Discovery requests in ERISA disability cases are found to be limited

A long-term disability case brought before Lincoln D. Almond, U.S. Magistrate Judge in the District of Rhode Island, brings to light how important it is for a long-term disability attorney to prepare a discovery request carefully and to make every effort to resolve discovery issues without involving the court system. The case we are going to discuss could have gone more favorably for Lorene Roccon Thompson, if her attorneys had paid more attention to the details. Discovery in ERISA disability cases is extremely limited and generally is only allowed to determine the extent of a conflict of interest.

First let’s begin by taking a look at the claim history in this case.

Thompson, as an employee of UBS financial services (UBS), participated in a long-term disability benefit plan that was administered and insured by Life Insurance Company of North America (LINA), also known as CIGNA. After she was diagnosed with chronic fatigue syndrome (CFS) and Meniere’s disease, she was paid benefits for two years under the “own occupation” clause. But in February 2008, her definitions of disability changed to “unable to perform any occupation”. This is typical of most long-term disability policies.

CIGNA denied disability benefits under the “any occupation” definition. Thompson filed suit after exhausting her administrative appeals, claiming CIGNA’s decision was “arbitrary and capricious and an abuse of discretion” because CIGNA had the power to both determine whether Thompson was eligible and paid the long-term disability benefits. She also claimed that CIGNA’s decision was infected by a structural conflict of interest.

Thompson’s attorneys, in order to prove these claims, asked the court to go beyond the administrative record that had been compiled around Thompson’s claim. They asked the court to approve an amended motion that would compel discovery. This included a series of interrogatories (requests for further information) and document requests. They also wanted the Court to strike objections by the insurance company and award Thompson attorney’s fees.

Interrogatories typically include formal questions that one side in a law suit wants the court to require the other side to answer. In most cases, this is to clarify what evidence and facts pertain to the case. Motions to strike objections allow information to be presented before the Court if the Court doesn’t allow the objections. If the Court allows the objections, then the information cannot be asked for or used in the case.

We will discuss here what kind of discovery Thompson requested and how the court responded.

In an August 27, 2007 letter, CIGNA told Thompson that after 24 months her long-term disability benefits would only remain payable if she was unable to perform all the material duties of any occupation for which she could reasonably become qualified for based on her education, training or experience or if due solely to injury or sickness she was unable to earn more than 80% of her indexed covered earnings before her disability occurred.

On February 14, 2008, when Thompson’s 24 months expired, CIGNA’s wording had changed. Now, she had to both be unable to perform any job her abilities and qualifications enabled her to do and she had to be unable to earn more than 80% of her previous earnings. In court, Thompson requested copies of the policy documents to determine whether Thompson was required to meet the more stringent requirements of the February 14, 2008 letter or if the August 27, 2007 letter applied. In this case, the Court ruled that discovery in this matter was essential and ordered all policy documents from January 1, 2005 through the present be produced, whether already in the administrative record or not.

Thompson’s counsel also requested additional documents. Because CIGNA claimed to not have some documents, Thompson requested that UBS be served with the demand to produce the documents. The Court granted Thompson’s request.

Thompson made a blanket request for copies of CIGNA’s claims manuals, claims-handling manuals, operating manuals, books of operating knowledge and any other documents that set forth the company’s protocols for responding to, investigating, negotiating and approving or denying claims that were in effect from the time of Thompson’s initial disability claim to the present.

CIGNA objected to this request and the Court sided with CIGNA’s objection, agreeing that the request to produce all of the company’s claims handling documents was unwarranted. The Court was willing to consider requiring CIGNA to produce documents that applied to Thompson’s case, but to expect CIGNA to produce such extensive documentation could not be supported by any prior ruling of the District Court. Judge Almond limited Thompson’s request to documents that specifically addressed CIGNA’s claims handling process for cases involving CFS and Meniere’s disease.

The Court also ruled that CIGNA would only be required to release certain documents that were subject to confidentiality issues if Thompson agreed to an appropriate confidentiality order.

When Judge Almond looked at the issue of structural conflict of interest, he found that Thompson’s attorneys had been slack in their efforts. Applying a rule known as Local Rule Cv 37(a) which applies to discovery requests, he found that Thompson’s attorneys had not done their research. Each discovery request should have been framed in the context of the prior requests made for the documents, the response received, if any, and reasons why any responses they had received were inadequate.

This was going to work against Thompson’s getting the answers desired. The Court sustained many of CIGNA’s objections, though some were stricken. In other cases, Judge Almond determined that answers could not be compelled but recommended response.

In the end, Judge Almond stated his dissatisfaction with both sides. He found that Thompson’s attorneys had made little effort to tailor discovery requests to her case. He saw little evidence that Thompson had made any efforts to resolve the discovery issues without requiring the court’s involvement. Nor had CIGNA made any efforts to resolve the issues before the matter came before the judge. Based on this apparent disrespect for the Court’s time, Judge Almond refused to award attorney fees and costs to Thompson.

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