United States District Court, D. Maine
FREDERICK J. DUMONT, Plaintiff,
PEPSICO, INCORPORATED and PEPSICO ADMINISTRATION COMMITTEE, Defendants.
ORDER ON DEFENDANTS’ MOTION TO DISMISS OR
Torresen United States Chief District Judge
the Court is the Defendants’ motion to dismiss the
Plaintiff’s Complaint pursuant to Federal Rule of Civil
Procedure 12(b)(6), or alternatively, to transfer the action
to the United States District Court for the Southern District
of New York pursuant to 28 U.S.C. § 1404(a) (ECF No. 6).
For the reasons stated below, the motion is DENIED.
Plaintiff in this action is Frederick Dumont, a retiree
living in Fairfield, Maine. Compl. ¶¶ 1, 15 (ECF
No. 1). The Defendants are PepsiCo, Inc.
(“PepsiCo”), a North Carolina corporation
authorized to do business in Maine, and the PepsiCo
Administrative Committee, which administers the PepsiCo
Hourly Employees Retirement Plan (“Hourly Plan”)
and the PepsiCo Salaried Employees Retirement Plan
(“Salaried Plan”) (together, the
“Plans”). Compl. ¶¶ 2-3. This action
arises from a dispute regarding the amount of benefits Dumont
is owed under the Plans.
began working for Seltzer & Rydholm, Inc. in 1979. Compl.
¶ 11. Pepsi Bottling Group, Inc. purchased Seltzer &
Rydholm, Inc. in 2004, and, in 2010, PepsiCo acquired Pepsi
Bottling Group, Inc. Compl. ¶¶ 12, 14. For the
first twenty-seven years and seven months of his employment
Dumont worked as a salaried employee, and for approximately
the final six years of his employment he worked as an hourly
employee. Compl. ¶¶ 11-15. Dumont participated in
both the Hourly and Salaried Plans. Compl. ¶ 7. Although
the Plans are not in the record, documents attached to the
Complaint repeatedly refer to the vested status of his
benefits. E.g., Pension Benefit Modeling Statement 4
(ECF No. 1-5) (“Vesting Percentage: 100%”); Apr.
4, 2013 Employer Benefits Statement 1 (ECF No. 1-8)
(“Full Vesting Date 12/01/1984”).
2010, PepsiCo made changes to the Plans. One of these changes
was the addition of a forum selection clause. Oct. 1, 2015
Ryan Aff. ¶¶ 3, 5 (“Ryan Aff.”) (ECF
No. 6-1). The new forum selection clause in each of the Plans
reads as follows:
Any claim or action filed in court or any other tribunal in
connection with the Plan by or on behalf of a
Petitioner . . . shall only be brought or filed in
the United State District Court for the Southern District of
New York, effective for claims and actions filed on or after
January 1, 2011 . . . .
Aff ¶ 3. PepsiCo distributed notice of this change to
participants in December of 2010. Ryan Aff. ¶ 5.
Plaintiff retired from PepsiCo after May 31, 2013. Compl.
¶ 27. He now disputes the calculation of his retirement
benefits under the Plans.
Atlantic Marine Construction Co. v. United States
District Court for the Western District of Texas, the
Supreme Court clarified the appropriate procedural vehicle
and standard for enforcement of a “valid” forum
selection clause. 134 S.Ct. 568, 581-83 (2013). Where the
plaintiff has brought a case in a venue that is considered
proper under the general venue statute (28 U.S.C. §
1391) or a more specific statutory venue provision such as
that found in the Employee Retirement Income Security Act
(“ERISA”) (29 U.S.C. § 1132(e)(2)), “
‘federal law, specifically 28 U.S.C. § 1404(a),
governs the District Court’s decision whether to give
effect to the parties’ forum-selection clause.’
” Atl. Marine, 134 S.Ct. at 579 (quoting
Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 32
28 U.S.C. § 1404(a), “[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.” A
motion to transfer venue under § 1404(a) “calls on
the district court to weigh in the balance a number of
case-specific factors.”Stewart Org., 487 U.S. at
29. “When the parties have agreed to a valid
forum-selection clause, a district court should ordinarily
transfer the case to the forum specified in that
clause.” Atl. Marine, 134 S.Ct. at 581.
“[W]hen a plaintiff agrees by contract to bring suit
only in a specified forum-presumably in exchange for other
binding promises by the defendant-the plaintiff has
effectively exercised its ‘venue privilege’
before a dispute arises.” Id. at 582.
“When parties agree to a forum selection clause, they
waive the right to challenge the preselected forum as
inconvenient or less convenient for themselves . . . .”
issue raised by the Defendants’ motion is whether the
Plans’ forum selection clauses are enforceable against
Dumont. Neither the United States Supreme Court nor the First
Circuit has yet addressed whether forum selection clauses
that channel participants challenging their ERISA benefit
determinations to a single, plan-chosen forum are
permissible. One appellate court (through a divided
panel) has held that forum selection clauses are enforceable
in ERISA-governed plans. Smith v. Aegon Cos. Pension
Plan, 769 F.3d 922, 932-33 (6th Cir. 2014). The majority
of district courts to address the issue have likewise held
that forum selection clauses are permissible in the ERISA
plan context. See, e.g., Malagoli v. AXA
Equitable Life Ins. Co., No. 14-cv-7180, 2016 WL
1181708, at *2 (S.D.N.Y. Mar. 24, 2016); Turner v.
Sedgwick Claims Mgmt. Servs., Inc., No. 7:14-cv-1244,
2015 WL 225495, at *21 (N.D. Ala. Jan. 16, 2015); Vega v.
Carondelet Health Network, No. cv- 12-617, 2013 WL
784365, at *3 (D. Ariz. Feb. 5, 2013); Conte v. Ascension
Health, No. 11-12074, 2011 WL 4506623, at *4 (E.D. Mich.
Sept. 28, 2011); Rodriguez v. PepsiCo Long Term
Disability Plan, 716 F.Supp.2d 855, 862 (N.D. Cal.
2010); Sneed v. Wellmark Blue Cross & Blue Shield of
Iowa, No. 1:07-cv-292, 2008 WL 1929985, at *3 (E.D.
Tenn. Apr. 30, 2008); Klotz v. Xerox Corp., 519
F.Supp.2d 430, 437-38 (S.D.N.Y. 2007); Schoemann ex rel
Schoemann v. Excellus Health Plan, Inc., 447 F.Supp.2d
1000, 1007 (D. Minn. 2006); Bernikow v. Xerox Corp.
Long-Term Disability Income Plan, No. cv-06-2612, 2006
WL 2536590, at *2 (C.D. Cal. Aug. 29, 2006). Two district
courts have held that forum selection clauses are not
enforceable against ERISA plan participants. See Coleman
v. Supervalu, Inc. Short Term Disability Program, 920
F.Supp.2d 901, 909 (N.D. Ill. 2013); Nicolas v. MCI
Health & Welfare Plan No. 501, 453 F.Supp.2d 972,
974 (E.D. Tex. 2006).
The Evolution of Forum Selection Clause
have long recognized that plaintiffs hold a “
‘venue privilege.’ ” E.g.,
Atl. Marine, 134 S.Ct. at 581 (quoting Van Dusen
v. Barrack, 376 U.S. 612, 635 (1964)). This is the
unremarkable proposition that a plaintiff gets to
choose-consistent with jurisdictional and venue
limitations-where to bring suit.
But when a plaintiff agrees by contract to bring suit only in
a specified forum-presumably in exchange for other binding
promises by the defendant-the plaintiff has effectively
exercised its “venue privilege” before a dispute
arises. Only that initial choice deserves deference, and the
plaintiff must bear the burden of showing why the court
should not transfer the case to the forum to which the
Id. at 582.
courts have disfavored forum selection clauses. However,
M/S Bremen v. Zapata Off-Shore Co. marked a
sea change in how courts treat them. 407 U.S. 1 (1972). In
Bremen, the Supreme Court held that a
freely-negotiated forum selection clause between two
sophisticated international corporations was enforceable. The
There is strong evidence that the forum clause was a vital
part of the agreement, and it would be unrealistic to think
that the parties did not conduct their negotiations,
including fixing the monetary terms, with the consequences of
the forum clause figuring prominently in their calculations.
Id. at 14 (footnote omitted). The presumption of
enforceability of forum selection clauses “freely
entered into between two competent parties” took hold.
Id. (citation and internal quotations omitted).
Under Bremen, unless the resisting party could show
that the forum selection clause was invalid for such reasons
as fraud or overreaching, or that enforcement would be
unreasonable, unjust or would contravene a strong public
policy, the clause would be enforced. Id. at 15.
Carnival Cruise Lines, Inc. v. Shute, the Supreme
Court “refine[d] the analysis of The Bremen to
account for the realities of form passage contracts.”
499 U.S. 585, 593 (1991). At issue in Shute was a
forum selection clause printed on the back of a cruise ship
ticket. The Court held that the forum selection clause was
enforceable, even though the customer had unequal bargaining
power and did not negotiate the terms of the contract.
Scrutinizing the clause for “fundamental fairness,
” the Court noted that the customers “conceded
that they were given notice of the forum provision and,
therefore, presumably retained the option of rejecting the
contract with impunity.” Id. at 595.
Shute and Bremen, the First Circuit upheld
the enforcement of a forum selection clause
“embedded” in a series of consent forms signed by
a patient before a medical procedure. Rivera v. Centro
Médico de Turabo, Inc., 575 F.3d 10, 12-13 (1st
Cir. 2009). While the forum selection clause was a
non-negotiated boilerplate provision between parties of
unequal bargaining power, the First Circuit reasoned that the
patient signed the form days before his procedure and
“had the option of going to another hospital.”
Id. at 22.
Court’s most recent discussion of forum selection
clauses is found in Atlantic Marine, where the Court
addressed a “valid” forum selection clause and
resolved a procedural issue. When a “plaintiff
agrees” to a forum selection clause, the Court
explained, it has effectively exercised its “venue
privilege” and waived its right to challenge the
pre-selected forum as inconvenient under 28 U.S.C. §
1404(a). Atl. Marine, 134 S.Ct. at 582.
important distinction between the controlling forum selection
clause cases and this case is that Mr. Dumont never agreed to
the forum selection clauses contained in the Plans. As pled,
Mr. Dumont did not play a part in the negotiation of the
Plans, he did not sign off on the Plans, and he did not agree
to the addition of the forum selection clauses in
2010. Although he was sent notice of
modifications to the Plans, including the forum selection
clauses, he was not notified about the modifications at a
time when he could do anything about it. He was 31 years into
his career at the time the forum selection clauses were
added, and his retirement benefits had already vested. He
could not have simply chosen to work for another employer,
the way the plaintiffs in the cases above could have chosen
another cruise line, a different hospital, or a new corporate
Shute, and Atlantic Marine, all of which focus on an
agreement between the parties, do not fit the situation
before me. The Defendants lean heavily on cases from outside
of this District and Circuit that have held that forum
selection clauses in ERISA plans can be enforced against plan
participants. Turning to those authorities, a few patterns
some of the decisions cited by the Defendants simply applied
the Bremen/Shute/Atlantic Marine presumption of
validity without really analyzing whether or why a party that
has not agreed to the forum selection clause should
lose the plaintiff’s venue privilege. E.g.,
Smith, 769 F.3d at 930; Haughton v. Plan
Adm’r of Xerox Corp. Ret. Income Guarantee Plan, 2
F.Supp. 3d 928, 933 (W.D. La. 2014); Price v. PBG Hourly
Pension Plan, 921 F.Supp.2d 764, 770 (E.D. Mich. 2013);
Vega, 2013 WL 784365, at *3; Scaglione v.
Pepsi-Cola Metro. Bottling Co. Inc., 884 F.Supp.2d 642,
643 (N.D. Ohio 2012); Rodriguez, 716 F.Supp.2d at
857-58; Williams v. CIGNA Corp., No. 5:10-cv-00155,
2010 WL 5147257, at *4 (W.D. Ky. Dec. 13, 2010);
Klotz, 519 F.Supp.2d at 433-34; Rogal v.
Skilstaf, Inc., 446 F.Supp.2d 334, 338 n.3 (E.D. Pa.
the cases cited by the Defendants acknowledged that the
plaintiffs before them had not agreed to the forum selection
clauses, but found it sufficient that they, as ERISA
participants, had knowledge of the term. E.g.,
Loeffelholtz v. Ascension Health, Inc., 34 F.Supp.
3d 1187, 1191-92 (M.D. Fla. 2014); Smith v. Aegon USA,
LLC, 770 F.Supp.2d 809, 811-12 (W.D. Va. 2011);
Testa v. Becker, No. cv-10-638, 2010 WL 1644883, at
*6-7 (C.D. Cal. Apr. 22, 2010). And a couple of courts held
that it was not even essential for the participant to have
knowledge of the forum selection clause, as long as the
employer that negotiated the plan had notice. See Angel
Jet Serv., LLC v. Red Dot Bldg. Sys.’ Emp. Benefit
Plan, No. cv-09-2123, 2010 WL 481420, at *2 (D. Ariz.
Feb. 8, 2010); Laasko v. Xerox Corp., 566 F.Supp.2d
1018, 1024 (C.D. Cal. 2008). In Schoemann ex rel.
Schoemann v. Excellus Health Plan, Inc., 447 F.Supp.2d
1000 (D. Minn. 2006), the court stated:
When a plaintiff sues a defendant, and the defendant seeks to
enforce a forum-selection clause that was negotiated between
the plaintiff and the defendant, it makes sense to refer to
the forum selection clause as reflecting the
“preference” of the parties for the venue
identified in the clause. But when, as here, the contract was
negotiated between a plan administrator and an employer, the
forum-selection clause obviously does not reflect any
“preference” of the beneficiaries. Indeed, it is
likely that a typical beneficiary does not even know that the
forum-selection clause exists. Perhaps, then, a
forum-selection clause in an ERISA plan should be entitled to
less weight than other forum-selection clauses when parties
move to transfer under § 1404(a). But the Schoemanns go
14-cv-7180, 2016 WL 1181708, at *2 (S.D.N.Y. Mar. 24, 2016)
(alternation in original) (internal quotations and citation
omitted) (“Malagoli contracted with AXA in 2003 to
allow[ ] [him] to receive retirement benefits while . . .
[continuing] to receive commissions, fees . . ., and
additional compensation.”); Mroch v. Sedgwick
Claims Mgmt. Servs., Inc., No. 14-cv-4087, 2014 WL
7005003, at *2 (N.D. Ill.Dec. 10, 2014) (“The forum
selection clause was established within Ascension’s LTD
plan contract and was clearly stated and agreed to when
Plaintiff began working for Alexian Brothers.”);
Bernikow v. Xerox Corp. Long-Term Disability Income
Plan, No. cv-06-2612, 2006 WL 2536590, at *2 (C.D. Cal.
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