You already know that discovery is usually limited in appeals of the denial of ERISA-governed benefits. This is especially true when there is de novo review. 

But watch out if a breach of fiduciary duty claim is asserted. That same rule (prohibiting discovery) does not apply when a party seeks discovery into purported breaches of fiduciary duty under 29 USC 1132(a)(3).

Here’s the case of Friemon v. National Carriers’ Conference Committee and Union Pacific Railroad Company,  2018 WL 6171439 ( E.D. Missouri November 26, 2018).

FACTS: Friemon sought ERISA-governed Supplemental Sickness Benefits after sustaining injuries in a head-on auto accident. After Aetna denied the claim, Plaintiff brought suit claiming his benefits were: (1)  wrongly denied, and that (2) the employer breached a fiduciary duty under 29 USC 1132(a)(3) essentially by failing “to provide the necessary paperwork to apply” for the benefits. 

Even though there was no evidence the employer was even a fiduciary of the plan, Plaintiff sought discovery on the breach of fiduciary duty claim.

ISSUE: Is discovery allowed with regard to a breach of fiduciary duty claim under 29 USC 1132(a)(3)?

DISTRICT COURT HELD: YES.

  1. “The Court finds it would be premature to determine [the employer’s] fiduciary status at this early stage of the proceeding.”  Op. at 4.
  2. “‘[T]he general rule is that review is limited to evidence that was before the administrator.’”  Op. at 3.
  3. “This limitation on discovery does not apply, however ‘to claims involving ERISA plans when the claims are for equitable relief under 1132(a)(3) or for equitable estoppel. …This is so because these types of actions ‘do not benefit from the administrative process.’”  Op. at 3.

 

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Photo of Mike Reilly Mike Reilly

Mike Reilly is a nationally recognized labor, employment and employee benefits attorney, named one of the “Top 100 Most Powerful Employment Attorneys in the Nation” for the past five consecutive years by Human Resource Executive®. He has decades of experience providing strategic employment…

Mike Reilly is a nationally recognized labor, employment and employee benefits attorney, named one of the “Top 100 Most Powerful Employment Attorneys in the Nation” for the past five consecutive years by Human Resource Executive®. He has decades of experience providing strategic employment advice, and has represented clients in more than 75 jury trials, arbitrations, bench trials and claims before the EEOC and Washington State Human Rights Commission.

Small and large employers retain Mike for his strategic advice and decades of experience in employment issues and litigation, business decisions and litigation avoidance. Mike provides advice in claims involving discrimination, retaliation, wrongful discharge, disability accommodation, ERISA and non-ERISA employee benefit claims, and wage/hour claims. He served as lead counsel in an employee raiding/trade secret case as reported in the Wall Street Journal, and defends employers in class action claims.

Mike’s remarks on employment issues have been quoted in NewsweekCorporate Legal TimesSeattle TimesEmployee Relations Law JournalPuget Sound Business JournalCFO.com, and other professional journals and management publications. Chambers USA’s Guide to America’s Leading Lawyers for Businessrates Mike in the top ranking (band one) for his work in labor and employment law, and has described him as “one of Seattle’s top-rate attorneys” who is “truly phenomenal [with] superb legal instincts” and “an amazingly assertive litigator.” His clients include Nordstrom, Seattle Seahawks, Home Depot, KeyBank, Starbucks, Fred Hutchinson Cancer Research Center, Red Robin and Seattle Chamber of Commerce, among others.