Jottings By An Employer's Lawyer

Wednesday, February 04, 2004

ERISA Statement of Rights Is Not A Forum Selection Clause


MetLife was no doubt shocked when it removed a claim for disability benefits under an employee benefit plan to federal court on the basis of a federal question and had it remanded to state court. The district court relied on language in the STATEMENT OF ERISA RIGHTS which provides in part, "If you have a claim for benefits which is denied or ignored, in whole or in part, you may file suit in a state or federal court." Interpreting this as a contractual forum selection clause, the court held that MetLife was bound by an agreement that the case could be heard in state court. Since MetLife had copied a model form provided by the DOL for compliance with ERISA, it was less than pleased. Fortunately, the 7th Circuit had jurisdiction to hear the appeal of the remand since it was based on a choice of forum clause rather than a lack of jurisdiction.

And all is well that ends well, if of course you omit the judicial time and attorneys fees and expense caused by the erroneous decision. The 7th Circuit quickly found (less than 1 month after oral argument)what seems obvious, that this language was just a statement of rights, not a contractual agreement. Cruthis v. Metropolitan Life (7th Cir. 2/2/04) [pdf]. The denial of coverage was in 2001, the motion to remand was in April of 2003, and now in February of 2004, the case gets sent back to the district court for a ruling on the merits.


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