Discovery Limited in Deferential Review of Accidental Death Insurance Claim

Employees in Chicago with claims for life insurance or accidental death insurance benefits frequently ask what happens during discovery in litigation. Generally, discovery is the process where the parties exchange information with one another. But ERISA cases have their own discovery rules, and the extent of discovery can depend on the standard of judicial review of the life insurance or accidental insurance claim. Where the standard of review is the deferential “arbitrary and capricious” standard, courts generally limit discovery to the administrative record compiled before the administrator at the time it denied the benefit claim. The reason for this limitation is that under deferential review, the court does not make an independent decision regarding whether you are entitled to benefits. Instead, the court reviews the claim administrator’s, or the insurer’s, decision-making process to determine if it was “arbitrary and capricious.” A recent case demonstrates how the standard of review limited discovery.

In Hanley v. Unum Life Insurance Co. of America, No. 4:22-cv-01094, 2023 WL 3736478 (E.D. Mo. May 31, 2023), Suzanna Hanley died from a subdural hemorrhage a few days after she accidentally fell in a parking lot. Suzanna’s widower, Riley Hanley, made the claim to Unum for accidental death insurance benefits under Suzanna’s employer-sponsored group life insurance policy. Unum denied the claim, contending Ms. Hanley’s death was contributed to by her peripheral vascular disease, which she treated with aspirin and Plavix. Mr. Hanley appealed the denial, contending the death certificate and medical records did not list any contributing causes to the death, and the death was a result of an accidental fall. Unum upheld the denial, and Mr. Hanley sued under ERISA § 502(a). In litigation, Hanley sought discovery of internal policies and claims manuals, training manuals, and evidence of efforts to comply with ERISA regulations. Unum opposed the discovery.

The United States for the Eastern District of Missouri denied Hanley access to the requested discovery. It explained that under deferential review, discovery may be permitted to determine if a conflicts of interest or procedural irregularity exists. But to secure this discovery, Hanley must show “good cause” that the administrative record is sufficient to show that conflict of interest or procedural irregularity, and this “will ordinarily be apparent on the face of the administrative record or will be stipulated to by the parties.” The court held Hanley had not demonstrated any good cause to show the administrative record is insufficient to establish this conflict of interest or procedural irregularities, making only bald assertions of irregularities. The court thus denied Hanley any discovery in the litigation, restricting review to the administrative record.

If you have a claim for life insurance or accidental death insurance benefits, contact an experienced ERISA life insurance lawyer today.