It is true that the claims overlap. But where they do, they operate as alternate theories of liability. Pleading multiple causes of action and alternative theories of liability is a standard practice of civil litigation. See F.R.C.P. Rule 8(a)(3). And it is permissible under ERISA. To further clarify, the Ninth Circuit has held that a plaintiff may seek relief under both Section 1132(a)(1)(B) and Section 1132(a)(3) and that such claims “may proceed simultaneously so long as there is no double recovery.” Moyle v. Liberty Mut. Retirement Ben. Plan, 823 F.3d 948, 960-61 (9th Cir. 2016), as amended on denial of reh’g and reh’g en banc (Aug. 18, 2016).
Cherry v. Prudential Ins. Co. of Am. (W.D. Wash. 2021)
In this claim for benefits case, the plaintiff also alleged a claim for breach of fiduciary duty. The parties agreed that the plaintiff’s claim for denial of benefits should be limited to the record before the plan administrator. They disagreed over whether the plaintiff was entitled to discovery on his claim for breach of fiduciary duty. (
Prudential argued that the plaintiff was not entitled to discovery because there is no difference between his two claims, Therefore, he should not be able to evade the traditional limitations on discovery for a claim for denial of benefits by casting it as a claim for breach of fiduciary duty.
The Court noted that while courts typically do not allow discovery on Section 1132(a)(1)(B) claims, they have consistently permitted discovery on Section 1132(a)(3) claims. The rationale is stated as follows:
“A denial-of-benefits claim alleges that the fiduciary, acting in the scope of their duties, incorrectly denied benefits and seeks a review of the decision. A claim for fiduciary breach alleges that the fiduciary has violated their obligations as a fiduciary. It may or may not be preceded by, related to, an administrative record. As a result, proving a claim for fiduciary breach may require facts outside the administrative record.’
The court concluded that, though the claims overlapped, they were based on two different theories and sought separate forms of relief.
In his Section 1132(a)(1)(B) claim the plaintiff alleged that Prudential wrongfully denied his claim for benefits and seeks payment of monthly benefits through the date of judgment; compensation for treatment costs he incurred which would have been covered under the plan; prejudgment interest; a declaration that he is disabled under the plan and entitled to benefits; and attorney’s fees and costs.
On the other hand, in his Section 1132(a)(3) claim, the plaintiff alleged that Prudential breached its fiduciary duties by “looking for ways to terminate his claim.” Elaborating, the court noted that the plaintiff alleged that Prudential solicited medical opinions from consultants “it knows to be biased” in favor of insurance companies and continued to rely on their opinions “even when presented with information demonstrating or tending to demonstrate that those consultants were biased or unqualified or unreliable.”
So long as there is no double recovery, the court applied Ninth Circuit precedent to permit discovery on the latter claim and granted the plaintiff’s motion to compel.
Note: In support of permitted discovery on Section 1132(a)(3) claims the court cited Guenther v. Lockheed Martin Corp., 646 F. App’x 567, 570 (9th Cir. 2016) (on remand, district court should permit discovery with respect to claim for equitable relief under ERISA); Hancock v. Aetna Life Ins. Co., 321 F.R.D. 383, 389 (W.D. Wash. 2017) (collecting cases). Aside from the different standard of review (no deference required), a claim of fiduciary breach may precede or be unassociated with an “administrative record.”