A federal district court in Illinois ruled that a plan’s forum selection was unenforceable because it conflicts with ERISA’s public policy of providing plaintiffs “ready access to the Federal courts.”

Darlene Harris purchased a life insurance policy for her husband and paid the required policy premiums until his death. When Harris sought the policy benefits, the administrator denied her claim and then she commenced a lawsuit in the Northern District of Illinois. Defendants moved to transfer the case to the Northern District of Texas on the ground that the plan’s forum selection clause provided that the “only proper venue for any person to bring a suit against the Plan or to recover Benefits shall be in federal court in Harris County, Texas.”

ERISA provides that an action “may be brought 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). Elsewhere, ERISA uses mandatory language when it takes away the parties’ freedom to contract for plan provisions. In the court’s view, even though there was no textual bar against enforcing plan venue provisions, this provision was susceptible to multiple interpretations and determined that the word “may,” as used in this context, could be read as either allowing a plaintiff to file suit in multiple districts or “as providing a right to ERISA plaintiffs to file their action in the most suitable of these locations.” The court thus looked to the policies underlying ERISA and identified ERISA’s public policy of providing plaintiffs “ready access to the Federal courts” as a guide for determining the enforceability of the forum section clause. Although the court admitted that it was adopting the minority view, the court held that, in its view, the most persuasive interpretation protects plaintiffs’ option of bringing suit in a convenient forum and determined that the forum selection clause was unenforceable.

In so ruling, the court observed that the Sixth and Eleventh Circuit appeared to have conflicting views of the meaning of “ready access to the Federal courts.” As the only circuit to date to rule on forum selection clauses for ERISA plans, the Sixth Circuit in Smith v. AEGON Cos. Pension Plan, 769 F.3d 922, 931-32 (6th Cir. 2014), interpreted “ready access” as being satisfied as long as the plaintiff was “provide[d] [a] venue in a federal court.” The Eleventh Circuit in Gulf Life Ins. Co. v. Arnold, 809 F.2d 1520, 1525 (11th Cir. 1987), however, opined in dictum that “ready access to the Federal courts” protects “plaintiffs[’] option of bringing suit in a convenient forum without forcing them to bear the heavy burden of showing that litigating elsewhere would literally foreclose any access to any federal court.”

Having determined the forum selection clause was unenforceable, the court applied a forum non conveniens analysis and found the most appropriate venue was the Southern District of Illinois because that is where Harris resided and where the alleged breach of the policy occurred.

The case is Harris v. BP Corp. N. Am. Inc., No. 15 C 10299, 2016 BL 221805 (N.D. Ill. July 08, 2016).