In Stephan v. Unum Life Insurance Co. of America, 697 F.3d 917 (9th Cir. 2012) (No. 10-16840), the Ninth Circuit held that the fiduciary exception to the attorney-client privilege applied to communications between a Plan administrator’s claims analyst and its in-house counsel. Here, the employer’s long-term disability insurance plan was underwritten and administered by Unum Life. An employee challenged the benefits calculation made by Unum and sought memoranda between Unum’s claim analyst and its in-house counsel to demonstrate that Unum operated under a conflict of interest. The memoranda, prepared after the employee’s attorney had contacted Unum, were notes of conversations between an Unum claims analyst and in-house counsel about how the insurance policy ought to be interpreted. In the ERISA context, the fiduciary exception provides that an employer acting in the capacity of ERISA fiduciary is disabled from asserting attorney-client privilege against plan beneficiaries on matters of plan administration. As a matter of first impression, the appellate court held that the fiduciary exception applies to insurance companies acting as Plan administrators. The trial court had ruled that the fiduciary exception did not apply to the memoranda, because the interests of the employee and the administrator had diverged prior to the creation of the memoranda. The appellate court disagreed, finding that the documents were prepared to advise the analyst about how best to interpret the Plan, and were communicated to the analyst before any final determination on the employee’s claim had been made. The content of the documents was thus about plan administration, which falls within the fiduciary exception.
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Plan administrator’s claims analyst/in-house counsel memo discoverable
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