Schrock v. Aetna Life Insurance Company
Filing
38
MEMORANDUM Opinion and Order Signed by the Honorable Mary M. Rowland on 7/12/2016. Mailed notice. (dm, )
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
THOMAS SCHROCK,
Plaintiff,
v.
AETNA LIFE INSURANCE
COMPANY,
No. 15 C 10582
Magistrate Judge Mary M. Rowland
Defendant.
MEMORANDUM OPINION AND ORDER
This matter is before the Court on Plaintiff Thomas Schrock’s Motion to Compel
Discovery. (Dkt. 28). Schrock filed this lawsuit against Defendant Aetna Life
Insurance Company seeking the reinstatement and payment of long-term disability
benefits pursuant to the Employee Retirement Income Security Act of 1974, 29
U.S.C. § 1001, et seq. (ERISA). Plaintiff’s motion to compel was granted in part in
open court on May 10, 2016. (Dkt. 32). The only remaining issue is whether Plaintiff
is entitled to discovery related to Aetna’s alleged structural conflict of interest as
both the plan administrator and payor of benefits. For the foregoing reasons, the
remainder of Plaintiff’s Motion to Compel Discovery is denied.
I. Background
Plaintiff Thomas Schrock brings this action seeking long term disability (LTD)
pursuant to his former employer URS Corporation’s benefit plan. Defendant Aetna
Life Insurance Company, who insures the plan, contends that Schrock is not
entitled to any benefits under the terms of the URS Corporation Welfare Benefits
Plan.
Schrock was initially awarded short term disability and LTD for the first 24
months of the LTD plan. (Dkt. 29 ¶ 7). On February 18, 2015, Aetna terminated
benefits because it determined Schrock had sedentary physical functional capacity,
and was capable of working in alternative occupations. (Id. ¶ 8). The decision was
based, in part, on a February 5, 2015 report by Nancy Robinson, a vocational
consultant and employee of an Aetna subsidiary. (Id. ¶ 10). In generating her
report, Robinson was instructed to use $16.46 per hour as the reasonable wage set
for Schrock. This amount was calculated as 70% of his pre-disability earnings.
Robinson listed four occupations that satisfied all aspects of Schrock’s transferable
skills and functional abilities and identified the United States Bureau of Labor
Statistics (BLS) mean wage for each of those occupations (Geodetic Computator,
Call Out Operator, Street Dispatcher, and Surveillance System Monitor). She also
identified the salary.com wages in the 10-25 percentiles for three of the occupations
(Call Out Operator, Street Dispatcher, and Surveillance System Monitor). (Id. ¶ 11;
Dkt. 1-4). No salary.com wage was calculated for Geodetic Computator. (Dkt. 1-4 at
4-5). Robinson concluded that “4 occupations . . . are within the reasonable wage
information per the BLS mean wage; however, the 4 occupations identified did not
meet the reasonable wage as researched via salary.com, which would be the most
appropriate wage to use.” (Dkt. 29 ¶ 15; Dkt. 1-4 at 5). Significant to Plaintiff’s
claim is that Robinson noted that due to a lack of training in these alternative
Schrock v. Aetna Life Insurance Co., No. 15 C 10582
2
occupations, Plaintiff could not earn the average wage for the three occupations she
identified using the salary.com figures. Rather, she stated that the 10-25 percentiles
of the salary.com wage data would be “most appropriate.” (Dkt. 1-4 at 5). On
February 18, 2015, the claims examiner terminated Plaintiff’s benefits finding that
Schrock could meet the wage requirement in any of the four occupations based on
Robinson’s opinion. (Id. ¶ 16).
On August 17, 2015, Plaintiff filed an appeal asserting that: (1) the claims
handler incorrectly computed Plaintiff’s wage at 70%, rather than 80%, of predisability earnings; (2) the claims handler erred in using the BLS mean wage
statistics rather than the salary.com wage statistics, which the vocational
consultant opined were more appropriate; and (3) the vocational consultant erred in
assuming Mr. Schrock had attended some college, and therefore erroneously
concluded he could work as a Geodetic Computator. (Dkt. 1-5).
On appeal, Aetna affirmed the decision to terminate benefits. (Dkt. 29-4). Aetna
noted Plaintiff completed a work history and education questionnaire on October
29, 2012 indicating that he attained one year of college education. (Dkt. 29-4 at 3).
With respect to the other concerns in the vocational report, the appeals specialist
noted that Plaintiff was correct that the reasonable wage should have been
calculated at 80% of Plaintiff’s pre-disability earnings. Plaintiff’s reasonable wage
was recalculated at $19.41 per hour, and Robinson’s Transferable Skills Analysis
(TSA) report was sent back to the Vocational Rehabilitation department. (Dkt. 29-4
at 3). An addendum review was completed by Tamara Starbuck, a vocational
Schrock v. Aetna Life Insurance Co., No. 15 C 10582
3
reviewer and Aetna employee, using the recalculated reasonable wage. (Id.). The
TSA Addendum calculated whether each of the four occupations identified by Ms.
Robinson would qualify using the recalculated reasonable wage. For each
occupation, Starbuck provided both the BLS mean wage, and the salary.com wage.
Starbuck used the 10-25 percentile range Robinson had used for three of the
occupations. Starbuck also included the salary.com mean wage for “Geodetic
Computator,” even though no salary.com figure was specified in Robinson’s report.
The report concluded that one occupation, Geodetic Computator, met the required
reasonable wage for Mr. Schrock ($19.41/hour) under both the salary.com mean
wage ($22.00/hour) and BLS mean wage ($23.90/hour). (Dkt. 29-5).
II. Discussion
Plaintiff asserts Aetna has a structural conflict of interest because it is both
responsible for paying benefits under the plan and determining benefits. Relying on
Metropolitan Life Ins. Co. v. Glenn, 554 U.S. 105 (2008), Schrock argues that
plaintiffs in LTD cases are permitted to explore whether the insurer’s structural
conflict of interest influenced its decision-making process.
It is well-established that in ERISA cases discovery is generally not permitted
and judicial review is limited to the administrative record. Krolnik v. Prudential
Ins. Co. of America, 570 F.3d 841, 843 (7th Cir. 2009); Weddington v. Aetna Life Ins.
Co., No. 15 C 1268, 2015 WL 6407764, at *2 (N.D. Ill. Oct. 21, 2015) (“In instances
where the plan at issue gives the plan administrator broad discretion to decide
eligibility for benefits, judicial review is governed by the arbitrary and capricious
Schrock v. Aetna Life Insurance Co., No. 15 C 10582
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standard, based on a consideration of the administrative record, and discovery
generally is not permitted.”). In Semien v. Life Ins. Co. of North America, the
Seventh Circuit explained that discovery beyond the claim file is limited to
“exceptional cases.” 436 F.3d 805, 815 (7th Cir. 2006). “First, a claimant must
identify a specific conflict of interest or instance of misconduct. Second, a claimant
must make a prima facie showing that there is good cause to believe limited
discovery will reveal a procedural defect in the plan administrator’s determination.”
Id. at 815. This standard for obtaining discovery sets “a high bar for individuals
whose claims have been denied by a plan administrator with discretionary
authority.” Id.
After Semien, the Supreme Court found that when a plan administrator acts as
both the administrator and the payor of benefits, there is a structural conflict of
interest. Glenn, 554 U.S. at 114. However, in affirming that the arbitrary and
capricious standard applies, the Court found that the presence of a conflict was “but
one factor among many” that a reviewing judge must take into account when
reviewing the decision of a plan administrator. Id. at 116. The conflict of interest
could prove to be of greater importance “where circumstances suggest a higher
likelihood that it affected the benefits decision, including, but not limited to, cases
where an insurance company administrator has a history of biased claims
administration.” Id. at 117. The conflict of interest could “prove less important
(perhaps to the vanishing point) where the administrator has taken active steps to
reduce potential bias and to promote accuracy, for example, by walling off claims
Schrock v. Aetna Life Insurance Co., No. 15 C 10582
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administrators from those interested in firm finances, or by imposing management
checks that penalize inaccurate decisionmaking irrespective of whom the inaccuracy
benefits.” Id.
In Dennison v. MONY Life Retirement Income Sec. Plan for Employees, the
Seventh Circuit noted that although “Glenn is not about discovery . . . it implies a
role for discovery in judicial review of benefits determinations when a conflict of
interest is alleged.” 710 F.3d 741, 747 (7th Cir. 2013). Dennison noted that some
cases following Glenn have inferred a “softening” of the Semien standard, see, e.g.,
Fischer v. Liberty Life Assur. Co. of Boston, 576 F.3d 369, 375 (7th Cir. 2009) (“The
correct standard of review to be applied therefore remains the arbitrary and
capricious standard, but one of the factors that must be taken into account in
applying that standard is any conflict of interest.”); Marrs v. Motorola, Inc., 577
F.3d 783, 789 (7th Cir. 2009) (“The likelihood that the conflict of interest influenced
the decision is . . . the decisive consideration . . . in the plan administrator’s
handling of the claim in issue.”) (emphasis in original). However, Dennison is
unequivocal that the two-part test set out in Semien remains, and moreover, “there
can be no doubt that even when some discovery is necessary in a particular case to
explore a conflict of interest, trial courts retain broad discretion to limit and manage
discovery under Rule 26 of the civil rules.” Id.
Following Dennison, cases in this Circuit have differentiated between “‘run-ofthe-mill’ cases for which no conflict-related discovery is permitted, or ‘exceptional’
cases ([. . .]
cases raising a suspicion of bias or misconduct) for which limited
Schrock v. Aetna Life Insurance Co., No. 15 C 10582
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discovery may be permitted.” Weddington, 2015 WL 6407764, at *3. Cases that have
allowed discovery have found evidence of a history of bias. For instance, in allowing
discovery the Warner court considered the defendant’s “disregard of [plaintiff’s]
physical therapist’s functional capacity evaluation . . . ; its reliance on file reviews
by consulting physicians instead of in-person examinations; [ ] alleged historical
hostility toward fibromyalgia claims; and its history of biased claims administration
that sparked an investigation of its claims practices by the United States
Department of Labor (‘DOL’) and dozens of state regulatory authorities, and
culminated with [defendant] paying a multi-million dollar fine and hundreds of
millions of dollars to past claimants.” Warner v. Unum Life Ins. Co. of Am., 2013
WL 3874060, at *3 (N.D. Ill. July 26, 2013). Relying on Glenn, the court found this
“documented history of biased claims administration . . . suggests this may not be a
‘run-of-the-mill case.’” Id. at *4 (internal quotation omitted).
However, in Weddington, the court denied discovery, noting that the plaintiff
failed to allege enough evidence to demonstrate that this was more than a “run-ofthe-mill” case. Weddington, 2015 WL 6407764, at *3. The plaintiff asserted that the
administrator wrongly assessed the medical evidence. The court noted that the
plaintiff “naturally is unhappy about the disposition she received, but her assertion
that Aetna ignored certain documents and/or gave insufficient weight to the
opinions of her treating physicians merely places this case squarely within the
category of the ‘typical’ benefits challenge case (the ‘run-of-the-mill’ case) for which
additional discovery is not allowed.” Id. at *4. See also Gebert v. Thrivent Fin. for
Schrock v. Aetna Life Insurance Co., No. 15 C 10582
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Lutherans Grp. Disability Income Ins. Plan, No. 13-C-170, 2013 WL 6858531, at *23 (E.D. Wis. Dec. 30, 2013) (where the plaintiff alleged that the defendant plan
administrator improperly relied on the opinion of an independent medical
consultant, the court found she was unable to make a prima facie showing that
would entitle her to limited discovery because the record contained no evidence of a
history of government fines or historical bias or other factors indicating that
something untoward had happened; rather, her claim was a run-of-the-mill
situation).
Here, Plaintiff seeks information on whether Aetna followed its own procedures
and protocols with respect to using vocational opinions to review claims, and
whether there are conflict procedures in place. Plaintiff relies heavily on cases that
predate Dennison and argues that he meets his burden by alleging Aetna’s
structural conflict of interest satisfies the prima facie showing for limited discovery.
(Dkt. 29 at 15). Yet Dennison explicitly reaffirmed the two-step holding in Semien
and cases in this district following Dennison have rejected this argument: “We read
Dennison as saying that a claimant [ ] cannot obtain discovery merely by pointing to
a structural conflict, as that approach would open the door too broadly.”
Weddington, 2015 WL 6407764, at *3. In his reply, Plaintiff clarifies that the
specific instance of misconduct is “that Aetna disregarded the first vocational report
by Nancy Robinson (Dkt. 1, Ex. 3)—which supported continuation of benefits—in
order to elicit a new vocational report that would support termination (Vocational
Review of Tamara Starbuck, Dkt. 29, Ex. D). This is an instance of a claims
Schrock v. Aetna Life Insurance Co., No. 15 C 10582
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administrator shopping for a report that will support a termination of benefits.”
(Dkt. 35 at 6). But allegations that Aetna gave insufficient weight to Robinson’s
report makes this a “run-of-the-mill” case for which additional discovery is not
allowed.
Moreover, Aetna did not disregard Robinson’s report and “elicit a new vocational
report.” (Dkt. 35 at 6). Rather, a TSA addendum was commissioned in response to
Plaintiff’s appeal which asserted that Robinson’s report incorrectly calculates
Schrock’s reasonable wage at 70% of his pre-disability earnings, rather than 80%.
The Vocational Rehabilitation department recalculated whether any occupations
exist using the 80% of pre-disability earnings figure. Based on the TSA Addendum,
the appeal specialist concluded that there was one occupation, Geodetic
Computator, that met the reasonable wage under both scales.
Additionally, Plaintiff asserts that the “lack of any salary.com data for [Geodetic
Computator] in two separate [vocational] reviewers’ opinions suggests that there
are no such jobs within a reasonable geographical area.” (Dkt. 29 ¶ 23). This is
incorrect. Starbucks’s report included the salary.com mean wage for Geodetic
Computator. (Dkt. 29-5 at 4). Using both the BLS and salary.com scales, Starbucks
found that both mean wages were above Schrock’s reasonable wage. Based on this,
Aetna affirmed the original finding, noting that one occupation, Geodetic
Computerator, existed that satisfied both the BLS mean wage and salary.com mean
Schrock v. Aetna Life Insurance Co., No. 15 C 10582
9
wage. 1 Plaintiff’s contention that the claims examiner ignored the salary.com
statistics in Robinson’s report is belied by the fact that salary.com statistics were
relied on in appeal. But even if the claims examiner chose to use the BLS mean
wage, and ignore the salary.com wage, there is no evidence that this presents an
“instance of misconduct” to open the door to discovery. Dennison, 710 F.3d at 746
(“[W]e do not think that benefits review officers should be subjected to extensive
discovery on a thinly based suspicion that their decision was tainted by a conflict of
interest.”).
Plaintiff also argues that the claims examiner failed to reconcile her decision
with the Social Security Administration (SSA) decision, which determined Plaintiff
was disabled. (Dkt. 29 ¶ 17). A finding by the SSA does not mean that Plaintiff is
entitled to benefits under a welfare disability plan pursuant to ERISA. Williams v.
Aetna Life Ins. Co., 509 F.3d 317, 326 (7th Cir. 2007); Krolnik, 570 F.3d at 844 (“a
finding of disability under the Social Security program need not imply disability for
any other purpose”); Weddington, 2015 WL 6407764, at *5 (relying on Krolnik, the
court stated “we observe that Ms. Weddington’s receipt of Social Security disability
benefits is not relevant to her request for additional discovery”). Similarly, the
Court finds that Plaintiff’s receipt of Social Security disability benefits is not
relevant to her request for additional discovery in this ERISA action.
Robinson’s report did not identify the salary.com mean wage for Geodetic Computator,
or indicate whether a percentile of the mean wage would be an appropriate figure to use.
(Dkt. 1-4 at 4-5).
1
Schrock v. Aetna Life Insurance Co., No. 15 C 10582
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Lastly, Plaintiff argues that neither vocational consultant provided a labor
market survey. (Dkt. 29 ¶ 23). Plaintiff asserts that “[t]he only way to ascertain
whether the occupation exists in significant numbers in the market and what the
appropriate wage data would be is to conduct a labor market survey.” (Dkt. 35 at 8).
Plaintiff cites no authority for this proposition. The vocational consultant used the
Dictionary of Occupational Titles. Id. There is no indication in the record that a
market labor survey is required, or that a failure to conduct one presents evidence
of a conflict of interest under the standard.
III. Conclusion
Plaintiff has failed to show the existence of a specific conflict of interest or
instance of misconduct. The Court will not discuss Semien’s second prong—whether
the plaintiff is able to make a prima facie showing that there is good cause to
believe that the limited discovery would reveal a procedural defect. Plaintiff’s
Motion to Compel Discovery [28] is denied.
E N T E R:
Dated: July 12, 2016
MARY M. ROWLAND
United States Magistrate Judge
Schrock v. Aetna Life Insurance Co., No. 15 C 10582
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