In ERISA Lawsuit for Disability Benefits, District Court Grants New York Life’s Motion to Transfer Venue to Plaintiff’s Resident District

In Penrose v. New York Life Insurance Company & Life Insurance Company of North America, No. 22 CIV. 2184 (JPC), 2023 WL 6198249 (S.D.N.Y. Sept. 22, 2023), New York Southern District Judge John P. Cronan granted Defendants New York Life and Life Insurance Company of North America’s (“LINA”) motion to transfer venue of this ERISA benefit action to the District of Utah.

Plaintiff, a resident of Utah, was employed at Wipro Limited and was a participant in Wipro’s group long-term disability plan underwritten by insurer LINA. New York Life acquired LINA in December 2020 and has been LINA’s “parent company” since. Plaintiff stopped working due to Periodic Limb Movement Disorder and submitted an LTD claim. LINA approved LTD benefits and began sending benefit checks by mail directly to Plaintiff at his residence in Utah, and later to his attorneys in Houston, Texas. Two years later, LINA terminated benefits and Plaintiff appealed, submitting medical records and opinions from four physicians, all of whom are located in Utah, and a vocational counselor located in Houston, Texas. LINA upheld its decision on appeal and the instant action ensued.

From the outset, Defendants raised multiple procedural issues including which defendant is the proper party and questions of personal jurisdiction. Among other motions, Defendants filed a Rule 12(b)(3) motion to dismiss the action for improper venue, or in the alternative to transfer venue in the interest of justice, asserting that the action “clearly could have been brought in the District of Utah or a District in Pennsylvania,” as Plaintiff is a resident of Utah, and LINA is both incorporated in and has its principal place of business in Pennsylvania.

Applying the two-part test to determine whether to grant a motion to transfer venue, the Court evaluated first, as a threshold inquiry, whether the transferee district is “one where jurisdiction over the defendant could have been obtained at the time suit was brought, regardless of defendant’s consent.” Noting ERISA’s broad venue provisions permitting jurisdiction “where the plan is administered, where the breach took place, or where a defendant resides or may be found” [29 U.S.C. § 1132(e)], the Court found that venue in the District of Utah would be proper as Plaintiff resided and worked in Utah, received benefits checks in Utah, and had his benefits terminated while residing in Utah.

As to the second requirement, whether transfer is appropriate and in the interest of justice, the Court considered nine factors: (1) the convenience of the witnesses; (2) the convenience of the parties; (3) the location of relevant documents and the relative ease of access to sources of proof; (4) the locus of operative facts; (5) the availability of process to compel the attendance of unwilling witnesses; (6) the relative means of the parties; (7) the forum’s familiarity with the governing law; (8) the weight accorded the plaintiff’s choice of forum; and (9) trial efficiency and the interests of justice.  Evaluating these factors, the Court concluded that the District of Utah was clearly the proper forum for the matter and granted Defendants’ motion.

Evaluating witness convenience, the Court reasoned that Plaintiff identified several witnesses with relevant information to the dispute who reside in Utah, including family members with knowledge of his disability claim who all reside in Salt Lake City, and at least five treating providers, all of whom reside in the District of Utah and provided medical records and opinions. Moreover, Plaintiff did not identify a single witness residing in the Southern District of New York. The Court rejected Plaintiff’s argument that this factor should not carry any weight since this was an ERISA case litigated on a closed record. The court noted that other courts in the circuit have rejected similar arguments, stating that “[w]hile this factor may [ultimately] be less significant in ERISA context, … to the extent there is a possibility for the need for witnesses, this factor weighs in favor of transfer.” With regard to the “convenience of the parties,” the court reasoned that because Defendants affirmatively moved to transfer to the District of Utah, they have expressed that they will not be inconvenienced by the proposed transfer. And because transfer to the District of Utah would certainly seem more convenient for Plaintiff, since he resides there, the Court found that this factor favored transfer.

The Court next found that the location of relevant documents was a neutral factor, given both the modern world of scanning and emailing documents with ease, and the fact that neither party pointed to any specific document or piece of evidence in either the current or transferee districts. The Court further concluded that the “locus of operative facts” overwhelmingly favored transfer to the District of Utah, particularly in an ERISA case where courts consider where the plaintiff lived, worked, applied for benefits, and received payments. With regard to the “availability of process to compel witness attendance,” the court noted that neither party submitted evidence suggesting that any prospective non-party witnesses would decline to voluntarily appear in either district. Moreover, eight of the identified witnesses appeared to live within the District of Utah, whereas only two of the identified witnesses would even possibly live within 100 miles of the Southern District of New York, a factor that was either neutral or slightly favored transfer.

As for evaluating the “relative means of the parties,” the Court found this factor was also neutral or slightly favored transfer given that both Defendants are corporate entities whereas Plaintiff, who is located in the District of Utah, alleged that he has been unemployed due to disability since September 2018. The court further noted that both districts are sufficiently familiar with governing ERISA law to render the “familiarity with governing law” factor neutral. And, while a Plaintiff’s choice of forum is generally entitled to deference, that deference was significantly diminished where, as here, the operative facts have no connection to the chosen district. Finally, the court concluded that the case was still in its preliminary stages, with no formal discovery having taken place, and transfer would not cause prejudice to Plaintiff or harm judicial economy.

If New York Life or your disability insurer has denied or terminated your disability insurance claim, contact us for assistance.