The opinion of the court was delivered by: Gerard E. Lynch, District Judge
Plaintiff Jerrold Black brings this action pursuant to the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. §§ 1001, et seq., challenging denials of disability benefits by his employer, defendant Pitney Bowes, Inc. ("Pitney Bowes"), defendant Pitney Bowes, Inc. Long-Term Disability Plan (the "Plan"), its retirement plan, and defendant Employee Benefits Committee of Pitney Bowes, Inc. (the "Committee" or the "Administrator"), the plan administrator. (Amended Compl. ¶¶ 4-6.)
On December 11, 2006, the parties submitted to the Court a jointly composed letter, pursuant to the undersigned judge's Individual Rule 2(F), describing several discovery disputes. Letter from Christopher P. Foley and Nicole A. Diller to the Court, Dec. 11, 2006 (the "Joint Submission"). The disputes concerned the availability of the attorney-client privilege to plan administrators with fiduciary duties under ERISA, the discoverability of evidence not considered by plan administrators in making benefits determinations, and the lateness of plaintiff's interrogatories. With the exception of the plaintiff's request for documents withheld as privileged, defendants will be directed to comply with plaintiff's discovery requests.
I. Documents Withheld As Privileged
On March 11, 2005, plaintiff requested the production of all documents generated in the course of making the determination of plaintiff's long-term disability benefits. Defendants produced some documents, but did not produce documents that they felt were protected by the attorney-client privilege and the work-product doctrine. (Joint Submission at 3; id. Exs. G, H, I.) The parties now ask for clarification of their rights with respect to those documents.
A. Standards on the Attorney-Client Privilege and the Fiduciary Exception
In general, the attorney-client privilege protects legal advice sought from an attorney in confidence and not disclosed. See In re Grand Jury Subpoena Duces Tecum Dated Sept. 15, 1983, 731 F.2d 1032, 1036 (2d Cir. 1984) (internal quotation marks omitted). In the ERISA context, however, there is a "fiduciary exception" to the attorney-client privilege. In matters of plan administration, such as determinations regarding whether to grant or deny benefits, employers and plan employers are fiduciaries under ERISA, see 29 U.S.C. § 1002(21), and as such have "an obligation to provide full and accurate information to the plan beneficiaries regarding the administration of the plan." In re Long Island Lighting Co., 129 F.3d 268, 271-272 (2d Cir. 1997). This obligation includes a duty to make "available to the beneficiary, upon request, any communications with an attorney that are intended to assist in the administration of the plan." Id. In other words, "an employer acting in the capacity of ERISA fiduciary is disabled from asserting the attorney-client privilege against plan beneficiaries on matters of plan administration." Id.
Some courts see this doctrine not as a true exception to the attorney-client privilege, but as an extension of the privilege to the beneficiary, who by virtue of the administrator's fiduciary duty is the true client of the attorney providing the advice. "Put another way, the attorneys are considered to be working for the fund and its beneficiaries and not for the fiduciary/administrator." Helt v. Metro. Dist. Com'n, 113 F.R.D. 7, 9 (D.Conn. 1986). Other courts see it as a true exception to the attorney-client privilege, arising from the duty to disclose information concerning plan administration to plan beneficiaries. See United States v. Mett, 178 F.3d 1058, 1063 (9th Cir. 1999) ("Viewed in this light, the fiduciary exception can be understood as an instance of the attorney-client privilege giving way in the face of a competing legal principle.").
Whatever its origins, courts agree that the applicability of the exception depends on the purpose of the communication. "The employer's ability to invoke the attorney-client privilege to resist disclosure sought by plan beneficiaries turns on whether or not the communication concerned a matter as to which the employer owed a fiduciary obligation to the beneficiaries." Long Island Lighting, 129 F.3d at 271. Thus, the case authorities mark out two ends of a spectrum. On the one hand, where an ERISA trustee seeks an attorney's advice on a matter of plan administration and where the advice clearly does not implicate the trustee in any personal capacity, the trustee cannot invoke the attorney-client privilege against the plan beneficiaries. On the other hand, where a plan fiduciary retains counsel in order to defend herself against the plan beneficiaries (or the government acting in their stead), the attorney-client privilege remains intact.
Mett, 178 F.3d at 1064. The privilege is maintained when fiduciaries retain counsel to defend themselves because "[w]hen an administrator is required to justify or to defend against a beneficiary's claims made because of an act of plan administration, the administrator does not act directly in the interests of the disappointed beneficiary but in his own interests or in the interests of the rest of the beneficiaries." Geissal v. Moore Med. Corp., 192 F.R.D. 620, 624 (E.D.Mo. 2000). Because it can be difficult to determine whether the purpose of a seeking legal advice is to fulfill an administrator's fiduciary duties or to avoid litigation accusing him of failing to fulfill those duties, courts have avoided standards that make it too easy or too difficult to claim the privilege.
In Mett, the Ninth Circuit rejected an argument that "the attorney-client privilege should be defeated whenever otherwise privileged legal advice 'relates to' fiduciary matters," 178 F.3d at 1064, because under that approach "any legal advice concerning an ERISA plan could be construed as relating, at least indirectly, to the administration of the plan," which in turn would mean that even communications between defendants and their counsel during the subsequent litigation were not privileged. Id. at 1065. Moreover, "[w]hen an ERISA trustee seeks legal advice for his own protection, the legal fiction of 'trustee as representative of the beneficiaries' is dispelled, notwithstanding the fact that the legal advice may relate to the trustee's administration of the trust." Id. Finally, the Ninth Circuit noted that the adoption of a broad fiduciary exception covering all materials pertaining to plan administration would discourage trustees from seeking legal advice. Id.
On the other hand, it would be equally inappropriate to hold that the mere prospect of litigation renders communications between fiduciaries and counsel privileged, because the prospect of litigation is always present in decisions about whether to grant or deny benefits. Thus, courts have properly rejected the view that a mere awareness of the possibility of postdecisional litigation or desire to avoid such litigation is enough to justify applying the fiduciary exception. "Because denying benefits to a beneficiary is as much a part of the administration of a plan as conferring benefits to a beneficiary, the prospect of post-decisional litigation against the plan is an insufficient basis for gainsaying the fiduciary exception to the attorney-client privilege." Lewis v. UNUM Corp. Severance Plan, 203 F.R.D. 615, 620 (D.Kan. 2001). See also Geissal, 192 F.R.D. at 625 ("Because the denial of claims is as much a part of the administration of a plan as the decision-making which results in no unhappy beneficiary, the prospect of post-decisional litigation against the plan is an insufficient basis for gainsaying the fiduciary exception to the attorney-client privilege.")
Between these two extremes, courts must undertake a fact-specific inquiry to determine whether the purpose of the withheld communications was to seek legal advice with respect to specific litigation. There should be little need for administrators to consult counsel regarding a specific benefits determination after that benefits determination is made, and so in some cases, courts have considered it highly relevant that communications occurred after the challenged benefits determination took place. See Bell v. Pfizer Inc., No. 03 Civ. 9945 (KMW), 2006 WL 2529762, at *7 (S.D.N.Y. Aug. 31, 2006) (holding that the fiduciary exception did not apply to communications that occurred after the challenged determination).*fn1 Of course, the fact that a consultation took place after the commencement of litigation would be even more suggestive of a concern with personal exposure, rather than plan administration. In other cases, courts have found that even communications that occurred prior to a challenged decision and prior to the initiation of litigation were protected by attorney-client privilege when "[t]rouble was in the air." Mett, 178 F.3d at 1064 (holding that communications prior to the initiation of litigation were privileged because the content of the memos concerned the trustees' personal exposure, and because "[t]he defendants . . . had good reason to seek advice from [counsel] regarding their personal exposure to additional civil and criminal ...