Discovery of facts outside of the administrative record regarding disability may be allowed
In the case I discussed last month, Patton v. Sun Life, a second issue arose as to whether the district court should have reopened discovery to permit Patton to, for instance, depose Dr. Ambrose. Patton argued that the evidence he wanted to present was necessary for the court to conduct an informed evaluation of his claims.
Sun Life's plan did not limit its participants' rights to informed, independent review of benefit determinations by the courts, so the district court had discretion to permit the introduction of additional evidence necessary to enable it to make an informed and independent judgment. Numerous factors are relevant to the district court's decision, the most central being the court's need to hear the evidence in order to make an informed evaluation of the parties' claims and defenses. The most important factor for the district court is whether the evidence is "necessary" to an "informed and independent judgment" on the parties' claims and defenses, which will obviously depend on the nature of the claims and whether the administrative record was "relatively undeveloped" with respect to those claims. Most courts use this discretionary approach to new evidence.
Other factors are also relevant. Courts have suggested, for instance, that the district court may wish to consider whether the evidence the parties seek to introduce would concern plan terms or historical facts concerning the claimant, whether the plan administrator faced a conflict of interest and, as Sun Life notes, whether the parties had a chance to present their evidence in the Employee Retirement Income Security Act of 1974 (ERISA) administrative proceeding. But no factor is necessarily determinative in any particular case. The district court must take the relevant factors into consideration and provide a reasonable explanation for its decision; so long as it does so, its decision will be affirmed. Reversals will be rare.
The Patton case was one of the rare ones. To begin with, the district court failed to adequately explain its decision. In making a discretionary decision, a court must present an explanation for its choice sufficient to enable a reviewing court to determine that it did not act thoughtlessly, but instead considered the factors relevant to its decision and in fact exercised its discretion. The court need not mechanically list factors or address all the parties' arguments, but a sufficiently strong argument merits discussion and a reviewing court cannot conclude that discretion was exercised when a strong argument is "passed over in silence."
Patton's argument for reopening discovery was compelling. The case could clearly have benefited from having the gaps in the record filled, particularly those concerning Dr. Ambrose and his various communications. It was clear that a relatively slight expenditure to depose Dr. Ambrose would result in a unusually high payoff in increased accuracy, because the case hinges in part on factual determinations which, given the obscure evidence in the administrative record, are little better than guesses, the Patton court held. Sun Life chose to credit those of Ambrose's contradictory messages most favorable to it. None of the messages purported to explain the others, and no party had offered any extrinsic evidence to explain the contradictions. On this record, a conclusion as to what Ambrose was even thinking was little better than a guess.
In claims for unpaid long-term disability benefits, it is important to build a concise and thorough record of your disability during the company's administrative review process. However, as the case above illustrates, the court has the discretion to allow additional discovery if necessary for the purpose of filling gaps in the record.
Alan C. Olson practices disability law from his offices in New Berlin, Wisconsin, and throughout the United States. AOlson@Employee-Advocates.com
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Long-Term Disability Standard Stricter After 24 Months
Under most LTD [Long-Term Disability] policies, you are considered disabled if by reason of illness, injury, accident or infectious disease you are not able to perform the material duties of your regular job. The standard for granting benefits during the first 24 months of disability is commonly referred to as the “own occupation” provision and the standard thereafter is referred to as the “any occupation” provision.
After 24 months of LTD payments, benefits can continue only if you cannot perform any occupation for which you are suited or could become qualified by education, training or experience. In other words, the threshold you must satisfy in order to continue receiving benefits after the first 24 months becomes stricter in that you must prove you are not only incapable of performing your old job, but also all other jobs that your background would equip you to perform despite your disability.
Before denying benefits, administrators of ERISA plans are required to have enough evidence to allow them to make a reasonable decision; ERISA does not require a full-blown investigation, but it does demand a reasonable inquiry into a claimant's medical condition and his vocational skills and potential. Employee Retirement Income Security Act of 1974, § 2 et seq., 29 U.S.C.A. § 1001 et seq. The insurance company’s failure to make a reasonable inquiry is grounds for an administrative appeal of the decision to terminate long term disability benefits, and for ultimately filing suit in federal court.
Alan C. Olson practices disability law from his offices in New Berlin, Wisconsin, and throughout the United States. AOlson@Employee-Advocates.com
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