Opinion
Civil Action 2:10-CV-826
05-29-2012
RUSBY ADAMS, Jr., et al., Plaintiffs, v. ANHEUSER-BUSCH COMPANIES, INC., et al., Defendants.
Judge Graham
Magistrate Judge King
OPINION AND ORDER
This is an action under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. §1001, et seq. This matter is now before the Court on Plaintiffs' Motion to Compel, Doc. No. 39. For the reasons that follow, the Court DENIES this motion.
I. Background
The Court has previously set forth in detail the background of this action. See Opinion and Order, Doc. No. 62, pp. 1-5. Briefly, Plaintiffs Rusby Adams, Jr., Leslie Schell, Daniel Stewart and Kevin Jones are former employees of the Metal Container Corporation ("MCC"), a former subsidiary of defendant Anheuser-Busch Companies, Inc. ("A-BC"). Id. at 1. As employees of MCC, plaintiffs were participants in the Anheuser-Busch Companies Pension Plan ("the Plan"). Id. A-BC was acquired by InBev, N.V., on November 18, 2008. Id. MCC was later sold to Ball Corporation on October 1, 2009, at which point plaintiffs became Ball employees. Id.
Around the time of the MCC sale to Ball, plaintiffs made claims for benefits under §19.11 of the Plan (entitled "Change in Control"). Id. Plaintiffs argued that because they were now Ball employees and no longer employees of a company affiliated with A-BC, and because less than three years had passed since the InBev acquisition of A-BC, plaintiffs had been "involuntarily terminated" within the meaning of §19.11(f). Id. at 2.After their §19.11(f) benefit claims were denied on December 23, 2009, plaintiffs appealed to defendant, the Anheuser-Busch Companies Pension Plans Appeals Committee ("the Appeals Committee").Id. On June 17, 2010, the Appeals Committee denied plaintiffs' appeals. Id. Part of the basis for the Plan's denial of benefits, and the Appeals Committee's subsequent denial of appeal, was consideration of a redacted version of a September 2008 legal opinion ("the Legal Opinion") provided by outside counsel to A-BC, which became part of the administrative record in plaintiffs' case. Id. at 3, 5.
Section 19.11(f) of the Plan provided that the retirement benefit of any participant
whose employment with the Controlled Group is involuntarily terminated within three (3) years after the Change in Control shall be determined by taking into account an additional five (5) years of Credited Service and [for purposes of early retirement], an additional five (5) years of age, and shall in any event be at least fifteen percent (15%) larger than the Participant's Normal Retirement Benefit, Late Retirement Benefit, Early Retirement Benefit or Accrued Benefit, as calculated without regard to this Section 19.11(f) as of the date the Participant's employment with the Controlled Group ends[.]
Plaintiffs filed the instant action pursuant to 29 U.S.C. §1132(a)(1)(B), asserting a claim for enhanced pension benefits under §19.11(f) of the Plan. Id.
Plaintiffs also asserted a claim for breach of fiduciary duty under 29 U.S.C. §1132(a)(2). This Court dismissed that claim on April 25, 2011. See Opinion and Order, Doc. No. 20.
In the motion presently before the Court, plaintiffs seek to compel the production of any portions of a document titled "Benefit Treatment Guide" that relate to §19.11. See Motion to Compel, Doc. No. 39, p. 1. Defendants have withheld production of the Benefit Treatment Guide as a privileged attorney-client communication. See Defendants' Privilege Log, attached as Exhibit A to Motion to Compel, Doc. No. 39-1. Plaintiffs argue that defendants waived any privilege regarding the subject of §19.11 when A-BC provided the Legal Opinion to the Appeals Committee and the Appeals Committee included the Legal Opinion in the administrative record. See Motion to Compel, Doc. No. 39, pp. 4-6; see also Plaintiff's Reply in Support of Their Motion to Compel, Doc. No. 52. Plaintiffs also argue that, because the subject matter of §19.11 is no longer privileged, any parts of the Benefit Treatment Guide addressing §19.11 are discoverable. Id.
Plaintiffs' motion also sought additional relief, but such requests have been abandoned as it appears that the parties have been able to resolve the additional issues without court intervention. See Memorandum in Opposition, Doc. No. 51, p. 2.
Defendants oppose plaintiffs' motion, contending that: (1) the requested Benefit Treatment Guide was used for purposes of the InBev merger, played no role in the denial of plaintiffs' claims, and therefore is not relevant to the Court's consideration of plaintiffs' claim; (2) the redacted Legal Opinion was not privileged when placed in the administrative record, so its disclosure by the Appeals Committee could not waive A-BC's separate privilege as to the Benefit Treatment Guide; and (3) the scope of the waiver propounded by plaintiffs "would devastate the ability of companies to secure privileged advice from an attorney on any matter related to benefits." See Memorandum in Opposition to Plaintiff's Motion to Compel, Doc. No. 51.
II. Standards
Rule 37 of the Federal Rules of Civil Procedure permits a motion to compel discovery if a party fails to respond to discovery requests, provided that the motion to compel includes a certification that the movant has, in good faith, conferred or attempted to confer with the party failing to respond to the requests. The Court is satisfied that this prerequisite to a motion to compel has been met in this case. See Motion to Compel, Doc. No. 39, p. 5.
Determining the proper scope of discovery falls within the broad discretion of the trial court. Lewis v. ACB Business Services, Inc., 135 F.3d 389, 402 (6th Cir. 1998). In general, discovery is not permitted in ERISA actions involving a denial of benefits. See Johnson v. Conn. Gen. Life Ins. Co. , 324 Fed. Appx. 459, 466-67 (6th Cir. 2009); Kmatz v. Metro. Life Ins. Co. , 458 F. Supp.2d 553, 561 (S.D.
Ohio 2005). A district court's review is typically limited to the administrative record, which "includes all documentation submitted during the administrative appeals process because this information was necessarily considered by the plan administrator in evaluating the merits of the claimant's appeal." Kalish v. Liberty Mut./Liberty Life Assurance Co., 419 F.3d 501, 511 (6th Cir. 2005); see also Schwalm v. Guardian Life Ins. Co., 626 F.3d 299, 308 (6th Cir. 2010); Ray v. Group Long Term Disability Policy, No. 2:06-cv-0460, 2007 WL 127983, at *2 (S.D. Ohio Jan. 11, 2007).
Under limited circumstances, however, a district court may permit discovery of materials outside the administrative record. See Kmatz, 458 F. Supp.2d at 561 (citing Wilkins v. Baptist Healthcare System, Inc. , 150 F.3d 609, 619 (6th Cir. 1998)). Specifically, a district court may permit discovery if the evidence sought is "offered in support of a procedural challenge to the administrator's decision, such as an alleged lack of due process afforded by the administrator or alleged bias on the part of the plan administrator." Id. ; see also Ray, 2007 WL 127983, at *2. The district court must "evaluate and determine whether and to what extent limited discovery is appropriate in furtherance of a colorable procedural challenge under Wilkins." Johnson, 324 Fed. Appx. at 467.
With these standards in mind, the Court proceeds to consider whether plaintiffs are entitled to discovery of the Benefit Treatment Guide.
III. Discussion
In support of compelling production of the Benefit Treatment Guide, plaintiffs center their arguments around the subject of privilege. But the Court need not delve into issues of privilege unless it first determines that the requested Benefit Treatment Guide is relevant to the Court's review of this administrative action.
Nothing in the record before the Court indicates that the Appeals Committee relied on, or even considered, the Benefit Treatment Guide in making its benefit determination. A-BC in-house counsel created and disseminated the Guide to A-BC human resources employees about the time of the InBev merger, which was at least 10 months prior to plaintiffs' initiation of claims for benefits. See Opinion and Order, Doc. No. 62, pp. 1-5; Memorandum in Opposition, Doc. No. 51, pp. 2-3; Reply, Doc. No. 52, p. 3-4. Plaintiffs have not shown that the Guide was ever mentioned by the Appeals Committee in any of the communications or notes concerning plaintiffs' claims or otherwise reflected in the administrative record. Thus, the Guide was not made part of the administrative record and is not relevant to plaintiffs' claims for benefits or, consequently, this Court's review. See, e.g., Kalish, 419 F.3d at 511; 29 C.F.R. §2560.503-1(m)(8)(i), (ii) (describing as "relevant" to a claim any document that was relied upon, submitted, considered, or generated in the course of making the benefit determination); see also Wilkins, 150 F.3d at 615 (concluding that district court properly excluded from its review any evidence that was not part of the administrative record of plaintiff's benefits claim denial).
Plaintiffs could attempt to discover the Benefit Treatment Guide, even though it is not part of the administrative record, in connection with a claim of bias and/or lack of due process. See Kmatz, 458 F. Supp.2d at 561. Plaintiffs briefly raise the issue of possible bias by the Appeals Committee. See Reply, Doc. No. 52, pp. 3-4. Specifically, plaintiffs claim that because the Guide was forwarded during the time of the InBev merger to an A-BC employee, Susan Brueggemann, who was also a member of the Appeals Committee, the Guide is "relevant to the Appeals Committee's conflict when interpreting the Plan." Id. ; see also Defendants' Privilege Log, attached as Exhibit A to Motion to Compel, Doc. No. 39-1.
But discovery is not automatically permitted in every ERISA case where the defendant is accused of operating under an inherent conflict of interest by being both the administrator and the payor under the plan. See Johnson, 324 Fed. Appx. at 467. Even where discovery is allowed, it is limited to a search for evidence of the circumstances surrounding the conflict of interest and whether the conflict actually affected the benefits decision. See Geiger v. Pfizer, Inc. , 271 F.R.D. 577, 583 (S.D. Ohio 2010); Busch v. Hartford Life & Accident Ins. Co., No. 5:10-00111-KKC, 2010 WL 3842367 (E.D. Ky. Sept. 27, 2010).
Here, plaintiffs, by their own words, are seeking to discover the Benefit Treatment Guide as "another example of an interpretation of Section 19.11 of the Plan at the time the change in control [i.e., the InBev merger] occurred." See Reply, p. 3. Plaintiffs have not argued that the Guide itself sheds light on defendants' bias as to plaintiffs' claims. In fact, plaintiffs have not shown that the Guide played any role whatsoever in the denial of their claims. The mere fact that one Appeals Committee member received a copy of the Guide while serving in a human resources role - more than one year prior to serving in her role regarding plaintiffs' claims - does not warrant expansion of the administrative record in this case. See Johnson, 324 Fed. Appx. at 467; Putney v. Med. Mut. of Ohio, 111 Fed. Appx. 803, 807 (6th Cir. 2004) ("[M]ere allegation of bias is not sufficient to permit discovery under Wilkins' exception.").
In sum, plaintiffs have not demonstrated a basis for discovery of the Benefit Treatment Guide. The Guide is not part of the administrative record, and plaintiffs have not shown that it would be relevant to a claim of bias or any other alleged procedural deficiency. Thus, the Guide would have no bearing on the Court's determination whether the Appeals Committee's decision is adequately supported by the administrative record. Further, because the Court concludes that defendants' relevance argument is dispositive, the issue of privilege need not be addressed.
When addressing the merits of their case, plaintiffs may still argue that defendants' conflict of interest affected the benefit decisions. But plaintiffs have not shown that discovery of the Benefit Treatment Guide is necessary, or even relevant, to such argument. See, e.g., Ray, 2007 WL 127983, at *4 (noting that plaintiff's "strong argument in her discovery motion that a conflict of interest existed" could be made to the Court with respect to the merits of her claim even though discovery was not warranted). Ultimately, the Court will consider the alleged conflict as one of many factors in determining whether the benefit denial was an abuse of discretion. See Johnson, 324 Fed. Appx. at 465-66.
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WHEREUPON, Plaintiffs' Motion to Compel, Doc. No. 39, is DENIED.
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Norah McCann King
United States Magistrate Judge
Complaint, Doc. No. 2, ¶25.