Revels v. Standard Ins. Co.

• Decision Date: 30 November 2020
• Docket Number: No. 3:19-CV-1168-L-BH,3:19-CV-1168-L-BH
• Citation: 504 F.Supp.3d 556
• Parties: Andrea REVELS, Plaintiff, v. STANDARD INSURANCE COMPANY, Defendant.
• Court: U.S. District Court — Northern District of Texas

504 F.Supp.3d 556

Andrea REVELS, Plaintiff,

v.STANDARD INSURANCE COMPANY, Defendant.

No. 3:19-CV-1168-L-BH

United States District Court, N.D. Texas, Dallas Division.

Signed November 30, 2020

Bernard A. Guerrini, John L. Thompson, Guerrini & Thompson PC, Dallas, TX, for Plaintiff.

Ryan Kent McComber, Cameron Elliot Jean, Figari Davenport, LLP, Dallas, TX, for Defendant.

MEMORANDUM OPINION AND ORDER

IRMA CARRILLO RAMIREZ, UNITED STATES MAGISTRATE JUDGE

By Order of Reference , filed September 16, 2019 (doc. 15), before the Court for recommendation is Plaintiff's Motion to Compel Discovery and Brief in Support , filed September 13, 2019 (doc. 13). Based on the relevant filings and applicable law, the motion is DENIED.

I. BACKGROUND

Andrea Revels (Plaintiff) sues Standard Insurance Company (Defendant) under the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1001 et seq. , based on its denial of her claim for long term disability (LTD) benefits under her former employer's employee benefit plan. (doc. 1 at 1-2; doc. 13 at 5.)¹ Plaintiff contends that a preponderance of the evidence establishes that she is entitled to LTD benefits under the plan. (doc. 1 at 3.) She alleges that Defendant "operated under a conflict of interest" because it was responsible for both reviewing claims and paying benefits under this plan, and that it "used unqualified and/or biased record reviewers." (Id. )

Plaintiff seeks discovery regarding Defendant's relationship with two non-treating medical consultants who were hired to review her medical records and then opine on her restrictions and limitations, including, in particular, (1) its financial arrangements with these medical consultants;² (2) its knowledge and tracking of their performance;³ and (3) documents it provided to them and its input into the procedures, guidelines, and processes they followed.⁴ (doc. 13 at 5, 10-16; doc. 14 at 5-6, 9-11.) She contends that regardless of the applicable standard of review, a conflict of interest exists, and that the discovery she seeks is relevant, discoverable and necessary because goes to the completeness of the record, Defendant's compliance with governing ERISA regulations, and context. (doc. 13 at 8-9.) She also claims that because the consultants were paid by Defendant, discovery is necessary "to expose [their] motivation and allegiance to supporting Defendant's claim denials," and that it will "impact[ their] credibility ... and the weight to be given their opinions." (Id. at 11-12.) Defendant objects to the discovery on grounds that conflict of interest discovery and discovery regarding compliance with procedural regulations is irrelevant under the de novo standard of review which the parties agree applies in this case. (doc. 18 at 6-7, 10-11.) It also objects on grounds of overbreadth and undue burden. (Id. at 14-16.)

II. ERISA

"ERISA and its regulations contemplate a system in which the administrator makes a decision as to whether to grant or deny benefits based on the factual scenario and based on its interpretation of the relevant plan provisions." Schadler v. Anthem Life Ins. Co. , 147 F.3d 388, 395 (5th Cir. 1998). It provides federal courts with jurisdiction to review those decisions. Estate of Bratton v. Nat'l Union Fire Ins. Co. , 215 F.3d 516, 521–522 (5th Cir. 2000) (citing 29 U.S.C. § 1132(a)(1)(B) ).

A. Standard of Review

Section 1132(a)(1)(B) does not provide any guidance regarding the standard of review to be employed by the federal courts. Vega v. Nat'l Life Ins. Servs., Inc. , 188 F.3d 287, 295 (5th Cir. 1999) (en banc), overruled on other grounds by Metro. Life Ins. Co. v. Glenn , 554 U.S. 105, 128, 128 S.Ct. 2343, 171 L.Ed.2d 299 (2008). The United State Supreme Court has held that "a denial of benefits challenged under § 1132(a)(1)(B) is to be reviewed under a de novo standard unless the benefit plan gives the administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe the terms of the plan." Firestone Tire & Rubber Co. v. Bruch , 489 U.S. 101, 115, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989) ; see also Ariana M. v. Humana Health Plan of Texas, Inc. , 884 F.3d 246, 256 (5th Cir. 2018) (en banc) (adopting the majority approach in holding that Firestone ’s default de novo standard applies when reviewing a denial of benefits based on a factual determination by an administrator of a nondiscretionary plan).⁵

1. De Novo Standard

Under the de novo standard, the district court's essential task "is to determine whether the administrator made a correct decision." Pike v. Hartford Life & Accident Ins. Co. , 368 F. Supp. 3d 1018, 1030 (E.D. Tex. 2019) (quoting Niles v. Am. Airlines, Inc. , 269 F. App'x 827, 832 (10th Cir. 2008) ). The court must "independently weigh the facts and opinions in the administrative record to determine whether the claimant has met his burden of showing that he is disabled within the meaning of the policy." Id. (quoting Richards v. Hewlett-Packard Corp. , 592 F.3d 232, 239 (1st Cir. 2010)). It must also "resolve questions of material fact, assess expert credibility, and—most critically—weigh the evidence." Id. at 1035 (quoting Weisner v. Liberty Life Assurance Company of Boston , 192 F. Supp. 3d 601, 614 (D. Md. 2016) ). "The administrator's decision to deny benefits ‘is not afforded deference or a presumption of correctness.’ " Koch v. Metro. Life Ins. Co. , 425 F.Supp.3d 741, 745 (N.D. Tex. 2019) (quoting Pike , 368 F. Supp. 3d at 1030 ). "Put simply, the [c]ourt must ‘stand in the shoes of the administrator and start from scratch, examining all the evidence before the administrator as if the issue had not been decided previously.’ " Byerly v. Standard Ins. Co. , No. 4:18-CV-00592, 2020 WL 1451543, at *18 (E.D. Tex. Mar. 25, 2020) (quoting Stiltz v. Metro. Life Ins. Co. , No. CIVA 105CV-3052-TWT, 2006 WL 2534406, at *6 (N.D. Ga. Aug. 30, 2006), aff'd by 244 F. App'x 260 (11th Cir. 2007) ); see also Ariana M. v. Humana Health Plan of Texas, Inc. , No. CV H-14-3206, 2018 WL 4384162, at *12 (S.D. Tex. Sept. 14, 2018), aff'd by 792 F. App'x 287 (5th Cir. 2019) (citations omitted) ("De novo review requires that the court apply the same standard as the plan administrator in deciding whether the benefits were owed under the plan's terms.").

2. Abuse of Discretion Standard

If the plan grants the administrator discretionary authority, the court reviews a denial of benefits for abuse of discretion. Firestone , 489 U.S. at 115, 109 S.Ct. 948. "A plan administrator abuses its discretion where the decision is not based on evidence, even if disputable, that clearly supports the basis for its denial." Holland v. Int'l Paper Co. Ret. Plan , 576 F.3d 240, 246 (5th Cir. 2009). "If the administrator's decision to deny a claim is supported by ‘some concrete evidence in the administrative record,’ the administrator did not abuse discretion." McDonald v. Hartford Life Grp. Ins. Co. , 361 F. App'x 599, 608 (5th Cir. 2010) (quoting Lain v. UNUM Life Ins. Co. of Am. , 279 F.3d 337, 342 (5th Cir. 2002) (emphasis original)). When reviewing the lawfulness of the plan administrator's decision, courts weigh "several different considerations ... before determining whether a plan administrator abused its discretion." Nichols v. Reliance Standard Life Ins. Co. , 924 F.3d 802, 808 (5th Cir. 2019) (quoting White v. Life Ins. Co. of N. Am. , 892 F.3d 762, 767 (5th Cir. 2018) ). These "considerations ‘are case-specific and must be weighed together before determining whether a plan administrator abused its discretion in denying benefits.’ " White , 892 F.3d at 767 (quoting Schexnayder v. Hartford Life & Accident Ins. Co. , 600 F.3d 465, 469 (5th Cir. 2010) ). "[A]ny 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." Metro. Life Ins. Co. , 554 U.S. at 117, 128 S.Ct. 2343.

The Supreme Court has recognized that a plan administrator that both evaluates claims and pays claims for benefits has a structural "conflict of interest," and that "a reviewing court should consider that conflict as a factor in determining whether the plan administrator has abused its discretion in denying benefits." Id. at 108, 128 S.Ct. 2343 (citing Firestone , 489 U.S. at 115, 109 S.Ct. 948 ); see also Vega , 188 F.3d at 295 (a plan administrator that both insures and administers the plan "is self-interested, i.e., the administrator potentially benefits from every denied claim").⁶ "A structural conflict may prove more important (perhaps of great importance) where circumstances suggest a higher likelihood that it affected the benefits decision, such as where an administrator has a history of biased claims administration, or where circumstances surrounding the plan administrator's decision suggest procedural unreasonableness." Nichols , 924 F.3d at 813 (internal quotations and citations omitted). In other words, "[t]he greater the evidence of conflict on the part of the administrator, the less deferential [the court's] abuse of discretion standard will be." Vega , 188 F.3d at 297 ; see also Ellis v. Liberty Life Assurance Co. of Boston , 394 F.3d 262, 270 (5th Cir. 2004), cert. denied , 545 U.S. 1128, 125 S.Ct. 2941, 162 L.Ed.2d 867 (2005) ("The degree to which a court must abrogate its deference to the administrator depends on the extent to which the challenging party has succeeded in substantiating its claims that there is a conflict.").

B. Scope of the Record

Despite first adopting Firestone ’s default de novo standard of review in Ariana M. , the Fifth Circuit explicitly reaffirmed its prior decision in Vega as the "leading case" on the scope of the record in ERISA cases, which would "continue to provide the guiding principles ... for future cases that apply de novo review to fact-based benefit denials." 884 F.3d at 256-57 (citing Vega , 188 F.3d at 299 ). Vega held ...