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Garvey v. Piper Rudnick LLP Long Term Disability Insurance Plan

October 9, 2009


The opinion of the court was delivered by: Magistrate Judge Nan R. Nolan

Judge Joan Humphrey Lefkow


Plaintiff J. Kevin Garvey has filed suit against the Piper Rudnick LLP Long Term Disability Insurance Plan (the "Plan") and the Plan's insurer, Standard Insurance Company, a subsidiary of Stancorp Financial Group, Inc. ("Standard"), to recover disability benefits under the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq. Currently before the court is Garvey's motion to compel discovery relating to Standard's possible conflict of interest in making a benefits determination in his case. For the reasons stated below, the motion is granted in part and denied in part.


Garvey worked as a partner at the law firm of DLA Piper US LLP (formerly known as Piper Marbury Rudnick & Wolfe LLP). At all relevant times, he was a participant in the Plan, which provides long term disability insurance benefits to partners and employees of the firm. Standard serves as the plan administrator and has discretionary authority over claims determinations, as well as responsibility for making payments on valid claims. On March 1, 2004, Garvey reduced his hours to part-time due to arthritis; a herniated disc; lower back pain with a history of laminectomy; stress; sleep disturbance resulting in insomnia; anxiety disorder; adjustment disorder with mixed features; and depressive disorder. Garvey received short term disability benefits under the Plan from March 1, 2004 to February 28, 2005, at which time he ceased working altogether due to his conditions.

At some point thereafter, Garvey filed a claim for long term disability benefits, stating that he was disabled under the Plan's "Own Occupation Definition of Disability." On May 5, 2005, Standard denied Garvey's claim, finding that he is able to perform the material duties listed in the definition of "Attorney" in the Dictionary of Occupational Titles. Garvey appealed the decision on October 18, 2005, but Standard upheld the denial of benefits on January 5, 2006. Garvey filed suit in the District of Oregon, seeking ERISA benefits and declaratory relief. On Defendants' motion, the Oregon court transferred the case to this district in February 2008. (Doc. 38.)

The parties proceeded with discovery, and on December 2, 2008, Garvey served Defendants with discovery requests relating to a potential conflict of interest in Standard's claim denial. Specifically, Garvey sought information regarding (1) the identities and compensation of Standard's employees and other third-parties responsible for reviewing and denying his claim; (2) Standard's policies and procedures; (3) statistics as to approval/denial/termination rates under the Plan; and (4) Standard's financial information. Defendants objected to all of these requests, insisting that Garvey is not entitled to anything other than the administrative record. Garvey responded with a motion to compel, and the district court has referred the matter to this court for resolution.


When, as here, a plan administrator has discretionary authority to make benefits determinations, courts generally limit discovery to the administrative record. Vallone v. CNA Financial Corp., 375 F.3d 623, 629 (7th Cir. 2004). The Seventh Circuit has cautioned that "discovery is normally disfavored in the ERISA context" and is only available in "exceptional circumstances." Semien v. Life Ins. Co. of N. Am., 436 F.3d 805, 814-15 (7th Cir. 2006). Specifically, the Seventh Circuit has allowed "limited discovery" where a plaintiff can both "identify a specific conflict of interest or instance of misconduct," and "make a prima facie showing that there is good cause to believe limited discovery will reveal a procedural defect in the plan administrator's determination." Id. at 815.

A. The Glenn Decision

The question presented here is whether the Supreme Court's recent decision in Metropolitan Life Ins. Co. v. Glenn, 128 S.Ct. 2343 (2008), has any effect on these special discovery rules. The plan in Glenn "grant[ed] MetLife (as administrator) discretionary authority to determine whether an employee's claim for benefits [wa]s valid; it simultaneously provide[d] that MetLife (as insurer) w[ould] itself pay valid benefit claims." Id. at 2346. The Court found that this dual role creates a structural conflict of interest that "must be weighed as a 'factor in determining whether there is an abuse of discretion.'" Id. at 2348 (quoting Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989)). The Court confirmed that the standard of review remains deferential, but stressed that the reviewing judge must "take account of the conflict when determining whether the trustee, substantively or procedurally, has abused his discretion." Id. at 2350. See also Jenkins v. Price Waterhouse Long Term Disability Plan, 564 F.3d 856, 861 (7th Cir. 2009).

The Court went on to explain that "conflicts are but one factor among many that a reviewing judge must take into account." Id. at 2351. In the Court's view, "[t]he conflict of interest... should prove more important (perhaps of great importance) where circumstances suggest a higher likelihood that it affected the benefits decision, including, but not limited to, cases where an insurance company administrator has a history of biased claims administration." Id. At the same time, the conflict "should prove less important (perhaps to the vanishing point) where the administrator has taken active steps to reduce potential bias and to promote accuracy." Id. The Court found that the Court of Appeals properly set aside MetLife's discretionary decision in that case, based in part upon the fact that "MetLife had encouraged Glenn to argue to the Social Security Administration that she could do no work, received the bulk of the benefits of her success in doing so..., and then ignored the agency's finding in concluding that Glenn could in fact do sedentary work." Id. at 2352.

B. The Aftermath of Glenn

Defendants spend much time arguing that the standard of review has not changed following Glenn. Garvey does not suggest otherwise. Indeed, in Raybourne v. Cigna Life Ins. Co. of New York, 576 F.3d 444 (7th Cir. 2009), the Seventh Circuit applied the abuse-of-discretion standard to a plan's discretionary decision to deny benefits. Id. at 449. See also Jenkins v. Price Waterhouse Long Term Disability Plan, 564 F.3d 856, 860-61 (7th Cir. 2009); Leger v. Tribune Co. Long Term Disability Benefit Plan, 557 F.3d 823, 831 (7th Cir. 2009) ("[T]he Court's decision in Glenn did not create a new standard of review... for claims involving a conflict of ...

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