Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-1_05-cv-00002/USCOURTS-caed-1_05-cv-00002-1/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

---

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

1

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

MICHAEL JORDAN, )

)

Plaintiff, )

v. )

)

SUNRISE MEDICAL, INC. LONG )

TERM DISABILITY PLAN, et al., )

)

Defendants. )

)

 )

1:05-CV-00002-AWI-SMS

ORDER GRANTING IN PART

PLAINTIFF’S MOTION FOR LEAVE TO

CONDUCT DISCOVERY (DOC. 10)

Plaintiff is proceeding with a civil action in this Court.

The matter has been referred to the Magistrate Judge pursuant to

28 U.S.C. § 636(b) and Local Rules 72-302(c)(1) and 72-303.

I. Background

Plaintiff, a former employee of Defendant Sunrise Medical,

Inc., sues pursuant to 29 U.S.C. § 1132(a)(1)(B) (ERISA) for

wrongfully withheld disability benefits. He alleges that he was

and is a qualified participant in and beneficiary of Defendant

Sunrise Medical, Inc.’s long-term disability plan. Defendant

Aetna Insurance Company is the issuer of the policy that funded

the plan as well as the administrator responsible for claims

review and determination. The parties have agreed that the

applicable standard of review of the administrator’s denial of

Case 1:05-cv-00002-AWI -SMS Document 16 Filed 06/02/05 Page 1 of 11
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 1

 The basis for the stipulation is not set forth. 

2

the claim is de novo.

1

Plaintiff filed his motion on April 29, 2005; Defendant

filed opposition on May 6, 2005; and the parties filed a joint

statement re: discovery dispute on May 18, 2005. Pursuant to the

parties’ agreement, the matter was submitted to the Court for

decision on the papers. 

II. Analysis

A. Scope of Review

Where the review is de novo, it has been held that a

district court that had granted summary judgment for the plan

erred in failing to consider evidence that was outside the

administrative record (a new diagnosis, not available during the

ERISA plan’s determination, that arguably would have fit within

the definition of a disability covered under the plan). 

Mongeluzo v. Baxter Travenol Disability Benefit Plan, 46 F.3d

938, 943-44 (9th Cir. 1995). The district court had declined to

consider the evidence because it decided that the administrative

record had been sufficiently developed. In Mongeluzo, the Court

of Appeal agreed with the Third, Fourth, Seventh, Eighth, and

Eleventh Circuits that new evidence may be considered under

certain circumstances to enable the full exercise of informed and

independent judgment. Id. at 943-44. It held that the district

court must exercise its discretion to allow evidence not before

the plan administrator only when circumstances clearly establish

that additional evidence is necessary to conduct an adequate de

novo review of the benefit decision. Id. In Mongeluzo, the

Case 1:05-cv-00002-AWI -SMS Document 16 Filed 06/02/05 Page 2 of 11
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

3

district court had applied too narrow a definition to the plan

term “mental illness,” where the plan excluded benefits for

mental illness; the term was ambiguous, and ambiguities were to

be resolved in favor of the insured. The plaintiff insured had

offered extra-record evidence that his condition was later

diagnosed as an arguably physical condition (chronic fatigue).

The Court of Appeals held that a broader definition of the plan

term required re-evaluation of the evidence; the evidence of

chronic fatigue syndrome was a new explanation for the insured

employee’s disability and had to be considered. Id. at 944. The

Court in Mongeluzo emphasized that the change in the analysis of

the legal definition required a re-evaluation of the evidence;

additional evidence should not be taken merely because new

evidence not presented to the plan had come up. Id. The court

agreed with the majority of circuits that new evidence may be

considered under certain circumstances to enable the full

exercise of informed and independent judgment. Id. at 943.

Thus, contrary to Defendants’ contention here, the fact that

the parties have stipulated to de novo review does not by itself

render irrelevant or immaterial consideration of extra-record

evidence. 

B. Scope of Discovery in De Novo Review Cases

In cases using de novo review, the question on the merits is

whether the claimant is disabled under the terms of the plan. In

Mongeluzo, the court appeared to approve the majority rule, by

citing Quesinberry v. Life Ins. Co. of North America, 987 F.2d

1017, 1025 (4th Cir. 1993), to the effect that in these cases, the

court in its discretion may consider extra-record evidence only

Case 1:05-cv-00002-AWI -SMS Document 16 Filed 06/02/05 Page 3 of 11
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

4

if good cause exists, consisting of exceptional circumstances,

including things such as the following:

1) claims involving complex medical questions;

2) claims involving issues regarding the credibility of

medical evidence;

3) issues regarding the adequacy of the administrative

record (such as situations involving only very limited

administrative review procedures with little or no evidentiary

record);

4) necessity of evidence regarding interpretation of the

plan terms as distinct from specific historical facts;

5) instances where the payor and administrator are the same

entity, and the court is concerned about impartiality;

6) claims that would have been insurance contract claims

prior to ERISA (i.e., where the court traditionally considers

extra-record evidence in deciding issues of construction, etc.); 

7) circumstances where there is additional evidence that the

claimant could not have presented in the administrative process. 

Quesinberry, id. at 1027.

In Waggener v. Unum Life Insurance, 238 F.Supp.2d 1179

(S.D.CA 2002), the parties agreed that the standard of review was

de novo. The court concluded that evidence of a plan

administrator’s conflict of interest is relevant to the question

of what extra-record evidence, if any, the district court will

consider in conducting de novo review. In that case the defendant

insurer both funded the plan through the policy and reviewed and

determined claims. The court disallowed discovery of evidence

regarding general claims handling information; it allowed

Case 1:05-cv-00002-AWI -SMS Document 16 Filed 06/02/05 Page 4 of 11
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

5

discovery of information relatively directly related to the

plaintiff’s disability, including the following:

1) information necessary to demonstrate the manner in, or

extent to which, the conflict of interest (based on the

defendant’s position as both insurer and administrator) affected

the decision making process;

2) information necessary to address any shortcomings in the

record or decision making process caused by the conflict of

interest; and

3) information regarding the independence or neutrality of

the physicians used by the plan for medical opinions relative to

the plaintiff’s disability claim.

The court reasoned that this information was discoverable

because it was reasonably related (relevant) to the claims and

defenses in the case within the meaning of Fed. R. Civ. P.

26(b)(1), and it might lead to evidence that the court might

permit to be admitted at the time of summary judgment or trial.

The information was directed toward determining whether the

administrative record was complete or should be supplemented. In

light of the governing ERISA policies of 1) increasing the

likelihood of beneficiaries’s receipt of full benefits, and 2)

maintaining premium costs of the system at a reasonable level,

the court required the discovery to be carefully tailored to the

issues raised in the case (there, the need to demonstrate

conflict of interest that actually required introduction of

additional evidence). Id. at 1185-86. The court noted that an

administrator’s inconsistent treatment of the claim, inconsistent

reasoning, inadequate explanations, and repeated hiring of the

Case 1:05-cv-00002-AWI -SMS Document 16 Filed 06/02/05 Page 5 of 11
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

2

 Other material evidence includes an administrator’s failure to follow its internal procedures for providing

claimants with claim-filing documents, notice of denial, and/or review thereof; lack of adequate dialogue; an unfair

review procedure (reviewers being given only poorly organized, raw data from the actual treating physicians but full

reports from examining physicians selected by the plan); intent on the part of the administrator to deny the claim; and

the administrator’s failure to attend to fiduciary obligations. See Friedrich v. Intel Corp., 181 F.3d 1105, 1109-10 (9th

Cir. 1999) (holding that where the administrator had discretion to determine claims, the trial court did not err in

concluding that a conflict of interest existed and reviewing the claims decision de novo, and further did not err in

admitting additional medical evidence to supplement the inadequate medical record resulting from the unfair claims

procedure).

6

same experts whose opinions were credited over those of the

treating physicians were factors that could indicate that a

conflict of interest affected the defendant’s decision on

benefits. Id. at 1187.2

In the case before the Court, the district judge will have

to come to a fully informed and independent judgment regarding

the question of whether the Plaintiff was entitled to benefits.

Part and parcel of the decision at either summary judgment or

trial will be whether or not to exercise discretion to allow the

introduction of evidence outside the administrative record. There

is some indication of a potential conflict of interest because

the plan administrator and insurer are the same entity. As to the

adequacy of the record, the administrator’s review procedures

themselves or the extent of compliance with the procedures, and

the neutrality of the medical evaluators, Plaintiff has not

pointed to any evidence in the administrative record itself that

specifically raises any issue. There is a logical possibility at

this early stage of discovery that such issues exist, but nothing

more. Without knowledge of what is in the record that apparently

was produced to Plaintiff in April, (Sched. Conf. Order at 4), it

is difficult carefully to tailor the discovery to issues actually

raised in the case. However, at this stage, the Court is not

Case 1:05-cv-00002-AWI -SMS Document 16 Filed 06/02/05 Page 6 of 11
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

7

considering whether Plaintiff has demonstrated a conflict of

interest, inadequacy of the record or procedures, or partiality

of the medical evaluators; rather, the Court is considering only

the scope of discovery that is relevant to a claim or defense or

to the subject matter of the action. Use of the approach

formulated in Waggener is appropriate. 

With the foregoing in mind, the Court concludes that some of

the requested discovery should be permitted. The Court notes that

Defendants have represented that they have provided Plaintiff

with a complete copy of the administrative record in this case.

(Opp. to motion at 3.) Thus, in all instances, the discovery to

be provided is limited to matters that are in addition to the

administrative record already provided to Plaintiff by Defendant.

C. Interrogatories

Plaintiff seeks the identities of persons or entities

participating in the evaluation of Plaintiff’s claim or appeal,

including persons or entities who are currently Aetna employees

as well as those who are not. This information would relate to

the manner or extent of any conflict of interest; further, it

would bear on the adequacy of the record because it would

indicate whether anyone who participated in the evaluation was

not included in the administrative record. It is not tangential,

but rather is basic information of the sort that is necessary to

demonstrate the manner and extent of a conflict or the inadequacy

of the record or decision making process. A review of the cases

shows that the administrative record often consists of less than

the full administrative file, so it seems premature to conclude

that the administrative record would necessarily contain all this

Case 1:05-cv-00002-AWI -SMS Document 16 Filed 06/02/05 Page 7 of 11
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

8

information. As Plaintiff argues, if all evaluators are

identified in the record, Defendants may easily indicate that

such is the case. 

With respect to those participating in Plaintiff’s

evaluation, Plaintiff seeks information regarding those who were

independent contractors, such as the number of times of use of

contractors and the amount of compensation paid on each occasion. 

This information would relate to the independence or neutrality

of the physicians and medical experts. This type of information

was allowed in Waggener. Plaintiff should provide this

information limited to calendar years 2001 through 2004. 

Thus, the information sought in Interrogatories identified

as 1 through 4 in Plaintiff’s motion should be discoverable as

limited above.

D. Document Requests

The administrative record apparently summarizes or narrates

a surveillance video, but the video itself is not in the record.

Request 5 is for “[d]ocuments, including the video tape itself or

its functional equivalent, which reflect or relate to

surveillance of Mr. Jordan.” Any such documents could relate to

the conflict of interest, the adequacy of the record, and the

adequacy of the decision making process; they appear to be

directly related to Plaintiff’s disability and would be central

to an evaluation of the disability. They thus are the sort of

documentation that would be necessary to demonstrate a conflict

or address deficiencies. This documentation was permitted in

Waggener. The Court will permit the discovery.

Request 6 is for any other documents which refer or relate

Case 1:05-cv-00002-AWI -SMS Document 16 Filed 06/02/05 Page 8 of 11
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

9

to Plaintiff and which were not contained within the

administrative record already provided. This request is very

broadly stated as to source and subject. The Court will grant

discovery of any other documents referring or relating to

Plaintiff that are in the possession or files of either Defendant

and which relate to Plaintiff’s disability or claim. As limited,

such documents relate to information that could be useful to

demonstrate conflict or address the adequacy of the record and

the process.

Plaintiff requests claims guidelines from January 1, 2001,

to the present referring to various topics. The complaint

reflects that the action of which Plaintiff complains, namely,

the termination of the benefits, which occurred on August 5,

2003. To the extent that the Court permits discovery of claims

guidelines, discovery will be limited to any guidelines that were

in effect as of the date of termination of benefits.

Claims guidelines employed in Plaintiff’s case, and the

extent to which Defendant Aetna adhered to those guidelines in

Plaintiff’s case, relate directly to the adequacy of the

procedure used to determine Plaintiff’s claim. They may also bear

on conflict of interest and neutrality of evaluators, depending

on the subject of the guideline. It appears from the joint

stipulation that surveillance, personal interview, investigation,

conditions of or injuries to the back, effects of medication,

vocational rehabilitation, transferable skills, vocational

analysis, and medical consultants were subjects, procedures, and

phenomena involved in the evaluation of his claim. Thus, the

Court will grant discovery of guidelines in existence on or after

Case 1:05-cv-00002-AWI -SMS Document 16 Filed 06/02/05 Page 9 of 11
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

10

December 2001 and until August 5, 2003, relating to physical

ailments with respect to investigations of the duties of

Plaintiff’s occupation, surveillance, independent medical

examinations or medical documentation reviews, selection and

retention of physicians to conduct such exams and reviews,

internal evaluation of medical documentation, conditions of or

injuries to the back, effects of medication, requesting

additional or supplemental medical or vocational information,

clinical referral/reviews, sedentary work, administrative appeals

of claim determinations, retention of outside consultants used in

Plaintiff’s case, and responses to claimants’ requests for file

documentation.

Documents not already in the administrative file that refer

or relate to any of Plaintiff’s treating physicians, including

Drs. Blair, Cantrell, Fujihara, Glenn, Lozano, and Watson could

relate to the manner or extent of any conflict, the adequacy of

the record or the process, and the independence or neutrality of

the medical evaluators. This matter was permitted to be

discovered in Waggener. The Court will permit this discovery.

Plaintiff’s request for guidelines regarding responses to

complaints to governmental agencies such as the California

Department of Insurance is very broad and as formulated does not

appear to seek information useful to demonstrate a conflict,

address the adequacy of the record or the decision making

process, or demonstrate a lack of neutrality of physicians who

rendered a medical opinion. Discovery as to this is denied. 

The scheduling conference order (at 3) indicates that

Defendants contend that “based upon a review of plaintiff’s

Case 1:05-cv-00002-AWI -SMS Document 16 Filed 06/02/05 Page 10 of 11
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

11

medical records, vocational rehabilitation and evaluations,

investigations contracted by Aetna, medical consultant reviews,

independent vocational specialist reviews, and labor market

surveys, plaintiff was not disabled pursuant to the terms of the

Sunrise Plan and was able to work in a reasonable occupation.”

Discovery of claims guidelines on labor market surveys thus will

be granted. 

It does not appear how guidelines regarding social security

disability are pertinent. Discovery as to these guidelines is

denied.

Documents reflecting the definition of “disability” as used

in the applicable plan appear to be discoverable because the

construction of a key plan term is within the Court’s scope of

review. Discovery of such documents is granted, to include those

in effect from January 1, 2001, through August 2003.

IT IS SO ORDERED.

Dated: June 1, 2005 /s/ Sandra M. Snyder 

icido3 UNITED STATES MAGISTRATE JUDGE

Case 1:05-cv-00002-AWI -SMS Document 16 Filed 06/02/05 Page 11 of 11