Smith v. Unum Life Insurance Company of America

Background

The parties submitted a joint letter seeking the court’s assistance with a discovery dispute in an Employee Retirement Income Security Act (ERISA) action. Under the scheduling order, fact discovery was to be completed by March 21, 2024; interrogatories and requests for admission were to be served by December 22, 2023; and depositions were to be completed by the applicable deadline in the order.

Smith served seven requests for admission, six interrogatories, and eight requests for production. She also notified the defendants that she intended to depose employees involved in the initial denial of her claim. The defendants said they would not respond to the discovery without a court order. The parties conferred by telephone on January 25, 2024, but did not resolve the dispute.

The parties’ positions

Smith argued that the scheduling order contained no special prerequisite for limited ERISA discovery and that her requests were timely. She relied on decisions recognizing that limited discovery may help evaluate an ERISA administrator’s conflict of interest and the completeness of the administrative record. She also argued that, under the “reasonable chance” standard discussed by courts in the Second Circuit, her discovery requests were proper because her complaint alleged that the defendants gave claim-handling employees monthly denial targets and encouraged them to meet recovery goals by denying a certain number of claims.

The defendants argued that discovery in ERISA cases is generally limited to the administrative record—the materials before the plan administrator when the claim decision was made—and that discovery outside that record requires a court order. They identified two approaches used by courts: the “reasonable chance” standard and the Federal Rule of Civil Procedure 26 standard. Under the first, a plaintiff must show a reasonable chance that the requested discovery will satisfy the requirement for allowing extra-record discovery. Under the second, the discovery must be narrowly tailored to the financial-conflict inquiry and proportional to the needs of the case. The defendants argued that Smith was not automatically entitled to the requested discovery and that only the court could determine whether it was warranted.

Order

Judge Jessica G. L. Clarke did not rule in this order on whether Smith’s discovery requests satisfied either standard or whether the defendants had to respond. The order directed the parties to file the discovery requests at issue with the court no later than March 8, 2024. This was a procedural order addressing the next step in the discovery dispute, not a decision on the merits of Smith’s ERISA claim.