Baty v. Metropolitan Life Insurance Company

Filing 23

MEMORANDUM AND ORDER granting 21 Plaintiff's Memorandum of Law Regarding Discovery. See Memorandum and Order for details. Signed by Magistrate Judge Gwynne E. Birzer on 10/10/17. (sj)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS

KAREN A. BATY,
Plaintiff,
v.
METROPOLITAN LIFE
INSURANCE COMPANY,
Defendant.

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Case No. 17-1200-EFM-GEB

MEMORANDUM AND ORDER
This matter comes before the Court on Plaintiff’s request to engage in discovery
outside the administrative record (“Memorandum of Law Regarding Discovery,” ECF
No. 21) and Defendant’s Memorandum concerning the same topic (ECF No. 20). Having
reviewed the parties’ briefing, and portions of the administrative record (ECF Nos. 13-19,
sealed), the Court is now prepared to rule. For the reasons set forth below, Plaintiff’s
request (ECF No. 21) is GRANTED.

I.

Background1
Plaintiff Karen A. Baty initially filed this case in the Sedgwick County District

Court2 against defendant Metropolitan Life Insurance Company (“MetLife”), the issuer

1

The information recited in this section is taken from the parties’ briefs regarding discovery
(ECF Nos. 20-21); portions of the Administrative Record (ECF Nos. 13-19), and Plaintiff’s
Petition attached to the Notice of Removal (ECF No. 1, Ex. 1). This background information
should not be construed as judicial findings or factual determinations.
2
Baty v. Metropolitan Life Insurance Company, No. 2017-CV-001709-CE (Sedgwick County
Dist. Ct., filed Jul. 25, 2017).

and administrator of a long-term disability plan (“Plan”) for Plaintiff’s former employer,
Textron Credit Union. In late 2013, Plaintiff was diagnosed with breast cancer and
underwent a variety of treatments, including surgery and chemotherapy. Although she
tried to work through her chemotherapy treatments, she claims she was ultimately unable
to perform her job because of cognitive difficulties resulting from her treatments.
Textron terminated her employment in November 2014.
After her termination, Plaintiff applied for long-term disability (“LTD”) benefits,
and Defendant denied her claim. She claims Defendant’s decision to deny her benefits
was arbitrary, capricious, and not supported by substantial evidence. Defendant hired
two physicians to review her case, and Plaintiff alleges those physicians used inaccurate
and unreasonable review procedures, and based their decision on erroneous facts.
Plaintiff brought this case to recover LTD benefits under the employee benefit plan
pursuant to the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C.
§ 1132(a)(1)(B).
Defendant MetLife removed the case to this federal court on August 11, 2017.
During the Scheduling Conference held on September 22, 2017, the parties announced
they had reached an impasse regarding the appropriateness of discovery outside the
administrative record reviewed by MetLife when determining Plaintiff’s eligibility for
LTD benefits. (See Order, ECF No. 12). In light of the discussions during the scheduling
conference, the Court ordered the parties to brief the issue of the scope of discovery.
Having had the opportunity to review the parties’ written arguments, the Court is now
prepared to rule.
2

II.

Legal Standard
When deciding whether discovery is appropriate in an ERISA denial of benefits

case, the Court must acknowledge the standard by which it reviews the claims
administrator’s decision. The Supreme Court determined “a denial of benefits challenged
under §1132(a)(1)(B) is to be reviewed under a de novo standard unless the benefit plan
gives the administrator or fiduciary discretionary authority to determine eligibility for
benefits or to construe the terms of the plan.”3 If the benefits plan gives the administrator
discretionary authority, the Court applies an arbitrary and capricious standard of review.4
The parties’ briefs each suggest the Plan granted MetLife, as claim fiduciary,
discretionary authority to interpret the Plan. Therefore, the Court weighs the parties’
arguments regarding the scope of discovery under the auspices of the arbitrary and
capricious standard of review.
When utilizing the arbitrary and capricious standard to review the administrator’s
decision, “the district court generally may consider only the arguments and evidence
before the administrator at the time it made that decision.”5 Therefore, the court’s review
is usually “limited to the administrative record—the materials compiled by the
administrator in the course of making his decision,”6 and it “is the unusual case in which

3

Jaremko v. ERISA Admin. Comm., No. 10-1137-RDR, 2011 WL 42881, at *1 (D. Kan. Jan. 6,
2011) (quoting Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989)).
4
Id. (citing DeGrado v. Jefferson Pilot Fin. Ins. Co., 451 F.3d 1161, 1167 (10th Cir. 2006)).
5
Id. (citing Sandoval v. Aetna Life and Cas. Ins. Co., 967 F.2d 377, 380 (10th Cir. 2002).
6
McNeal v. Frontier AG, Inc., No. 12–1284–RDR, 998 F. Supp. 2d 1037, 1041 (D. Kan. 2014)
(citing Holcomb v. Unum Life Ins. Co. of America, 578 F.3d 1187, 1192 (10th Cir. 2009)
(internal citation omitted)).

3

the district court should permit supplementation of the record.”7 “The party moving to
supplement the record or engage in extra-record discovery bears the burden of showing
its propriety.”8 Courts do not look favorably on attempts to discover or present additional
substantive evidence regarding the applicant’s disability.9 But courts have permitted
discovery, outside the administrative record, under such “exceptional circumstances” as
when a conflict of interest exists or “when there is evidence that a claimant could not
have presented in the administrative process.”10
An inherent conflict of interest arises when a claims administrator acts in a dual
role as both administrator/evaluator and insurer/payor of a claim.11 The court reviewing a
denial of benefits considers the conflict of interest as a factor in its abuse of discretion
analysis, weighing it “more or less heavily depending on the seriousness of the
conflict.”12 Courts generally view the conflict as more important “where circumstances
suggest a higher likelihood that it affected the benefits decision” and as less important
“where the administrator has taken active steps to reduce potential bias and to promote
accuracy.”13
Courts in this District and the Tenth Circuit apply the scope of discovery standard
of Fed. R. Civ. P. 26(b) to requests for extra-record discovery related to a dual-role
7

Id. (citing Hall v. UNUM Life Ins. Co. of Am., 300 F.3d 1197, 1203 (10th Cir. 2002)).
Id. (citing Murphy v. Deloitte & Touche Group Ins. Plan, 619 F.3d 1151, 1163 (10th Cir.
2010).
9
See Murphy, 619 F.3d at 1159, n.4 (noting a plan participant “is not entitled to a second chance
to prove his disability”) (citing Sandoval, 967 F.2d at 381) (other internal citations omitted).
10
McNeal, 998 F. Supp. 2d at 1041 (citing Hall, 300 F.3d at 1203).
11
Meyer v. UNUM Life Ins. Co. of Am., No. 12–1134–KHV, 96 F. Supp. 3d 1234, 1245 (D. Kan.
2015) (citing Metro. Life Ins. Co. v. Glenn, 554 U.S. 105, 112 (2008)).
12
Id. (citing Murphy, 619 F.3d at 1157 n. 1).
13
Id. at 1246 (citing Glenn, 554 U.S. at 117).
8

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conflict of interest.14 Under this standard, parties are entitled to discovery regarding
matters that are both “relevant to any party’s claim or defense and proportional to the
needs of the case.”15 But “neither a claimant nor an administrator should be allowed to
use discovery to engage in unnecessarily broad discovery that slows the efficient
resolution of an ERISA claim.”16

The district court must balance its “substantial

discretion in handling discovery requests under Rule 26(b),”17 with “both the need for a
fair and informed resolution of the claim and the need for a speedy, inexpensive, and
efficient resolution of the claim.”18

III.

Discussion
The parties agree that Defendant acted in a dual role regarding the LTD Plan: first,

as the insurer (the entity that would pay out benefits); and second, as the administrator
(the evaluator making the decision whether benefits are payable). Plaintiff contends
discovery outside the administrative record is appropriate because “there are red flags
within the administrative record that suggest the dual role conflict infected” Defendant’s
decision (ECF No. 21, at 6). Plaintiff lists examples of these red flags, such as that the
reports prepared by Defendant’s two Independent Physician Consultants (“IPCs”) utilized
the same formats. Additionally, the IPCs contacted Plaintiff’s treating doctors with “cold
calls” rather than scheduling interviews, which caught the physicians unprepared.

14

Parker v. Sun Life Assur. Co. of Can., No. 16-2554-JAR-JPO, 2017 U.S. Dist. LEXIS 42951,
at *2 (D. Kan. Mar. 23, 2017) (citing Murphy, 619 F.3d at 1162).
15
Id. (citing Fed. R. Civ. P. 26(b)(1), as amended in 2015).
16
Id. (citing Murphy, 619 F.3d at 1162-63).
17
Id. at *3 (citing Murphy, 619 F.3d at 1164).
18
Murphy, 619 F.3d at 1164.

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Plaintiff’s most troubling allegation is that both IPC reports contained factual
inaccuracies about their interviews with the treating physicians in ways that favored
Defendant. Plaintiff seeks discovery into Defendant’s use of, and relationship with, its
IPCs to determine whether it inappropriately coaches them in their review of claims.
Defendant disagrees that these examples support discovery outside the
administrative record. It contends the administrative record already demonstrates what
information and instruction the IPCs were given regarding their investigation of
Plaintiff’s claim, and no additional discovery is warranted. Additionally, Defendant
points out that both Plaintiff’s counsel and the treating physicians responded to the IPCs’
initial reports with their concerns regarding the factual errors and procedural issues they
found in the IPCs’ initial reports. As a result of those notifications, the IPCs addressed
and considered those concerns, and determined the issues did not change their evaluation
of Plaintiff’s claim. All of the correspondence surrounding Plaintiff’s concerns are
contained in the administrative record, and therefore Defendant concludes those alleged
inaccuracies are not indicative of any bias on the part of the IPCs.
But this Court is not so certain. Defendant argues the administrative record
demonstrates its referral process and selection of their IPCs (ML00379-ML00383, ECF
No. 14, sealed). The Court has reviewed those portions of the record, and the forms do
show

that

Defendant

requested

consulting

physicians

which

specialize

in

neuropsychology and oncology, specifically directed the IPCs to contact Plaintiff’s
medical providers, and directed the IPCs to ask targeted questions of Plaintiff’s treating
physicians. But this information does not demonstrate, in a more empirical sense, how
6

Defendant selects, trains, or otherwise directs its consultants—and, therefore, how it
avoids bias and promotes accuracy in its claims reviews. The short statements showing a
request for specific consultants tells nothing about how, or if, the IPCs’ methodologies or
opinions are reviewed; whether any unique training is provided to consulting physicians;
how the consulting physicians are paid; or other information indicative of the relationship
between Defendant and its IPCs. Such policies and procedures utilized by Defendant
could later assist the court in its analysis of Defendant’s dual-role conflict.
Defendant relies, in part, on Rutherford v. Reliance Standard,19 a 2011 District of
Kansas case where extra-record discovery was largely denied because many of the
plaintiff’s discovery requests sought information already contained in the administrative
record. However, Defendant ignores that the court in Rutherford, despite its partial
denial, did permit some extra-record discovery, and actually ordered the defendant to
produce any policies or guidelines on which the administrator relied to make its
decision.20 The court denied Rutherford’s request for statistical data concerning the
company’s prior claims and denials as an “unwieldy, burdensome, and speculative
fishing expedition,”21 but in his requests, Rutherford sought information spanning four
years.
In a more recent decision in this District, Parker v. Sun Life Assurance Company
of Canada,22 the court permitted extra-record discovery regarding limited statistical data,

19

Rutherford v. Reliance Standard Life Ins. Co., No. 10-2456-JWL-KMH, 2011 WL 4376557, at
*1 (D. Kan. Sept. 20, 2011).
20
Id. at *4.
21
Id.
22
No. 16-2554-JAR-JPO, 2017 U.S. Dist. LEXIS 42951, at *4.

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related to that employer’s plan for the limited time frame spanning the administration of
Parker’s claim.23 The court also permitted discovery of performance evaluations of the
decision-makers, including medical personnel, who reviewed the plaintiff’s claim for
benefits.24 The court found that this type of extra-record information fell within the
scope of Rule 26(b).
Likewise, when weighing the seriousness of the dual-role conflict in this case, the
court may ultimately examine whether Defendant, as administrator of the Plan, took
“active steps to reduce potential bias and to promote accuracy.”25

It is true that

Defendant’s physician consultants directly addressed Plaintiff’s concerns about
discrepancies in the initial reports, concluded those criticisms did not change their
decisions, and these concerns and conclusions are included in the administrative record.
But even as these specific issues are addressed within the administrative record, the Court
understands Plaintiff’s concern that the record does not go far enough to show what steps
Defendant takes—in a more general sense—to reduce overall bias in its processes and
procedures. Some limited extra-record discovery may reveal additional insight, such as
whether Defendant’s IPCs are true consultants or paid employees, how it trains or directs
its IPCs to ask specific questions, or whether it requires the physicians to utilize specific

23

Id. See also, e.g., Winfrey v. Hartford Life and Acc. Ins. Co., No. 14-1034-EFM-JPO, 2014
WL 4981436, at *5 (D. Kan. Oct. 3, 2014) (where the parties agreed to production of statistical
claims data for a three-year period).
24
Parker, 2017 U.S. Dist. LEXIS 42951, at *4.
25
Meyer, 96 F. Supp. 3d at 1246.

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procedures in their review.26 Defendant points to none of this relevant information as
present in the administrative record.
In many of the previous cases discussed here, those courts were tasked with
reviewing specific extra-record discovery requests for appropriateness under Fed. R. Civ.
P. 26(b).27 In this case, Plaintiff generally requests extra-record discovery prior to her
issuance of specific requests, so it is more difficult to discern whether the specific
discovery she ultimately seeks regarding the conflict will fall within the parameters of
Rule 26(b).
At this juncture, however, Plaintiff has met her burden to show the propriety and
relevance of some limited extra-record discovery. Plaintiff’s request for discovery does
not appear to be an attempt to supplement the record with substantive evidence of her
disability or an attempt to muster better evidence than she provided for the initial claim
review.28 Rather, she is attempting to demonstrate the alleged seriousness of the conflict
between Defendant’s role as the insurer and its role as the administrator of the Plan.
Defendant has not demonstrated that the discovery would be disproportionate as either

26

See id. at *1247 (considering UNUM’s procedures in handling the claim, including the use of
leading questions by its medical experts, as a part of the court’s conflict analysis).
27
See, e.g., Parker, No. 16-2554-JAR-JPO, 2017 U.S. Dist. LEXIS 42951, at *1-*7 (deciding
plaintiff’s motion to compel responses to specific discovery requests); Winfrey, No. 14-1034EFM-JPO, 2014 WL 4981436, at *6 (deciding plaintiff’s motion to compel responses to its
written discovery); Rutherford, No. 10-2456-JWL-KMH, 2011 WL 4376557, at *3-*5 (deciding
plaintiff’s motion to compel defendant’s responses to specific written requests).
28
Murphy, 619 F.3d at 1159 n.4 (citing Jewell v. Life Ins. Co. of N. Am., 508 F.3d 1303, 1309
(10th Cir. 2007) (quoting Hall, 300 F.3d at 1203) (further quotation omitted).

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overly burdensome or costly.29 Plaintiff’s request will be granted; however, Plaintiff is
cautioned to narrowly tailor her requests in light of the discussion herein.
IT IS THEREFORE ORDERED that Plaintiff’s request to engage in discovery
outside the administrative record (ECF No. 21) is GRANTED.

IT IS FURTHER ORDERED that, as previously ordered, the Court will
convene a supplemental scheduling conference on October 12, 2017, at 10:00 a.m. to
establish appropriate discovery deadlines. The conference will be held by telephone, to
be initiated by the Court.

IT IS SO ORDERED.
Dated this 10th day of October, 2017.
s/ Gwynne E. Birzer
GWYNNE E. BIRZER
United States Magistrate Judge

29

See Winfrey, No. 14-1034-EFM-JPO, 2014 WL 4981436, at *6 (finding the court was “not
persuaded that producing these materials would be overly burdensome or overly costly for
defendants”).

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