Discoverable Records in an Outrage Claim
Ex Parte Liberty Mutual Insurance Co. - Petition for Writ of Mandamus
Released March 16, 2012
The Alabama Court of Civil Appeals addressed discovery issues in an outrage claim when it ruled on Liberty Mutual’s Petition for Writ of Mandamus seeking relief from the Trial Court’s order. The Mobile Circuit Court had directed Liberty Mutual to produce the following documents in an outrage case: 1) lawsuits filed against Liberty Mutual alleging outrage or similar claims in Alabama, Georgia, Mississippi, Florida, Texas, and Tennessee, covering the 10-year period preceding the date of the subject injury; 2) personnel files for employees handling workers’ compensation claims, including their certificates, licenses, resumes and complaints or reprimands; and 3) policy and procedure manuals related to or involving peer review.
The basis for the outrage was denial of medical treatment recommended by the authorized treating physician in violation of Alabama law related to the utilization review process. Brunson alleged that Liberty Mutual developed a scheme to deny medical treatment recommended by the authorized treating physician by selecting peer review doctors that would use Liberty Mutual’s criteria for determining medical necessity. The Court pointed out that outrage claims have failed when the denial of medical treatment is based on the carrier merely asserting their legal rights in a permissible way. Garvin v. Shewbert, 564 So. 2d 428, 431 (Ala. 1990). Based on this, the court pointed out that Brunson would first have to show that the denial of his claim, or the manner in which it was denied, did not comply with the law.
The Court of Civil Appeals ruled Liberty Mutual should only have to produce lawsuits filed in Alabama that alleged that medical benefits, otherwise payable under the Act, were denied as the result of Liberty Mutual directing the course of medical treatment through some scheme of denying treatment for lack of reasonable medical necessity using criteria other than that set out in Alabama’s utilization review statutes and administrative regulations. Since Brunson’s claim was based on compliance with Alabama law, the lawsuits in other states were irrelevant and were not reasonably calculated to lead to the discovery of admissible evidence.
The Court of Appeals also ruled that personnel files are generally deemed protected from disclosure. However, there is a "rule-of-reason" test that has been applied to "public records," i.e. records of publicly employed persons. The Court of Appeals felt that privately employed persons should be afforded at least the same level and expectation of privacy afforded under this test. Therefore, the material sought must be clearly relevant and the need for discovery must be compelling because the information is not otherwise readily obtainable. While the Court of Appeals ruled that all employees’ resumes, credentials, general training, education etc . . . were not relevant, they did require Liberty Mutual to produce certain personnel records. The Court of Appeals stated that the following personnel documents would be discoverable: any information in employees’ personnel files that handled Brunson’s claim, any information regarding any training they received to assess medical necessity or deny worker’s compensation claims in Alabama on grounds other than that set out under Alabama law, and any information they received regarding incentives or the like for furthering the alleged unlawful scheme.
The Court of Appeals also order Liberty Mutual to produce the policy and procedure manuals related to the peer review process because they could contain directions for employees to determine medical necessity in a manner other than provided by Alabama utilization-review process.