Niles v. American Airlines, Inc. , 269 F. App'x 827 ( 2008 )

FILED
United States Court of Appeals
Tenth Circuit
UNITED STATES COURT OF APPEALS March 17, 2008
Elisabeth A. Shumaker
FOR THE TENTH CIRCUIT Clerk of Court
THERESA F. NILES,
Plaintiff-Appellant,
v. No. 07-3032
(D.C. No. 04-CV-4060-SAC)
AMERICAN AIRLINES, INC.; (D. Kan.)
TRANSWORLD AIRLINES, LLC,
UNIVERSAL WELFARE BENEFIT
PLAN,
Defendants-Appellees.
ORDER AND JUDGMENT *
Before TACHA, EBEL, and MURPHY, Circuit Judges.
Theresa F. Niles appeals the district court’s grant of summary judgment in
favor of the defendants on her claim for disability benefits brought pursuant to the
Employee Retirement Income Security Act, 29 U.S.C. §§ 1001 - 1461 (ERISA).
Ms. Niles argues that summary judgment should be reversed because the district
*
After examining the briefs and appellate record, this panel has determined
unanimously that oral argument would not materially assist the determination of
this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is
therefore ordered submitted without oral argument. This order and judgment is
not binding precedent, except under the doctrines of law of the case, res judicata,
and collateral estoppel. It may be cited, however, for its persuasive value
consistent with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
court (1) failed to apply the appropriate de novo standard of review to the
defendants’ action in denying her disability benefits; (2) improperly relied on a
surveillance video and portions of her deposition that were not part of the
administrative record; and (3) improperly excluded documents she submitted to
supplement the administrative record. We affirm in part, vacate in part, and
remand.
BACKGROUND
Ms. Niles worked as a Mechanics Supervisor and Technical Quality
Assurance Auditor for Trans World Airlines (TWA) from 1977 until November
1996. Her work for TWA ended after a motor vehicle accident in which she
sustained neck injuries. Effective May 1997, she began receiving long-term
disability benefits pursuant to TWA’s Group Benefits Plan.
In 2001, defendant American Airlines, Inc. (American) purchased certain
TWA assets and created the TWA Airlines LLC Universal Welfare Benefit Plan
(Plan). American sponsored and administered the self-insured Plan. As a former
employee of TWA, Ms. Niles remained insured and received ongoing disability
benefits under the Plan. The Plan provides disability benefits to an insured who
becomes “[t]otally [d]isabled from any occupation while covered because of an
accident, [s]ickness or pregnancy.” Aplee Supp. App. at 70. An employee is
considered totally disabled “during any period when, as a result of [i]njury,
[s]ickness or pregnancy, the Employee is completely unable to perform the duties
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of his occupation and is not performing any other work or engaging in any other
occupation or employment for wage or profit.” Aplt. App., Vol. III, at 881.
In March 2002, Metropolitan Life Insurance Company (MetLife) began
serving as the Plan’s third-party administrator. MetLife decided to conduct a
review of Ms. Niles’ continuing eligibility for disability benefits. As a part of the
review, it required her to undergo a Functional Capacity Evaluation (FCE) to
evaluate her physical ability to work.
The Functional Capacity Evaluation
MetLife hired a third-party evaluator, Isernhagen Work Systems
(Isernhagen) to administer the FCE tests to Ms. Niles. Dan Van Buskirk, an
occupational therapist, tested her on behalf of Isernhagen over a two-day period
in October 2002. Mr. Van Buskirk concluded that she gave “maximal effort” on
all of the test items. Id. at 990. He further noted that “[t]hroughout the lifting
and carrying portions of the evaluation, [Ms. Niles] requested to momentarily sit
down or lean against the shelves secondary to dizziness, nausea, and/or throbbing
headache.” Id. Objective signs coincided with these expressions of subjective
discomfort, but she was able to work through the discomfort and tolerated the
activities safely despite her pain.
Mr. Van Buskirk’s report concluded that Ms. Niles was able to work at the
“light” level, as defined by the United States Department of Labor. Id. at 991.
With certain restrictions, she could also perform “medium” work. Id. at 995. She
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would, however, only occasionally be able to tolerate trunk flexion, the range of
motion in her neck was limited, and “[w]ith increased physical exertion she
complains of neck pain, headache, dizziness, and nausea.” Id.With the FCE in hand, MetLife conducted a “Transferable Skills Analysis”
in which it identified 95 occupations in the “sedentary” or “light” categories that
were “good” or “closest” to Ms. Niles’ skills and experience and that paid at least
$11.63 per hour. Id. at 996. It then selected eighteen of these positions from the
list and hired a third-party consultant, CorVel Corporation, to conduct a labor
market survey. CorVel selected three of these jobs, “Quality Control
Technician,” “Transportation Maintenance Supervisor,” and “Inspector, General,”
interviewed local employers, and reported to MetLife concerning their
availability.
The Surveillance Report and Video
MetLife also hired a private investigator to conduct surveillance of
Ms. Niles. The investigator prepared a report and submitted a surveillance video
to MetLife.
The report indicates that on September 6, 2002, the investigator conducted
surveillance at Ms. Niles’ residence in Ottawa Kansas and observed a person
described as a “50-year-old female, 5’8” tall, approximately 165 lbs., with
shoulder length, brown hair” departing and returning to her residence. Id. at 978.
The next day, the investigator observed this person washing her gray Buick
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LeSabre at a local carwash. The investigator shot about twenty minutes of video
that shows “Claimant exiting her vehicle, opening the hood and trunk of the
vehicle, crouching down to wash the vehicle’s tires, and bending at times to wash
under the vehicle.” Id. at 979. He noted that her movements were “fluid and
without hesitation,” that she showed “no signs of pain or discomfort,” and wore
“no visible medical aids or devices.” Id.MetLife’s Initial and Second Review Denials
By letter dated December 31, 2002, MetLife notified Ms. Niles that her
benefits had been terminated because she no longer met the definition of total
disability under the Plan. According to the letter, MetLife reached this
determination based on the surveillance report and video and the results of the
FCE.
On January 14, 2003, Ms. Niles requested a second review from MetLife of
its disability determination. She contended that MetLife’s decision was “flawed,
misleading or untrue” for the following reasons: (1) certain personal details about
her provided by the investigator were incorrect, and she was not in Ottawa Kansas
on September 6-8, 2002, as the investigator indicated; (2) Mr. Van Buskirk was
instructed not to complete the evaluation portion of the FCE tests and his
information sheet only listed partial information about her disabilities; and
(3) MetLife’s decision was inconsistent with the Social Security Administration’s
determination that she was unable to perform competitive employment at any
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exertional level and with the recent decision of her life insurance carrier to waive
her annual premium based on her ongoing disability. Id. at 1013-14.
After considering the information provided by Ms. Niles, MetLife upheld
the termination of her benefits. It rejected reliance on determinations made by
the Social Security Administration (SSA) and Ms. Niles’s life insurance carrier.
Without addressing Ms. Niles’s specific objections to the FCE and the
surveillance, MetLife also noted that its decision was based primarily upon the
results of the FCE and the labor market survey, stating that “[t]he surveillance
done was a supplemental tool.” Id. at 1022.
PBAC Appeal
On August 21, 2003, Ms. Niles appealed MetLife’s denial of benefits to
American’s Pension and Benefits Committee (PBAC). She submitted a
significant amount of additional evidence with her appeal. These additional
materials included medical records from her treating physician, Dr. Spratt,
including letters in which he opined that she was disabled. In one of the letters,
Dr. Spratt criticized the conclusions reached by Dr. VanBuskirk in the FCE and
opined that the FCE was internally inconsistent. Ms. Niles also submitted
opinions from other treating physicians describing her exertional and
non-exertional limitations.
In her appeal letter, Ms. Niles criticized the surveillance report submitted
by MetLife’s private investigator. She again asserted that on the dates the
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surveillance was conducted, she was not in Ottawa, Kansas, but was in Colorado
at a mineral spa. She also submitted her own report from a vocational expert,
indicating that she was not able to return to her primary job, nor to perform any
other job on a competitive basis.
As part of its review, the PBAC referred Ms. Niles’s case to an independent
medical consultant, Dr. Robert D. Petrie. Dr. Petrie reviewed her medical records
and concluded that (1) she had no demonstrated impairments related to the
diagnosis of either hypothyroidism or scarcoidosis; (2) there was no evidence that
her activities of daily living were restricted due to a psychological impairment;
(3) her degenerative disc disease was not established as the source of her
subjective complaints of pain, which were inconsistent with the objective
findings; (4) her subjective pain complaints were better explained by pending
litigation and the possibility of financial gain than by significant physical
findings; (5) mentally, she was overly focused on a non-existent fracture of her
cervical spine, which was based on an early and incorrect diagnosis and
unsupported by radiologic findings; and (6) she had the ability to perform light to
moderate work activities and was not totally disabled according to the Plan
definition.
The PBAC issued its decision on November 24, 2003. Its decision letter
indicated that after conducting an extensive review and analysis of Ms. Niles’
case and considering all of the information she had provided with her appeal, the
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PBAC had determined that her disability claim had been processed in accordance
with the terms of the Plan. The PBAC therefore upheld the decision to deny
benefits. In response to Ms. Niles’ complaints about the investigative report, the
PBAC stated that the report (including, presumably, the surveillance video) had
not been a factor in its decision. The PBAC concluded that “there is no medical
evidence to justify Ms. Niles’ request for reinstatement/continuation of LTD
benefits.” Id. at 1140.
District Court Review
Ms. Niles filed a timely ERISA action seeking disability benefits and
alleging that defendants breached their fiduciary duty to her. All parties moved
for summary judgment. Although the parties disagreed concerning the standard
of review to be applied to the defendants’ actions, the district court determined
that de novo review applied. It struck many of the exhibits that Ms. Niles
submitted in support of her summary judgment motion, rejected her fiduciary duty
claim and granted summary judgment to the defendants on her claim challenging
the denial of disability benefits.
The district court found Ms. Niles’ challenges to the surveillance video
irrelevant, because the PBAC expressly stated it did not rely on the video in
making its decision. Notwithstanding this ruling on Ms. Niles’ challenges to the
video, the district court admitted the video on de novo review, “for the limited
purpose of demonstrating to the court the actions plaintiff admits she was able to
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do, rather than showing that the subject actually performing those actions [in the
video] was in fact the plaintiff.” Id., Vol. II, at 866. It found that “[a] reasonable
person viewing the video would conclude that the acts undertaken by the person
in the video are facially inconsistent with those that would voluntarily be
performed by one totally disabled by chronic pain syndrome, a degenerative
neck/disc disease or a limited ability to look down or bend over.” Id. at 867.
The district court concluded by stating that based on its review of the
record, Ms. Niles received a full and fair review and that the process was
reasoned and principled. It found no error in the PBAC’s denial of disability
benefits.
ANALYSIS
1. Standard of Review
“We review de novo the district court’s summary judgment decision,
applying the same standard as the district court.” Butler v. Compton, 482 F.3d
1277, 1278 (10th Cir. 2007). Summary judgment is appropriate “if the pleadings,
the discovery and disclosure materials on file, and any affidavits, show that there
is no genuine issue as to any material fact and that the movant is entitled to a
judgment as a matter of law.” Fed. R. Civ. P. 56(c) (2007). We examine the
record and all reasonable inferences that might be drawn from it in the light most
favorable to the non-moving party. Antonio v. Sygma Network, Inc., 458 F.3d
1177, 1181 (10th Cir. 2006). Finally, we may affirm on any basis supported by
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the record, even though not relied on by the district court. Felix v. Lucent Techs.,
Inc., 387 F.3d 1146, 1163 n.17 (10th Cir. 2004).
2. De Novo Review by District Court
The parties do not dispute the district court’s conclusion that the PBAC’s
decision should be reviewed de novo. Ms. Niles contends, however, that the
district court failed in fact to conduct a de novo review and instead improperly
deferred to the administrator’s decision.
“When applying a de novo standard in the ERISA context, the role of the
court reviewing a denial of benefits is to determine whether the administrator
made a correct decision. The administrator’s decision is accorded no deference or
presumption of correctness.” Hoover v. Provident Life and Accident Ins. Co.,
290 F.3d 801, 808-09 (6th Cir. 2002) (quotation and citation omitted). See also
Salve Regina Coll. v. Russell, 499 U.S. 225, 238 (1991) (“When de novo review is
compelled, no form of appellate deference is acceptable.”). We review de novo
the district court’s application of the appropriate standard of review to the
PBAC’s decision. DeGrado v. Jefferson Pilot Fin. Ins. Co., 451 F.3d 1161, 1167
(10th Cir. 2006). Ms. Niles raises a number of arguments in support of her claim
that the district court did not conduct de novo review.
a. “Full and Fair Review”
Under ERISA, an insurer must provide a full and fair review of an initial
denial of a claim for benefits. 29 U.S.C. § 1133(2). Ms. Niles complains that the
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district court erred by examining whether the PBAC conducted a full and fair
review, rather than conducting its own full and fair review. Her argument
misconstrues the district court’s decision. The district court’s determination that
the PBAC provided a full and fair review does not mean that it deferred to the
PBAC’s decision or that it failed to conduct a de novo review of the merits.
Although a court conducting de novo review owes the administrator no
deference, the administrator’s decision is still the decision under review. See
Hoover, 290 F.3d at 808-09. A showing that the administrator failed to follow
ERISA procedures therefore provides a basis for reversal separate from that
provided by de novo review of the merits of the claim. See, e.g., Hackett v. Xerox
Corp. Long-Term Disability Income Plan, 315 F.3d 771, 777 (7th Cir. 2003)
(remanding for retroactive reinstatement of benefits where plan administrator
failed to follow full and fair review procedures).
In her summary judgment motion, Ms. Niles sought reversal both on
procedural grounds and on the merits. Her full and fair review argument targeted
the PBAC’s failure to follow the proper procedures in evaluating her claim. See
Aplt. App., Vol. I, at 158-61. 1 These procedurally-based arguments were
presented separately from her argument targeting the merits of the PBAC’s
1
Specifically, she contended that the administrator failed to permit her to
respond to Dr. Petrie’s opinion, that it accepted his opinion though it was not
based on all the relevant evidence, and that the PBAC’s “failure to obtain an
[independent medical examination] constituted a procedural irregularity.” Aplt.
App., Vol. I, at 160.
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determination, which she argued was unsupported by substantial evidence. See
id. at 161-77. We conclude that the district court’s finding that PBAC provided a
full and fair review, which responded to the procedural arguments Ms. Niles
raised, did not deprive her of de novo consideration of the merits of her claim.
b. Other Alleged Evidence of Improper Deference
Other language in the district court’s opinion, however, raises a troubling
possibility that while ostensibly conducting de novo review, the district court may
have improperly deferred to the PBAC’s decision. An instance of this troubling
language is found in its analysis of Ms. Niles’s merits argument concerning the
FCE findings. The district court began its analysis by stating it did “not agree
with the plaintiff’s contention that the FCE’s findings establish plaintiff’s
inability to perform any work activity on a consistent basis.” Aplt. App., Vol. II,
at 864. It then listed reasons why it disagreed with Ms. Niles’s contention. It
concluded, however, by stating that “MetLife reviewed the FCE in its entirety,
found it to be valid, and identified occupations within both the light and sedentary
demand categories that match plaintiff’s job skills. Reliance on the FCE, and
resultingly, the Labor Market Survey, was warranted.” Id. at 864 (emphasis
added). This conclusion suggests that the district court may have believed its
function was to determine whether MetLife properly relied on the FCE, rather
than whether it should rely on the FCE in reaching a de novo decision on
disability.
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The district court employed other language suggesting application of an
improper standard. It stated that there was evidence that “might support an award
of long-term disability benefits,” but noted that this evidence was “based almost
exclusively on plaintiff’s subjective claims” and was rebutted by “[o]ther
substantial evidence.” Id. at 869 (emphasis added). It further concluded that
plaintiff’s admissions concerning her ability to perform the acts requisite to
washing her car, the evidence provided by Dr. Petrie’s report, and the FCE all
provided “some evidence that plaintiff was not totally disabled.” Id. On de novo
review, however, the standard is not whether “substantial evidence” or “some
evidence” supported the administrator’s decision; it is whether the plaintiff’s
claim for benefits is supported by a preponderance of the evidence based on the
district court’s independent review. See, e.g., Alexander v. Winthrop, Stimson,
Putnam & Roberts Long Term Disability Coverage, 497 F. Supp. 2d 429, 433, 440
(E.D.N.Y. 2007) (applying preponderance standard in de novo review case); see
also Ray v. UNUM Life Ins. Co. of Am., 224 F. App’x 772, 782 (10th Cir. 2007)
(unpublished) (approving district court’s application of preponderance standard in
de novo review case).
c. District Court’s Review of Record
We are also concerned by whether the district court conducted a de novo
review of the medical evidence. The district court stated that it had reviewed the
administrative record. Aplt. App., Vol. II, at 869. It is difficult to determine the
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extent of this review, however, because it failed to discuss much of the medical
evidence Ms. Niles submitted. We are particularly concerned by the fact that the
district court appears to have viewed Ms. Niles’ evidence primarily through the
lens of the independent medical expert, Dr. Petrie. While it devoted considerable
discussion to Dr. Petrie’s report and conclusions, the district court mentioned the
opinions and diagnoses of Ms. Niles’s treating physicians in passing at most.
“Plan administrators . . . may not arbitrarily refuse to credit a claimant’s reliable
evidence, including the opinions of a treating physician.” Black & Decker
Disability Plan v. Nord, 538 U.S. 822, 834 (2003). The same principle applies to
a court reviewing the medical record de novo.
American’s position that the district court was not obligated to discuss each
and every piece of medical evidence seems unimpeachable. See Aplee. Br. at 27
n.4. But that is not the problem. The problem is that the district court’s language
conveys the impression that it believed its task was only to determine whether
Dr. Petrie’s report provided substantial evidence for the PBAC’s decision. As we
have seen, that is not the appropriate standard to be applied as part of a de novo
review. The district court should instead have examined all the medical evidence,
including Dr. Petrie’s report, and determined whether that evidence created a
genuine issue of material fact concerning whether Ms. Niles was disabled under
the preponderance standard.
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d. Conclusion
For the foregoing reasons, we must vacate that portion of the district
court’s decision granting summary judgment to the defendants on Ms. Niles’s
disability benefits claim, and remand for a proper de novo analysis of whether her
claim to benefits is supported by a preponderance of the evidence. On remand,
the district court should give careful consideration to all the evidence of record in
reaching its conclusion, including the FCE and Ms. Niles’s objections thereto, and
the medical evidence.
3. Evidentiary Rulings
Ms. Niles also challenges the district court’s rulings on certain evidentiary
issues.
a. Consideration of Surveillance Video and Deposition
The PBAC stated that it had not relied on the surveillance report in
reaching its decision. The district court nevertheless considered the surveillance
video for the limited purpose of determining the type of activities Ms. Niles
admittedly was capable of performing. Ms. Niles made the admission on which
the district court relied during the course of her deposition. She contends that the
district court should not have considered the video and should not have admitted
her deposition into evidence.
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i. The Video
The video was part of the administrative record presented to the PBAC and
therefore part of the record to be considered by the district court on de novo
review. At the time of the PBAC’s decision, Ms. Niles denied that she was the
person captured on the video. Her subsequent admission during her deposition
that she was capable of performing the activities portrayed on the video came
after the administrative record was closed and was not available to the PBAC.
The fact that the PBAC discounted the video was therefore not binding on the
district court on de novo review, particularly given the limited purpose for which
the district court considered it. Cf. Wible v. Aetna Life Ins. Co., 375 F. Supp. 2d
956, 970-71 (C.D. Cal. 2005) (considering, as part of de novo review,
surveillance results favorable to claimant that went ignored and unmentioned by
plan administrator in its denial decisions). 2
ii. The Deposition
Ms. Niles argues that her deposition should not have been admitted into
evidence because it was outside the administrative record and did not meet the
criteria for supplementing the record on de novo review that we outlined in Hall
2
Ms. Niles also argues that the video should not be given much weight
because it only shows what she could do for the twenty minutes or so of its
duration and therefore is only weakly probative of her ability to work an
eight-hour day. On remand, the district court may of course consider this factor
in determining whether either party has established entitlement to summary
judgment.
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v. UNUM Life Insurance Co. of America, 300 F.3d 1197 (10th Cir. 2002). Under
Hall, “[t]he party seeking to supplement the record bears the burden of
establishing why the district court should exercise its discretion to admit
particular evidence.” Id. at 1203. Specifically, the party must show that (1) the
evidence is “necessary to the district court’s de novo review”; (2) “it could not
have been submitted to the plan administrator at the time the challenged decision
was made”; (3) the evidence is not “[c]umulative or repetitive” nor (4) may it be
“evidence that is simply better evidence than the claimant mustered for the claim
review.” Id. (quotation omitted). “District courts must conduct analysis
case-by-case to determine whether the four prongs of the Hall test are met.”
Jewell v. Life Ins. Co. of N. Am., 508 F.3d 1303, 1309 (10th Cir. 2007), petition
for cert. filed (U.S. Feb. 19, 2008) (No. 07-1121). We review the district court’s
ultimate decision under Hall for an abuse of discretion. Id.Addressing the first factor in Hall, the district court found that the
deposition was necessary to its de novo review because it involved admissions by
Ms. Niles that were important in determining the issue of whether she was
disabled. Addressing the second factor, it concluded that the deposition could not
have been presented in the administrative process, which concluded long before
her deposition was taken. Although the district court did not address the last two
factors, Ms. Niles does not argue that the deposition is cumulative or repetitive or
that it is simply better evidence than that previously considered as part of the
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administrative process. We conclude that the district court did not abuse its
discretion by admitting the deposition.
Finally, Ms. Niles contends that if her deposition is considered, it should be
admitted in its entirety. She complains that the deposition submitted to the
district court was incomplete because it did not contain her corrections. It is
unclear from her argument what these corrections contain or why Ms. Niles
believes they are significant. If she previously submitted any corrections to the
district court, they do not appear in the record on appeal. Any concerns Ms. Niles
may have concerning the completeness of her deposition for review purposes are
best addressed to the district court in the first instance on remand.
b. Striking of FCE Documents
Ms. Niles also challenges the district court’s decision to strike certain
documents attached to her motion for summary judgment. The district court
struck her exhibit 10, an affidavit of Sharon Gram, the records custodian at
Ransom Memorial Hospital (RMH), where Ms. Niles underwent the FCE. The
affidavit was offered to authenticate over 300 pages of medical records, including
her exhibits 3 through 5. Exhibits 3 through 5 purportedly are early drafts of the
FCE report that contain handwritten notations and a fax cover sheet between
Isernhagen and Mr. Van Buskirk. Ms. Niles draws the conclusion from these
exhibits that Isernhagen and/or MetLife induced Mr. Van Buskirk to modify his
conclusions on the final draft of the FCE.
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The district court struck exhibit 10 because Ms. Niles failed to disclose it
as part of her initial disclosure of documents under Fed. R. Civ. P. 26. It then
struck exhibits 3 through 5 for lack of foundation, which was no longer provided
by the stricken exhibit 10.
Ms. Niles’s initial Rule 26 document disclosures identified only the
defendants’ claim file, including the final FCE, and did not mention her exhibit
10. 3 In striking the exhibit, the district court cited Fed. R. Civ. P. 26(a)(1)(B), 4
which states that “a party must, without awaiting a discovery request, provide to
other parties . . . a copy of, or a description by category and location of, all
documents . . . that are in the [party’s possession] and that the disclosing party
may use to support its claims or defenses, unless solely for impeachment.” Rule
37(c)(1) further provides that “[i]f a party fails to provide information or identify
a witness as required by Rule 26(a) or (e), the party is not allowed to use that
information or witness to supply evidence on a motion, at a hearing, or at a trial,
unless the failure was substantially justified or is harmless.” We review for an
abuse of discretion both the district court’s decisions to impose sanctions for
discovery abuses under Rule 37, Woodworker’s Supply, Inc. v. Principal Mut. Life
3
The applicable version of Rule 26 exempts from its disclosure requirements
“an action for review on an administrative record.” Fed. R. Civ. P. 26(a)(1)(E)(I).
Ms. Niles does not argue that this exception applies here.
4
A revised version of Rule 26 is currently in effect, but did not go into
effect until December 1, 2007, and was therefore not applicable to the required
disclosures in this case.
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Ins. Co., 170 F.3d 985, 992-93 (10th Cir. 1999), and its application of Rule 26(a),
Davis v. U.S. Bancorp, 383 F.3d 761, 764 (8th Cir. 2004).
Ms. Niles admits that she failed to disclose exhibit 10 as part of her initial
Rule 26 disclosures. She argues that the district court should nevertheless have
admitted the exhibit, for two reasons: (1) she had no duty under Rule 26 to
disclose it; and (2) any failure to disclose it was harmless.
Ms. Niles argues that she had no duty to disclose the exhibit under Rule
26(a)(1)(A), pertaining to the disclosure of witnesses. But the district court did
not rely on Rule 26(a)(1)(A); it relied on Rule 26(a)(1)(B), pertaining to the
disclosure of documents. The distinction is significant because the argument
Ms. Niles raises applies only to the disclosure of witnesses under Rule
26(a)(1)(A). She argues that a records custodian like Ms. Gram is not an
“individual likely to have discoverable information,” Rule 26(a)(1)(A), and
therefore need not be disclosed as a witness. Ms. Niles fails to show that this
argument has any relevance to the requirement of production of documents.
Moreover, even if Rule 26(a)(1)(A) were applicable here (perhaps on a
theory that an affidavit and the identity of the witness providing it are
inseparable), Ms. Niles fails to show that as a records custodian Ms. Gram had no
“discoverable information.” Ms. Niles cites no authority to support her theory
that the identity of records custodians need not be disclosed under Rule
26(a)(1)(A). Given the nature of the documents involved in this case, we
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conclude that the district court did not abuse its discretion in determining that the
affidavit was subject to disclosure. Ms. Niles sought to use Ms. Gram’s
declaration to obtain admission of documents suggesting that the defendants
exerted undue influence over the preparation of the FCE. Defendants were
deprived by the lack of disclosure of an opportunity to depose Ms. Gram
concerning any knowledge she might have of the history and provenance of the
FCE documents and the handwritten notations on them. See U.S. ex rel. Fago v.
M&T Mortgage Corp., 518 F. Supp. 2d 108, 113-14 (D.D.C. 2007) (striking
declarations from title company records custodians along with attachments
purportedly showing history of challenged documents because party failed to
disclose them under Rule 26(a)(1)).
We are concerned, however, by two other arguments that Ms. Niles makes
in support of admission of exhibit 10 and, consequently, exhibits 3 through 5.
She argues that she intends to use exhibit 10 solely for impeachment purposes,
see Rule 26(a)(1)(B), and that her failure to disclose exhibit 10 was harmless, see
Rule 37(c)(1). The district court did not address these considerations in striking
the exhibits. Because these exhibits may be crucial to Ms. Niles’s case if they
invalidate the FCE, we instruct the district court on remand to consider whether
the exhibits should be received notwithstanding the lack of timely disclosure of
exhibit 10 and the consequent lack of authentication for exhibits 3 through 5,
either because they are going to be used solely for impeachment purposes, or
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because the lack of disclosure is harmless. The defendants may of course renew
their other objections to receipt of these exhibits, including their argument that
they fall outside the administrative record and do not meet the criteria in Hall.
CONCLUSION
We VACATE the portion of the district court’s decision granting summary
judgment to the defendants on Ms. Niles’s ERISA claim for disability benefits,
and denying Ms. Niles’s summary judgment motion, and REMAND for
reconsideration of both defendants’ and Ms. Niles’s motions for summary
judgment under the appropriate de novo standard. Should the district court find
that it cannot grant summary judgment to either party because genuine issues of
material fact exist, it should then conduct a de novo review of the evidence to
determine whether Ms. Niles’s benefits claim is supported by a preponderance of
the evidence. We AFFIRM the district court’s challenged evidentiary rulings,
with the exception of its order striking Ms. Niles’s exhibits 3 through 5 and 10,
which it should reconsider in light of the analysis provided in this order and
judgment.
Entered for the Court
Michael R. Murphy
Circuit Judge
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