Kasko v. Aetna Life Insurance

33 F. Supp. 3d 782, 2014 WL 3586085, 2014 U.S. Dist. LEXIS 98366
CourtDistrict Court, E.D. Kentucky
DecidedJuly 21, 2014
DocketCivil Action No. 5:13-243-DCR
StatusPublished
Cited by9 cases

This text of 33 F. Supp. 3d 782 (Kasko v. Aetna Life Insurance) is published on Counsel Stack Legal Research, covering District Court, E.D. Kentucky primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kasko v. Aetna Life Insurance, 33 F. Supp. 3d 782, 2014 WL 3586085, 2014 U.S. Dist. LEXIS 98366 (E.D. Ky. 2014).

Opinion

MEMORANDUM OPINION AND ORDER

DANNY C. REEVES, District Judge.

This matter is pending for consideration of Plaintiff Linda E. Kasko’s (“Kasko”) motion to compel discovery regarding whether a conflict of interest influenced Defendant Aetna Life Insurance Company’s (“Aetna”) decision to deny her claim for long-term disability (“LTD”) benefits. [Record No. 15] Having reviewed the briefs filed in support of the parties’ respective positions, the Court will grant a portion of the relief sought.

I.

Kasko was covered through her former employer, InVentiv Health, under a group LTD plan governed by the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001 et seq. Kas-' ko claims that she was disabled and stopped working on July 9, 2011. [Record No. 1, p. 3] As a result, she filed a claim for LTD benefits with Aetna. The claim was denied. In addition to providing LTD coverage to InVentiv, Aetna administers the plan.

Kasko filed this action on July 31, 2013, alleging that the decision to deny her claim for LTD benefits was arbitrary, capricious and not supported by substantial evidence. She further asserts that “the decision to deny LTD benefits was under a perpetual conflict of interest because the benefits would have been paid out of its own funds.” [Record No. 1, ¶ 27] Kasko also contends that the decision to deny her claim for LTD benefits was influenced by the reviewing doctors’ conflicts of interest. [Record No. 25, p. 4].

On January 24, 2014, Kasko served the defendant with seven interrogatories and five requests for production of documents. Aetna objected to a number of the discovery requests. Thereafter, Kasko moved the Court to compel Aetna to respond. [Record No. 14] The discovery subject to Aetna’s objections and Kasko’s motion concerns a potential conflict and bias of doctors hired by Aetna to review Kasko’s benefits claim. [Record No. 15].

II.

A. Discovery Outside the Administrative Record

Generally, an ERISA claimant may not seek discovery regarding matters outside the administrative record. See Wilkins v. Baptist Healthcare Sys., Inc., 150 F.3d 609, 618 (6th Cir.1998) (noting that a district court may not ordinarily consider new evidence). This is based on two governing principles. First, the reviewing court’s determination is not whether a claimant is eligible for benefits, but rather whether the administrator’s decision was proper, based on the administrative record. See Perry v. Simplicity Eng’g, 900 F.2d 963, 966 (6th Cir.1990) (holding that under either “de novo” or [786]*786“arbitrary and capricious” standard, court’s review is limited to the record). Second, limitations regarding discovery furthers ERISA’s primary goal; that is, the inexpensive and expeditious resolution of disputes. Id. at 966-67.

However, when a claimant makes a procedural challenge to an administrator’s decision, such as 'a challenge based on bias, limited discovery may be appropriate. Johnson v. Conn. Gen. Life Ins. Co., 324 Fed.Appx. 459, 466 (6th Cir.2009) (citation omitted). In such a case, the first rationale is inapplicable and the court may look outside the administrative record to fully consider the circumstances affecting the administrator’s alleged conflict. Metro. Life Ins. Co. v. Glenn, 554 U.S. 105, 117, 128 S.Ct. 2343, 171 L.Ed.2d 299 (2008). For the same reason, however, discovery must be strictly confined to the procedural challenge. Johnson, 324 Fed.Appx. at 466; Moore v. Lafayette Life Ins. Co., 458 F.3d 416, 430 (6th Cir.2006). Moreover, the second rationale for prohibiting discovery remains applicable. As a result, any discovery which is permitted must be tailored to facilitate the prompt resolution of the dispute. See Price v. Hartford Life and Acc. Ins. Co., 746 F.Supp.2d 860, 865-66 (E.D.Mich.2010) (courts should account for the “interests of economy, efficiency, accuracy, and fairness” when addressing scope of discovery issues).

In Glenn, the Supreme Court held that there is an inherent conflict of interest whenever a plan administrator evaluates and pays benefits on claims. Glenn, 554 U.S. at 117, 128 S.Ct. 2343. However, the Court discouraged special procedural or evidentiary rules for analyzing a potential conflict of interest. Id. (“Neither do we believe it 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.”). The Sixth Circuit has interpreted this holding to mean that threshold evidentiary showings are not required for discovery in ERISA cases. Johnson, 324 Fed.Appx. at 466. But that does not necessarily mean that discovery is available every time the defendant is both the evaluator and payor under a benefits plan. Id. Rather, the district court must determine whether discovery is appropriate to further a colorable procedural challenge. Id. In Johnson, the Sixth Circuit found that the district court did not abuse its discretion by permitting discovery regarding an alleged conflict of interest where the plaintiff offered more than a mere allegation of bias. Id. More recently, it held that discovery may be appropriate in determining the weight to give a conflict of interest. Notwithstanding these determinations, the district court still possesses discretion to determine whether discovery should be allowed. Bell v. Ameritech Sickness & Acc. Disability Ben. Plan, 399 Fed.Appx. 991, 998 (6th Cir.2010).

After Johnson, courts have taken several approaches concerning requests for discovery outside the administrative record. Some have found that discovery regarding claims of bias is appropriate when the only showing of bias is the allegation of an inherent conflict of interest, as defined in Glenn.1 Pemberton v. Reliance Standard Life Ins. Co., No. 08-86-JBC, 2009 WL 89696, at *2 (E.D.Ky. Jan. 13, 2009); see also Cramer v. Appalachian Reg’l Healthcare, Inc., No. 5:11-49-KKC, 2012 WL 996583, at *2 (E.D.Ky. Mar. 23, 2012); Busch v. Hartford Life & Accident Ins. Co., No. 5:10-111-KKC, 2010 WL 3842367, at *3 (E.D.Ky. Sept. 27, 2010). These courts reason that the act of denying dis[787]*787covery until there has been an initial showing of bias “essentially handcuffs the plaintiff, who ... will rarely have access to any evidence beyond a bare allegation of bias, in the absence of discovery.” Kinsler v. Lincoln Nat. Life Ins. Co., 660 F.Supp.2d 830, 836 (M.D.Tenn.2009). These courts find that the Supreme Court’s instruction that “it does not ‘believe it is 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,’ ” renders the inherent conflict sufficient to allow limited discovery. Busch,

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33 F. Supp. 3d 782, 2014 WL 3586085, 2014 U.S. Dist. LEXIS 98366, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kasko-v-aetna-life-insurance-kyed-2014.