Davidson v. Ascension Health Long Term Disability Plan et al

Filing 69

MEMORANDUM AND ORDER. (See Full Order.) IT IS HEREBY ORDERED that plaintiff Elizabeth Davidson's Motion for Discovery 59 is granted in part and denied in part as set out in this Memorandum and Order. Signed by District Judge Catherine D. Perry on 10/16/2017. (CBL)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
ELIZABETH DAVIDSON,
Plaintiff,
v.
ASCENSION LONG-TERM
DISABILITY PLAN, et al.,
Defendants.

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Case No. 4:17 CV 995 CDP

MEMORANDUM AND ORDER
Plaintiff Elizabeth Davidson brings this action under the Employee
Retirement Income Security Act (ERISA), 29 U.S.C. §§ 1001, et seq., to recover
long-term disability benefits under her employee welfare benefit plan, Ascension
Long-Term Disability Plan (Plan). The claims administrator, defendant Sedgwick
Claims Management Services, Inc., denied her claim for benefits. Davidson now
asks that I permit her to conduct limited discovery outside the administrative
record to show Sedgwick’s conflict of interest and procedural irregularities in the
claims review process. She also asks to conduct discovery in order to complete the
administrative record. For the reasons that follow, I will allow Davidson to engage
in some limited discovery.
The first step in evaluating a claim under ERISA is determining the
appropriate standard of review. When evaluating a challenge to the denial of

benefits, the court conducts de novo review unless the plan grants its administrator
discretionary authority to determine benefit eligibility or construe terms of the
plan. Metropolitan Life Ins. Co. v. Glenn, 554 U.S. 105, 111 (2008); Janssen v.
Minneapolis Auto Dealers Benefit Fund, 477 F.3d 1109, 1113 (8th Cir. 2006). If a
plan gives discretion to a plan administrator, the plan administrator’s decision is
reviewed under a deferential abuse-of-discretion standard. Janssen, 477 F.3d at
1113. A less deferential standard of review may be applied, however, in cases
where a claimant has presented “material, probative evidence demonstrating that
(1) a palpable conflict of interest or a serious procedural irregularity existed, which
(2) caused a serious breach of the plan administrator’s fiduciary duty.” Woo v.
Deluxe Corp., 144 F.3d 1157, 1160 (8th Cir. 1998).
When reviewing an administrator’s benefits decision, a court is generally
limited to review of the evidence that was before the administrator when it denied
the claim. Jones v. ReliaStar, 615 F.3d 941, 945 (8th Cir. 2010). For this reason,
courts generally do not allow the parties in ERISA cases to obtain additional
discovery. Atkins v. Prudential Ins. Co., 404 Fed. App’x 82, 84-85 (8th Cir. 2010).
However, limited discovery may be permitted to determine whether a conflict of
interest or procedural irregularity exists. See Sampson v. Prudential Ins. Co. of
America, No. 4:08CV 1290 CDP, 2009 WL 882407, at *2 (E.D. Mo. March 26,
2009) (“[A] conflict or procedural irregularity cannot be considered in a vacuum.
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Discovery is required to explore the nature and extent of the purported conflict or
irregularity at issue.”) (citing Glenn, 554 U.S. at 116-17).
Here, Davidson does not argue that the additional discovery she seeks will
necessarily determine that a less deferential standard of review is appropriate in the
case, although she avers that it may. Instead, she contends that the discovery is
relevant to whether defendants abused their discretion in denying her claim given
the procedural irregularities involved and possible conflict of interest. I agree.
In this action, Davidson claims that Sedgwick delegates the decision-making
authority regarding disability to an outside medical consulting firm, Dane Street
LLC, who reviews medical records and is known to render biased opinions on the
ultimate issue of disability. With respect to her own claim for benefits, Davidson
alleges that Dane Street’s reports show that it conducted a skewed review of the
medical evidence and made inconsistent findings and conclusions regarding
disability, and that Sedgwick wrongfully relied on these biased reports to deny her
benefits. Davidson also contends that Sedgwick itself engaged in an inconsistent
pattern of document retrieval and review throughout the administrative process.
Davidson avers that both Sedgwick and Dane Street engage in this practice to
reduce benefit payouts, thereby satisfying their clients and resulting in increased
profits for themselves.
I have reviewed Davidson’s proposed discovery requests and will permit her
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to engage in limited discovery to the extent relevant to her claims of conflict and/or
irregularities in the determination of her claim for benefits. Neither the Plan nor
Sedgwick lodge any objection to the requested production of the Administrative
Services Agreement for Sedgwick in effect during 2014 and 2015, so I will order
this production. Nor do they object to the requested production of documents to
explain acronyms, abbreviations, and industry terms used in the claim file. I will
order this production as well. With respect to the remaining requests directed to
the defendants, I will allow discovery of the following requests by Davidson: (1)
request for admissions to Sedgwick set out in Exhibit 1 (ECF #60-2); and (2)
interrogatory numbers 3, 4, and 5 to Sedgwick set out in Exhibit 3 (ECF #60-4).
Defendants shall have fourteen (14) days from the date of this Order to provide this
discovery to Davidson.
Davidson also asks that a third party subpoena be issued to Dane Street for
numerous documents, including, inter alia, internal communications,
compensation statements, instructions, policies, procedures, claim information,
notes, and drafts. Much of this requested discovery is excessive, especially in an
ERISA case where discovery is limited. I will allow discovery of the following
documents, however, involving Dane Street: (1) all agreements between Sedgwick
or the Plan and Dane Street in effect at any time from March 10, 2014, through
June 16, 2015, concerning record review services; (2) all documents that reflect, in
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whole or in part, rules, policies, procedures, or guidance in effect at Dane Street at
any time from March 10, 2014, through June 16, 2015, concerning any one or
more of the following: (a) performing a record review, (b) preparing a report of a
record review, (c) reviewing a report of a record review, (d) editing and/or
changing a report of a record review, and (e) addenda and/or follow-up to a report
of a record review; and (3) all non-identical copies of reports of Dane Street’s
record review(s) conducted in connection with Davidson’s long-term disability
claim, with accompanying drafts – including comments, notes, deletions, additions,
markups, edits, and corrections – and report addenda. Davidson shall prepare and
propound a third party subpoena to Dane Street LLC forthwith, in accordance with
Fed. R. Civ. P. 45.
In all other respects, Davidson’s request for discovery appears unnecessary
at this time to establish procedural irregularities in this case.
Accordingly,
IT IS HEREBY ORDERED that plaintiff Elizabeth Davidson’s Motion for
Discovery [59] is granted in part and denied in part as set out in this Memorandum
and Order.

CATHERINE D. PERRY
UNITED STATES DISTRICT JUDGE
Dated this 16th day of October, 2017.
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