ERISA – Where To Litigate The Case

ERISA cases are complicated, as any attorney handling ERISA cases can tell you.  This is exemplified in an April 2018, opinion from the U.S. District Court, Western Division, Austin Texas.  The opinion is styled, Kimberley Phillips v. Charter Communications, Inc. Welfare Benefit Plan.

Charter filed a motion to transfer the case to the District Court for the Eastern District of Missouri.  This court granted the motion.

This ERISA plan contains a forum-selection clause (FSC) that states, “any legal action to appeal a denial of claims for benefits shall be brought in a federal court sitting within the Eastern District of Missouri.  Charter argues that the FSC is valid and controlling, warranting transfer.  Phillips, meanwhile, argues that the controlling document to this dispute is the Summary Plan Description (SPD) for the Charter  Short-Term Disability Program ( STD Program), which is a component program of the Plan.  The SPD contains a clause that states, “at the completion of that review process, you have the right to file suit in federal or state court.”  Phillips argues that the SPD’s clause supersedes the Plan’s FSC and confers broad forum-selection authority upon Phillips.  In the alternative, Phillips argues that even if the Plan’s FSC is valid, the Court should refuse to apply it because doing so would be unfair.

The dispute over whether the SPD clause supersedes the Plan’s FSC requires the Court to interpret the SPD clause.  Because the SPD is a component of an ERISA–

regulated plan, interpreting the SPD clause is governed by federal law.

When construing ERISA plan provisions, courts are to give the language of an

insurance contract its ordinary and generally accepted meaning if such a meaning exists.

To do so, the Court interprets the contract language in an ordinary and popular sense as would a person of average intelligence and experience, such that the language is given its generally accepted meaning if there is one.  A provision is not ambiguous simply because of a “lack of clarity, or because the parties proffer different interpretations of the contract.”

The question is whether it is reasonable to interpret the SPD clause to supersede the Plan’s FSC.  The SPD clause appears in a section of the SPD entitled “Your Rights Under ERISA.”  That section contains a number of general statements, such as, “you are entitled to certain rights and protections under ERISA,” and “the law provides that fiduciaries who violate ERISA may be removed.”  Under a subsection entitled, “Enforce Your Rights,” the SPD informs the insured that “ERISA specifically provides for circumstances under which you may take legal action,” such as:
If your claim for benefit to the Claims Administrator or Plan Administrator is denied in full or in part, you have a right to know why this was done, to obtain copies of documents relating to the decision without charge, and to appeal any denial, all withing certain time schedules.  At the completion of that review process, you have a right to file suit in federal court or state court.
Phillips contends that this language constitutes “specific authority to file suit in federal or state court” that is “broadly conferred,” such that the insured has the authority to file suit in any federal court.
The Court did not agree that Phillips interpretation is a reasonable interpretation saying the clause would not appear to a person of average intelligence and experience as conferring forum-selection authority on the insured and thus, does not supersede the Plan’s FSC.