Reliance Standard Life Insurance Company Discovery Problems - UPDATED

Update: Reliance Standard is very, very unhappy about this blog post. Through their attorneys, they first asked me to take this information down, claiming it was false and defamatory. When I did not do so, Reliance Standard filed a motion in the Jordan case seeking to have the judge order me to take it down. That motion was denied. Now, they have renewed their request that I take it down, again claiming that I am telling untruths and defaming them.

Notably, Reliance Standard does not claim that any of the facts I have reported are false. They only quibble with my terminology and the completeness of my statements. They have three main complaints:

1. My claim that they have been "routinely excluding evidence from its ERISA claim files for years" they say is false. They admit they have been excluding what they claim are "ministerial" emails pertaining to claims from their claim files, but they argue that such emails are not evidence because they do not pertain to the decisionmaking on the claim.

2. Reliance's second concern is my statement that “one could be forgiven for assuming there were attempts to hide or destroy evidence.” They say nothing was destroyed, and that they offered an innocent explanation for their use of "white redaction."

3. Finally, Reliance complains that I did not mention their later discovery responses, only their initial responses. They essentially say that denying the existence of emails and then admitting the existence of emails only after Plaintiff was forced to file two motions to compel is just a normal part of the discovery process, and because everything came out eventually, there's no harm, no foul.

I believe that it is very important for this information to remain available to claimants and their attorneys for future cases, and that it is my responsibility to share unprotected information of this nature as widely as possible. However, I do not want it to be said that I have unfairly maligned Reliance Standard. Their actions speak for themselves, in my opinion. To that end, I have revised the original blog post at the bottom of this post, and I will provide contextual responses to Reliance's concerns below.

Regarding Reliance's claim that "ministerial" emails are not evidence, and that they therefore have not been excluding evidence from claim files, I believe that is an incorrect statement of the law. Even “ministerial” emails, as Reliance describes them, are relevant documents in an ERISA case. The ERISA claims regulations state that all “relevant” documents must be provided to claimants, and defines “relevant” as follows:

A document, record, or other information shall be considered “relevant” to a claimant's claim if such document, record, or other information
(i) Was relied upon in making the benefit determination;
(ii) Was submitted, considered, or generated in the course of making the benefit determination, without regard to whether such document, record, or other information was relied upon in making the benefit determination;[...]

29 C.F.R. Sec. 2560.503-1(m)(8). This is a broad definition of relevance that fairly includes any documents, emails included, which were created as part of the handling of a claim.

Reliance argues instead that the phrase “in the course of making a benefit determination,” such as is found in subparagraph (ii), means that a document is not “relevant” if it did not have a direct impact on the claim decision itself. That interpretation is not supported by a reading of the rest of the section. That would essentially strip away subparagraphs (ii) - (iv), and limit relevance only to subparagraph (i). Subparagraph (i) states that documents “relied upon in making the benefit determination” are relevant, but is then followed by subparagraph (ii), which states that every other document which was “generated” in the course of the claim, “without regard to whether such document... was relied upon in making the benefit determination...” is also relevant. As such, I believe Reliance is incorrect in claiming its internal emails are not “evidence.”

When it moved to have my blog taken down, Reliance's attorneys did not cite any cases supporting their narrow interpretation of what constitutes evidence in an ERISA case. For my argument, I cited Miller v. MetLife, 925 F.2d 979, 986 (6th Cir. 1991), in which the Court stated that “In reviewing a final decision, this court must consider what occurred during the administrative appeals process.” I argued that this means the entire administrative appeals process is on review, including what Reliance would choose to characterize as “ministerial.”

Furthermore, even if Reliance's narrow definition of “evidence” was correct, it still withheld evidence from the claim file it originally produced. Ms. Dickerson’s email - the one that Ms. Brunner ordered her to delete - was absolutely related to the determination of Ms. Jordan's claim. Therein, Ms. Dickerson laid out her rationale for the final denial of the claim to her supervisor, Ms. McGill. Reliance has never offered an explanation for why that email was not included in the claim file. 

Responding to Reliance's second concern, I will make clear in the edited blog below that it is only my opinion that Reliance intended to hide evidence in this case. I have no direct proof of it, but neither do I accept their explanation that the "white redaction" was an innocent mistake. That, however, is my opinion, not a fact I can prove. The verifiable fact is that they provided me with discovery materials from which information was withheld, and did not disclose that withholding until after a second order from the court compelled them to. Future litigants should present this information honestly and let a judge decide if Reliance should be required to double-check its discovery responses.

Finally, regarding Reliance's concern that I am not taking into consideration their later discovery responses, I do not see how that matters. The fact remains that their original discovery responses were deficient, and if I had not filed not one, but two motions to compel complete and accurate discovery responses, I do not believe I would have received any of this additional material. The point I am making with this blog is that future litigants should be very cautious in accepting what Reliance provides with its initial discovery responses in all cases. Whether you chalk it up to carelessness or actual bad behavior, this case demonstrates that Reliance may have much, much more it is not telling you in its initial responses.

Without further ado, the edited original blog post follows. I am also attaching an updated version of my affidavit for use in litigation. If anyone using this information has any questions for me, feel free to contact me through this website.

---

I rarely post about ongoing cases, not because there's anything wrong with that, but because there's usually nothing interesting to say until we actually receive a decision at the end of the case. However, based on one insurer's conduct in one case, I think it is worth making an exception. It has become apparent to me, based on the conduct of Reliance Standard Life Insurance Company in the case of Jordan v. Reliance Standard, that this insurer has been routinely excluding certain emails from its ERISA claim files for years. Also, while I have no direct proof, I believe Reliance Standard attempted to hide and destroy evidence in this case.

Because discovery in ERISA cases is so severely limited, many ERISA plaintiffs and their attorneys would be unable to uncover such omissions by Reliance Standard in its discovery disclosures without permission from the presiding judge to engage in deeper discovery than is usually allowed. One of the things that can support such a request for deeper discovery is evidence of discovery abuses in other cases. To that end, I am sharing the attached affidavit, in which I lay out what happened in my client's case. For any attorneys or claimants who find this document on my website, know that it is yours to use in your case in any way you see fit. None of the information in this document is privileged or protected in any way. If Reliance Standard has told you you received a complete claim file in court, and you don't see any internal emails in it, then I encourage you to ask your judge to force Reliance Standard to look again, and to provide a complete and proper ERISA Administrative Record.

Click here to download my Affidavit, with supporting exhibits.

- Jeremy Bordelon

p.s., Since the original posting of this blog and affidavit, there have been many developments in this case which are available on PACER, including affidavits from Mr. Cate and Mr. Bachrach offering their explanations of what happened during the discovery process, as well as briefs and an order related to Reliance's attempt to have this blog taken down. I encourage anyone with a PACER account to log on to the Court's website and read those affidavits, as they are also unprotected and available for download. This additional knowledge changes none of the facts described in my affidavit.

What's the Deadline for a Long Term Disability Lawsuit?

In pretty much every other area of the law, figuring out when a lawsuit has to be filed is relatively easy. First, you figure out what the "bad action" that you're suing over was, and when it happened, and then you look up the law that says what the deadline is (called a "statute of limitations"), put the two together, and voila! That's your deadline! So for a personal injury case, you just figure out what your state's statute of limitations is for a personal injury claim (often, it's one year), and make sure you sue within a year of the injury.

Unfortunately, it's not nearly that easy in the world of ERISA long term disability claims. First of all, there is no statute of limitations - not one written into the ERISA law for a benefits claim, anyway. You might ask, then, "does that mean there's no deadline, and I can sue anytime?" Of course not! 

First of all, if an ERISA benefits claim has only been denied once, you probably can't sue yet. The courts have decided that since ERISA requires plans to offer you an appeal, you're required to "exhaust" those appeals before going to court. If you sue after a first denial, and never even try to appeal, you'll usually be thrown out of court. If you're lucky, they'll send you back to do the appeal, but many times they'll just dismiss your case, and you have no way to go back and pursue the appeal. So that's the first thing - making sure you exhaust all of the necessary* appeals. (*Note: There can also be optional appeals, that you can skip, but it's sometimes hard to tell which is which.) I'm not going to discuss the pre-lawsuit appeal process in this article, but just know that you do have the right to hire an attorney for help with those appeals, and it is a very, very good idea to do so. If you do the appeal without an attorney's help, there could irreparable holes in your case later on.

But say you have gotten a final denial, and there are no more appeals left - what then? What's the deadline to sue, if there's no statute of limitations in the ERISA law? The courts have decided that if the plan documents don't say anything about a deadline, then they will use the state law deadline for similar types of cases. It's not always easy to figure out which state law deadline is "most similar," but that's not usually a problem, because almost always, the employee benefit plan will have it's own deadline written into it. Sometimes, attorneys will call that deadline the "contractual period of limitations," since the employee benefit plan document works like a contract.

Unfortunately, for reasons that are too complicated to get into here, most benefit plans say the deadline is something like this:

"You can start legal action regarding your claim 60 days after proof of claim has been given and up to 3 years from the time proof of claim is required, unless otherwise provided under federal law."

That's a real example from an LTD policy in a case I've worked on recently, and is typical of hundreds of other plans I've reviewed over the years. What does it mean? Can you really sue 60 days after your claim is filed? Do you have 3 years from a claim denial to sue?

No and No! As we discussed above, first you have to exhaust the appeals (sometimes called "administrative remedies") before you can sue, so if you did what the quoted provision said, and sued 60 days after you gave proof of your claim, you'd likely be thrown out of court. You don't necessarily have 3 years from a denial to sue, either, because that deadline is measured "from the time proof of claim is required." So how long do you have?

Most of these policies say that "proof of claim" or "proof of loss" is required 90 days after the end of the benefits waiting period (which is usually called an "elimination period"). For most long term disability policies, that waiting period is 180 days, or roughly 6 months. So if you stop working on January 1st, the waiting period goes through around the end of June, and then you have to provide proof by around the end of September. Add 3 more years, and the deadline to file a lawsuit, according to the policy, is around the end of September 3 years later, about 3 years and 9 months after you stopped working. I cannot stress enough - this goes for many policies, but NOT ALL! Some policies have wildly different language, and it's the language of YOUR particular policy that determines your deadline.

For someone who's claim is denied from the very beginning, this usually isn't a hard deadline to meet. If someone stops working January 1st, as in the example above, files their claim for LTD benefits in the summer, it gets denied in the fall, they hire me to work on the appeal, and all the appeals are denied by the end of the next year, that still leaves roughly 2 years to file the case in court, and there's no reason it should take that long. 

Where it gets really tricky is with people who aren't denied in the beginning. What happens if you get paid LTD for a few years, then you get denied? Often, LTD carriers will pay someone for 2 years because they're disabled from their "own occupation," then deny them after that because they are not disabled from "any occupation." This is allowed under the terms of most LTD policies, but what's the lawsuit deadline then? 3 years from that denial?

Well, that would be the fair and rational thing to do, but that's not what the Supreme Court says. In 2013, the Supreme Court said in case called Heimeshoff v. Hartford Life & Accident Insurance Company that you just do what it says in the policy, even if the "lawsuit clock" is running before someone's claim is even denied! So under the example policy language above, you could have this timeline:

• Stop working due to a disability on January 1st, 2014
• Claim approved by LTD carrier, start getting paid July 1, 2014
• Get paid for disability from your "own occupation" from July 1, 2014 - June 30, 2016
• Claim denied June 30, 2016 because they say you could do other work
• You appeal within the statutory 6 month deadline, on December 20, 2016
• Your LTD carrier takes 90 days to decide your appeal, denying you again on March 20, 2017

What's your deadline to sue? You probably only have about 6 months from the "final denial" to get into court, under this scenario. That's a lot less than the 3 years you might think you have if you look at the policy! And this example is when everything goes relatively smoothly, and no one receives any extra extensions beyond the norm. Quite often, the process takes longer than that, meaning you could find yourself with even less time after a final denial to get into court.

Sometimes, the court deadline can come and go before you're even done with the mandatory appeals! What do you do then? If you have an attorney who's experienced in this field, he or she might ask the LTD carrier to enter into a "tolling agreement," as I have in a few cases. A tolling agreement is just a short contract between you and the LTD company that says that even if the deadline to sue technically passes while you're working on the appeals, the LTD carrier will let you take the case to court after the appeals are done. The LTD companies will usually consent to these agreements, in my experience. That's good, because aside from it being required by the courts, you generally don't want to short-circuit the appeals process in these cases, because it's usually your only opportunity to submit evidence of your disability.

Long story short - when people ask me what the "statute of limitations" or "SOL" is on an ERISA benefits claim, I have to give them a lawyer's favorite answer: "It depends!"

--Jeremy Bordelon

When Should You Hire An Attorney?

Many times, people who get a disability insurance denial will not know what to do next.  Do you appeal on your own?  Hire an attorney now?  Hire one later?  Sometimes, the first thing they do is to contact their State's Insurance Commissioner, asking for advice.  Unfortunately, the advice people get from those departments is not always good.  Sometimes it's very, very bad. Consider this question I received from someone online:

I have a group LTD plan with Standard. I have been on LTD for 12 months. I was notified last week that I am no longer eligible for coverage (despite restrictions and limitations assessed by two of my doctors!)  My state insurance commissioner said I could not use an attorney until after my appeal was denied and even then it would be difficult to find someone willing to take this kind of case.  He said with ERISA laws if I lost the appeal and wanted to pursue legal action that I would sue my employer NOT Standard.

Thankfully, this person thought to ask a lawyer before following that advice!  Here was my answer:

Your insurance commissioner, or whoever you spoke to in his office, is wrong. Dead wrong. Dangerously, woefully wrong. About the only thing he was right about is that it can indeed be difficult to find an attorney to work on an ERISA LTD case. Those of us who do work on them have to be very picky about what cases we take, both medically and financially, because we typically charge a percentage of the person's benefits, only if they win or settle. 

A couple of things to know about ERISA - first, it's a Federal law, and it trumps most State laws, so I suppose it's not surprising that the State insurance commissioner doesn't know much about it. I believe the proper defendant in your case probably WOULD be Standard. You live in Virginia, which is in the 4th Circuit's jurisdiction (for Federal courts). Last I checked, the 4th Circuit had not made a clear pronouncement about who the proper defendant was in an ERISA case, but the lower courts within the 4th Circuit have followed the rule that the proper defendant is the entity which has responsibility for making decisions under the plan. For you that's Standard, not your employer. 

The other thing the commissioner was wrong about is when you should hire an attorney. Do it BEFORE the final denial. One of the other things about ERISA is that when these cases do go to court, they generally do so on a closed record. What I mean is that anything not submitted to Standard will probably be excluded from the court's consideration. You will not get to testify. Your doctors will not get to testify. There will be no jury. It's generally just Standard's claim file, plus arguments from both sides' attorneys, so if there's any good evidence you want to use in the future, you have to make sure it's in Standard's claim file BEFORE the final denial, otherwise you may not be able to use it. That's why you hire an attorney before the final denial - so he or she can help you build that record. 

Find a competent employee benefits attorney who understands ERISA and get his or her help on your appeal. It may be difficult to find someone in your area, but you do not need to limit yourself to your local area. Because ERISA is a federal law, the rules don't change much from place to place, and those of us who work on these cases can often do so from a distance. Also, because there isn't a traditional trial if the case goes to court, attorneys have a little more leeway about where they can practically file the case. For example, I'm in Portland, Oregon.  I have had people hire me from all over the country, to work on cases with several different insurance companies, but when I get hired on a case involving Standard Insurance, no matter where the client lives, I can file those cases here in Portland, because that's where Standard is headquartered!  The same goes for Unum - until recently, I practiced in Chattanooga, Tennessee, which is Unum's headquarters.  A woman in Hawaii hired me to represent her, and I could have filed her court case there in Chattanooga. In most of these cases, there are two or three different options available for where to file the case, and you want to hire an attorney that can make the best choice for your case.

I encourage everyone to look around on the web, talk to people in the know, and find someone you're comfortable with, no matter where their office is located. ERISA is too complicated to go it alone, and too specific to take the advice of those who don't understand it (like your insurance commissioner, apparently).

--Jeremy Bordelon

ERISA-governed Healthcare Claims

With limited exceptions, almost all employee benefits claims are governed by the Employee Retirement Income Security Act of 1974 (ERISA). This includes group health insurance obtained through your employer. ERISA claims can be very complicated, and if your ERISA healthcare claim is denied, you should immediately educate yourself before jumping into filing any appeals, and, if you can find one, consult with an attorney who handles these types of cases.

In all ERISA benefits claims, the internal appeals process must be completed before filing suit. If the denial is upheld through the mandatory appeals process, there may be additional, voluntary appeal levels available. In court, however, there are only limited remedies available. There will likely be no jury trial, no medical testimony, and no depositions or documents obtained from the insurance company. The court will probably review the insurance company’s claim file, and not much else. Normally, you cannot recover more than the benefits you were owed in the first place. So, for a $50,000 surgery that the medical insurer refused to pay for, the most you will recover in court is likely $50,000. Some courts will allow pre- and post-judgment interest on top of the recovery, but not all. There will not be any punitive damages, pain-and-suffering, mental anguish, or anything like that in an ERISA case.

Healthcare claims are divided into three different categories by the Department of Labor’s ERISA claims regulations: urgent care claims, pre-service claims, and normal post-service claims. 29 C.F.R. § 2560.503-1(m)(2-4). Post-service claims must be decided by the insurer within 30 days, but the insurer is allowed one 30-day extension. Pre-service claims must be decided within 15 days (with a one-time 15 day extension available), and urgent care claims must be decided within 72 hours. No extensions are available for urgent care claims, but if the insurer determines that it does not have sufficient information to decide the claim, it must notify you of the deficiency within 24 hours of receiving the claim, and give you 48 hours to provide the requested information.

Although extensions are only supposed to be taken if necessary “due to circumstances beyond the insurer’s control," in practice these extensions are taken frequently, with little explanation, sometimes late, and often due to purely internal delays. Technically, the insurer’s failure to comply with the regulations in this manner could give you a right to sue without pursuing any further internal appeals. 29 C.F.R. § 2560.503-1(l). In practice, it is usually best to overlook these minor technical violations and complete the mandatory appeals. Usually you will want to avail yourself of the full 180 day appeal window to develop the medical record. You must be given at least 180 days to appeal the denial.

An outright denial is easy to recognize, but in the healthcare arena especially, there are varying degrees of “denial." An exhaustive definition is available at 29 C.F.R. § 2560.503-1(m)(4), but in essence, anything less than a complete approval of the claim can (and usually should) be appealed as if it was an outright denial. For example, health insurers may use “post-payment audits" to demand partial refunds of fees paid to providers. While beyond the scope of this brief article, these practices are “adverse benefit determinations" (denials), and have generated large-scale class action ERISA litigation by medical providers.

So, if you have been denied, and have exhausted the mandatory appeals process, then the window in which you can file an ERISA § 502 suit has opened. When that window closes, however, is a more difficult question. The ERISA law itself does not contain a statute of limitations for § 502(a) claims for benefits. If there is no clause in the policy stating a limitations period, the courts will look to analogous state statutes of limitations, such as for contract actions. Where the insurance contract itself contains a contractual period of limitations, courts will usually uphold those provisions, even if they are shorter than the relevant state-law periods, if they allow people a reasonable amount of time to sue. Limitations periods as short as 90 days have been upheld by the courts in healthcare claims. E.g., _ Northlake Regional Medical Center v. Waffle House System Employee Benefit Plan, 160 F.3d 1301, 1303-04 (11th Cir. 1998). These periods are not necessarily tolled while the claimant exhausts the mandatory appeals, either. _See, e.g., Rice v. Jefferson Pilot, 578 F.3d 450 (6th Cir. 2009).

Once your case is filed in court, that's it as far as new evidence is concerned. At that point, if you haven’t done everything you needed to do earlier, it will all come back to haunt you. The court will likely only be looking at the record that the insurance company had when it made the denial decisions, so if your best medical evidence was never submitted to the insurance company in support of the claim and/or the appeal, then the court will likely never see it. This is part of what makes these cases so difficult. You need to consult an experienced attorney when denied, rather than filing a simple appeal letter with no evidentiary support, and your attorney must know to fully develop the evidence before saying the magic words, “I appeal." Once the insurance company issues its “final denial," the record might be closed forever.

--Jeremy Bordelon