Ennis v. Prudential Insurance Company of America et al

Filing 33

MEMORANDUM AND ORDER re: 27 MOTION to Compel filed by Plaintiff Doris L Ennis motion is GRANTED and defendants shall produce their internal claims handling manuals to plaintiff's counsel within 14 days. The Courtwill take under adv isement defendants' alternative request for a protective order and permit the parties seven days to file any additional memorandum in support of or in opposition to that request, in addition to any proposed order.. Signed by District Judge Stephen N. Limbaugh, Jr on 1/17/13. (MRS)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
DORIS L. ENNIS,

)
)
Plaintiff,
)
)
vs.
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PRUDENTIAL INSURANCE COMPANY )
OF AMERICA, et al.,
)
)
Defendants.
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Case No. 4:12CV00432 SNLJ

MEMORANDUM AND ORDER
This ERISA disability benefits case is before the Court on “Plaintiff's Motion to Compel
Discovery,” # 27, to which defendants have filed a response in opposition, #29, and plaintiff a
reply thereto, #30. Plaintiff was an employee of defendant Anheuser Busch, and Defendant
Prudential was plan administrator for a disability benefits plan operated by AB. Plaintiff filed a
claim under the plan that she was totally and permanently disabled, but defendants denied the
claim. Plaintiff now contends that denial of the claim was unlawful because defendants refused
to consider the fact that the Social Security Administration [SSA] determined that plaintiff was
totally and permanently disabled and refused to consider the medical records on which that
determination was based. It appears from the briefing that the parties have resolved their
differences over plaintiff's discovery requests except the request for defendants’ “internal claims
handling manuals concerning disability claims.”
As the Eighth Circuit repeatedly has held, the general rule in ERISA cases “is that review
is limited to evidence that was before the [plan] administrator.” Atkins v. Prudential Ins. Co.,
404 Fed. Appx. 82, 84 (8th Cir. 2010), quoting Jones v. ReliaStar Life Ins. Co., 615 F.3d 941,

945 (8th Cir. 2010). To be sure, internal claims handling manuals go beyond the administrative
record presented to the plan administrator, but plaintiff here seeks those manuals to ascertain the
nature and extent of the conflict of interest presented by the fact that Prudential was both the
claims administrator for the plan and the insurer for the plan. The Court in both the Atkins and
Jones cases rejected similar claims. In Jones, the Court first noted that the plan administrator
conceded “that it was both insurer and administrator for the plan,” so that discovery on that issue
was unnecessary. In addition, the Court observed that plaintiff’s challenge to the merits of the
decision involved “an application of policy language to undisputed facts.” For these reasons, the
Court then held that the administrative record was “sufficient to permit a fair evaluation of [the]
decision.” Jones, at 945. In Atkins, plaintiff premised his discovery request on Metro Life Ins.
Co. v. Glenn, 554 U.S. 105 (2008), in which the Supreme Court held that there is indeed a
conflict of interest when the insurer and claims administrator of a plan are one and the same. The
Atkins Court responded that “We have not yet decided whether Glenn affects discovery
limitations under ERISA. . .and Atkins’s argument that Glenn controls the outcome of this
decision is unconvincing.” Atkins, at 85. In rejecting the discovery request, the Court then noted
that “This case is comparable to Jones” in that “[defendant] conceded that it was both insurer
and administrator of the plan” and “the administrative record was sufficient to permit a fair
evaluation of the decision.” Id. The other instruction from the Eighth Circuit on the matter -though it is not a discovery case -- is the Court’s admonition in Chronister v. UNUM Life Ins.
Co. of America, 563 F.3d 773, 775 (8th Cir. 2009), that “Under Glenn, courts must analyze the
facts of the case at issue, taking into consideration not only the conflict of interest, but also other
factors that might bear on whether the administrator abused its discretion.”
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With these precedents in mind, this Court determines that the internal claims handling
manuals at issue here are discoverable. Unlike the Jones and Atkins cases, the challenge to the
administrative decision here does not involve simply “an application of policy language to
undisputed facts.” Plaintiff’s argument, instead, is that the plan administrator wrongfully refused
to consider the SSA’s determination that plaintiff is in fact totally and permanently disabled and
the medical evidence supporting that determination. In other words, the process and procedures
that led to the plan administrator’s denial of the disability claim are what really is at issue, and
this Court agrees with plaintiff that the only way to discern whether the administrator followed
its own internal procedures in arriving at its decision is through disclosure of the internal claims
handling manuals that identify those procedures.
The circumstances of the Chronister case, which are nearly identical to the case at hand,
illustrate full well what the Court meant by the need to “analyze the facts of the case at issue,
taking into consideration not only the conflict of interest, but also other factors that might bear on
whether the administrator abused its discretion.” In Chronister, as here, the plan administrator
refused to consider that the SSA had determined that plaintiff was disabled and entitled to full
disability benefits. That refusal, however, was “contrary to the clear dictates of [defendant’s]
claims-handling policies” which expressly provided that SSA determinations must be considered,
and it constituted a “most egregious” factor in the Court’s holding that defendant abused its
discretion in denying plaintiff’s claim. Chronister, at 776-77. Given this holding, plaintiff here
is entitled to know whether similar provisions are set out in defendants’ internal claims handling
manuals. By implication, though, the larger point is that a plan administrator’s serious and
significant deviation from its own internal policies and procedures -- whatever those deviations
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may be – is substantial proof that the administrator’s structural conflict of interest is exacerbated
and that an abuse of discretion has occurred. Accordingly, plaintiff is entitled to know whether
defendants abided by their internal policies and procedures, and the claims handling manuals
shall be produced for that purpose.
This Court arrives at the same conclusion for a different and independent reason as well.
Plaintiff cites a U.S. Department of Labor’s ERISA regulation providing that a person appealing
a denial of benefits under an ERISA plan “shall be provided, upon request and free of charge,
reasonable access to, and copies of, all documents, records, and other information relevant to the
claimant's claim for benefits.” 29 § C.F.R. 2560.503-1(h)(2)(iii). A corresponding subsection
states:
A document, record, or other information shall be considered ‘relevant’ to
a claimant’s claim if such document, record, or other information:
(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 [paragraph (b)(5) requires “administrative
processes and safeguards designed to ensure and to verify that benefit
claim determinations are made in accordance with governing plan
documents and that, where appropriate, the plan provisions have been
applied consistently with respect to similarly situated claimants”]; or
(iv) In the case of . . . 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. § 2560.503-1(m)(8).
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Although there is a dearth of cases, at least within the Eighth Circuit, that address this
regulation, it is this Court’s opinion that a plan administrator’s internal claims handling manuals
are relevant documents or records as defined by the regulation. If nothing else, they certainly
constitute “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.” Thus, under the regulation, the
manuals must be disclosed.
For the foregoing reasons, plaintiff’s motion to compel is granted and defendants shall
produce their internal claims handling manuals to plaintiff’s counsel within 14 days. The Court
will take under advisement defendants’ alternative request for a protective order and permit the
parties seven days to file any additional memorandum in support of or in opposition to that
request, in addition to any proposed order.
SO ORDERED this 17th day of January, 2013.

_______________________________
STEPHEN N. LIMBAUGH, JR.
UNITED STATES DISTRICT JUDGE

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