ERISA And Discovery

ERISA lawyers are quick to tell potential clients the limitations of ERISA claims.  One of those limitations is that little to no legal discovery is allowed in ERISA claims.  This is discussed in an April 2019, opinion from the Northern District of Texas, Dallas Division.  The case is styled, Jose Chavez v. Standard Insurance Company.

In this lawsuit, Chavez is seeking long term disability (LTD) benefits from Standard.

Chavez filed suit against Standard in sought to compel discovery of contractual and financial arrangements under which Standard’s medical consultants played their respective roles regarding Chavez’s LTD claim.  Chavez also sought discovery of Standards internal claim procedures.

Motions governing motions to compel discovery responses are found in Federal Rule of Civil Procedure 37(a).  A party resisting discovery must show how each discovery request is not relevant or otherwise objectionable.  This is bolstered by Rule 26(b)(1).

ERISA cases have additional limitations on discovery as discussed in the Fifth Circuit opinion, Vega v. Nat’l Life Ins. Servs., Inc., which states generally, that a district court is limited to the administrative record in ERISA cases.

Chavez argues that discovery beyond the administrative record is relevant because questions are raised about whether or not Standard complied with ERISA’s procedural regulations.  The Court did not agree.

Chavez argues the contractual and financial records of the medical consultants are relevant because companies like Standard often use experts as a pretext to justify denial of a claim and because compliance with ERISA’s procedural regulations is relevant.   Standard replies that the requests go beyond the administrative record and are improper, an argument the Court agreed with.

Chavez insists on the relevance going to whether there is a conflict of interest with these experts.  This Court cited the Fifth Circuit stating that:

We have long held that in conducting review under an abuse of discretion standard, a district court should evaluate the administrator’s fact findings regarding the eligibility of a claimant based on the evidence before the administrator …[but] we have also explained how other evidence, not dealing with the historical facts underlying the benefit determination, and therefore usually not in the administrative record, was relevant under our abuse of discretion analysis.

The Court in this case, discussed further why the requested  discovery in this case was not going to be allowed and that the case was going to proceed based on the administrative record.  A must read for ERISA attorneys.