Mellian v. Hartford Life and Accident Insurance Company

Filing 16

OPINION and ORDER Regarding Plaintiff's 8 MOTION for Limited Discovery and Defendant's 10 Cross-Motion for Protective Order, ( Cross Motions due by 2/6/2015) Signed by District Judge Gerald E. Rosen. (JOwe)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
TERI LYNN MELLIAN,
Plaintiff,

Case No. 14-10867

v.

Hon. Gerald E. Rosen

HARTFORD LIFE AND ACCIDENT
INSURANCE COMPANY,
Defendant.
____________________________________/
OPINION AND ORDER REGARDING
PLAINTIFF’S MOTION FOR LIMITED DISCOVERY
AND DEFENDANT’S CROSS-MOTION FOR PROTECTIVE ORDER
At a session of said Court, held in
the U.S. Courthouse, Detroit, Michigan
on
December 24, 2014
PRESENT: Honorable Gerald E. Rosen
Chief Judge, United States District Court
I. INTRODUCTION
Plaintiff Teri Lynn Mellian is a former employee of Unistrut International
Corporation (“Unistrut”), a division of Atkore International, Inc. Defendant Hartford Life
and Accident Insurance Company is the insurer of a policy known as the “Group Long
Term Disability Plan for Employees of Atkore International, Inc.” (the “Plan”), an
employee benefit plan that is subject to the terms of the federal Employee Retirement
Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001 et seq. Through the present
suit commenced on February 24, 2014, Plaintiff has asserted a claim under § 501(a)(1)(B)

of ERISA, 29 U.S.C. § 1132(a)(1)(B), requesting that the Court reverse a decision by the
Defendant insurer to deny Plaintiff’s claim for long term disability benefits under the
Plan.
In Wilkins v. Baptist Healthcare System, Inc., 150 F.3d 609, 619 (6th Cir. 1998),
the Sixth Circuit adopted a set of guidelines for conducting judicial review of a plan
administrator’s decision to deny benefits under an ERISA plan. As pertinent here,
Wilkins holds that a district court’s review of such a decision ordinarily should be “based
solely upon the administrative record,” and that a district court may stray beyond the four
corners of this administrative record only to consider evidence “offered in support of a
procedural challenge to the administrator’s decision, such as an alleged lack of due
process afforded by the administrator or alleged bias on its part.” Wilkins, 150 F.3d at
619. As a corollary to this rule, the Sixth Circuit has held that discovery typically is not
available in an ERISA action contesting a denial of benefits, unless it is deemed
necessary to support a procedural challenge to the administrator’s decision. Wilkins, 150
F.3d at 619; see also Calvert v. Firstar Finance, Inc., 409 F.3d 286, 293 n.2 (6th Cir.
2005).
In a motion filed on April 24, 2014, Plaintiff seeks leave of the Court to conduct
the limited discovery permitted under Wilkins and its progeny, arguing that this discovery
is needed to pursue Plaintiff’s allegations of procedural irregularities, bias, and conflict of
interest on the part of the Defendant claims administrator. Defendant filed a response in
opposition to Plaintiff’s motion on May 8, 2014, as well as a cross-motion for a protective
2

order prohibiting any discovery in this suit. Having reviewed the parties’ briefs in
support of and in opposition to these cross-motions,1 as well as their accompanying
exhibits and the remainder of the record, the Court finds that the relevant allegations,
facts, and legal issues are sufficiently presented in these written submissions, and that oral
argument would not aid the decisional process. Accordingly, the Court will decide the
parties’ cross-motions “on the briefs.” See Local Rule 7.1(f)(2), U.S. District Court,
Eastern District of Michigan. This opinion and order sets forth the Court’s rulings on
these motions.
II. FACTUAL AND PROCEDURAL BACKGROUND
Plaintiff commenced her employment with Unistrut on November 20, 2000,
initially working as an administrative assistant to the plant manager at Unistrut’s
manufacturing facility in Wayne, Michigan, and later holding a position in the accounting
department. As a Unistrut employee, Plaintiff was eligible for coverage under the Plan
issued by the Defendant insurer to Unistrut’s parent corporation, Atkore International.

1

Beyond the usual sequence of initial, response, and reply briefs, Defendant has sought
leave to file a sur-reply brief in further opposition to Plaintiff’s motion for discovery. As
Defendant recognizes, however, a sur-reply is appropriate only where the opposing party raises
new arguments or presents new evidence for the first time in a reply brief, such that the party
seeking leave to file the sur-reply had no opportunity to address the arguments or evidence in its
prior submissions. See Mirando v. United States Department of Treasury, 766 F.3d 540, 548-49
(6th Cir. 2014). Having carefully reviewed Plaintiff’s reply brief, the Court is not persuaded that
Plaintiff has advanced any new arguments or proffered any new evidence that would warrant a
sur-reply. In any event, because the arguments identified by Defendant as “new” have played no
role in the Court’s disposition of Plaintiff’s motion for discovery, Defendant has not been
prejudiced by any lack of opportunity to address these arguments in a sur-reply. Accordingly,
the Court denies Defendant’s motion for leave to file a sur-reply brief.
3

On June 7, 2012, Plaintiff was placed on disability leave as a result of surgery on
her right foot, and she was granted short term disability benefits. During this disability
leave, Plaintiff had additional surgery on her right foot in November of 2012, and she
also continued to experience pain from a back injury she had suffered in a motor vehicle
accident several years earlier. Accordingly, Plaintiff applied for long term disability
benefits under the Plan, and Defendant approved this request for the period from
December 6, 2012 through February 28, 2013. On March 12, 2013, however, Defendant
denied Plaintiff’s request for continuation of her long term disability benefits,
determining that as of March 1, 2013, Plaintiff could perform the essential duties of her
occupation on a full time basis.2
On June 25, 2013, Plaintiff sought reconsideration of this adverse decision. In
support of this administrative appeal, Plaintiff produced additional office notes from her
treating foot and back specialists, both of whom opined that Plaintiff was unable to
perform the duties of her job. Defendant, in turn, referred Plaintiff’s claim for review by
a medical consulting firm, MCMC,3 which designated two physicians to examine
Plaintiff’s medical records, contact Plaintiff’s physicians, and provide opinions as to
Plaintiff’s “physical restrictions and limitations” and her “ability to perform primarily
2

When Plaintiff failed to return to work following this determination that she was no
longer disabled as of March 1, 2013, her employment was terminated.
3

Plaintiff notes that the correspondence in the record from MCMC indicates that this
firm’s name is an acronym for “managing care, managing claims,” (see, e.g., Defendant’s
Response, Ex. E, Lobel Report at 1), but that the firm’s advertising refers to MCMC as standing
for “managing care, managing costs.” (See Plaintiff’s Motion at ¶ 4.)
4

sedentary level work activities.” (See Defendant’s Response, Ex. E, Lobel Report at 2;
Ex. F, Rubinfeld Report at 1.) After each of the two physicians retained by MCMC
opined that Plaintiff had the “ability to perform primarily sedentary level work activities,”
(see Lobel Report at 3; Rubinfeld Report at 2), Defendant denied Plaintiff’s
administrative appeal on August 28, 2013. Having exhausted her administrative
remedies, Plaintiff commenced this action on February 24, 2014, challenging Defendant’s
denial of her claim for long term disability benefits under the Plan.
III. ANALYSIS
Through her present motion, Plaintiff seeks leave to conduct discovery so that she
may explore her allegations that Defendant’s denial of her claim for long term disability
benefits was tainted by impermissible bias and a conflict of interest. In support of her
claim of bias, Plaintiff characterizes the outside medical consulting firm chosen by
Defendant, MCMC, as a “hired gun” that “maintains its ‘customers’ by rubberstamping
the opinions of the Plan Administrator.” (Plaintiff’s Motion at ¶ 5.) As for her claim that
Defendant operated with a conflict of interest, Plaintiff points to Defendant’s dual role in
paying benefits under the Plan and in deciding which claims to pay. Accordingly,
Plaintiff requests that she be permitted to propound discovery to Defendant that would
shed light on “Defendant’s relationship with MCMC, its history of referring claims to that
entity, and MCMC’s history of affirming[] or contradicting Defendant’s decisions
concerning whether a claimant is disabled,” as well as any guidelines or protocols that
govern MCMC’s reviews. (Id.)
5

As observed earlier, the Sixth Circuit has held that discovery is available in an
ERISA action contesting a denial of benefits only if it is shown to be necessary to support
a procedural challenge to the plan administrator’s decision. See Wilkins, 150 F.3d at 619;
see also Calvert, 409 F.3d at 293 n.2. Plaintiff, of course, seeks to pursue such a
procedural challenge here, citing allegations of bias and conflict of interest. Nonetheless,
the Sixth Circuit has emphasized in a number of cases that mere allegations of bias or
some other procedural irregularity are “not sufficient to permit discovery under Wilkins’
exception.” Putney v. Medical Mutual of Ohio, No. 02-3901, 111 F. App’x 803, 807 (6th
Cir. Sept. 10, 2004); see also Huffaker v. Metropolitan Life Insurance Co., No. 07-5410,
271 F. App’x 493, 504 (6th Cir. Mar. 25, 2008) (“A claimant cannot obtain discovery
beyond the administrative record — even if limited to a procedural challenge — merely
by alleging a procedural violation.”); Likas v. Life Insurance Co. of North America, No.
06-5124, 222 F. App’x 481, 486 (6th Cir. Mar. 12, 2007). Rather, “a claimant must make
a predicate showing with respect to an alleged procedural violation to be granted further
discovery.” Huffaker, 271 F. App’x at 504.
To be sure, the law of this Circuit is not altogether clear as to precisely what sort of
showing or evidence a claimant must put forward in order to pursue discovery in aid of a
procedural challenge. In Johnson v. Connecticut General Life Insurance Co., No. 083347, 324 F. App’x 459, 466 (6th Cir. Apr. 7, 2009), for example, the court viewed the
Supreme Court’s then-recent decision in Metropolitan Life Insurance Co. v. Glenn, 554
U.S. 105, 128 S. Ct. 2343 (2008), as “counsel[ing] against” a hard-and-fast rule that a
6

claimant must make “a threshold evidentiary showing of bias as a prerequisite to
discovery under Wilkins.” Yet, while the court in Johnson affirmed the district court’s
decision to allow limited discovery as to the defendant plan administrator’s conflict of
interest, it cautioned that discovery is not “automatically . . . available any time the
defendant is both the administrator and the payor under an ERISA plan,” and the court
further explained that the plaintiff in that case had “offered more than a mere allegation of
bias.” Johnson, 324 F. App’x at 467.
Upon thoroughly surveying the Sixth Circuit decisions addressing the availability
of discovery in ERISA actions, as well as rulings on this subject by district courts within
this Circuit, Magistrate Judge Scheer of this District aptly observed that “[t]he role of
discovery in the process of weighing a conflict [of interest or claim of bias] remains
somewhat obscure.” Geer v. Hartford Life & Accident Insurance Co., No. 08-12837,
2009 WL 1620402, at *2 (E.D. Mich. June 9, 2009); see also Price v. Hartford Life &
Accident Insurance Co., 746 F. Supp.2d 860, 865 (E.D. Mich. Oct. 12, 2010) (likewise
stating that this question “remains unsettled” among the district courts in this Circuit).
Against this admittedly uncertain backdrop, Magistrate Judge Scheer rejected “the
proposition that an inherent decision maker/payor conflict automatically entitles a
benefits claimant to discovery,” reasoning that “[a]cceptance of that view would
effectively eliminate the general rule against discovery in ERISA suits in a substantial
portion of such cases.” Geer, 2009 WL 1620402, at *4. Instead, the court in Geer
concluded that “discovery should be allowed where a plaintiff has provided sufficient
7

initial facts suggesting a likelihood that probative evidence of bias or procedural
deprivation would be developed.” 2009 WL 1620402, at *5. Magistrate Judge Scheer
acknowledged the apparent anomaly that “a claimant must have some evidence of bias
before being allowed to seek such evidence in discovery,” but reiterated that “an
unconditional right to discovery, in the absence of some predicate showing that it is likely
to be productive, would completely eviscerate the general rule against discovery in
ERISA benefits review cases and undermine the well recognized legislative intent that the
statute provide parties with a prompt a economical means of resolving disputes.” 2009
WL 1620402, at *5; see also Kennard v. Means Industries, Inc., No. 11-15079, 2012 WL
3156529, at *4-*5 (E.D. Mich. Aug. 3, 2012) (also electing to follow the line of Sixth
Circuit cases requiring a predicate showing of a procedural violation before allowing
discovery). But see Price, 746 F. Supp.2d at 865 (opining that “[n]o special rules or
procedures are necessary or appropriate” for determining whether to permit discovery in
an ERISA action, and that the usual standards of Fed. R. Civ. P. 26(b)(1) should instead
govern this inquiry).
This Court is persuaded by Magistrate Judge Scheer’s reading of the pertinent case
law, and therefore adopts Geer’s holding that discovery should be permitted in support of
an ERISA claim for benefits only where the plaintiff has “provided sufficient initial facts
suggesting a likelihood that probative evidence of bias or procedural deprivation would
be developed.” Geer, 2009 WL 1620402, at *5. As observed in Geer, 2009 WL
1620402, at *4-*5, because it is fairly commonplace for the defendant in an ERISA action
8

to both evaluate claims for benefits and pay the claims that it approves, the bare existence
of such a conflict of interest, standing alone, cannot justify discovery without
“eviscerat[ing] the general rule against discovery in ERISA benefit review cases.”
Similarly, a medical consulting firm, such as MCMC here, that is asked to conduct an
independent medical examination (“IME”) or perform a medical record review will
invariably have an economic incentive to “make its customer happy” — and thereby
increase the likelihood of repeat business — by providing results favorable to the claims
administrator that retained this firm. The Court fully recognizes, of course, that it must
take such inherent conflicts and potential biases into account in reviewing a decision to
deny benefits. See Glenn, 554 U.S. at 115, 128 S. Ct. at 2350; Kalish v. Liberty
Mutual/Liberty Life Assurance Co., 419 F.3d 501, 506 (6th Cir. 2005). Nonetheless, the
Court finds that absent a predicate showing that discovery is “likely to be productive” in a
particular case to shed further light on these considerations, Geer, 2009 WL 1620402, at
*5, the presence of a conflict of interest or potential bias can be sufficiently accounted for
in the Court’s review of the administrative record compiled during a defendant claims
administrator’s evaluation of a plaintiff’s claim, without the need for any additional
details that a discovery effort might provide.
It remains only to inquire whether Plaintiff in this case has satisfied this standard
for pursuing discovery from the Defendant claims administrator, and the Court concludes
that she has not. Apart from the bare allegations in Plaintiff’s complaint that Defendant
has a conflict of interest in light of its dual role as claims administrator and payor of
9

benefits, and that the medical consultants retained by MCMC to review Plaintiff’s
medical records were “flatly biased in favor of Defendant,” (Complaint at ¶¶ 45(H), (J)),
the only evidence submitted in support of Plaintiff’s present motion for discovery is a
printout of two pages from MCMC’s website, (see Plaintiff’s Motion, Ex. A). In
particular, Plaintiff directs the Court’s attention to MCMC’s statements on its website that
its services will “contain[]” or “decrease” the medical costs paid by its clients, and that
this firm’s “Independent Peer Review division completes over 50,000 reviews each year
for more than 400 clients.” (Id.) These assertions made on MCMC’s website, however,
merely confirm points that are a matter of public record and do not warrant further
exploration in discovery — namely, MCMC touts its ability to limit the costs paid by its
clients for claim administration, and points to its position as a “leading independent peer
review organization” as evidenced by the many reviews it conducts each year on behalf of
hundreds of clients. (Id.) Even assuming that these statements might suggest a potential
for bias, this surely would not distinguish MCMC from any other for-profit medical
consulting firm that has achieved a degree of success in its field.
Beyond these garden-variety promotional claims on MCMC’s website, nothing in
the record suggests anything other than an ordinary arms-length business relationship
between Defendant and MCMC. Most notably, Plaintiff has failed to provide any
evidentiary support for her claim that Defendant has developed a “special” form that it
uses for referrals to MCMC. (Plaintiff’s Motion at ¶ 4.) Neither has Plaintiff identified
any irregularity in the process through which Defendant referred Plaintiff’s claim to
10

MCMC for a medical record review, or in the procedures used by MCMC to select and
supervise the medical professionals who conducted this particular file review. Rather,
from all that appears in the record, Defendant’s selection of MCMC for the task of
reviewing Plaintiff’s medical records appears to have been entirely routine. See Andren
v. The Hartford, No. 07-12559, 2008 WL 2115165, at *2 (E.D. Mich. May 12, 2008)
(observing that “[i]f the existence of a continued business relationship between an
insurance company and the group of physicians that reviews it[]s medical files were
enough to permit discovery, the exception would swallow the rule and discovery would
be permitted in most, if not all, ERISA denial of benefits actions”).
Moreover, Defendant correctly observes that further discovery is not needed to
explore the specific details of the reviews conducted by MCMC in this case, as the
administrative record already sheds sufficient light on these matters. In particular, the
existing administrative record includes such materials as the forms used by Defendant to
refer Plaintiff’s claim to MCMC, (see Defendant’s Response, Exs. D, H), the invoices
issued by MCMC to Defendant, (see Defendant’s Response, Ex. G), and the case reports
produced by the physicians who reviewed Plaintiff’s medical records on MCMC’s behalf,
(see Defendant’s Response, Exs. E, F). The case reports, in turn, disclose the areas of
specialization for the two physicians retained by MCMC, the questions they were asked
to consider, their findings on these questions, the records they reviewed, and the results of
their efforts to contact Plaintiff’s physicians. (See id.) In addition, the physicians closed
their reports with certifications that they were not operating under a conflict of interest
11

and had no financial or other stake in the outcome of their reviews. (See id.)
The absence of evidentiary support for Plaintiff’s allegations of bias and conflict of
interest serves to distinguish this case from other ERISA actions for benefits in which
discovery was permitted. Plaintiff points, for example, to the decision in Price, 746 F.
Supp.2d at 863, where (as here) the plaintiff’s medical records were reviewed by a
physician retained by MCMC. In ruling that the plaintiff in that case was entitled to
propound discovery in support of her claim of bias, the court observed that the plaintiff’s
request for discovery was based in part on the “particularly close working relationship”
between the defendant insurer and MCMC, “as evidenced by the special referral form
created specifically for this organization.” Price, 746 F. Supp.2d at 867.4 The plaintiff
also produced a copy of a California market study that was critical of the defendant
insurer’s claim handling practices. 746 F. Supp.2d at 867. Here, in contrast, Plaintiff has
produced no such evidence of a close working relationship between Defendant and
MCMC, nor does the record include any studies suggestive of systemic procedural
defects or irregularities in Defendant’s processing of claims.
Similarly, the Court is not persuaded by Plaintiff’s appeal to a Magistrate Judge’s
decision to allow discovery in Back v. Hartford Life & Accident Insurance Co., No. 094

Since Defendant here is the same insurer named as a defendant in Price, this statement
in Price presumably provides the basis for Plaintiff’s assertion in this case that Defendant uses a
“special form” for its referrals to MCMC. Yet, while Price does not disclose what sort of
evidentiary support (if any) the plaintiff in that case might have provided for her claim of a
“particularly close relationship” between the defendant insurer and MCMC, the record here lacks
any evidentiary foundation whatsoever for Plaintiff’s allegation of a “special form” used by
Defendant for its referrals to MCMC.
12

14446, 2010 WL 8938975, at *4-*5 (E.D. Mich. July 1, 2010), aff’d, 2010 WL 3518063
(E.D. Mich. Sept. 8, 2010). In support of this ruling, the court noted that the plaintiff in
that case had been awarded Social Security disability benefits, and it pointed to the
defendant insurer’s failure to give any weight to the determination of the Social Security
Administration (“SSA”) or to provide “any substantive explanation of why its findings
differed from the SSA’s.” Back, 2010 WL 8938975, at *4. Based on this and other
evidence, the court concluded that the plaintiff had “presented much more tha[n] a mere
allegation of bias” in support of her request for discovery, but instead had satisfied “the
‘predicate showing’ test of Likas and Putney.” Back, 2010 WL 8938975, at *5 (internal
quotation marks omitted);5 see also Geer, 2009 WL 1620402, at *6 (likewise citing the
defendant insurer’s failure to address an award of Social Security disability benefits as
“sufficient, in concert with the decision maker/payor conflict of interest, to warrant
limited discovery as to bias and/or procedural defect”).
In contrast to these decisions, Plaintiff’s request for discovery in this case rests
solely upon mere allegations of conflict of interest and bias, and not upon any predicate

5

To be sure, one piece of evidence cited by the court in Back was “promotional
material[s]” from MCMC revealing that this firm “perform[s] over 50,000 independent medical
reviews (i.e., file reviews) and 18,000 IMEs annually.” Back, 2010 WL 8938975, at *5. Based
on these materials, the court reasoned that “[t]he medical review companies used in this case
derive a tremendous financial benefit in service to the insurance industry,” and it concluded that
“[t]he degree to which those benefits lead to bias in their disability opinions is fair game for
discovery.” 2010 WL 8938975, at *5 (footnote omitted). As explained earlier, this Court does
not view the success of MCMC’s medical consulting business, standing alone, as lending
support to the possibility that the findings of the medical professionals retained by MCMC in
this case were influenced by a desire to render a decision favorable to Defendant as MCMC’s
client.
13

showing of procedural anomalies in Defendant’s decision to deny Plaintiff’s claim for
benefits. As discussed, this Court reads the pertinent case law as demanding more than
bare allegations to warrant a departure from the typical practice under Wilkins of
reviewing denial-of-benefit decisions based solely on the administrative record.
Accordingly, because Plaintiff has not made this threshold showing, the Court finds that
her request for discovery must be denied.

14

IV. CONCLUSION
For the reasons set forth above,
NOW, THEREFORE, IT IS HEREBY ORDERED that Plaintiff’s April 24, 2014
motion for order permitting limited discovery (docket #8) is DENIED. IT IS FURTHER
ORDERED that Defendant’s May 8, 2014 cross-motion for a protective order prohibiting
discovery (docket #10) is GRANTED. In light of these rulings, the parties shall file their
cross-motions to affirm or reverse the Defendant administrator’s decision to deny
Plaintiff’s claim for long-term disability benefits on or before February 6, 2015.

s/Gerald E. Rosen
Chief Judge, United States District Court
Dated: December 24, 2014
I hereby certify that a copy of the foregoing document was served upon the parties and/or
counsel of record on December 24, 2014, by electronic and/or ordinary mail.
s/Julie Owens
Case Manager, [phone]

15