Whipple v. Unum Group Corporation

Filing 40

ORDER granting 29 Motion to Compel. Signed by U. S. District Judge Jeffrey L. Viken on 1/17/12. (SB)

UNITED STATES DISTRICT COURT
DISTRICT OF SOUTH DAKOTA
WESTERN DIVISION
JOY R. WHIPPLE, M.D.,
Plaintiff,
vs.
UNUM GROUP CORPORATION,
d/b/a Unum Life Insurance
Company of America,
Defendant.

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CIV. 10-5075-JLV

ORDER

INTRODUCTION
Plaintiff Joy R. Whipple, M.D. (Dr. Whipple) filed a complaint against
defendant Unum Group Corporation (Unum) alleging defendant violated the
Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1001
et seq., in denying plaintiff disability benefits. (Docket 1). Unum admits the
group disability insurance plan (Plan) with plaintiff’s employer is subject to
ERISA. (Docket 10). Unum admits it is both the insurer and the claims
administrator of the Plan. (Docket 37-1, ¶ 2). The Plan gives Unum the
discretion to determine benefits, resolve factual disputes and interpret the Plan
provisions. Id. Unum denies it violated ERISA in determining plaintiff was no
longer disabled within the meaning of the Plan. Id. Plaintiff filed a motion to
compel to determine bias and conflict of interest by defendant in denying
plaintiff benefits. (Docket 29). Defendant resists plaintiff’s motion. (Docket
35). After briefing, the motion is ripe for resolution. For the reasons stated
below, plaintiff’s motion is granted.

DISCUSSION
Plaintiff seeks an order compelling Unum to answer certain
interrogatories and produce documents associated with those interrogatories.
The interrogatories sought disclosure of the W-2 or 1099 income for Dr. Tony
Smith, Dr. Suzanne Benson, Dr. Beth Schnars, Dr. Andrew Krouskop, and
Pam McMillian, RN, MSC, for the years 2007-2010. All of these individuals
participated in evaluating Dr. Whipple’s disability claim. (Docket 30, p. 2).
Plaintiff seeks discovery of these individuals’ relationship with Unum for the
years 2007-2009, as these “medical advisors . . . reviewed Dr. Whipple’s case
. . . provided opinions which were part of the basis for Unum’s denial of
benefits to Dr. Whipple [and] . . . the amount of money Unum paid these
individuals and the number of cases they reviewed may show bias and a
conflict of interest.” Id. “If these individuals receive substantial income from
Unum and review many cases, they may have an interest in preserving their
income and employment.” Id.
The question posed by plaintiff was: “How many cases did [name] review
for you in each of the following years: 2007, 2008 [and] 2009 . . . .” (Docket
31-2). The request for production of documents made the same request
relating to each individual: “Please provide the W-2 or 1099 you issued to
[name] for each of the following years: 2007, 2008 [and] 2009 . . . .” (Docket
31-3).
Unum’s objections to the interrogatories were, as follows:
Defendant objects to this request on the grounds that (1) it is vague
and ambiguous, particularly with regard to the use of the word
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“cases;” (2) it seeks information which is neither relevant to the
subject matter of this litigation nor reasonably calculated to lead to
the discovery of admissible evidence; (3) it is overly broad,
particularly with regard to scope and time, as Plaintiff did not file her
claim for benefits until 2010; and (4) that plaintiff’s claim is under a
plan governed by ERISA, and therefore the Court’s review is limited
to the administrative record, a copy of which has been previously
produced to plaintiff.
(Docket 31-1). In response to plaintiff’s requests for production of documents,
defendant interposed the following objection:
Defendant objects to this request on the grounds that (1) it seeks
documents which are neither relevant to the subject matter of this
litigation nor reasonably calculated to lead to the discovery of
admissible evidence; (2) it is overly board, particularly with regard to
scope and time, as Plaintiff did not file her claim for benefits until
2010; (3) that plaintiff’s claim is a plan governed by ERISA, and
therefore, the Court’s review is limited to the administrative record,
a copy of which has been previously produced to plaintiff; (4) it seeks
documents which constitute or contain confidential information; and
(5) to the extent it seeks documents protected by third parties’ right
of privacy.
(Docket 31-3).
Since Unum concedes it is both the insurer and claims administrator
and operates under a conflict of interest, Unum argues discovery into the
conflict is not warranted. (Docket 35, p. 3). Unum argues no further discovery
is necessary as it has already produced over 1,000 pages, including the claims
file and policies. (Docket 36, ¶ 2).

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Notwithstanding its objections, Unum disclosed on a confidential basis
information for each individual’s income1 and work2 on Unum claims for the
year 2010, summarized as follows:
Dr. Tony Smith

$196,693.28

588 claims;

Dr. Suzanne Benson

$203,707.36

250 claims;

Dr. Beth Schnars

$166,050.00

188 claims;

Dr. Andrew Krouskop

$212,115.34

127 claims; and

RN Pam McMillian

$68,672.63

619 claims.

(Dockets 31-4 & 31-2).
Under Metropolitan Life Insurance Co. v. Glenn, 554 U.S. 105 (2008),
when a court “review[s] the lawfulness of benefit denials, [it] will often take
account of several different considerations of which a conflict of interest is
one.” Id. at 117. The court must “reach[] a result by weighing all [factors]
together.” Id. “In such instances, any 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.”
Id. “The conflict of interest . . . should prove more important (perhaps of great

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The income for Drs. Smith, Benson, and Krouskop and RN McMillian
were reported on W-2s [employee income] and Dr. Schnars’ income was
reported on a Form 1099 [as an independent contractor]. (Docket 31-4).
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Unum describes this work as “performing activities . . . [which] may
include tasks such as preparation of written reviews, attending physician
contacts, roundtable participation and doctoral consultations.” (Docket 31-2).
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importance) where circumstances suggest a higher likelihood that it affected
the benefits decision . . . .” Id. The conflict of interest factor “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. Evaluating the Plan’s
decision for abuse of discretion, it is important to the court whether Unum
“emphasized a certain medical report that favored a denial of benefits, had
deemphasized certain other reports that suggested a contrary conclusion, and
had failed to provide its independent vocational and medical experts with all of
the relevant evidence.” Id. at 118 (emphasis added).
After Glenn, this court specifically authorized discovery into conflict of
interest in an ERISA denial of benefits case. See Hackett v. Standard
Insurance Co., CIV. 06-5040-JLV, 2010 WL 1494772 (D.S.D. April 4, 2010).
“Where a conflict of interest exists, the court, using its authority under Fed. R.
Civ. P. 26, should allow plaintiff to inquire into any financial incentive an
administrator or its claims department may have in denying claims which, but
for the conflict, would seem appropriate for payment of benefits.” Id. at *3.
“The same holds true with respect to the relationship between an
administrator’s claims department and those outside medical advisors who

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may have an incentive to inappropriately deny claims so as to extend or
otherwise enhance their longstanding financial relationship with the
administrator.” Id. at *4.
Unum argues Hackett is not authoritative because of two cases issued
after Hackett by the Court of Appeals for the Eighth Circuit. (Docket 35, p. 4).
Unum cites to Jones v. ReliaStar Life Insurance Co., 615 F.3d 941 (8th Cir.
2010) and Atkins v. Prudential Insurance Co., 404 Fed. App. 82 (8th Cir. 2010)
(unpublished opinion). (Docket 35, p. 3).
Unum’s argument is not persuasive. In Jones, the defendant conceded it
was operating under a conflict of interest because “it was both insurer and
administrator of the plan . . . .” Jones, 615 F.3d at 945. The court denied
plaintiff’s challenge to the district court’s denial of discovery into the conflict of
interest and the merits of defendant’s decision because the case “involves an
application of policy language to undisputed facts, and the administrative
record is sufficient to permit a fair evaluation of ReliaStar’s decision.” Id.
(emphasis added). In Atkins, the district court, after denying plaintiff’s request
for discovery on the conflict of interest issue (through broad interrogatories and
requests for production of documents), granted summary judgment to
Prudential Insurance because the administrative record was complete, the
plan’s decision was supported by substantial evidence and was reasonable.
Atkins, 404 Fed. App. at 84. Comparing Atkins to Jones, the Court of Appeals

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for the Eighth Circuit concluded the district court did not abuse its discretion
in denying plaintiff’s request for discovery. Id. at 85.
Dr. Whipple’s case is more closely aligned with Hackett than with Jones
or Atkins. It is clear to the court this case involves significant disputed facts,
interpretations of medical diagnoses, medical opinions, and projections of
future employability or disability. Resolution of disputed facts will rest in large
part on the credibility of the witnesses, including Unum’s medical advisors.
While Unum concedes the conflict of interest, it fails to acknowledge that four
of its five “independent” medical advisors are actually employees of Unum.
“Based upon suggestions by the reviewing physicians, a second review (by a
physical medicine and rehabilitation physician) was done and later reviews
were also done by an internal medicine physician and a second physical
medicine and rehabilitation physician, and an internal medicine physician was
also consulted.” (Docket 35, pp. 1-2).
Nowhere does Unum admit the financial nature of the relationship, but
the W-2s indicate the individuals are Unum’s own employees. The Form 1099
for Dr. Schnars indicates she generated a significant income during 2010 from
her work with Unum. As employees, or as an outside contractor, these medical
advisors “may have an incentive to inappropriately deny claims so as to extend
or otherwise enhance their longstanding financial relationship with the
administrator.” Hackett, 2010 WL 1494772 at *4. “[A] conflict . . . cannot be

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considered in a vacuum. Discovery is required to explore the nature and
extent of the purported conflict . . . at issue.” Id. (internal citation omitted). “A
large body of historical evidence might lend some statistical credibility to the
claim that a pervasive bias infected a particular decision.” Mulligan v.
Provident Life and Accident Insurance Co., 271 F.R.D. 584, 589-90 (E.D. Tenn.
2011).
Unum’s objections that plaintiff’s discovery requests are vague, overly
broad, or unduly burdensome are without merit based on the 2010 discovery
defendant provided. Producing W-2s or Form 1099s and reporting the number
of claims on which an individual performed some activity, as Unum did for
2010, are reasonable methods by which defendant will provide discovery for the
years 2007-2009.
ORDER
Based on this analysis, it is hereby
ORDERED that plaintiff’s motion to compel discovery (Docket 29) is
granted.
IT IS FURTHER ORDERED that defendant Unum Life Insurance
Company of America shall provide answers to plaintiff’s interrogatories and
produce the documents requested for the years 2007-2009 for Dr. Smith, Dr.
Benson, Dr. Schnars, Dr. Krouskop, and RN McMillian in the same manner in
which the defendant produced information for the year 2010.

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IT IS FURTHER ORDERED that defendant Unum Life Insurance
Company of America shall produce this discovery to plaintiff, but not file it with
the court, on or before February 16, 2012.
Dated January 17, 2012.
BY THE COURT:
/s/ Jeffrey L. Viken
JEFFREY L. VIKEN
UNITED STATES DISTRICT JUDGE

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