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Johnston v. Commerce Bancshares, Inc.

United States District Court, W.D. Missouri, Western Division

August 1, 2016

JOHN JOHNSTON, Plaintiff,
v.
COMMERCE BANCSHARES, INC., and PRUDENTIAL INSURANCE COMPANY of AMERICA, Defendants.

          John Johnston, Plaintiff, represented by Benjamin F. Easter & Kelly C. Tobin.

          Commerce Bancshares, Inc., Defendant, represented by Christopher M. McHugh, Seigfreid Bingham, P.C., Jordan Leigh May, Seigfreid Bingham, P.C., Richard J. Pautler, Thompson Coburn LLP & Shannon Dawn Johnson, Seigfreid Bingham, P.C..

          Prudential Insurance Company of America, Defendant, represented by Richard J. Pautler, Thompson Coburn LLP, Ada W. Dolph, Seyfarth Shaw LLP, pro hac vice & Alexius C. O'Malley, Seyfarth Shaw LLP, pro hac vice.

          ORDER GRANTING IN PART MOTION FOR ADDITIONAL DISCOVERY

          GREG KAYS, Chief District Judge.

         This ERISA action arises from Defendant Prudential Insurance Company of America's ("Prudential") termination of Plaintiff's long-term disability benefits.

         Now before the Court is Plaintiff's motion to allow discovery beyond the administrative record (Doc 34). Because Plaintiff has shown good cause to conduct some limited discovery outside of the administrative record, the motion is GRANTED IN PART.

         Plaintiff may discover: (1) internal communications from Prudential related to the reason his particular file was brought up for review; and (2) Standard Operating Procedures ("SOP") used by Prudential to determine when to review and terminate benefits, including SOP outlining any criteria used for triggering a review. This discovery is limited to requests for production of documents and things, and it excludes taking any depositions.

         Background

         Defendant Commerce Bancshares, Inc. ("Commerce"), employed Plaintiff as a senior computer programmer. As part of his compensation, it provided him with long-term disability insurance purchased from Prudential. Under the policy, Prudential operated as both the claims administrator and the plan administrator who owed a fiduciary duty to the plan participants. As such, an inherent conflict of interest existed. Metro. Life Ins. Co. v. Glenn, 554 U.S. 105, 112, 114 (2008).

         In June 2013, doctors found Plaintiff had a colloid cyst resulting in hydrocephalus, a condition which caused fluid buildup in his brain. Plaintiff had brain surgery to correct the problem, but apparently the procedure was not totally successful: the Social Security Administration declared Plaintiff totally disabled, and in November of 2013, Prudential determined he qualified for long-term disability benefits under the policy.

         In January 2014, Commerce selected a new insurance company to provide disability insurance benefits, thus Prudential would not receive any premium payments for new policies. (Plaintiff, of course, retained any right to benefits he may have had under Prudential's policy.) Two months later, Prudential began reviewing Plaintiff's continued eligibility for benefits. On October 2, 2014, Prudential terminated Plaintiff's benefits retroactively, effective August 31, 2014.

         Plaintiff subsequently sued Defendants under ERISA.

         Prudential and Plaintiff hotly dispute the reasons why Prudential began reviewing his claim. Prudential contends that after it approved Plaintiff's claim it received additional medical records from Plaintiff's doctors that led it to question whether he was eligible for benefits. At least one of the reviewing doctors who examined these records questioned whether Plaintiff fully exerted himself in the testing. Plaintiff argues that the timing of events suggests that after Commerce terminated its relationship with Prudential, Prudential acted in its own self-interest to clear its books of a long-term financial liability in violation of its fiducial duty to Plaintiff as a plan participant.

         Plaintiff now moves to conduct discovery outside of the administrative ...


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