On January 17, 2017, the Supreme Court of the United States declined to decide the issue of whether forum selection clauses contained in ERISA benefit plans are enforceable when it denied Certiorari in Clause v. U.S. District Court for the Eastern District of Missouri, 2017 U.S. Dist. LEXIS 719 (Jan.17, 2017).
The Supreme Court's denial of Certiorari in Clause allows to stand an 8th Circuit decision upholding the enforceability of a forum selection clause contained in a benefit plan governed by ERISA which required the plan participant to litigate her claims in a particular forum. ERISA itself provides that a participant or beneficiary may bring a claim for benefits, “in the district where the plan is administered, where the breach took place, or where a defendant resides or may be found.” 29 U.S.C. § 1132(e)(2). Forum selection clauses in ERISA plans typically limit where such claims may be brought to where the plan is administered. Proponents of such clauses generally argue that limiting the forum in which a claim may be brought allows for some degree of uniformity in how claims will be handled, while opponents of such clauses generally state that they impose an increased burden on the claimant by requiring them to litigate in a distant forum.
While the only two U.S. appellate courts to rule on the issue of forum selection clause enforceability as it relates to ERISA benefit plans (i.e., the 6th and 8th Circuits) have upheld their validity, it is worth noting that several U.S. district courts within other circuits have found these clauses unenforceable (typically on grounds of public policy, as well as contradicting ERISA's own choice of forum clause contained at 29 U.S.C. § 1132(e)(2). Perhaps a split of opinion among the circuits is what the Supreme Court is looking for before it will decide to take on the issue itself; however, given the rising use of forum selection clauses in ERISA-governed benefit plans, it is likely only a matter of time before that occurs.
It must be remembered that denial of Certiorari by the Supreme Court is of no precedential value. Therefore, while forum selection clauses within ERISA-governed benefit plans may continue to be enforced in the 6th and 8th Circuits, other circuits are still free to adopt the opinion that such clauses are invalid and thus unenforceable. Check back periodically on our discussion page for continuing coverage of this issue as it becomes available.
If you have exhausted your internal administrative appeals and are filing or intend to file a claim for benefits in court under your benefit plan and your benefit plan contains a forum selection clause, contact us today for advice regarding your ability to file the claim in your forum of choice. Butterfield Schechter LLP is San Diego's largest law firm focusing its practice on ERISA and employee benefits law.
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