The opinion
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
KEVIN NAUSS, )
)
Plaintiff, )
)
v. ) Case No. 4:20-CV-00304 JAR
)
)
SEDGWICK CLAIMS MANAGEMENT )
SERVICES, INC., )
)
Defendant. )
MEMORANDUM AND ORDER
This is an action under the Employee Retirement Income Security Act (“ERISA”), 29
U.S.C. § 1001 et. seq., for judicial review of a decision by Defendant Sedgwick Claims
Management Services, Inc. (“Sedgwick”) to deny Plaintiff’s claim for short-term disability
benefits. Before the Court is Plaintiff’s motion for additional discovery outside of the
administrative record. (Doc. No. 27). Specifically, Plaintiff seeks to depose Sedgwick employee
Sonia Brown as well as a corporate representative of Sedgwick. In support of his motion, Plaintiff
states that Brown made the decision to deny his claim for benefits and appears to be “the person
responsible for failing to adequately provide a timely determination to Plaintiff and his attorney of
Sedgwick’s denial of those benefits” and for failing “to timely provide the correct Summary
Description of the Plan to Plaintiff and his attorney.” Plaintiff contends these facts and
circumstances may be pertinent to the applicable standard of review in this case. In addition,
Plaintiff seeks to depose Sedgwick’s corporate representative on these issues, “the relevant
portions of the Plan involved, and how the determination to deny benefits to Plaintiff was made.”
Sedgwick opposes further discovery on the grounds that the administrative record already contains
all the information necessary to this Court’s determination. (Doc. No. 28).
Courts review a denial of benefits under an ERISA plan de novo unless the plan gives the
administrator or fiduciary discretion to determine eligibility for benefits, in which case an abuse
of discretion standard of review is used. Metro. Life Ins. Co. v. Glenn, 554 U.S. 105, 111 (2008);
Waldoch v. Medtronic, Inc., 757 F.3d 822, 829 (8th Cir. 2014), as corrected (July 15, 2014)
(quoting Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989)). In ERISA cases, review
is generally limited to evidence that was before the administrator, and discovery is not allowed.
Jones v. ReliaStar Life Ins. Co., 615 F.3d 941, 945 (8th Cir. 2010); Atkins v. Prudential Ins. Co.,
404 F. App’x 82, 84-85 (8th Cir. 2010). This limitation on evidence ensures “expeditious judicial
review of ERISA benefit decisions” and prevents “district courts from becoming substitute plan
administrators.” Brown v. Seitz Foods, Inc. Disability Benefits Plan, 140 F.3d 1198, 1200 (8th Cir.
1998) (citation omitted).
However, some limited discovery may be permissible in certain ERISA cases, but only if
the plaintiff demonstrates good cause. Scheff v. Blue Cross Blue Shield of N. Dakota, No. 4:15-
CV-173, 2020 WL 3086874, at *2-3 (D.N.D. June 10, 2020). Courts in this district have limited
the scope of this discovery to determining whether a conflict of interest or procedural irregularity
exists. See, e.g., Barnes v. Ascension Health All., No. 4:16-CV-2170 (CEJ), 2017 WL 3006882
(E.D. Mo. July 14, 2017); Maly v. Trustees of Local 309 Wireman’s Pension Tr., No.
4:11CV00675 AGF, 2011 WL 5597316 (E.D. Mo. Nov. 17, 2011); Sampson v. Prudential Life
Ins. Co. of America, No. 4:08CV1290 CDP, 2009 WL 882407 (E.D. Mo. Mar. 26, 2009); T.D.E.
v. Life Ins. Co. of No. America, No. 4:07CV1387 CDP, 2009 WL 367701 (E.D. Mo. Feb. 11,
2009); Winterbauer v. Life Ins. Co. of No. America, No. 4:07CV1026 DDN, 2008 WL 4643942
(E.D. Mo. Oct. 27, 2008). Conflicts of interest exist whenever the same entity both determines
benefits eligibility under an ERISA plan and pays the benefits out of its own pocket. Glenn, 554
U.S. at 112. A procedural irregularity is said to exist where the plan administrator, in the exercise
of its power, acted dishonestly, from improper motive, or failed to use sound judgment in reaching
its decision. Menz v. Procter and Gamble Health Care Plan, 520 F.3d 865, 869 (8th Cir. 2008)
(citing Neumann v. AT & T Commc’ns, Inc., 376 F.3d 773, 781 (8th Cir. 2004)). Often, a conflict
of interest or procedural irregularity will be apparent from the administrative record. Farley v.
Arkansas Blue Cross & Blue Shield, 147 F.3d 774, 776 n.4 (8th Cir. 1998)). As a result, “the
district court will only rarely need to permit discovery and supplementation of the record to
establish these facts.” Id. (emphasis added). Discovery is not permitted on the merits of the benefit
claim, even if the conflict of interest or procedural irregularity is shown. See Atkins, 404 F. App’x
at 84-85.
Here, Plaintiff has neither alleged nor based his request for discovery on a claim that
Sedgwick, the claims administrator, acted under a conflict of interest, and therefore has not
demonstrated good cause with respect to the conflict of interest prong. Menz, 520 F.3d at 870-871.
Instead, Plaintiff points to alleged procedural irregularities, namely Sedgwick’s failure to provide
him with a timely benefits decision and the current summary description of the plan. Upon
consideration of these arguments, the Court finds they fail to demonstrate good cause for
discovery, because Plaintiff has not alleged sufficient facts to establish any basis for a finding that
Sedgwick acted dishonestly, from improper motive, or failed to use sound judgment in reaching
its decision.
Plaintiff alleges Sedgwick initially sent him an outdated Summary Plan Description
(“SPD”) governing his claim. (See Amended Complaint (“AC”), Doc. No. 18 at ¶ 1). He does not,
however, identify any relevant changes between the SPD he was initially sent and the current SPD
subsequently provided to him, or explain how this affected the substantive decision reached. Menz,
520 F.3d at 869 (citing Buttram v. Cent. States, Se. & Sw. Areas Health & Welfare Fund, 76 F.3d
896, 901 (8th Cir. 1996)).
Plaintiff further alleges that Sedgwick “did not adequately make and legally deliver to
Plaintiff and his attorneys a valid timely final determination” of his claim for benefits. He asserts
that a notice of denial, dated “July 25, 2019,” was e-mailed to him the following day, “July 26,
2019,” but that “he was not aware of it” because “it had been delivered to his Spam Email.” (See
AC at ¶¶ 11-15). Plaintiff argues that because the plan’s procedural deadline for making a final
determination on his claim for benefits had passed, a de novo standard of review should apply,
citing Fessenden v. Reliance Standard Life Ins. Co., 927 F. 3d 998, 999-1000 (7th Cir. 2019),
which holds that when an administrator “fail[s] to issue a decision” in an internal appeal of a
benefits denial “within the timeline mandated by the regulations,” a de novo standard of review
applies. (See AC at ¶ 17).
Plaintiff’s allegations appear to actually concede that a timely denial was made. In any
event, under controlling Eighth Circuit caselaw, an administrator’s decisional delay on appeal does
not in and of itself trigger de novo review; rather, it is a factor to be considered by the district court
when reviewing the administrator’s decision for an abuse of discretion. McIntyre v. Reliance
Standard Life Ins. Co., 972 F.3d 955, 963-65 (8th Cir. 2020) (citing Seman v. FMC Corp.
Retirement Plan for Hourly Emps., 334 F.3d 728, 733 (8th Cir. 2003)). As for Plaintiff’s contention
that Sedgwick failed to provide him with “lawful and adequate” notice of its benefits
determination, the administrative record, which includes the correspondence between Sedgwick,
Plaintiff, and Plaintiff’s counsel, is sufficient to evaluate this issue.
Lastly, Plaintiff seeks to depose Sedgwick’s corporate representative about the relevant
portions of the Plan involved and how the determination to deny him benefits was made. The
requested discovery is not permissible as it appears to go to the merits of Plaintiff’s claim — not a
procedural irregularity — and depends on documents that are in the administrative record. Plaintiff
has not demonstrated that the record is inadequate to review Sedgwick’s determination. No
additional discovery is warranted where, as here, “the administrative record [is] sufficient to permit
a fair evaluation of the decision.” Atkins, 404 F. App’x at 85.
Accordingly,
IT IS HEREBY ORDERED that Plaintiff's motion to take the depositions of Sedgwick
employee Sonia Brown and the corporate representative of Sedgwick [27] is DENIED.
Dated this 23rd day of October, 2020.
ise A. ROSS
ITED STATES DISTRICT JUDGE