United States District Court, M.D. Florida, Tampa Division
S. SNEED, UNTIED STATES MAGISTRATE JUDGE
MATTER is before the Court on
Defendants'/Counter-Plaintiffs' Motion to Compel
Written Discovery and Deposition Testimony (“Motion to
Compel”) (Dkt. 42), with Plaintiff's response in
opposition (Dkt. 45), and Plaintiff's Motion for
Protective Order Regarding Defendants' Subpoenas of
Plaintiff's Bank Records (“Motion for Protective
Order”) (Dkt. 44), with Defendants' response in
opposition (Dkt. 47). For the reasons set forth below, the
Motion to Compel is granted in part and denied in part, and
the Motion for Protective Order is denied.
Tyrone Keys, played football in the National Football League
(“NFL”) from 1983 to 1989, when he retired due to
injuries. (Dkt. 35 ¶ 5.) Following his retirement,
Plaintiff received benefits from the Defendants' plans.
(Dkt. 35 ¶ 12-19.) In August of 2017, Defendants
allegedly terminated Plaintiff's benefits, claiming he
had been improperly overpaid. (Dkt. 35 ¶ 31.) Plaintiff
sues Defendants under the Employee Retirement Income Security
Act (“ERISA”) for a declaration of his rights
under the plans (Count I), for benefits under the plans
(Count II), and for equitable estoppel under the plans (Count
III). (Dkt. 35.) In response, Defendants filed a counterclaim
seeking to recover overpaid benefits from Plaintiff. (Dkt.
39.) On July 8, 2019, Plaintiff answered Defendants'
counterclaims. (Dkt. 40.) In the Motion to Compel, Defendants
move the Court to compel Plaintiff to respond to discovery
requests and to compel Plaintiff and his spouse to submit to
a deposition. (Dkt. 42.) In the Motion for Protective Order,
Plaintiff moves the Court to quash two bank subpoenas seeking
Plaintiff's personal bank records. (Dkt. 44.)
is entitled to “discovery regarding any nonprivileged
matter that is relevant to any party's claim or defense
and proportional to the needs of the case.”
Fed.R.Civ.P. 26(b)(1). “Proportionality requires
counsel and the court to consider whether relevant
information is discoverable in view of the needs of the
case.” Tiger v. Dynamic Sports Nutrition, LLC,
2016 WL 1408098, at *2 (M.D. Fla. Apr. 11, 2016).
“Information within this scope of discovery need not be
admissible in evidence to be discoverable.”
Id. A party may move for an order compelling
disclosure or discovery. Fed.R.Civ.P. 37. The Court has broad
discretion in managing pretrial discovery matters and in
deciding to compel. Josendis v. Wall to Wall Residence
Repairs, Inc., 662 F.3d 1292, 1306 (11th Cir. 2011);
Perez v. Miami-Dade Cnty., 297 F.3d 1255, 1263 (11th
must quash or modify a subpoena that “requires
disclosure of privileged or other protected matter, if no
exception or waiver applies.” Id. at
45(d)(3)(A)(iii). Further, a protective order may be issued
for good cause to protect a person from annoyance,
embarrassment, oppression, or undue burden or expense, by
forbidding the discovery, forbidding inquiry into certain
matters, or limiting the scope of disclosure or discovery to
certain matters. Id. at 26(c)(1)(A), (D). The party
seeking a protective order has the burden of demonstrating
good cause. Auto-Owners Ins. Co. v. Se. Floating Docks,
Inc., 231 F.R.D. 426, 429-30 (M.D. Fla. 2005).
“‘Good cause' is a well established legal
phrase. Although difficult to define in absolute terms, it
generally signifies a sound basis or legitimate need to take
judicial action.” In re Alexander Grant & Co.
Litig., 820 F.2d 352, 356 (11th Cir. 1987).
motions at issue raise a dispute about the proper scope of
discovery on Defendants' counterclaims. While discovery
in ERISA cases is governed by Rule 26(b), which permits
discovery of information that is relevant to any party's
claim or defense and proportional to the needs of the case,
the scope of discovery in ERISA cases is also integrally
linked to the standard of review applied in each case.
Hawkins v. Arctic Slope Reg'l Corp., 344
F.Supp.2d 1331, 1333 (M.D. Fla. 2002). There are three
standards of review in ERISA benefit determination cases: (1)
de novo, when the plan does not grant the administrator
discretion to determine eligibility for benefits or to
construe the terms of the plan; (2) arbitrary and capricious,
when the plan grants the administrator discretion; and (3)
heightened arbitrary and capricious, when there is a conflict
of interest, such as when an administrator both insures the
plan and makes the final claims decision. See Firestone
Tire & Rubber Co. v. Bruch, 489 U.S. 101, 109
(1989); Buckley v. Metro. Life, 115 F.3d 936, 939
(11th Cir. 1997). When reviewing a denial of benefits under
the de novo standard of review, the court may examine
evidence beyond that which was presented to the administrator
at the time the denial decision was made. Moon v. Am.
Home Assurance Co., 888 F.2d 86, 89 (11th Cir. 1989). On
the other hand, under an arbitrary and capricious standard of
review, the district court is limited to “the facts as
known to the administrator at the time the decision was
made.” Jett v. Blue Cross & Blue Shield of
Ala., Inc., 890 F.2d 1137, 1139 (11th Cir. 1989);
see also Lee v. Blue Cross/Blue Shield of Ala., 10
F.3d 1547, 1550 (11th Cir. 1994) (looking “only to the
facts known to the administrator at the time the decision was
made” in a heightened arbitrary and capricious standard
Defendants' counterclaims are not claims challenging a
denial of benefits, which might be subject to a narrow
standard of review. See Firestone, 489 U.S. at 115.
Defendants bring their counterclaims for reimbursement under
ERISA § 502(a)(3), 29 U.S.C. § 1132(a)(3), which
allows a plan fiduciary “to bring civil suits ‘to
obtain other appropriate equitable relief . . . to enforce .
. . the terms of the plan.'” Montanile v. Bd.
of Trs. of Nat'l Elevator Indus. Health Benefit
Plan, 136 S.Ct. 651, 657 (2016) (quoting 29 U.S.C.
§ 1132(a)(3)). Because “these actions do not
benefit from the administrative process, ” case law
“does not constrain discovery under ERISA §
502(a)(3) actions.” Jensen v. Solvay Chems.,
Inc., 520 F.Supp.2d 1349, 1355 (D. Wyo. 2007)
(explaining that “a finding that claims arise from
ERISA § 502(a)(3) reverts discovery into the traditional
realm and is governed under traditional federal, circuit, and
local procedure”). Indeed, many district courts have
allowed broader discovery in actions under ERISA §
502(a)(3). See Milby v. Liberty Life Assurance Co. of
Boston, No. 3:13-CV-487-CRS, 2016 WL 4599919, at *4- 5
(W.D. Ky. Sept. 2, 2016); Moran v. Life Ins. Co. of N.
Am. Misericordia Univ., No. 3:cv-13- 765, 2014 WL
4251604, at *9 (M.D. Pa. Aug. 27, 2014); Jones v.
Allen, No. 2:11-cv-380, 2014 WL 1155347, at *8 (S.D.
Ohio Mar. 21, 2014); Winburn v. Progress Energy
Carolinas, Inc., No. 4:11-3527-RBH, 2013 WL 3880149, at
*3-4 (D.S.C. July 25, 2013); Malbrough v. Kanawha Ins.
Co., 943 F.Supp.2d 684, 691-93 (W.D. La. 2013);
Mainieri v. Bd. of Trs. of Operating Eng'rs Local 825
Pension Fund, No. 07-1133 (PGS), 2008 WL 4224924, at *4
(D.N.J. Sept. 10, 2008).
discovery requests focus on the amount of overpayments
Plaintiff received from the plans and whether Plaintiff has
any assets traceable to the overpayments. (Dkt. 42 at 2.)
Plaintiff makes two objections to Defendants' discovery
requests. First, Plaintiff argues that Defendants are not
entitled to discovery on their counterclaims because they
failed to exhaust their administrative remedies prior to
filing suit. (Dkt. 45 at 3-6.) Defendants counter that they
are not required to exhaust any administrative remedies.
See Jensen, 520 F.Supp.2d at 1356 (finding that
claims under ERISA § 502(a)(3) are exempt from the
“standard ERISA exhaustion requirement”);
Reliance Standard Life Ins. Co. v. Smith, No.
3:05-CV-467, 2006 WL 2993054, at *3 (E.D. Tenn. Oct. 18,
2006) (“As Reliance is not a beneficiary/participant
under the plan, it is not required to exhaust any
administrative procedures on the overpayment claim.”).
Given the procedural posture of the case, Plaintiff's
affirmative defense concerning exhaustion of administrative
remedies may be decided on summary judgment or at trial.
Nevertheless, while the counterclaims are pending, the
parties “may obtain discovery regarding any
nonprivileged matter that is relevant to” the claims.
Fed.R.Civ.P. 26(b)(1); see also Horne v. Potter, No.
07-61829-CIV-DIMITROULEAS/ ROSENBAUM, 2009 WL 10666885, at *4
(S.D. Fla. Jan. 27, 2009) (“Under these circumstances,
where the requested information is relevant to a claim in the
case and therefore falls within the scope of Rule 26, the
Court will not preclude discovery simply because the USPS
claims as an affirmative defense failure to exhaust
Plaintiff argues that discovery should not be allowed where a
claim for reimbursement is not authorized by the plans. (Dkt.
44 at 2-5; Dkt. 45 at 6-11.) Plaintiff argues that, in this
case, the plans authorize Defendants to “[r]ecover any
overpayment of benefits through reduction or offset of future
benefit payments or other method chosen by the
Retirement Board.” (Dkt. 44-3 at 11.) Plaintiff argues
that the “or” in that provision precludes
Defendants from offsetting future benefits-which they have
already done-and also making a counterclaim for
reimbursement. (Dkt. 44 at 5.) In response, Defendants argue
that the terms of the plans are intended to give the
administrators “the broadest possible power and
authority to recover over payments” and that the Court
should defer to the administrators' interpretation of the
plans. (Dkt. 47 at 10-11.)
August 27, 2019, Plaintiff filed a motion for leave to file
an amended answer specifically alleging this issue as an
affirmative defense. (Dkt. 46.) On October 2, 2019, the Court
granted the motion (Dkt. 52) and on October 7, 2019,
Plaintiff filed his amended answer (Dkt. 53). Accordingly,
based on the procedural posture of this case, this is also an
issue that may be decided on summary judgment or at trial.
The Court will not rule on the merits of Plaintiff's
affirmative defense-that is, whether reimbursement is
authorized by the plans-at the discovery stage. See
Kaminsky v. Nat'l Bureau Collection Corp., No.
07-61604-CIV-DIMITROULEAS/ ROSENBAUM, 2008 WL 11330717, at *4
(S.D. Fla. Oct. 15, 2008) (noting that it is “not
appropriate for the Court to opine on” the viability of
an affirmative defense on a discovery motion).
the discovery sought by Defendants goes directly to the
issues that must be established “to succeed on a
Section 1132(a)(3) claim.” Herman v. Metro. Life
Ins. Co., 689 F.Supp.2d 1316, 1330 (M.D. Fla. 2010). In
Herman, the defendant argued that the court
“should enter judgment in its favor on the
reimbursement claim and then permit it to conduct discovery
in aid of execution to determine whether there is an
identifiable fund as to which it has a claim under Section
1132(a)(3).” Id. at 1331. However, the court
held that the discovery the defendant sought would
“determine whether it is entitled to bring a
Section 1132(a)(3) claim fruition, i.e., to
judgment, ” and therefore ...