Dow V Lumen Technologies Inc

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Automated Summary

Key Facts

Plaintiffs Dolly Dow and Virginia Sakal filed suit against Lumen Technologies and related entities alleging ERISA violations regarding a $1.4 billion pension obligation transfer to Athene Annuity and Life Co. in October 2021. The plaintiffs, who retired from CenturyLink (formerly Lumen) in 2014 and 2015 respectively, claim defendants breached fiduciary duties by not selecting the safest annuity available and engaged in prohibited transactions. Defendants moved to transfer venue to Western District of Louisiana based on a forum selection clause in the pension plan. The court denied the motion, determining plaintiffs' claims for ERISA violations and fiduciary breach do not fall within the scope of the forum selection clause because they seek to enforce ERISA's fiduciary obligations against defendants rather than enforce or interpret the Plan itself.

Transaction Type

Lumen Technologies transferred over $1.4 billion in pension obligations to Athene Annuity and Life Co. in October 2021

Issues

  • Whether the Lumen Combined Pension Plan's forum selection clause, which designates the United States District Court for the Western District of Louisiana as the exclusive venue for disputes 'relating to or arising under this Plan to enforce or interpret this Plan,' applies to plaintiffs' ERISA breach of fiduciary duty claims under 29 U.S.C. §§ 1104, 1106, and 1132(a)(9). The Court must determine if plaintiffs' claims seeking to enforce statutory fiduciary obligations against defendants (rather than enforce or interpret the Plan itself) fall within the scope of the forum selection clause.
  • Whether the Motion to Transfer Venue pursuant to 28 U.S.C. § 1404(a) to the United States District Court for the Western District of Louisiana, Monroe Division should be granted. Defendants argue that the Plan's forum selection clause designates Louisiana as the exclusive venue, and that plaintiffs' claims 'relate to or arise under' the Plan. The Court must evaluate whether defendants have demonstrated that the existing forum is inconvenient and that the interests of justice are better served in the alternate forum.

Holdings

The Court denied the Motion to Transfer Venue pursuant to 28 U.S.C. § 1404(a) to the Western District of Louisiana, Monroe Division. The Court found that plaintiffs' ERISA breach of fiduciary duty claims do not fall within the scope of the Lumen Combined Pension Plan's forum selection clause because the claims seek to enforce ERISA's fiduciary obligations against defendants rather than enforce or interpret the Plan itself. The Court determined that plaintiffs' claims do not relate to or arise under the Plan to enforce or interpret it.

Remedies

The court denied the Motion to Transfer Venue Pursuant to 28 U.S.C. § 1404(a) to the United States District Court for the Western District of Louisiana, Monroe Division. The court also denied the Motion for Leave to File Surreply in Opposition to Motion to Transfer. The court found that plaintiffs' claims do not seek to enforce or interpret the Plan under the forum selection clause, and therefore the venue provision does not apply.

Legal Principles

  • Plaintiffs allege defendants breached fiduciary duties under ERISA § 1104 in transferring pension obligations to Athene. The court examines whether claims seek to enforce ERISA fiduciary obligations against defendants rather than the Plan itself, finding the claims target defendants individually for disgorgement and security posting rather than Plan assets.
  • The court analyzes whether the Plan's forum selection clause designating the Western District of Louisiana as exclusive venue applies to plaintiffs' claims. The court finds the clause governs disputes 'to enforce or interpret this Plan,' but plaintiffs' claims seek to enforce ERISA statutory rights, not Plan enforcement or interpretation. The motion to transfer venue is denied.
  • The plaintiff bears the burden of establishing that transfer to the designated forum in the forum-selection clause is unwarranted. Defendants must demonstrate the alternate forum is appropriate under 28 U.S.C. § 1404(a). The court rejects defendants' arguments as plaintiffs' claims fall outside the forum selection clause's scope.

Precedent Name

  • Swepi, LP v. Mora Cnty., N.M.
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  • Oceanside Ten Holdings.com, LLC v. Mktg, Inc.
  • Atlantic Marine Const. Co., Inc. v. U.S. Dist. Court for the Western Dist. of Tex.
  • Stewart Org., Inc. v. Ricoh Corp.

Key Disputed Contract Clauses

The Lumen Combined Pension Plan contains a forum selection clause designating the United States District Court for the Western District of Louisiana as the exclusive venue for 'any and all disputes relating to or arising under this Plan to enforce or interpret this Plan.' Defendants argue this clause applies to plaintiffs' ERISA breach of fiduciary duty claims. The Court analyzed whether the plaintiffs' claims seek to enforce or interpret the Plan itself, or instead enforce statutory ERISA obligations against defendants individually. The Court found the claims fall outside the clause's scope because they target defendants for disgorgement and security posting rather than seeking Plan assets or Plan enforcement.

Cited Statute

  • ERISA
  • Federal Courts

Judge Name

Philip A. Brimmer

Passage Text

  • Therefore, the Court finds that plaintiffs' claims do not seek to enforce the plan; they seek to enforce ERISA's fiduciary obligations against defendants. The Court also rejects defendants' argument that plaintiffs' claims seek to interpret the Plan such that they are governed by the forum selection clause. Defendants provide no support for the proposition that, because the Court may need to consult the Plan to identify the Plan's fiduciaries, the Court must interpret the Plan. Instead, although defendants may rely on the Plan as part of a defense that they were not fiduciaries and therefore did not violate ERISA, nothing about plaintiffs' claims requires the Court to interpret the Plan to resolve the dispute.
  • Therefore, it is ORDERED that the Motion to Transfer Venue Pursuant to 28 U.S.C. § 1404(a) to the United States District Court for the Western District of Louisiana, Monroe Division [Docket No. 26] is DENIED. It is further ORDERED that the Motion for Leave to File Surreply in Opposition to Motion to Transfer [Docket No. 41] is DENIED.
  • Plaintiffs request the following relief from the Court: Find and declare Defendants have breached their fiduciary duties and caused the prohibited transactions described above; Order disgorgement of all sums derived from the improper transaction; Order Defendants to post adequate security to assure receipt by Plaintiffs and class members of all retirement benefits covered by Athene annuities, plus prejudgment interest; Certify the proposed class, appoint each Plaintiff as a class representative, and appoint Schlichter Bogard LLP as Class Counsel; Award to the Plaintiffs and the class their attorney's fees and costs under 29 U.S.C. § 1132(g)(1) and the common fund doctrine; Order the payment of interest to the extent it is allowed by law; and Grant any other relief as the Court deems appropriate to remedy the ERISA violations.

Damages / Relief Type

  • Order disgorgement of all sums derived from the improper transaction
  • Award to the Plaintiffs and the class their attorney's fees and costs under 29 U.S.C. § 1132(g)(1) and the common fund doctrine; Order the payment of interest to the extent it is allowed by law
  • Find and declare Defendants have breached their fiduciary duties and caused the prohibited transactions described above
  • Order Defendants to post adequate security to assure receipt by Plaintiffs and class members of all retirement benefits covered by Athene annuities, plus prejudgment interest