Marin v. Xerox Corporation et al
Filing
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ORDER GRANTING MOTION TO TRANSFER. Signed by Judge Richard Seeborg on 3/8/13. (cl, COURT STAFF) (Filed on 3/11/2013)
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IN THE UNITED STATES DISTRICT COURT
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FOR THE NORTHERN DISTRICT OF CALIFORNIA
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SAN FRANCISCO DIVISION
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For the Northern District of California
United States District Court
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KATHLEEN MARIN,
Plaintiff,
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No. C 12-06532 RS
ORDER GRANTING MOTION TO
TRANSFER
v.
XEROX CORPORATION, SEDGWICK
CLAIMS MANAGEMENT SERVICES,
Defendants.
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Kathleen Marin is a former employee of Xerox and a participant in the Xerox
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Corporation Long-Term Disability Income Plan (“LTD Plan”). The LTD plan is an “employee
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welfare benefit plan” under the Employee Retirement Income Security Act of 1974 (“ERISA”),
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29 U.S.C. § 1002(1). Plaintiff’s last day at work for Xerox was in 1977. She stopped working
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due to a degenerative joint disease that has progressively worsened. She received LTD Plan
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benefits until November 9, 2012, when Sedgwick Claims Management Services informed her
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that the benefits were terminated. Marin seeks to recover those benefits and brings her claim
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under ERISA § 502(a)(1)(B).
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The current Xerox LTD Plan came into effect April 2007 and includes the following
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NO. C 12-06352 RS
ORDER GRANTING MOTION TO TRANSFER
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As a result of this forum provision, defendants move to dismiss Marin’s Complaint for improper
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venue under Rule 12(b)(3) of the Federal Rules of Civil Procedure. In the alternative, defendants
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request this matter be transferred to the Western District of New York pursuant to 28 U.S.C.
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§1406(a). Marin references the LTD Plan in her Complaint, and it thus may be considered in
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connection with this motion.
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It is undisputed that the 1977 benefits plan in place when plaintiff received benefits did
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not have a mandatory forum provision. The controlling document is the version of the welfare
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For the Northern District of California
United States District Court
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provision:
Section 7.14. Restriction of Venue. Any action in connection with the Plan by an
Employee or beneficiary may only be brought in Federal District Court in Monroe
County, New York.
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plan in effect when a participant’s cause of action accrues. Grosz-Solomon v. Paul revere Life
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Ins. Co., 237 F.3d 1154, 1160 (9th Cir. 2001) (“That she became permanently disabled and filed
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her disability claim while the first policy was in effect is irrelevant; it does not entitle her to
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invoke that plan’s provisions in perpetuity.”). A participant’s cause of action accrues on the date
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the claim is denied. See id. at 1159 (citing Blessing v. Deere & Co., 985 F.Supp. 899, 903 (S.D.
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Iowa 1997) (“an ERISA cause of action based on a denial of benefits accrues at the time the
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benefits are denied.”); Menhorn v. Firestone Tire & Rubber Co., 738 F.2d 1496, 1501 (9th Cir.
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1984) (“We accept the proposition that an ERISA cause of action based on a denial of benefits
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accrues at the time the benefits are denied.”). Thus the LTD Plan in effect in 2012 when
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plaintiff’s claim was denied, not 1977 when her benefits were first granted, is the controlling
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document.
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Plaintiff at oral argument, however, contended that, as a preliminary matter, it must be
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determined whether her rights under the 1977 Plan vested at the time she initially filed for
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benefits. The Ninth Circuit has noted that welfare benefits, unlike pension benefits, need not
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ever vest, unless the employer specifically states vesting has occurred. Grosz-Solomon 237 F.3d
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at 1160. The Seventh Circuit considered vesting with respect to the Xerox 1977 LTD plan in
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Hackett v. Xerox Corp. Long-Term Disability Income Plan, 315 F.3d 771 (2003). After
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considering the language of the Plan, the court concluded that “rights to benefits do not accrue
NO. C 12-06352 RS
ORDER GRANTING MOTION TO TRANSFER
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prospectively. [Plaintiff] did not, upon initial determination of eligibility, accrue a right to
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benefits indefinitely; instead his right to those benefits accrues as the payments become due.” Id.
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at 774. Similarly, the Central District of California found a plaintiff’s rights under the Xerox
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1977 LTD Plan had not vested, and she thus had no right to avoid the forum selection clause
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provided in the updated document. Laasko v. Xerox Corp., 566 F.Supp.2d 1018, 1022 (C.D. Cal.
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2008) (citing Hackett, 315 F.3d at 774). Plaintiff points to no authority in which a court found
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an employee’s rights to have vested at the time of injury under the Xerox 1977 LTD Plan.1
Plaintiff argues enforcement of the forum selection clause would violate the broad venue
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provision of ERISA. The statute allows actions to be brought “in the district where the plan is
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administered, where the breach took place, or where a defendant resides or may be found.” 29
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For the Northern District of California
United States District Court
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U.S.C. § 1132(e)(2). Marin contends that constraining her choice of forum is contrary to this
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provision and against the statutory goal of providing “ready access to the Federal courts.” 29
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U.S.C. § 1001(b). Courts, however, have held that enforcement of forum selection clauses is not
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inconsistent with the terms or policy rationales of ERISA. See e.g., Rodriguez v. PepsiCo Long
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Term Disability Plan, 716 F.Supp.2d 855, 860 (N.D. Cal. 2010) (“Nothing in the statutory
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language bars those negotiating ERISA plans from narrowing that menu of options to one venue
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in particular. As many other district courts have already observed, Congress could have – but
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has not – expressly barred parties from agreeing to restrict ERISA’s venue provisions.”); Smith v.
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Aegon USA LLC, 770 F.Supp.2d 809, 812 (D. W. Va. 2011) (“Such a contractual arrangement
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certainly does not conflict with ERISA’s provision for ‘ready access to the federal courts’ 29
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U.S.C.A. § 1001(b).); Laasko, 566 F.Supp.2d at1023 (“It is significant that § 1132(e)(2) uses the
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Even if plaintiff’s rights had vested under the Plan, however, the result would be the same.
Once vested, a substantive right cannot be amended. A forum selection clause does not
implicate a substantive right. Rather it dictates where arguments with respect to the modification
of a substantive right must be heard. Plaintiff’s reliance at oral argument on Helton v. AT&T,
805 F.Supp.2d 223 (E.D. Va. 2011) is inapposite. In that case, the court found plaintiff had not
been adequately notified of a material change in her pension plan. Id. at 230-31. The material
change contemplated was the eligibility requirements under the plan. Id. at 226. Eligibility
requirements, unlike a forum selection clause, go to the heart of the substantive rights provided
in a benefit package. Accordingly, there is no need to examine the LTD Plan to confirm that
prior decisions denying the vesting of any rights are correct.
NO. C 12-06352 RS
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word “may,” and not “shall,” in describing where actions may be brought. . . enforcement of the
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forum selection clause in this case is not inconsistent with the federal policy.”).
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Marin condemns this precedent as “wrongly decided” and relies instead on Nicolas v.
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MCI Health and Welfare Plan No. 501, 453 F.Supp.2d 972 (E.D. Tex. 2006) to argue that
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ERISA prohibits forum selection clauses. In Nicolas the court stated it “can not allow the Plan’s
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forum selection clause to override a Congressionally enacted statutory framework aimed at
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assisting employees.” Id. at 974. The court worried that doing so “would encourage a flood of
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new, non-negotiated “plans” containing forum selection clauses.” Id. This district, however, has
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declined to adopt that reasoning. Rodriguez, 716 F.Supp.2d at 861 (“The Court does not share
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the concern articulated in Nicolas”). Courts in other districts have similarly declined to follow
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For the Northern District of California
United States District Court
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the holding of Nicolas. See, e.g., Smith, 770 F.Supp.2d at 812 (noting “Nicolas is the only
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discovered case in which the court has declined to enforce a forum selection clause because it
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was superseded by ERISA” and thus declining to follow it); Klotz v. Xerox Corp., 519 F. Supp.
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2d 430, 436 (S.D.N.Y. 2007) (“Although Nicolas correctly noted that Congress intended ERISA
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to ‘remove jurisdictional and procedural obstacles,’ and to provide beneficiaries with ‘ready
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access to the federal courts,’ nothing in ERISA's statutory text or legislative history evinces any
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intent by Congress to preclude private parties from limiting venue to one of the three forums
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permitted by the statute.”) (internal citations omitted).
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Moreover, the Supreme Court has reiterated that forum selection clauses are to be
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enforced unless they violate fundamental fairness or are the result of fraud or overreaching. M/S
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Bremen v. Zapata Off-Shore Co., 407, U.S. 1, 15 (1972); Carnival Cruise Lines, Inc. v. Shute,
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499 U.S. 585, 593-94 (1991) (finding venue selection clauses to be binding even if the contract
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in question was not negotiated). In Laasko, a district court in the Central District of California
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found that the specific forum selection clause at issue in this case was not fundamentally unfair
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and did not contravene public policy. 566 F.Supp.2d at 1023-24. In fact, the court stated
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“enforcement of the forum selection clause in this case actually advances one of the purposes of
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ERISA by ‘bringing a measure of uniformity in an area where decisions under the same set of
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NO. C 12-06352 RS
ORDER GRANTING MOTION TO TRANSFER
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facts may differ from state to state.’” Id. at 122 (citing Bird v. Shearson Lehman/American
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Express, Inc., 926 F.2d 116, 122 (2d Cir.1991)). This district has similarly found that “limiting
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claims to one federal district encourages uniformity in the decisions interpreting that plan, which
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furthers ERISA’s goal of enabling employers to establish a uniform administrative scheme”
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Rodriguez, 716 F.Supp.2d at 861 (internal citations omitted).
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The venue selection clause contained within the updated 2007 LTD Plan is controlling,
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and dictates that all matters arising under the Plan must be brought in the Western District of
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New York. Plaintiff has presented no evidence to suggest that enforcing this clause would
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violate fundamental fairness. Rather, enforcement will allow this case to be heard in the district
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most familiar with the LTD plan at issue. Accordingly, this district is not the proper venue to
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For the Northern District of California
United States District Court
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hear this matter. Under 28 U.S.C. 1406(a), this Court has discretion to, in the interest of justice,
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transfer a case to any district in which it could have been brought. Accordingly, this matter shall
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be transferred to the Western District of New York for all further proceedings.
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IT IS SO ORDERED.
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Dated: 3/8/13
RICHARD SEEBORG
UNITED STATES DISTRICT JUDGE
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