Schrock v. Aetna Life Insurance Company, 1:15-cv-10582

Background

Plaintiff Thomas Schrock sued Aetna under ERISA seeking reinstatement and payment of long-term disability (LTD) benefits after Aetna terminated benefits on February 18, 2015.
Aetna relied on a vocational report by Nancy Robinson (an Aetna subsidiary employee) identifying four alternative occupations and using wage data (BLS mean and salary.com percentiles); the claims examiner found Schrock could meet the plan's wage requirement.
On appeal Schrock argued Aetna miscalculated his ‘‘reasonable wage’’ (should be 80% v. 70% of pre-disability earnings), relied on inappropriate wage sources, and mischaracterized his education.
Aetna recalculated the wage at 80% ($19.41/hr), commissioned a TSA addendum by Tamara Starbuck, and concluded one occupation (Geodetic Computator) met the wage requirement under both BLS and salary.com mean wages; Aetna affirmed the termination.
Schrock moved to compel limited discovery into Aetna’s alleged structural conflict of interest (administrator and payor) and whether Aetna ‘‘shopped’’ vocational reports or failed to follow its procedures.
The magistrate judge denied the motion, finding Schrock failed to identify a specific instance of misconduct or prima facie cause to allow discovery beyond the administrative record.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether plaintiff may take limited discovery into Aetna’s structural conflict of interest	Schrock contends Glenn allows probing discovery to explore whether Aetna’s dual role biased its decision; alleges report-shopping and procedural defects	Aetna argues discovery is barred absent a showing of specific misconduct or a prima facie showing that discovery will reveal procedural defects; this is a routine benefits denial	Denied — structural conflict alone insufficient; plaintiff failed to identify a specific instance of misconduct or meet Semien’s two-step standard
Whether Aetna ‘‘shopped’’ vocational reports to produce a termination-supporting opinion	Schrock says Aetna disregarded Robinson’s favorable report and elicited a new report to terminate benefits	Aetna says the TSA addendum was commissioned in response to Schrock’s appeal correcting the wage calculation and properly reassessing occupations	Court found Aetna’s actions were a legitimate reassessment on appeal, not improper report-shopping
Whether alleged failure to use salary.com or to conduct a labor market survey justifies discovery	Schrock argues lack of salary.com data and absence of a labor market survey suggest flawed process and market uncertainty	Aetna points out Starbuck’s addendum included salary.com mean for Geodetic Computator and no authority requires a labor market survey	Court held absence of a market survey or initial missing salary.com figure does not demonstrate misconduct or justify discovery
Relevance of Social Security Administration (SSA) disability finding to discovery request	Schrock cites SSA disability award as evidence that Aetna’s decision should be scrutinized	Aetna argues SSA determination is not dispositive for ERISA plan benefits and not a basis for expanded discovery	Court held SSA award is not relevant to authorize extra-record discovery in ERISA review

Key Cases Cited

Metropolitan Life Ins. Co. v. Glenn, 554 U.S. 105 (2008) (structural conflict is a factor in arbitrary-and-capricious review; may justify greater scrutiny in some circumstances)
Semien v. Life Ins. Co. of N. Am., 436 F.3d 805 (7th Cir. 2006) (two-part test for extra-record discovery: identify specific conflict/misconduct and make prima facie showing that discovery will reveal a procedural defect)
Dennison v. MONY Life Ret. Income Sec. Plan for Employees, 710 F.3d 741 (7th Cir. 2013) (Glenn implies a role for limited discovery but reaffirmed Semien’s two-step standard and trial courts’ broad discovery management)
Krolnik v. Prudential Ins. Co. of Am., 570 F.3d 841 (7th Cir. 2009) (ERISA benefit determinations are generally reviewed on the administrative record under arbitrary-and-capricious standard)
Williams v. Aetna Life Ins. Co., 509 F.3d 317 (7th Cir. 2007) (an SSA disability finding does not necessarily establish entitlement under an ERISA welfare benefit plan)
Fischer v. Liberty Life Assurance Co. of Boston, 576 F.3d 369 (7th Cir. 2009) (conflict of interest is a factor to consider under the arbitrary-and-capricious standard)
Marrs v. Motorola, Inc., 577 F.3d 783 (7th Cir. 2009) (likelihood that a conflict influenced the decision is a central consideration in reviewing plan administrator conduct)