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Jones v. ReliaStar Life Insurance Co.

August 9, 2010


Appeal from the United States District Court for the Western District of Arkansas.

The opinion of the court was delivered by: Colloton, Circuit Judge.

Submitted: January 11, 2010

Before SMITH and COLLOTON, Circuit Judges, and KORNMANN,*fn1 District Judge.

Thomas Jones received long-term disability benefits under an employee welfare benefit plan governed by the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. §§ 1001-1461. The plan is administered by ReliaStar Life Insurance Company ("ReliaStar") through ING Employee Benefits ("ING"), an internal business division of ReliaStar. Jones sued ReliaStar and ING after ReliaStar began offsetting the disability benefits he received under the Plan by the amount of disability benefits he collected from the Department of Veterans Affairs ("VA"). The district court*fn2 denied Jones's motion for leave to conduct discovery, and determined that ReliaStar did not abuse its discretion in offsetting Jones's benefits. We affirm.


Jones was employed as a trust officer at Hibernia Corporation until 2001. On August 1, 2001, Jones applied for long term disability benefits under Hibernia's ERISA-governed employee welfare benefit plan (the "Plan"), which was administered by ReliaStar. Jones's application for benefits listed his disability as gastroparesis. Jones's doctor submitted a letter to ReliaStar that explained that Jones's disability was caused by numerous conditions, including type II diabetes mellitus, peripheral neuropathy, and diabetic gastroparesis. ReliaStar approved Jones's disability claim effective May 9, 2001.

Prior to the award of benefits from ReliaStar, Jones received disability benefits from the VA. Beginning in 1971, the VA continuously paid Jones benefits for a disability caused by a shrapnel wound to his left shoulder. In 1999, Jones applied for additional disability benefits from the VA based on diabetes. The VA awarded Jones the additional benefits on December 27, 2001, with an effective date of November 18, 1999.

On April 19, 2005, ReliaStar informed Jones that it had discovered that he was receiving disability benefits from the VA because of his diabetes, and explained that his benefits under the ReliaStar plan would be reduced by the amount of his diabetes-based VA benefits pursuant to a provision in the plan. Under the ReliaStar plan, "Other Income is subtracted from the benefit [a participant] would otherwise receive."

(Appellant App. 48). "Other Income" is defined as income that a plan participant is eligible to receive based on "the same or related disability for which [he is] eligible to receive benefits under the Group Policy." (Appellant App. 48). Based on these provisions, ReliaStar concluded that Jones's diabetes-based benefits from the VA were "other income" that should be subtracted from the amount of benefits payable under the ReliaStar plan. Jones brought an administrative appeal, and ReliaStar's ERISA Appeal Committee concluded that the offset of the VA benefits was appropriate.

Jones then filed suit in the district court pursuant to ERISA, 29 U.S.C. § 1132(a)(1)(B), and sought discovery. The district court denied Jones's request for discovery and dismissed the case, concluding that ReliaStar's decision to offset Jones's benefits was not an abuse of discretion.


Jones first contends that the district court erred by rejecting his argument, presented by way of a motion in the district court, that the court should apply a less deferential standard of review than "abuse of discretion" when evaluating ReliaStar's decision. We review de novo whether the district court applied the correct standard of review in evaluating the plan administrator's decision. See Hackett v. Standard Ins. Co., 559 F.3d 825, 829 (8th Cir. 2009). When an ERISA plan provides a plan administrator with discretion to construe the terms of the plan, the court should review the administrator's interpretation under an abuse of discretion standard. Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989). Jones does not dispute that the Plan gave ReliaStar discretion to interpret the terms of the Plan, and the district court thus did not err in applying the abuse of discretion standard. Jones's contention that a less deferential standard of review should apply because ReliaStar was operating under a conflict of interest was rejected in Metropolitan Life Insurance Co. v. Glenn, 128 S.Ct. 2343, 2350-51 (2008).

Jones next argues that the district court erred in denying his motion for leave to conduct discovery. We review the district court's discovery rulings for abuse of discretion. LaSalle v. Mercantile Bancorporation, Inc. Long Term Disability Plan, 498 F.3d 805, 811 (8th Cir. 2007). In ERISA cases, the general rule is that review is limited to evidence that was before the administrator, see id., and Jones presents no convincing reason why this case should be an exception. He emphasizes that discovery should be allowed to explore ReliaStar's conflict of interest, but ReliaStar concedes that it was both insurer and administrator of the plan, so discovery is unnecessary to establish the existence of a conflict. See Farley v. Ark. Blue Cross & Blue Shield, 147 F.3d 774, 776 n.4 (8th Cir. 1998). Jones's challenge to the merits of ReliaStar's decision involves an application of policy language to undisputed facts, and the administrative record is sufficient to permit a fair evaluation of ReliaStar's decision. The district court did not abuse its discretion in denying Jones's request for discovery.

The central issue in the appeal is whether ReliaStar abused its discretion in deciding to offset Jones's disability benefits. Our cases identify several factors that inform our analysis, including whether the administrator's interpretation is "inconsistent with the Plan's goals, whether it renders language of the plan meaningless, superfluous, or internally inconsistent, whether it conflicts with the substantive or procedural requirements of ERISA, whether it is inconsistent with prior interpretations of the same words, and whether it is contrary to the Plan's clear language." Erven v. Blandin Paper Co., 473 F.3d 903, 906 (8th Cir. 2007). The ...

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