:: A Primer On Venue Choice In ERISA Claim Disputes
Plaintiffs originally filed their complaint in the Court of Common Pleas of Philadelphia County, Pennsylvania. Defendants then removed the action to federal court. The plaintiffs’ choice of venue is generally accorded great weight, but other factors such as where the underlying events occurred and where the plaintiffs reside can override this concern.
Schoonmaker v. Highmark Blue Cross Blue Shield, 2009 U.S. Dist. LEXIS 101088 (E.D. Pa. Oct. 30, 2009)
This district court opinion features an ample discussion of an important preliminary issue that is often taken for granted – choice of venue. One of the advantages of modern medical advances has been the proliferation of centers of excellence for various diseases. On the other hand, access to these facilities often requires travel.
What factors should a court take into account in determining proper venue in a dispute over benefit payment? The Court in Schoonmaker reviews this question in considerable detail.
The Facts
Plaintiffs originally filed their complaint in the Court of Common Pleas of Philadelphia County, Pennsylvania. Defendants then removed the action to federal court.
The medical treatment occurred in Utah and, as the Court observed, none of the underlying facts took place in the Eastern District Pennsylvania where the Plaintiff’s filed suit. The Plaintiff’s preference for the Eastern District stemmed from the fact that a third party benefits consultant was based in there.
The Defendants Highmark Blue Cross Blue Shield and Highmark, Inc. filed a motion to dismiss and a motion to transfer venue to the United States District Court for the Western District of Pennsylvania, which was the defendant’s principal place of business.
The Plaintiffs, Michigan residents, opposed the motion.
Choice Of Venue
As a preliminary matter, the Court noted that the plaintiffs’ choice of venue is generally accorded great weight, but other factors such as where the underlying events occurred and where the plaintiffs reside can override this concern.
This Court stated in Connors v. UUU Productions, Inc., 2004 WL 834726, at *6 (E.D. Pa. Mar. 15, 2004), “Although plaintiff’s choice of venue ‘generally receives substantial weight,’ his choice in this case receives ‘diminished weight’ because he chose a forum in which he does not reside and in which none of the conduct giving rise to his claims occurred,” quoting Lamusta v. Lawson Mardon Wheaton Inc., 2000 U.S. Dist. LEXIS 2708, at * 6 (E.D. Pa. Mar. 10, 2000), and Gallant v. Trustees of Columbia Univ., 111 F. Supp. 2d 638, 647 (E.D. Pa.2000).
The decisions to deny plaintiff coverage occurred in defendants’ principal places of business which was located in the Western District.
The specific unit that reviews and authorizes the types of claims submitted by plaintiffs is located in the Pittsburgh, PA office. Defendants have no offices in Philadelphia, PA and transact very little business in this District.
Plaintiffs argued that the operative facts occurred in Plymouth Meeting, Montgomery County, PA (the Eastern District) where Health Advocate, Inc. was located. Health Advocate, however, was not a party to the litigation, and that entity made no decisions which resulted in the denial of claims.
Rather, Health Advocate, Inc. is a third party which apparently was retained by plaintiffs to assist them in communicating with defendants about their claims. In other words, Health Advocate, Inc. merely served as a conduit to pass along information from defendants to plaintiffs.
Because plaintiffs do not reside in this District and the underlying operative facts did not occur in this District, plaintiffs decision to file its original complaint in the Philadelphia County Court of Common Pleas will not be given great weight.
The Governing Statute
The Defendants moved to transfer venue pursuant to Section 1404(a) which provides:
“For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought.” 28 U.S.C. § 1404(a).
Noting that the burden of establishing the need for transfer rests with the movant, the Court turned to the factors set forth in Jumara v. State Farm Ins. Co., 55 F.3d 873, 879-880 (3d Cir. 1995).
The Court of Appeals’ decision in Jumara identified public and private interests that courts should consider when determining whether to transfer venue.
Private interests include:
- plaintiff’s forum preference as manifested in the original choice;
- the defendant’s preference;
- whether the claim arose elsewhere;
- the convenience of the parties as indicated by their relative physical and financial condition;
- the convenience of the witnesses-but only to the extent that the witnesses may actually be unavailable for trial in one of the fora; and
- the location of books and records (similarly limited to the extent that the files could not be produced in the alternative forum).
Public interests include:
- the enforceability of the judgment;
- practical considerations that could make the trial easy, expeditious, or inexpensive;
- the relative administrative difficulty in the two fora resulting from court congestion;
- the local interest in deciding local controversies at home;
- the public policies of the fora; and the familiarity of the trial judge with the applicable state law in diversity cases.
Motion Granted
The Court engaged in a painstaking review of the various factors, but the key factor was the locus of benefit decisions.
As discussed above, all of the relevant decisions occurred outside of this district. There is no evidence that any part of plaintiffs’ claims arose in this District.
Thus, the Court concludes:
Defendant has demonstrated that venue in this action should be transferred to the Western District. The decisions which gave rise to the underlying claims did not occur in the Eastern District, but rather in Pittsburgh and/or Camp Hill; all of defendants’ employees responsible for making those decisions and the relevant documents and records are located in Pittsburgh or Camp Hill; plaintiffs are not a resident of the Commonwealth and transferring the venue will actually move the trial closer to plaintiffs’ state of residence; and any witnesses located in this District will not be made unavailable by transferring the venue. I will grant defendants’ motion to transfer this case to the Western District.
Note: The following factors were deemed irrelevant:
(1) the enforceability of the judgment; judgment will be equally enforceable in this District or the Western District;
(2) the local interest in deciding local controversies at home; neither party is local to this District, and as will be discussed, the controversy did not occur in this District;
(3) the public policies of the fora do not differ; and
(4) the familiarity of the trial judge with the applicable state law in diversity cases is the same in both districts.
Venue Provision - Although not explicitly addressed in the opinion, the outcome accords with the provisions of ERISA addressing the subject:
Venue for an ERISA action is proper either:
in the district [i] where the plan is administered,
[ii] where the breach took place, or
[iii] where a defendant resides or may be found.
29 U.S.C.§ 1132(e)(2).
