“And if the Wind is Right You Can Sail Away and Find Tranquility…” – Unless You Are Forced to Litigate in an Unwanted Forum!

This is the first post by PLUS Blog contributor José M. Jara, a partner at FisherBroyles, LLP. Mr. Jara has over 20 years of ERISA and employee benefits law experience. In the field of employee benefits law, he provides innovative solutions to his clients by incorporating into his guidance a business and practical perspective.  In addition, he understands the triad relationship between the law firm, the client, and the insurance carrier and in litigation matters manages the relationships to produce optimal results for the trio involved.  He has also acted as monitoring counsel and coverage counsel.  


sunset_sailingOver 20 years ago the Supreme Court found that, even though there was unequal bargaining power between the parties, a forum selection clause on cruise tickets was reasonable and valid, requiring a couple from Washington State to litigate in Florida personal injuries sustained on a cruise from L.A. to Mexico. Carnival Cruise Lines, Inc., v. Shute, 499 U.S. 585, 111 S.Ct. 1522, 113 L.Ed. 2d 622 (1991). Recently, a court has held that a forum selection clause added to the company’s retirement plans was invalid because, unlike the plaintiffs in Carnival Cruise Lines — who could have chosen another cruise line for their travels — in this case the plaintiff could not simply have chosen to work for another employer. Dumont v. PepsiCo, Inc., 2016 U.S. Dist. LEXIS 84853 (D. ME., June 29, 2016).

In reaching its decision, the court in Dumont focused on the fact that the plaintiff had worked 31 years for the company, was already vested in his retirement benefits, did not negotiate the terms of the plans, and did not sign off on any clauses in the plans. Thus, when the plan sponsor amended the plans in 2011 to include a forum selection clause, the plaintiff at that time “could [not] have walked away with impunity if [he] did not want to be bound by the forum selection clause.” Dumont, at *13.

In providing broad access to the federal courts, ERISA’s venue provision provides that an action “may be brought in the district (1) where the plan is administered, (2) where the breach took place, or (3) where a defendant resides or may be found. ERISA 502(e)(2). The Court in Dumont noted that the clause “where the breach took place” has been interpreted to mean “where benefit payments are received” and, thus, allowed the plaintiff to keep his claim in Maine.

As with most areas of ERISA, the case law is not settled. In another recent case, a court ruled that ERISA forum selection clauses are not per se invalid and transferred the case to the court designated in the forum selection clause.  Malagoli v. AXA Equitable Life Ins. Co., 2016 U.S. Dist. LEXIS 39112 (S.D.N.Y. Mar. 24, 2016). Yet, in another recent case, a court “decline[d] to endorse the legal fiction that all the terms of ERISA plans are freely negotiated ….” Harris v. BP Corp. N. Am., 2016 U.S. Dist. LEXIS 89593, at *23 (N.D. Ill., July 8, 2016). In doing so, the Court found the forum selection clause unenforceable because, while the language of ERISA 502(e)(2) is ambiguous, ERISA’s overriding purpose of guaranteeing participants ready access to federal courts and legislative history is not. Id. at *25-26.

More often than not, the choice of forum matters. In ERISA cases, it appears that while judges are not against forum selection clauses in ERISA plan documents per se, plan sponsors should nonetheless review their plan documents to assess whether the forum selection clause bears a reasonable relationship to the plan and its participants.

– José M. Jara

2016 Southern Cal Golf Outing

On August 8, 2016, the Southern California PLUS Chapter hosted its annual golf event at the Mountaingate Country Club to raise funds for the PLUS Foundation.  The event was well attended with over 60 golfers and several volunteers from the Chapter.  The first place group included: Nick Johndrow, Brad Hering, Steve Wunderling and Steven Smith.  Congratulations to the winners!

A special thanks again to the Event Sponsor – CRC Insurance Services, Inc. – as well as all of the other sponsors and golfers who made the event possible.  Your commitment to supporting the Chapter and raising funds for the PLUS Foundation are greatly appreciated.

Eastern Chapter Golf 2016

Thunderstorms threatened to ruin the day, but it ended up just being overcast for the 2016 PLUS Eastern Chapter Golf Outing. There was a fantastic turn-out, with 148 registered golfers. The tournament raised over $29,000 for the PLUS Foundation –a record fundraising amount for East Golf since prior to 2010!

We want to give a special thank you to our Golf Chairs: Louigi Spadafora, Christine DeFelice, Chris Alfieri, and Michael Cavallaro, Chapter Chair, as well as the entire Committee.  Also, a special thank you to the following East Golf Tournament Sponsors for supporting the PLUS Foundation!

Photography Sponsor
Markel Global

Beverage Sponsor
Skarzynski Black LLC

Single Hole Sponsors
Allianz
Argo Pro
AXIS
Beazley Group
Endurance Re
Gordon & Rees LLP
Hiscox USA
Lewis Brisbois Bisgaard & Smith LLP
PL Risk
The Hartford
Traub Lieberman Straus & Shrewsberry LLP
Winget Spadafora & Schwartzberg LLP