Carlisle v. The Board of Trustees of the American Federation of the New York…
Carlisle v. The Board of Trustees of the American Federation of the New York State Teamsters Conference Pension and Retirement Fund
- P. Castel
- 1:20-cv-08793
- U.S. District Court · Southern District of New York
- 11
In Carlisle v. Board of Trustees, Judge Castel transferred the ERISA case to the Northern District of New York under a mandatory forum-selection clause.
Robert Carlisle, the pension plan’s trustees and board members, the plan’s investment consultant, and its actuary were affected by the order transferring the action from the Southern District of New York to the Northern District of New York.
What happened
In Carlisle v. The Board of Trustees of the American Federation of the New York State Teamsters Conference Pension and Retirement Fund, Robert Carlisle alleged that pension-plan fiduciaries violated federal benefits law by making risky investments that contributed to benefit cuts.
The defendants asked to move the case from the Southern District of New York to the Northern District of New York. They relied on a plan participation agreement requiring federal lawsuits by participants to be filed in the Northern District, and on a summary plan document that gave participants notice of that requirement.
Judge Castel granted the transfer motion. He ruled that the clause was clearly communicated, mandatory, covered Carlisle’s claims, and was not unfair or unjust to enforce, so the case was transferred and the file was closed in the Southern District.
The detailed version
- Carlisle v. The Board of Trustees of the American Federation of the New York… · No. 1:20-cv-08793
- P. Castel
- Apr. 16, 2021
Background
Robert Carlisle alleged that defendants breached fiduciary duties under the Employee Retirement Income Security Act (ERISA). The defendants included the pension plan’s board of trustees, the individuals serving on that board, the plan’s investment consultant, and its actuary. Carlisle alleged that they invested in volatile, high-risk assets to pursue unrealistically high returns, resulting in cuts to benefits paid to him and other participants.
The complaint asserted claims under ERISA sections 404(a)(1)(A) through (D) and 405(a). Carlisle filed the action in the Southern District of New York. The defendants moved to transfer it to the Northern District of New York under 28 U.S.C. § 1404(a), relying on a forum-selection clause in a 2014 participation agreement and notice of that clause in a 2019 summary plan description.
Forum-selection clause
The participation agreement stated that participating employees and participants were bound by the agreement as a condition of participation in the pension fund. It also stated that all federal district court actions brought by an employee or participant against the fund or its trustees “shall be commenced and heard” in the Northern District of New York, and that an action filed elsewhere would be transferred there.
The summary plan description, which was mailed to participants and posted online, stated that a participant suing over misuse of plan money or a breach of fiduciary duty under ERISA had to bring the suit in the Northern District of New York. Carlisle’s counsel requested the summary plan description before filing the case, and the plan directed counsel to a website where it could be accessed.
Court’s analysis
The court applied the four-part test for enforcing a forum-selection clause: whether the clause was reasonably communicated, whether it was mandatory rather than permissive, whether it covered the parties and claims, and whether enforcement would be unreasonable or unjust.
The court concluded that Carlisle had actual or constructive notice of the clause. Although the plan’s governing document did not contain a forum-selection clause applicable to his claims, the summary plan description accurately summarized the clause in the participation agreement. The court also concluded that the word “shall” made the clause mandatory and that its broad language covered Carlisle’s ERISA claims.
Carlisle argued that enforcement was unfair because he was not a direct signatory to the participation agreement and had not received its full text. The court rejected that argument, reasoning that the agreement expressly bound participating employees and that it was foreseeable that Carlisle would be bound as a participant. The court also rejected arguments that the summary plan description conflicted with the plan document and that the trustees had applied the clause selectively. It found that Carlisle had not shown that enforcement would be unfair or unjust.
Disposition
Judge Castel granted the transfer motion. The clerk was directed to terminate the motion and related letter-motion, transfer the action to the Northern District of New York, and close the file in the Southern District of New York. Because the mandatory forum-selection clause required transfer, the court did not address the defendants’ separate argument for transfer under the additional multi-factor analysis in section 1404(a).
Read the full 11-page opinion on CourtListener, the free public archive maintained by the Free Law Project.