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Boyce v. Eaton Corp. Long Disability Plan

United States District Court, W.D. North Carolina, Asheville Division

July 18, 2017




         THIS MATTER is before the Court on the Plaintiff's Motion to Lift the Stay on Discovery and Motion to Amend the Case Management Plan. [Doc. 25].


         Plaintiff Barbara Boyce (“Plaintiff”) filed this action pursuant to 29 U.S.C. § 1132(a)(1)(B), after having exhausted her administrative remedies, seeking long term disability benefits under an Employee Retirement Income Security Act (ERISA) plan of her former employer, Eaton Corporation (“Eaton”). [Complaint, Doc. 1 at ¶¶ 3, 8; Answer, Doc. 6 at ¶ 8].

         The Plaintiff's employment with Eaton began on November 20, 2000. [Doc. 15 at 32]. On September 29, 2009, the Plaintiff sustained a rotator cuff injury while on duty at Eaton. [Doc. 15 at 21]. On June 18, 2010, after having received short term disability benefits for approximately seven months, the Plaintiff applied for long term disability benefits under the Eaton Corporation Disability Plan for U.S. Employees (the “Plan”), [1], [2] as a result of the rotator cuff injury. [Id.; see Doc. 15 at 33].

         On July 15, 2010, the Plaintiff's application for long term disability benefits was approved and on July 23, 2010, the Plaintiff began receiving these benefits. [Doc. 15 at 29-33]. Sedgwick Claims Management Services, Inc., (“Sedgwick”) served as the Claims Administrator for the Plan during the times relevant in this matter. [See, e.g., Doc. 15 at 33; Doc. 18 at 365]. Sedgwick periodically reviewed the Plaintiff's long term disability benefits claim under the Plan. On August 21, 2015, Sedgwick advised the Plaintiff that it had completed one of these reviews and that, under the terms of the Plan, it found she was no longer totally disabled and that benefits would be terminated as of August 31, 2015. [Doc. 15 at 474]. Namely, it found the Plaintiff's condition no longer met the definition of “disability, ”[3] as defined by the Plan. [Doc. 15 at 474]. Under the Plan, long term disability benefits end, for among other reasons, when the employee “no longer h[as] a covered disability under the Plan, as determined by the Claims Administrator.” [Doc. 18 at 533].

         On September 30, 2015, pursuant to 29 U.S.C. § 1133, the Plaintiff timely appealed the denial of benefits. [Doc. 15 at 477]. On March 15, 2016, Sedgwick advised the Plaintiff that the denial of her claim for disability benefits had been reviewed and that, “because the medical information in the file does not support the inability to perform any occupation, as defined by the Plan [ ], we have no alternative other than to reaffirm the denial of benefits for the period of September 1, 2015 forward.” [Doc. 16 at 27-28]. On March 23, 2016, the Plaintiff notified Eaton that she was appealing the March 15, 2016 decision upholding the previous decision to deny her benefits. [Doc. 16 at 31]. Pursuant to ERISA, this level appeal was made to the Plan Administrator, which the Plan defines as the Eaton Corporation Health and Welfare Administrative Committee (the “Committee”). [Doc. 18 at 552]. Pursuant to the terms of the Plan, the Committee was required to give a “full and fair review” of the March 15, 2016 decision denying the Plaintiff's claim. 29 U.S.C. § 1133(2).

         On June 15, 2016, after review of the March 15, 2016 decision was stayed for 21 days at the request of Plaintiff's counsel to allow for “additional time to consider submitting medical records” and after a 45-day extension for additional time for the Committee to conduct its review, the Committee upheld the denial of the Plaintiff's claim for long term disability benefits under the Plan. [Doc. 18 at 99, 104]. On July 15, 2016, after having exhausted her administrative remedies, the Plaintiff filed this action, seeking long term disability benefits under the Plan pursuant to 29 U.S.C. § 1132(a)(1)(B). [Complaint, Doc. 1 at ¶ 3].

         On December 21, 2016, the Court entered a Pretrial Order and Case Management Plan (“Pretrial Order”), which provides, in pertinent part, “[t]he parties agree that discovery is not required in this case.” [Doc. 10 at 2 (emphasis added)]. The Administrative Record (the “Record”) was filed on February 27, 2017. [See Docs. 15-18]. The Plaintiff represents that “on or about April 13, 2017, the Defendant provided Plaintiff with additional documents which were not initially disclosed nor provided in the administrative record when the Defendant initially sent the record.” [Doc. 25 at 1-2]. On May 30, 2017, in response to the parties' Joint Motion to File Supplemental Materials as Part of the Administrative Record (“Joint Motion”), [Doc. 32], the Court ordered these additional documents be filed within 7 days of the entry of that order. [Doc. 34].

         The Supplemental Materials include the following: (1) a basic timeline of events relevant to the Plaintiff's injury and disability claim, [Doc. 33 at 5]; (2) a “Summary of Long Term Disability Claim Second Level Appeal” (the “Summary Report”), [Doc. 33 at 6-11]; (3) a document that reflects that attorney Patrick Egan (“Mr. Egan”) was invited to a one-hour meeting and/or teleconference of the Committee to occur on May 13, 2016, regarding the “Boyce Disability Appeal” (the “Committee Meeting”) and prior to which the “Claim Summary”[4] was to be sent to the Committee, [Doc. 33 at 12]; and (4) an e-mail dated April 21, 2016, from a litigation paralegal of Mr. Egan's firm, Benesch, Friedlander, Coplan & Aronoff LLP (the “Law Firm”) to Nathaniel Bax, the Plaintiff's attorney, enclosing a blurred and incomplete copy of a “Statement of Barbara Boyce” and requesting that Mr. Bax transmit another copy of the same. [Doc. 33 at 13-15].

         On May 2, 2017, before the Joint Motion was filed, the Plaintiff filed the Motion now before the Court seeking to lift “the stay” on discovery imposed by the Pretrial Order and to amend the Case Management Plan in order to extend the dispositive motions deadline. [Doc. 25; see Doc. 10]. The Plaintiff contends, in light of the Supplemental Materials, “it has come to Plaintiff's attention that limited discovery is necessary in this case.”[5] [Doc. 25 at 8]. The Plaintiff argues that the Supplemental Materials (1) raise additional questions regarding whether she received a “full and fair review” and (2) indicate that there may be a conflict of interest which caused the Committee to abuse its discretion in denying her claim for long term disability benefits.

         In the instant Motion, the Plaintiff requests: (1) “the opportunity to perform limited discovery as to who prepared the [Summary Report], who reviewed the report, and who forwarded the report to Defendant's appeal committee, ” because “the summary calls into question ‘the adequacy of the materials considered to make the decision, '” [Doc. 25 at 17, citing Champion v. Black & Decker (U.S.) Incorporated, 550 F.3d 353, 359 (4th Cir. 2008)]; (2) discovery on “what process was taken and materials considered by the Defendant's appeal committee during the 30 minute [Committee Meeting], ”[6]because this goes to whether the “Defendant's appeal committee carefully reviewed adequate materials, using a principled and reasoned process, ” [Doc. 25 at 17]; and (3) discovery “to determine how many other cases exist where Defendant's outside counsel has participated both in the appeal review process and subsequently represented Defendant in litigation, ” which “is necessary to show a pattern of behavior and, consequently, the extent of the conflict of interest and the extent of Defendant's conducting of reviews that conform with the requirements of ERISA.” [Doc. 25 at 17-8]. Then, in her Reply Brief, the Plaintiff states she “is only seeking information about the conflict of interest, how it influenced the Committee's decision, and the process by which the Benefits Committee came to its decision, ” [Doc. 30 at 2], as well as “discovery on what exactly the appeals committee reviewed as it goes to the very heart of ERISA's promise that every claimant will receive a full and fair review.” [Doc. 30 at 10].

         It appears there are two distinct, but related questions before the Court. First is the more general question of whether extra-record discovery should be permitted to enable a plaintiff to demonstrate that a plan administrator did not conduct a “full and fair review” of her claim. The second is whether and to what degree discovery can and should be allowed where a plaintiff seeks to establish that a plan administrator abused its discretion in denying benefits because of an alleged conflict of interest held by the plan's attorney.

         II. ...

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