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Linda Wise v. Life Insurance Company of North America

April 10, 2012


The opinion of the court was delivered by: Byron G. Cudmore, U.S. Magistrate Judge:


Tuesday, 10 April, 2012 11:23:38 AM

Clerk, U.S. District Court, ILCD


This matter comes before the Court to determine the appropriate scope of discovery. This is an action for benefits brought under the Employee Retirement Income Security Act of 1974, as amended (ERISA), 29 U.S.C. §1132(a)(1)(B). Plaintiff Linda Wise is seeking accidental death benefits under an ERISA qualified benefit plan (Plan) sponsored by her late husband Michael Wise's employer, Honeywell International, Inc. The Plan was underwritten by Defendant Life Insurance Company of North America (LINA) pursuant to the terms of a group insurance policy (Policy). See Notice of Removal (d/e 1) attached Complaint for Declaratory Judgment; Defendant's Position Statement Relative to Extent and Scope of Discovery (d/e 9) (LINA Position Statement), at 1. LINA denied her claim for benefits, and Wise then brought this action for benefits.

The parties dispute the appropriate scope of discovery. See Proposed Discovery Plan Pursuant to Fed. R. Civ. P. 26(f) (d/e 7) (Proposed Discovery Plan), at 2-3. LINA proposes that the case be decided on the administrative record without discovery. Wise proposes a number of areas of discovery related to the cause and circumstances of Michael Wise's death and into areas related to LINA's process and procedures in adjudicating claims and into possible conflicts of interest. Proposed Discovery Plan ¶4(a).*fn1

The Court noted the dispute, canceled the Rule 16 scheduling conference, and directed the parties to submit briefs on the appropriate scope of discovery. Text Order entered February 7, 2012. The Court has read the parties' submissions and the reviewed the applicable law. For the reasons set forth below, the Court adopts Wise's proposed scope of discovery set forth in the Proposed Discovery Plan ¶ 4(a); provided however, that if the uncertainty regarding the standard of review is resolved (whether arbitrary and capricious or de novo), then the Court would consider limiting the scope of discovery to matters relevant to the appropriate standard of review.

The standard of review in uncertain at this time. Wise asserts that the scope of review is de novo. Plaintiff's Brief Concerning the Availability and Scope of Pretrial Discovery (d/e 8) (Wise Position Statement), at 2. LINA states that based on the documents in its possession at this time de novo review is appropriate; however, "LINA reserves its right to assert an arbitrary and capricious standard of review should plan documents be located which confer express discretionary authority upon the Company." Lina Position Statement, at 2 n.1. This uncertainty is important because the standard of review significantly affects the scope of discovery.

Generally, Courts review ERISA claims for benefits de novo. Firestone Tire and Rubber Co. v. Bruch, 489 U.S. 101, 112-14 (1989); Perlman v. Swiss Bank Corp. Comprehensive Disability Protection Plan, 195 F.3d 975, 980 (7th Cir. 1999). The Court decides whether the claimant is entitled to benefits under the terms of the plan and the facts and circumstances of the case without regard to the decision made by the plan administrator. Krolnik v. Prudential Ins. Co. of America, 570 F.3d 841, 843 (7th Cir. 2009). If, however, the plan documents give the plan administrator discretionary authority to interpret the plan and to determine benefit eligibility, then the Court applies a deferential standard of review to the plan administrator's decision to determine whether the decision was an abuse of discretion. See Metropolitan Life Ins. Co. v. Glenn, 554 U.S. 105, 108 (2008); Firestone Tire and Rubber Co., 489 U.S. at 115. Courts also use the term arbitrary and capricious to describe the deferential standard of review. See e.g., Marrs v. Motorola, Inc., 577 F.3d 783, 786 (7th Cir. 2009). In such cases, the Court reviews the decision based on the administrative record that was before the plan administrator. Vallone v. CNA Financial Corp., 375 F.3d 623, 629 (7th Cir. 2004).

A case subject to the de novo review should be handled like any contract case. Krolnik, 570 F.3d a 843. In this case, the issue is whether Michael Wise's death entitled his beneficiary Linda Wise to accidental death benefits under the terms of the Plan. Wise proposes discovery regarding the facts and circumstances of Michael Wise's death. See Proposed Discovery Plan ¶¶ 4(a)(5)-(a)(8). This would be appropriate in a typical insurance contract case to see if his death was accidental.

Wise also seeks all relevant documents of the Policy for review of Wise's claim. Proposed Discovery Plan ¶4(a)(1). This information may lead to relevant evidence regarding the meaning of the terms of the Plan. The Court will interpret the meaning of the Plan. Where the plan documents are unambiguous, the Court will not look beyond the language in the documents. The Court will decide as a matter of law whether ambiguities exist. Any ambiguities will be strictly construed against plan and in favor of the beneficiary. See Central States, Southeast and Southwest Areas Pension Fund v. Waste Management of Michigan, Inc., __ F.3d __, 2012 WL 638502, at *3 (7th Cir. 2012); Hammond v. Fidelity and Guar. Life Ins. Co., 965 F.2d 428, 430 (7th Cir. 1992). Under the de novo review standard, Wise should be able to discover all the relevant Plan documents to determine the meaning of the Plan and to see if any ambiguities exist.

LINA argues that Wise is not entitled to any discovery in a case under de novo review unless she can first demonstrate that additional evidence is necessary to enable the Court to make an informed and independent decision. The cases cited by LINA generally address admissibility at trial. Those cases hold that the Court has discretion whether to decide the case on the administrative record. E.g., Estate of Blanco v. Prudential Ins. Co. of America, 606 F.3d 399, 402 (7th Cir. 2010); Casey v. Uddeholm Corp., 32 F.3d 1094, 1099 (7th Cir. 1994). The Court may admit additional evidence if the Court determines in its discretion that the evidence is necessary to make an informed and independent judgment. Casey, 32 F.3d at 1099.

The issue before the Court, however, is the scope of discovery, not scope of admissibility. An ERISA action for benefits under de novo review should have the same scope of discovery as any other contract case. See Krolnik, 570 F.3d at 843. The scope of discovery is broad.

A party may obtain discovery regarding any matter, not privileged, which is relevant to the claim or defense of any party. Relevant information need not be admissible at trial if the discovery appears to be reasonably calculated to lead to the discovery of admissible evidence. Fed. R. Civ. P. 26(b)(1). If the information sought is unnecessary in light of the evidence in the administrative record, the Court may enter a protective order to limit discovery to avoid undue burden or expense. See Krolnik, 570 F.3d at ...

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