THE CURRENT STATE OF DISCOVERY IN ERISA WELFARE-BENEFITS LITIGATION

1. THE CURRENT STATE OF DISCOVERY IN ERISA WELFARE-BENEFITS LITIGATION Joshua Bachrach – A Defendant’s Perspective Jonathan M. Feigenbaum – A Plaintiff’s Perspective

2. The late Senator Jacob Javits (Republican-New York), one of the main sponsors of the Employee Retirement Income Security Act of 1974 (“ERISA”) heralded the law as “the greatest development in the life of the American worker since Social Security.”

3. When you were a child,what was your response to the question, What do you want to be when you grow up?

4. An ERISA Litigator, of course!

6. Let’s Focus on Areas That We Agree.

7. Litigation is suppose to be, well CIVIL

8. Let’s Leave The Gloves In the Gym!

9. Some areas of agreement. • -The case law is all over the place. • -The quantity of discovery is judge- dependent. • - De novo determination or discretionary review may not make much difference.

10. I can find a case that says, “No discovery,” says Josh!. • “But I can show you a court order that says I get all the discovery I want,” says Jonathan

11. Do you really want to argue that discovery is not allowed?

12. Discovery is here to stay and is likely to become broader

13. What do the Federal Rules of Civil Procedure say about discovery in ERISA cases?

14. Rule 1. Scope and PurposeThese rules govern the procedure in all civil actions and proceedings in the United States district courts, except as stated in Rule 81. They should be construed and administered to secure the just, speedy, and inexpensive determination of every action and proceeding .

15. The Supreme Court explained the universality of the Federal Rules of Civil Procedure in New Hampshire Fire Ins. Co. v Scanlon, 362 U.S. 404 (1960).

16. We will come back to this! • Identify any other private party litigation, other than ERISA 502(a)(1)(B) cases, where the Article III Judge must defer to the decision of the defendant. • Is deference to the defendant Constitutional?

17. So why should the usual rules of civil litigation and discovery not apply?

19. Discovery. • Plaintiff wants it and defendant doesn’t. • Pretty Basic Stuff. • But Why???

21. Defendant’s Rationale Pre-Glenn • Congress has not provided Article III courts with the statutory authority, nor the judicial resources, to engage in a full review of the motivations behind every plan administrator's discretionary decisions. To engage in such a review would usurp plan administrators' discretionary authority and move toward a costly system in which Article III courts conduct wholesale reevaluations of ERISA claims. Imposing onerous discovery before an ERISA claim can be resolved would undermine one of the primary goals of the ERISA program: providing “a method for workers and beneficiaries to resolve disputes over benefits inexpensively and expeditiously.” Perry v. Simplicity Eng'g, 900 F.2d 963, 967 (6th Cir.1990) (internal citation omitted).Semien v. Life Ins. Co. of N. Am., 436 F.3d 805, 815 (7th Cir. 2006)

22. Defendant’s Rationale Post-Glenn • The prohibition of discovery effectuates ERISA's “primary” goal—the “inexpensive[ ] and expeditious[ ]” resolution of disputes. Id. at 966–67. [Citing to Perry v. Simplicity Eng'g, 900 F.2d 963 (6th Cir.1990)] • Mulligan v. Provident Life & Acc. Ins. Co., 271 F.R.D. 584, 588 (E.D. Tenn. 2011)

23. ERISA IS A LOW COST BENEFIT. • If lawyers drive-up the cost of providing benefits, employers will cease offering benefits.

24. Plaintiff’s Rationale – Shed Light On Conflict! • As to all three taken together, we believe them outweighed by “Congress' desire to offer employees enhanced protection for their benefits.” Varity, supra, at 497, 116 S.Ct. 1065 (discussing “competing congressional purposes” in enacting ERISA).Metro. Life Ins. Co. v. Glenn, 554 U.S. 105, 114, 128 S. Ct. 2343, 2349, 171 L. Ed. 2d 299 (2008)

25. DEFENSE PERSEPCTIVE: WHAT IS THE REAL MOTIVE?

28. But the obligation to show no conflict is on the plan • “With that in mind, courts are duty-bound to inquire into what steps a plan administrator has taken to insulate the decisionmaking process against the potentially pernicious effects of structural conflicts.” • Denmark v. Liberty Life Assur. Co. of Boston566 F.3d 1, 9 (1st Cir. 2009).

29. What’s there?

31. DEFENSE PERSEPCTIVE: ARE THERE REALLY ANY SECRETS?

33. DEFENSE PERSEPCTIVE: IS DISCOVERY A WASTE OF TIME?

34. DEFENSE PERSEPCTIVE: INCREASING A POTENTIAL FEE CLAIM?

35. Plaintiff Success Post- Glenn. • Additionally, testimony from the administrator during his deposition that he had never applied paragraph 9 of the “Other Income Benefits” section of the policy “to a claim that involved personal injury other than in the context of workers' compensation” tends to raise the eyebrows in respect to a conflict of interest analysis. • Baxter v. Sun Life Assur. Co. of CanadaSlip Copy, 2011 WL 2214661 (N.D.Ill.)at *10 (2011)

36. Plaintiff Success Pre-Glenn. • It gets worse. Dr. Pollack was asked whether physical therapy would prevent contractures. She said, “No.” Why not? “Because it is my belief that it is not an effective way to prevent contractures.” Where did this belief come from? “I cannot tell you exactly how I developed it because I haven't thought about it for a long time.” • Bedrickv. Travelers Ins. Co.93 F.3d 149,154 (4th Cir. 1996)

37. Plaintiff Success Post-Glenn. • “The court disagrees. McGahey points out that Dr. McManama recommended denial of every long-term disability claim in the twenty-two cases that he reviewed for Harvard during the specified time period. Dr. Clayman recommended denial in 80 percent of the cases he reviewed (twenty-five of thirty-one).”McGahey v. Harvard Univ. Flexible Benefits Plan, 685 F. Supp. 2d 168, 180 (D. Mass. 2009)

38. Protective Orders

39. Anyone Have an Answer? • Identify any other private party litigation, other than ERISA 502(a)(1)(B) cases, where the Article III Judge must defer to the decision of the defendant. • Is deference to the defendant Constitutional?