The Honorable Gregory Woods in the United States District Court for the Southern District of New York
The Honorable Woods wrote an interesting opinion in the case styled Chau v. Hartford Life Insurance Company, 14-cv-8484, 2016 WL 7238956 (SDNY Dec. 13, 2016).
In Chau, Judge Woods rejected the notion that, in order to obtain conflict discovery from a structurally conflicted claim administrator (i.e., Hartford), a plaintiff bears the burden of showing a "reasonable chance" that the requested discovery will satisfy good cause requirement for supplementing the administrative record. Relying on the rationale from the Supreme Court's decision in Metropolitan Life Insurance Co. v. Glenn, 554 U.S. 105, 112-15 (2008), Judge Woods ruled that plaintiff challenging a claim determination made by a dual-role administrator is "entitled to conduct some discovery." While this does not afford plaintiffs free reign over discovery on any issue, it does afford plaintiffs (and the Court) the opportunity to obtain information concerning the likelihood that Hartford’s structural conflict impacted its decision or evidence that it actually did impact its decision.
The practical effect of this decision is huge. Previously, plaintiff had to point to specific evidence in the administrative record that the insurer's structural conflict affected its decision just to gain entitlement to discovery on that very issue. The requirement, in my opinion, is nonsensical -- evidence of conflict affecting an insurers decision is the type of information an insurer would rarely put into the record, as Judge Woods astutely noted in the decision.
Now plaintiffs are entitled to document discovery as well as a FRCP 30(b)(6) deposition to fully flesh out the extent to which a structural conflict affected an insurer's benefit claim decision.