John Johnston v. Prudential Insurance Co., 916 F.3d 712

Background

Johnston, an employee covered by Commerce Bancshares’ ERISA-governed LTD plan administered by Prudential, stopped working in July 2013 after complications from hydrocephalus and brain surgery.
Prudential initially approved LTD benefits (Nov. 2013) but reserved the right to periodically obtain information and requested neuropsychological testing for continuation of benefits.
Subsequent testing produced inconsistent/invalid results; Dr. Robert Denney (Jun. 2014) concluded validity tests indicated poor effort and possible deliberate underperformance.
Prudential terminated benefits effective Sept. 1, 2014; Johnston appealed and submitted a therapist’s statement about fatigue and concentration problems.
Prudential ordered a second independent exam; Dr. Michelle Zeller (Jun. 2015) reported failure on all validity measures and concluded Johnston was likely exaggerating symptoms.
Prudential upheld the denial, Johnston sued under ERISA § 502(a)(1)(B); the district court granted summary judgment to Prudential and this court affirms.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Prudential abused its discretion in terminating LTD benefits under a plan granting administrator discretion	Johnston: His treating providers and the SSA found disability; Prudential must not terminate absent evidence disproving disability and should have sought vocational input	Prudential: Plan places burden on claimant to prove continuing disability; independent neuropsychological testing objectively showed invalid effort/malingering supporting termination	Held: No abuse of discretion; Prudential’s decision was supported by substantial evidence of invalid test performance and malingering
Whether burden of proof shifted to Prudential after initial approval	Johnston: After initial approval, Prudential needed new evidence to show no disability or shift burden	Prudential: No burden shift; claimant retains obligation to prove continuing disability under plan terms	Held: No burden-shifting; plan and precedent permit administrator to rely on new evidence to reassess eligibility
Whether Prudential’s malingering finding was subjective/biased	Johnston: Insurer may have incentive to allege malingering to save money	Prudential: Validity tests are objective and widely accepted; multiple tests supported the conclusion of suboptimal effort	Held: Court finds validity testing objective and substantial; no basis to view finding as merely subjective or biased
Applicability of Gunderson (requiring substantial evidence for changed conclusions)	Johnston: Administrator should have obtained vocational opinion per Gunderson before changing decision	Prudential: Gunderson forbids changing conclusions based on the same evidence absent new evidence; here Prudential had new exam evidence showing malingering	Held: Gunderson not violated—Prudential relied on new, substantial evidence (Denney/Zeller reports) to support changed conclusion

Key Cases Cited

McClelland v. Life Ins. Co. of N. Am., 679 F.3d 755 (8th Cir. 2012) (standard: de novo review of district court, abuse-of-discretion review of administrator when plan grants discretion)
Green v. Union Sec. Ins. Co., 646 F.3d 1042 (8th Cir. 2011) (abuse-of-discretion review affirmed when decision supported by substantial evidence)
Nichols v. Unicare Life & Health Ins. Co., 739 F.3d 1176 (8th Cir. 2014) (consider conflict of interest when administrator is insurer and give it some weight in abuse-of-discretion analysis)
Carrow v. Standard Ins. Co., 664 F.3d 1254 (8th Cir. 2012) (discussing role of conflict of interest in ERISA benefits review)
Farley v. Benefit Tr. Life Ins. Co., 979 F.2d 653 (8th Cir. 1992) (plan may place burden of proving eligibility for benefits on claimant)
Gunderson v. W.R. Grace & Co. Long Term Disability Income Plan, 874 F.2d 496 (8th Cir. 1989) (administrator cannot change its understanding of the same medical opinions without substantial evidence supporting the new understanding)