You already know that discovery in ERISA cases is generally limited because of the “significant ERISA policy interests of minimizing costs of claim disputes and ensuring prompt claims-resolution procedures.”

Various circuits have different tests on when additional discovery may be taken beyond the administrative record.

And, if limited discovery is allowed, then what discovery is allowed?

The recent case of Aitken v. Aetna Life Insurance Company, 2017 WL 455547 (S. D. N. Y. January 19, 2017)(PDF) highlights the point.

FACTS: Aitken, a Chief Financial Officer, sought ERISA-governed long term disability benefits as a result of coronary artery disease. Aetna, which administered the claim and is liable to pay the benefit, had an in-house vocational assessment and a physician from Professional Disability Associates (PDA) evaluate the claim. After an exchange of reports and replies to Aitken’s physicians, Aetna denied the claim and the subsequent appeal.

During the lawsuit, Plaintiff alleged Aetna had a structural conflict of interest and sought discovery outside the administrative record. Plaintiff alleged PDA “serves only insurance companies,” PDA has a financial incentive to give favorable opinions “to preserve Aetna as a client,” and PDA and Aetna ignored his physicians’ opinions on disability.

DISTRICT COURT HELD: Limited Discovery Outside the Administrative Record Allowed.

1. “Discovery in ERISA cases is generally limited because of the ‘significant ERISA policy interests of minimizing costs of claim disputes and ensuring prompt claims-resolution procedures.’” Op. at 10.
2. “Generally, discovery is limited to the actual evidence that was before the claims administrator when the decision was made.” Op. at 6.
3. “It is unnecessary to determine the standard of review before deciding on the scope of discovery.” Op. at 4, fn 2.
4. The Court denied Plaintiff’s request to seek discovery into the “reasoning/actions undertaken by Aetna in the evaluation of Plaintiff’s claim.” “Unless it is shown that there is a reasonable chance that the requested discovery will satisfy the good cause requirement, a plaintiff is limited to the administrative record.” Op. at 6-7.
5. A procedural irregularity arises when the claim review “does not take into account all comments, documents, records or other information submitted by the claimant….” Op. at 8.
6. The record presented evidence of “some procedural irregularities” which justified “at least some discovery….” Op. at 10.
7. Limited Discovery Defined: “[P]laintiff may propound document requests and interrogatories limited to the issue of whether, during the determination of benefits, Aetna disregarded his doctors and experts or his own complaints.” Op. at 11.