AQUILINO v. HARTFORD LIFE AND ACCIDENT INSURANCE COMPANY
MEMORANDUM AND/OR OPINION SIGNED BY MAGISTRATE JUDGE ELIZABETH T. HEY ON 8/31/10. 9/1/10 ENTERED AND COPIES E-MAILED.(ti, )
IN THE UNITED STATES DISTRICT COURT F O R THE EASTERN DISTRICT OF PENNSYLVANIA
D IA N E AQUILINO
v. H A R T F O R D LIFE AND ACCIDENT IN S U R A N C E COMPANY
: : : : : : :
C IV IL ACTION
N O . 10-2044
M E M O R A N D U M AND ORDER E L IZ A B E T H T. HEY U N IT E D STATES MAGISTRATE JUDGE 1 P la in tif f Diane Aquilino ("Plaintiff") brought this action against Defendant H a rtf o rd Life and Accident Insurance Company ("Defendant" or "Hartford") seeking p a ym e n ts and damages arising from Hartford's decision to terminate her long-term d is a b ility ("LTD") benefits effective May 8, 2009. Presently before the court is a dispute a s to whether Plaintiff is entitled to discovery beyond the paper record which Hartford re lie d upon in making its decision to terminate Plaintiff's LTD benefits (the " A d m in is tra tiv e Record"). For the following reasons, I find that Plaintiff is not entitled to d is c o v e ry beyond the Administrative Record.
This case was originally assigned to the Honorable William H. Yohn. Judge Y o h n referred the matter to me for all proceedings upon the consent of the parties. See D o c s . 6 & 8.
R E L E V A N T FACTS AND PROCEDURAL HISTORY P la in tif f was employed as a program coordinator by Certainteed Corporation,
w h ic h was a fully owned subsidiary of Saint-Gobain Corporation, from December 1984, th ro u g h April 25, 2008. See Doc. 1, Exh. 2 ("Compl.") at ¶¶ 3,4, 7. Plaintiff was a p a rtic ip a n t in the group benefit plan for its employees, which provided LTD benefits to e lig ib le and qualified employees pursuant to the terms of a group policy of insurance (the " P o l i c y" ) . 2 P la in tif f suffers from Crohn's Disease and related illnesses and became unable to p e rf o rm the essential duties of her job by April 2008. Compl. at ¶ 8. Plaintiff received s h o rt-te rm disability benefits pursuant to the Policy from August 31, 2007, through April 2 5 , 2008, and LTD benefits beginning on April 26, 2008. Id. at ¶¶ 9, 10. Meanwhile, in a c c o rd a n c e with beneficiary obligations under the Policy, Plaintiff filed a claim for Social S e c u rity Benefits on May 27, 2008, and was awarded benefits on April 23, 2009, with an e f f e c tiv e start date of November 26, 2007. Id. at ¶ 11. On May 7, 2009, Hartford determined that Plaintiff was no longer entitled to re c e iv e LTD benefits, and terminated the benefits effective the following day. Compl. at ¶ 13. Plaintiff requested reconsideration of the LTD termination notice by letter dated N o v e m b e r 2, 2009, and Hartford denied the request by letter dated November 19, 2009. Id. at ¶¶ 14, 15.
The Policy is attached to the Complaint at Exh. "A." 2
Plaintiff commenced suit in state court, asserting claims against Defendant for b re a c h of contract and bad faith. See Compl. at Counts I & II. Defendant removed the m a tte r to federal court on the basis that Plaintiff's claims were preempted by the E m p lo ye e Retirement Income Security Act of 1974, 29 U.S.C. § 1001, et seq. ("ERISA"), a n d filed a motion to dismiss the state law bad faith claim asserted in Count II of the C o m p la in t. See Docs. 1 & 3. On June 8, 2010, after the matter was referred to me, I held a teleconference with c o u n s e l to discuss the pending motion to dismiss and a dispute concerning the scope of d is c o v e ry. Two orders followed, the first granting Defendant's motion to dismiss as u n o p p o s e d and dismissing Count II of the Complaint, and the second directing Plaintiff to n o tif y Defendant of all discovery sought beyond the Administrative Record and setting f o rth a schedule for the parties to address the discovery dispute in responsive letter briefs. See Docs. 9 & 10.3 C o n s is te n t with my scheduling order, Plaintiff sent Defendant a letter proposing s ig n if ic a n t discovery beyond the Administrative Record. See 06/24/10 letter, attached to D o c . 16 at Exh. "A." For example, Plaintiff seeks to depose various individuals, in c lu d in g Rakesh Vinayek, M.D., the medical consultant who reviewed Plaintiff's file, S te p h e n Murray, a senior claims investigator with Hartford, and Christine Chiodo of
T h e latter order was revised by two subsequent orders dated June 15, 2010, and J u ly 6, 2010, respectively. See Docs. 11 & 12. 3
Certainteed's human relations department. See id. at 1-2. Plaintiff also seeks production o f various documents, including all correspondence between Plaintiff and Defendant, the m e d ic a l case manager's file, the Commonwealth of Pennsylvania Attorney General's O f f ic e file related to a fraud report concerning Plaintiff which was submitted by Mr. M u rra y, and Plaintiff's employment records from Certainteed covering the period January 1 , 2006, through November 25, 2007. See id. at 2. Defendant thereafter filed a letter brief opposing Plaintiff's proposed discovery in its entirety (Doc. 16), Plaintiff submitted a letter brief in response (Doc. 17), and D e f e n d a n t submitted a letter brief in reply (Doc. 18). The discovery dispute is now ripe f o r review. II. D ISC U S S IO N T h e sole issue presented is whether Plaintiff is entitled to discovery in this matter b e yo n d the Administrative Record utilized by Defendant in its decision to terminate P la in tif f 's LTD benefits. The parties agree that resolution of this issue turns on what s ta n d a rd of review applies at trial. Plaintiff argues that the court should engage in de n o v o review, in which case Plaintiff should be permitted to develop her case beyond the e x is tin g Administrative Record. Defendant counters that the arbitrary and capricious s ta n d a rd of review applies, and that no such expanded discovery is permissible. The p a rtie s agree that if the more deferential arbitrary and capricious standard of review a p p lie s, Plaintiff would not be entitled to any expanded discovery. See Doc. 17 at 4
("[S]hould the Court adopt . . . the arbitrary and capricious standard, I [Plaintiff's c o u n s e l] would agree . . . that the discovery requested by [Plaintiff] is not authorized."). Plaintiff concedes that the Policy conveys upon Hartford "full discretion" to determine eligibility for benefits under the Policy. See Doc. 17 at 1 (quoting the Policy at p . 32) ("The Plan has granted the Insurance Company full discretion and authority to d e te rm in e eligibility for benefits and to construe and interpret all terms and provisions of th e Policy."). Ordinarily, such discretionary language in a policy is sufficient to shift ju d ic ia l review of a benefits determination from de novo to discretionary review. See F ire s to n e Tire & Rubber Co. v. Bruch, 489 U.S. 101, 111, 115 (1989) (de novo review g e n e ra lly applies in ERISA cases, but where a plan grants administrator or fiduciary d is c re tio n a ry authority to determine benefits eligibility, "[t]rust principles make a d e f e re n tia l standard of review appropriate"). Nevertheless, Plaintiff argues that de novo re v ie w should apply in this case because Hartford is vested with both discretionary a u th o rity to determine eligibility for benefits and responsibility for paying those benefits, th u s creating a conflict of interest. See Doc. 17 at 1, 5. In support of her argument, Plaintiff relies on Hall v. UNUM Life Ins. Co., 300 F .3 d 1197 (10th Cir. 2002). See Doc. 17 at 1-2. In Hall, the Tenth Circuit considered the q u e s tio n of what discovery should be permitted in the context of de novo ERISA cases. See 300 F.3d at 1200-01. The court concluded that "the best way to implement ERISA's p u rp o s e s . . . is ordinarily to restrict de novo review to the administrative record, but to
allow the district court to supplement that record `when circumstances clearly establish th a t additional evidence is necessary to conduct an adequate de novo review of the benefit d e c is io n .'" Id. at 1202 (quoting Quesinberry v. Life Ins. Co. of N. Am., 987 F.2d 1017, 1 0 2 5 (4th Cir. 1993)). The Tenth Circuit identified several "exceptional circumstances" th a t could warrant such additional evidence, including "instances where the payor and the a d m in is tra to r are the same entity and the court is concerned about impartiality." Id. at 1 2 0 3 (quoting Quesinberry, 987 F.2d at 1027). Plaintiff's reliance on Hall is misplaced for two reasons. First, the policy a d m in is tra to r in Hall did not have discretionary authority and therefore the parties in that c a s e did not dispute the lower court's determination that de novo review applied. See 300 F .3 d at 1200-01. Thus, the question in Hall was not the same as that implicated here n a m e ly, whether de novo review applies but rather whether the "exceptional c irc u m s ta n c e s " identified by the court entitled Petitioner to obtain evidence beyond the a d m in is tra tiv e record in the context of de novo review. Id. at 1202-03. Second, as to the question whether a conflict of interest constitutes an "exceptional c irc u m s ta n c e " warranting a shift in the standard of review from discretionary to de novo, a s Plaintiff suggests, that proposition has been explicitly rejected by the United States S u p re m e Court. In Metropolitan Life Ins. Co. v. Glenn, 554 U.S. 105, 128 S.Ct. 2343 (2 0 0 8 ), the Supreme Court explained that the fact that the same entity both determines e lig ib ility for, and is responsible for paying, benefits, did not imply "a change in the
standard of review, say, from deferential to de novo review." 128 S.Ct. at 2350 (e m p h a s is in original). Instead, the Supreme Court held that deferential review is a p p lic a b le , and that the reviewing judge should "take account of the conflict when d e te rm in in g whether the [administrator] . . . has abused his discretion." Id. Prior to the Supreme Court's decision in Glenn, the Third Circuit "adjusted the s ta n d a rd of review using a `sliding scale' in which the level of deference we accorded to a p la n administrator would change depending on the conflict or conflicts of interest a f f e c tin g plan administration." Estate of Schwing v. Lilly Health Plan, 562 F.3d 522, 525 (3 d Cir. 2009). In light of Glenn, the Third Circuit in Schwing abandoned its earlier a p p ro a c h and held that in such cases courts "should apply a deferential abuse of discretion s ta n d a rd of review across the board and consider any conflict of interest as one of several f a c to rs in considering whether the administrator or the fiduciary abused its discretion." 562 F.3d at 524.4 Since Glenn and Schwing, courts in this jurisdiction have repeatedly h e ld that the existence of a conflict does not alter the standard of review, and that the d e c is io n s of claims administers in such circumstances should be reviewed under the d e f e re n tia l arbitrary and capricious standard of review. See, e.g., Doroshow v. Hartford L if e & Accident Ins. Co., 574 F.3d 230, 233-34 (3d Cir. 2009), cert. denied, 130 S.Ct. 1 0 6 0 (2010) (existence of conflict of interest does not change deferential standard of
In the ERISA context, the "abuse of discretion" and "arbitrary and capricious" s ta n d a rd s are "practically identical." Schwing, 562 F.3d at 526 n.2 (citing Abmathiya v. H o f f m a n -L a Roche Inc., 2 F.3d 40, 45 n.4 (3d Cir. 1993)). 7
review); Lubich v. Liberty Life Assur. Co., 2010 WL 1253547, *5 (W.D. Pa. Mar. 4, 2 0 1 0 ) (same); Kovach v. UNUM Life Ins. Co., 08-5388, 2009 WL 5217076, *2-3 (E.D. P a . Dec. 30, 2009) (Robreno, J.) (arbitrary and capricious standard of review applies w h e re administrator is vested with discretion to make disability determinations). S o m e courts have permitted limited discovery, even in the context of arbitrary and c a p ric io u s review, so long as the discovery is narrowly tailored to explore an alleged c o n f lic t of interest by a claims administrator. See, e.g., Sivalingam v. UNUM Provident C o rp ., 09-4702, 2010 WL 2650428, *3 (E.D. Pa. July 1, 2010) (Bartle, C.J.) ("Discovery is the only way the record can be fully developed on the conflicts issue"). Here, Plaintiff s e e k s broad discovery based on her argument that de novo review applies, and has not ta ilo re d her requests to the question of Hartford's conflict of interest. This broad, meritsb a s e d evidentiary pursuit is not permitted in the context of arbitrary and capricious re v ie w . See Dandridge v. Raytheon Co., 2010 WL 370598, *3 (D.N.J. Jan. 26, 2010) (F a lk , M.J.) ("[T]o the extent Plaintiff seeks discovery into the merits of the Defendant's c la im determination, it is clear that such discovery is prohibited"). In light of the Supreme Court's ruling in Glenn and subsequent Third Circuit case la w , I conclude that the deferential arbitrary and capricious standard of review applies in th e present case. I further conclude that Plaintiff has not established that she is entitled to d is c o v e ry beyond the Administrative Record. See Bauer v. Reliance Standard Life Ins. C o ., 09-0397, 2009 WL 4287407, *3 (E.D. Pa. Aug. 13, 2009) (Joyner, J.)
(acknowledging conflict of interest may have influenced policy interpretation, but c o n c lu d in g "additional conflict of interest discovery outside the administrative record is n o t required for the Court's analysis of the reasonableness of the Policy's in te rp re ta tio n ." ); Smathers v. Multi-Tool, Inc., 298 F.3d 191, 199-200 (3d Cir. 2002) (" W h e th e r a claim determination is arbitrary and capricious requires a determination `w h e th e r there was a reasonable basis for [the administrator's] decision, based upon the f a c ts known to the administrator at the time the decision was made.'") (quoting Levinson v . Reliance Std. Life Ins. Co., 245 F.3d 1321, 1326 (11th Cir. 2001)). III. C O N C L U S IO N F o r the foregoing reasons, I conclude that this matter is subject to the deferential a rb itra ry and capricious standard of review, and that Plaintiff is not entitled to discovery b e yo n d the existing Administrative Record. Accordingly, I will deny Plaintiff's request f o r expanded discovery. An appropriate Order follows.
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