District Court Transfers Venue of ERISA Action from Residence Forum of Participant’s Trustee to Residence Forum of Plan Participant

In Hammer v. JP Morgan Chase Long-Term Disability Benefit Plan, 2023 WL 4053801 (N.D. Cal. June 16, 2023), California Northern District Magistrate Judge Laurel Beeler granted Defendants’ Moton to Transfer Venue to the District of Connecticut, finding that Defendants satisfied their burden of proving that the residence forum of the plan participant served the convenience of the parties and promoted the interests of justice.

This action concerns a dispute over LTD benefits paid to Kenneth Morrison, a deceased former Vice President of JP Morgan Chase. Mr. Morrison, who worked in New York City and lived in Connecticut, became permanently disabled when he was struck by a taxi in 1995. From then until his 2022 death, he was paid benefits under Chase’s LTD plan. Plaintiff, who resides in San Francisco, is the successor trustee of Mr. Morrison’s trust and the co-conservator of his estate. Plaintiff alleges six claims for violations of ERISA (two for monetary relief and four alternative claims for equitable relief), asserting that the Plan and the Plan Administrator, Prudential, underpaid the benefits because they underreported his base salary at the time of his injury and failed to follow a proper claims-handling processes. Defendants filed two motions: a motion to partially dismiss the complaint under Rules 12(b)(1) and 12(b)(6) and a motion to transfer venue under 28 U.S.C. § 1404(a). Because the Court transferred the case to the District of Connecticut, it declined to decide the motion to dismiss.

The court noted that the venue issue turned largely on the extent to which Plaintiff’s choice of forum is entitled to deference. Although the dispute’s only connection to the current district was Plaintiff and the role he played, as he is not the employee or plan participant, the Court concluded that as trustee of the trust for Mr. Morrison’s plan benefits, Plaintiff was still the real party in interest and his choice of forum was entitled to deference as usual. However, the usual caveats still applied: the plaintiff’s choice might merit less consideration if: (1) the operative facts occurred outside the forum, or (2) the forum lacks interest in the parties or subject matter. The operative facts in an ERISA case are where the claims were administered, where the employee worked and received medical treatment and employee benefits, where the employer and plan administrator are headquartered, and other connections to the forum related to the employee benefits.

Mr. Morrison, the plan participant, lived in Connecticut and received his medical treatment and plan benefits there for twenty-seven years. His brother Douglas, who was his sole conservator from 1995 until 2020, also lived in Connecticut and received the plan benefits there (before transferring them to the San Francisco trust account). A Connecticut probate court governs Mr. Morrison’s estate and trust and appointed Plaintiff. Mr. Morrison’s attorneys were in Connecticut, and they and Douglas Morrison had frequent contact with the plan administrator, Prudential. Both Prudential, and JP Morgan Chase are headquartered not far from Connecticut (Newark and New York City, respectively).

The Court found that the Northern District had minimal interest in the dispute. Plaintiff was not the plan participant, and instead only administered the plan benefits via a Connecticut special-needs trust. The Northern District of California thus functioned as a conduit for the plan benefits, whose object was in Connecticut. And, as the defendants pointed out, the alleged underpayment of plan benefits harmed the plan participant in Connecticut. As such, the overall factual context shows that the operative facts occurred in Connecticut and that state has a far greater local interest in the controversy. The Court accorded only minimal consideration to Plaintiff’s choice of forum. Without deference to Plaintiff’s choice of forum, and with the operative facts and local interest centered in Connecticut, the court concluded that Defendants carried their burden to show that transfer was appropriate.

As this case demonstrates, selection of an appropriate forum is an important step in the pursuit of ERISA-related litigation. If Prudential has denied or terminated your disability insurance claim, or if you believe your benefits have been improperly calculated, contact us for assistance.