In re Mathias

• Decision Date: 10 August 2017
• Docket Number: No. 16-3808,16-3808
• Citation: 867 F.3d 727
• Parties: IN RE: George W. MATHIAS, Petitioner.
• Court: U.S. Court of Appeals — Seventh Circuit

867 F.3d 727

IN RE: George W. MATHIAS, Petitioner.

No. 16-3808

United States Court of Appeals, Seventh Circuit.

Submitted December 23, 2016

Decided August 10, 2017

Rehearing and Rehearing En Banc Denied September 28, 2017

Daniel Luke Geyser, Esq., Attorney, STRIS & MAHER LLP, Los Angeles, CA, John M. Gallagher, Attorney, JOHN M. GALLAGHER, LLC, Media, PA, Douglas D. Geyser, Esq., Attorney, STRIS & MAHER LLP, Dallas, TX, Peter K. Stris, Attorney, STRIS & MAHER LLP, Los Angeles, CA, for Petitioner.

Before Bauer, Ripple, and Sykes, Circuit Judges.

Sykes, Circuit Judge.

This mandamus petition raises a question of first impression in this circuit: Does ERISA's venue provision, 29 U.S.C. § 1132(e)(2), preclude enforcement of a forum-selection clause in an employee-benefits plan? George Mathias, the plan beneficiary and mandamus petitioner here, argues that it does; the Secretary of Labor, as amicus curiae, supports that interpretation. The respondent health plans argue that § 1132(e)(2) is permissive only and does not invalidate a forum-selection clause contained in plan documents.

Only one circuit has addressed this question. The Sixth Circuit has held that an ERISA plan's forum-selection clause is enforceable even if it overrides the beneficiary's choice of a venue permitted by § 1132(e)(2). Smith v. Aegon Cos. Pension Plan , 769 F.3d 922, 931–34 (6th Cir. 2014), cert. denied , ––– U.S. ––––, 136 S.Ct. 791, 193 L.Ed.2d 708 (2016). The court reasoned that because the statute is phrased in permissive terms—it states that a suit "may be brought" in one of several federal judicial districts—it does not preclude the parties from contractually channeling venue to a particular federal district. Id. at 932. We agree and join the Sixth Circuit in holding that ERISA's venue provision does not invalidate a forum-selection clause contained in plan documents.

I. Background

This case is in its early stages and the mandamus petition raises a single legal issue, so we can be brief about the factual and procedural background. From 1978 to 1997, Mathias worked for Caterpillar, Inc., at its plant in York, Pennsylvania. In May 1997 he experienced serious health issues, and the Social Security Administration declared him disabled as of that date. Caterpillar covered his health insurance as an employee on long-term disability, billing him accordingly for his portion of the premium. In September 2012 Mathias chose to retire retroactively, effective October 1, 2009. Caterpillar failed to change Mathias's status and did not realize its mistake until the middle of 2013. The company then notified Mathias that he owed more than $9,500 in past-due premiums, which reflected the difference between the rate for a long-term disabled employee and the rate for a retired employee. When Mathias did not pay that amount, Caterpillar terminated his benefits.

Mathias sued Caterpillar and the relevant health plans in federal court in the Eastern District of Pennsylvania.¹ (We'll refer to the defendants collectively as "Caterpillar.") The plan documents require suit in federal court in the Central District of Illinois, so Caterpillar moved to transfer the case under 28 U.S.C. § 1404(a). Mathias opposed the motion, arguing that the forum-selection clause is invalid in light of § 1132(e)(2), ERISA's venue provision. Judge Robreno of the Eastern District of Pennsylvania rejected that argument, relying primarily on the Sixth Circuit's decision in Smith , which held that forum-selection clauses in ERISA plans are enforceable and not inconsistent with the text of ERISA's venue provision or the purposes of ERISA more generally. 769 F.3d at 931–34. Judge Robreno accordingly granted Caterpillar's motion and transferred the case to the Central District of Illinois.

When the case arrived in the Central District, Mathias moved to transfer it back to Pennsylvania—either to the Eastern or Middle District² —again arguing that the plan's forum-selection clause is invalid under § 1132(e)(2). Judge Mihm denied the motion.

Mathias petitioned for mandamus relief in this court. He asks us to direct Judge Mihm to transfer the case to the Eastern or Middle District of Pennsylvania. Caterpillar has responded, and Mathias tendered a reply brief with a motion for leave to file it. We now grant that motion and accept the reply brief. In addition, we invited the Secretary of Labor to file an amicus curiae brief. He has done so and supports Mathias's interpretation of § 1132(e)(2). The matter is ready for decision.

II. Analysis

We begin by noting that mandamus is the appropriate procedural method to obtain review of a district court's decision on a § 1404(a) transfer motion. Without the availability of mandamus relief, the question of proper venue escapes meaningful appellate review. In re Hudson , 710 F.3d 716, 717 (7th Cir. 2013) ; In re LimitNone , LLC , 551 F.3d 572, 575 (7th Cir. 2008) (per curiam); In re Nat'l Presto Indus., Inc. , 347 F.3d 662, 663 (7th Cir. 2003).

Mathias could have asked the Third Circuit for mandamus relief from Judge Robreno's transfer order, but for reasons not clear to us, he waited to seek appellate review until after Judge Mihm denied his motion to send the case back to Pennsylvania. Appellate review would have been more appropriate in the Third Circuit, where the transferor court sits. See 15 CHARLES ALAN WRIGHT ET AL., FEDERAL PRACTICE AND PROCEDURE § 3846 (4th ed. 2016). In considering Mathias's motion to re transfer, Judge Mihm was bound by law- of-the-case principles that apply to transfer decisions of another district court.

Constrained by those principles, the motion was highly unlikely to succeed. Although a court may revisit a prior decision of its own or a coordinate court, it ordinarily should not do so "in the absence of extraordinary circumstances such as where the initial decision was ‘clearly erroneous and would work a manifest injustice.’ " Christianson v. Colt Indus. Operating Corp. , 486 U.S. 800, 817, 108 S.Ct. 2166, 100 L.Ed.2d 811 (1988) (quoting Arizona v. California , 460 U.S. 605, 618 n.8, 103 S.Ct. 1382, 75 L.Ed.2d 318 (1983) ). "[T]he policies supporting the doctrine [of law of the case] apply with even greater force to transfer decisions than to decisions of substantive law; transferee courts that feel entirely free to revisit transfer decisions of a coordinate court threaten to send litigants into a vicious circle of litigation." Id. at 816, 108 S.Ct. 2166 ; see also United States v. Wyatt , 672 F.3d 519, 523 (7th Cir. 2012) ("[I]n the usual case another court should not respond by batting the suit back again.").

Unsurprisingly then, Mathias's retransfer motion failed. Judge Mihm found no clear defect or manifest injustice in Judge Robreno's ruling that the plan's forum-selection clause is valid and enforceable. With no controlling Supreme Court or Seventh Circuit precedent, Judge Mihm quite reasonably deferred to Judge Robreno's decision, which drew primarily on the Sixth Circuit's opinion in Smith , the only appellate ruling on this subject. Judge Mihm also looked to a recent decision by a district judge in the Southern District of Illinois collecting district-court decisions on this issue, most of which follow Smith . Feather v. SSM Health Care , 216 F.Supp.3d 934 (S.D. Ill. 2016) (collecting cases).

Like Judge Robreno before him, Judge Mihm rejected Mathias's argument that § 1132(e)(2) gives plan beneficiaries a statutory right to their choice of venue. He observed that forum-selection clauses are "not inconsistent with the purposes of ERISA generally or its venue statute in particular." The judge went on to explain that a forum-selection clause like the one at issue here "allows a plaintiff access to federal courts when it provides for venue in a federal court" and "promotes other ERISA policies, including uniformity of administration and reducing costs, which benefit all participants and beneficiaries."

Our review of Judge Mihm's order necessarily incorporates the merits of Judge Robreno's original transfer decision. Alexander v. Erie Ins. Exch. , 982 F.2d 1153, 1156 (7th Cir. 1993) ; see also Posnanski v. Gibney , 421 F.3d 977, 980–81 (9th Cir. 2005) ; SongByrd, Inc. v. Estate of Grossman , 206 F.3d 172, 177 (2d Cir. 2000) ; Hill v. Henderson , 195 F.3d 671, 677 (D.C. Cir. 1999). Law-of-the-case principles do not insulate the question from appellate review. Christianson , 486 U.S. at 817, 108 S.Ct. 2166 ; Minch v. City of Chicago , 486 F.3d 294, 302 (7th Cir. 2007) ; McMasters v. United States , 260 F.3d 814, 818 (7th Cir. 2001). If the district court applied the wrong standard, mandamus relief may be appropriate. Atl. Marine Constr. Co. v. U.S. Dist. Court for W. Dist. of Tex. , ––– U.S. ––––, 134 S.Ct. 568, 575, 187 L.Ed.2d 487 (2013).

As in all mandamus proceedings, however, the party seeking mandamus in the transfer context "has an uphill fight"; the writ may be used to reverse a transfer decision "only if the applicant can show that the transfer order is a ‘violation of a clear and indisputable legal right, or, at the very least, is patently erroneous.’ " Hudson , 710 F.3d at 718–19 (quoting In re Rhone–Poulenc Rorer, Inc. , 51 F.3d 1293, 1295 (7th Cir. 1995) (alteration omitted)); see also In re Balsimo , 68 F.3d 185, 187 (7th Cir. 1995). That steep standard has not been met here.

The transfer statute provides: "For 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." § 1404(a). The Supreme Court has recently reiterated that § 1404(a) is the proper "mechanism for enforcement of forum-selection clauses that point to a particular federal district." Atl. Marine , 134 S.Ct. at 579. But the § 1404(a) analysis is much narrower in this context:

In the typical case not involving a forum-selection clause, a district court considering a

...