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March 25, 2003


The opinion of the court was delivered by: Laura Taylor Swain, District Judge


By Amended Order dated March 12, 2002, the Court granted Plaintiff's motion to compel certain discovery. At a pre-trial conference on May 22, 2002, the Court ordered Defendant Metropolitan Life Insurance Company ("MetLife") to make a comprehensive response to the outstanding discovery, including the production of a "Best Practices Manual," by June 4, 2002. In response to MetLife's objection to disclosure of the manual absent confidentiality restrictions, the Court ordered that the manual be used "solely for purposes of this litigation" pending adjudication of a timely motion for a protective order. The protective order application was initiated by Notice of Motion, dated June 10, 2002, seeking a "permanent" protective order relating to the Best Practices Manual and MetLife's Claims Management Guidelines. The Court has reviewed thoroughly the parties' submissions in support of and in opposition to the application, as well as the subject documents. For the following reasons, the motion is granted.

MetLife's motion papers are accompanied by an affidavit attesting specifically to the business purposes and internal confidential treatment of both documents. The affidavit further represents that MetLife would suffer injury if the documentation were disclosed publicly, because competitors could gain advantage from the business method efficiencies MetLife has achieved through the studies and work that are reflected in the two documents. Plaintiff argues that MetLife's showing of confidentiality is insufficient to warrant protection under Rule 26(c) of the Federal Rules of Civil Procedure.

Rule 26(c) provides in pertinent part that a court may make "any order which justice requires to protect a party from annoyance, embarrassment, oppression or undue burden or expense, including . . . that a trade secret or other confidential research, development or commercial information not be revealed or be revealed only in a designated way." Fed.R.Civ.P. 26(c). The party seeking protection has the burden of coming forward with evidence demonstrating that the information is confidential and that disclosure will result in a clearly defined and serious injury to its business. See Bank of New York v. Meridien Biao Bank Tanzania, Ltd., 171 F.R.D. 135, 143-44 (S.D.N.Y. 1997) and cases cited therein. MetLife's affidavit is sufficient to fulfill its burden of showing both the requisite confidential nature of the material and good cause for issuance of a protective order. MetLife's evidence shows that the Manual consists of confidential commercial information, valuable to MetLife and potentially valuable to its competitors who could take unfair advantage of MetLife's substantial analytical and experiential investment by using the material to achieve efficiencies in their claims handling operations, and that the material thus warrants appropriate protection under the principles normally applied in the discovery context.

Plaintiff further argues, however, that a protective order is inappropriate here because, whatever the normal commercial status of the documents in question, they are materials whose unconditional disclosure to participants and beneficiaries of employee benefit plans is mandated by section 104(b)(4) of ERISA, 29 U.S.C.A. § 1024(b)(4) (West Supp. 2002). Section 104(b)(4) provides in pertinent part that The [plan] administrator shall, upon written request of any participant or beneficiary, furnish a copy of the latest updated summary . . . plan description, and the latest annual report, any terminal report, the bargaining agreement, trust agreement, contract or other instruments under which the plan is established or operated.
29 U.S.C.A. § 1024(b). Plaintiff asserts, citing a 1996 Department of Labor opinion letter and an unpublished Ohio district court opinion, that the MetLife manual and claims handling procedures, neither of which is specific to the employee benefit plan at issue in this litigation, nonetheless constitute "the instruments under which the plan is operated . . . [and that] [t]here is little question that MetLife would be required to produce these documents upon demand of the Secretary of Labor or a plan beneficiary (29 U.S.C. § 1024(b)(2),(4)), and that they would thereafter be made public (29 U.S.[C.] § 1026)." Mem. of Law in Opp. at 2. Although Plaintiff has not, to the Court's knowledge, requested the documents through plan administrative channels nor is there any representation that disclosure on this basis has been refused by the administrator, and there is no indication that the Secretary of Labor has demanded any of the documents in question, the Court must address this argument at this point because a legal mandate for public disclosure of the document would indeed undermine any commercial sensitivity justification for a protective order.

Plaintiff's invocation of the Secretary of Labor's statutory authority to "requir[e] any information or data from any . . . plan to which [ERISA's disclosure provisions] . . . appl[y] where he finds such data or information is necessary to carry out the purposes of [ERISA]"*fn1 is misplaced. As noted above, there is no indication that the Labor Department has shown any interest in, much less obtained, the documents in question, and Plaintiff has no legal authority to trigger such procedures. Nor is there any apparent merit in Plaintiff's argument that any and all documents so disclosed to the Labor Department are statutorily required to be made public. Rather, the public disclosure provision cited by Plaintiff applies specifically to "the contents of the annual reports, statements and other documents filed with the Secretary pursuant to this part [of ERISA]." 29 U.S.C.A. § 1026 (West 1999). See 29 U.S.C.A. § 1024(a)(1) (West 1999 & Supp. 2002) (requiring plan administrators to file annual reports, plan descriptions, summary plan descriptions and summaries of material modifications in plan terms).

The Court therefore turns to Plaintiff's argument that the manual and procedures are "plan documents," disclosure of which is mandated upon the request of a participant. The law of this Circuit makes it clear that ERISA section 104(b)(4) imposes no such mandate. The Second Circuit addressed the proper interpretation of the statutory term "instruments under which the plan is established or operated" in Board of Trustees of the CWA/ITU Negotiated Pension Plan v. Weinstein, 107 F.3d 139 (2d Cir. 1997), holding that the term "`instrument' itself . . . connotes a formal legal document" and that "the clause was meant to refer to formal documents that govern the plan, not to all documents by means of which the plan conducts operations." Id. at 142, 143. "Congress did not," the Weinstein Court continued, "mean the clause `instruments under which the plan is . . . operated' to encompass all of the plan's papers, documents, recorded information or reports." Rather, the section requires only the disclosure of the types of documents specified and "`"other instruments" similar in nature.'" Id. at 143, quoting Hughes Salaries Retirees Action Committee v. Administrator of the Hughes Non-Bargaining Retirement Plan, 72 F.3d 686, 691 (9th Cir. 1995) (en banc), cert. denied, 517 U.S. 1189 (1996). Thus, the Weinstein Court affirmed a declaratory judgment that a plan administrator was not required to disclose actuarial valuation reports under section 104(b)(4). See also Faircloth v. Lundy Packing Co., 91 F.3d 648 (4th Cir. 1996), cert. denied, 519 U.S. 1077 (1997) (asset appraisal reports, IRS determination letter, fiduciary bonding policy, trustee meeting minutes not within scope of section 104(b)(4)).

Suffice it to say that Plaintiff, whose brief ignores binding Second Circuit authority, has cited no case establishing that proprietary business methods documents, applicable to the general conduct of administrative functions by an insurance company for a number of different types of plans, constitute "instruments under which the plan is established or operated," such that they are required to be disclosed under ERISA section 104(b)(4). Even the authorities cited by Plaintiff, which take a broader view of the scope of the statute than does the Second Circuit, would not support mandatory disclosure of the documents at issue here. DOL Opinion Letter 96-14A, cited by Plaintiff in support of her argument, concerned insurance company schedules that specified particular dollar benefits payable under a plan pursuant to a "usual and customary" fee payment provision of the plan. Plaintiff has shown no such direct nexus between the documents at issue here and details of the plan's particular benefit structure. Staib v. Vaughn Ind., 2001 WL 1143195 (D. Ohio June 14, 2001), concerned an effort to limit disclosure of the formal legal plan document and its benefit provisions.

Accordingly, MetLife shall submit, on 10 days' notice to Plaintiff's counsel, a proposed protective order providing that the two documents shall be used solely for purposes of this litigation, that any portions of such documents required to be filed with the Court in connection with this litigation shall be filed under seal, and that the documents shall be returned to MetLife and retrieved from the Court at the conclusion of the litigation. The Court will file under seal the copies of the manual and claims procedures that were filed in connection with the instant motion.

SO ...

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