HLD, v. 31, n. 8
U.S. Court In Indiana Denies Motion
To Compel Discovery Outside Administrative Record
Barry Schuchman and his wife Sandra had medical insurance coverage
through Barry's employer and were covered under a group health insurance policy
issued by Trustmark Insurance Company. Under the plan's provisions, Trustmark
had the exclusive authority to make benefit determinations. In 1997, Sandra
was diagnosed with advanced ovarian cancer and Trustmark covered her chemotherapy
and surgery. However, in 1998 Trustmark denied benefits for Sandra's participation
in a clinical research trial that her physicians requested. Trustmark concluded
the trial for high dose chemotherapy with peripheral stem cell or bone marrow
transplant was experimental and not medically necessary. The Schuchmans appealed
the determination, and Trustmark denied the appeal. Sandra eventually died of
cancer. Trustmark sought a declaratory judgment in the federal district court
that it properly denied the benefits under the Employee Retirement Income Security
Act (ERISA), and Schuchman counterclaimed asserting ERISA violations for denial
of the claim, federal estoppel, and other state law claims. Schuchman also sought
a declaratory judgment. Both parties moved for summary judgment, and the court
held the plan was governed by ERISA and Trustmark had standing to pursue a declaratory
judgment. The court also granted in part and denied in part Trustmark's motion,
and held Schuchman's state law claims were pre-empted by ERISA, and the federal
estoppel and declaratory judgment claims were not pre-empted and could continue.
Schuchman sought discovery through interrogatories, a request for production,
and a notice of deposition for information about the plan, its review process,
and the facts Trustmark relied on in making its decision. Trustmark also sought
discovery on Schuchman's federal estoppel claim. Both sides moved to compel
The U.S. District Court for the Southern District of Indiana, in
a magistrate judge's decision, denied both motions to compel discovery. The
court first addressed Schuchman's motion to compel discovery on the ERISA claims.
Trustmark objected to Schuchman's discovery request on the ground that ERISA
only permitted discovery of the administrative record. In order to determine
if Trustmark had properly objected to Schuchman's discovery requests, the court
had to determined what standard of review applied. Schuchman sought de novo
review, which would allow him to discover items outside the administrative record,
and Trustmark contended the deferential arbitrary and capricious standard applied
that would limit review to the administrative record. The court explained that
a denial of benefits is reviewed de novo unless the administrator has the discretionary
authority to make eligibility determinations. The court determined that the
plan gave the administrator discretion to interpret the plan and make benefit
determinations, and that review should be under the arbitrary and capricious
standard. Rejecting Schuchman's argument that de novo review was appropriate
and thus discovery outside the administrative record was permitted, the court
found Trustmark had retained the right to interpret the plan provisions. Therefore,
the court denied Schuchman's motion to compel discovery of the ERISA claims.
The court then turned to Schuchman's non-ERISA claims, and noted
Schuchman stated he had a right to discovery, but failed to state which discovery
requests were related to his claim. Thus the court had to deny Schuchman's motion
to compel discovery. Trustmark had filed a cross motion to compel discovery
for responses to interrogatories on Schuchman's federal estoppel claims, and
Schuchman contended the interrogatories were overly broad, unreasonable, burdensome,
and cumulative. Finding Trustmark's motion to compel failed to specify the deficiencies
in Schuchman's responses, the court concluded Trustmark's motion to compel discovery
also had to be denied.
Accordingly, the court denied Schuchman and Trustmark's motions
to compel discovery.
Trustmark Ins. Co. v. Schuchman, No. IP99-1081-C-T (S.D.
Ind. June 2, 2003).