Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-4_12-cv-00617/USCOURTS-azd-4_12-cv-00617-0/pdf.json

Nature of Suit Code: 791
Nature of Suit: Employee Retirement Income Security Act (ERISA)
Cause of Action: 28:1001 E.R.I.S.A.

---

1 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

UNITED STATES DISTRICT COURT 

DISTRICT OF ARIZONA 

Robert Manuel Vega, 

 Plaintiff, 

vs. 

Carondelet Health Network, and 

Ascension Health, and 

Sedgwick Claims Management Services,

Inc. 

 Defendants. 

CV 12-00617-TUC-DCB (JR) 

REPORT AND 

RECOMMENDATION 

 

 In this action, Robert Manuel Vega (“Plaintiff”) seeks to: (1) recover all 

benefits due under the terms of the Long-Term Disability Plan (“LTD Plan”) and to 

enforce his rights under the terms of the LTD Plan; (2) reinstate any other employee 

benefits, which were terminated, discontinued, or suspended as a result of the 

termination of his disability benefits; (3) recover his attorney’s fees and costs 

incurred herein from Carondelet Health Network (“Carondelet”), Ascension Health 

(“Ascension”), and Sedgwick Claims Management Services, Inc. (“Sedgwick”), 

Case 4:12-cv-00617-DCB Document 28 Filed 02/05/13 Page 1 of 10
2 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

(collectively, “Defendants); and (4) receive prejudgment interest on the benefits to 

which he is entitled and on his damages at the highest legal rate until paid. Plaintiff 

seeks such remedies and requests judgment against Defendants as a result of the 

allegedly erroneous termination of Plaintiff’s long-term disability benefits as of 

February 28, 2011. 

 Plaintiff, a Tucson, Arizona resident, filed his Complaint on August 16, 2012. 

(Doc. 1). Defendants filed a Motion to Dismiss for Improper Venue or, in the 

alternative, Transfer Venue and Dismiss Defendant Carondelet Health Network on 

November 27, 2012. (Doc. 18). In response, Plaintiff Robert Manuel Vega filed 

Opposition to Defendants’ Motion to Dismiss for Improper Venue and Dismiss 

Defendant Carondelet Health Network on December 4, 2012. (Doc. 20). Defendants 

filed a Reply in Support of Defendants’ Motion to Dismiss for Improper Venue and 

Dismiss Defendant Carondelet Health Network on December 12, 2012. (Doc. 21). A 

hearing was conducted in this Court on January 31, 2012. The Court now issues its 

recommendation that the Defendants’ Motion to Dismiss be granted in part and 

denied in part and that this matter be transferred to the Eastern District of Missouri. 

I. Factual Background

 On June 1, 2008, Carondelet adopted the LTD Plan, a purported benefit plan 

under the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. §1011, 

et seq., for the benefit of its eligible employees. (Doc. 1). Ascension, a non-profit 

corporation formed under the laws of the State of Missouri, and Sedgwick are joint 

Case 4:12-cv-00617-DCB Document 28 Filed 02/05/13 Page 2 of 10
3 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

plan administrators under the LTD Plan. (Doc. 1). Carondelet provided certain 

employees with long-term disability insurance pursuant to the LTD Plan. (Doc. 1). 

 Plaintiff was a Carondelet employee, became a covered individual under the 

Plan, and remained continuously employed as a Stationary Engineer. (Doc. 1). 

However, on December 11, 2009, Plaintiff became disabled and was unable to 

perform the duties of his occupation. (Doc. 1). Plaintiff suffers from severe 

degenerative joint disease of the knee, and alleges the condition prevents him from 

performing the material duties of his occupation or any other work or service for 

which he is reasonably qualified. (Doc. 1). Plaintiff’s treating physicians have placed 

restrictions and limitations upon his capacity to work. (Doc. 1). As a result, Sedgwick 

approved Plaintiff’s application for benefits on May 20, 2010. (Doc. 1). 

 On February 28, 2011, Sedgwick terminated Plaintiff’s long-term disability 

benefits. (Doc. 1). In response, Plaintiff initiated this action for relief under ERISA. 

(Doc. 1). Plaintiff alleges that Sedgwick’s denial of long-term disability benefits was 

erroneous, contrary to, and in breach of the terms of coverage and was based on 

erroneous information and false assumptions. (Doc. 1). Plaintiff also alleges that 

Sedgwick’s determination that he was not entitled to benefits was influenced by an 

improper conflict of interest. (Doc. 1). 

II. Discussion 

 A. Motion to Dismiss or Transfer Based on Improper Venue 

 1. Forum Selection Clause 

Case 4:12-cv-00617-DCB Document 28 Filed 02/05/13 Page 3 of 10
4 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

 In Defendants’ Motion to Dismiss, Defendants claim that venue is improper 

in this Court because the forum selection clause contained in the LTD Plan identifies 

the United States District Court for the Eastern District of Missouri as the exclusive 

venue for any claim “relating to or arising under” the LTD Plan. (Doc. 18). Thus, 

pursuant to Fed. R. Civ. P. 12(b)(3) and 28 U.S.C. § 1406(a), Defendants request that 

the case be dismissed or transferred to the Eastern District of Missouri. (Doc. 18). 

 A forum selection clause is presumptively valid and “should control absent a 

strong showing that it should be set aside.” M/S Bremen v. Zapata Off-Shore Co., 

407 U.S. 1, 15 (1972); Argueta v. Banco Mexicano, S.A., 87 F.3d 320, 325 (9th Cir. 

1996) (“Although Bremen is an admiralty case, its standard has been widely applied 

to forum selection clauses in general.”). To avoid the application of a forum 

selection clause, the party opposing its enforcement must show that it is unreasonable 

under the circumstances. M/S Bremen, 407 U.S. at 10; see also Manetti-Farrow, Inc. 

v. Gucci America, Inc., 858 F.2d 509, 514-15 (9th Cir. 1988). The enforcement of a 

forum selection clause is unreasonable where: (1) the inclusion of the clause in the 

agreement was the product of fraud or overreaching; (2) the party objecting to the 

clause would effectively be deprived of his day in court if the clause is enforced; and 

(3) the enforcement of the clause would “contravene a strong public policy of the 

forum in which suit is brought.” Murphy v. Schneider Nat’l, Inc., 362 F.3d 1133, 

1140 (9th Cir. 2004) (citations omitted). Forum selection clauses are also evaluated 

for fundamental fairness. To determine whether a forum selection clause is 

fundamentally fair, and thus enforceable, courts consider the absence of a bad-faith 

Case 4:12-cv-00617-DCB Document 28 Filed 02/05/13 Page 4 of 10
5 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

motive, the absence of fraud or overreaching, and notice of the forum provision. 

Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585, 595; Dempsey v. Norwegian 

Cruise Line, 972 F.2d 998, 999 (9th Cir.1992)). 

 Here, the Plaintiff has presented no evidence to suggest bad-faith, fraud or 

overreaching. Moreover, the forum selection clause was explicitly clear in the LTD 

Plan. Specifically, it reads as follows: 

 10.20 Forum Selection Clause. Except as the laws of the United States may 

 otherwise require, any action by any Plan Participant or Beneficiary relating to 

 or arising under the Plan shall be brought and resolved only in the U.S. 

 District Court for the Eastern District of Missouri and in any courts in which 

 appeals from such court are heard, and such court shall have personal 

 jurisdiction over any Participant or Beneficiary named in such action. 

 According to Defendants, Ascension is a member of many non-profit health 

systems, hospitals, and other health care facilities in twenty states and the District of 

Columbia. (Doc. 19). Therefore, without a forum selection clause, Defendants could 

be subject to litigation in countless jurisdictions nationwide, since it is presumable 

that the LTD Plan’s participants and beneficiaries are citizens of at least twenty-one 

locations. The forum selection clause eliminates any uncertainty about where 

jurisdiction lies, thus avoiding confusion regarding venue selection. Moreover, since 

it is arguably more cost efficient for Defendants to litigate in Missouri, those savings 

could be passed along to the LTD Plan itself. See Cent. States, Southeast and 

Southwest Areas Pension Fund v. O’Brien & Nye Cartage Co., No. 06-4988, 2007 

WL 625430, at *3 (N.D. Ill. Feb. 22, 2007) (finding that “[t]he purpose of including 

the venue selection clauses is obviously to allow for the Trustees to better exercise 

Case 4:12-cv-00617-DCB Document 28 Filed 02/05/13 Page 5 of 10
6 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

efficient administration of the Funds by reducing cost associated with litigating 

claims against multiple employers . . . .”). 

 Counsel for Ascension and Sedgwick are located in and do business in 

Missouri. (Doc. 21). While local counsel for Defendants reside in Pima County, the 

defense firm representing Defendants is Missouri based. (Doc. 21). Plaintiffs 

argument that transferring venue would be “enormously expensive” has some merit, 

but falls short as it is more likely than not that neither Plaintiff nor his attorney would 

be required to travel to Missouri; ERISA cases are normally decided by crossmotions and without the need for trial or discovery. See, e.g., Russell v. Comcast 

Corp., 381 Fed.Appx. 657 (9th Cir. 2010). It is also critical to note that even if 

Plaintiff could obtain discovery in this case, any information that Plaintiff could 

theoretically discover would likewise be located in St. Louis, Missouri, making travel 

inevitable. (Doc. 19). 

 Additionally, Plaintiff has failed to prove that venue is improper in the United 

States District Court for the Eastern District of Missouri. In fact, Plaintiff has gone as 

far as acknowledging that “the majority of courts in this Circuit reviewing the case 

under strict contractual interpretation will find merit in Defendant’s motion.” (Doc. 

20). Instead, Plaintiff argues that the “uniqueness” of ERISA and the present case 

require further analysis by this Court. (Doc. 20). However, Plaintiff has failed to 

demonstrate any significant “uniqueness” to this case that would warrant 

disregarding the forum selection clause. Additionally, the record fails to establish that 

the enforcement of the forum selection clause would “contravene a strong public 

Case 4:12-cv-00617-DCB Document 28 Filed 02/05/13 Page 6 of 10
7 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

policy of the forum in which suit is brought.” Bremen, 407 U.S. at 15. This Court 

finds no rational reason as to why public policy would prevent such a transfer. 

 As the Plaintiff has failed to overcome the strong presumption in favor of 

enforcing forum selection clauses, the Court recommends that the District Court 

enforce the clause.

 2. Dismiss or Transfer 

 Having concluded that venue in this Court is improper based on the forum 

selection clause contained in the LTD Plan, the Court has the discretion to: (1) 

dismiss the action; or (2) transfer venue to the Eastern District of Missouri, if it is in 

the best interests of justice to do so. See 28 U.S.C. § 1406(a). The Defendants have 

urged dismissal, but both in their papers and at the hearing raised no strong objection 

to transfer. The fact that Plaintiff will likely incur additional fees and refile this 

action in Missouri should the Court opt to dismiss has been found a sufficient 

consideration to justify transfer over dismissal. See, e.g., Citizens for a Better Env’tCalifornia v. Union Oil Co. of California, 861 F.Supp. 889, 898 (N.D.Cal. 1994) 

aff’d 83 F.3d 1111 (9th Cir. 1996); Rodriguez v. PepsiCo Long Term Disability Plan, 

716 F.Supp.2d 855 (N.D.Cal. 2010). 

 B. Motion to Dismiss Carondelet Health Network 

 Defendants request that Carondelet be dismissed from the action pursuant to 

Fed. R. Civ. P. 12(b)(6), as Carondelet is not a proper defendant under Section 

502(a)(1)(B) of ERISA. (Doc. 18). Defendants claim that because Carondelet is not 

the Plan Sponsor, Plan Administrator or Claims Administrator of the LTD Plan and 

Case 4:12-cv-00617-DCB Document 28 Filed 02/05/13 Page 7 of 10
8 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

the complaint fails to allege that Carondelet played any role in determining whether 

Plaintiff was eligible for additional long term disability benefits, Carondelet should 

be dismissed. (Doc. 18). 

 In response, relying on Cyr v. Reliance Standard Life Ins. Co., 642 F.3d 1202, 

(9th Cir. 2011), Plaintiff argues that Carondelet is a proper party because “potential 

liability under 29 U.S.C. § 1132(a)(1)(B) is not limited to a benefits plan or the plan 

administrator.” Id. at 1207. While correct to a limited extent, Plaintiff neglects to 

acknowledge that “appropriate circumstances” must be presented to assert that a 

party is proper. Id. at 1204. 

 When asked at the hearing to identify the circumstances that support 

Carondelet’s inclusion as a defendant in this case, Plaintiff’s counsel suggested that 

should the Plaintiff find it necessary to return to work, Carondelet may well refuse to 

allow him to do so. As these events have not come to pass, and appear unlikely to be 

associated with ERISA or the LTD Plan in question, such a claim is entirely 

speculative and does not constitute the “appropriate circumstances” needed to 

support a claim against Carondelet in this action. Furthermore, it is unrefuted that 

Carondelet has no discretionary authority to interpret and apply the LTD Plan and 

has no authority to decide claims or pay LTD Plan benefits. As such, the Court 

recommends that the District Court grant Defendants’ Motion to Dismiss Carondelet. 

 C. Appropriateness of Dismissal and Transfer 

 At the hearing, the Court raised its concerns about dismissing Carondelet prior 

to transferring the case to another district, thinking it might be best to allow the 

Case 4:12-cv-00617-DCB Document 28 Filed 02/05/13 Page 8 of 10
9 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

transferee court to rule on the Motion to Dismiss. However, the Court is satisfied 

that dismissal is the appropriate course of action. See, e.g., Garvey v. Piper Rudnick 

LLP Long Term Disability Insurance Plan, 2008 WL 410088 (D. Oregon Feb 12, 

2008). 

 In Garvey, the plaintiff was a partner of a law firm and entitled to long-term 

disability benefits under a plan administered by his law firm and insured by Standard. 

Id. at 1. After the plaintiff applied for and received short-term disability benefits, he 

quit working and applied for long-term disability benefits, but was denied. Id. The 

plaintiff then filed an action seeking, among other things, a determination that he was 

entitled to benefits under his plan. Id. In response, the defendants sought to transfer 

venue from the District of Oregon to the Northern District of Illinois and also sought 

the dismissal of defendant Standard based on the plaintiff’s failure to state a claim 

under Fed. R. Civ. P. 12(b)(6). Id. In ruling on the motions, the court found that 

Standard was not a proper party, because there was a “clear designation” that another 

entity was the plan administrator and, thus, the only proper party. Id. at 5. The court 

also concluded that venue was improper in Oregon and transferred the case to the 

proper forum, the Northern District of Illinois. Id. at 9. 

 Like the Standard defendant in Garvey, it is clear that Carondelet is an 

improper defendant in this case. It is equally clear that this case should be transferred 

based on the forum selection clause. Accordingly, the Court’s concerns about the 

propriety of doing both are allayed and recommends that the District Court enter an 

order dismissing Carondelet and transferring the action to Missouri. 

Case 4:12-cv-00617-DCB Document 28 Filed 02/05/13 Page 9 of 10
10 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

IX. RECOMMENDATION

For the foregoing reasons, the Magistrate Judge recommends that the District 

Court, after its independent review, grant in part and deny in part Defendants’ 

Motion (Doc. 18) as follows: deny Defendant’s Motion to Dismiss for Improper 

Venue; grant Defendants’ Motion to Dismiss Carondelet; and grant Defendants’ 

Motion to Transfer Venue to the Eastern District of Missouri. 

Pursuant to Federal Rule of Civil Procedure 72(b)(2), any party may serve and 

file written objections within 14 days of being served with a copy of this Report and 

Recommendation. If objections are not timely filed, they may be deemed waived. 

The parties are advised that any objections filed are to be identified with the 

following case number: 12-CV-00617-TUC-DCB. 

 Dated this 5th day of February, 2013. 

Case 4:12-cv-00617-DCB Document 28 Filed 02/05/13 Page 10 of 10