1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 PAUL LAWRENCE VIANI, Case No.: 3:21-cv-00004-BEN-DEB
12 Plaintiff, ORDER GRANTING DEFENDANT’S 13 v. MOTION FOR RECONSIDERATION OF 14 THE LINCOLN NATIONAL LIFE MAGISTRATE JUDGE’S INSURANCE COMPANY, a 15 DISCOVERY ORDER LINCOLN FINANCIAL GROUP
16 COMPANY fka LIBERTY LIFE [ECF No. 28] ASSURANCE COMPANY OF 17 BOSTON, 18 Defendant. 19
20 On September 23, 2021, the magistrate judge issued his Order on the parties’ Joint 21 Discovery Motion. Dkt. No. 23. Defendant THE LINCOLN NATIONAL LIFE 22 INSURANCE COMPANY, a Lincoln Financial Group Company formerly known as 23 Liberty Life Assurance Company of Boston (“Defendant”) moved this Court for 24 reconsideration on October 7, 2021. Plaintiff PAUL LAWRENCE VIANI (“Plaintiff”) 25 filed his memorandum in opposition on October 18, 2021, and Defendant replied on 26 October 25, 2021. Pursuant to Local Rule 7.1(d)(1), the Court submitted the matter 27 without oral argument. Dkt. No. 32. After careful consideration of the parties’ briefing 28 and relevant legal authority, the Court GRANTS Defendant’s Motion and modifies the 1 discovery order as discussed below. 2 I. BACKGROUND 3 This is an ERISA case. Plaintiff challenges Defendant’s denial of long-term 4 disability benefits under a policy issued by Defendant during Plaintiff’s employment at 5 Qualcomm. Dkt. No. 1. Presently, the Court will only discuss the events that are 6 relevant to the Defendant’s Motion. 7 The disputed portion of the September 23, 2021 discovery order is as follows: 8 Defendant’s representations regarding the documents falling within [29 C.F.R.] § 2560.503-1(m)(8)(iii) (i.e., that Defendant 9 “evaluated Plaintiff’s claim on its individual merits based on the 10 facts and circumstances of the claim and terms of the Group Policy at issue,” and that Defendant “did not create any new 11 documents to comply with the cited regulatory requirement,” 12 however, are unclear. Dkt. No. 23 at 29–30. Defendant’s response leaves open the possibility that it has pre-existing 13 documents responsive to this regulation and Plaintiff’s RFP No. 14 5. If any such documents exist (regardless of when and why they were created or whether they were specifically relied upon), 15 Defendant must produce them. 16 Dkt. No. 25, 12-13. Defendant challenges this ruling on the basis that Department of 17 Labor (“DOL”) regulations only require the production of documents used in making the 18 benefit determination. Mot., Dkt. No. 28 at 1. 19 II. STANDARD 20 The district judge must consider the appeal and not set aside any portion of a 21 magistrate judge’s order unless it is clearly erroneous or contrary to law. 28 U.S.C. § 22 636(b)(1)(A); FED. R. CIV. P. 72(a); McKeever v. Block, 932 F.2d 795, 799 (9th Cir. 23 1991). The clearly erroneous standard applies to factual findings. United States v. 24 McConney, 728 F.2d 1195, 1200 (9th Cir. 1984), overruled on other grounds by Maric v. 25 Alvarado, 748 Fed. Appx. 747 (9th Cir. 2018). After reviewing the entire record, the 26 district judge must accept the magistrate judge’s ruling unless the district judge is “left 27 with a definite and firm conviction that a mistake has been committed.” Burdick v. 28 Comm’r Internal Revenue Serv., 979 F.2d 1369, 1370 (9th Cir. 1992). This standard is 1 “significantly deferential” to the magistrate judge’s judgment. See Hernandez v. 2 Tanninen, 604 F.3d 1095, 1100 (9th Cir. 2010) (internal citation omitted). The contrary 3 to law standard applies to legal conclusions and allows for de novo review. McConney, 4 728 F.2d at 1200; see also Schwarzer et al., Fed. Civ. P. Before Trial, § 16:278 (The 5 Rutter Group 2013). A decision is contrary to law if it applies the wrong legal standard 6 or neglects to consider all elements of the applicable standard. See Hunt v. National 7 Broadcasting Co., 872 F.2d 289, 292 (9th Cir. 1989). 8 III. DISCUSSION 9 Plaintiff argues that Defendant must produce documents responsive to Plaintiff’s 10 discovery request regardless of whether Defendant relied upon such documents, Dkt. No. 11 22, 28-29, while Defendant contends that it only needs to produce documents on which it 12 relied in making the benefit determination, id. at 29. Magistrate Judge Butcher agreed 13 with Plaintiff by ordering the production of responsive documents regardless of whether 14 Defendant relied upon such documents. Dkt. No. 25 at 13. 15 Title 29 of the Code of Federal Regulations, section 2560.503-1(m)(8) provides the 16 standard for what is relevant to a claimant’s claim for benefits: 17 A document, record, or other information shall be considered “relevant” to a claimant’s claim if such document, record, or 18 other information: 19 (i) Was relied upon in making the benefit determination; 20 (ii) Was submitted, considered, or generated in the course of 21 making the benefit determination, without regard to 22 whether such document, record, or other information was relied upon in making the benefit determination; 23 (iii) Demonstrates compliance with the administrative 24 processes and safeguards required pursuant to paragraph 25 (b)(5) of this section in making the benefit determination; or 26 (iv) In the case of a group health plan or a plan providing 27 disability benefits, constitutes a statement of policy or guidance with respect to the plan concerning the denied 28 1 treatment option or benefit for the claimant’s diagnosis, without regard to whether such advice or statement was 2 relied upon in making the benefit determination. 3 (Emphasis added). 4 Regulations like the one in question here are legislative in character and have the 5 force and effect of law. In determining the meaning of such regulations, courts should 6 apply the canons of statutory interpretation. See Wronke v. Marsh, 787 F.2d 1569, 1579 7 (Fed. Cir. 1986) (citing General Elec. Co. v. U.S., 610 F.2d 730, 734 (Ct. Cl. 1979). This 8 Court agrees with Defendant’s argument that interpreting Section (iii) to include all 9 documents whether relied upon or not runs afoul of the expression unius est exclusion 10 alterius canon of interpretation, which provides that “when a statute designates certain 11 persons, things, or manners of operation, all omissions should be understood as 12 exclusions.” Boudette v. Barnette, 923 F.2d 754, 756-57 (9th Cir. 1991). The DOL 13 could have inserted the “without regard” language from subparagraphs (ii) and (iv) into 14 subparagraph (iii); it did not. Moreover, the DOL could have indicated it wanted the 15 “without regard” language to apply to Sections (i)-(iv) by placing it in the main body of § 16 2560.503-1(m)(8); again, it did not. This Court assumes the placement of “without 17 regard” in subparagraphs (m)(8)(ii) and (iv) and its omission from subparagraph 18 (m)(8)(iii) is intentional, absent evidence to the contrary.
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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 PAUL LAWRENCE VIANI, Case No.: 3:21-cv-00004-BEN-DEB
12 Plaintiff, ORDER GRANTING DEFENDANT’S 13 v. MOTION FOR RECONSIDERATION OF 14 THE LINCOLN NATIONAL LIFE MAGISTRATE JUDGE’S INSURANCE COMPANY, a 15 DISCOVERY ORDER LINCOLN FINANCIAL GROUP
16 COMPANY fka LIBERTY LIFE [ECF No. 28] ASSURANCE COMPANY OF 17 BOSTON, 18 Defendant. 19
20 On September 23, 2021, the magistrate judge issued his Order on the parties’ Joint 21 Discovery Motion. Dkt. No. 23. Defendant THE LINCOLN NATIONAL LIFE 22 INSURANCE COMPANY, a Lincoln Financial Group Company formerly known as 23 Liberty Life Assurance Company of Boston (“Defendant”) moved this Court for 24 reconsideration on October 7, 2021. Plaintiff PAUL LAWRENCE VIANI (“Plaintiff”) 25 filed his memorandum in opposition on October 18, 2021, and Defendant replied on 26 October 25, 2021. Pursuant to Local Rule 7.1(d)(1), the Court submitted the matter 27 without oral argument. Dkt. No. 32. After careful consideration of the parties’ briefing 28 and relevant legal authority, the Court GRANTS Defendant’s Motion and modifies the 1 discovery order as discussed below. 2 I. BACKGROUND 3 This is an ERISA case. Plaintiff challenges Defendant’s denial of long-term 4 disability benefits under a policy issued by Defendant during Plaintiff’s employment at 5 Qualcomm. Dkt. No. 1. Presently, the Court will only discuss the events that are 6 relevant to the Defendant’s Motion. 7 The disputed portion of the September 23, 2021 discovery order is as follows: 8 Defendant’s representations regarding the documents falling within [29 C.F.R.] § 2560.503-1(m)(8)(iii) (i.e., that Defendant 9 “evaluated Plaintiff’s claim on its individual merits based on the 10 facts and circumstances of the claim and terms of the Group Policy at issue,” and that Defendant “did not create any new 11 documents to comply with the cited regulatory requirement,” 12 however, are unclear. Dkt. No. 23 at 29–30. Defendant’s response leaves open the possibility that it has pre-existing 13 documents responsive to this regulation and Plaintiff’s RFP No. 14 5. If any such documents exist (regardless of when and why they were created or whether they were specifically relied upon), 15 Defendant must produce them. 16 Dkt. No. 25, 12-13. Defendant challenges this ruling on the basis that Department of 17 Labor (“DOL”) regulations only require the production of documents used in making the 18 benefit determination. Mot., Dkt. No. 28 at 1. 19 II. STANDARD 20 The district judge must consider the appeal and not set aside any portion of a 21 magistrate judge’s order unless it is clearly erroneous or contrary to law. 28 U.S.C. § 22 636(b)(1)(A); FED. R. CIV. P. 72(a); McKeever v. Block, 932 F.2d 795, 799 (9th Cir. 23 1991). The clearly erroneous standard applies to factual findings. United States v. 24 McConney, 728 F.2d 1195, 1200 (9th Cir. 1984), overruled on other grounds by Maric v. 25 Alvarado, 748 Fed. Appx. 747 (9th Cir. 2018). After reviewing the entire record, the 26 district judge must accept the magistrate judge’s ruling unless the district judge is “left 27 with a definite and firm conviction that a mistake has been committed.” Burdick v. 28 Comm’r Internal Revenue Serv., 979 F.2d 1369, 1370 (9th Cir. 1992). This standard is 1 “significantly deferential” to the magistrate judge’s judgment. See Hernandez v. 2 Tanninen, 604 F.3d 1095, 1100 (9th Cir. 2010) (internal citation omitted). The contrary 3 to law standard applies to legal conclusions and allows for de novo review. McConney, 4 728 F.2d at 1200; see also Schwarzer et al., Fed. Civ. P. Before Trial, § 16:278 (The 5 Rutter Group 2013). A decision is contrary to law if it applies the wrong legal standard 6 or neglects to consider all elements of the applicable standard. See Hunt v. National 7 Broadcasting Co., 872 F.2d 289, 292 (9th Cir. 1989). 8 III. DISCUSSION 9 Plaintiff argues that Defendant must produce documents responsive to Plaintiff’s 10 discovery request regardless of whether Defendant relied upon such documents, Dkt. No. 11 22, 28-29, while Defendant contends that it only needs to produce documents on which it 12 relied in making the benefit determination, id. at 29. Magistrate Judge Butcher agreed 13 with Plaintiff by ordering the production of responsive documents regardless of whether 14 Defendant relied upon such documents. Dkt. No. 25 at 13. 15 Title 29 of the Code of Federal Regulations, section 2560.503-1(m)(8) provides the 16 standard for what is relevant to a claimant’s claim for benefits: 17 A document, record, or other information shall be considered “relevant” to a claimant’s claim if such document, record, or 18 other information: 19 (i) Was relied upon in making the benefit determination; 20 (ii) Was submitted, considered, or generated in the course of 21 making the benefit determination, without regard to 22 whether such document, record, or other information was relied upon in making the benefit determination; 23 (iii) Demonstrates compliance with the administrative 24 processes and safeguards required pursuant to paragraph 25 (b)(5) of this section in making the benefit determination; or 26 (iv) In the case of a group health plan or a plan providing 27 disability benefits, constitutes a statement of policy or guidance with respect to the plan concerning the denied 28 1 treatment option or benefit for the claimant’s diagnosis, without regard to whether such advice or statement was 2 relied upon in making the benefit determination. 3 (Emphasis added). 4 Regulations like the one in question here are legislative in character and have the 5 force and effect of law. In determining the meaning of such regulations, courts should 6 apply the canons of statutory interpretation. See Wronke v. Marsh, 787 F.2d 1569, 1579 7 (Fed. Cir. 1986) (citing General Elec. Co. v. U.S., 610 F.2d 730, 734 (Ct. Cl. 1979). This 8 Court agrees with Defendant’s argument that interpreting Section (iii) to include all 9 documents whether relied upon or not runs afoul of the expression unius est exclusion 10 alterius canon of interpretation, which provides that “when a statute designates certain 11 persons, things, or manners of operation, all omissions should be understood as 12 exclusions.” Boudette v. Barnette, 923 F.2d 754, 756-57 (9th Cir. 1991). The DOL 13 could have inserted the “without regard” language from subparagraphs (ii) and (iv) into 14 subparagraph (iii); it did not. Moreover, the DOL could have indicated it wanted the 15 “without regard” language to apply to Sections (i)-(iv) by placing it in the main body of § 16 2560.503-1(m)(8); again, it did not. This Court assumes the placement of “without 17 regard” in subparagraphs (m)(8)(ii) and (iv) and its omission from subparagraph 18 (m)(8)(iii) is intentional, absent evidence to the contrary. Moreover, DOL guidance is 19 consistent with this interpretation: 20 As a concomitant to this general requirement, subparagraph (m)(8)(iii) further provides that, among the information that a 21 plan must provide a claimant upon request after receiving an 22 adverse benefit determination, is any information that the plan has generated or obtained in the process of ensuring and verifying 23 that, in making the particular determination, the plan complied 24 with its own administrative processes and safeguards that ensure and verify appropriately consistent decision making in 25 accordance with the plan’s terms. It is not the Department’s 26 intention in this regard to require plans to artificially create new systems for the sole purpose of generating documents that can be 27 handed to a claimant whose claim is denied in order to satisfy this 28 disclosure requirement. The Department anticipates that plans 1 generally will have systems for ensuring and verifying consistent decision making that may or may not result in there being disclosable documents or information pertaining to an individual 3 claims decision. 4 Employee Retirement Income Security Act of 1974; Rules and Regulations for Administration and Enforcement; Claims Procedure, 65 FR 70246-01 (emphasis added). 6 Here, the magistrate’s determination that material that falls under the umbrella of subparagraph (m)(8)(iii) 1s discoverable “whether relied upon or not” 1s contrary to law. 8 The plain and unambiguous language of the regulation, as well as DOL guidance, demonstrates this “whether relied upon or not” qualifier does not apply to discoverable 10 materials under subparagraph (m)(8)(111). IV. CONCLUSION 12 Defendant’s Motion for Reconsideration is GRANTED. The magistrate’s 13 discovery order is modified as follows: M4 Current Version: If any such documents exist (regardless of when and why they 15 were created or whether they were specifically relied upon), Defendant must produce 16 them. iM Modified Version: If any such documents exist and such documents were relied 18 upon in adjudicating Plaintiff's claim, Defendant must, produce them. 19 IT IS SO ORDERED. 20 Dated: December 23, 2021 21 HON. ROGER T. BENITEZ 27 United States District Judge 23 24 25 26 27 28