A federal district court in the Eastern District of Pennsylvania transferred an ERISA lawsuit against Caterpillar Inc. to the Northern District of Illinois after finding the forum selection clause contained in the governing plan was valid and enforceable. In so ruling, the court deepened an already existing split among district courts as to the enforceability of these provisions. In September 2012, Plaintiff George Mathias, who lived in Hanover, Pennsylvania, retroactively retired from Caterpillar effective October 1, 2009 after having been on long-term disability for many years. Due to an administrative error, Mathias’ retroactive retirement was not processed correctly and for several years he was undercharged for his long-term disability insurance premiums as an incorrectly classified active employee. After Caterpillar corrected the error, Mathias was sent a bill for the difference in the premium amounts he paid and the premium amounts owed as a retired participant. Mathias failed to pay the balance and his benefits were terminated. He subsequently filed suit in the Eastern District of Pennsylvania, seeking reinstatement of his health insurance benefits among other things. Caterpillar moved to transfer the case on the ground that the plan’s forum selection clause requires actions seeking to recover plan benefits or to enforce a participant’s rights under ERISA be brought in the Northern District of Illinois. The court determined that the forum selection clause was valid and enforceable because: (1) the clause was fundamentally fair and enforceable due to Mathias’ voluntary acceptance of the offered benefits and having been on notice that the plan contained the venue selection clause; and (2) no extraordinary circumstances existed militating against the clause’s enforcement. The court also observed that forum selection clauses further ERISA’s goal of promoting a uniform administrative scheme by having the same court decide all cases relating to a single plan, and also found Mathias’ claim of physical and financial limitations irrelevant to its analysis. The court recognized that its holding was at odds with rulings in other courts that forum selection clauses in ERISA plans are unenforceable because they improperly restrict “ready access to the Federal courts” by limiting venue options available to litigants. In rejecting these rulings, the court concluded that ERISA’s policy that litigants have “ready access to the Federal courts” was not intended to supersede the general enforceability of forum selection clauses. Thus, a plan may contractually limit the number of locations where an action “may be brought.”
The case is Mathias v. Caterpillar, Inc., No. 16-1846, 2016 BL 281011 (E.D. Pa. Aug. 29, 2016).