Feather v. SSM Health Care

• Decision Date: 25 October 2016
• Docket Number: Case No. 16–CV–393–NJR–SCW
• Parties: Lisa FEATHER, on behalf of herself, individually, and on behalf of all others similarly situated, and on behalf of the SSM Plan, Plaintiff, v. SSM HEALTH CARE, Pension Committee for the Retirement Plan for SSM Employees, John and Jane Does 1–40, Members of the Pension Committee for the Retirement Plan for SSM Employees, and John and Jane Does 21–40, Defendants.
• Court: U.S. District Court — Southern District of Illinois

216 F.Supp.3d 934

Lisa FEATHER, on behalf of herself, individually, and on behalf of all others similarly situated, and on behalf of the SSM Plan, Plaintiff,

v.SSM HEALTH CARE, Pension Committee for the Retirement Plan for SSM Employees, John and Jane Does 1–40, Members of the Pension Committee for the Retirement Plan for SSM Employees, and John and Jane Does 21–40, Defendants.

Case No. 16–CV–393–NJR–SCW

United States District Court, S.D. Illinois.

Signed October 25, 2016

Douglas P. Needham, Mark P. Kindall, Robert A. Izard, Izard Nobel LLP, West Hartford, CT, Edward W. Ciolko, Julie Siebert–Johnson, Mark K. Gyandoh, Kessler Topaz Meltzer & Check, LLP, Radnor, PA, Jamie Leigh Bowers, Julie G. Reiser, Karen Handorf, Michelle C. Yau, Mary Joanne Bortscheller, Cohen, Milstein, Sellers & Toll, PLLC, Washington, DC, Laura R. Gerber, Lynn Lincoln Sarko, Keller Rohrback, LLP, Seattle, WA, Ron Kilgard, Keller Rohrback, LLP, Phoenix, AZ, Matthew H. Armstrong, Armstrong Law Firm LLC, St. Louis, MO, for Plaintiff.

Amy L. Blaisdell, Daniel J. Schwartz, Heather M. Mehta, Greensfelder, Hemker & Gale, PC, St. Louis, MO, Russell K. Scott, Greensfelder, Hemker & Gale PC, Swansea, IL, for Defendants.

MEMORANDUM AND ORDER

ROSENSTENGEL, District Judge:

This matter is currently before the Court on a motion to transfer venue filed by Defendants (Doc. 33). Defendants also filed a motion asking the Court to schedule oral arguments on their motion to transfer (Doc. 34). The Court feels, however, that oral arguments are not necessary; the transfer request can be resolved based on the papers already filed by the parties. Consequently, the motion for oral argument is denied. And, for the reasons explained below, the motion to transfer venue is granted.

BACKGROUND ¹

Defendant SSM Health Care ("SSM") is a non-profit corporation that operates a variety of healthcare facilities and employs over 31,000 people across Missouri, Illinois, Wisconsin, and Oklahoma. SSM sponsors three non-contributor defined benefit pension plans that cover substantially all of its employees: the Retirement Plan for Employees of SSM Health Care; the Retirement Plan for Employees of Certain Illinois Entities Related to SSM Health Care; and the Retirement Plan for Employees of St. Mary's Hospital Centralia, Illinois (collectively, the "pension plans").

Plaintiff Lisa Feather was employed for nearly thirty years by SSM at Good Samaritan Hospital in Mount Vernon, Illinois, and is a vested participant in SSM's pension plans. She filed this putative class action in April 2016 on behalf of herself and all other similarly situated participants in the pension plans under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq. She alleges that SSM erroneously and wrongfully designated its pension plans as "church plans" that did not need to comply with the requirements of ERISA. Feather further alleges that SSM violated numerous ERISA requirements, including failing to provide plan participants with summary plan descriptions and pension benefits statements and failing to file annual reports with the Secretary of Labor. Most seriously, she claims that SSM underfunded the pension plans by at least $700 million.

In response to the complaint, Defendants filed a motion to transfer venue pursuant to 28 U.S.C. § 1404(a) (Doc. 33). They argue that this case should be transferred to the United States District Court for the Eastern District of Missouri because each of the pension plans contains a mandatory forum selection clause requiring any and all actions relating to or arising under the plans to be brought and resolved in that venue (Doc. 33). Feather opposes the motion to transfer, arguing that the forum selection clauses are unreasonable and inconsistent with ERISA (Doc. 39).

The forum selection clauses at issue each state the following:

Governing Law, Venue Selection. The Plan and the Trust shall be construed, enforced, and administered and their validity determined in accordance with the laws of the State of Missouri except as preempted by federal law. Any action by any Plan Participant, Beneficiary, or Alternate Payee relating to or arising under the Plan shall be brought and resolved only in the state courts in St. Louis County, Missouri, or the U.S. District Court for the Eastern District of Missouri. These state or federal courts shall have personal jurisdiction over any party to an action relating to or arising under the Plan. Each party shall be responsible for paying its own attorney's fees.

(Doc. 33–1, p. 79; Doc. 33–2, p. 76; Doc. 33–3, p. 84).

DISCUSSION

The proper mechanism for enforcing a forum selection clause that points to a particular federal district court is a motion to transfer under 28 U.S.C. § 1404(a). Atl. Marine Const. Co. v. U.S. Dist. Court for W. Dist. of Texas , ––– U.S. ––––, 134 S.Ct. 568, 579–80, 187 L.Ed.2d 487 (2013) ; Stewart Org., Inc. v. Ricoh Corp. , 487 U.S. 22, 28–29, 108 S.Ct. 2239, 101 L.Ed.2d 22 (1988). Section 1404(a) provides that "[f]or 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 or to any district or division to which all parties have consented." 28 U.S.C. § 1404(a). In the typical case not involving a forum-selection clause, a district court considering a § 1404(a)motion must conduct a "flexible and individualized analysis" that considers and balances the plaintiff's choice of forum and private-interest factors, such as convenience to the parties and witnesses, with public-interest factors, such as efficient administration of the court system and the relationship of each community to the controversy. Atl. Marine , 134 S.Ct. at 581 ; Research Automation, Inc. v. Schrader–Bridgeport Int'l, Inc. , 626 F.3d 973, 977 (7th Cir. 2010).² The party seeking transfer ultimately bears the burden of proving that the transfer is warranted. E.g., New York Marine & Gen. Ins. Co. v. Lafarge N. Am., Inc. , 599 F.3d 102, 114 (2d Cir. 2010) ; Coady v. Ashcraft & Gerel , 223 F.3d 1, 11 (1st Cir. 2000).

However, "the calculus changes" when a motion to transfer is premised on the enforcement of a valid forum-selection clause. Atl. Marine , 134 S.Ct. at 581. "The plaintiff's choice of forum merits no weight," and "the plaintiff must bear the burden of showing why the court should not transfer the case to the forum to which the parties agreed." Atl. Marine , 134 S.Ct. at 581. Additionally, the district court cannot weight the parties' private interests, but must deem such interests to "weigh entirely in favor of the preselected forum." Atl. Marine , 134 S.Ct. at 582. The court may only consider public interests, and "[b]ecause public-interest factors will rarely defeat a transfer motion, the practical result is that forum-selection clauses should control except in unusual cases." Atl. Marine , 134 S.Ct. at 582. Thus, the Court must first address whether the forum selection clause is valid and enforceable before deciding whether a transfer is warranted under § 1404(a).

A. Validity and Enforceability of the Forum Selection Clause

In order to determine whether the forum selection clause is valid and enforceable, the Court must first identify the governing law. Neither party explicitly states whether federal law or state law applies (see Doc. 33; Doc. 39, pp. 4–5; Doc. 40, p. 1 n.3). But if state law applies, Feather suggests that it should be the law of Illinois (Doc. 39, p. 5), while Defendants believe it should be the law of Missouri (Doc. 40, p. 1 n.3).

While a majority of federal circuit courts have concluded that federal common law governs the validity of a forum selection clause, the Seventh Circuit has taken a different approach and concluded that for "contracts containing a choice of law clause...the law designated in the choice of law clause would be used to determine the validity of the forum selection clause." Jackson v. Payday Fin., LLC , 764 F.3d 765, 774 (7th Cir. 2014), cert. denied sub nom. W. Sky Fin. v. Jackson , ––– U.S. ––––, 135 S.Ct. 1894, 191 L.Ed.2d 763 (2015) (citing Abbott Laboratories v. Takeda Pharmaceutical Co., 476 F.3d 421 (7th Cir. 2007) ). See also Wong v. PartyGaming Ltd., 589 F.3d 821, 827 & n.5 (6th Cir. 2009) (collecting cases); 14D Charles Alan Wright, et al., Federal Practice & Procedure § 3803.1, at 107–12 (4th ed. 2014).

Here, the pension plans each contain a choice of law clause, which provides that the laws of the State of Missouri apply except as preempted by federal law (Doc. 33–1, p. 79; Doc. 33–2, p. 76; Doc. 33–3, p. 84). The Court need not definitively decide whether Missouri law or federal law applies when determining the enforceability of the forum selection clause because there is no conflict between the two (see Doc. 40, p. 1 n.3). See also High Life Sales Co. v. Brown–Forman Corp., 823 S.W.2d 493, 497 (Mo. 1992) ("Following the important Supreme Court decision in M/S Bremen, many jurisdictions adopted the rule upholding the parties' free contractual choice, at least where the agreement was not unreasonable.... [W]e join the better-reasoned majority rule and will enforce such clauses, so long as doing so is neither unfair nor unreasonable."); Paramont Properties, LLC v. LaSalle Bank Nat. Ass'n , No. 4:08CV00193MLM, 2008 WL 948284, at *2 (E.D. Mo. Apr. 4, 2008) ("Missouri has adopted the federal standard for determining whether to enforce a forum selection clause.") (citation omitted); Hernandez v. Texas Capital Bank, N.A. , No. 07–0726–CV–W–ODS, 2008 WL 342758, at *2 (W.D. Mo. Feb. 5, 2008) ("Missouri [has] adopted the federal standard.") (citation omitted).³

The federal standard for enforcement of forum selection clauses was set forth in M/S Bremen v. Zapata Off–Shore Co., 407 U.S. 1, 10, 92 S.Ct. 1907, 32 L.Ed.2d 513 (1972). Under the Bremen standard, forum selection clauses are presumptively valid and should be enforced unless they are...