Chau v. Hartford Life Insurance Company
MEMORANDUM OPINION AND ORDER. For the foregoing reasons, Dr. Chau's motion for extra-record discovery is GRANTED IN PART and DENIED IN PART. Dr. Chau may conduct discovery that is consistent with the limitations set forth in this opinion. The Clerk of Court is directed to terminate the motion pending at Dkt. No. 94. SO ORDERED. re: 94 MOTION for Discovery For Extra Record Discovery filed by Elizabeth Boey Chau. (Signed by Judge Gregory H. Woods on 12/13/2016) (rjm)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
ELIZABETH BOEY CHAU, M.D.,
HARTFORD LIFE INSURANCE COMPANY,
DOC #: _________________
DATE FILED: 12/13/2016
GREGORY H. WOODS, District Judge:
Dr. Chau brings this suit under the Employee Retirement Security Act of 1974 (“ERISA”),
29 U.S.C. § 1001 et seq., challenging the termination of her long-term disability insurance benefits by
Hartford Life Insurance Company (“Hartford”). She also asserted various state law claims against
Defendants, which this Court has previously held to be expressly preempted by ERISA. Now
before the Court is Dr. Chau’s motion for extra-record discovery on the issue of Hartford’s alleged
conflict of interest as both the administrator and the payor of her disability claim. Defendants
oppose extra-record discovery. For the reasons that follow, the Court concludes that limited
discovery is warranted on this issue.
The Court assumes familiarity with the facts pleaded in Dr. Chau’s complaint, most of which
are not directly relevant to the Court’s review of Dr. Chau’s motion. Of relevance here are Dr.
Chau’s allegations that Hartford’s termination of her benefits was motivated by its conflicting
financial self-interest. First Am. Compl. (“AC”), Dkt. No. 26, ¶¶ 38, 48-50, 54-66. This “conflicting
financial self-interest” flows from Hartford’s dual role as the evaluator and payor of claims made
under the relevant benefit plan. In other words, Hartford is responsible both for determining who
is eligible for benefits under the plan and for paying those benefits.
In Metropolitan Life Insurance Co. v. Glenn, 554 U.S. 105, 112-15 (2008), the Supreme Court
held that a conflict of interest exists for ERISA purposes when a plan administrator both evaluates
claims for benefits and pays benefits claims. The parties do not dispute that Hartford served in this
dual role. And, given the Court’s decision in Glenn, Hartford cannot dispute that a conflict exists.
Instead, the parties disagree as to whether this structural conflict affected Hartford’s decision to
terminate Dr. Chau’s benefits. E.g., AC, ¶ 38 (alleging that Hartford’s termination of Dr. Chau’s
benefits was “motivated by [Hartford]’s conflicting financial self-interest”); Answer to AC, ECF No.
91, ¶ 38 (denying that allegation).
Dr. Chau contends that the structural conflict recognized in Glenn entitles her to conduct
discovery. Mem. of Law in Supp. of Mot to Req. Extra-Record Disc. (“Pl.’s Mem.”), ECF No. 95,
at 1, 17. Hartford argues that Dr. Chau is not entitled to discovery because she has “fail[ed] to
show, or even suggest, that conflict of interest considerations influenced Hartford’s decision-making
on her claim.” Mem. of Law in Opp’n to Mot. (“Def.’s Mem.”), ECF No. 101, at 2. For her part,
Dr. Chau purports to make such a showing by arguing that Hartford’s decision was so irrational and
contrary to the evidence that “conflict and financial bias are the only explanation” for Hartford’s
termination of her benefits. Pl.’s Mem. at 5-12.
In order to decide Dr. Chau’s motion, the Court must determine (1) whether she is entitled
to any discovery at all and (2) if so, the appropriate scope of that discovery. The Court concludes
that Dr. Chau is entitled to conduct discovery that is limited and narrowly tailored to Hartford’s
financial conflict of interest.
The appropriateness of discovery is somewhat intertwined with the standard the Court will
employ in reviewing Hartford’s claim decision. “[A] denial of benefits . . . is to be reviewed under a
de novo standard unless the benefit plan gives the plan administrator or fiduciary discretionary
authority to determine eligibility for benefits or to construe the terms of the plan.” Firestone Tire &
Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989). Where a plan provides the administrator with
discretionary authority, the benefits decision is reviewed for abuse of discretion. Id. at 111; Pepe v.
Newspaper & Mail Deliverers’-Publishers’ Pension Fund, 559 F.3d 140, 146 (2d Cir. 2009) (“Since the
terms of the Plan grant the [administrator] discretionary authority to interpret the Plan, the standard
governing the district court’s review . . . is the arbitrary-and-capricious standard.”); Kruk v. Metro. Life
Ins. Co., No 3:07-cv-1533 (CSH), 2009 WL 1481543, at *2 n.1 (D. Conn. May 26, 2009) (“The term
‘arbitrary and capricious’ is used interchangeably with the phrase ‘abuse of discretion,’ and either
describes the deferential standard applied when an ERISA plan reserves discretion for the
administrator.” (citations omitted)). Because the plan at issue here confers discretion on Hartford in
making benefits determinations, the termination of Dr. Chau’s benefits will be reviewed under the
arbitrary-and-capricious/abuse of discretion standard. See Group Benefit Plan, Def.’s Mem., Ex. A,
at 3 (“The Hartford has full discretion and authority to determine eligibility for benefits and to
construe and interpret all terms and provisions of the Plan.”).
Whether the decision is reviewed de novo or deferentially, the district court’s review is
typically limited to the evidence that the plan administrator itself considered, i.e., the administrative
record. DeFelice v. Am. Int'l Life Assurance Co. of N.Y., 112 F.3d 61, 66-67 (2d Cir. 1997) (de novo
review); Miller v. United Welfare Fund, 72 F.3d 1066, 1071 (2d Cir. 1995) (deferential review). Courts
have discretion, however, to admit evidence outside the record if the plaintiff shows “good cause”
to do so. E.g., Krauss v. Oxford Health Plans, Inc., 517 F. 3d 614, 631 (2d. Cir. 2008). “A demonstrated
conflict of interest in the administrative reviewing body is an example of ‘good cause’ that may,
under certain circumstances, warrant the introduction of additional evidence.” Biomed Pharms., Inc. v.
Oxford Health Plans (N.Y.), Inc., 831 F. Supp. 2d 651, 658 (S.D.N.Y. 2011) (citing DeFelice, 112 F.3d at
Although the Court must find “good cause” to consider extra-record evidence in its review
of a claim decision, the standard for permitting discovery to supplement the record is “far less
stringent.” Joyner v. Continental Cas. Co., 837 F. Supp. 2d 233, 240-41 (S.D.N.Y. 2011) (quoting Baird
v. Prudential Ins. Co. of Am., No. 09-cv-7898, 2010 WL 3743839, at *8 (S.D.N.Y. Sept. 24, 2010)
(“[T]he standard for permitting discovery to supplement the administrative record in an ERISA case
is far less stringent than the standard for actually considering that outside evidence when reviewing
the decision of the Plan Administrator . . . .”)); see also Burgio v. Prudential Life Ins. Co. of Am., 253
F.R.D. 219, 229 (E.D.N.Y. 2008) (“[T]he decision as to whether to allow discovery is distinct from
the decision as to whether to allow consideration of additional evidence.” (citation omitted)). “But
what that ‘less stringent’ standard is remains somewhat unclear.” Joyner, 837 F. Supp. 2d at 241.
Some courts have held that, although the plaintiff need not make a full showing of “good
cause” to warrant discovery, she must nonetheless “show a reasonable chance that the requested
discovery will satisfy the good cause requirement.” Yasinoski v. Conn. Gen. Life Ins. Co., No. 07-cv257, 2009 WL 3254929, at *5 (E.D.N.Y. Sept. 30, 2009); Trussel v. Cigna Life Ins. Co. of N.Y., 552 F.
Supp. 2d 387, 390-92 (S.D.N.Y. 2008). Some of those courts have elucidated that standard by
holding that a plaintiff seeking discovery on the basis of a conflict of interest must point to “specific
examples from the administrative record showing that [the plan administrator] exerted improper
influence over Plaintiff’s treating physician or other review doctors.” E.g., Quinones v. First Unum Life
Ins. Co., No. 10-cv-8444 (SAS), 2011 WL 797456, at *3 (S.D.N.Y. Mar. 4, 2011) (quoting Yasinoski,
2009 WL 3254929, at *11). Defendants rely upon that standard in opposing Dr. Chau’s motion.
Other courts have rejected the imposition of any special threshold showing for permitting
conflict-of-interest discovery in light of the Supreme Court’s decision in Glenn. The Court in Glenn
resolved two questions. First, as noted above, the Court held that a conflict of interest exists for
ERISA purposes when a plan administrator acts in the dual role of evaluating and paying benefits
claims, even when the administrator is not the plan participant’s employer. Glenn, 554 U.S. at 11215. The Court then considered how that conflict should be taken into account on judicial review of
a discretionary benefit determination. The Court rejected the approach that had been taken by some
lower courts, including those within the Second Circuit,1 wherein the standard of review was shifted
from arbitrary-and-capricious to de novo when a conflict of interest was present. Id. at 115-17. In
reaching that conclusion, the Court explained that it is not “necessary or desirable for courts to
create special burden-of-proof rules, or other special procedural or evidentiary rules, focused
narrowly upon the evaluator/payor conflict.” Id. at 116-17. Instead, the Court stated that district
courts “should consider” a financial conflict of interest as a “factor” in determining whether a plan
administrator abused its discretion, the significance of which will vary depending upon the
circumstances of the particular case. Id. at 108. By way of further guidance, the Court explained:
[A]ny one factor will act as a tiebreaker when the other factors are closely balanced,
the degree of closeness necessary depending upon the tiebreaking factor’s inherent
or case-specific importance. The conflict of interest at issue here, for example,
should prove more important (perhaps of great importance) where circumstances
suggest a higher likelihood that it affected the benefits decision, including, but not
limited to, cases where an insurance company administrator has a history of biased
claims administration. It should prove less important (perhaps to the vanishing
point) where the administrator has taken active steps to reduce potential bias and to
promote accuracy, for example, by walling off claims administrators from those
interested in firm finances, or by imposing management checks that penalize
inaccurate decisionmaking irrespective of whom the inaccuracy benefits.
Id. at 117 (citations omitted).
In light of Glenn’s command that district courts consider the evaluator/payor conflict
as a factor in its arbitrary-and-capricious review, some courts in this circuit and others have
held that at least some discovery is warranted when such a conflict exists, even if there is no
evidence in the administrative record that the conflict tainted the administrator’s decision.
1 See Sullivan v. LTV Aerospace & Defense Co., 82 F.3d 1251, 1256 (2d Cir. 1996) (holding that, “[i]f the court finds that the
administrator was in fact influenced by the conflict of interest, the deference otherwise accorded the administrator’s
decision drops away and the court interprets the plan de novo”).
Hogan-Cross v. Metro. Life Ins. Co., 568 F. Supp. 2d 410, 414 (S.D.N.Y. 2008) (Kaplan, J.)
(“Accordingly, MetLife’s notion that discovery is inappropriate in this case because ‘there is
no evidence in the administrative record of any actual conflict,’ a dubious proposition to
begin with before Glenn, is misguided. The question here, as in all cases, is whether the
discovery sought is relevant in itself or ‘appears reasonably calculated to lead to the discovery
of admissible evidence.’” (citations omitted)); Joyner, 837 F. Supp. 2d at 242 (Rakoff, J.)
(“Given Glenn’s command that district courts ‘should consider’ evidence of a financial conflict
of interest, it appears reasonable to allow plaintiff the opportunity to discover evidence the
Court may find gives it good cause to go outside the administrative record. And since Glenn
warned against erecting procedural hurdles to showing a financial conflict, the Court
concludes that it is unwarranted to impose a standard such as a ‘reasonable chance’ that
discovery will lead to ‘good cause’ at the discovery stage of litigation.” (citations omitted)); see
also Denmark v. Liberty Life Assurance Co. of Bos., 566 F.3d 1, 10 (1st Cir. 2009) (“The majority
opinion in Glenn fairly can be read as contemplating some discovery on the issue of whether
a structural conflict has morphed into an actual conflict.”); Murphy v. Deloitte & Touche Grp.
Ins. Plan, 619 F.3d 1151, 1162 (10th Cir. 2010) (“We take Glenn’s admonition against special
rules to apply beyond the particular issue addressed in Glenn. We think it also commands
that we not create any special rules for discovery related to a dual role conflict of interest.
Instead, we must apply Federal Rule of Civil Procedure 26(b) to discovery requests seeking
information related to a dual role conflict of interest, just as we would apply that rule to
other discovery requests.”).
This Court agrees with that approach and declines to apply the “reasonable chance”
standard to the extent that it would require Dr. Chau to point to specific evidence in the
administrative record that Hartford’s structural conflict affected its decision just to gain
entitlement to discovery on that very issue. For one thing, the “reasonable chance” standard
predates the decision in Glenn,2 and it is not clear that post-Glenn decisions applying that
standard have fully considered its impact on discovery. More importantly, the very factual
examples provided in Glenn to guide district courts’ weighing of the conflict—namely,
whether there is a “history of biased claims administration” and whether the administrator
has taken “active steps taken to reduce potential bias and to promote accuracy”—are facts
that would rarely be expected to appear in the record before the administrative reviewer. It
is difficult to understand how district courts could consider such case-specific facts in
assigning weight to a given conflict without permitting some discovery. 3 See Barker v. Life Ins
Co. of N. Am., 265 F.R.D. 389, 395 (S.D. Ind. 2009) (“[T]he only way for the district courts
to implement Glenn’s directive—to determine the weight to be accorded the conflict of
interest factor in light of the ‘circumstances’ of the case—is to determine what those
circumstances are. This usually cannot be accomplished without discovery.” (internal
To be sure, the “reasonable chance” standard may be workable as a general standard
2 For example, the decision in Trussel, 552 F. Supp. 2d 387, dates from April 4, 2008, approximately two months before
the decision was issued in Glenn.
In a concurring opinion in Glenn, Chief Justice Roberts expressed concern regarding the breadth and indeterminacy of
the majority’s approach to analyzing the dual-role conflict in the context of arbitrary-and-capricious review of a claim
decision. See 554 U.S. at 119-20 (Roberts, C.J., concurring) (“The majority’s approach would allow the bare existence of
a conflict to enhance the significance of other factors already considered by reviewing courts, even if the conflict is not
shown to have played any role in the denial of benefits. The end result is to increase the level of scrutiny in every case in
which there is a conflict—that is, in many if not most ERISA cases—thereby undermining the deference owed to plan
administrators when the plan vests discretion in them.”). As a reviewing court, this Court appreciates Chief Justice
Roberts’s concerns, but the majority decision in Glenn governs. Additionally, as noted above, the question of whether to
permit discovery is distinct from the question of whether the court should actually consider that evidence. Regardless of
the extent to which the majority opinion in Glenn requires (or permits) district courts to give weight in its review to an
administrator’s dual-role conflict even absent evidence that the conflict actually impacted the claim decision, this Court
concludes that Glenn requires it to permit discovery regarding the conflict. Indeed, Chief Justice Roberts’s concurrence
supports the conclusion that such discovery is necessary to ascertain the weight that the conflict should be accorded. Id.
at 123 (Roberts, C.J., concurring) (stating that evidence that the insurer provided bonuses for “claims savings” or
evidence of a pattern of denying meritorious claims could “support a finding that an administrator abused its
for permitting extra-record discovery in ERISA cases. In this Court’s view, however, Glenn
overrides such a standard with respect to dual-role conflict-of-interest discovery, given that
district courts are required to consider the specific circumstances of the conflict in their
review. This approach also offers the benefit of not inviting plaintiffs to point to the merits
of the administrator’s claim decision—as Dr. Chau does here, arguing that the decision was
so contrary to the evidence that it could only be explained by Hartford’s conflict—in an
attempt to make a showing that discovery is warranted.
In sum, this Court agrees with Judges Rakoff and Kaplan that an ERISA plaintiff
challenging a claim determination made by a dual-role administrator is entitled to conduct
some discovery. The Court also agrees with Judge Rakoff, however, that this “does not
afford plaintiff free reign over discovery on any issue in this case.” See Joyner, 837 F. Supp.
2d at 242. Accordingly, Dr. Chau may conduct discovery in this case that is narrowly
tailored to the financial conflict of interest inquiry discussed in Glenn—that is, discovery
targeted to reveal evidence of the likelihood that Hartford’s structural conflict impacted its
decision or evidence that it actually did impact its decision. She may not conduct discovery
that relates solely to the merits of Hartford’s claim decision. For guidance on the contours
of permissible discovery, the Court directs Dr. Chau to the kinds of evidence described as
relevant to the degree of weight to be accorded a conflict of interest in Glenn, as well as the
kinds of specific discovery requests held permissible in Joyner and Hogan-Cross.
As in Joyner, the Court will limit this discovery to document requests and a deposition
of a representative of Hartford pursuant to Fed. R. Civ. P. 30(b)(6), without prejudice to Dr.
Chau later seeking to depose other witnesses. Whether any evidence that Dr. Chau obtains
will satisfy the “good cause” standard such that the Court can consider it in reviewing the
termination of her benefits is a separate issue that is not yet ripe for decision.
DR. CHAU’S REQUEST FOR DISCOVERY PURSUANT TO HIPAA
Dr. Chau contends that she is entitled, pursuant to the Health Insurance Portability and
Accountability Act (“HIPAA”), to discover the identities of all individuals and entities to whom her
medical information was disclosed. Pl.’s Mem. at 15. Dr. Chau does not cite any particular
provision of HIPAA for this proposition, nor does she satisfactorily explain why this argument is
relevant to her motion for extra-record discovery or even to this Court’s eventual arbitrary-andcapricious review of Hartford’s claim decision. The Court observes that 45 C.F.R. § 164.528
provides individuals with a right to receive an accounting of disclosures of their protected health
information under certain circumstances. That right may be exercised without a court order.
DR. CHAU’S REQUEST FOR DISCOVERY INTO THE COMPLETENESS OF
In a single paragraph at the end of her reply brief, Dr. Chau states that her motion for extra-
record discovery is based not only on Hartford’s financial conflict of interest, but also on
incompleteness of the administrative record. Reply Mem. of Law in Supp. of Mot., ECF No. 102, at
8. In particular, she contends that “the administrative record does not appear to include the
arrangements, agreements and communications related to Chau, between Hartford and the IME
doctor, Hartford and its reviewing doctors, and Hartford and other third parties.” Id.
Under appropriate circumstances, ERISA plaintiffs may be permitted to conduct discovery
into the parameters of the administrative record. See, e.g., Porter v. Prudential Ins. Co. of Am., No. 05cv-6113, 2006 WL 2242770, at *2 (S.D.N.Y. Aug. 2, 2006). The “administrative record” in an
ERISA action is “the evidence that the fiduciaries themselves considered.” Miller, 72 F.3d at 1071.
Dr. Chau does not allege that these “arrangements, agreements and communications” were
considered by Hartford in terminating her benefits, nor does she point to any evidence in the record
suggesting that they were. Therefore, she has not provided adequate grounds to justify discovery on
the basis that the record that has been disclosed to her is incomplete. See Porter, 2006 WL 2242770,
at *1 (denying request for discovery because plaintiff did not provide “any reason to raise questions
about the parameters of the record”).
For the foregoing reasons, Dr. Chau’s motion for extra-record discovery is GRANTED IN
PART and DENIED IN PART. Dr. Chau may conduct discovery that is consistent with the
limitations set forth in this opinion.
The Clerk of Court is directed to terminate the motion pending at Dkt. No. 94.
Dated: December 13, 2016
New York, New York
GREGORY H. WOODS
United States District Judge
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