District of New Jersey Affirms Narrow Scope of ERISA Discovery, Holds Prior STD Claim File Is Not Part of LTD Administrative Record

In Stallman v. First Unum Life Insurance Company, et al, No. CV 23-20975 (JXN)(LDW), 2025 WL 3749611 (D.N.J. Dec. 29, 2025), the United States District Court for the District of New Jersey affirmed a magistrate judge’s discovery ruling in an ERISA long-term disability (“LTD”) benefits case, reinforcing well-established limits on the scope of discovery in cases reviewed under the arbitrary-and-capricious standard. The court held that a claimant’s prior short-term disability (“STD”) claim file was not part of the administrative record for purposes of reviewing the denial of LTD benefits and that the plaintiff failed to establish a sufficient basis for broad extra-record discovery into the insurer’s alleged conflict of interest .

The plaintiff, a former attorney at Kasowitz Benson & Torres LLP, brought suit under ERISA § 502(a)(1)(B) challenging the denial of LTD benefits under his employer’s ERISA-governed disability plan. First Unum Life Insurance Company both insured the plan and served as the claims administrator. In September 2019, the plaintiff received STD benefits following a fractured pelvis. He was medically cleared to return to work without restrictions effective November 1, 2019, and confirmed to First Unum that he could perform all duties of his occupation at that time.

Several months later, in January 2020, the plaintiff submitted a separate claim for LTD benefits based on an alleged mental health condition, depression, with an asserted onset date of January 3, 2020. First Unum denied the LTD claim, concluding that the medical evidence did not establish disability and that the plaintiff was not covered under the policy as of the relevant date. After exhausting administrative appeals, the plaintiff filed suit.

During discovery, the plaintiff moved to compel production of his entire STD claim file and sought broad extra-record discovery related to First Unum’s alleged structural conflict of interest, including discovery into claims-handling practices and internal incentives. The magistrate judge granted the motion only in limited part, holding that the STD claim file was not part of the administrative record for the LTD claim, but permitting narrow discovery in the form of a single interrogatory addressing whether claims or medical personnel involved in the LTD decision were compensated or evaluated based on claim outcomes.

The plaintiff appealed that discovery ruling to the district court. Applying the “clearly erroneous or contrary to law” standard under Rule 72(a)—and noting that discovery matters are entitled to even greater deference—the district court affirmed in full.

With respect to the administrative record, the court emphasized that the applicable standard of review was arbitrary and capricious because the plan granted discretionary authority to the administrator. Under long-standing Third Circuit precedent, judicial review in such cases is generally limited to the evidence that was before the administrator at the time of the benefits decision. The administrative record includes only those materials relied upon, considered, or generated in connection with the determination at issue—not all documents a claimant later characterizes as relevant.

Although First Unum was aware that the plaintiff previously received STD benefits, the court found no evidence that the STD claim file was relied upon, reviewed, or considered when adjudicating the LTD claim. The LTD file referenced the existence of the earlier STD claim and included limited administrative requests for information, but those references alone were insufficient to incorporate the entire STD file into the LTD administrative record. The court further noted that any information from the STD claim that was relevant to the LTD determination had already been included in the LTD record.

The court rejected the plaintiff’s argument that the STD file should be included simply because it was “relevant.” The STD and LTD claims were based on different medical conditions, arose at different times, and were maintained as separate and distinct files. Accepting the plaintiff’s position, the court explained, would improperly expand the administrative record beyond the limits recognized by Third Circuit law. The court also distinguished cases cited by the plaintiff in which STD files had been produced, noting that isolated examples do not establish a general practice or justify extra-record discovery, particularly where the factual circumstances differ.

Turning to conflict-of-interest discovery, the court reaffirmed that an insurer’s dual role as both claims evaluator and payor does not, by itself, warrant extra-record discovery. While conflicts of interest may be weighed as a factor in reviewing an administrator’s decision, courts in the District of New Jersey consistently require a plaintiff to identify a reasonable basis to suspect that a conflict actually influenced the benefits determination before permitting discovery beyond the administrative record.

Here, the plaintiff failed to identify any procedural irregularities, unexplained reversals, selective reliance on evidence, or other indicia of misconduct. Instead, he relied primarily on generalized allegations regarding First Unum’s history, its structural conflict, and the use of claims-tracking tools—conduct the plaintiff himself acknowledged could be innocuous. Under these circumstances, the court held that the magistrate judge acted well within her discretion in limiting discovery to a single interrogatory focused narrowly on compensation and performance evaluation practices.

The court also declined to consider new evidence offered for the first time on appeal, reiterating that a district court reviewing a magistrate judge’s non-dispositive ruling may not consider evidence that was not presented to the magistrate judge in the first instance.

Key Takeaway:
This decision provides a clear reminder that ERISA plaintiffs face a high bar when seeking to expand the administrative record or pursue extra-record discovery in cases subject to arbitrary-and-capricious review. Prior STD claims—even when administered by the same insurer—are not automatically part of the administrative record for a later LTD denial, particularly where the claims involve different conditions and time periods. The ruling also underscores that allegations of structural conflict, without concrete evidence of procedural irregularities, will not justify broad discovery into an insurer’s claims practices.