Legal Summary: Williamson v. UnumProvident

Williamson v. UnumProvident Corp.
Nos. 1:04-CV-162,1:04-CV-163, 2005 WL 6731769 (E.D.Tenn. Oct. 21, 2005)

Our client was denied the benefits we believed he deserved under his Employee Welfare Benefit plan administered by UnumProvident. We brought suit seeking judicial review of this denial and damages for UnumProvident’s breaches of fiduciary duties. To assist in proving our case, we made a limited discovery request for information regarding incentive structures within UnumProvident that would encourage denial of valid claims. We wanted to determine whether UnumProvident acted with bias and out of a conflict of interest in evaluating our client’s claim.

Discovery in ERISA cases is typically not permitted outside of the administrative record that the provider relied on in making its determination. Discovery is usually limited in this way because when ruling on whether the decision was arbitrary and capricious, courts consider only what was in front of the administrator at the time of its decision. However, “[w]here a plaintiff alleges a procedural challenge to the administrator’s decision,…a district court is permitted to consider evidence which was not originally presented to the administrator.” 

We made a procedural challenge, alleging that there was impermissible bias against claimants, which resulted in a lack of due process in the administrator’s decision-making process. In these types of cases, the court determines whether good cause exists to grant additional discovery by considering whether the claimant: “(1) identifies specific procedural challenges concerning a fiduciary’s decision to deny or terminate ERISA benefits, and (2) makes an initial showing to the court that he has a reasonable basis to make such procedural challenges.”

We satisfied both prongs of the rule for granting additional discovery. First, we identified a specific procedural challenge to UnumProvident’s decision-making process. Our challenge was based on “the existence of institutionalized policies and procedures in place, under which Unum Defendants act on the conflict of interest creating individual bias in the administration of claims: UnumProvident employees participate in UnumProvident Corporation’s management incentive compensation program and in UnumProvident Corporation’s performance recognition plan which are designed to protect profits.” 

Second, we made an adequate initial showing that we had a reasonable basis for our procedural challenge. We “establish[ed that] some of the UnumProvident employees who participated in the administration of [our client’s] claim participated in one or both of these employee incentive pay programs.”

Therefore, we satisfied both prongs of the relevant standard, so the court granted our motion for discovery outside of the administrative record. This was a significant win for us in an area of law that rarely engages in discovery outside of the administrative record. The additional discovery that we obtained helped us better advocate for our client. 

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