Kelly v. Valeo North America, Inc.

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UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
THOMAS KELLY,
Plaintiff,
vs.
VALEO NORTH AMERICA, INC.,
Defendant.
2:24-CV-11066-TGB-KGA
HON. TERRENCE G. BERG
ORDER DENYING
PLAINTIFF’S PROCEDURAL
CHALLENGE
(ECF NO. 23)
Plaintiff Thomas Kelly brings this suit against his former employer,
Defendant Valeo North America, Inc. (“Valeo”), under the Employee
Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001, et
seq., seeking increased pension benefits. Valeo has agreed that Kelly is
entitled 	to 	a 	retirement 	benefit 	under 	the 	Valeo 	Lighting 	Salaried
Pension Plan (“the Plan”), but the dispute is over the amount of the
monthly pension benefit Kelly may receive under the Plan. Valeo asserts
that Kelly may receive a Deferred Vested benefit under the Plan, and
that the benefit is subject to actuarial deductions because Kelly retired
before age 65, while Kelly asserts he is entitled to his full benefit amount
as an Early Retirement benefit, without any deductions. Valeo upheld its
benefit determination on appeal and Kelly now brings this lawsuit
challenging 	that 	determination. 	ECF 	No. 	1. 	Valeo 	filed 	the
Administrative Record with the Court on May 12, 2025. ECF No. 21.
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Now 	before 	the 	Court 	is 	Kelly’s 	Procedural 	Challenge 	to 	the
Administrative Record and request for limited discovery, ECF No. 23,
and Valeo’s Response, ECF No. 26. For the reasons stated below, Kelly’s
Procedural Challenge will be DENIED.
I. 	BACKGROUND
Thomas Kelly was employed at Siemens from 1985 to 1993 and with
Valeo North America, Inc. (“Valeo”) from 1997 through March 1998.
Valeo and Osram Sylvania—which is owned by Siemens—formed a joint
venture in 1998 known as Valeo Sylvania LLC, and Kelly worked at
Valeo Sylvania LLC from April 1998 through his termination on July 15,
2012, at which time he was 51 years old. Complaint (“Compl.”) ¶¶ 14–16,
ECF No. 1.
Kelly is a participant in Valeo’s pension plan, currently known as
the Valeo Lighting Salaried Pension Plan (“the Plan”). Answer ¶ 18, ECF
No. 4. Kelly disputed Valeo’s calculation of his pension benefits prior to
his election of benefits and he sent various inquiries to Valeo regarding
his pension benefits under the Plan. Kelly contended that his “benefit
service” years should be calculated at 14.1 years instead of 13.25, as
Valeo had previously calculated, and that his “accredited service” years
should be calculated at 23.1 years based on an accredited service date
beginning June 15, 1989. ARD 77, 78, ECF Nos. 21-76, 21-77. He also
contended that he should be able to receive unreduced Early Retirement
benefits under the Plan starting at age 58, effective July 26, 2019. Id.
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On January 4, 2019, the Valeo Appeals Committee rendered a
partially favorable decision regarding Kelly’s inquiries. ARD 81, ECF No.
21-80. Valeo agreed with Kelly that his “benefit service” years should be
14.1 years and his “accredited service” years should be 23.1 years. Id.
However, Valeo explained that because Kelly terminated employment
with Valeo in 2012 at age 51, instead of age 55 or older, he was not eligible
for the Early Retirement Service Pension under the Plan, and instead
qualified for the Plan’s Deferred Vested Pension. Id. Valeo explained that
although Kelly’s accredited service years meet the requirements for Early
Retirement under the Plan, his age at termination does not because he
was not age 55 at the time of his termination with Valeo. Id. Valeo further
explained that under the Deferred Vested Pension, the “Actuarial Early
Deferred Vested Reduction Factors,” which detail the pension reduction
factors if a person chooses to begin retirement benefits under the Plan
prior to age 65, shows that for retirement at age 58, the reduction factor
is 56.7%. Id.
Kelly states that he then applied for Early Retirement benefits in
April 	2019. 	He 	contends 	that 	he 	met 	the 	requirements 	for 	Early
Retirement 	and 	eligibility 	to 	receive 	100% 	of 	his 	monthly 	pension
starting at age 58. Valeo rejected Kelly’s application because he was not
actually employed by Valeo at age 55. See ARD 86, ECF No. 21-85,
PageID.1205–06.
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Kelly eventually brought this lawsuit against Valeo on April 23,
2024. ECF No. 1. Following the Court’s ruling granting in part and
denying in part Valeo’s motion to dismiss portions of Kelly’s Complaint,
Kelly’s remaining claims are for denial of benefits under the Plan under
29 	U.S.C. 	§ 	1132(a)(1)(B), 	and 	failure 	to 	comply 	with 	request 	for
information under 29 U.S.C. § 1332(c). ECF No. 13. The Court entered
an ERISA scheduling order, ECF No. 14, and on May 12, 2025, Valeo filed
the Administrative Record (“AR”), consisting of over 1000 pages, under
seal. ECF No. 21.
On June 12, 2025, Kelly filed a Statement of Procedural Challenge.
ECF No. 23. Kelly seeks discovery based on a claim of “perceived bias” by
the Administrator in denying his appeal, or a procedural due process
violation, contending that the AR was incomplete, that it failed to include
documents 	he 	contends 	should 	be 	included, 	and 	that 	it 	contained
irrelevant documents or documents he had not seen before.
Valeo responded on July 9, 2025, arguing that Kelly is not entitled
to any discovery beyond the AR because he has failed to provide any
evidence or argument of bias on the part of the Administrator or lack of
due process, including how any claimed missing documents would change
the Administrator’s decision in this case. Valeo states that the AR filed
in this case included everything in Valeo’s possession with the exception
of privileged communications between Valeo and its counsel. When
Kelly’s counsel complained the file was incomplete, Valeo asked to see
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the claimed missing documents and offered to include them if they were
relevant to his claim. Kelly however has failed to provide any records to
Valeo, and instead brought this procedural challenge.
II. 	LEGAL STANDARD
The Sixth Circuit instructs district courts to follow a two-step
process in adjudicating an ERISA benefit action:
1. As to the merits of the action, the district court should
conduct 	a 	de 	novo 	review 	based 	solely 	upon 	the
administrative record, and render findings of fact and
conclusions of law 	accordingly. 	The 	district 	court may
consider 	the 	parties’ 	arguments 	concerning 	the 	proper
analysis of the 	evidentiary materials 	contained in 	the
administrative record, but may not admit or consider any
evidence not presented to the administrator.
2. The district court may consider evidence outside of the
administrative record only if that evidence is offered in
support of a procedural challenge to the administrator’s
decision, such as an alleged lack of due process afforded by
the administrator or alleged bias on its part. This also
means that any prehearing discovery at the district court
level should be limited to such procedural challenges.
Moore v. Lafayette Life Ins. Co., 458 F.3d 416, 430 (6th Cir. 2006) (quoting
Wilkins v. Baptist Healthcare Sys., Inc., 150 F.3d 609, 618–19 (6th Cir.
1988)).
“Where a plaintiff has laid a factual foundation to support a claim
for lack of due process or bias” at the administrative level, he has the
right to limited discovery regarding the procedural challenge. See Pearce
v. Chrysler Grp., LLC Pension Plan, 615 F. App’x 342, 350 (6th Cir. 2015);
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Moore, 458 F.3d at 430 (“The Wilkins panel foresaw occasions in which
the procedural process of gathering all pertinent information may have
broken down at the administrative level and directed the courts to permit
discovery in those cases.”). Examples of due process problems which could
demonstrate a procedural defect include “lack of notice, inadequate
explanation for a denial of benefits, and not giving an opportunity for a
participant who had been denied a claim to receive a full and fair review
of the denial.” Caudill v. Sears Transition Pay Plan, 714 F. Supp. 2d 728,
737 (E.D. Mich. 2010) (Tarnow, J.) (citing Moore, 458 F.3d at 436).
Notably, however, absent 	evidence 	of bias or lack of due process to
support a procedural challenge, the Court’s review is limited to the
administrative record. See Pearce, 615 F. App’x at 350.
III. 	DISCUSSION
Kelly’s procedural challenge broadly alleges “a lack of due process
by the administrator, as well as bias against him, as evidenced by the
administrative record itself.” ECF No. 23, PageID.1425. Kelly contends
that the AR includes documents: (1) that he has not previously seen in
whole or in part; (2) that were produced to this Court with Valeo’s motion
to dismiss; and (3) that are irrelevant. Id. PageID.1425–26. Kelly further
complains that documents in the AR refer to other documents that are
not included in the AR and that the AR fails to include some documents
Kelly provided to Valeo for use in determining his pension benefits and
appeal. Id. In support, Kelly attaches his declaration in which he makes
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these same allegations. ECF No. 23-1. While he lists documents in his
declaration he claims should have been included in the AR, he does not
attach 	any 	of 	the 	alleged 	missing 	documents, 	or 	explain 	how 	the
documents 	(missing 	or 	previously 	unseen) 	impact 	Valeo’s 	decision
regarding his pension benefits or otherwise demonstrate bias or lack of
due process.
First, in response to Kelly’s claim of numerous “missing” documents
from the AR, Valeo responds that the AR includes everything in Valeo’s
possession 	with 	the 	exception 	of 	privileged 	communications. 	Valeo
asserts that it made no relevancy determinations with respect to the
documents in the AR, but instead produced everything. ECF No. 26,
PageID.1445. Valeo states that the AR includes communications with
Kelly dating as far back as 2005, wherein he was invited to, and did,
submit documents to the Plan, through December 2023. See AR, ECF No.
21. Valeo states that the AR documents include the calculations used to
determine Kelly’s benefits and records as early as 2005, in which Valeo
explained that benefits elected prior to age 65 would be Deferred Vested
Pension 	benefits 	subject 	to 	an 	actuarial 	reduction. 	ECF 	No. 	26,
PageID.1446–47, citing ARD 17, 65, 68, 79, 94, 95, ECF Nos. 21-16, 21-
64, 21-67, 21-78, 21-93, 21-94. Kelly was afforded an appeal of the
Administrator’s pension determination, which was granted in part and
which explained in detail the reasons for the benefits determination.
ARD 81, ECF No. 21-80. The AR further includes responses to Kelly’s
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attorney’s continued submissions through December 2023. ECF No. 26,
PageID.1450, citing ARD 91, 93–95, ECF Nos. 21-90, 21-92–21-94.
Valeo 	explains 	in 	its 	Response 	that 	when 	Kelly’s 	counsel
complained that the AR was incomplete, Valeo offered to review the
claimed missing documents and to include them in the AR if they were
pertinent 	to 	Kelly’s 	claim. 	Id. 	PageID.1446. 	Kelly 	however 	never
provided those claimed missing documents to Valeo. Id. Valeo states that
its offer to supplement the record still stands. Id. Valeo asserts, in any
event, that Kelly fails to argue how any of the alleged missing documents
would 	change 	the 	calculation 	of 	his 	benefits 	under 	the 	Plan. 	Id.
PageID.1446–47.
The Court first finds that to the extent Kelly asserts that certain
documents should have been included in the AR to make it “complete,”
then he should supply those records so that Valeo may review them for
inclusion in the AR, as Valeo invited him to do. It is not clear to the Court
why Kelly has failed to pursue this available remedy—which would
appear to resolve Kelly’s concern that the AR is incomplete. In any event,
Valeo contends that many of the documents Kelly refers to in his
declaration as “missing” are actually parts of lengthy email chains that
are in fact already included in the AR. ECF No. 26, PageID.1451–52,
citing ARD 69, 74, 79 (including emails dates 11/2/16, 11/7/16, 11/22/16,
11/23/16, 11/28/16, 12/2/16, 1/12/17, and 4/19/18)), ECF Nos. 21-68, 21-
73, 21-78. If Kelly supplies the alleged missing documents to Valeo, this
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can be confirmed. To the extent Valeo declines to include any documents
in the AR that Kelly asserts should be included, Kelly could file a motion
to supplement the record to include those documents, with a detailed
explanation as to how the documents are pertinent to his benefits
determination and why the documents must be included in the AR. See
Vandivier v. Corning Inc. Benefits Comm., No. 5:23-CV-71, 2024 WL
1197868, at *2 (E.D. Ky. Mar. 20, 2024) (noting plaintiff could have
moved 	to 	supplement 	the 	record 	to 	include 	documents 	not 	in 	the
administrative record).
Second, Valeo further argues that Kelly otherwise provides no
evidence of bias or lack of due process to support a procedural challenge
here. The requirement of due process in an ERISA claims procedure case
is expressed in 29 U.S.C. § 1133, which provides that every employee
benefit plan must:
(1) provide adequate notice in writing to any participant or
beneficiary whose claim for benefits under the plan has
been denied, setting forth the specific reasons for such
denial, written in a manner calculated to be understood by
the participant, and
(2) afford a reasonable opportunity to any participant whose
claim for benefits has been denied for a full and fair review
by 	the 	appropriate 	named 	fiduciary 	of 	the 	decision
denying the claim.
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Moreover, ERISA requires that a claimant be provided with access to and
copies of all documents relevant to his or her claim for benefits. 29 C.F.R.
§ 2650.503–1(h)(2)(iii).
Valeo asserts that Kelly was invited to and did submit documents
to the Plan over the years and that he was afforded a full appeal of the
Administrator’s benefit determination. The appeal denial set forth the
specific reasons for the appeal determination in detail. ARD 81, ECF No.
21-80. 	Valeo 	asserts 	that 	it 	further 	responded 	to 	an 	additional
submission by Kelly’s counsel in 2023, ARD 93, ECF No. 21-92, and the
AR includes the calculations used to determine Kelly’s benefits. ARD 94,
95, ECF Nos. 21-93, 21-94. Valeo states that the AR filed in this case
includes everything in Valeo’s possession with the exception of privileged
communications. Valeo asserts that Kelly therefore was afforded due
process, and he fails to argue how the alleged missing or excluded
documents 	affected 	his 	benefits 	determination. 	ECF 	No. 	26,
PageID.1049–50.
Kelly’s procedural challenge here fails. The Court’s scheduling
order required a party asserting a procedural challenge to “indicate with
particularity the nature of the procedural challenge and the presently-
known factual and legal bases to assert it.” ECF No. 14, PageID.263
(emphasis added). Kelly fails to provide anything more than mere general
assertions of “bias” or “lack of due process.” See Pearce, 615 F. App’x at
350 	(stating 	that 	“the 	district 	court’s 	review 	is 	limited 	to 	the
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administrative record absent evidence to support ‘a procedural challenge
to the administrator’s decision, such as an alleged lack of due process
afforded by the administrator or alleged bias on its part.’”) (emphasis in
original). Kelly offers no evidence of bias on the part of the Administrator
and no facts to support a claim that discovery might lead to such
evidence. And while Kelly lists various documents in his declaration that
he claims were either omitted from the AR, including lengthy email
chains, or improperly included, he fails address the alleged content of
those documents or explain how the claimed missing documents or
included documents evidence any bias on the part of the Administrator
or how he has been denied due process by the Administrator. Kelly’s
mere, unsupported contention that the failure of the AR to include every
document or communication he had with Valeo must have been because
of some alleged “bias” or “due process violation” fails because Kelly offers
no explanation as to how additional discovery is necessary for his benefits
determination here. See Putney v. Med. Mut. of Ohio, 111 F. App’x 803,
807 (6th Cir. 2004) (noting plaintiff provided no evidence supporting his
allegation 	that 	defendant 	did 	not 	permit 	him 	to 	develop 	the
administrative record and no evidence that could have influenced or did
influence defendant’s decision to deny benefits); Mellian v. Hartford Life
& Accident Ins. Co., No. 14-10867, 2014 WL 7366104, at* 6 (E.D. Mich.
Dec. 	24, 	2014) 	(Rosen, 	J.) 	(denying 	procedural 	challenge 	where
“Plaintiff’s request for discovery … rests solely upon mere allegations of
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conflict of interest and bias, and not upon any predicate showing of
procedural anomalies in Defendant’s decision to deny Plaintiff’s claim for
benefits”); see also Likas v. Life Ins. Co. of N. Am., 222 F. App’x 481, 485
(6th Cir. 2007) (“Likas failed to provide sufficient evidence of bias—or of
any 	procedural 	irregularity—to 	justify 	prehearing 	discovery. 	Likas
supports his claim with conjecture, and a mere allegation of bias is
insufficient to ‘throw open the doors of discovery’ in an ERISA case.”)
(citations omitted). In addition, any documents Kelly complains about
that were created after the appeal determination are not relevant to the
appeal determination and do not affect his due process. See Miami Valley
Hosp. v. Jones, No. 3:20-cv-320, 2021 WL 2158020, at *2 (S.D. Ohio May
27, 2021) (information after the appeal decision, and thus not before the
administrator, was not relevant as a matter of law, because “relevant”
evidence 	includes 	evidence 	that 	the 	administrator 	“‘relied 	upon 	in
making 	the 	benefit 	determination 	[and] 	submitted, 	considered, 	or
generated in the course of making the benefit determination’”) (citing 29
C.F.R. § 2560.503-1(m)(8)(i)–(ii)).
Finally, Kelly cites to only two cases in support of his right to a
procedural 	challenge—VanderKlok 	v. 	Provident 	Life 	& 	Accident
Insurance Company, 956 F.2d 610, 616 (6th Cir. 1992) and Killian v.
Healthsource Provident Administrators, Inc., 152 F.3d 514 (6th Cir.
1998)—but neither case supports his right to discovery in this case. In
VanderKlok, court found that the defendant violated the procedural
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protections of ERISA because plaintiff was not provided notice of the
denial of his benefits claim for almost two years, and the denial letter was
deficient because it failed to provide “the specific reason or reasons for
denial and the specific reference to the pertinent plan provisions on
which the denial is based.” VanderKlok, 956 F.2d at 613, 616. Here, Kelly
does not dispute that he timely received the denial letter from the
Administrator 	and 	the 	letter 	detailed 	the 	reasons 	for 	the 	benefits
determination, 	including 	specific 	reference 	to 	the 	pertinent 	plan
provision on which the denial was based.
And in Killian, the plan administrator expressly refused to consider
certain information submitted by the plan participant who was seeking
preauthorization for certain treatment for breast cancer, asserting that
the administrative record was closed. Killian, 152 F.3d at 517–18. The
court found that the administrator’s refusal to consider the submitted
information 	was arbitrary and capricious because the plan 	did not
prescribe 	an 	appeal 	procedure 	for 	the 	preauthorization 	context, 	as
opposed to the claims context, and thus the administrator “was not
required by the plan to forestall consideration of additional information.”
Id. 	at 	521–22. 	In 	addition, 	the 	administrator 	continued 	to 	review
information 	relating to 	the 	preauthorization request even after the
“deadline” for such submissions was communicated to the plaintiff. Id.
The court held such behavior was irrational unless explained by improper
financial motives. Id. (“[O]bviously, it is not open to a plan administrator
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to curtail consideration of the information propounded by the plan
beneficiary, while continuing to accumulate information that bolsters a
denial decision already made.”). The facts of 	Killian 	are not at all
analogous to the facts of this case. Here the Plan prescribed the appeal
procedure 	for 	Kelly’s 	claim 	for 	increased 	pension 	benefits, 	he 	was
afforded a full appeal under that procedure, and there is no evidence that
the Administrator refused to consider information provided by Kelly.
For all of these reasons, Kelly’s procedural challenge and request
for 	additional 	discovery 	beyond 	the 	Administrative 	Record 	will 	be
DENIED. To the extent Kelly argues he is entitled to discovery because
he contends the Administrator wrongly denied him benefits, that claim
is properly examined on summary judgment, and not subject to discovery.
IV. 	CONCLUSION
For the reasons stated above, Kelly’s procedural challenge, ECF No.
23, is DENIED.
The Court will enter an amended scheduling order.
IT IS SO ORDERED.
Dated: November 24, 2025 	/s/Terrence G. Berg
HON. TERRENCE G. BERG
UNITED STATES DISTRICT JUDGE
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