Court holds that plan administrator or insurer can force ERISA beneficiaries to sue in distant venue

In Smith v. Aegon Companies Pension Plan, a group of aggrieved Kentucky employees sued their pension plan after it severely reduced their retirement.  The plan argued that the employees could only sue in Cedar Rapids, Iowa, based on a restrictive 2007 venue selection clause it unilateally added to the plan articles.  The employees argued that such a venue selection clause was unenforceable as it unduly restricted the beneficiiaries access to enforce the fiduciary obligations of the plan administrator. 

The lower court agreed and allowed the employees to sue in Kentucky. A two-judge majority of the Sixth Circuit reversed, summarily dismissing the suit.  Judge Clay dissented, citing a wealth of federal law upholding the employees' right to challenge the management of their plan in a reasonably convenient location.  He noted that the cited location was arbitrary and bore no relationship to the parties' prior dealings.   He also pointed out the illogic of the majority's holding, since it relied upon a case upholding mandatory arbitration, without recognizing that a federal statute compelled recognizing arbitration---and that no court has ever mandated arbitration in a distant venue.