Legal Summary: Kinsler v. Lincoln National Life Insurance Company

660 F. Supp. 2d 830 (M.D. Tenn. 2009)

In our suit against Lincoln National Life Insurance Company, we filed a motion for discovery, to gain information about the potential bias that may have affected the decision to deny our client’s claim for long term disability benefits, including potential incentive systems for claim denials, frequency of case reviews, and third party reviews. Kinsler v. Lincoln Nat’l Life Ins. Co. 660 F. Supp. 2d 830, 831 (M.D. Tenn. 2009). Our claim centered around an inherent conflict of interest arising from the fact that the defendant “was responsible both for evaluating the plaintiff’s claim for benefits and paying any benefits that would be due.” Id. After considering this issue and the need for discovery, the court granted our motion.

In making the decision to grant the motion, the court considered the limited amount of discovery we requested, as well as the type of discovery requested, six interrogatories and three production of documents requests. In response to these requests, the defendant objected, claiming that in the Sixth Circuit, this type of discovery is not permitted “in the absence of an initial threshold showing of conflict of interest, bias, or some other procedural irregularity” and that we had not made a showing for one of these. Id.

In making this decision, the court considered two groups of competing Sixth Circuit precedent. Id. at 832. The applicable general rule and exception come from Wilkins v. Baptist Healthcare Sys., Inc., 150 F.3d 609 (6th Cir.1998). The general rule is that “a district court may only consider evidence that was first presented to the administrator.” Id. at 618. However, there is also an exception that “when consideration of that evidence is necessary to resolve an ERISA claimant’s procedural challenge to the administrator’s decision, such as an alleged lack of due process afforded by the administrator or alleged bias on its part.” Id.

The court then turned to the two competing schools of thought. The first is the proposition that in order to be entitled to discovery when bringing an ERISA claim, a plaintiff must “do more than merely allege a conflict of interest.” Kinsler, 660 F. Supp. 2d at 832; see Putney v. Medical Mutual of Ohio, 111 Fed.Appx. 803 (6th Cir.2004). In opposition to this view, other cases have held that “an ERISA plaintiff need not make any initial threshold showing of a conflict of interest in order to be entitled to discovery into this issue.” Kinsler, 660 F. Supp. 2d at 832; see Calvert v. Firstar Finance, Inc., 409 F.3d 286 (6th Cir.2005).

The court here ultimately held that discovery would be compelled in such cases as this one, where “a plaintiff has alleged an inherent conflict of interest to the extent that the entity that makes a benefits determination is the same entity that is responsible for paying that claim,” relying on the holdings of Wilkins v. Baptist Healthcare Sys., Inc., 150 F.3d 609 (6th Cir.1998), Moore v. Lafayette Life Insurance Co., 458 F.3d 416 (6th Cir.2006), and Metro. Life Ins. Co. v. Glenn, 554 U.S.105 (2008). Kinsler, 660 F. Supp. 2d at 836. The court reasoned that the language of Wilkins does not require anything more than an allegation of bias or lack of due process to make relevant evidence discovery. Wilkins, 150 F.3d. at 618. The court in Moore suggested the same conclusion as in Wilkins, and the Glenn court spoke about the necessity of discovery in order to consider a conflict of interest. Kinsler, 660 F. Supp. 2d at 836. Thus, our motion for discovery was granted and the defendants were compelled to respond to our requests.

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