Venue and Forum Issues in ERISA Benefits Litigation

By: Jeremy L. Bordelon

A plaintiff’s attorney in an ERISA benefits case usually has several different options available in which to file his or her case. While the process of making that choice is often given the much- maligned title of “forum shopping,” it remains a perfectly legal and necessary choice that attorneys have to make for their clients. How to make that choice, and what to do if one’s first choice is challenged, are the subjects of this article.

The venue rules in ERISA cases are quite broad, consistent with Congress’s intent in enacting the law “to remove jurisdictional obstacles which in the past appear to have hampered effective enforcement of fiduciary responsibilities….” 1 Two statutes speak to venue in ERISA cases. First, there is 28 U.S.C. § 1391(b), which describes general venue provisions for a federal question case. 2 Second, and more importantly, there is the ERISA statute’s own jurisdiction and venue statement, 29 U.S.C. § 1132(e), ERISA § 502(e), which states that benefits actions may be brought in federal court for the district:

where the plan is administered,
where the breach took place, or
where a defendant resides or may be found.

Id., § 1132(e)(2). “Where the plan is administered” is usually read to mean the plan administrator’s address, listed in the plan documents. 3 “Where the breach took place” is also subject to interpretation, but is most commonly read as the place where the claimant was to receive the denied benefits – usually, his home district. 4 However, a minority of courts have interpreted this clause to include the district from which the denial itself was issued. 5 Finally, and broadest, is the option to file “where a defendant … may be found.” In most ERISA benefits cases today, at least one of the defendants will likely be a nationally operating insurance company, such as Unum, Hartford, MetLife, or Cigna. Because these companies operate nearly everywhere in one name or another, they may be “found” there.

So establishing proper venue, at least in most ERISA cases, is easy. Unfortunately, that means it is also easy to identify several alternative proper venues if your opponent (or the court sua sponte) seeks to transfer the case elsewhere. This leads to a question of convenience to the parties and witnesses under the federal venue transfer statute, 28 U.S.C. § 1404(a).

Pursuant to 28 U.S.C. § 1404(a), courts have broad discretionary powers to transfer civil actions. The statute, in relevant part, 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.” While courts can, and sometimes do, transfer cases sua sponte with no warning, they will usually inform the parties of their concerns and give them an opportunity to be heard on the matter. 7 If it is one of the parties requesting transfer, the moving party bears the burden of demonstrating by a preponderance of the evidence that, “in light of these factors, ‘fairness and practicality strongly favor the forum to which transfer is sought.’”

In a typical ERISA benefits case, no trial will be held, so the convenience to the parties themselves is largely irrelevant. It is quite common for none of the parties to ever see the inside of a courtroom, no matter where the case is decided. This leaves the convenience to witnesses, and the convenience of discovery generally, as the sole remaining questions. If a case was not brought in the plaintiff’s home district for some reason, that is often one of the first alternatives for where it should be transferred if that question arises. However, transferring to the plaintiff’s home district makes perhaps the least amount of sense in an ERISA benefits case.

In cases concerning a denied claim for ERISA welfare benefits, the court’s review is generally limited to the ERISA Record, which is largely and often entirely comprised of the insurer’s claim file. 9 Any discovery beyond that administrative record may be had “only if that evidence is offered in support of a procedural challenge to the administrator’s decision, such as an alleged lack of due process afforded by the administrator or alleged bias on its part.” 10 For the most part, when any discovery occurs in ERISA cases at all, it is the defendant answering questions on these topics posed by the plaintiff. If any witnesses are deposed, they are typically employees of the insurer, answering questions regarding potential bias or lack of due process. The plaintiff does not typically testify in these cases, nor do her doctors or employer. All of the evidence regarding those issues which will be before the court in deciding these cases is already contained in the claim file.

A “fundamental principle” that should guide a court’s analysis is “that litigation should proceed in that place where the case finds its center of gravity.” 11 However, a plaintiff’s choice of forum “is entitled to some deference, and perhaps even ‘greater deference’ when a claim involves ERISA.” 12 Even the physical location of discoverable documentary evidence is of limited importance now, since “[i]n the modern era of photocopying, scanning, fax machines, email, overnight delivery services, etc., the location of documents should be considered a neutral factor when deciding to transfer venue under § 1404(a).”
Because venue is technically proper nearly everywhere in ERISA benefits cases, and because the plaintiff’s choice of forum is such a powerful factor, it may be helpful to present an alternative suggestion when responding to a motion to transfer venue. For example, if you have filed in District A, and defendant moves to transfer to District B, instead of focusing solely on why the case should remain in District A, think about what the “next best thing” is in the case from your own perspective. Federal Judges are busy people, and an opportunity to transfer a case from their often-overloaded dockets may be a tempting prospect. If you only argue that the case should stay put, and the judge decides to transfer, it will likely be to the defendant’s suggested district. Assuming up front that the judge might want to transfer the case, where do YOU think he or she should send it? In the end, the case may stay where you filed it, or it may be transferred, but if it is, it may be transferred to your “second choice” venue, which may still be vastly better than where the Defendant wanted to take the case.

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