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“Your Rights Under ERISA” Section in SPD Insufficient to Overcome Forum...

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  • “Your Rights Under ERISA” Section in SPD Insufficient to Overcome Forum...



    Attached is a case out of the Western District of Texas, Phillips v. Charter Communications, Inc. Welfare Benefit Plan. The case is before the court on a Motion to Transfer Venue. Defendant moved to transfer the case to the Eastern District of Missouri pursuant to a Forum Selection Clause in the plan document. Plaintiff argued that the SPD had a clause that stated suit could be filed “in federal or state court” and that the SPD clause superseded the plan’s clause. The court disagreed.

    The question is thus whether it is reasonable to interpret the SPD clause to supersede the
    Plan’s FSC. The SPD clause appears in a section of the SPD entitled “Your Rights Under ERISA.” (SPD, Dkt. 5-1, at 27). That section contains a number of general statements, such as, “you are entitled to certain rights and protections under ERISA,” and “[t]he law provides that fiduciaries who violate ERISA may be removed.” (Id.). Under a subsection entitled, “Enforce Your Rights,” the SPD informs the insured that “ERISA specifically provides for circumstances under which you may take legal action,” such as:

    If your claim for benefits to the Claims Administrator or Plan Administrator (as
    applicable) is denied in full or in part, you have a right to know why this was done, to
    obtain copies of documents relating to the decision without charge, and to appeal
    any denial, all within certain time schedules. At the completion of that review
    process, you have a right to file suit in federal or state court.
    (Id. at 27–28).

    Phillips contends that this language constitutes “specific authority to file suit in federal or state court” that is “broadly conferred,” such that the insured has the authority to file suit in any federal court. (Resp. Mot. Leave, Dkt. 5, at 6). Phillips’ construction of the SPD clause, however, is not a reasonable one, as the context surrounding the clause resolves any ambiguity concerning its meaning. The “Your Rights Under ERISA” section is a disclosure statement that informs the insured in general terms about ERISA; it does not set forth contractual terms. The SPD clause, like the rest of the section in which it appears, is a generic statement about what “you” can do under ERISA. It would not appear to a person of average intelligence and experience that the clause confers forum-selection authority on the insured.1 Because it is unambiguously not a forum selection clause, it does not supersede the Plan’s FSC.
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