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U.S. Court In Indiana Denies Motion To Compel Discovery Outside Administrative Record


HLD, v. 31, n. 8 (August 2003)

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 discovery.

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).

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