Yesterday the United States Supreme Court allowed a Seventh Circuit decision to remain in effect that determined that a forum choice provision in an ERISA plan is enforceable, despite ERISA’s statement that suits “may be brought” in courts tied to the plan or plan beneficiary.

Here’s the case of George W. Mathias, Petitioner v. United States District Court for the Central District of Illinois, et al., 867 F. 3d 727 (7th Cir. 2016), pet. for review denied (January 16, 2017).

FACTS. Mathias worked for decades for Caterpillar in Pennsylvania and brought suit in the Eastern District of Pennsylvania when his ERISA-governed long term disability benefits were denied. The Caterpillar ERISA plan, however, required that suit be filed in the Central District of Illinois. Caterpillar sought transfer of the case to Illinois relying on this forum selection clause. When the Illinois judge denied Mathias’ motion to transfer the case back to Pennsylvania Mathias filed a writ of mandamus with the Seventh Circuit. The Seventh Circuit determined the forum selection clause in Caterpillar’s plan, that required all suits be filed before the Central District of Illinois, was valid and enforceable.

Mathias then petitioned the United States Supreme Court to review whether a contractual forum-selection clause that appears to override ERISA’s venue provision was valid and enforceable.

United States Supreme Court:  Allowed the Seventh Circuit decision to remain in effect when the petition for review was denied.

Rationale of the Seventh Circuit Decision (attached):

  1. Like the Sixth Circuit, the Seventh Circuit concluded the forum selection provision is enforceable.  Op. at 11.
  2. A “contractual choice of forum is now considered controlling ‘except in unusual cases.’ Op. at 12.
  3. Nothing in the text of [ERISA section 1132(e)(2)] precludes the parties from contractually channeling litigation to a particular federal district. Nor is contractual forum selection incompatible with ERISA’s policy goals more generally.” Op. at 12-13.

What this means for ERISA plans

In the Sixth and Seventh Circuit, ERISA plan venue provisions will likely be enforced if challenged in a litigated benefits dispute. Both decisions, however, involved dissenting opinions. Expect that other appellate courts could go the other way, and the Department of Labor historically has challenged the validity of forum selection clauses.