may conduct discovery

LINA does not dispute that a structural conflict exists. Based on this structural conflict

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of interest, the Court finds that discovery into the scope of the conflict, as well as discovery

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regarding the nature, extent, and effect of the conflict on the decision making process is

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appropriate. Nevertheless, the Court reminds Plaintiff that “such discovery must be narrowly

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tailored and cannot be a fishing expedition.” Groom v. Standard Ins. Co., 492 F. Supp. 2d

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1202, 1205 (C.D. Cal. 2007).

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Plaintiff does make clear precisely what discovery he seeks regarding the conflict of

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interest, including information on Dr. Marcus J. Goldman and MERS. To the extent the parties

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are unable to resolve disputes regarding specific discovery requests, pursuant to Civil Local

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Rule 72-1, the Court HEREBY REFERS this matter to a randomly assigned magistrate judge

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for resolution of such discovery disputes and for resolution of all discovery matters.

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Plaintiff also seeks documents to ensure that the record is complete. Pursuant to 29
U.S.C. § 1133, Plaintiff is entitled to a “full and fair review” of LINA’s denial of his disability
claim. Providing a “full and fair review” requires that claimants be given access to all

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For the Northern District of California

United States District Court

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“information relevant to the claimant’s claim for benefits.” See 29 C.F.R. § 2650.503-

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1(h)(2)(iii). The regulations define “relevant” to mean all documents, records, or other

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information that:

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(i) Was relied upon in making the benefit determination;
(ii) Was submitted, considered, or generated in the course of making the benefit
determination, without regard to whether such document, record, or other
information was relied upon in making the benefit determination;
(iii) Demonstrates compliance with the administrative processes and safeguards
required pursuant to paragraph (b)(5) of this section in making the benefit
determination; or
(iv) In the case of a group health plan or a plan providing disability benefits,
constitutes a statement of policy or guidance with respect to the plan concerning
the denied treatment option or benefit for the claimant’s diagnosis, without
regard to whether such advice or statement was relied upon in making the benefit
determination.
29 C.F.R. § 2650.503-1(m)(8).
LINA argues that it has provided the complete insurance policy, including all

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endorsements and the application. However, the application is an unsigned, undated document.

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To the extent LINA has not already done so, LINA shall produce a complete policy. Plaintiff

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also seeks discovery on the policy holder and the “trust document,” but has not shown that he

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has an entitlement to discover this information based on the limited discovery that is allowed in

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ERISA actions. Nor can Plaintiff propound discovery “to establish the manner by which

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discretion was retained.” The plan documents will determine whether LINA retained discretion

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and what standard of review should be applied.

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Plaintiff also seeks to discover LINA’s internal claims policies and procedures. The

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Court finds that LINA should produce the portions of its policies and procedures, or other

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internal documents, to the extent such documents were (1) relied upon in making the benefit

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determination; (2) were submitted, considered, or generated in the course of making the benefit

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determination, without regard to whether such document, record, or other information was

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relied upon in making the benefit determination; or (3) constitute a statement of policy or

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guidance with respect to the plan concerning the denied treatment option or benefit for the
claimant’s diagnosis, without regard to whether such advice or statement was relied upon in

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For the Northern District of California

United States District Court

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making the benefit determination. To the extent LINA is concerned with the disclosure of such

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documents to its competitors, LINA may submit these documents pursuant to a protective order

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and may file them pursuant to a request to keep such documents under seal in accordance with

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Northern District Local Civil Rule 79-5. If the parties are unable to agree on a protective order,

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the parties may raise their dispute with the magistrate judge assigned to resolve discovery

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disputes. If LINA does not have any internal documents which fall under any of these

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categories, LINA shall file a declaration under penalty of perjury attesting to this fact.

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However, the Court notes that Plaintiff’s motion appears to be overreaching. He seeks

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discovery on “whether or not [LINA] has the procedures required,” on “changes in . . .

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procedures designed to improve them,” and “of the monitoring of . . . procedures to determine

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whether or not they have actually resulted in improved claims handling.” It is not clear what

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Plaintiff is requesting. However, to the extent LINA has internal documents that do not fall

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under the three categories enumerated above, Plaintiff is not entitled to discovery on such

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documents.

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The Court therefore grants in part and denies in part Plaintiff’s motion for leave to

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conduct discovery. As stated above, to the extent the parties cannot resolve specific discovery

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disputes on the topics the Court has determined discovery is permissible, the parties shall

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address such disputes with the assigned magistrate judge.

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IT IS SO ORDERED.

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Dated: March 14, 2014
JEFFREY S. WHITE
UNITED STATES DISTRICT JUDGE

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cc:

Magistrate Referral Clerk

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For the Northern District of California

United States District Court

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