Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_15-cv-03305/USCOURTS-cand-3_15-cv-03305-5/pdf.json

Nature of Suit Code: 791
Nature of Suit: Employee Retirement Income Security Act (ERISA)
Cause of Action: 29:1132 E.R.I.S.A.: Employee Benefits

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United States District Court

For the Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

DAVID BAIN, et al.,

Plaintiffs,

v.

UNITED HEALTHCARE INC.,

Defendant.

Case No. 15-cv-03305-EMC 

ORDER RE JOINT LETTER OF 

NOVEMBER 3, 2016

Docket No. 57

The Court has reviewed the parties’ joint letter of November 3, 2016, and hereby rules as 

follows.

To the extent Mr. Bain seeks reconsideration of the Court’s ruling that the standard is 

review is abuse of discretion,1the Court denies Mr. Bain relief. First, Alexander H. v. Oxford 

Health Insurance Inc., 833 F.3d 1299 (11th Cir. 2016), is not binding authority as it was issued by 

the Eleventh Circuit. Second, even if it were, nothing in Alexander H. constitutes a ruling that the 

standard of review should be de novo where an external review was conducted. In fact, as UHI 

argues, if anything, the Eleventh Circuit indicated to the contrary. See id. at ---, nn. 8, 10 (noting 

that the district court held that the external review “removed [the insurance company’s] discretion 

to deny benefits” and thus applied de novo review; stating that “[w]e . . . deem it prudent to give 

the district court, in the first instance, the opportunity to reconsider its view that de novo review 

applies” because, contrary to what the district court had concluded, the external review was not

binding on the issue of medical necessity).

As for the issue regarding the scope of discovery – i.e., what discovery on conflict of 

 

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The Court notes that, in the letter, Mr. Bain claims that he is not; however, he reserves the right 

to challenge the standard of review and therefore the Court addresses the issue here.

Case 3:15-cv-03305-EMC Document 59 Filed 11/09/16 Page 1 of 2
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United States District Court

For the Northern District of California

interest should be permitted – the Court concludes that the fact of the external review does not 

automatically immunize UHI from discovery into a possible conflict of interest with respect to the 

external reviewer. It is plausible that external reviewers are “repeat players” who may therefore 

have biases. Thus, it is fair for Mr. Bain to conduct some narrowly targeted discovery to see if the 

external review process was tainted by a conflict of interest. 

That being said, if the external review process was not tainted by a conflict of interest, and 

UHI simply abided by the results of the external review, then it is not clear how Mr. Bain could 

argue that a UHI internal structural conflict (e.g., failing to wall off the claims department from 

the finances department) or a UHI-retained expert financial conflict (i.e., hiring biased outside 

reviewers) improperly affected the decision-making on his claim.

Accordingly, the Court rules that, at this juncture in the proceedings, Mr. Bain may take 

discovery as to a conflict of interest with respect to the external review process only. He may not 

take discovery as to any UHI internal structural conflict or to a financial conflict of interest on the 

part of UHI-retained experts. Mr. Bain may ask for leave to expand discovery to the latter topics 

only if there is sufficient evidence to support a conclusion that the external review process was 

tainted.

This order disposes of Docket No. 57.

IT IS SO ORDERED.

Dated: November 9, 2016

______________________________________

EDWARD M. CHEN

United States District Judge

Case 3:15-cv-03305-EMC Document 59 Filed 11/09/16 Page 2 of 2