Hilbert v. The Lincoln National Life Insurance Company

Filing 50

MEMORANDUM re MOTION for Discovery 33 (Order to follow as separate docket entry)Signed by Honorable Sylvia H. Rambo on 2/24/16. (ma)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
YVONNE HILBERT,

:
:
Plaintiff
:
:
v.
:
:
THE LINCOLN NATIONAL LIFE :
INSURANCE COMPANY,
:
:
Defendant
:

Civil No. 1:15-cv-0471

Judge Sylvia H. Rambo

MEMORANDUM
Presently before the court is Plaintiff Yvonne Hilbert’s (“Plaintiff”)
motion to compel discovery from Defendant The Lincoln National Life Insurance
Company (“Defendant”) and supporting brief. (Docs. 33 & 34.) Defendants have
opposed the motion for discovery (Doc. 36) and Plaintiff replied (Doc. 41). Upon
consideration of the parties’ arguments, the court will deny the motion.
I.

Background
After allegedly becoming disabled and unable to maintain gainful

employment, Plaintiff received short-term disability benefits from Defendant
pursuant to an employee benefit plan governed by the Employee Retirement
Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001.

(Doc. 1, ¶ 9.)

Defendant later denied Plaintiff’s claim for long-term disability benefits (id. at ¶
10), and Plaintiff commenced this suit. Pursuant to 29 U.S.C. § 1132(a)(1)(B),
Plaintiff seeks to recover the plan benefits Defendant denied, to receive

reinstatement for payment of future benefits, and to obtain declaratory relief.1 (Id.
at ¶ 30.)
Through this motion, Plaintiff seeks additional discovery beyond the
administrative record for her claim. Defendants oppose the motion, claiming, inter
alia, that the requested discovery is beyond the permissible scope of discovery in a
case involving an ERISA-governed benefits plan.
II.

Discussion
It is well established that the Federal Rules of Civil Procedure allow

broad and liberal discovery. However, broad discovery does not necessarily apply
in the context of ERISA. Indeed, in an ERISA case such as this where the abuse of
discretion standard applies,2 the review is limited to the administrative record and
further discovery is generally not permitted. See Stevens v. Santander Holdings
USA, Inc. Self-Insured Short Term Disability Plan, Civ. No. 11-cv-7473, 2013 WL
322628, *7 (D.N.J. Jan. 28, 2013) (citations omitted). A court may, however,

1

In her complaint, Plaintiff also sought equitable relief under 29 U.S.C. § 1132(a)(3). However,
Defendant filed a motion for judgment on the pleadings as to Plaintiff’s equitable claims, and the
court granted the motion by memorandum and order on December 8, 2015. (Docs. 48 & 49.)
2

The parties herein appear to agree that the applicable plan grants Defendant the discretionary
authority warranting an abuse of discretion standard of review. See Firestone Tire & Rubber Co.
v. Bruch, 489. U.S. 101, 111 (1989). The question thus becomes the proper scope of discovery
in this case under that deferential standard.
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permit discovery if it is directed at an administrator’s conflict of interest,3 which
must be considered as a factor in determining whether there has been an abuse of
discretion. Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989). The
existence of such a conflict, however, does not change the standard of review or
make it less deferential. Metropolitan Life Ins. Co. v. Glenn, 554 U.S. 105, 111
(2008); Doroshow v. Hartford Life & Accident Ins. Co., 574 F.3d 230, 234 (3d Cir.
2009).

Rather, a “conflict is merely one factor, among several case-specific

considerations, district courts should consider,” and may serve as a tie-breaker only
where the other factors are “closely balanced.” Glenn, 554 U.S. at 117; Doroshow,
574 F.3d at 234 (“The Court in Glenn reiterated its position in Firestone that a
reviewing court should consider the conflict of interest—but only as one
consideration among many.”) As such, any discovery into a potential conflict
“must be allowed sparingly and, if allowed at all, must be narrowly tailored so as
to leave the substantive record essentially undisturbed.” Denmark v. Liberty Life
Assur. Co. of Boston, 566 F.3d 1, 10 (1st Cir. 2009).
To establish that additional discovery is warranted, a plaintiff must—at
the very least—make “a good-faith allegation of a procedural irregularity or bias in
3

Conflicts of interest may be structural or procedural. “‘Structural conflicts’ relate to financial
incentives inherent in a plan’s design, such as where the same entity both funds and administers
a benefits plan.” Sivalingam v. Unum Provident Corp., 735 F. Supp. 2d 189, 195 (E.D. Pa.
2010) (citing Post v. Hartford Ins. Co., 501 F.3d 154, 162 (3d Cir. 2007)). “‘Procedural
conflicts’ pertain to the way in which the administrator arrives at its decision” and “often take the
form of biases.” Id. (citing Post, 501 F.3d at 165)).
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the review process.”

Mainieri v. Bd. of Tr. of Operating Eng’r’s Local 825

Pension Fund, Civ. No. 07-cv-1133, 2008 WL 4224924, *3 (D.N.J. Sept. 10,
2008). Discovery generally should not be permitted beyond the administrative
record when a plaintiff’s allegation of bias or conflict amounts to nothing more
than a dispute over the reasonableness of a defendant’s benefits decision. Cipriani
v. Liberty Life Assur. Co. of Boston, Civ. No. 12-cv-1335, 2014 WL 2115121, *4
(M.D. Pa. May 21, 2014) (citation omitted).
Courts have wide discretion in deciding whether additional discovery is
appropriate, and this discretion includes a ruling denying discovery beyond the
administrative record. Verme-Gibboney v. Hartford Ins. Co., Civ. No. 11-cv-3796,
2013 WL 6633084, *3 (D.N.J. Dec. 16, 2013). In exercising its discretion, the
court must keep in mind that countervailing forces exist between the need to permit
plaintiffs to obtain discovery to prove bias and the need to limit discovery to
prevent a costly and inefficient dispute. As such, the court should “limit discovery
to those cases in which it appears likely that the plan administrator committed
misconduct or acted with bias.” Semien v. Life Ins. Co. of N. Am., 436 F.3d 805,
815-16 (7th Cir. 2006). The court cannot simply grant a plaintiff’s request to
conduct discovery outside the administrative record “where she has a groundless
hope of finding some proof of bias after a long and costly search. Such a policy
would seriously impair ERISA’s goal of providing plan participants and
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beneficiaries an expeditious and inexpensive method of resolving their disputes.”
Delso v. Tr. Of the Ret. Plan for the Hourly Emps. of Merck & Co., Civ. No. 04-cv3009, 2006 WL 3000199, *2 (D.N.J. Oct. 20, 2006).
In the instant matter, Plaintiff argues that, because Defendant is both the
decision-maker and payer of benefits, she is entitled to extra-record discovery
regarding the impact of such conflict. As discussed above, however, an allegation
of structural conflict does not give a plaintiff “carte blanche” to seek conflict of
interest discovery beyond the administrative record. Verme-Gibboney, 2013 WL
6633084 *4. Plaintiff has failed to establish any good faith basis for alleging bias
or other irregularity in Defendant’s decision-making process that affected her
claim or that raises a reasonable suspicion of misconduct. Indeed, Plaintiff’s broad
allegations lack any case-specific factual basis for the court to suspect that she
herself was affected by a bias or conflict. The court will not grant Plaintiff’s
request to conduct discovery outside the administrative record simply because she
hopes that it may lead to some proof of bias after a long and costly search.
Accordingly, where Plaintiff has failed to establish a good faith basis or reasonable
suspicion of misconduct, the court will deny the motion for discovery beyond the
administrative record.

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III.

Conclusion
For the reasons stated above, the court will deny Plaintiff’s request to

conduct additional discovery. An appropriate order will follow.

s/Sylvia H. Rambo
SYLVIA H. RAMBO
United States District Judge
Dated: February 24, 2016

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