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Northwest OH Legal Blog

Tuesday, October 3, 2017

Federal Appellate Court Enforces Plan Clause Restricting Venue for Lawsuits against Plan

The United States Court of Appeals for the Seventh Circuit, which consists of federal courts in Illinois, Indiana, and Wisconsin, has determined that the Employee Retirement Income Security Act of 1974 (“ERISA”) does not preclude a plan document from designating the venue for lawsuits against the plan. 

Background.  In the legal context, the word “venue” is defined as the place where a court is located.  ERISA’s venue provision allows a lawsuit to be filed in the federal district court where—

  • the plan is administered,
  • the breach took place, or
  • the party being sued resides or may be found.

Facts.  In In re Mathias, 2017 WL 3431723 (7th Cir. 2017), a participant in a long-term disability plan sued his employer and the plan for wrongful termination of benefits. Despite the plan document’s “forum selection” clause stating that lawsuits could be brought only in an Illinois federal court, the participant filed his lawsuit in a federal court in Pennsylvania, where he lived and worked. The company argued that the forum selection clause required the case to be transferred to Illinois, and the courts in both states agreed to the transfer.  The participant then appealed to the United States Court of Appeals for the Seventh Circuit, arguing that the plan’s requirement to file suit in Illinois was invalid in light of ERISA’s broader venue provision and that the Seventh Circuit should order the case returned to the Pennsylvania court.

Appellate Court Ruling.  Concluding that the plan’s forum selection clause was based on the venue options listed in ERISA, the Seventh Circuit held that the plan’s Illinois-only venue requirement was enforceable and denied the participant’s request to transfer the case back to the Pennsylvania federal court.  The court rejected the argument made by the United States Department of Labor (“DOL”) in its brief supporting the participant’s position that forum selection clauses in ERISA plan documents are “categorically invalid.”  In its brief, the DOL contended that ERISA’s venue provision is intentionally protective of ERISA participants and beneficiaries, ensuring that legal recourse can be sought in a location that is near the place where the benefit was due.  Based on this reading of ERISA, the DOL argued that because forum selection clauses deprive plan participants and beneficiaries of the right to select a venue specifically authorized by ERISA, such clauses contravene ERISA.  The Seventh Circuit, however, was persuaded by the reasoning in a Sixth Circuit case that forum selection clauses are consistent with the broader statutory goals of ERISA in that they promote uniformity in plan administration and reduce administrative costs.

Takeaway.  The appellate court’s ruling in In re Mathias indicates that at least some federal courts are disinclined to give an expansive interpretation to ERISA’s venue provision.  Rather, the courts are more inclined to view forum selection clauses as consistent with ERISA’s broader statutory goals of promoting uniformity in plan administration and reducing administrative costs.

If you have any questions or concerns regarding this communication, please do not hesitate to call Allotta | Farley Co., LPA at (419) 535-0075 or email megarner@allottafarley.com.


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With an office located in Toledo , OH Allotta Farley Co., L.P.A. serves clients throughout northwest OH with various legal matters. Areas of service include Allen County, Ashland County, Auglaize County, Crawford County, Defiance County, Erie County, Fulton County, Hancock County, Hardin County, Henry County, Huron County, Lucas County, Marion County, Mercer County, Morrow County, Ottawa County, Paulding County, Putnam County, Richland County, Sandusky County, Seneca County, Van Wert County, Williams County, Wood County, Wyandot County.

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