Roger Smith v. Aegon Companies Pension Plan

RECOMMENDED FOR FULL-TEXT PUBLICATION

Pursuant to Sixth Circuit I.O.P. 32.1(b)

File Name: 14a0256p.06

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

_________________

ROGER L. SMITH, ┐

Plaintiff-Appellant, │

│

│ No. 13-5492

v. │

>

│

AEGON COMPANIES PENSION PLAN, │

Defendant-Appellee. │

┘

Appeal from the United States District Court

for the Western District of Kentucky at Louisville.

No. 3:12-cv-00697—John G. Heyburn, District Judge.

Argued: January 24, 2014

Decided and Filed: October 14, 2014

Before: SILER, BATCHELDER, and CLAY, Circuit Judges.

_________________

COUNSEL

ARGUED: Stacey E. Elias, UNITED STATES DEPARTMENT OF LABOR, Washington,

D.C., for Amicus Curiae. Michael D. Grabhorn, GRABHORN LAW OFFICE, PLLC,

Louisville, Kentucky, for Appellant. David R. Levin, DRINKER BIDDLE & REATH LLP,

Washington, D.C., for Appellee. ON BRIEF: Michael D. Grabhorn, GRABHORN LAW

OFFICE, PLLC, Louisville, Kentucky, for Appellant. David R. Levin, DRINKER BIDDLE &

REATH LLP, Washington, D.C., Michael D. Risley, STITES & HARBISON PLLC, Louisville,

Kentucky, for Appellee. Stacey E. Elias, UNITED STATES DEPARTMENT OF LABOR,

Washington, D.C., for Amicus Curiae.

BATCHELDER, J., delivered the opinion of the court, in which SILER, J., joined.

CLAY, J. (pp. 15–17), delivered a separate dissenting opinion.

1

No. 13-5492 Smith v. Aegon Companies Pension Plan Page 2

_________________

OPINION

_________________

ALICE M. BATCHELDER, Circuit Judge. Appellant Roger Smith appeals the district

court’s dismissal of his claims without prejudice because of improper venue. The district court

held that the venue selection clause in the Employee Retirement Income Security Act

(“ERISA”)-governed AEGON Pension Plan requiring that suit be brought in federal court in

Cedar Rapids, Iowa, was enforceable and applied to Smith’s claims. Accordingly, the court

dismissed his complaint for failure to state a claim under Federal Rule of Civil Procedure

12(b)(6). We AFFIRM.

I.

Prior to his retirement in 2000, Smith was an employee of Commonwealth General

Corporation (“CGC”). When CGC agreed to merge with AEGON USA, Inc. (“AEGON”), CGC

offered some employees, including Smith, enhanced compensation if they would remain with

CGC until its merger with AEGON was completed. The offer’s terms were reflected in the

Voluntary Employee Retention and Retirement Program (“VERRP”), which the CGC Board of

Directors (“Board”) adopted and approved on October 10, 1997.

The VERRP provided that Smith would retire on March 1, 2000. Smith elected to

receive $1,066.54 under the qualified plan, and $1,122.97 under the non-qualified plan, for a

total of $2,189.51 per month.1 The document through which Smith selected this election was

titled “AEGON USA Pension Plan: Election for Distribution and Explanation of Benefits,” and

an attached letter informed Smith that “[i]f you elect to participate in the Voluntary Employee

Retention & Retirement Program (‘VERRP’), you will be entitled to receive additional benefits

from the Commonwealth General Corporation Retirement Plan under that program.” VERRP

Attachment A stated that Smith was entitled to a $154,976.12 benefit under the CGC Change in

Control Plan. Attachment B stated, “As a participant in the [VERRP], you are entitled to receive

1

Neither the VERRP booklet nor the AEGON Companies Pension Plan booklet explains the difference

between qualified and non-qualified benefits.

No. 13-5492 Smith v. Aegon Companies Pension Plan Page 3

a supplemental benefit either as a lump sum or in the same annuity form that your regular

retirement benefit will be paid.”

On February 1, 2000, Smith received a booklet from the AEGON Insurance Group with

information on the CGC Retirement Plan and the VERRP, as well as a notice that, effective

January 1, 2000, the CGC Plan and the AEGON Companies Pension Plan (“Plan”) had been

integrated pursuant to the merger. The Plan defines “CGC VERRP Participant” as “a CGC

Grandfathered Participant . . . who was also a participant in the [VERRP] . . . which was an early

retirement program in effect in the CGC Plan from September 8, 1997 until December 31, 1999

and in effect in this Plan from January 1, 2000 until February 29, 2000, as a result of the merger

of the CGC Plan with this Plan . . . .”

Smith retired on March 1, 2000, and the Plan paid him both a lump sum benefit and

$2,189.51 per month. In 2007, the AEGON Board of Directors amended the Plan to add a

“venue provision.”2 The provision states: “Restriction on Venue. A participant or Beneficiary

shall only bring an action in connection with the Plan in Federal District Court in Cedar Rapids,

Iowa.” In August 2011, the Plan told Smith that they had been overpaying him by $1,122.97 per

month, or the amount of the benefit categorized as “non-qualified” under the VERRP, for the

previous eleven years. The Plan reduced, and then eliminated, Smith’s entire monthly benefit

payments, stating that it would continue to do so until it had recouped the overpayment or Smith

remitted to the Plan $153,283.25.

Smith exhausted the administrative remedies provided by the Plan by appealing to the

AEGON Pension Committee. In that appeal Smith complained that the Plan had refused “to

produce all relevant documents and information in accordance with the Plan terms and the

applicable laws and regulations,” and cited a number of “ERISA claims regulations.” Further, he

argued that “[t]he VERRP specifically provided enhanced benefits under the Plan, payable either

as a lump sum or in this case in an increased monthly annuity of $1,079.48 per month. The

VERRP also entered the date on which Mr. Smith could commence receiving his Plan benefits

(including the VERRP enhancement).” The Pension Committee denied Smith’s appeal, and

Smith filed suit against CGC in Jefferson County Circuit Court, asserting claims for breach of

2

Litigants and the district court refer to this provision as a “forum selection clause.”

No. 13-5492 Smith v. Aegon Companies Pension Plan Page 4

contract, wage and hour state statutory violations, estoppel, and breach of the duty of good faith

and fair dealing. CGC removed the action to the U.S. District Court for the Western District of

Kentucky, and filed a Rule 12(b)(6) motion to dismiss.

The district court granted CGC’s motion and dismissed Smith’s complaint under Rule

12(b)(6) for failure to state a claim. The court found that the VERRP was regulated by ERISA,

and that Smith was suing to recover benefits under this ERISA plan. The court concluded that

because the Pension Committee controlled and administered the Plan, only the Pension

Committee—not CGC—was a proper party defendant. We affirmed. See Smith v.

Commonwealth General Corp., No. 12-6284 (6th Cir. Oct. 9, 2014) (Smith I). After the district

court dismissed the Smith I complaint, Smith filed suit against the AEGON Companies Pension

Plan in the U.S. District Court for the Western District of Kentucky. The district court dismissed

Smith’s complaint without prejudice under Rule 12(b)(6) because of the Plan’s venue selection

clause, and Smith appealed.

II.

A.

We are required at the outset to determine the level of deference to be afforded the

Secretary of Labor’s (“Secretary”) position, expressed in an amicus brief, that venue selection

clauses are incompatible with ERISA.3 The Secretary’s interpretation of ERISA appears in the

Secretary’s amicus brief in this case, and in one prior amicus brief. See Brief of the Secretary of

Labor as Amicus Curiae Supporting Appellant, Mozingo v. Trend Personnel Services, 504 F.

App’x 753 (10th Cir. 2012) (No. 11-3284), 2012 WL 1966227. Smith contends that “[t]he

DOL’s position is entitled to Chevron, or at the very least Skidmore, deference.”

The Supreme Court has yet to address the appropriate level of deference to give the

construction of a statute articulated by an agency only in amicus briefs. See Bradley George

Hubbard, Comment, Deference to Agency Statutory Interpretations First Advanced in

Litigation? The Chevron Two-Step and the Skidmore Shuffle, 80 U. Chi. L. Rev. 447, 459

3

The Secretary does not request deference, but Smith asks that we defer to the Secretary’s construction of

ERISA.

No. 13-5492 Smith v. Aegon Companies Pension Plan Page 5

(2013). Although our Court has provided no answer either, some of our sister circuits have

concluded that agency positions expressed in amicus briefs deserve Skidmore deference.4 We

decline to afford either Chevron or Skidmore deference to the Secretary’s “regulation by

amicus”5 in this case.

The Secretary’s interpretation is not entitled to deference under Chevron, U.S.A., Inc. v.

Natural Resources Defense Council, Inc., 467 U.S. 837 (1984). The Court in United States v.

Mead Corp., 533 U.S. 218, 221 (2001), made it clear that Chevron’s two-step procedure for

determining when controlling weight should be given an agency’s construction of a statute is

triggered only when an agency is acting with the force of law. In our case, the Secretary’s

interpretation of ERISA is not entitled to Chevron deference because the interpretation was not

made with the force of law. See Bowen v. Georgetown Univ. Hosp., 488 U.S. 204, 212 (1988)

(“We have never applied the principle of [Chevron] to agency litigating positions that are wholly

unsupported by regulations, rulings, or administrative practice.”); Rosales-Garcia v. Holland,

322 F.3d 386, 403 n.22 (6th Cir. 2003) (“An interpretation contained in a brief—like

interpretations contained in opinion letters, policy statements, agency manuals, and enforcement

guidelines—lacks the force of law and is therefore not entitled to Chevron deference.”).

Whether the Secretary’s amicus interpretations of 29 U.S.C. §§ 1001(b), 1132(e)(2), and

1104(a)(1)(D) are entitled to Skidmore deference is a more difficult question. Despite their

factual dissimilarity to our case, cases from both the Supreme Court and our Court have featured

deference to amicus briefs. Skidmore v. Swift & Co., 323 U.S. 134 (1944), required the Supreme

Court to determine whether the time spent within a certain proximity of the Swift plant by fire-

response employees was compensable overtime under the Fair Labor Standards Act (“FLSA”).

The Department of Labor (“DOL”) had outlined factors to determine compensable work time

through informal rulings and an interpretive bulletin. Id. at 138–39. The DOL then applied its

guidelines to the specific facts in Skidmore in an amicus brief. The Court held that these

informal positions

4

See, e.g., Ball v. Memphis Bar-B-Q Co., 228 F.3d 360, 365 (4th Cir. 2000); Serricchio v. Wachovia

Securities LLC, 658 F.3d 169, 178 (2d Cir. 2011).

5

The Secretary of Labor has been particularly aggressive in “attempt[ing] to mold statutory interpretation

and establish policy by filing ‘friend of the court’ briefs in private litigation.” Deborah Thompson Eisenberg,

Regulation by Amicus: The Department of Labor’s Policy Making in the Courts, 65 Fla. L. Rev. 1223, 1223 (2013).

No. 13-5492 Smith v. Aegon Companies Pension Plan Page 6

constitute a body of experience and informed judgment to which courts and

litigants may properly resort for guidance. The weight of such a judgment in a

particular case will depend upon the thoroughness evident in its consideration, the

validity of its reasoning, its consistency with earlier and later pronouncements,

and all those factors which give it power to persuade, if lacking power to control.

Skidmore, 323 U.S. at 140. Mead, 533 U.S. at 228, added other contextual factors for courts to

consider in conducting the Skidmore inquiry: “The fair measure of deference to an agency

administering its own statute has been understood to vary with circumstances, and courts have

looked to the degree of the agency’s care, its consistency, formality, and relative expertness, and

to the persuasiveness of the agency’s position.” (citations omitted).

In Kasten v. Saint-Gobain Performance Plastics Corp., 131 S. Ct. 1325 (2011), the Court

also gave “a degree of weight to [the DOL’s] views about the meaning of” the word “filed,” and

whether oral complaints were covered by the FLSA’s anti-retaliation protections. Id. at 1335.

The Court held that Skidmore governed because the DOL’s interpretation had been held

consistently for close to fifty years, evidenced by enforcement actions, amicus briefs, agency

practice, and Equal Employment Opportunity Commission guidelines. See id. The Court held

that the agencies’ views “add force to our conclusion” under Skidmore because “[t]he length of

time the agencies have held them suggests that they reflect careful consideration . . . .” Id.; see

also Christopher v. SmithKline Beecham Corp., 635 F.3d 383, 400 (9th Cir. 2011), aff’d, 132 S.

Ct. 2156 (2012) (“[W]e cannot accord even minimal Skidmore deference to the position

expressed in the amicus brief. . . . The about-face regulation, expressed only in ad

hoc amicus filings, is not enough to overcome decades of DOL nonfeasance and the consistent

message to employers [to the contrary] . . . .”).

Two Sixth Circuit cases are also relevant. In OfficeMax, Inc. v. United States, 428 F.3d

583, 584 (6th Cir. 2005), the government asked this Court to defer to its interpretation of “toll

telephone service,” which Congress subjected to a federal excise tax. One of the government’s

interpretations was “not yet embraced by any administrative ruling” and was expressed solely in

the government’s merits brief. See id. at 596. We held that “Skidmore deference does not apply

to a line of reasoning that an agency could have, but has not yet, adopted.” Id. at 598.

No. 13-5492 Smith v. Aegon Companies Pension Plan Page 7

In Rosales-Garcia, 322 F.3d at 403 n.22, we noted in passing that the Immigration and

Naturalization Service’s interpretation, “contained in a brief,” of the Illegal Immigration Reform

and Immigrant Responsibility Act of 1996, was “entitled to respect pursuant to” Skidmore. But

because “the government’s position has been inconsistent” and was advocated only during the

litigation, we held that the interpretation was “unpersuasive,” and instead adopted our own

reading of the statute. See id. Thus, Skidmore informed the outcome of neither case.

An analysis of the contextual factors discussed by Skidmore and its progeny convinces us

that the Secretary’s position in this case is not entitled to Skidmore deference. First, we defer to

agencies under Skidmore because of their relative expertise. See Mead, 533 U.S. at 228.

Skidmore directs that we consider “the thoroughness evident in [the agency’s] consideration.”

Skidmore, 323 U.S. at 140. But the Secretary is no more expert than this Court is in determining

whether a statute proscribes venue selection. Even were the Secretary more expert, the

Secretary’s bare textual analysis of ERISA, without more, does not “constitute a body of

experience and informed judgment to which courts” should defer. Id.; see also Shikles v.

Sprint/United Mgmt. Co., 426 F.3d 1304, 1315–16 (10th Cir. 2005) (“In this case, the EEOC

simply asserts its position in an amicus brief. . . . The EEOC’s brief provides no indication of

whether the agency has been thorough in its consideration of the issue, and it appears that the

agency’s position has not been subjected to any sort of public scrutiny.”).

Second, the Secretary’s interpretation of ERISA has been expressed only once

previously, in one other circuit-court amicus brief. The Secretary had taken no position, even an

informal one, against the enforceability of venue or forum selection clauses under ERISA for the

thirty-nine years prior to these two amicus positions. The Secretary’s new interpretation is not

consistent with prior acquiescence, see Mead, 533 U.S. at 228; is an “about-face,” see

SmithKline Beecham Corp., 635 F.3d at 400; and lacks longevity, suggesting the interpretation

does not “reflect careful consideration,” see Kasten, 131 S. Ct. at 1335.

Third, unlike Skidmore and Kasten, the only indication here that the agency has adopted

this particular interpretation of ERISA is the amicus briefs themselves. The Skidmore amicus

brief pointed the Court to an interpretive bulletin, see 323 U.S. at 138–39, and the amicus brief at

issue in Kasten cited fifty years of enforcement proceedings and agency practice, see 131 S. Ct.

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at 1335. But the amicus brief in this case can only be characterized as, to borrow a phrase from

Justice Frankfurter, an expression of a mood. See Universal Camera Corp. v. NLRB, 340 U.S.

474, 487 (1951). An agency’s mood is not entitled to Skidmore deference. There has never been

an enforcement action brought related to a venue selection clause, and only one other amicus

brief exists that has articulated the Secretary’s current position. The Secretary has promulgated

no regulation or interpretive guidance related to venue selection clauses. As we have noted,

“Skidmore deference does not apply to a line of reasoning that an agency could have, but has not

yet, adopted.” OfficeMax, Inc., 428 F.3d at 598.

B.

The level of deference to be afforded the Secretary’s interpretation does not determine

the outcome of this case because, even were we to give the Secretary’s interpretation heightened

deference under Skidmore, ERISA and our precedent do not support adopting the Secretary’s

position. See Rosales-Garcia, 322 F.3d at 403 n.22 (concluding that “although the government’s

position is entitled to respect pursuant to Skidmore,” the government’s interpretation was

unpersuasive). Because, as we explain below, we conclude that the venue selection clause is

enforceable and applies to Smith’s claims, we do not opine whether 29 U.S.C. § 1132(e)(2)

permits venue in the U.S. District Court for the Western District of Kentucky.

III.

We review de novo the enforceability of a forum selection clause. Wong v. PartyGaming

Ltd., 589 F.3d 821, 826 (6th Cir. 2009). Smith, as the party opposing enforcement of the forum

selection clause, “bears the burden of showing that the clause should not be enforced.” Id. at

828.

ERISA’s “statutory scheme . . . is built around reliance on the face of written plan

documents.” US Airways, Inc. v. McCutchen, 133 S. Ct. 1537, 1548 (2013) (internal quotation

marks omitted); see also 29 U.S.C. § 1102(a)(1) (“Every employee benefit plan shall be

established and maintained pursuant to a written instrument.”). Plan administrators and

employers “are generally free under ERISA, for any reason at any time, to adopt, modify, or

terminate welfare plans. This rule applies equally to pension benefit plans.” Coomer v.

No. 13-5492 Smith v. Aegon Companies Pension Plan Page 9

Bethesda Hosp., Inc., 370 F.3d 499, 508 (6th Cir. 2004) (internal quotation marks and citation

omitted). “The ‘large leeway’ granted to employers in the design of pension plans applies

equally to their modification or amendment of those plans.” Id. at 508. The Plan was amended

in 2007 to include the venue selection clause at issue.7

Smith argues that the amendment was not the product of an arms-length transaction

because the venue selection clause was added seven years after his benefits commenced. But the

Supreme Court has recognized the validity of forum selection clauses even when those clauses

were not the product of an arms-length transaction. See Carnival Cruise Lines v. Shute, 499 U.S.

585, 595 (1991) (enforcing a forum selection clause contained on the back of a cruise ticket).

The logic supporting enforcement of such clauses applies equally to the venue selection clause

here. And given the discretion available to plan administrators, we see no reason why this venue

selection clause is invalid. The AEGON Pension Plan’s venue selection clause is presumptively

valid and enforceable. See M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 15 (1972) (“The

correct approach would have been to enforce the forum clause specifically unless Zapata could

clearly show that enforcement would be unreasonable and unjust, or that the clause was invalid

for such reasons as fraud or overreaching.”); F.D. Rich Co. v. Indus. Lumber Co., 417 U.S. 116,

125 (1974) (holding that a Miller Act requirement that suits be brought in specific federal courts

was “merely a venue requirement” that could be waived).

Smith believes our holding could lead to an excessive burden on ERISA litigants were

venue to lie only in Hawai’i or Alaska. That is not this case. And a party may always challenge

the reasonableness of a forum selection clause. In Wong, 589 F.3d at 828, we provided a three-

part test to use in evaluating the enforceability of a forum selection clause: “(1) whether the

clause was obtained by fraud, duress, or other unconscionable means; (2) whether the designated

forum would ineffectively or unfairly handle the suit; and (3) whether the designated forum

would be so seriously inconvenient such that requiring the plaintiff to bring suit there would be

unjust.” But as the district court noted, “Plaintiff has not argued that the clause was induced by

7

A plan amendment by an employer does not disturb our conclusion in Smith I that only the Plan controls

administration of the VERRP. See Lockheed Corp. v. Spink, 517 U.S. 882, 890 (1996) (“[B]ecause [the] defined

functions [in the definition of fiduciary] do not include plan design, an employer may decide to amend an employee

benefit plan without being subject to fiduciary review.” (internal quotation marks omitted)).

No. 13-5492 Smith v. Aegon Companies Pension Plan Page 10

fraud, that the Cedar Rapids federal court would ineffectively or unfairly handle the case, or that

the inconvenience to Plaintiff is unjust or unreasonable.”

Smith argues in the alternative that the Plan document under which he retired should

control his case because his pension claims accrued in 2000, and thus the venue selection

amendment adopted in 2007 is inapplicable. Smith alleges that although claims accrue when

benefits are denied, claims also accrue when they are paid because each payment inherently

repudiates a claim to additional benefits. The Sixth Circuit, however, follows the “clear

repudiation rule,” under which a cause of action accrues “when a fiduciary gives a claimant clear

and unequivocal repudiation of benefits.” Morrison v. Marsh & McLennan Cos., 439 F.3d 295,

302 (6th Cir. 2006). Thus, Smith’s claims did not accrue until 2011—after the venue selection

clause was added—when the AEGON Pension Plan informed him that it was reducing his

payments. Smith cites to Fallin v. Commonwealth Industries, Inc. Cash Balance Plan, 521 F.

Supp. 2d 592, 597 (W.D. Ky. 2007), in support of his argument that a cause of action also

accrues when benefits are paid. The problem for Smith is that he does not dispute the level of

benefits he received from 2000–2011. Smith might theoretically have a cause of action that

accrued as early as 2000, but the claims he is raising here only relate to action taken in 2011.

Thus, the venue selection clause applies to Smith’s claims.

IV.

We turn next to the question whether ERISA precludes venue selection clauses. A

majority of courts that have considered this question have upheld the validity of venue selection

clauses in ERISA-governed plans.8 These courts reason that if Congress had wanted to prevent

private parties from waiving ERISA’s venue provision, Congress could have specifically

8

See Bernikow v. Xerox Corp. Long-Term Disability Income Plan, CV 06-2612 RGKSHX, 2006 WL

2536590 (C.D. Cal. Aug. 29, 2006); Gipson v. Wells Fargo & Co., 563 F. Supp. 2d 149 (D.D.C. 2008); Klotz v.

Xerox Corp., 519 F. Supp. 2d 430 (S.D.N.Y. 2007); Rodriguez v. PepsiCo Long Term Disability Plan, 716 F. Supp.

2d 855 (N.D. Cal. 2010); Rogal v. Skilstaf, Inc., 446 F. Supp. 2d 334 (E.D. Pa. 2006); Schoemann ex rel. Schoemann

v. Excellus Health Plan, Inc., 447 F. Supp. 2d 1000 (D. Minn. 2006); Smith v. Aegon USA, LLC, 770 F. Supp. 2d

809 (W.D. Va. 2011); Sneed v. Wellmark Blue Cross & Blue Shield of Iowa, No. 1:07-CV-292, 2008 WL 1929985

(E.D. Tenn. Apr. 30, 2008); Williams v. CIGNA Corp., No. 5:10-CV-00155, 2010 WL 5147257 (W.D. Ky. Dec. 13,

2010). But see Coleman v. Supervalu, Inc. Short Term Disability Program, 920 F. Supp. 2d 901 (N.D. Ill. 2013);

Nicolas v. MCI Health & Welfare Plan No. 501, 453 F. Supp. 2d 972 (E.D. Tex. 2006).

No. 13-5492 Smith v. Aegon Companies Pension Plan Page 11

prohibited such action. See, e.g., Bernikow v. Xerox Corp. Long-Term Disability Income Plan,

No. CV 06-2612 RGKSHX, 2006 WL 2536590, at *2 (C.D. Cal. Aug. 29, 2006).

Smith argues that “Aegon is required to abide by ERISA where the terms of the Plan

Conflict with ERISA.” The Secretary and Smith point to a number of statutory provisions they

think conflict with venue selection clauses. None of them does.

First, ERISA’s policy is to provide “ready access to the Federal courts.” 29 U.S.C.

§ 1001(b). Smith and the Secretary argue that this “Congressional policy behind ERISA cannot

be ignored.” But neither Smith nor the Secretary explains how a venue provision inhibits ready

access to federal courts when it provides for venue in a federal court. See Smith v. Aegon USA,

LLC, 770 F. Supp. 2d 809, 812 (W.D. Va. 2011) (holding that a contractual venue provision

“certainly does not conflict with ERISA’s provision for ‘ready access to the federal courts.’”

(citation omitted)). And other ERISA policies are furthered by venue selection clauses. For

instance, “limiting claims to one federal district encourages uniformity in the decisions

interpreting that plan, which furthers ERISA’s goal of enabling employers to establish a uniform

administrative scheme so that plans are not subject to different legal obligations in different

States.” Rodriguez v. PepsiCo Long Term Disability Plan, 716 F. Supp. 2d 855, 861 (N.D. Cal.

2010); see also Klotz v. Xerox Corp., 519 F. Supp. 2d 430, 436 (S.D.N.Y. 2007) (“The forum

selection clause contained in Xerox’s LTD [Long Term Disability Income] Plan allows one

federal court to oversee the administration of the LTD Plan and gain special familiarity with the

LTD Plan Document, thereby furthering ERISA’s goal of establishing a uniform administrative

scheme.”). The cost to employees of one plan’s being subject to the varying pronouncements of

federal district courts around the country would also undermine ERISA’s goal of providing a

low-cost administration of employee benefit plans. See Scaglione v. Pepsi-Cola Metro. Bottling

Co. Inc., 884 F. Supp. 2d 642, 643 (N.D. Ohio 2012) (“Forum selection clauses in ERISA plans

promote ERISA’s goal of uniformity of administration and reduce costs . . . .”).

Second, Smith and the Secretary point to ERISA’s venue provision, which provides:

Where 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.

No. 13-5492 Smith v. Aegon Companies Pension Plan Page 12

29 U.S.C. § 1132. ERISA’s venue provision is permissive: suit “may be brought” in one of

several districts. AEGON’s venue selection clause provides that suit is to be brought in one of

these statutorily designated places, namely, the district where the plan is administered—Cedar

Rapids, Iowa. ERISA’s venue provision does not conflict with AEGON’s chosen venue. See

Price v. PBG Hourly Pension Plan, No. 12-15028, 2013 WL 1563573, at *2 (E.D. Mich. Apr.

15, 2013) (“The may of § 1132(e)(2) does not mean cannot. Congress provided that an action

may be brought in several venues. Congress did not provide that private parties cannot narrow

the options to one of these venues.”); Williams v. CIGNA Corp., No. 5:10-CV-00155, 2010 WL

5147257, at *4 (W.D. Ky. Dec. 13, 2010) (concluding that Congress did not “intend to usurp the

right of private parties to predetermine the situs of anticipated litigation under ERISA” because

ERISA’s venue selection provision is permissive).

But even if the venue selection clause laid venue outside of the three options provided by

§ 1132, the venue selection clause would still control. We have previously upheld the validity of

mandatory arbitration clauses in ERISA plans, see Simon v. Pfizer Inc., 398 F.3d 765, 773 (6th

Cir. 2005), which are, “in effect, a specialized kind of forum-selection clause,” Scherk v.

Alberto-Culver Co., 417 U.S. 506, 519 (1974). It is illogical to say that, under ERISA, a plan

may preclude venue in federal court entirely, but a plan may not channel venue to one particular

federal court. Smith tries to distinguish Simon by arguing that arbitration affects only forum, not

venue. But an arbitration clause may prescribe the geographic location of the proceedings as

well as the forum. See Sneed v. Wellmark Blue Cross & Blue Shield of Iowa, No. 1:07-CV-292,

2008 WL 1929985, at *2 (E.D. Tenn. Apr. 30, 2008) (“A forum selection clause merely requires

the parties to submit their dispute to a different judge in a different courthouse who will use a

substantially similar process to reach a decision. An arbitration clause will prevent a litigant

from submitting the dispute to a judge or formal court proceeding at all. If arbitration clauses are

enforceable the Court sees no reason to conclude forum selection clauses are not enforceable.”).

Thus, ERISA’s venue provision does not invalidate AEGON’s venue selection clause.

Third, Smith raises two arguments regarding fiduciary duties under ERISA. Smith

argues that the venue selection clause violates 29 U.S.C. § 1110(a), which states, “any provision

in an agreement or instrument which purports to relieve a fiduciary from responsibility or

No. 13-5492 Smith v. Aegon Companies Pension Plan Page 13

liability for any responsibility, obligation, or duty under this part shall be void as against public

policy.” But Smith did not raise this argument until his Federal Rule of Civil Procedure 59

motion to alter, vacate, or amend the district court’s judgment, and he has waived it.9 See Am.

Family Prepaid Legal Corp. v. Columbus Bar Ass’n, 498 F.3d 328, 335 (6th Cir. 2007); Am.

Meat Inst. v. Pridgeon, 724 F.2d 45, 47 (6th Cir. 1984).

Smith tries to distinguish his benefits claims from his breach of fiduciary duty claims,

arguing that venue cannot be limited with regard to the latter, even if it can be for benefit claims.

Smith did not raise this argument until his Rule 59 motion, and thus has waived it as well.

Regardless, none of the statutory provisions Smith cites provides a reason not to apply the venue

selection provision to both his fiduciary and benefits claims. The venue selection provision

applies to all actions brought by a participant or beneficiary, not just claims for benefits.

V.

Finally, Smith contends that the district court impermissibly dismissed his claims rather

than transferring them under 28 U.S.C. § 1404(a). We review for an abuse of discretion. See

First of Michigan Corp. v. Bramlet, 141 F.3d 260, 262 (6th Cir. 1998) (“The decision of whether

to dismiss or transfer is within the district court’s sound discretion, and accordingly, we review

such a decision for an abuse of discretion.”). Smith never sought transfer before the district

court, though the Secretary argued in an amicus brief at the motion to dismiss stage that “the

appropriate remedy is not dismissal, but transfer.” In an additional citation filed with this Court

after briefing, Smith points to the Supreme Court’s recent decision in Atlantic Marine

Construction Co. v. U.S. District Court for the Western District of Texas, 134 S. Ct. 568 (2013),

9

Even absent waiver, this argument would fail. 29 U.S.C. § 1110(a) refers to responsibilities, obligations,

and duties “under this part,” which is Part 4 of ERISA. AEGON’s venue selection clause appears in Part 5, not Part

4. See § 1132(e)(2). Furthermore, a forum or venue selection clause does not attempt to free a fiduciary from its

substantive obligations under ERISA. See Arnulfo P. Sulit, Inc. v. Dean Witter Reynolds, Inc., 847 F.2d 475, 478

(8th Cir. 1988) (“Section 1132(e), unlike sections in part 4 of subtitle B of the statute, does not impose any

substantive duties or liabilities on ERISA fiduciaries.”). Both the Supreme Court and our Court have held that

forum selection clauses do not waive substantive rights. See Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth,

Inc., 473 U.S. 614, 628 (1985) (“We must assume that if Congress intended the substantive protection afforded by a

given statute to include protection against waiver of the right to a judicial forum, that intention will be deducible

from text or legislative history.”); Roney & Co. v. Goren, 875 F.2d 1218, 1221 (6th Cir. 1989) (“We are unable to

discern how an agreement limiting a customer to one [particular arbitration entity] would constitute a waiver of any

substantive rights under the [Securities] Exchange Act.”).

No. 13-5492 Smith v. Aegon Companies Pension Plan Page 14

as support for his argument on appeal that transfer is the proper remedy. The Atlantic Marine

Court stated:

The question in this case concerns the procedure that is available . . . to

enforce a forum-selection clause. We reject petitioner’s argument that such a

clause may be enforced by a motion to dismiss under 28 U.S.C. § 1406(a) or Rule

12(b)(3) of the Federal Rules of Civil Procedure. Instead, a forum-selection

clause may be enforced by a motion to transfer under § 1404(a).

Id. at 575. Noting that the defendant had not filed a motion to dismiss under Rule 12(b)(6), and

further noting the specific differences between Rule 12(b)(6) and § 1404(a), the Court declined

to apply its holding to Rule 12(b)(6) dismissals. See id. at 580. In our case, Smith’s complaint

was dismissed pursuant to Rule 12(b)(6), not Rule 12(b)(3). The district court did not abuse its

discretion in dismissing the case instead of transferring it.

VI.

For the foregoing reasons, we AFFIRM the judgment of the district court.

No. 13-5492 Smith v. Aegon Companies Pension Plan Page 15

_________________

DISSENT

_________________

CLAY, Circuit Judge, dissenting. The Employee Retirement Income Security Act of

1974 (“ERISA”), 29 U.S.C. § 1001 et seq., was designed to provide “ready access to the Federal

courts” so as “to protect . . . the interests of participants in employee benefit plans and their

beneficiaries.” § 1001(b). In enacting ERISA, Congress expressly sought to eliminate

“jurisdictional and procedural obstacles which in the past appear to have hampered effective

enforcement of fiduciary responsibilities.” H.R. REP. NO. 93-553, at 17 (1973), reprinted in

1974 U.S.C.C.A.N. 4639, 4655. Consistent with the congressional goal of removing

jurisdictional barriers that would prevent plan participants and their beneficiaries from asserting

their statutory rights, ERISA § 502(e)(2) provides broad jurisdiction for benefit claims:

Where 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 the 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). The preclusive venue selection clause that the AEGON Companies

Pension Plan (“the Plan”) unilaterally added in 2007 is inconsistent with the purpose, policy, and

text of ERISA, and contravenes the “strong public policy” declared by ERISA; therefore, the

clause should be deemed unenforceable. M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 15

(1972). Because the United States District Court for the Western District of Kentucky is a

proper venue for Plaintiff’s ERISA pension benefits claims pursuant to § 502(e), 29 U.S.C.

§ 1132(e), and because the venue selection clause should be deemed unenforceable,

I respectfully dissent.

The venue selection clause that the Plan seeks to enforce forbids Plaintiff from bringing a

suit for benefits anywhere other than Cedar Rapids, Iowa––a venue that is located more than

500 miles away from Plaintiff’s home and place of work, and with which Plaintiff has no

connection. Such a restrictive clause not only conflicts with the broad venue provision set forth

in § 502(e) of ERISA, but also undermines the very purpose of ERISA and contravenes the

No. 13-5492 Smith v. Aegon Companies Pension Plan Page 16

strong public policy evinced by the statute. Section 502(e), which provides broad jurisdiction for

benefit claims, is “intended to grant an affirmative right” to ERISA participants and

beneficiaries. Coleman v. Supervalu, Inc. Short Term Disability Program, 920 F. Supp. 2d 901,

906 (N.D. Ill. 2013) (holding that a forum selection clause in an ERISA plan was unreasonable

as contrary to public policy and unenforceable). This right is indispensable for many of those

individuals whose rights ERISA seeks to protect, since claimants in suits for plan benefits––

retirees on a limited budget, sick or disabled workers, widows and other dependents––are often

the most vulnerable individuals in our society, and are the least likely to have the financial or

other wherewithal to litigate in a distant venue. See French v. Dade Behring Life Ins. Plan, No.

09-394-C-M2, 2010 WL 2360457, at *3 (M.D. La. Mar. 23, 2010). A venue selection clause that

purports to eliminate proper statutory venues conflicts with ERISA’s venue provision as well as

the strong statutory public policy against imposing obstacles to beneficiaries in pursuit of benefit

claims.

ERISA’s policies and provisions supersede the general judicial policy of enforcing

“contractual choice-of-forum” clauses, which the Supreme Court has cautioned “should be held

unenforceable if enforcement would contravene a strong public policy,” including a policy

“declared by statute.” Bremen, 407 U.S. at 15. The statutory text and legislative history of

ERISA clearly demonstrate that Congress desires open access to several venues for beneficiaries

seeking to enforce their rights. See, e.g., 29 U.S.C. § 1001(b) (declaring that it is the policy of

ERISA “to protect . . . the interests of participants in employee benefit plans and their

beneficiaries . . . by providing for . . . ready access to the Federal courts.”); H.R. REP. NO. 93-

553, at 17 (1973), reprinted in 1974 U.S.C.C.A.N. 4639, 4655 (explaining that Congress

intended ERISA’s enforcement provisions “to remove jurisdictional and procedural obstacles

which in the past appear to have hampered effective enforcement of fiduciary responsibilities.”).

As the district court recognized in Coleman, “an employer’s unilateral restriction of that access

would undermine Congress’ stated desire.” Coleman, 920 F. Supp. 2d at 908. This is especially

true where, as here, the restrictive venue selection clause was unilaterally added to the Plan

seven years after Plaintiff agreed to its terms. These circumstances compel the conclusion that

the venue selection clause is unreasonable, inasmuch as it contravenes the strong and clearly

stated public policies of ERISA.

No. 13-5492 Smith v. Aegon Companies Pension Plan Page 17

The majority relies upon a decision from this Court enforcing an arbitration agreement in

the context of an ERISA benefit claim, and reasons that it is “illogical” to conclude that a plan

may mandate arbitration, but may not restrict venue to a specific geographic location. Majority

Op. at 12. In so concluding, the majority overlooks the important distinctions between the

arbitration agreement at issue in Simon v. Pfizer Inc., 398 F.3d 765 (6th Cir. 2005), and the

venue selection clause at issue in the present case. We enforce arbitration agreements with

regard to federal statutory claims not based on some general policy favoring forum selection

clauses, but because that is what the Federal Arbitration Act, 9 U.S.C. §§ 2, 3, requires. See

Shearson/American Express, Inc. v. McMahon, 482 U.S. 220, 226 (1987) (holding that an

arbitration clause was enforceable under the Federal Arbitration Act with respect to a claim

under the Securities Exchange Act of 1934). Though the majority opinion states otherwise, see

Majority Op. at 12, this Court has never held that an arbitration clause may prescribe the

geographic location of the proceedings as well as the forum. The majority’s conclusion that an

arbitration clause may prescribe the geographic location of the proceedings does not appear in, or

naturally flow from, our opinion in Simon, and does not appear elsewhere in our case law.

Arbitration provides an alternative decisionmaker, but does not necessarily require a claimant to

travel to a distant venue to pursue a claim for benefits. The distinction between arbitration

provisions and venue selection clauses is not, in the words of the majority, “illogical;” upon

closer inspection, such a distinction can be rather easily reconciled.

Requiring Plaintiff to litigate in a distant venue imposes a substantial increase in expense

and inconvenience that obstructs his access to federal courts. Because the express purpose and

policy of ERISA is to provide unobstructed access to a forum in which participants and

beneficiaries can pursue their claims for benefits, the unilaterally added venue selection clause at

issue in this case should be deemed unenforceable, and the Plan’s motion to dismiss for improper

venue should be denied.

I therefore respectfully dissent.