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Sixth Circuit Upholds Forum Selection Clause in ERISA Plan

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December 4, 2014

The Sixth Circuit Court of Appeals recently upheld a provision in an ERISA plan document in Smith v. Aegon Companies Pension Plan, No. 13-5492 (6th Cir. Oct. 14, 2014) that restricts the venue in which a plan participant may bring a claim. In Smith, the Sixth Circuit upheld a venue selection provision which limited participant litigation to a federal court where the plan was located, in this case in Cedar Rapids, Iowa.

The Department of Labor argued in its amicus brief that these forum choice provisions in plan documents are incompatible with ERISA, which is intended to permit broad access to the federal courts. Ultimately, the Sixth Circuit issued an employer-friendly ruling by reasoning that these forum choice provisions promote administrative uniformity that would be undermined if plans were required to defend legal actions in different states and different federal courts. The Sixth Circuit’s decision is consistent with the prevailing view in the federal district courts which, subject to certain limitations, permit these provisions in plan documents. Notably, however, some federal district courts, including one in the Seventh Circuit, have not clearly held that forum selection clauses comply with ERISA.

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