Denmark Opinion Influences Narrow Post-Glenn Discovery In Judicial Review
Monast seeks extensive discovery in two areas: (1) financial documents related to the structure of Johnson & Johnson’s LTD plan; and (2) eight years of administrative statistics relating to the appeals of decisions denying benefits because of documentation failures.
Still valid First Circuit precedent discussing the right to discovery in ERISA cases holds that “some very good reason is needed to overcome the strong presumption that the record on review is limited to the record before the administrator.”
Monast v. Johnson & Johnson, 2009 U.S. Dist. LEXIS 83395 September 14, 2009
Denmark v. Liberty Life, No. 05-2877 (1st Cir.) (May 6, 2009) casts a long shadow over post-Glenn discovery efforts in the First Circuit as this recent district court opinion illustrates.
Citing Denmark, the district court states that:
. . . it is not sufficient for a plaintiff to simply show the existence of a conflict. To be entitled to discovery, she must also show that the conflict had a distorting effect on the administrator’s decision to deny or terminate her benefits. See Denmark v. Liberty Life Assurance Co., 556 F.3d 1, 10 (1st Cir. 2009) (”The majority opinion in Glenn fairly can be read as contemplating some discovery on the issue of whether a structural conflict has morphed into an actual conflict.”).
“Very Good Reason” Needed
The Court states that a “very good reason” must be shown by the plaintiff for allowing discovery. This hurdle is described as a “threshold showing” that:
the denial of benefits was improperly influenced by the administrator’s [structural] conflict of interest.”
This requirement may be viewed as circular since, without discovery, there is some doubt that the showing can be met.
Factors Bearing On Question
Nonetheless, the Court provides a short list of factors that will be considered in evaluating the plaintiff’s requests for discovery:
- the extent to which the record discloses efforts to insulate the claims review process from institutional financial considerations;
- the thoroughness and consistency of the explanation of the denial; the care with which the claimant’s own physician’s opinions were treated; and,
- if the administrator relied on the opinion of independent experts, the extent to which these experts were in fact truly independent.
The Plaintiff’s Motion To Compel
The Court found the Plaintiff’s requests off the mark.
Monast’s sole potentially relevant discovery request seeks “a listing of all appeals for LTD benefits appealing a denial of LTD benefits for a late submission and the decisions on such appeals” for the years 2000 through 2007. The request does not match any of the factors previously set out by the court.
Though that fact alone was not fatal,
What is fatal is Monast’s failure to articulate how the information she seeks will show an improper extraneous influence on the administrator’s decision making.
On the facts shown to the Court, nothing indicated to its satisfaction anything more than an exercise of discretion. Thus, the motion to compel was denied.
Note: There is some question, however, as to whether the First Circuit has registered its final views on the discovery limitations. As observed in :: First Circuit Vacates District Court Opinion For Post-Glenn Analysis, the Denmark comment on discovery limitations was disputed among the panel judges and, in effect, characterized as dictum.
