Haughton v. Plan Adm'r of the Xerox Corp.

• Decision Date: 06 March 2014
• Docket Number: Civil Action No. 13–2664.
• Court: U.S. District Court — Western District of Louisiana
• Parties: Michael C. HAUGHTON v. PLAN ADMINISTRATOR OF the XEROX CORPORATION RETIREMENT INCOME GUARANTEE PLAN.

2 F.Supp.3d 928

Michael C. HAUGHTON

v.PLAN ADMINISTRATOR OF the XEROX CORPORATION RETIREMENT INCOME GUARANTEE PLAN.

Civil Action No. 13–2664.

United States District Court,

W.D. Louisiana,

Monroe Division.

Signed March 6, 2014.

J. Michael Rhymes, Monroe, LA, for Michael C. Haughton.

Joel P. Babineaux, Babineaux Poche et al., Lafayette, LA, Richard J. Pautler, Thompson Coburn, St. Louis, MO, for Plan Administrator of the Xerox Corporation Retirement Income Guarantee Plan.

MEMORANDUM ORDER

KAREN L. HAYES, United States Magistrate Judge.

Before the undersigned Magistrate Judge, on reference from the District Court, is an amended motion to transfer venue [doc. # 14] filed by defendant, Plan Administrator of the Xerox Corporation Retirement Income Guarantee Plan (“RIGP”). For reasons assigned below, the motion is GRANTED, and the matter is hereby TRANSFERRED to the United States District Court for the Western District of New York. 28 U.S.C. § 1404(a).¹

Statement of Facts

On September 13, 2013, Michael C. Haughton (“Haughton”) filed the instant complaint under the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001 et seq. (specifically, § 1132(a)(2)), against the Xerox Corporation Retirement Income Guarantee Plan (“RIGP” or the “Plan”). (Compl.). RIGP is an “employee pension benefit plan” within the meaning of § 3(2) of the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1002(1). See Compl., ¶¶ 1, 3. Haughton is a former employee of Xerox Corporation and a “beneficiary” under the Plan. Id.

In 2012, Haughton retired from Xerox Corporation, and determined to take a lump sum benefit under the Plan in 2013. Id., ¶ IV. He executed the necessary retirement documents, and verbally instructed agents of the plan administrator that he intended the valuation date to be effective January 2013, rather than 2012. Id., ¶ V. Nevertheless, despite his instructions, the plan administrator processed his claim with a retirement date in 2012, thus causing Haughton's lump sum benefit under the Plan to be $50,000 less than it otherwise would have been had the plan administrator received his retirement paperwork in 2013. Id., ¶ VI. Haughton contends that the plan administrator breached its fiduciary duty by failing to provide him with relevant information and/or by misleading him relative to his election. See Compl., ¶ VIII; Opp. Memo., pg. 2. As a result, Haughton seeks to recover the $50,000 shortfall in his intended and expected benefit under the Plan. (Compl., Prayer).

On November 26, 2013, RIGP initially appeared in this matter via a disjunctive motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(3), or in the alternative, to transfer venue, 28 U.S.C. § 1406(a), premised upon a forum selection clause set forth in the Plan. On December 3, 2013, however, the United States Supreme Court issued its opinion in Atl. Marine Const. Co., Inc. v. U.S. Dist. Court for W. Dist. of Texas, holding that the proper mechanism to enforce a forum selection clause is a motion to transfer pursuant to 28 U.S.C. § 1404(a), not a motion to dismiss under Rule 12(b)(3) or 28 U.S.C. § 1406(a). Atl. Marine Const. Co., Inc. v. U.S. Dist. Court for W. Dist. of Texas, ––– U.S. ––––, 134 S.Ct. 568, 187 L.Ed.2d 487 (2013) (“ Atlantic Marine ”).

Following the Supreme Court's clarification, RIGP sought and obtained permission to file the instant amended motion to transfer venue pursuant to 28 U.S.C. § 1404(a), which effectively superseded its prior motion. See Dec. 17, 2013, Order [doc. # 17]. Plaintiff filed his opposition to the amended motion on December 17, 2014. RIGP filed its reply brief on January 27, 2014. Thus, the matter is ripe for decision.

Discussion

I. The Forum Selection Clause is Valid and Enforceable

As recounted above, RIGP seeks transfer to the United States District Court for the Western District of New York pursuant to a forum selection clause contained in the Plan. The Supreme Court explained in Atlantic Marine that 28 U.S.C. § 1404(a) “provides a mechanism for enforcement of forum-selection clauses that point to a particular federal district.” Atlantic Marine, supra. Nonetheless, before this court may proceed to apply Atlantic Marine, several underlying preconditions must be assured. In Atlantic Marine, for instance, the Court presupposed a contractually valid forum-selection clause, agreed-to by the parties. Atlantic Marine, 134 S.Ct. at 581 and n. 5. Furthermore, the district court must determine whether the forum selection clause applies to the type of claims asserted in the lawsuit by looking to the language of the agreement. See Braspetro Oil Servs. Co. v. Modec (USA), Inc., 240 Fed.Appx. 612, 616 (5th Cir.2007) (unpubl.) (citation omitted).

In the case sub judice, the Plan includes the following provision, “ Restriction of Venue. Any action in connection with the Plan by a Member or beneficiary may only be brought in Federal District Court in Monroe County, New York.” (The Plan, § 14.8; M/Dismiss, Exh. 1A; see also Compl., ¶ II) (emphasis added). Of course, “the phrase ‘in connection with’ is essentially ‘indeterminat[e]’ because connections, like relations, ‘stop nowhere.’ ” Maracich v. Spears, ––– U.S. ––––, 133 S.Ct. 2191, 2200, 186 L.Ed.2d 275 (2013) (citation omitted). It is evident, however, that the Plan employed the “in connection with” phrase to denote that the forum selection clause applies to any action arising under ERISA. Indeed, a state law “relates to” an employee benefit plan for purposes of ERISA preemption if it has a “connection with” or reference to such a plan. Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 96–97, 103 S.Ct. 2890, 77 L.Ed.2d 490 (1983).

Here, Haughton alleges that he is a beneficiary under an ERISA plan, and seeks damages against the plan administratorfor breach of fiduciary duty under ERISA. Therefore, it is manifest that the instant action is connected with the Plan, and that the forum selection clause, if otherwise enforceable, is broad enough to encompass the dispute.

The enforceability of a forum selection clause is decided pursuant to federal law. Haynsworth v. The Corp., 121 F.3d 956, 962 (5th Cir.1997). Forum selection clauses are “prima facie valid and should be enforced unless enforcement is shown by the resisting party to be unreasonable under the circumstances.” M/S Bremen v. Zapata Off–Shore Co., 407 U.S. 1, 10, 92 S.Ct. 1907, 32 L.Ed.2d 513 (1972). “This rule also applies to form contracts,” i.e. unilateral contracts. See Kevlin Servs., Inc. v. Lexington State Bank, 46 F.3d 13, 15 (5th Cir.1995) (citing Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585, 111 S.Ct. 1522, 1527, 113 L.Ed.2d 622 (1991)). Nonetheless, “[t]he presumption of enforceability ... may be overcome by a clear showing that the clause is unreasonable under the circumstances.” Haynsworth, supra (citation and internal quotation marks omitted). A party may demonstrate unreasonableness where

(1) the incorporation of the forum selection clause into the agreement was the product of fraud or overreaching; (2) the party seeking to escape enforcement “will for all practical purposes be deprived of his day in court” because of the grave inconvenience or unfairness of the selected forum; (3) the fundamental unfairness of the chosen law will deprive the plaintiff of a remedy; or (4) enforcement of the forum selection clause would contravene a strong public policy of the forum state.

Id. (citing Carnival Cruise Lines, 499 U.S. at 595, 111 S.Ct. at 1528; The Bremen, 407 U.S. at 12–13, 15, 18, 92 S.Ct. at 1914–15, 1916, 1917).

An additional consideration, at least in the context of unilateral or form contracts, is whether the party contesting the clause had notice of the provision. See Carnival Cruise Lines, supra. In the end, however, the party resisting enforcement bears a “heavy burden of proof.” Haynsworth, supra.

Haughton raises several arguments which may fall under one or more of the recognized grounds for unreasonableness. First, he contends that the forum selection clause is against public policy because it contravenes ERISA's generous venue provision: ²

[w]here an action under this subchapter is brought in a district court of the United States, it 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, and process may be served in any other district where a defendant resides or may be found.

29 U.S.C. § 1132(e)(2).

Plaintiff then argues that by adopting a clause that limited ERISA's venue provisions, the plan administrator breached its fiduciary duty under ERISA: “a fiduciary shall discharge his duties with respect to a plan solely in the interest of the participants and beneficiaries and—in accordance with the documents and instruments governing the plan insofar as such documents and instruments are consistent with [ERISA].” 29 U.S.C. § 1104(a)(1)(D) (emphasis added).³

As pointed out by RIGP, however, a decision by a plan sponsor to modify or amend a plan is a decision rendered in its capacity as a trust settlor, not as a fiduciary. Kirschbaum v. Reliant Energy, Inc., 526 F.3d 243, 251 (5th Cir.2008) (emphasis added).⁴ Thus, no fiduciary duty is owed (or breached) as a result of the inclusion of a forum selection clause in the Plan. See Kirschbaum, supra.

Having deflated Haughton's breach of fiduciary duty argument, the court further observes that ERISA's venue provisions are not appreciably more expansive than the options available under the general venue statute. See28 U.S.C. § 1391; Atlantic Marine, supra (general “venue statutes reflect Congress' intent that venue should always lie in some federal court whenever federal courts have personal jurisdiction over the defendant.”). Moreover, the Supreme Court has recognized that, by prior agreement, parties are free to derogate from the general venue statute. Atlantic Marine, supra (and cases cited therein).

In addition, courts have held...