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Klotz v. Xerox Corp.

October 22, 2007

ROBIN KLOTZ, PLAINTIFF,
v.
XEROX CORPORATION, SHPS INC., SHPS HUMAN RESOURCE SOLUTIONS, INC., SHPS HEALTH MANAGEMENT SOLUTIONS, INC., AND THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, DEFENDANTS.



The opinion of the court was delivered by: Gerard E. Lynch, District Judge

OPINION AND ORDER

Plaintiff Robin Klotz, an employee of defendant Xerox Corporation ("Xerox"), filed this action alleging that defendants SHPS, Inc., SHPS Human Resource Solutions, Inc., and SHPS Health Management Solutions, Inc., unlawfully terminated her disability benefits under the "Xerox Long Term Disability Income Plan" (the "LTD Plan").*fn1 (Compl. ¶¶ 4, 9.) Citing a forum selection clause in the LTD Plan, defendants move pursuant to Fed. R. Civ. P. 12(b)(3) and 28 U.S.C. § 1406(a) to dismiss for improper venue, or in the alternative, to transfer the case to the United States District Court for the Western District of New York.*fn2 The motion to transfer will be granted.

DISCUSSION

I. Enforceability of Forum Selection Clauses The Xerox LTD

Plan is an "employee welfare benefit plan" within the meaning of § 3(1) of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1002(1). (See Compl. ¶ 121.) As required by ERISA § 402(a), 29 U.S.C. § 1102(a), the terms of the LTD Plan are set out in an official plan document ("LTD Plan Document"). Section 7.14 of the LTD Plan Document states:

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. (Becker Aff. Ex. A, at 12.) Monroe County is located in the Western District of New York. See 28 U.S.C. § 112. Accordingly, the LTD Plan expressly designates the United States District Court for the Western District of New York as the exclusive forum for "[a]ny action in connection with the Plan by an Employee." (Becker Aff. Ex. A, at 12.)

The Second Circuit recently instructed that the determination of whether to enforce a forum selection clause involves a four-part analysis:

The first inquiry is whether the clause was reasonably communicated to the party resisting enforcement. The second step requires us to classify the clause as mandatory or permissive, i.e., to decide whether the parties are required to bring any dispute to the designated forum or simply permitted to do so. Part three asks whether the claims and parties involved in the suit are subject to the forum selection clause.

If the forum clause was communicated to the resisting party, has mandatory force and covers the claims and parties involved in the dispute, it is presumptively enforceable. The fourth, and final, step is to ascertain whether the resisting party has rebutted the presumption of enforceability by making a sufficiently strong showing that "enforcement would be unreasonable or unjust, or that the clause was invalid for such reasons as fraud or overreaching."

Phillips v. Audio Active Ltd., 494 F.3d 378, 383-84 (2d Cir. 2007) (citations omitted), quoting M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 10 (1972).

A. Presumptive Enforceability

Plaintiff does not seriously allege that Xerox failed to "reasonably communicate[]" the forum selection clause to her. Id. at 383. Although plaintiff, who is represented by counsel, asserts that Xerox should not require its employees, many of whom live hundreds of miles from New York, to discern which federal district court has jurisdiction over Monroe County (P. Mem. 13), that argument is a mere quibble over draftsmanship. The LTD Plan Document, which was provided to plaintiff, clearly conveys to any reader that any action regarding the plan must be brought in a specific court, and the location of that court is readily ascertainable from ordinary reference materials in any public library, let alone to any lawyer. Thus, the forum selection clause in Section 7.14 of the LTD Plan Document reasonably conveyed to plaintiff that venue for her lawsuit is restricted to the Western District of New York.

With regard to step two of the enforceability inquiry, plaintiff contends that the language employed in the forum selection clause - specifically, the use of the words "may only" instead of "shall" - creates an ambiguity as to whether the clause is mandatory or merely permissive.

(P. Mem. 11.) "Only" means "exclusively, solely." Webster's Third New International Dictionary 1577 (2002). The plain meaning of the words "may only" thus unequivocally evinces the mandatory nature ...


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