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Bad Plaintiff's Forum Selection Clause Case - E.D. Pa.

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  • Bad Plaintiff's Forum Selection Clause Case - E.D. Pa.

    Bad Plaintiff's Forum Selection Clause Case - E.D. Pa.

    Attached is a case out of the Eastern District of Pennsylvania, Robertson v. Pfizer Retirement Committee, et. al. The case is before the court regarding the validity of a forum selection clause in an ERISA governed plan document. Plaintiff's arguments include that the forum selection clause is inconsistent with ERISA's venue provision and that he did not agree to the forum selection clause being included in the plan document. In the end, the court agrees with defendant and transfers the litigation consistent with the forum selection clause.

    Plaintiff's argument that the forum-selection clause is inconsistent with the ERISA venue provision argument Plaintiff argues that the enforcement of the forum-selection clause in this cause would interfere with the Congressional intent for venue under § 1132(e)(2) of ERISA. Specifically, Plaintiff contends that because the ERISA venue provision is explicit and provides that an action "may be brought in the district where the plan is administered, where the breach took place, or where a defendant resides or may be found," a venue-selection clause provision is not allowed. Plaintiff further argues that venue is not appropriate in the Southern District of New York because the Plan was not administered there, the breach did not occur there, and Defendant PRC is principally located in New Jersey.6 Thus, allowing a transfer to the Southern District of New York would be incompatible with the venue provision of ERISA. Defendants disagree and argue that the venue provision of ERISA is permissive in nature, and that the forum-selection clause does not interfere with the venue provision of ERISA.

    The Third Circuit has not yet determined whether a forum-selection clause is incompatible with the ERISA venue provision of 29 U.S.C. § 1132(e)(2). See Mathias v. Caterpillar, 203 F. Supp. 3d 570, 578 (E.D. Pa. 2016). However, courts in this district have adopted the reasoning set forth in the Sixth Circuit's decision, Smith v. Aegon Companies Pension Plan, 769 F.3d 922 (6th Cir. 2014), which held that the language of 29 U.S.C. §1132(e)(2) is permissive, and a forum-selection clause can be upheld, "even if the venue selection clause laid venue outside of the three options provided by §1132 . . . ." Id. at 932. In Smith, the court explained that "if Congress had wanted to prevent private parties from waiving ERISA's venue provision, Congress could have specifically prohibited such action." Id. at 931. In Mathias v. Caterpillar, the Honorable Eduardo C. Robreno, expressly adopted the reasoning of Smith and held that because the ERISA's venue provision uses the language "may be brought," the venue provision does "not invalidate the [ERISA] plan's venue selection clause. . . ." 203 F. Supp. 3d at 578; see also In Re Mathias, 867 F.3d 727, 728 (7th Cir. 2017) (holding that § 1132(e)(2) is permissive and "does not preclude the parties from contractually channeling venue to a particular federal district."). Likewise, other courts within this Circuit have also adopted the persuasive reasoning set forth in Smith. See also Shah v. Wellmark Blue Cross Blue Shield, 2017 WL 1186341, at *2 (D.N.J. Mar. 30, 2017) (holding that a forum-selection clause does not infringe upon the public policy of ERISA); University Spine Center v. 1199SEIU Nat'l Benefit Fund, 2018 WL 1327109, at *2 (D.N.J. Mar. 15, 2018) (following the reasoning of Smith and Shah and holding the same).7

    This Court is guided and persuaded by the reasoning set forth in Smith and Mathias and, further, finds that §1132(e)(2) is permissive as to where an ERISA action "may be brought." 29 U.S.C. § 1132(e)(2). Since it is permissive, the venue provision of § 1132(e)(2) does not render invalid the Plan's forum-selection clause.8

    Agreement to and notice of the forum-selection clause

    Plaintiff contends that he did not agree to the forum-selection clause, which was added to the Plan in January 2016 and, further, that he did not receive proper notice of its implementation. Specifically, Plaintiff asserts that he was not aware that the Plan administrators were considering adding a forum-selection clause, that he "had no opportunity to be heard on the venue issue, no idea why the Southern District of New York was chosen, no opportunity to bargain about its selection and no opportunity to accept or reject this amendment to the Pension Plan." [ECF 15-1 at 4-5]. In response, Defendants argue that Plaintiff was put on sufficient notice of the amendment to the Plan which added the forum-selection clause because Plaintiff was properly notified consistent with the statutory requirements of ERISA; and that Plaintiff agreed to the forum-selection clause when he sought benefits under the Plan at the time of his retirement.

    Though Plaintiff argues that he did not have the opportunity to negotiate the addition of the forum-selection clause in the Plan or to be heard on the issue, extensive participation in negotiating a forum-selection clause is not necessary. See Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585, 591, 595 (1991) (holding a form contract on a cruise ticket that contained a forum-selection clause to be enforceable, although "it would be entirely unreasonable for us to assume that respondents--or any other cruise passenger--would negotiate with petitioner the terms of a forum-selection clause . . . ."); see also Danganan v. Guardian Protection Servs., 2015 WL 6103386, at *2, 4 (E.D. Pa. Oct. 16, 2015) (upholding the enforceability of a forum-selection clause even though the plaintiff did not have the chance to negotiate the terms of the clause). Further, as Plaintiff sought benefits under the terms of the Plan after the addition of the forum-selection clause, it is evident that the provisions within the Plan had been accepted by Plaintiff. See, e.g., Kemmerer v. ICI Americas Inc., 70 F.3d 281, 287 (3d Cir. 1995) (noting that a pension plan "constitutes an offer that the employee, by participating in the plan, electing a distributive scheme, and serving the employer for the requisite number of years, accepts by performance"); see also Mathias, 203 F. Supp. 3d at 576 (finding that "it was clear that acceptance of the benefits provided by [defendant] was conditioned upon the acceptance of the terms in the various plan documents," including a forum-selection clause).
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