Lead Opinion
. This mandamus petition raises a question of first impression in this circuit: Does ERISA’s venue provision, 29 U.S.C. § 1132(e)(2), preclude enforcement of a forum-selection clause .in an employee-benefits plan? - George Mathias,.- the ■ plan beneficiary and mandamus petitioner here, argues that it does; the Secretary of Labor, as amicus curiae,, supports that interpretation. The respondent health plans argue that § 1132(e)(2) is permissive only and does not invalidate a forum-selection clause contained in plan documents.
Only one circuit has addressed this question. The Sixth Circuit has held that an ERISA plan’s forum-selection clause is enforceable even if it overrides the benefi-ciaras choice of a venue permitted by § 1132(e)(2). Smith v. Aegon Cos. Pension Plan,
I. Background
This case is in its early stages and the mandamus petition raises a single legal issue, so we can be brief about the factual and procedural background. From 1978 to 1997,- Mathias worked for Caterpillar, Inc., at its plant in York, Pennsylvania. In May 1997 he experienced serious health issues, and the Social Security Administration declared him disabled as of that date. Caterpillar covered his health insurance as an employee on long-term disability, billing him accordingly .for his portion of the premium. In September 2012 Mathias chose to retire retroactively, effective October 1,
Mathias sued Caterpillar and the relevant health plans in federal court in the Eastern District of Pennsylvania.
When the case arrived in the Central District, Mathias moved to transfer it back to Pennsylvania—either to the Eastern or Middle District
Mathias petitioned for mandamus relief in this court. He asks us to direct Judge Mihm to transfer the case to the Eastern or Middle District of Pennsylvania. Caterpillar has responded, and Mathias tendered a reply brief with a motion for leave to file it. We now grant that motion and accept the reply brief. In addition, we, invited the Secretary of Labor to file an amicus curiae brief. He-has done so and supports Mathias’s interpretation of § 1132(e)(2). The matter is ready for decision.
II. Analysis
We begin by noting that mandamus is the appropriate procedural method to obtain review of a district court’s decision on a § 1404(a) transfer motion. Without the availability of mandamus relief, the question of proper .venue escapes meaningful-appellate review. In re Hudson,
Mathias could have asked the Third Circuit for mandamus relief from Judge Ro-breno’s transfer order, but for reasons not clear to us, he waited to seek appellate review until after Judge Mihm denied his motion to send the case back to Pennsylvania. Appellate review would have - been more appropriate in the Third Circuit, where the transferor court sits. See ,15 Charles Alan Wright et al„ Federal Practice and Procedure § 3846 (4th ed. 2016). In considering Mathias’s motion to retransfer, Judge Mihm was bound by law-
Constrained by those principles, the motion was highly unlikely to succeed. Although a court may revisit a prior decision of its own or a coordinate court, it ordinarily should not do so “in the absence of extraordinary circumstances such as where the initial decision was ‘clearly erroneous and would work a manifest injustice.’ ” Christianson v. Colt Indus. Operating Corp.,
Unsurprisingly then, Mathias’s retrans-fer motion failed. Judge Mihm found no clear defect or manifest injustice in Judge Robreno’s ruling that the plan’s forum-selection clause is valid and enforceable. With no controlling Supreme Court or Seventh Circuit precedent, Judge Mihm quite reasonably deferred to Judge Robreno’s decision, which drew primarily on the Sixth Circuit’s opinion in Smith, the only appellate ruling on this subject. Judge Mihm also looked to a recent decision by a district judge in the Southern District of Illinois collecting district-court decisions on this issue, most of which follow Smith. Feather v. SSM Health Care,
Like Judge Robreno before him, Judge Mihm rejected Mathias’s argument that § 1132(e)(2) gives plan beneficiaries a statutory right to their choice of venue. He observed that forum-selection clauses are “not inconsistent with the purposes of ERISA generally or its venue statute in particular.” The judge went on to explain that a forum-selection clause like the one at issue here “allows a plaintiff access to federal courts when it provides for venue in a federal court” and “promotes other ERISA policies, including uniformity of administration and reducing costs, which benefit all participants and beneficiaries.”
Our review of Judge Mihm’s order necessarily incorporates the merits of Judge Robreno’s original transfer decision. Alexander v. Erie Ins. Exch.,
As in all mandamus proceedings, however, the party seeking mandamus in the transfer context “has an uphill fight”; the writ may be used to reverse a transfer decision “only if the applicant can show that the transfer order is a ‘violation of a clear and indisputable legal right, or, at the very least, is patently erroneous.’” Hudson,
The transfer statute provides: “For the convenience of parties and witnesses, in the interest of justice, a district court may-transfer any civil action to any other district or division where it might have been brought or to any district or division to which all parties have consented.” § 1404(a). The Supreme Court has recently reiterated that § 1404(a) is the proper “mechanism for enforcement of forum-selection clauses that point to a particular federal district.” Alt. Marine,
In the typical case not involving a forum-selection clause, a district court considering a § 1404(a) motion (or a forum non conveniens motion) must evaluate both the convenience of the parties and various public-interest considerations. Ordinarily, the district court would weigh the relevant factors and decide whether, on balance, a transfer would serve “the convenience of parties and witnesses” and otherwise promote “the interest of justice.” § 1404(a)
The calculus changes, however, when the parties’ contract contains a valid forum-selection clause, which “represents the parties’ agreement as to the most proper forum.” Stewart [Org., Inc. v. Ricoh Corp.,487 U.S. 22 , 81,108 S.Ct. 2239 ,101 L.Ed.2d 22 (1988) ]. The “enforcement of valid forum-selection clauses, bargained for by the parties, protects their legitimate expectations and furthers vital interests of the justice system.” Id. at 33,108 S.Ct. 2239 (Kennedy, J., concurring). For that reason, and because the overarching consideration under § 1404(a) is whether a transfer would promote “the interest of justice,” “a valid forum-selection clause [should be] given controlling weight in all but the most exceptional cases.” Id.
Atl. Marine,
Atlantic Marine clarified that “[t]he presence of a valid forum-selection clause requires district courts to adjust their usual § 1404(a) analysis in three ways. First, the plaintiffs choice of forum merits no weight.” Id. Second, and relatedly, “a court evaluating a defendant’s § 1404(a) motion to transfer based on a forum-selection clause should not consider arguments about the parties’ private interests.” Id. at 582. The Court explained that a contractual forum-selection clause is an agreed-upon predispute allocation of the plaintiffs “venue privilege” and the parties’ respective private interests. Id. at 581-82. Accordingly, to resolve a transfer motion in this context, “a district court may consider arguments about public-interest factors only.” Id. at 582. And because public-interest factors will “rarely-defeat” a transfer to the contractually chosen forum, “the practical result is that forum-selection clauses should control except in unusual cases.” Id.
Although ERISA plans are a special kind of contract and courts are attentive to the statutory goal of protecting beneficiaries, an ERISA plan is nonetheless a contract. Larson v. United Healthcare Ins. Co.,
What all this means for the present dispute is that the forum-selection clause in the Caterpillar plan is controlling unless ERISA invalidates it. The relevant part of ERISA’s venue provision states:
Where an action under this subchapter is brought in a district court of the United States, it 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, and process may be served in any other district where a defendant resides or may be found.
§ 1132(e)(2) (emphasis added). Nothing in this text expressly invalidates forum-selection clauses in employee-benefits plans.
Mathias argues that ERISA’s broad beneficiary-protection, purpose requires us to read this language as conferring on plan beneficiaries a statutory right to choose any of the listed venues without regard to a forum-selection clause contained in the governing plan documents. This beneficiary right of venue choice, the argument goes, maximizes ERISA’s goal of “protect[ing] ... the interests of participants ... by providing ... ready access to the Federal courts.” 29 U.S.C. § 1001(b). With support from the Secretary of Labor, Mathias argues that forum-selection clauses in plan documents are categorically invalid because they deprive plan participants and beneficiaries of the right to select from the menu of ■ venue options offered by § 1132(e)(2).
The Sixth Circuit has carefully considered and rejected this interpretation of ERISA’s venue provision. Smith,
The Sixth Circuit also explained that forum-selection clauses channeling litigation to a particular federal court preserve ready access to federal court, consistent with the general policy expressed in § 1001(b). Id. at 931. Finally, the court observed that plan language limiting litigation to a single federal district promotes uniformity in decisions interpreting the plan, thus reducing administrative costs for plan sponsors and beneficiaries alike.
Though Smith was not unanimous, see id. at 934-36 (Clay, J. dissenting), we find the majority’s reasoning convincing. The Sixth Circuit’s analysis is faithful to the statutory text and’ not inconsistent with the broader statutory policy of maintaining access to federal court. Moreover, the forum-selection clause in the Caterpillar plan funnels litigation to a venue listed in
In support of their position, Mathias and the Secretary direct us to an obscure decision of the Supreme Court: In Boyd v. Grand Trunk Western Railroad Co.,
In a brief per curiam opinion, the Court invalidated the stipulated forum clause, noting that the agreements were signed after the employee was injured and limited fora otherwise available under FELA. Id. at 265-66,
Boyd is a bit of a relic, but it has not been overruled. Mathias and the Secretaiy urge us to give it controlling force here. We’re not inclined to extend Boyd to modern forum-clause jurisprudence. Boyd was decided in an era of marked judicial suspicion of contractual forum selection. The Court has since adopted “a more hospitable attitude toward forum-selection clauses.” M/S Bremen v. Zapata Off-Shore Co.,
More to the point here, Boyd sheds no light on the proper interpretation of ERISA’s venue provision. As we’ve explained, nothing in the text of § 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. “ERISA represents a ‘careful balancing’ between ensuring fair and prompt enforcement of rights under a plan and .the encouragement of the creation of .such plans.” Fifth Third Bancorp v. Dudenhoeffer, — U.S. -,
The forum-selection 'clause in the Caterpillar plan chooses from among the venue options listed in § 1132(e)(2), and nothing
Notes
. The company maintains several health plans covering active and retired employees.
. Mathias lives in the Middle District of Pennsylvania. Caterpillar’s York plant, where he worked, is also located there. Caterpillar has dealerships in the Eastern District of Pennsylvania.
. The Sixth Circuit declined to defer to the views of the Secretary of Labor. See Smith v. Aegon Cos. Pension Plan,
. The Eighth Circuit recently considered' a very similar petition for a writ of mandamus in which the petitioner argued that a contractual forum-selection clause was invalid under ERISA’s venue provision and sought retrans-fer of the case. In re Clause, No. 16-2607 (8th Cir. Sept. 27, 2016), cert. denied,
Dissenting Opinion
dissenting.
My esteemed colleagues have voted to deny the petition. Their opinion, as well as the thoughtful opinions of other courts that have taken that position, demonstrate that their view is a very defensible perspective on a very difficult issue.
Mr. Mathias admittedly has to face an array of general principles that militate against acceptance of his position. First, although federal law once disfavored forum selection clauses, after the Supreme Court’s decision in The Bremen v. Zapata Off-Shore Co.,
In the face of these general principles, Mr. Mathias, along with the Secretary of Labor, contend that the forum selection clause in this case is invalid, and that therefore the district court should have employed the traditional 1404(a) inquiry without any reference to the forum selection clause in the plan documents. Their core contention is that forum selection clauses in ERISA plan documents cannot narrow the venues available to a plaintiff so as to exclude a venue specifically authorized by the ERISA venue provision. That provision states that a challenge under the relevant subchapter of ERISA “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, and process may be served in any other district where a defendant resides or may be found.” 29 U.S.C. § 1132(e)(2). The Secretary views this provision as intentionally protective of the ERISA beneficiary. It ensures that the beneficiary has recourse to the federal court at a place near where the benefit was due. While he acknowledges that fiduciaries must “discharge ,.. duties ... in accordance with the documents and instruments governing the plan insofar as such doeuments and instruments are consistent with the provisions of’ the statute, id. § 1104(a)(1), he points out that the statute ought to be read “to protect ... the interests of participants in employee benefit plans ... by providing for appropriate remedies, sanctions, and ready access to the Federal courts,” id. § 1001(b). Therefore, he argues, the special venue provisions cannot be cancelled out by agreement between the employer and the plan.
I think there is merit in the Secretary’s view. Certainly, the Supreme Court’s cases have sanctioned the widespread use of forum selection clauses. But, as the Supreme Court has made clear, “[a] contractual choice-of-forum clause should be held unenforceable if enforcement would contravene a strong public policy of the forum in which suit is brought, whether declared by statute or by judicial decision.” The Bremen,
entitled “Protection of Employee Benefit Rights[,]” sets forth the Congressional findings and contains a declaration of policy. 29 U.S.C. § 1001. In enacting*736 ERISA, Congress found that the “continued well-being and security of millions of employees and their dependents are directly affected by [employee benefit plans].” Id. § 1001(a). Congress further declared that a policy of ERISA was “to protect ... the interests of participants in employee benefit plans and their beneficiaries ... by providing for appropriate remedies, sanctions, and ready access to the Federal Courts.” Id. § 1001(b) (emphasis added).
Dumont,
As Judge Torresen notes,' an ERISA plan beneficiary is in a unique and difficult position with respect to a forum selection clause embedded in the plan documents. An ERISA beneficiary has no role in the negotiation or even the acceptance of the plan'terms. Unlike the plaintiffs in cases like Shute, who chose to enter a contract as a party, even though they did not negotiate the terms in an arms-length transaction, an ERISA beneficiary is, as a practical matter, simply a beneficiary of an agreement that other parties have negotiated and accepted.
Although I reach this result on the basis of my own interpretation of the statute, I hasten to add that I also am persuaded that the Secretary’s interpretation is indeed entitled to respect. Adthough “[c]er-tain aspects of statutory interpretation remain within the purview of the courts” rather than “properly understood as delegated by Congress to an expert and accountable administrative body,” Negusie v. Holder,
Accordingly, I respectfully part company with my esteemed colleagues. In my view, the forum selection clause at issue is invalid and unenforceable because it is inconsistent with the forum selection rights protected by § 1132.1 therefore conclude that mandamus relief is appropriate in the
. As my colleagues have noted, the question presented here has been presented previously in many district courts throughout the country, and the majority have determined that forum selection clauses are not inconsistent with ERISA. Among our sister circuits, only the Sixth has considered the' question. In Smith v. Aegon Cos. Pension Plan,
Judge Clay dissented. He concluded that the public policy embodied in ERISA was designed to protect the interests of plan participants and the statute explicitly set forth as an enacted purpose to remove jurisdictional and procedural obstacles. Id. at 935-36 (Clay, J., dissenting). He wrote that the broad venue provision
is indispensable for many of those individuals whose rights ERISA seeks to protect, since claimants in suits for plan benefits—retirees on a limited budget, sick or disabled workers, widows and other dependents—are often the most vulnerable individuals in our society, and are the least likely to have the financial or other wherewithal to litigate in a distant venue.
Id. at 935.
. Mr. Mathias, a resident of Hanover, Pennsylvania, employed by Caterpillar most recently in York, Pennsylvania, brought this action against his employer and the relevant plans in the Eastern District of Pennsylvania. Both of these cities are within the confínes of the Middle District of Pennsylvania. Mr. Mathias claimed venue was proper in the Eastern District under the clause of the ERISA venue provision allowing an action "where a defendant resides or may be found,” 29 U.S.C. § 1132(e)(2), citing Caterpillar's distributorships throughout the Eastern District. See R.7-3 at 1-2.