In a recent case out of the Southern District of Florida, Johnston v. Aetna Life Ins. Co., No. 1720996 2017 WL 4654431 (S.D. Fla. Oct. 16, 2017), the court rejected Aetna's argument that discovery was not permitted, beyond the administrative record assembled and proffered by an insurer carrier in claims governed by the Employee Retirement Income Security Act of 1974 ("ERISA"). The case involved a disability insurance claim filed by Dr. Roy Neil Johnson under his ERISA governed Aetna policy.
The judge began his order by stating:
In their song 'Don't Speak,' the rock band No Doubt sang the following lament about being rejected: 'Don't speak / I know what you're thinking / I don't need your reasons / Don't tell me cause it hurts.' But in the instant case, Plaintiff urges a completely contrary theme: he wants to know why he was rejected. In fact, the discovery dispute at issue arises from Plaintiff's desire to know exactly what Defendant was thinking when it turned down his disability claim, and the tussle also concerns his efforts to know all the reasons for Defendant's thumbs-down treatment of his claim.
Aetna argued that in the ERISA governed lawsuit, Dr. Johnson was restricted from obtaining any information from Aetna other than the actual file it asserts contains the facts available to Aetna at the time it made its benefit determination. Citing to "lyrics from the Neil Young song 'Revolution Blues,'" the judge explained that Dr. Johnson asserted that he should not be limited to assuming that Aetna including all necessary information in the file, without any opportunity to test the veracity of Aetna's assertion: "'I hope you get the connection, 'cause I can't take the rejection / I won't deceive you, I just don't believe you." Johnston, 2017 WL 4654431, at *4 (S.D. Fla. Oct. 16, 2017).
The Southern District Court agreed with Dr. Johnson and noted that while in ERISA governed lawsuits claimants are typically limited to the facts available or known to the administrator at the time of the final adverse benefit decision, all the facts available or known to a financially conflicted insurance carrier may not necessarily make it into the file prepared by the insurance carrier. Accordingly, the Court found that Johnson was permitted to seek discovery into the facts available to Aetna.
Moreover, the Court explained that where an insurance carrier both decides eligibility for benefits and is the entity responsible for paying benefits, a financial conflict of interest exists. Thus, the Court explained that ERISA claimants are permitted to seek discovery into whether the financial conflict may have influenced the claim determination. Finally, the Court addressed the fiduciary exception in ERISA cases. The Court concluded that the fiduciary exception permits discovery of attorney-client communications between Aetna employees and Aetna's in-house counsel before the lawsuit was filed and may allow discovery of post-lawsuit communications before the final benefits decision was made. Therefore, Aetna was required to produce all documents and electronically stored information pertaining to communications with between its claims representatives and its in-house counsel before the lawsuit was filed. The court also required Aetna to submit to it, under seal, all post-lawsuit communications with its in-house counsel up to the time the final decision to deny benefits was made, so that the court could review the communications and render a determination as to whether they should be disclosed to Johnson in discovery.