Anderson v. The Reliance Standard Life Insurance Company et al

Filing 20

MEMORANDUM OPINION AND ORDER. Signed by Magistrate Judge Paul W. Grimm on 1/5/2012. (aos, Deputy Clerk)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
Northern Division

BRIAN ANDERSON,

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Plaintiff,

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v.

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RELIANCE STANDARD LIFE
INSURANCE CO.,

Case No.: WDQ-11-1188

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Defendants.
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MEMORANDUM OPINION AND ORDER
In this suit, brought under the Employee Retirement Income Security Act, 29 U.S.C.
§§ 1001–1461 (“ERISA”), Plaintiff Brian Anderson filed a Motion to Compel Discovery from
Defendant Reliance Standard Life Insurance Co., pursuant to Fed. R. Civ. P. 37, and a
Memorandum of Points and Authorities in Support of Plaintiff’s Motion to Compel Discovery.
ECF Nos. 10 & 10-1. I denied Plaintiff’s motion without prejudice to refiling after the parties
met and conferred and made a good faith effort to resolve their disputes without the Court’s
intervention. Oct. 11, 2011 Mem. & Order, ECF No. 12. The parties met as directed, resolving a
number of disputes, and thereafter Plaintiff submitted a spreadsheet of the remaining disputes, in
which Plaintiff and Defendant each made their arguments, in compliance with my October 11,
2011 Order.1

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Plaintiff emailed the spreadsheet to my Chambers, as directed, rather than submitting it via
CM-ECF. The spreadsheet, which now includes the Court’s rulings as well as the parties’
arguments, is attached hereto as Exhibit A.

The remaining disputes concern the discovery Plaintiff sought in Interrogatories Nos. 2,
4–6, and 11, and Document Requests Nos. 1, 8, 10, and 12. In Interrogatory No. 2, Plaintiff
sought “the total number of disability claims referred to the Matrix Absence Management for the
performance of disability claim administration by Reliance Standard Life Insurance company
during the years 2007 – current inclusive listed on an annual basis” and the number of findings
of disability each year.”

Pl.’s Mem. 11.

Interrogatories Nos. 4 and 5 requested similar

information with regard to referrals to National Medical Evaluation Services and MES Solutions,
respectively. Id. at 12, 23. Interrogatory No. 6 asked Defendant to “provide a total of all monies
paid to MES Solutions listed on an annual basis during years 2007 – current inclusive.” Id. at
27-28. Document Request No. 1 was for documents “evidencing relationship and or control of
the corporate entities Reliance Standard Insurance Company and Matrix Absence Management
and their parent corporation, Delphi Group.” Id. at 36. Document Requests Nos. 8 and 10 asked
for “IRS Form 1099s issued to MLS National Medical Evaluation Services and/or its parent
company MLS Group of Companies, Inc. . . . and First Advantage Investigative Services for
2007 – current inclusive.”2 Id. at 39.
The dispute resulting from this group of interrogatories and document requests concerns
the availability to an ERISA plaintiff of discovery relevant to an alleged conflict of interest and
its effects on the eligibility determination, as well as the scope of any permissible discovery. As
the parties note, Metropolitan Life Insurance Co. v. Glenn, 554 U.S. 105 (2008), changed the
dynamic in evaluation of ERISA cases. There, the Supreme Court held that when “the entity that
administers the [employee benefit] plan, such as an employer or an insurance company, both
determines whether an employee is eligible for benefits and pays benefits out of its own pocket[,]

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Interrogatory No. 11 and Document Request No. 12 are discussed infra.
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. . . this dual role creates a conflict of interest,” and “a reviewing court should consider that
conflict as a factor in determining whether the plan administrator has abused its discretion in
denying benefits; . . . the significance of the factors will depend upon the circumstances of the
particular case.” Id. at 108. The Court emphasized that “for ERISA purposes a conflict exists”
nonetheless when “the plan administrator is not the employer itself but rather a professional
insurance company.” Id. at 114.
Although “Glenn unambiguously requires district courts to determine the likelihood that
an administrator’s conflict of interest affected its benefits decision,” Clark v. Unum Life Ins. Co.
of Am., No. JKB-10-3107, 2011 WL 3204673, at *3 (D. Md. July 27, 2011), the issue of the
permissibility and scope of discovery relating to an alleged conflict was not before the Supreme
Court. The most recent Fourth Circuit opinion, which preceded Glenn, provided that “when a
district court reviews a plan administrator’s decision under a deferential standard, the district
court is limited to the evidence that was before the plan administrator at the time of the
decision.” Bernstein v. CapitalCare, Inc., 70 F.3d 783, 788 (4th Cir. 1995) (citing Sheppard &
Enoch Pratt Hosp. v. Travelers Ins. Co., 32 F.3d 120, 125 (4th Cir. 1994)); see Bartel v. Sun Life
Assurance Co. of Canada, 536 F. Supp. 2d 623, 630 (D. Md. 2008) (quoting Bernstein, preGlenn).

Yet, Glenn “may have opened the door to additional discovery under certain

conditions,” and post-Glenn Fourth Circuit opinions, as well as post-Glenn opinions in other
circuits, “appear to acknowledge the relevance of extra-record evidence in determining the
significance of a conflict.” Clark, 2011 WL 3204673, at *2-3 (citing, inter alia, Vaughan v.
Celanese Americas Corp., 339 Fed. App’x 320, 328 (4th Cir. 2009) (noting with approval that
district court held evidentiary hearing); Champion v. Black & Decker (U.S.), Inc., 550 F.3d 353,

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362 (4th Cir. 2008) (noting that the court could “find no evidence” to magnify the conflict and
that the plaintiff “provide[d] no contrary evidence”)).
This Court recently explored this exact discovery issue in Clark, 2011 WL 3204673,
where the plaintiff “sough discovery of information regarding Defendant’s claims review
process, the compensation structure of its employees and consultants, and statistical data
regarding findings of disability by Defendant’s consulting physicians.” Id. at *1. It held that
“Glenn created an exception to the general rule (still otherwise in force) that extra-record
discovery is unavailable to ERISA plaintiffs.” Id. at *3. This Court further held: “Such
discovery is available when an administrator has a structural conflict of interest and information
not contained in the record is necessary to enable the court to determine the likelihood that the
conflict influenced the particular benefits decision at issue.” Id. Accord Worsley v. Aetna Life
Ins. Co., 780 F. Supp. 2d 397, 408 (W.D.N.C. 2011) (“The Court thus finds it appropriate to
consider the very limited evidence presented by Aetna regarding the procedural safeguards it has
implemented to ensure that its inherent structural conflict of interest does not dead to biased
claim determinations.”); McDonough v. Aetna Life Ins. Co., No. 3:09cv00071, 2011 WL
1418878 (W.D. Va. Apr. 8, 2010) (“[B]ecause the conflict of interest must be evaluated to
determine what role it should play in a reviewing court’s analysis of a fiduciary’s decision, . . .
limited discovery on the nature of the conflict in this case is not ‘clearly erroneous and contrary
to law.’”) (quoting Fed. R. Civ. P. 72(a)); Catledge v. Aetna Life Ins. Co., 594 F. Supp. 2d 610
(D.S.C. 2009) (“In light of the paucity of evidence as to the basis of Aetna’s ‘intent’
determination, and comments in Glenn regarding matters which might be considered in weighing
the impact of a conflict of interest, this court allowed limited discovery in this matter in the form

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of two depositions of the key individuals involved in the decisionmaking process.

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depositions were further limited as to subject matter.”).
Additionally, this Court observed that the scope of such discovery should be narrow
enough to “avoid[] ‘near universal review by judges de novo—i.e., without deference—of the
lion’s share of ERISA plan claims denials,’” yet broad enough to “avoid[] ‘special burden-ofproof rules, or other special procedural or evidentiary rules, focused narrowly upon the
evaluator/payor conflict.’” Clark, 2011 WL 3204673, at *4 (quoting Glenn, 554 U.S. at 116).
This Court concluded, id.:
[T]he best way to accommodate both of these interests is to carefully scrutinize
the relevance and necessity of Plaintiff’s proposed extra-record discovery at the
outset, by determining whether or not the administrative record contains enough
information to allow the court to properly weigh Defendant’s admitted conflict of
interest. If it does, then no discovery will be necessary because information
beyond the record would not be relevant. If, however, the court determines that
additional information is needed, then discovery will be allowed to proceed on the
specific issue of the effect of Defendant’s conflict on its benefits decision in this
case.
The Court directed the parties “to file supplemental memoranda addressing the following
question:

Is the information already contained in the administrative record sufficient to

determine the extent, if any, to which Defendant’s conflict of interest influenced its decision to
deny Plaintiff’s claim for long-term disability benefits?” Id. The defendant identified evidence
in the administrative record that supported its position that “its admitted conflict of interest was
‘neutralized’ . . . by the thoroughness of its investigation of Plaintiff’s claim and appeal”; the
plaintiff made only “generalized allegations” without identifying any evidence of bias. Id. at *6.
After receiving the supplemental briefing, the Court concluded that “the administrative record in
th[e] case contain[ed] enough information to allow the Court to determine the likelihood that
Defendant’s conflict of interest (i.e., its financial incentive to avoid paying claims) improperly

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influenced its decision to terminate Plaintiff’s LTD benefits,” and on that basis, denied the
plaintiff’s motion to compel. Id. at *6.
Here, Plaintiff seeks “disability benefits payments under The Apptis, Inc. Group Long
Term Disability Plan which is insured by The Reliance Standard Life Insurance Company . . .
and administrated by . . . Matrix Absence Management, Inc.”

Pl.’s Mem. 1.

In his

Memorandum of Points and Authorities in Support of Plaintiff’s Motion to Compel Discovery,3
Plaintiff alleges a complicated web of relationships among the plan administrator, the insurer,
and various medical providers.

Id. at 11-37.

Specifically, according to Plaintiff, “Matrix

Absence Management, Inc. is a sister company of Reliance Standard Insurance Company and a
fellow subsidiary of Delphi Financial Group,” such that they “are working toward the same end.”
Id. at 11. He claims that “the performance of Matrix Absence Management is influenced by the
Defendant.” Id. at 37. Plaintiff further asserts that the MLS Group of Companies, including its
subsidiary National Medical Evaluation Services, to whom Defendant Reliance Standard
Insurance Co. refers claims, receives a significant percentage of its work from insurance
companies and “is influenced by the monies paid by the insurance industry.” Id. at 13-14.
Additionally, Plaintiff alleges that “MES Solutions [an IME organization] was acquired by Exam
Works, Inc., a company which owns other similar . . . cost control business including Health
Cost Management, Inc[.], Roy Medical Consultants, Inc., Verity Medical, Inc., among others.”
Id. at 26.

Plaintiff identifies the relationship between independent medical evaluators and

insurance companies as another conflict of interest, id. at 15-23, noting that “[i]t has long been
questioned how IME facilities can guarantee an impartial examination when the insurer is paying

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Plaintiff’s Memorandum was unnecessarily long, often citing to unhelpful authority from other
courts but ignoring authority from this Court. It appeared as though much of the Memorandum
was cut and pasted from filings in other cases.
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the bill when the insurer is seeking to minimize its exposure and can take their business
elsewhere,” id. at 22.
Plaintiff insists that if “solely . . . the claim file contents” were considered to assess the
alleged conflicts of interest and their effects on the eligibility determination, “such information
could never [be] discerned.” Pl.’s Mem. 4. He alleges: “Given the administrator’s sole control
over the claim file, it is certain that no such information would ever be disclosed for a claim
beneficiary to bring a merit[-]worthy challenge concerning underlying factors which illustrate
the nature of the conflict of interest inherent in such claims decision.” Id. at 4-5 (emphasis
added). This is strong language, considering that Plaintiff’s counsel was counsel for the plaintiff
in Clark,4 where the Court concluded that the conflict of interest determination could be made
from the administrative record alone. See Clark, 2011 WL 3204673, at *6. Nonetheless, it
appears that, in this case, with the possible multi-tiered and interwoven conflicts described
above, certain limited additional discovery may shed light on the alleged conflicts of interest and
their effects. The Court’s ruling on the parameters of this discovery appears at the conclusion of
this Memorandum Opinion and Order and on the attached spreadsheet, which is attached as
Exhibit A and incorporated herein by reference.
Additionally, the Court reviewed the arguments presented by counsel as to Interrogatory
No. 11 and Document Request No. 12. In Interrogatory No. 11, Plaintiff asked Defendant to
“identify any and all internal guidelines, policies, procedures, claims handling manuals,” and
similar documents “concerning the interpretation and/or administration of the policy issued in
this case that are not contained in the claim record whether relied upon or not during the

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Given Plaintiff’s counsel’s role in Clark, it is all the more unusual that he failed to discuss
Clark in any meaningful way in Plaintiff’s Memorandum, especially because Clark is far more
helpful to resolving this issue than the cases from other jurisdictions that Plaintiff cited.
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administration of the subject disability claim,” and to state why each document was or was not
followed. Id. at 30-31. Defendant offered to produce its claims manual under a confidentiality
agreement, but Plaintiff argued that “Defendant has no right to a confidentiality agreement.” See
Ex. A. In Document Request No. 12, Plaintiff requested “[a]ny and all educational and/or
training materials utilized for the investigation, evaluation, or review of disability insurance
claims.” Id. at 40. Defendant asserted the attorney–client privilege and work product doctrine,
but failed to particularize its objections in its in original response, in which it simply stated that it
“object[ed] to plaintiff’s request on the grounds it seeks documents and/or information protected
by the attorney client privilege or attorney work product doctrine.” Pl.’s Mot. to Compel Ex. 4,
Resp. to Doc. Prod. Req. No. 12, ECF No. 10-6. Moreover, in the spreadsheet the parties
submitted with regard to their unresolved disputes, Defendant still did not particularize its
objections, referring instead to its response to Interrogatory No. 11, in which it said that it
“offered to produce its claims manual under confidentiality.” See Ex. A.
Plaintiff responded that the fiduciary exception applied, such that “an ERISA fiduciary
cannot assert the attorney-client privilege against a plan beneficiary about legal advice dealing
with plan administration.” Pl.’s Mem. 41. Indeed, the Fourth Circuit concluded that “the
fiduciary exception to attorney-client privilege extends to communications between an ERISA
trustee and a plan attorney regarding plan administration,” and that “there is no legitimate basis
on which to distinguish between the two privileges in the application of the fiduciary exception
in the ERISA context.” Solis v. Food Employers Labor Relations Ass’n, 644 F.3d 221, 228, 233
(4th Cir. 2011). In any event, as this Court cautioned Defendant in its October 11, 2011
Memorandum and Order, “[o]bjections based on attorney-client privilege or the work product
doctrine must be particularized, Fed. R. Civ. P. 26(b)(5), and accompanied by the information

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that this Court’s Discovery Guidelines 6 and 9.c require,” and “[t]he Court may deem the failure
to do so to be a waiver of the privilege or work product protection.” Oct. 11, 2011 Mem. &
Order 5 (citing Victor Stanley, Inc. v. Creative Pipe, Inc., 250 F.R.D. 251, 267 (D. Md. 2008)).
As noted, Defendant did not particularize its claim of privilege, but rather offered to produce the
manual under a confidentiality agreement.

See Ex. A.

Therefore, Defendant has waived

attorney-client privilege and work product protection, but a confidentiality agreement may be
appropriate.
Fed. R. Civ. P. 26(c)(1)(G) provides that “[t]he court may, for good cause, issue an order
to protect a party or person from annoyance, embarrassment, oppression, or undue burden or
expense, including . . . requiring that . . . confidential . . . commercial information not be revealed
or be revealed only in a specified way.” While Defendant has failed to make a particularized
showing of good cause in this instance, I am satisfied that an insurance company’s claims
manual is the type of commercial information that warrants a confidentiality agreement when it
is produced for discovery. Accordingly, I am ordering the parties to confer and prepare such a
confidentiality order for my signature. See Loc. R. 104.13 (stating requirements of proposed
confidentiality order). An example is included as Stipulated Order Regarding Confidentiality of
Discovery Material and Inadvertent Disclosure of Privileged Material in Appendix D to the
Local Rules of this Court.
In sum, certain limited extra-record discovery is appropriate in this case in response to
Interrogatories Nos. 2 and 4–6, but not with regard to Document Requests Nos. 1, 8, and 10. See
Fed. R. Civ. P. 26(b)(2)(C)(i). The parameters of this discovery are outlined in the attached
spreadsheet. Defendant shall provide its discovery responses within thirty (30) days of the date
of this Memorandum Opinion & Order. Additionally, Defendant shall produce its claims manual

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in response to Interrogatory No. 11 and Document Request No. 12, subject to a confidentiality
agreement that shall be submitted to me to approve once the parties have signed it.
So ordered.
Dated: January 5, 2012

_______/S/________
Paul W. Grimm
United States Magistrate Judge

lyb

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Exhibit A: Anderson v. Reliance Standard Life Insurance Co., WDQ-11-1188,
Discovery Dispute Spreadsheet
Interrogatory/
RFPD No.

Plaintiff’s explanation

Defendant’s explanation

Ruling

Interrogatory
No. 2

Interrogatories directed to
Reliance Standard Insurance
Co. and not the Apptis Plan.
Answer is insufficient.
It is relevant to the conflict
of interest question as the
company involved does a
large amount of business
with the insurance industry
and this business interest has
the potential to influence the
findings of the medical
reports issued. This is
demonstrated by the amount
of money paid to the
company and the results of
the reviews.

Reliance Standard (“RSL”)
has fully responded. It stated
that it referred no claims
directly to Matrix. Matrix
provided limited claim
services per an agreement
with the policyholder. RSL
made the final decision on
each claim. Matrix did not
receive any money directly
from RSL so plaintiff’s
stated basis does not apply.
Regardless, RSL provided
full information on the status
of each claim under the
policy it issued to Apptis.

The Defendant shall provide
a complete and unevasive
response to Interrogatory No.
2 but shall not be required to
spend more than twenty (20)
hours in manually reviewing
its records in order to
compute the requested
information.

Interrogatory
No. 4

Same as above

RSL provided a full
response, stating that no
other Apptis claim was
referred to this vendor. This
compromise response was
discussed with Mr. Elkind in
advance but he apparently
has decided that he wants
information on all claims
referred to this vendor under
any policy. In Clarke v.
Unum Life Ins. Co., 2011
U.S. Dist. LEXIS 110318
(D. Md. Sept. 27, 2011), the
Court denied Mr. Elkind’s
motion to compel the same
discovery, since there was no
factual basis to infer that bias
affected the outcome of that
claim. The same is true here.

The Defendant shall provide
a complete and unevasive
response to Interrogatory No.
4 but shall not be required to
spend more than twenty (20)
hours in manually reviewing
its records in order to
compute the requested
information.

Interrogatory
No. 5

Same as above; however,
RSL explained that one other
Apptis claim was referred to
this vendor and the amount
of the payment was
provided.

The Defendant shall provide
a complete and unevasive
response to Interrogatory No.
5 but shall not be required to
spend more than twenty (20)
hours in manually reviewing
its records in order to
compute the requested
information.

Interrogatory
No. 6

Same as above

The law is clear that the
Defendant has no right to a
confidentiality agreement.

See above. Additionally, the
amount of payments to a
vendor is not evidence of
bias on the part of the
defendant. An ERISA
defendant is not required to
follow the opinion of the
treating physician and there
is no other way to obtain a
medical opinion other than to
pay someone for their time.
RSL offered to produce its
claims manual under
confidentiality. Contrary to
plaintiff’s position, in Weed
v. Prudential Ins. Co. of Am.,
No. 08cv10969-NG, 2009
WL 2835207 (D. Mass. Aug.
28, 2009), the court ordered
production of the manual
under confidentiality. See
also Palmiotti v.
Metropolitan Life Ins. Co.,
No. 04 Civ. 718 (LTS), 2006
WL 510387 (S.D.N.Y. Mar.
1, 2006).

The Defendant shall provide
a complete and unevasive
response to Interrogatory No.
6 but shall not be required to
spend more than twenty (20)
hours1 in manually
reviewing its records in order
to compute the requested
information.

Interrogatory
No. 11

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Same as above

See January 5, 2012
Memorandum Opinion and
Order 8-9.

To be clear, Defendant may spend up to twenty hours responding to Interrogatory No. 2, an additional twenty hours
responding to Interrogatory No. 4, an additional twenty hours responding to Interrogatory No. 5, and an additional twenty
hours responding to Interrogatory No. 6, for a possible total of eighty hours.

RFPD No. 1

See explanation for
Interrogatory No. 1

RSL has explained the
relationship between the
named entities. Only RSL is
a fiduciary and it made the
final claim decision.
Broadly asking for any
contracts or agreements
between RSL, Matrix and
Delphi is improper. There
are none as it relates to
plaintiff’s claim for benefits.

These documents are
unnecessary given the other
discovery that the Court has
ordered. See Fed. R. Civ. P.
26(b)(2)(C)(i).

RFPD No. 8

Same as above

See response re interrogatory These documents are
no. 4.
unnecessary given the other
discovery that the Court has
ordered. See Fed. R. Civ. P.
26(b)(2)(C)(i).

RFPD No. 10

Same as above

First Advantage provided
surveillance services. It did
not provide opinions.
Therefore, any amounts paid
to it are even less relevant to
the issue of whether RSL’s
decision was biased. See
also responses re
interrogatories 5 and 6.

RFPD No. 12

The law is clear that the
Defendant has no right to a
confidentiality agreement

See response re interrogatory See January 5, 2012
11.
Memorandum Opinion and
Order 8-9.

These documents are
unnecessary given the other
discovery that the Court has
ordered. See Fed. R. Civ. P.
26(b)(2)(C)(i).